LIVE CALLER: Standardized Pricing and First Year Blues

Hey, everyone, this is Mike Andes. You're listening to the Landscape businesscourse.com podcast. Today we're doing something very cool, very different. Never done it before. And we're gonna have a live caller that I. Well, this is the deal. So, on Business Bootcamp podcast, the other podcast I've hosted for a couple years, I put out this thing where if people give me their phone number, I would call the first 10 registrants and then 10 of the next, like, random, the rest people. So we had bunch of people sign up, and the first 10 filled up really fast. But then Nathan, who is one of our course members here on Landscape Business course, he signed up and was drawn as one of the random 10 people. So what I figured I'd do is just take the recording of that call and put it on here, because we talk a lot about standardized pricing and some of the challenges that you'll have after your first year of business. So I wasn't planning on doing it, but the calling app that I have recorded records it, and so it's gonna be fun. I think you'll get something out of it. This is Nathan, and he started on the course a couple months ago. And let's tune in to our live call. So he didn't know I was calling him necessarily, because everyone. Well, actually he did, because he had emailed me the day before, and he had asked a question. I said, hey, you actually got drawn for this random caller thing, so I'll talk to you tomorrow. So he does know I'm gonna call him. So let's tune in, though. This was just a couple days ago, and this is Nathan and myself on the phone.

Hello, this is Nathan.

Nathan, how's it going? This is Mike Andes with Business Boot Camp Podcast.

Hey, Mike, how's it been?

Good, good. Do you have a minute?

Yeah, I do.

Cool. Awesome. Yeah, it was funny because I got your email yesterday.

And then I already had seen that you were drawn as one of the ten random calls. So that's cool.

Oh, perfect. Yeah, I was just going through the standardized process pricing list, and I just.

I've been having a problem with, like, some of my fall cleanups and kind of bidding them incorrectly for the amount of time that they take. And so I wanted to, like, get that standardized pricing down so I could find out what works and what doesn't.

Right. Okay. Well, here, let me pull up. Actually, what we're looking. Do you have in front of you or. Probably not.

Okay, I'm going to try to pull it up too standardized.

Because we Just put up a new one. So that's probably the one you're talking about, I'm guessing. Here we go. Standard flashing list. Perfect. Got it. All right. I'm looking at what you're looking at here in about two seconds. So, yeah, like, for fall cleanups, like, the one thing we can't do as far as standardization is essentially tell you how long something is going to take. Right. So part of it is experience, like just knowing, okay, like, hey, there's so much property with so many leaves or so many trees, it's going to take you kind of generally, you know, a quarter day or half day. What the kind of. What the quarter and half and full day kind of thing. Kind of break it. It makes a little bit easier as far as. Instead of trying to figure out is this going to take three, three or four hours, you can just determine if it's gonna take a quarter day or a half day. So it kind of like, it makes your pricing actually a little bit less accurate, but it also makes it a lot simpler for making the estimate, just because. What I mean by accurate is there might be a job that takes four hours, but you charge almost the same thing as if it takes five hours just because you charge half a day. But yeah. So when you say you're kind of inaccurate now in pricing, are you saying, like, you're some jobs, you're losing some jobs, you're making more?

Yeah, exactly. And I mean, the biggest thing is, like, because I don't have that standardized pricing, I'll charge two different customers that'll take me the same amount of time. I'll charge them two completely different prices.

Right.

You know, and so because I didn't have that system down of like, okay, this is going to take a half a day, so I'm charging them X amount of. And I'm even. Okay. Like, the way I figure, sometimes it would come out to be where, like, where one job may. I might charge them both the same amount for a half day, but one job might take me two hours and take me four hours, where I might make more money on one job, a little less on another, and it would kind of balance itself out eventually.

Right. Like, just out of curiosity, what's your hourly rate that you kind of target for when you're doing those per man hour?

$50 an hour.

Great. Awesome. Awesome. Yeah. So, like, for a half day, you're probably charging almost 500. Is that right? For a crew of two.

Are you like, four? Yeah. 450 or something like that. Okay. So, like, right now, when you show up, do you, do you tell them your price when you're there, or do you kind of like leave and then send them an email with the estimate?

So I've been telling them that. I've been telling them when I'm there. And I think that part of the problem is, well, because I'm.

I get what you're saying about not giving the price there, and I agree with that. And I think that's a good way to go because I feel too pressured to give them a price right then and there to get the job. And then I end up either under bidding or overbidding and it kind of has an opposite effect.

Right, but like, I understand why you would do it too, to be honest, Nathan, like we. When I first started, I was like, I was under the impression like, you know what? They're in front of me. I just want to get a yes. And so I know where you're coming from as far as like giving them a price. The thing is, when we're using standardized pricing and we know exactly what we want to charge for on their side, it's gonna feel like we're making it up almost, right? Like if you're just like, oh, it's gonna cost 4.99, they're gonna be like, okay, where did he get that number from? Where? Like, we know that's our half, you know, our half dollar days worth of work, but on their end, number one, it's a little bit weird. And then on our end, sometimes you don't have the two or three minutes just to kind of think about the specifics of the job. For instance, like, it might be the same size property, but do they have a whole bunch of trees that when you're doing the blowing, it's gonna get caught up in all the bushes and you're have to end up pulling them out by hand. You know, little stuff like that that if you could just sit in your truck or sit at the office and kinda think about for a second, you'd probably pick up on those little things instead of when they're kind of like standing right there and you're kind of crunching a number in your head and you're like, okay, well maybe we could go to a quarter day instead of a half day. Things like that, right? So sometimes it goes both ways. Obviously for us it's better because we get a couple more minutes to think about the job. Really, it is just like that couple minutes that it just takes to.

Think about the little. Excuse me, the nuances. Of a job that would make it more or less profitable. And then for them, though, I think this is what I had to get over. It's actually better for the customer because when you have standardized pricing and you know exactly what you want to charge, it's weird for them when you're just kind of like all of a sudden you're pulling a round number out of your head. Or even if you write down like, okay, half day plus, you know, an eight foot bed pickup truck, dump, run to the dump, that's 99, it's gonna take me an hour. Even if you do those numbers really quick in your head and give them a number, it just feels weird for them. So that's what I changed. But I totally get why you would want to do it in person. Like, I did it for my first year because I was like, I don't want to be afraid of asking for the sale and I want to, you know, have them say yes while I'm there and not have like, you know, two or three days of emailing back and forth and stuff. Right, so, so I understand though, I get it. Like, but. And it's a little bit of, a little bit of a learning curve going from doing it in person to when you just literally. What's cool about it though, Nathan, though, is you can kind of use the close of, hey, I'm gonna go back to the office and they'll send you an estimate. Like, I don't know how exactly you're set up with your business right now, and we can talk about it if you want, but like, it makes a nice way of saying, hey, I'm go back to the office and they'll send you an estimate within you can say like two hours and literally you can get in your truck, create the estimate, email it to them through Lawn Pro or whatever. And then on their end they're thinking, hey, this company has their communication down, right? And it's going to come off really professional that, hey, the estimator came out, he got to the office, the office sent it back to me, they had the exact notes that we talked about. And so I know at first it kind of seems like you're not tricking them, but it just seems like maybe not. You're super honest about it, but eventually that's what you're going to get anyways as you grow. And so even now, like when I do an estimate, I am actually sending the estimate to the office and then they are sending the estimate to the client. However, that's the exact same words I used when I was the guy that was making the estimate and sending it to them, I said, hey, I'm going to get back to the office. They'll get back to you within a couple hours. And it seemed like, honestly, to be perfectly honest, Nathan, I don't think it helps your closing ratio, but I think it helps the amount of value. And you can charge more when you do that because when you are making the numbers up in their mind, you're making up on the spot. It just doesn't seem like you offer the value that a full fledged full service company with an office might have. Right?

Yeah, absolutely. And they don't need to necessarily know that I'm the one that's doing everything.

Exactly.

They could think that I have a whole staff behind me that they don't even see, which can add value as well.

Exactly. Totally. And I think just with like, how long have you been in business now, Nathan?

I just did my first season.

Yeah. So like, really, like, I wouldn't beat yourself up too much over the fact that there's some jobs that you're losing more, making more. Like, honestly, like, I've done this for nine years, so I have it down a little bit more. But like your first year, if you're already working on standardized pricing and being like you're on the course and like you're way ahead of the game, to be honest with you, like, I didn't start standardized pricing until a few years ago. So like I spend my wheels for six years in making, literally making things up on the spot and kind of just giving numbers in my head. And so like, you're ahead of the game and so I wouldn't beat yourself up too much because you're going to get experience as far as looking at a job and knowing exactly how long it's going to take. Like, even for mowing, like, you know, now I can look at a job and down to within a minute or two variants, know exactly how long it's going to take for like a standard lawn just to mow it. But like, I couldn't do that when I first started. So really don't beat yourself up too much because it's going to come with just experience and being able to see the jobs. And that's why like, even your first year, it's not a bad thing if you don't have an office and you don't have a bunch of crew members because you'll actually do the work yourself and get to know exactly how long things take. And so for instance, like I mentioned when you do a leaf cleanup. Yes. You're looking at how big the property is, how many leaves there are, but you're also looking at, like, when you blow the leaves, are you going to be hitting other trees? Because, like, that can slow you down big time. Because then you have to pick them up by hand.

Even as far as, like, which direction are you going to be blowing the leaves out? Because if the wind's coming from a certain way, like, all those things will come with time. So I wouldn't beat yourself up too much, but you're definitely in the right direction trying to standardize it.

Mm, perfect. Yeah. I feel like I'm kind of, like, spinning my wheels a little bit because I feel like I'm a little bit further ahead as far as my knowledge of how to run a business versus my technical knowledge of the business. That's like, I'm kind of trying to catch up.

Get. I get it. Yeah. Like, that's the side you want to err on, though, like, to be perfectly honest with you, Nathan, because, like, with the podcast and stuff, I'm with contact dozens of business owners each week, and with the course and stuff, and 90% of the ones that are failing are the people who are so good at what they do, but they don't know the business aspect. Like, if I was to choose an entrepreneur to invest in or, like, bet on, I would bet on the people who got the business aspect down, and then they'll figure out the technical aspect. Right. Like, even. Especially in our business. Right. Like, what we're doing isn't rocket science. And so I wouldn't stress out too much about, like, seriously, if you know the business aspect and you're confident in that, that's really where I think in our industry, when so many people are so good at horticulture and tree trimming and fertilization, but they can't talk to people correctly. They don't know how to estimate jobs, they don't know how to run a business or create websites. Like, that's what's gonna set you apart. So, like, that's not a negative. I don't think you'll learn the other part with time and on. Honestly, you can YouTube things on, like, you know, tree care and things like that. And part of that is part of the reason, though. Like, in. In February, we're loading up the video course for training. So, like, we're gonna go over fertilization. What npk, like, nitrogen, phosphorus, like, all that stuff stands for. For fertilizing and tree care. Like, we're gonna go over all that because I, you know, obviously part of it, too, is just your confidence in knowing those things. So you can, you know, with bid, with confidence, and even just share information with a customer that's educational so that you. You appear as an expert in your field, and then that's where the value comes in. You can still charge more. Right? So. So that's kind of why we're doing the employee training too, because I. It's important. Like, I get it, but I wouldn't. Like I. Like I said, like, you're ahead of the game. I wouldn't stress out about it. And by get what you're feeling, because if you're just finishing your first year, I would imagine you're probably not make taking a whole lot of the company. And it kind of feels like. Like you're probably in the slow season now. And it's like, oh, my goodness, like, how are we gonna make this work? Right? Like, how? Like, just out of curiosity, if you don't mind, like, how much did you make in the first year net? I mean, gross.

Gross, 35,000.

Yeah. So, like, you're right. You're right where I was at. Like, I only did 30. So, like, you're ahead of the game a bit. So. And I know it's tough because it's easy to say, oh, well, like, for me, just say, oh, that was easy because that was my first year. But, like, that first year, I didn't make a single penny as far as pulling money out of the company. I lived on, like, nothing. Just trying to get by. And so I know where you're at because you're in the slow season now.

Right?

Like, not a whole lot of work.

Yeah. Well, we do have snow removal here in Salt Lake, so I'm doing a little bit of snow removal, and I'm actually still getting a lot of people calling about, like, fall cleanups and leaf removal. Like, I'm three jobs back. Like, I'm just waiting for the weather to be right, to be able to do those.

That's awesome, man. Like, really. And so, like, I think. I think year two, come spring. Well, you've already established and you're already so busy. It's a great time to, you know, to take the plunge into getting someone to help you. And then, you know, you're right in track. You're right in line for year two, like, you know, getting up, and that's when you're gonna start seeing a little bit of progress. Not so much in your net, but you'll start to see revenue growth. And then year three is when you really start to cash in. And so I know it feels like you're spinning your wheels. It feels like. Did you have a job before you started the landscaping business, Nathan?

Yeah, and I was actually doing landscaping only like, two days a week.

Oh, I gotcha.

And then a couple hours before work when I had. When I had another job.

Mm. Do you still have that job then?

Well, kind of. I mean, I quit my job because my wife is going to D.C. and so I'm staying home with the kids. I would be still working at this point.

Right.

But my plans for next year, when we started up the next season, is to do it full time. And I have actually already hired someone to help me.

Awesome.

Then they start April 1st.

Yeah, man, that's totally awesome. You're literally, like, right where I was at. Like, that's what I did. Like, the first year I was working part time just to cover my expenses. Then second year, I knew that I was going to hire someone and then go full time myself. That's when you really start to see the growth. So, yeah, don't get discouraged. And anything like that, like 35, it can seem like it's nothing, and then you don't really take anything out, but it's a start, you know? And so, trust me, you're ahead of the game if you're already thinking about standardized pricing. Because a lot of times people, when they're in their first year, they're thinking like, oh, it's just me. I can make up numbers myself. I can send the estimates myself. I don't need to, like, create the systems. And that's what keeps them from getting. When they do start to grow and they have five people that they're hiring and now they're still trying to juggle all those things, it doesn't work. And so for you to be already setting the system, the thing that people.

Don'T understand is that if they start doing that now when they're by themselves, it's a whole lot easier. And when you bring people on, they. You already have those systems in place so that there's no adjustment. Like, you can grow so much faster if you have those systems in place already.

You got it? Yeah, totally. Totally.

Anything else I can kind of, you know, walk you through or anything you can have a question about?

I don't think so. Right. Well, are you going to.

Do any. Put up anything, like a employee handbook or anything for on the landscape business course?

Yep, definitely. So, Jan, we're Filming it right now. It's a 30 video, like 30 part video series on employee training. And you said April 1st, your guy starts.

Yeah, April 1st.

Okay. So yeah, we'll definitely be done for that. And it'll be. It'll probably be like, I'm guessing four to six hours long. It'll walk them like your new hires through everything from striping a lawn to fertilization techniques, aeration, thatching. It'll walk them through all of that. And then what. What we'll probably do is once the video is done, we will make an actual book copy of that so you can kind of send it home for reading for them and just make it like an easy read, probably 40, 50 pager. But the videos, I think will be good because on the first day they come, if they don't know anything about it or even if they had experience, like, we're gonna actually have all our guys that we currently hire. I'm gonna have them watch the entire video course because I want everyone to be trained the same way. Because when you do it that way, it's a little more standardized than if you just like throw them with their manager and say, hey, you train them because they're going to train in different than a little bit different than their other manager. And so we'll probably have everyone watch it. But yeah, we'll definitely have that. For all your new employees, you can have them. And the thing too is, Nathan, like, you'll probably want to customize some of it. Like, I'm going to be training everyone exactly how we do stuff, but you'll probably say like, hey, like, we use a different type of mower here. Or our trailer isn't set up exactly like that. But it'll be a good kind of baseline for your employees to learn a lot of the technique and theory behind, you know, fertilization, tree care, mowing, just the basic stuff. We talk about safety too, so it's kind of a good first. I just, I kind of want it to be like a. The thing that you allow your employee to watch the first day they're hired. And so they're kind of. They get a good idea of what they. What's expected of them and how to do a lot of the roles.

Yeah, that's perfect. That's awesome. Then I also made those changes that you suggested on my website. Still have a lot of SEO work to do, but I'm up on the second page of Google now.

Yeah, already. What were you on before?

I couldn't even find myself before.

Dude, that's awesome. It's only been a few weeks though, hasn't it?

That's actually kind of crazy. Usually it takes a month.

I don't know how much your changes affected it, but, I mean, I was doing a bunch of stuff and I basically didn't have any SEO stuff before, so.

That's awesome. And even the thing too is even if the change, like the changes I made, there's kind of smaller stuff and I think the ones I told you were more as far as geographic, but like, even like adding blog posts, making links like, those are big, too. So you know that. Kudos to you. That's awesome.

Yeah, absolutely.

All right, man. We'll stay in touch. Definitely. I'll try to check in with you.

Let's see here. I'll try to make a note to check in with you in May and if I forget, just send me an email. And I want to stay in contact. Once you get someone full time, there'll be other things that'll pop up or just like, little questions or whatever. I'm here for you and will stay in contact for sure.

All right, cool. Thanks. Well, I appreciate all your help and.

All your time, Nathan. You're awesome. Thanks so much. Have a good one. Happy Merry Christmas, too.

All right. Every Christmas.

Bye. Bye.

Yeah. Bringing the fire.