Mike Andes Coaches a $500K Lawn Care Business (CRAZY NUMBERS)

Hey, everyone, it's Mike Andes. I'm the founder of Augusta Lawn Care. We have over 170 locations around the world. Today, I'm doing a coaching call with a business owner that has about a $500,000 lawn care business. He does it completely remotely.

It's not running on all cylinders because it doesn't have a captain, and we're kind of missing that stuff.

And so we're going to be talking today of whether or not he should focus on just the lawn care, but also talk about having a position for an operations manager, how to compensate them, as well as their office manager. How do you actually get someone to be a leader when it comes to the office, sales, etc. You take someone who's operationally sound, really, really good, maintaining, optimizing, and then you tell them, okay, we're going to grow the business. It just throws a monkey wrench in their brain, and they don't like it. It's a really good coaching call. I recommend watching this one a couple times because there's so much we jump into about compensating your managers, finding great leaders, and how to do this all remotely. Just.

Just.

I'm kind of brought up to speed. We have Quiet Lawn, and then we have Neon. Are we rebranding Quiet Lawn over to Neon to incorporate the pest control, or are we keeping them separate?

Well, probably. What? A bit. Well, right now we're. We moved over to rebrand the Neon to do the treatment side, so that'll be fertilization, weed control, and pest control. And I honestly don't know what I'm gonna do with Quiet Line Mike. I want to keep it separate to possibly sell it if I can make it valuable enough in the next couple years or just keep them separate. But for now, we're trying to, you know, head towards the. The treatment side of the business.

Awesome.

So that. That's the current goal. But. But yeah, so now it's kind of a mix. It's kind of a mess because we've got, you know, Quiet Lawn at the same shop doing mowing. And then, you know, we got Neon. So I don't know, I might do. I might offer mowing and do everything under Neon because it doesn't pigeonhole me to use electric mowers. Like, I'll still use the handheld stuff, but if I want to get a gas stander, I'm not really tied to, you know, tied to what we're using.

But okay, so an operations manager. We have a guy that already that does been doing pest control. For 10 years and he's treated laws for that and he's, he's worked for us for over a year.

What do you look for when you screen somebody for an operations manager? Like how, how, how deep do you go? Do you do like Colby tests and stuff like that or what? What are you looking for?

Yeah, like the main thing I'm looking for is what type of operations manager are they and what, what is their objective? Because a lot of times people will say they want an operations manager when reality they want a general manager to run the entire business operationally but also do sales. And so I think clarity first on like what is his role? Is it just operations or is he actually going to be doing estimates, doing follow up calls? What's sort of his actual role going to look like?

Mostly the operations because you know, we have a, I guess kind of a similar setup but we have Ibrahim and a team that does Sal, you know, they close all the sales, they do the customer service. Most of our estimates are especially for that stuff. We don't do any on site estimates, it's all online. So it mostly just be the operation, the day to day operations at the shop, you know, managing the employees, you know, making sure the work gets done, holding people accountable, you know, making sure equipment's taken care of, stuff like that.

Yeah, so I think the operations manager is the right move, especially if the business is not growing fast. Um, even, even if they're just focused on, on operations. I find if a business is growing super fast, they really, it's a different role than someone who is maintaining or optimizing the current business. And so just realize that like sometimes I've lost managers when I stopped like they were grow, grow, grow, grow. And then okay, let's make it profit, let's raise prices. We're not going to hire more people, we're not going to get more trucks, we're going to raise prices and make this more profitable. I would sometimes lose them because they like that growth and like the hunt and then vice versa. Sometimes if you take someone who's operationally sound really, really good at maintenance, maintaining, optimizing, and then you tell them, okay, we're going to grow the business, we need to hire more people, it just throws a monkey wrench in their brain and they don't like it. So I think getting clarity on like what they would like to do, like what their goals are is super important. If they like them more of the maintain and optimize or if they like the grow and expand part.

Okay, okay, perfect.

Perfect.

And I think where we are, you know, kind of transitioning, you know, I want to, I want growth, but not super rapid growth. You know, it's nice. Be nice to start you one to $200,000 a year more, you know, a little bit more than that. You know, start getting that growth. Now that we've kind of, you know, spent some time figuring out what we want to do and, you know, getting that down and. Okay, so perfect. What would that be? Their roles and responsibilities? What knowing that person. Like, what. What would you expect that person to do if they're there with 1, 2, 3 employees?

Yeah, like, I would take every single action of the day and I'd group into three things. One is getting the work. The second one is doing the work. The third one is greasing, green greasing the gears. So basically sales, operations and admin. It sounds like sales and admin. You're basically handling for this person. So it's like, what are the actual tasks that are. Operations are typically the things that need a person in. In person, because you already have made things outsourced in terms of admin and sales. So, like, it's like, what are those tasks? Anything that requires a person in person and make sure that the work gets done. So whether it be site visits, whether that be quality control, whether that be team meetings, whether it be interviews in person for new hires, get those. That's the checklist. And I just group every single, like, function of the day into those three categories. And everything in operations is what do I need to do to get the work done? Like, if all sales stopped, the phone never rang for customer service, what would be have to get done just to get work that's currently in the schedule completed?

Okay. Okay, perfect.

Okay. Pay. How do you structure pay and incentives for an operations manager like that? Like what, what's the, what kind of base pay are you kind of seeing in our, you know, kind of in South Carolina, North Carol, Georgia, Florida? What are you. How are you, you know, incentivizing them, you know, percentage of revenue, percentage of profit. What are you. How are you?

Yeah, you know, like Charlie Munger always said, like, you know, show me the incentive, I'll show you the outcome. Right. And so this is the same thing here. It's like, if you want to grow the business, you'll want to do it based upon more revenue, close ratio and those metrics. If you're willing to optimize for profit, we're going to do it very differently. And so ultimately, there's really three ways to do it. And one is based upon the P and L, the other one is based upon the balance sheet. So on the P and L there's two ways to incentivize someone, either top line or bottom line. So top line is going to be, you're going to be wanting growth, you want to expand the business and you just simply are either giving them a commission or bands of bonuses that get unlocked based upon monthly revenue. So for example, on my locations it's like, hey, you're getting a base pay and you're going to get profit sharing. But we know that's down the road because we're growing and growth sucks cash. So what we're going to do is going to get an incentive based upon top line revenue. If you get over 20,000amonth, immediate bonus unlocked. If you go over 30,000, 40, just dollar amounts that go over to them. Some.

You know, you're right, you're about to say what I was about to say. Some people will just do a straight percentage like 3, 4, 5, 6% of top line revenue. And then I would make sure you have a conversion cycle and hey, that's for the first two years and then it converts into profit sharing. Now profit sharing comes in two forms. One bottom line on a P and L or secondary would be based on the balance sheet in terms of owner's distributions. And so when you look at the bottom line P and L, the reason there's a difference here is because if you have any sort of debt, it's not going to show up on the P and L in terms of anything besides interest expense. So you could have a business that's leveraged and look very profitable on the P and L. But there's no money in the bank account because the actual principal pay down is not being accounted for in the P and L. You just see interest expense, especially with zero percent interest. People like ah, zero percent, great, your P and L is going to look really good. Your balance sheet is going to look horrible and you're not going have any bank, any money in the bank. And so I would be very careful with determining do you give profit sharing based upon the P and L or do you give distributions a percentage of distributions in cash in the bank. I really like the second one, especially if you're going to be remote as an app and T owner. So the second, the first one's pretty simple and that is like a bottom line profits end of the quarter, you're getting a percentage of that. I would only give any sort of profit sharing if the business is more stable, it's not growing quickly. There's going to be predictable profits 4/4 out of a year. If it's only profitable for two quarters because you're growing so much in spring rush, et cetera, profit sharing starts to become like nebulous and they, they don't trust you because there's not, there's nothing to share. So, and then I would, I would make the distinction between bottom line profit on p&l vs distributable cash on a balance sheet based upon whether or not you have debt. And so if you have debt, it's, it's a conversation to have with them. Like hey, look, our bottom line PNL is going to look really good, but really I'm having to make all these, these payments for all the equipment, etc. To get started. And so the third way is my, my most ideal and that is the, the distributable cash. And that's essentially at the end of the quarter, anything above a certain threshold of cash, we are distributing and you're getting a percentage of it. And the distributions go to the owner, as would owner distributions typically. But a percentage of those owner distributions go back to the, the manager. And so I like it for the fact that it, it incentivizes the ultimate thing that you want down the road, which is you're able to take money out of the business.

Great. Can, can we get specific with our situation and actually can you help me come up with an actual number for this person? You know, because we're, we're like half a million right now. You know, we got rid of a lot of mowing last year, kind of stayed about the same, added some pest control and stuff. But debt wise we have, you know, we do have debt. I got a 200000 SBA loan that's at 3, I think 3.75% and you know, a thousand, basically a thousand dollars a month. And then I have a Tesla that I just bought for, you know, my use. So that's about 43 000. So that's kind of our debt situation. We don't have any other debt but you know, that's significant amount. But how would you, you know, structure this? You know, what, what would you be thinking base pay for this person? You know, they're going to be spending probably 80% of their time in the field. You know, he's our full, he's our full time technician. And then I would, was thinking the rest, you know, the, to doing inspections, you know, making sure we have supplies at the shop. But I'd like to, you know, we, we waste a lot. I'd like to, you know, we break a lot. You know, the guys were breaking all kinds of stuff last year. I'd like to find some kind of way to incentivize him to keep costs down and have guys take care of stuff. But how would you specifically pay this person and structure it?

Yeah, like, I think simplicity around the incentives is important. When you start getting the weeds of like, okay, we're going to start tracking damage cases. Well, ultimately that just ties like really what you're saying is I didn't make enough profit. Like, I want to see more money coming to me. So just incentivize the actual end result because all of that other stuff trickles down into the final result of more distributable cash for you as the owner. And so like at 500,000, this is a working GM. That's what we call them. This is where I wanted them to spend as much time in the field as possible. So I would be tracking this every single week. And that is how many budget hours worth of work do they complete every single week? And I want that to start at 30 budget hours a week. And because 30 budget hours, assuming a 75% efficiency is going to be 40 clock hours full time. So for my working GMs, that's around that $500,000 marker, up to 800,000. I'm expecting you to complete 30 budget hours of work in the field. Unless you have in person estimates, I'm going to take an hour away for each one of those or interviews with team members, going to take an hour away for that. And so let's just say for us we have in person estimates. Let's say there's for you, it's just like a few like site visits, something like that. Let's say there's three. And then let's say that they have to interview two people that week. Well, that's gonna be 30 minus five. I expect 25 budget hours worth of work to be completed in that week. Because what you need to do is operationalize your expectations of them doing work in the field. Because if you just say, hey, I want you to work in the field and you also need to do all these other tasks, what will happen is they will do all these other tasks and be very inefficient and the actual work getting done will not happen.

Okay.

And so you want to operationally, on a weekly basis, you're going to have that meet in your Meeting with them and you're tracking. Okay, we're going to track the efficiency of the business. But also these are the expectations. 30 budget hours completed work a week. And then we subtract out for any in person visits with customers or interviews with employees. And you could also do something around training, if they're training them. And then, then we have an established benchmark of how much work we expect to get done. And then it's pretty easy to be able to pay off their salary with amount of work they get completed actually doing work in the field.

Okay.

You know, we're pretty good at calculating budgeted hours for mowing. You know, it's a little bit more simple. It's much found it much more complicated with fertilization and weed control to calculate and like pest control to calculate budget hours of you. Do you have much of that with your businesses or do you have a better formula to kind of, you know.

Ultimately figuring out budget hours for mowing is simply I'm going to take how much revenue I'm making, divide that by my labor rate that I'm targeting and, and you know, come up with budget hours. The same thing is true with, with weed control, et cetera and pest control. It's just a function of there is going to be inherent product cost baked into that price and it's going to be a lower percentage that I'm going to give you giving the employee because there's product costs, higher customer acquisition cost, lower lifetime value typically compared to something where I'm going every single week. And it's 50, $60 per. And so, um, you might give 30% of labor revenue on a, on a mowing route to the customer or to an employee on PvP, you might only give 10 to 15% on a recurring, you know, pest control or spraying application. And so I would just, yes, it's going to be like there's more variability but you can come up with the number and like okay, if someone is going to complete six budget hours of mowing an eight hour clock day, how many. If I just do. You can just look back in time like last three months and I look at every single person and see how long they were taking the route and, and calculate approximately the budget hours and come up with a rate per hour which is going to be much higher than you're mowing. That's what I would be doing is like that hourly rate is probably looking. If your mowing is $100 an hour, your, your application could be 150, could be $200 per hour that you're going to backtrack the dollar amount to a budgeted hour because ultimately you're still selling time.

Sure, sure.

Okay, perfect.

Now we got. Yeah, and I think we have that as far as our rate for that and stuff. Okay.

To answer your question more directly, Michael, I think, I think the base pay you got to be at least at 60 grand a year. Even in our area, it's actually mandated now it's government. As of January 1, you can't pay less than 58,000 on salary for this kind of position. So I think it's 58, 600 or something. So usually 60 is what you're going to need to get someone even interested if they had any experience because they want like some sort of foundational guarantee and then incentives on that. The business you want to usually get that to where if the business final cylinders, they grow this thing, it's way more profitable. That should be able to get to 100k, assuming they hit all these benchmarks. So that's why it's like, okay, I'm going to bake in some revenue incentives based upon growth. I'm going to then more long term bake in distributable cash incentives. And for me, Michael, if I'm remote and I'm never having to work in the business, I'm willing to give up 50% of distributable cash. But that means me never being there. And so I work my way down from 50 down to 5% based on my involvement. So if you're showing up every day, that might be like 15%. Right? If you're showing up every week, maybe it's 20%. But if you literally are involved in hiring, buying decisions, they handle everything, that number can flex up. And so this allows you to actually bake into their compensation model. Hey, as you take more off my plate, I don't have to be there as often. And you're hitting these KPIs, your percentage additional cash goes to the point where you are literally making every dollar I make out of the business, you're getting 50 cents of it.

Okay. Okay, good. And that, that calculating that distributable cash is just looking at the balance sheet every quarter.

And so what we do, and you can adjust this like you just need to set what the threshold is for distributed cash. What I mean by that is over what dollar amount do we actually consider cash in the bank distributable? For for example, what we do is we say, hey, over the past quarter, the past three months, what's the average monthly revenue. Let's say it's 40,000, 50,000 and 60,000 revenue per month. Well, the average would be 50,000. At the end of that quarter. I am going to take anything over $50,000 in the bank and consider that distributable cash. Let's say there's $70,000 in the bank. Well, now there's $20,000 of distributable cash. Let's say I'm giving 1/3 of that to the general manager, one third of distributable cash. That person's going to make $6,333 or whatever it is, and that's going to be their disabled cash, their bonus, and then you're going to make the 14.

Okay. Okay, now that makes sense. That's a, it's a lot better. What better way to do it with actual cash? I like that. Okay, so we said, I mean, if.

You do, you know, monthly billing because you are getting paid late for services you're doing. So doesn't that get complicated?

A bit, yeah. Great, great, great one, Abraham. So what we do is we do the fifth of the month. So for example, instead of doing January 1st through April 1st, we do January 5th through April 5th. So that way if you do monthly billing and you bill on the last day of the month or the first day of the month, you'll get all that money into the cycle.

Okay.

No, I think that's good. And I mean this would be based on actual, I mean we just, like we do Ibrahima, we did the actual revenue generated, not, you know, not accounts receivable or not, not based on the monthly amount. But what we actually work, we actually did. But that would be, you know, that would set it off a little bit because you know, we've, we put Everybody on a 12 month contract for every service.

Yeah, like what is, I kind of recommend, Michael, if you're trying to, hey, I want to grow, I want to incentivize this person long term, is you simply say, hey, I'm going to give you two incentives. One of them is going to be valid for 36 months and the other one is the main objective as I came for the next 36 months. If you hit these revenue markers per, you get an immediate bonus or you get a commission off the top, some sort of revenue incentive because you want them to grow, you need them to grow the business. But then also from day one, any distributable cash of this percentage you will be able to get when I take a dollar out you get 15 cents, whatever it might be. But that start to go up as you take things off of my plate. Because the eventual goal is that you take distributions and do nothing in the business. And so we don't want the incentives around revenue to eclipse the incentives around distributions though. So be very careful because if you just incentivize revenue so much, they'll just always want to grow the business and they'll never actually be any distributable cash.

No, that's good. And I mean, I'm not, I'm not involved in all in the business now.

So this, you know, I'm involved very little.

One thing to keep in mind too, Michael, when you do distributable cash, you will need to basically open up the books to them very openly because they'll need to know that there's debt payments coming out because otherwise they're gonna look at their P and L like I'm, I'm way more profitable. But in reality, you know, you're probably going to have 2000, $24,000 a month or $24,000 a year difference simply because there's debt payments coming out. And that's going to be the difference between your profit on your P&L versus distributable cash. So you'll have to open up the books of them if you do open based upon distributable cash.

Okay, so talk me about this 58,000. It was what, 38 or 39,000? This just got raised to 58,000. If you got a full time manager.

Yep, if they're on salary. Yep, if they're on salary.

So the guy we have now, you know, is. He makes probably what, 40, 45? Ibrahim, I would guess he's our technician, but we only, you know, it's. So he makes 40 or 45 right now.

You could keep on hourly then you could keep him an hourly. That's fine. It's just if you switch him to salary, because what they're wanting, they don't want people to do is have a $30,000 salary and working 50 hours a week.

Right.

Because people are taking advantage of it. So they're raising this to basically keep people from going into salary. So you could keep this person hourly and still do all these same incentives. It's not a bad move.

Would you, I mean, would you just keep in like a P4P hourly employee for like 30 or saying he's got to do a minimum of 30 hours in that and then say the other 10 hours is some kind of hourly Base pay.

Yeah.

And then do the, and then do the cash incentive on top of that.

Yep. I, I think it'd be good. I would probably, honestly, if I was you, Michael, I would probably just say, hey, you get an hourly rate. Because this is the challenging part with an operations manager, even when they're out doing work in the field, they're gonna have to be contacting other people. They're gonna have to contact the office. They're in touch with Abraham. So, like, I would, I would just make it, hey, you make X amount per hour flat, plus you have to, you have to get the 30 budget hours a week done. So you kind of bake in P4P into the fact that, you know, these, this work has to get completed.

Okay. No, that's better. Yeah. Because, I mean, yeah, I mean, that would just be, I mean, well, you know, right now, like, we're only doing a half a million, but we do it with two FTEs, like less than two employees. Like, he's by himself right now. We did that with two people last year. So. Because we've spread the workout and we've got good Christmas light business and, you know, we're moving towards the higher margin stuff. So it's not like he's managing three or four guys. Um, but I would like to get to that. But yeah, yeah, definitely to jump from, you know, 40, 45,000 to 80 or a hundred is a huge jump.

So, yeah, I'd keep on hourly. I would make sure he's pro. I'd probably be like 25 an hour. That's going to get around 50. So there's no downside for him. And by getting that $25 an hour, we expect these gets to 30 budget hours of work done a week, minusing out any in person visits or training and interviews. And then you just know you kind of baked P4P into that by expecting the 30 budget hours. And if they're not hitting that benchmark, they potentially get a lower rate. It's like, hey, if you're not getting above 30 budget hours for three weeks straight, you go down just to make sure that there's an incentive for them to actually hit that, that benchmark. And then it keeps it simple. It's like, hey, you're getting paid per hour. You're expected to do this amount of work and all these other tasks. And when you're doing these other tasks, you're getting paid this $25 an hour.

Okay. And what would, what percentage would you probably do top line for that to incentivize some growth.

I would be looking at your, your capacity limits for the business. So for example, what's like your best month last year in revenue? Probably.

No, go ahead. Yeah, November and October, the Christmas light revenue we got plus the prepays. I don't know if that counts as revenue because it distribute throughout the whole year. But yeah, I would say October and November.

And is that around 50, 60,000 Abraham?

Yeah, we got around 80k in November and around 60k I think in, in October.

So what you could do Michael, you say hey, okay, we know based upon our fixed expenses and keeping this one person busy, we probably need to make about $25,000 a month to break even anything other than just do layers above that. Okay. If you hit 40, if you hit 50, if you hit 60, if you hit 70, if you 80, there's just dollars amount at the end of the quarter or at end of the month. We're just going to give you as as a bonus. So they're just incentivized to grow that like keep going, get it to 100.

Instead of like doing like a 2% revenue or something like that or 2.

Either one. Either one works. Right. It's just a matter of like do you want them to. Actually this is the reason I like the the tiers is because if they're at 58000 I want them to make sure they go get the extra job done on the 31st because I want them to like be incentivized to do get to that next 60. So I also don't want to give them 2% of let's just say I'm only doing 25,000 that month. I don't want to give them a percentage when I'm not making any money. So I like to have like a zero point. A zero point and it goes above and I would make the zero point your break even.

Ah, that's a good. I said that. So Z. Yep. So the break even the percent even if I did a percentage above breaking. But you said the tears. Yeah, that. Yeah, doing tears. I like that.

It's like when I'm, when I'm trying to grow like I generally know that if I'm having a general manager and they got like a storage unit and a maybe a ploy and a truck or two. If I don't make less, if I don't make more than 20,000amonth in revenue, I'm going to lose money. So I just dart their revenue incentives based on 20,000amonth in revenue and up.

Okay. Okay, now that's perfect. Okay, so break on even on that and then do the. Obviously do the cash. The cash on hand or set on the triple cash distributable cash bonus as well on quarterly.

And you guys be honest. I'm like, hey, at the beginning, there's not going to distributor cash. We're growing the business. We're going to have to buy another truck. We're going to be doing a lot of advertising. But the goal is to move towards us over time. And you can make it really juicy for them to know. Like, the eventual goal is that you take money out of the business. And the reason I like this, Michael, is you want them excited for you to take money out of the business. Like, that is your whole goal. You don't want to be there, so you want things taking off of your plate. So I incentivize the percentage of distributable cash based on my involvement. And then I am going to. I want them to be like, hey, please take a couple thousand dollars out of the bank. You want that?

Yeah. Yeah. Okay. Oh, that's perfect. That'll incentivize them to keep costs down and not break stuff and buy a bunch of stuff we don't need. Okay, Exactly. Okay, perfect. Let me get back to my question.

Or get debt on equipment and then it doesn't show on the P L. Because that's what I see all the time with GMs that are based upon just the bottom line profit on a P L is they can go get 0% interest and never actually see any impact to their. Their profit sharing and getting all this equipment.

So sure. Okay, perfect. So second, second person, Second thing we're working on is an office manager, A virtual office manager. What? We have a good person in mind too. She's in Columbia. Columbia, South America. But what do you look for in that type of person? Because Abraham and I, we're working on other stuff. I have, you know, a couple other businesses, but neither one of us are a good leader or good at holding people accountable or getting stuff done. I'd say we're probably operating at 50% efficiency with everything we do, because there's just no. No leadership in the field. There's no, you know, we don't, you know, that kind of everybody does their own thing. What, what. You know, that's kind of the challenge we have. We need somebody here that's going to be a leader. And we need somebody, I think, with the office manager role. What. What are you looking for in that person? Like when.

Well, I Think the thing to be careful of is, you know, obviously them being overseas, it's going to be cheaper. It's also going to take more your time to manage and train them. Right. And there's going to be turnover in that role as well. And so like I think, you know, at 500,000 you definitely want to be growing to $800,000 marker in order to be able to just afford a operations manager, afford this office person. And then your time, even though it won't show up on the P and L is at a cost to the business to train this person, manage them, et cetera, yours and Ibrahim. So I would be, I would be hesitant to think that they're going to have any sort of leadership skills. I think that's your operations manager, like in terms of in, in person with the team, as you grow the business, they're going to be the leader. That's, that's the person you're compensating heavily for. You have a lot more incentives around the overall business. I think when it look, when you look at office manager or even just office person, I'm going to be, I'm going to be looking at more the inputs. So like whether it be close ratio would be the amount of the upsell, whether it be like what are the things that they actually can do to change the business because they're going to be less able to change the efficiency of the crew. They're going to be less able to be able to do a lot of aspects that actually are going to show up in the bottom line. But what they can do is increase close ratio. They can upsell customers from. So they're not a thousand dollars a year, they're $2,000. So like I would be incentivizing all the things that they can actually do to meaningfully change the business if possible.

Okay, so how would I guess specifically so you knowing how we kind of operate and that they, you know, they kind of handle, you know, all the admin side and the sales side.

You know, we're obviously, you know, it's going to obviously change by the, the country. But you know what, what, you know, if we're paying say maybe a thousand fifteen hundred dollar base salary, what would you, how else would you incentivize those them for those things? Would it be revenue? Would it be like you said, close ratio, stuff like that. But how, how else would you incentivize that person to do the right activities?

Yeah, like the challenging part is that 500,000, even if you pay someone, you know, $18,000 a year. You know, is it just the base 18,000. Right. It's still a enough revenue and well, I'm actually most concerned about your time managing them. I think it becomes all of a sudden goes from three and a half to four percent of revenue going to this person to very quickly 10% because your time in managing and training them and then your operations manager dealing with them every single day. So like they will either, you know, grease the like again, admin is greasing the gears and so what again in those categories of sales, operations, admin, it's greasing the gears, running payroll, checking the email, doing voicemail, answering the phone, all these other things. And so how do we actually measure that is usually going to come a function of actually what is their percentage of the revenue in the business that they are taking. And so I would, I would make it much more like if you have one person doing all these things, which I think it's 500,000, you don't even need a full time person doing this. But like let's assume the business grows 800,000 that you're putting more on their plate. I think that it'd be much more around like incentivizing their efficiency is what you could literally give them a flat rev, a percentage of revenue. Like if you say hey, we're gonna be 3% of all the revenue. So at 3% of you know, 500,000, that's 1500, 15, $15,000 a year. Right. You could give them a flat percentage. And then as the revenue grows and then it's like hey, you must complete all of these tasks and if it takes you four hours in a day, that's fine, but you've got to do all of these things in order to earn this 3% or 4% or whatever you're giving them. But the inherent cost, that will not be tracked. And this is the part I'm very cautious about when it comes to remote is your time managing them. It's never calculated. It doesn't show up in the P and L. I'm only spending like 4 or 5% of revenue on my virtual staff. But then they're spending three hours a day managing them and your time is far more valuable. And so now all of a sudden you have an owner not producing revenue, you have a virtual person and you have an operations manager. And that on a $500,000 business will never be profitable. That's part to be careful of. I would say though, if they're managing all office and all admin and they have full control of a lot of like the admin functions of the business. And you're also expecting them to create SOPs so that if they ever bailed, it's all documented for someone else to pick up. If that's their role, I would probably give them a percentage of revenue and then as a base that can't go below. So, for example, we say, hey, you can't make less than $1,000 a month, but you're going to make 3% of all revenue. And you know that that's going to look around 50. You could just say like last year we made $500,000. That'd be $15,000. But in exchange for that, we expect all of these things to be done every single day, all of these things done every week, and all of these things done every month. If these are not done, you will not get that incentive above your base pay.

Okay. And just to give you some more info so that, you know, they do handle platinum, but they also handle, we offer, you know, the virtual support to a handful of other lawn care businesses. That's kind of another little business that we're growing. So there's a team of what, five or six? I mean, a lot of them are part time. We got like a graphic designer, we've got a customer service person. We've got, you know, some different little roles there. But I don't know if that, you know, but part of their role would be just managing those people and holding them accountable. Got it. Trying to figure out how we would, you know, how we would structure that since they're all virtual and.

Yeah, so it sounds like they're going to be managing things outside of just this one, like your business. They're going to be managing the people. So then it's a function of like, I would just be looking at this department.

Right.

I wouldn't even look at the business like the $500,000 business because like, you're actually managing other businesses. You basically, you said this command center over the past five or 10 years. And so I would be looking at that as a department. So all the revenue coming to that command center, all the, all the time that you would bill to your business, you'd be billing them like you would a regular business. The manager should be getting a piece of that. Nothing to do with your business because again, they can't control operations. They can't control the efficiency. They don't even really control the lead flow because they're not spending. They don't make decisions on marketing. And so I would Treat your command center as.

The incentives around that. So based on revenue. Same thing. Based on revenue. Based on profitability. I'd be giving them incentives. If you're expecting to manage the agents that are serving other businesses as well as your own.

Okay, okay.

I treat your business just like every. So my locations, for example, they get treated the exact same as all the other locations and they pay money to Command center same exact way. And then the, the leadership there gets incentivized based on that.

Okay. And we set it up like that. So. And you know, still, Quiet Line is by far the main, you know, main contributor to that. But, you know, so they probably, you know, primarily be running, you know, the day. Like you said, we're just basically, you know, selling our services to Quiet Lawn and the other lawn care, you know, other companies that we're working for.

Okay, so that makes sense. How do you. I like, you know, obviously basing it on revenue or basic, you know, we do like sales commissions if they close the sale or something like that. But how do you, what, what reverse incentives do you have to keep them from just selling and you know, not selling, overselling the services, you know, kind of your true green kind of stuff where they're just selling the moon and just to get a commission and then we're not able to live up to those expectations with a customer. How do you kind of keep. Keep them from just chasing revenue?

Yeah, like the bottom line is, especially if you're serving other businesses, if you don't do enough job, they'll leave. And so if you ultimately lose customers, I. E. Other businesses that you are serving this, this virtual service.

They will, they should be making less money. And because so if, if they're doing that and they're chasing the commission.

No question the businesses that are paying you, is that a flat monthly fee or is that based upon a sale? Are they giving you commission?

Yep, both as a plus commission, you know, got it.

So like.

Then your incentives are relatively aligned. If they're giving you a commission based upon a sale, it simply comes down to their satisfaction. So I would probably incentivizing your manager based on the satisfaction of the people you're serving, including your operations manager at, at Neon or Quiet Lawn. Like I would, I would be like, hey, you're going to get a, A, a survey and you're also going to get metrics and those metrics of satisfaction to the people we serve from the quote unquote, Command center is also going to play into your incentives. So I would make it say it's revenue, it's profitability. But then both of those are levered on something like a CSAT score, customer satisfaction. And so you could, you could do that because then if that number goes down, it's likely they're being less satisfied because, you know, either A, they're not closing enough or B, they, they go so hard for the sale, they're doing bad customer service. So you want your manager to have a more holistic incentive package if you just do it based upon sales, which is more like your frontline agents, which is fine, I'm okay with that. But if you lose out on the quality aspect, which the manager needs to be holding, training and customer service and doing reps and doing coaching calls with each rep, et cetera, they need to be incentivized on customer satisfaction. And so for us, it's like if franchisees are leaving and they're not using our services command center, that's like a demerit. Like we, we did something wrong. And so we, we are surveying like, how can we improve? How can we make this better? What is, what's satisfactory? What's. Which departments are you happy with? Which services inside a command center are you happy with? Because that is the true indicator from a manager's perspective of the success of the, of the department.

Okay, Ibrahim, do you have specifics as far as more.

No, I don't. I just wanted to. One question I wanted to ask is like you said the operations operational manager and then you have the office manager.

How does the communication kind of are. Who's above who in. In your case? Who's, who's above in the hierarchy in your case?

It just depends how you want to set it up. Like, I think that if you look at sales, operations and admin, right now, really your virtual team is doing operation or sales and admin, you probably are going, it's probably going to look like you have an office manager, you have an operations manager, and then you're above them and they both report to you. Now the thing is they're going to have to communicate on a daily basis quite consistently. So either A, you have one of them slightly above the other, probably your operations manager, they have boots on the ground. And you're also incentivizing the base upon distributable cash. They'd probably be the ones that I would, I would look to as the person to make calls for the business. The reason is also because your office manager, you're incentivizing the base upon something totally different, which is the, like the command center like all these other entities using the services, they should be focused on making a really good command center as an office person, whereas the operations manager should be making all the business decisions for Quiet Lawn. That would be my recommendation. Like, that way, your incentives are. They're aligned, like, hey, over here, command center. I want to serve Quiet Lawn as best as I possibly can because my incentives are aligned with them being satisfied. Over here. I'm making business. Business decisions from an operations manager perspective on distributable cash. Right. If you start incentivizing or saying, like, even at the office manager has any in, like, in the sway of what the operations manager does now, the operations manage, like, well, why should they care about what my. My business is doing? They have no incentive based upon what I'm incentivizing, which is distributable cash. And so I would keep them separate. I would let the operations manager be kind of like the final say on things.

Okay. Okay. Perfect. All right. So.

That was kind of a challenge, Mike, you know, getting. You know, it's kind of a challenge, you know, especially not having leadership. For me in the field, you know, it's getting. There's a lot of communication that doesn't happen between, you know, the. The guys didn't get a lot of information because it's hard to get that and have someone that gets that information from, you know, Ibrahim and the guys over there to the. To the team. What kind of stuff do you have in place to keep that communication between, you know, keep everybody on the same page with your virtual remote command center and then boots on the ground. I know you do meetings every morning, but is. Is there other systems you have in place to keep everybody on the same page as far as what we're doing? What's.

Yeah. So, like, I think from your perspective or. Abraham, whoever is kind of whoever these people are reporting to, your operations manager and your office manager, who are they reporting to you, Abraham? What's that structure? Look above them.

Yeah, everyone reports to me. Right now you're looking to set up the operations manager role this year to kind of separate that?

Yeah.

Yeah. So I would probably be having a weekly operations manager Abraham conversation. This is going to be a scorecard. It's going to look based upon like, hey, operations is budget hours. How many estimates have been sent out, what your close ratio is, revenues, profits, like, just on a weekly cadence, especially around the budget hours, because we want them to be in the field as much as possible.

To be like the kind of month or. Sorry, weekly cadence. Then the Monthly cadence is more financial. Right? So that's when we're going to actually look at profits and the actual dollars and cents, how much cash is in the bank. That's going to be much more like marketing strategy, hiring, etc. The weekly ones are very operational. I just want to stay focused on are they being efficient. These are 10 to 15 minute meetings. I'm having a one page scorecard that they have to fill out prior to that meeting. The scheduled time every single week, usually Monday. And then the, the monthly one is like, okay, let's look at the piano from last month. Let's look at. Is there what we're looking like in terms of distributable cash? What are we going to spend on marketing? What are we at in terms of capacity? Could we get 10 more customers without having to buy another truck? Could we, is everyone only working 30 hours a week? And we could, we could put some more on their plate. That's more of a monthly basis. And then the quarterly one is very easy because like everyone wants to know how much money I make last last quarter. And we're looking at distributable cash, we're looking at the revenue increases, etc. And so I just like to have that, that weekly, monthly and then quarterly kind of cadence for those reports. And I would do the exact same thing with your office, right? It's like, okay, how many, how many, what percent? What was our close ratio on the phone? What was our CSAT rating from our, our customers, including quiet lawn? What was our satisfaction scores? That would just be like a regular cadence. And then also looking at what percentage of time the reps are actually on the phone doing billable time for the same way we look about efficiency score in the field, I want to know the efficiency score in the office. It's going to be much lower than guys out in the field because they're not going to be on properties for 20, 30 minutes at a time. It's usually going to be between 30 and 60% efficiency score for someone in the office because they're switching tasks every minute or two. So there's much less time that is actually spent that's billable.

Mike, if you want to continue, I'm getting a call about our alarm getting.

Yeah, I don't know if Tony. Sorry, Mike. We're getting our alarm at the shop. Don't know if somebody's.

You could take your time, you're good.

A security alignment shop. Okay. So other staff, you know, like we have different roles like in the office, you Know like we have graphic designers or a graphic designer, we have, you know, somebody that does Facebook marketing ads. Like how do you incentivize the. Maybe a customer support. I mean I guess they would be doing some sales too, so they would get commissions. But how do you incentivize the people that aren't directly in sales? Maybe they're doing graphic design for social media post or they're doing, you know, place in our Facebook ads. How, how would you kind of incentivize those people or do you have those roles?

Yeah, first off, I would say like for the command center side of things, what's the total revenue per year? Are we talking like 200,000? Are we talking a million? Like what's the size and scope of this all revenue?

We just.

Found 65k k. 65k for the whole year. So I would get laser like focused on one service because by doing everything for someone you're just not going to be able to create metrics around paying and compensating people because like it's not a full time job to do posting. They're also having to answer the phone, they're also having to run payroll. They're doing all these things. It's impossible to incentivize them. And that's the reason why most office and admin people are just paid hourly flat. And you can't really incentivize because like well if I give people a percentage or some sort of commission around close ratio, well then really it's whoever takes the phone call is going to get more money versus like I also need them to also do these other tasks. Whereas if I have a commission based upon close ratio or upsells for example, I can then say okay, you're on the phone all day long. Your incentive is based upon these things versus right now. It's very difficult to create an incentive around like posting or like number of impressions. Like these are just very nebulous things because if they just put a weird wacky picture, it will get more impressions, it will get more shares, it will get more likes, but is that really good for the brand in the long term? And so I would be really inclined at that size of a command center to be like we're going to do one thing and we're going to do it well because by doing that you'll increase your CSAT scores for that service. And so what I would personally do if I was you, because what we just recently did with our owners is we literally surveyed them like hey, if we look at only offer for you, probably two things or three things. Which is the most valuable of the services we offer to you and cut everything else because if you got really good at those things, the customer satisfaction would go way up. Because you spend all your time on training your crew or your team around that. You'd be able to create incentives for your team based upon metrics that they do all day long versus very sporadically going around and trying to figure stuff out.

Makes sense. Yep.

If you look at this and by the way, you would. You possibly might not even need a survey them you could literally look at other 65,000. Was 50,000 of it this one thing? If so we should probably just, just do that and cut out this like social media management and all these other things that we're doing. Because like right now you're considering admin is like one big bucket. But there's probably email management, payroll, answering the ph own. There's a party at 50 things inside of that. And so breaking all of that down because as you scale it's extremely difficult to operationalize. And that's the struggle we've had. We have like 20 some odd departments. It's like, okay, we send a survey out and we then we looked at what are people actually using. They literally matched perfectly. People want.