Mike Andes Gets Challenged on P4P! Matt and Dave (Atkinson Landscaping)

Hey, everyone, it's Mike Andes, and you're listening to landscapebusinesscourse.com today, another episode of Roundup. And I'm very excited to have our two guests on today's show. It's the first time on Roundup that we've had two partners on the same episode, and really looking forward to asking them some questions about their partnership struggles of that and how they've grown their business. Just not too far from me, Actually, they're probably about, I don't know, probably 10, less than 10 miles away from where I'm at, but they're in a different country, and. And they're in Canada. And right now, that Canadian border has been closed for over a year. And so I have not seen them very recently, but they've been to the past few conferences, and I've got to know them very, very well. They're one of the few people that I have hit golf balls into a farm with when I went and visited their shop. So they're quite the bun. Really looking forward to having them on the show and learning from them. So without any further delay, the back of their shirts tell it all that they're the man, the myth, the legend, the landscaper. Let's open it up to Dave and Matt Atkinson. How you guys doing?

Good, good. How are you?

So, so just so we clarify, let's make sure we know who is who, because, you know, Atkinson is named after Matt, but Dave obviously was not good enough to make his name known on the company. So explain who you guys are, and let's kind of share how you guys got to know each other and then start the business.

Yeah, sure. I'll. I'll get it rolling here. So I'm Dave. I'm the non Atkinson half of Atkinson.

What am I? How do we get started? Matt and I knew each other growing up. We were next door neighbors, actually, and we're both kind of working in landscaping. And then just kind of one day started, kind of decided to start cutting lawns together, and it just kind of evolved, and now we have a fairly substantial business. So that's kind of how it all happened.

I think we have to kick things off with a good question from Kevin Ferburn. What he wants to know is, when these cats gonna grow real, real beard?

I don't. I don't know. Matt's doing pretty good.

What about your beard?

Yeah.

Hey, hey, hey, hey, hey. That would be an ugly site anyways. Okay, so, yeah, so tell me. I know, I know when I met you, you guys had done about 400,000 revenue, if I'm not mistaken, the past few years. Now, you're going to be doing well over one and a half, if I'm not mistaken. But you kind of fill me on some of the numbers, what you guys are doing in terms of revenues, and then kind of how you have the business organized currently.

Okay, yeah. So my name is Matt, by the way.

Last year we did 1.3 million, and this year we're planning on doing 2 million. And like, to structure that. We have a office manager, an estimator, a production manager kind of in place in our leadership team, and then me and Dave leading the team. So that's kind of like how we're going to attack that with. We have about seven crew leads and about 14 to 16 people in the field every day.

So back when. When I met you guys, like, several years ago, it was kind of at the point where you had one year that was really good, and you're like, man, like, we could really make this, you know, go bigger with this. What was the point when you was like, you know what? We could actually make this a real business and scale this up and make it something kind of cool. Was there a point in time or just, like, you guys kind of got together and like, let's go for it?

Yeah, I think it was, like, the whole thing. I mean, lately it's been more strategic, but at least at the start was pretty unstrategic. We were just like, let's start mowing lawns and started doing sod installs. Whatever. Whatever kind of came up, we just do. And just kind of hired and, like, bought things as we grew. I mean, I'd say probably going to your conference was a big part of that the first year, and just seeing that there was, like, ability to scale, grow, and actually build a systematized business. Also, like, reading books, like, the E. Myth has been a really big book for us. So that's a book we read through with our, like, staff and leadership team and trying to build, like, system. Systematized, scalable business. So I don't know what the exact point was, but, yeah, probably around when we came to your conference, we were kind of in that transition period. I don't know. Is that about the right time frame?

Yeah. Yeah. I think when we came to your first landscape summit was kind of the time when we. We had just kind of, like, transitioned to, like, working full time, hiring employees, and figuring out that realm of business versus the actual working on the tools. And I think it gave a really good vision on what could be next and the kind of steps that we needed to get there. And it kind of spurred on the ideas of system development and people development and that kind of stuff.

So, yeah, very cool. And I know Dave wanted to make it very clear that today's show, he wanted to quiz me and try to stump me on a few things. So we'll let you guys get to that in just a second. But I did want to kind of get some value for those listening in terms of the partnership between the two of you. I know it's never easy, and I don't expect anyone to have a rosy kind of picture of things, but I remember meeting you guys and then telling you later on that, like, what you guys had was pretty special in terms of the partnership and that it's never easy working together. But how do you feel it worked? Like, what. Why did it allow you guys to actually build a business together with. When so many people can't even get along, you know, let alone build a $2 million business together?

Yeah, great question. No, like, I think, like, we go through ebbs and flows. I think Matt and I have had our, like, our hard, like, it's been, like, a struggle at times. For sure. I think it is hard having, like, two people steering the ship and making decisions and stuff. And especially when it comes to, like, money and stuff and deciding, like, where we think it should be spent or even just priorities in life. Like, I'm a few years older than Matt, so sometimes it's like, oh, I want to, you know, know, buy a house or whatever. But that impacts, like, how the business runs.

But I think we've, like, yeah, we've definitely had, like, ebbs and flows and ups and downs, but I think for the most part, we've been able to, like, persevere and push through. I mean, traditionally, I've ran more of, like, the installation end of the business and the construction, and Matt's run more of the maintenance. So, like, at least for a time there, as we were growing, there was like, almost the level of the businesses being independent, even though they're the same company, but just like, oh, I had my staff and my systems and stuff. And then we've more so come together in the last year or two and kind of morph the two ends together and had, you know, production manager and office manager overseeing different. Different elements of both. But there is still some separation there. But we've kind of, like, got to a point where, like, having two general managers or CEOs or whatever it is isn't really strategic or helpful. And so we are actually planning on launching a second business. And at that point, like, I'll kind of be the general manager of Atkinson and Matt will be the general manager of that business. So I don't know if Matt wants to talk more about that business, but that's kind of, I think, the company.

Sorry, just a second. Just before you get to that, I wanted to ask you though, like, for someone who's is gonna make the partnership work with two people, obviously you guys are continually gonna grow with the two brands. But when it comes to working together, like, what happens when it comes to like a disagreement? For example, have you made it like, okay, if it has to do with installation, Dave is the last call. And then Matt on the, on the maintenance side, like, how do you make that decision?

I would say, like, in the past, like, so like last year we were more separate. So the decisions we were. We more like made our own decisions. And more recently we've kind of like brought the business together. We created a management team. So the decision making process has been a little bit of like, we just kind of like talk it out and we talk it out until we kind of come to a conclusion and like, it. It's not like the perfect solution sometimes, but we, we like, we both value each other and we try and work through that. We're actually in the process of like, creating a decision making system so that like, you can actually evaluate every decision so that then when a decision is brought forward, there is like a process in which like, the idea is run through. So that's something that's like in the works right now. So that like, the decision making process becomes a little more simplified.

Yeah, we also just recently did our like, disc personality tests and I, I thought that was helpful. I think like anyone in relationships and I think even like our staff, like, knowing how to interact with them, I think it was really neat and just seeing like, I don't know, I kind of had a feeling that like, I was more analytical, slow to make decisions. Mal was more of a risk taker, quick to make decisions, but just to see it.

Kind of like in paper and work through like a third party that kind of walked us through like, hey, these are going to be Dave's tendencies and these are gonna be Matt's tendencies. And I think that was, yeah, definitely helpful. I think actually also now having like a leadership team is helpful because sometimes, like, I know I do this personally, like, I'll have an idea and I'll want to push it and it's hard for me to, like, look at the idea outside myself, because you have that, like, oh, I thought of this. I want it to be right. And then going to, you know, a trusted other person in the business and be like, hey, am I, Am I? Am I rubbed the wrong, you know, alley here? Is this a dumb idea and not just being stubborn because it's your idea? So I found that to be helpful to having, you know, our trusted leadership team.

I think sometimes the hardest part for people, maybe decisions aren't necessarily because they're able to say, hey, like, so and so is the last line of defense, or like, they make the last call, but when it comes to, like, profit. So Garrett in the comments section asked specifically about this. How do you split profits and costs? And he tried merging his business with a friend. It did not end well. When it comes to, like, personal costs, who's taking what out of the business? Do you determine salaries, or have you made it more a matter of distributions on a quarterly basis? How did that kind of change over time to. As the business actually started kicking out some real profits?

Yeah, so what's funny is when we started and we had the foresight that the business needed money, we just. Every job we did, we split three ways. The business kept a third, and Matt and I each took a third, and that's all we did. And pretty quick, we found out that was logistically challenging. So this might actually sound funny, but Matt and I actually keep track of our hours and pay ourselves based on our hours worked. And then we have, like, sort of an informal bonus system in the past, but hours of now, we also each take 2% of profit, and that's our, like, distribution for being owners of the company. And then I think as we grow and evolve, it'll be like, okay, like Dave or Matt or whoever, your general manager, here's the salary associated with that position. But then as owners, we're going to get a dividend from the company that might be 5% or whatever. So that's kind of how we've done it. And there's some definite drawbacks to being on hourly. But it does keep a transparency that if, like, I go, like, I went to Mexico a couple years ago and I'm not paid for that time, and then if Matt goes out of town, he's not paid. But it's funny, like, I think last year our salaries were within, like, $1,000 of each other. So our hours did work out to be very, very similar.

And when it comes to. Because. Because in the past, at Least you've kept the business under one entity, but then had the landscaping and the mowing side. When it comes to creating profit, obviously sometimes one side of the business makes the majority of the profit, depending on the business model. So was ever a source of confusion or discrepancy in terms like, oh, well, we made a bunch of money this past month. On the hardscaping side, you. You guys didn't make any money because the spring rush on the mowing side, was there that ever an issue in terms of kind of figuring out between the two of you who was, you know, the most profitable part of the ownership?

I think, like, one thing as you, like, start a business for, well, your first time, and you're scaling it like, there isn't any money to fight over so that the. The. That wasn't a problem we really ran into. I think there was times when, like, um. Like I was in a different stage of life when we started the business where Dave was working a little bit more, and then there was like, hey, you're not working as much as me. And that was a little bit of a challenge. But as we scaled up the business, we both kind of came to the understanding that, like, we both have the same goals. We want to see our business do well, we want to grow our business, and, like, we want to, like, help people in the business as well. So we've, like, kind of, like, like I said, we came back, we can join, and we kind of, like, used our brains to, like, create something that is great. And, like, since then, it's been like, like the hourly rate, like, maybe we'll probably, one day we'll move to a salary, but, like, we. We do the hour hourly, late hourly rate, plus the profit share, and that's been, like, really good for us. And we both, like, think it's super fair, and it gives us the flexibility and freedom to, like, if, like, one of us wants to go away or like, anything like that, like, we. It's not like a burden to the other person.

So.

Cool. So what was the impetus or the reason why you kind of came to the fact that this year your guys got to split ways? Was it a matter of, like, hey, like, we're gonna do better if we split up? Or is it a matter of, like, we don't want to, you know, we want to stick, you know, stay together, but, like, we can't if we're always working with each other so closely. What was the reasoning behind splitting up and now making a second business?

I think it was more of, like, so it was kind of my idea to, like, split up, but it was more of, like, oh, I saw an opportunity in, like, sun industry that's, like, developing and, like, we both have this skill set where, like, we can both run and grow businesses, and we both know we can do that. And it feels like sometimes, like, you. Like, if there's two people driving the bus, like, number one, like, sometimes we bang our heads into each other and we want to steer a different way. But at the same time, like, if I'm growing a bit, like, me being around Atkinson probably won't grow Atkinson that much more. I'm still going to be involved. Like, I. Like, there's some things I love. Like, I love recruiting, and I love, like, people development and, like, just being a part of, like, the culture and, like, culture development. So those are things that I still want to be a part of, but the same time, like, I. I want to, like, lead, and we both want to lead, and this allows us to both, like, like, work on our strengths and, like, delegate the, like, our weaknesses kind of thing and grow two things at once.

So, yeah, what is the. What is the new business? A completely different industry or just different brand or. What are you guys doing?

Yeah, completely different industry. We're getting into, like, epoxy concrete coating.

Oh, yeah. Cool.

Yeah.

Still home service based.

Yeah, still home service based. So it'll, like, basically use all the same systems. Like, everything's gonna be slightly different, but we're even gonna share, like, our CSR and, like, split her wage for the first six months, probably. But it's gonna be a lot more strategic than our last business as well. Like, we're starting it with about, like, me plus three other people, and we're. We're gonna try and, like, hit it hard from the start then. The name of the business is coding Titan. So if anyone needs their floor coat, their floors coded, come see us.

You know, if they're living.

And you live in Canada.

Canada's a pretty big country, just as a head.

Okay, cool. So let's go ahead and jump into the part where Dave wants. Is eager to get his words in here. So.

I did want to. So first say, though, just one second before. Before you jump in, I want to commend the both of you for bringing. You're the only person who brought your entire team to last year's conference, or I guess, year before last, before COVID And, you know, I. Obviously, it's sometimes hard to get them engaged in the entire time, but even just the show that, you know, you guys brought them. I did the same thing several years ago when we had a conference that I went to. I brought my entire team and paid them on the clock while they were there. And it wasn't so much whether or not they learned anything. It was a matter of just, like, showing them that, hey, like, we want to invest in you guys and all the rest of it. And so big shout out to you guys for doing that. And I know, like, you know, whether or not they stayed with you and you've grown with those guys or are moved on, I think it's a. A testament to what you guys are trying to build. So thank you. All right, Dave, ready for the quiz?

I've been ready.

Okay, sounds good. I was say we have. We have implemented, like, full on open book, and that's something we took from the conference. Profit sharing.

That took you like a year, bro. I got so many messages from you and your accountant saying that it shouldn't be done. So for a second here, what was the. Why were you not going to do it? What kicked you over into doing it? Tell me a little bit about that because I might help someone.

This is a time and point where, like, we didn't know the book, so what would we present? You know, hey, here's a guess at what we maybe did. So first we have to get ourselves dialed in. I'm like, and my personality definitely test definitely revealed this, but just like, slower to make decisions. Want to be a little more cautious, want to be a little more analytical. My fear that still hasn't been a case so far is just like at some point they might be like, oh, you paid us 10% of profits. Well, why did you get to keep 90? But that's not really the reality, especially because we do it on accrual basis, not cash basis. So there's this reality where it's like in the quarter one, it looks like we made like 200,000 in profit or whatever. And so they got this like $20,000 bonus, which I think is amazing. That's a huge bonus. But then, like, are they thinking, you know, oh, Dave and Matt each took 90. Is that right? 90k or whatever? Yeah, but it's like, well, in reality, we had to budget to be able to pay out that bonus because we have all these things going on. So I still get nervous at some point someone might challenge us about that. But I'd say the feedback's been really encouraging. People are kind of learning accounting systems and they're asking good questions, and I think they just feel like Appreciated that they're getting the books shared with and like, they appreciate the books are being shared with them and that they get a cut of it. And like, I think that's really neat. So so far I'd definitely give it a thumbs up.

Cool. Cool. All right, go for it. I know you guys are looking at your notes and you've been scrounging all night trying to stump me on stuff, so let's jump in.

Well, I'll preface the conversation for saying we do track budget hours versus actual hours and we do have a hybrid system that is paid out. Essentially. We do it a team bonus though. So if the team as a whole hits budgeted hours, then we get a bonus. And like our thought was like one of our core values is play as a team. And so we thought that was a neat idea. It definitely like, in some ways does like. I don't want to say like punishes the. The guys that kill it, but like, occasionally someone might have like 20 hours under budget on a project. We still don't hit bonus. And then that sometimes sucks. But then it also helps the other way where has a bad week but still gets to win. So the ups and downs that. So I don't want to make it sound like we're 100% anti pay for performance. We do have a hybrid system.

I actually think I'm gonna pass the question to Matt because I think this is more Matt's question. I don't wanna. I'm not trying to dodge my anti P for P4P or something, but just like, like the idea of like long term employees and yeah, so like my.

One of my thoughts, like, because we. We heavily thought about doing like a. A pay for performance model and we landed on the hybrid model which is like base wage plus a bonus for simplicity in the start. And then our goal was to move to a pay for performance system. But the more and more like research and like kind of like how I felt like people interacted with the bonus, it went. I felt like for keeping people long term, I felt thought it would be a little bit more of a challenge with pay for performance because like with a older demographic where they need to like budget for their life and like know what they're gonna make, it's hard like when a wage could vary from like anywhere from $18 to like $30 an hour and then it's like harder for them to like, yeah, basically like live their life. Budget for their life. I think it's also really hard on a person. Like, and I think like our Goal is to hire a players and we want people to like really work hard, come to work to work hard and to like live and breed that. And I fully believe that our people work as, as hard as they possibly can. But like sometimes like there's like estimator mistakes and I know you build in the back end culture so that like they don't blame the system and get mad at like the estimator. But at the same time like there are those mistakes. And I think like, like we even trained an estimate or this year, like it would have hurt people's pay a lot. And like, I think like you it would. It like it'd be harder to scale because I think you'd have a little bit more turnover than paying people with a higher base rate and then having like a good bonus incentive that was like really fair to everyone, if that makes sense.

Yeah, like you know, two things. Well, let's just go over one. So the, the reason I thought the same thing, right? And I was like, hey look, if I can pay, I'd Rather pay people 20, $21 an hour as like our base pay and like pay really good. Just have a reputation to pay people. Well, the problem with that is you are basically raising the pay that you can afford for your lowest, your lowest performing people or new people. And then you're basically taking away the money from the person who's been there the longest. Like if I want to incentivize someone to stay a long time, I want them to see more and more and more money as they are with me. The problem is if I get, if I'm growing my lawn care business and I'm doing a split between everybody as I add new people, it's actually bringing down the average pay of the collective because I'm, I'm sharing between everybody. Right, but surely you guys do some sort of tiered system based upon like years with you or something like that.

Well, it's more based on like position. Right. So anywhere they're making like kind of a starting employee around 18, someone who's been there a while, like 25. And then they get a cut of profit sharing, then the production bonus as well, which can work out to about 2 bucks an hour for a foreman.

Do you guys do like 18 for the maintenance side and 25 for the hardscaping, like that sort of thing?

The hardscaping traditionally like will end up making more if you're hardscaping foreman. But like it, it more comes down to we have like laborers, let's call them, and Then like foreman. So the foreman role and the maintenance might make like 23 in the foreman role and the hardscape might make 25. And then probably both entry level employees would make around 18. And like we honestly, it's something we're kind of account for next year. I'd say we don't have a great like, hey, this is where you're starting out and after three months you're going to be a trained labor and you're going to make this. And I think that would be helpful to lay it out for people. Yeah, that would be my thought.

Yeah. Yeah, that's one thing we're working on is like the career planning aspect and the like corporate structure of like, oh, this position pays this and this position pays this. Like kind of like, oh, like untrained labor makes this and then you like learn the tools and you get like skilled laborer and then there's like lead hand on a crew kind of thing. We're building that into our like structure as we grow. But that's like one thing that we are working on.

Yeah. One challenge we had like was when you kind of get to the point where the business isn't growing by 50% a year and you come to the point where there's not new opportunities opening up in the business for someone to move into. Right. Hey, look, we got an office person, you know, we got an estimator. Like, we're good to go. Right. So where can those people move into? That becomes the challenge when if they are really high performer and they can't keep making more and more and more on P4P, that's when it becomes debilitating. But as long as you can keep all of your crew as a collective, they will become more profitable. It just really like we sound like when someone's training someone else, they're not gonna usually make, you know, hit but beat budget hours by big time. Right. So that was the kind of. The thing that we ran into is when we stopped growing super fast. We didn't. We could no longer use the incentive of oh, you can get, you can get to the next spot. Oh, you can go from labor to foreman, foreman to estimator. That loses its value once you get so many guys in the labor position and then you filled the positions above them. Right. And that, that's the big reason we have to go more to a more individualized way of doing the P2P and then using profit sharing as the counterbalance in terms of teamwork. But I see what you guys are doing. It's still not, it's still great. It's still really good.

Yeah, I think that's a good point. Like, we do try to open up positions, and that's something we're running into even now is like, as for next year, we've kind of filled all our leadership positions. We have a few guys that are like, well, what's next for me? And then we're almost developing positions for them. Like, we've talked about like a project manager role and doing a few bigger projects and stuff.

But also I would say that, like, do you find on P4P, like, it doesn't necessarily just come down to how much they're making. Sorry, half my face is there. It doesn't just necessarily come down to how much they're making. They want to do like, like learn a new skill, have more responsibility, like, just move up in the organization. So do you find like, like, do you think someone could work 10 years for you on P4P or do you think it's more of like, oh, I'm gonna go work for a year or two and have a good experience, make some money, but then like, that's not the long term goal of my life kind of idea?

Yeah. Like, you know, as long as you're growing, you can move them up in the organization, right. They can become a former, they can become an estimator for us. They can become a franchisee owner. Right. The challenge is when you stop growing. And so that's the reason why we, a few years ago, as you guys know, like when we started franchising, is because I knew I'd lose Lee and Liz because they were so exceptional and I, I had nowhere else to put them higher. Right. Like they, they, I don't, I don't care. If I made them the general manager of the one location, they would have got bored.

Right?

And so eventually you'll hit that. But you guys are aways from. Because you're in massive growth mode right now. Right. Even if you had to take stuff over to the seal coding side of things from your landscaping business, because you just have an exceptional person, you could do that. Right? The, the, the challenge becomes when it's like, okay, we're, we're kind of like, we're at 2, 3, 4, whatever million you want to stop at. We want to get a general manager. We want to, you know, pay them really good and then kind of lock up those leadership roles and then have a churn on the labor side only, right. That becomes a little more challenging. That's very difficult. That's. Or experience the local shop. Because we have people leaving every. Every few months, becoming owners or being drawn into the franchise. We got to replace those with new people. Right. And that's tough to always the new training, it's pretty difficult now do you find?

And I don't do a ton of our hiring, but I could also see somebody like not necessarily understanding the concept of P4P. Like they're like, oh, I make 25 at my current job. I can come in for you, work for you and make somewhere between 20 and 30 based on this performance thing that I don't really understand. And then not recruiting them for that reason because they're not guaranteed that 25. Have you experienced that all at all or is that not absolutely?

Yep. No, that's totally valid because most people don't understand it. They don't understand until they make their first performance dollar like above base pay. And sometimes, usually that takes about two months before them to see above base pay because they're getting trained, they're less efficient after that first one. It clicks usually. But yes, from a recruiting standpoint, P4P is definitely something that they. How we pitch it is like, look, here's your base pay. And after the first year, the average employee is making X amount per hour and we just give them the average, right? So 23 to $25 per hour is the average person will make after years of labor. And there's some people who make more, some people make less, but it's really based upon your performance. And the reason that's a good thing for you as an applicant is that you left your last job because you were tired of working with people who were slacking off, being on their cell phone, stopping at gas stations. And that annoyed you. And you're not going to have that here because everyone's busting their butt, right? So we, we, that's kind of how we. But there's definitely a drawback because people are looking at dollars per hour and there's absolutely validity to the fact that I could say we could just do $20 an hour for all our labors and I'd probably attract more applicants than If I do $18 per hour. But say, hey, you can make up to, you know, 24$25 per hour based upon performance. And I gotta explain the fact that they're getting a percentage of revenue, right? So from an, from a, an acquisition of talent standpoint, we've had to raise base pay in quite a few of our locations just because that $1amount number figure is what people look at, right?

Well, even for us, like, like we had a good, we had a good quarter one. So it won't necessarily be like the case all the way through, but like, the average employee made an extra $3 an hour on their pay and they made probably, they probably hit bonus more often than not. So let's say another dollar an hour in production bonus. So like somebody making 26 is actually making like 30. But I think if someone asked how much they make, they go, I make $26 an hour. But it's like, oh, my body's making 28. Well, no, actually you're making 30, but you know what I mean.

So it's the challenge with benefits in general. Right? Like, for example, like next year we're starting to do full benefit package for all of our employees. I know up in Canada you got free medical. Yes, yes, clap, clap. So. But you know, that is something that is tough because most entry level employees don't even look at that. They just look at dollars per hour. It's like, no, like, actually that's costing us a lot more per. Per hour. And then, you know, like you said, profit sharing. You know, they just got 650 bucks last month or whatever. Like, you know, if they actually calculate that number, they just gotta show up and they'll make that extra $2 dollars per hour, you know?

Yeah, totally. Yeah, no, yeah, that's, that's like kind of what one of my concerns was. The other thing that I think is tricky, we do a lot like commercial strata maintenance. I know you guys don't know have strata in the States, but townhouse complexes, whatever. So year contracts. And I think I've talked to you and sent you messages about it, but we found it really difficult to accurately break those down into like a weekly visit per hour for the purposes of pay for performance. So essentially what happened this year is they killed it in the quarter one and then got killed in quarter two because it wasn't really accurate. So then the problem is, is that, so that's problem one. Like, I don't know if you can master P4P on an annual contract or at least do it well. Same with like, bigger installs. I think it's a little bit easier, but still some challenges with that. And then what I found is like, is it feasible to scale a business, let's say, to $5 million doing residential lawn mowing? Because that's like, I don't know, 10 million lawns a year or something like that. Who knows? That doesn't, that doesn't really make sense, but you know what I mean, 100,000 lawns a year. So.

That'S like the other thing we've ran into is like, is pay for performance really good if you're doing these small, simple projects and running a million to 2 million dollar business? But if you want to run a 5 million dollar business, is it still feasible?

So yeah, like, you know, I think there's definitely, there's definitely companies that are doing tens of millions in revenue just on residential lawns. They usually go to commercial eventually because they have the scale to be super price competitive and that's where they can keep scaling. Right. But getting there is absolutely possible. P4P will work for that, no problem. The, the fact of the matter, you're 100, right? And there's a large HOAs and strata or commercial properties. Maintenance for P4P is much more difficult because there's so many areas to cut corners. Like, do we really need to pull the weeds every visit? Well, yes, on the contract, but we could probably not do it this week if we didn't. Didn't have to. Right. And so that's, that's the biggest challenge is large commercial for maintenance. When it comes to P4P for hardscaping, I think it's, it's actually the best. It's much easier than commercial commercial maintenance. Like I would say, I'd say Atkinson or Matt. Like you, you really have seen that on, on the strata side too. Like just people skipping, skimping out on, weeding and cutting corners.

Well, it's hard to pinpoint who it is too because we do it on like a four week rotation, right. So it could have been like a month ago.

I think like the like part of the thing is that we, to make it work for like the performance pay that we implemented this year, we kind of shorten hours everywhere. And I had a conversation with a lot.

And then in the spring this year, they were more worried about hitting hours than they were like doing a quality job. Not like, not exactly, I don't want to say that, but like there was this like feeling where like people didn't want to let down the team. And we enforced this like team, this like production culture. We also want people to do a good job. So it was like this like squeeze on like a lot of our foremans where like they wanted to do a good job, they wanted to hit hours and like they wanted to not let everyone down. And I think it was like really hard for those people. And we like, we didn't do as Good of a job, as I would have liked on all our properties. And then we actually, like, we pulled our performance incentive and, like, we're like, we're gonna get all our properties up to speed. And, like, we weren't doing a bad job by any means. We just weren't doing as good of a job as I would have wanted to do. That makes sense. So it almost feels like the weeding or.

What parts of those contracts do you fall through the cracks for you guys? Because, like, for example, for us, disclosure last week. Yeah, weeding all the time. So last week we had three properties where there. They'd been missing a com. An area for, like, the entire year, basically. And, like, we're talking, like, weeds taller than me. And so literally, Lee, what he did is like, look, we don't know. It's like, this is the hard part, what you said, Dave, you can't. It's hard to pinpoint who did it, right? And so he just said, hey, look, we're gonna have to take P for P from every single person on the team, and we're gonna have to spend three days and just go knock them out. And so what did you do? I know, Matt, you said you kind of. You guys said, hey, we're gonna go fix this, and, like, everyone's off of performance pay, and we're gonna go fix this and take the hit. What did you do after that to make sure that kept staying up to standard?

Well, we're still working on it. It's like more of like, it was like a month mission kind of thing because, like, we. We do, like, a lot of stratas and it's a lot of space to cover, and we want them to look, like, amazing by the end of the month. And we're doing all our pruning and stuff as well, which we did budget, but we're just kind of like, mixing it all in, getting ahead, keeping our property managers, like, super happy because of some of our properties were complaining a little bit. So. And that's part of the thing is, like, I feel like if you're heavily incentivizing production, you need to be doing some sort of quality control because, like, it's so easy to, like, skimp on some of those stuff. And, like, I like, understand that, like, if people, like, skimp on services, then you're like, clients, they're going to complain, and then those people are going to get caught. But, like, on stratas, they can get out of hand pretty quick. And like you, I'm under the assumption that if you're doing like a performance incentive. You should like, at least spot check like 5% of work. And we're in the process of putting something like that together because, like, you need to be, like, you need to have an eye watching. Not that I don't trust everyone, I trust like every one of my staff members completely, but like, you just, like, you need to be. They need to be like, your sites need to be watched kind of thing to make sure that the quality is happening. Because like, like on, especially in landscaping, like, quality can fall really quickly in a lot of different areas to save time, if that makes sense.

Yeah, and I think that's the hard part about strata too is the fact that, like, it's harder to rotate your cruise. Right. Like, it's, it's so much better have governed crews for strata. But like you said, it's easier for them to cut corners because if you mix it up the cruise, they become their own quality control. Like, oh, like so and so didn't weed last time. It's very obvious. Right. And they'll catch it. And so that's also even another struggle with P4P on large strata. You know, commercial projects or maintenance is if you don't have crews that are cycling, then it, it's harder to do quality control. And if you do, then they're less efficient because they don't know the property as well.

Yeah, but the other problem is too, the cycling crews. It's sometimes harder to kind of pinpoint who, who screwed up, you know what I mean? Whereas, like, if we get a complaint on a strap that's always managed by the same people, it's pretty easy to talk to the foreman. But when it's like, you know, oh, this person says that person, that person is that person, we can kind of look at whose quadrant it was, but then they're saying it wasn't good from the week prior, just right. It's hard.

Yeah, that's true.

Yeah.

Cool. Anything else, Dave? You said you had a few things.

Yeah, no, I. Not, not a ton of things. I think my main thing was like, we're hitting a lot of capacity issues this right now and to kind of skirt that. We've been trying to run, you know, like three man crews and do, you know, some larger stuff like strata, like, bigger install. And I think there's just some, like, hurdles you run into with the P4P. We were also doing, like, we tried last year to really rotate all our crews, but then we lost a lot of quality because, like, people are installing paving stones that have never installed paving stones and stuff. So this year we've kind of more solidified like foreman and they make a little bit more.

But yeah, it's. Yeah, just I'm not really sure I'm going on. I just find it's the P4P kind of held us back a little bit in some ways from getting to like a 5 million dollar business, but in full transparency. We haven't fully committed to trying it. So I can't say, I can't say that I know. It's just.

I know you and I have talked before about kind of like just standardization and simplification of the landscaping, the hardscaping side of things. How has that come a long ways because I know at first you were very much like hey, like we're gonna do custom work and like that's what we're known for and people ask all the time. But over time you've kind of, you've developed somewhat more of a system around that. Talk to me a little bit about that because you've grown that side of the business substantially.

We're pretty standardized now. Like we, we only kind of work with standard pavers, slabs like Allen block walls. We don't really skirt outside of that. There's like conversation about next year might like create a project form and do a couple like bigger things with landscape lighting on one job this year. But, but pretty standardized. I think a big thing that's helped is just like our sales process. Like I, I always thought about it from like oh, this will help our installers. But then to I was always wondering the estimates. Right. So it was a little easier. But when we tried and trained an estimator is a lot easier to trade an estimator with standardized stuff. I think one thing that probably the point you brought up but it actually like, like I used to give people the manufacturer's book, right. Like hey, here's the book. Go look at all the photos. Like, but that actually like hurt like the sales process from our standpoint. But also their like they were overwhelmed. Right. And then they wanted to see everything got confused. Whereas like when we're like product A, product B, hey, here's a photo of it that's been really good. So I think you've really made the right call on that. We even have an iPad now that I don't know if my salesman uses because our old salesman took it. But.

That was helpful. He's our old salesman's now our production manager. So then he just thinks it's his, I guess. But having like Some standardized stuff on there has been been super helpful and I have found like sometimes our new salesman will move away from our standardized stuff. Like he'll sell 10 foot cedars or something and then it becomes this big like managerial nightmare. So we still will sometimes go outside of our standardized stuff, but we add like administrative hours to the quote. We make sure the estimators source them and have like some different controls in place to allow us to do that. But only within reason do we really. Yeah. Go away from the standardized in system.

How have you guys found over the past couple years have grown so much? I've seen a definite change in just your attitude towards culture and you know, you know, the team and you know, developing that. I know at the very beginning it was very much like you all knew each other, you're friends. It was very much like, you know, partying almost together all the time. How has that changed? Have you had to change the way you have led the team over the past few years?

We're still pretty loud friends and party together. So. Talk about that one a little bit. I've been rambling a lot.

I think like we like obviously as you grow a company and you get bigger, there is a little bit more space in between everyone. Like for example, like me and Dave are really, really close with our like leadership team. Like we, we see each other all day, every day kind of thing with like the guys in the field that have been there a while. Like I'm really close still. I try to be really intentional with like all of our staff and really get to know them personally. I think that's like super huge and growing and scaling a company is just like everyone knowing that like the people above them do care about them. With COVID like doing events has been like really hard for us just because being in Canada, like literally I think as of last week we were allowed to like gather, well, gather inside in groups of six. We're now actually allowed to gather outside in groups of 50. So there's been a lot of visiting outside. But.

Like I'm hoping to do a lot more like events and stuff and keep everyone really close because I think it's huge. Like for example, like we got really like really behind in like mid May and just at the end of the week there we did like a barbecue for the staff like after work and like we had like, like drinks and hot dogs and stuff for them. I think it was like really, really good. And it was like the, the like the, the we. We got the momentum that everyone needed from that So I still think like really getting to know everyone and building like a strong, tight knit team culture is like so important for like our business and like what we're trying to accomplish.

I know Dave, you guys have disagreed on one thing. Before I go, I want to. We have to get a little bit of dirt on the situation. So you guys have disagreed somewhat on like buying new trucks and things like that. So who's the one that wants to buy the new trucks? Which of you is trying to bring reason to the other and let's kind of go over some of the stuff we've gone over. Dave, in terms of the pros and the cons.

Yeah. I just think I have a tendency to be cheap and buy junky stuff and like, and I know that about myself. But it's. I would say there's more of a push from like Matt to buy new, newer stuff. I wouldn't say there's been at this point like a really, really serious conversation about buying new trucks. We've continually bought newer and better vehicles as we've grown and I think that's been really helpful. I think there's this reality and I think Matt would make this argument and I think it's fair. It's just that like as you scale there's like a cost to like finding a vehicle used because there's like less options. Whereas like if we're just like we use F150s when we just call the F150 dealer. Although right now with COVID it's hard to get new trucks. But most of the time that would be the case. Right? You just know you use half tons that are crew cabs or whatever. So there's a benefit there. And then just be being reliable. Right. Like downtime's so costly and even today we had like a truck issue and I was like pissed off about it and had to get it fixed and it's annoying. And now we have it off the road tomorrow and that's like a logistical headache and it's downtime and all that stuff. So I think we've kind of like come to a point where we've been buying like I think most of our trucks are like that we bought lately around 10 years old and in pretty good shape, clean and that seemed to be pretty good. What's going to be really hard is like our, what I call our install trucks or diesel trucks. They're like around 2000, so they're about 20 years old and I know they're coming up for replacement and it's going to be really hard to find. Like, they're just so expensive, right? Like, a new one could be 100k. And then like even a used one, they're like, we'll have 300,000 K on them and they're like 30 grand. So I don't know what the perfect one is. I just find there's like, I think the argument be there's some peace of mind to buying new and just knowing you have something and budgeting for it. And I would say that's like, I like, should I find the deal and find, you know, something that makes sense financially and not be having payments because we might have some slower winters or something. And then. But then I think the counter is valid of just, you know, ease of scaling. And I think of like, if we're growing, like, I know there's a company nearby and they'll be like, oh, we need to buy eight trucks this year. Well, if you have to buy eight trucks, it's pretty hard to find eight used trucks, get them inspected, sign off on them. So it's just kind of figuring out that balance, I guess.

Yeah, I'd like to hit on that. Like, I'm like, I haven't yet pushed for like, new, new trucks. I. They just like been pushing for newer, nicer trucks. I don't think in landscaping it's like, smart to buy a new, new truck. I think, like, they'd get beat up pretty quick and you see depreciation. I think my biggest thing is like, if you're running a crew and you're trying to hit a daily production, let's say of fourteen hundred dollars a day, and you're like, that cruise truck breaks down and they can't do that daily production.

You're.

You're losing out on that. Like that day. You're paying the cost, you're paying your managers to figure it out. You're also, if you're not driving as nice of trucks, like there's like a branding thing as well. Like, there's a, there's a loss in branding cost. I think there's a lot of things that happen. And then as you grow into like the 10, 20amount of trucks, you're then going to need to employ a fleet manager. And then you have to take your fleet manager's time into that as well, because if he's spending time fixing trucks, you're going to need more fleet managers for like, less trucks, if that makes sense. So then, like, there's like a lot of other costs involved that aren't just the cost of the truck and like going out and like, like jumping a truck or something. Like with like a manager going to do that, like is that the best use of that manager's time? And if we can like navigate or be in a world where that happens less often, I think it's like there's like also like I also think, I fully believe that if you buy the guys nicer trucks they'll treat them better as well. So if they're driving around junkers, they're not going to be stoked on like treating their junker like.

Really well. So I think there's like a lot of these like back end and like subconscious things as well that happen. So but like I haven't been able to put together a dollar value to those but I think there is some sort of dollar value to that.

So it's okay. Dave's the analytical one. He'll put the number, put together the spreadsheet for you.

The problem is that like from a dollar dollar standpoint, I think the use is always going to make sense. Right. We buy an eight year old truck and it's a fifth of the cost of the new one equivalent. Right. But then it's like hard to even like, like my anger is there's a cost, there's dollar value on, I don't know how to put it and I get really angry when the trucks break down. So it's like how do you. So it's, it's hard. But I think we've, I think we've done better this year. Like I said, the diesels are going to be a big thing. Like finding a truck that can pull a trailer is going to be hard. But definitely like the maintenance trucks, I think we've dialed in pretty good.

Cool. Last question before I let you guys go. In terms of partnerships, I know some people out there, like they know they need a partner because they perhaps lack a certain element of the business side of things. For both of you who kind of feel like you probably are well rounded enough to do it by yourself, what advice would you give to someone that's just getting started thinking they need a partner, that they're looking for a partner to grow the business with, what would you kind of like warn them of or say hey, like this is something you should probably talk about before you get started. And the reason I ask is one of our local guys, I don't know if him, Austin and then Tyler, two of our employees, they're going to be going out of Texas and starting a franchisee location. And so I had a discussion with them last Saturday, just talking about, like, hey, here's the things you need to talk about before you guys go into business together and like, figure out how this is going to end. And it's not necessarily, it's a bad thing, but like, what happens if tomorrow you wake up and you want to sell the business? What happens the other person? What. How does equity work out? Have you guys figured that stuff out? And what would you say to someone getting into a partnership with someone else, Amigo?

Yeah, I mean, I can talk. I think for me, like, I don't think I would have like stuck with it if I didn't have a partner because I just like. I mean, it's a little easier now because we've got a team, right? So you're like, motivated because you have people to talk to and stuff. But I think like, individually at first, to be a big grind, to be like, I'm gonna be self motivated and accountable to myself to like go find work and build this company and stuff. I think that would be extremely difficult. I think that's a huge pro of, of a partnership. I think, I think some good expectations that would be set would be like. And I don't think Matt didn't. I did this well. But like expectations of how much each person wants to work I think would be really good. Expectations on like what, like after like five years, like once the business is through, like infancy. Infancy and like kind of self, like sustainable. Like, where's the expectation at that point? Because like in reality, like either matter, I could probably take like a year off work or something. And if Matt's like, I'm just gonna take a year off, but I want to make the same amount of money, I'd be like, well, that doesn't really seem fair. It's like an expectation on like, yeah, hours worked, that kind of thing. And then I think like, probably an expectation on like what each person wants to kind of see happen, at least in the immediate future. Like, I think it's kind of unfair to say like, where, where do you, where are you going to be in 10 years? But just like for me, like, yeah, buying a house. And I don't know what it's like where you guys are, but it's like a million dollars. Well, it's literally a million dollars to buy a house here. So it's, it's just like that requires me to have a consistent cash flow for, you know, a period. So just like expectations like that being on the same page, I think are, are really Big. And then, yeah, if you want to move away or something, that's also obviously crucial because our business is so localized. It's not like you can work for the company and live in a different state or something, at least not easily. So that'd be my. My few thoughts.

Yeah, I have some thoughts as well. I think expectations are huge. Like, really talk about your future, what you want, and set those expectations with pay and all that. I also think, like, talk about, like, what are your skill sets? Like, I think, like, when me and Dave started, we kind of did the exact same thing, and we, like, operated in the exact same way. And then in the last, like, year or so, we've realized that, like, Dave and I both have, like, like, a similar skill set, but we also skilled in, like, a lot of different areas. And that's, like, kind of allowed us to, like, kind of push through to the next level as well and then learn about, like, how you two communicate. Because I think me and Dave also have had to learn, like, how to communicate well with each other and, like, what kind of communication works and what doesn't work. And I think, like, the expectations, like, a huge part of that. And then I would say to, like, the person, like, thinking they need a business partner, that's this side. They need a business partner or wanting a business partner. Like, think about, like, why that is. Like, if someone's, like, overrun with the amount of work and they just, like, need someone else to do that. Like, I think the huge thing that me and Dave did was hire an office manager. And obviously, like, we hired office manager. She's been amazing. She's been with us, like, two and a half years now, I think, and she basically allowed Dave to do the things that we do now that hire. I think, like, we're both. Dave and I aren't very skilled administratively. Like, we can do administration, but it's one of those things that kind of, like, sucks the life out of you and then really trying to implement those systems and processes so that, like, as you do bring people on, like, don't grow super fast and grow out of your, like, area where you can handle it. Like, like, strategic growth is, like, definitely the way to go. Like, know your numbers and, like, really focus in on those, like, systems that you need to get to the next level. And, like, a huge book I would recommend would be, like, the E. Myth for that. And, like, Mike's podcast.

I think it's awesome. Zero turn, of course.

Yeah.

Oh, man.

Don't worry.

Awesome. Well, thanks, guys. I really appreciate you guys coming on and everything. I know, Dave. You hop in sometimes on the chat and everything like that and help other people too, so really appreciate it. And, you know, if Augusta wasn't, you know, border bound, we'd be competing with each other. So I'm glad there's that. That international or to keep us from, uh, hot hands, you know?

Yeah.

Yeah, definitely.

Okay, guys, have a great evening. I appreciate it.

Yeah, take care.

All right, everyone, make sure you tune on. Tune in next Tuesday, same time as usual, for another episode of Roundup. Really appreciate the guys coming on. Make sure you join the Facebook group landscape business course. You can chat with them and other landscapers, pick their brains and see what works for them. Might work for you too. Thanks so much. I'm Mike Andes, landscape business course, and we'll see you on the next video.