Mike Andes LIVE Call-In Show! (Labor Day 2023)

Welcome everybody. Happy Labor Day. We're doing a call in show today, doing some Q and A questions and answers and believe it or not, we are less than six weeks away from Landscape Summit. If you haven't booked your tickets already, make sure you go to mikeannies.comsummit where we're going to meet together for two days solid in Louisville, Kentucky right before equip Expo. And I'm really looking forward to it. These are by far the keynote. I've never spent this long and this much time in preparation for keynotes I'm really looking forward to. I have a couple of different types of keynotes I'm going to be presenting. Kind of testing a few different things what, what works best for the audience. Really looking forward to it. This morning I was putting together some models for looking at your estimate, process, refining it and really the fact that close ratio, albeit an extremely important number is actually hiding some data and hiding some things that you should be tracking in your business because it's a very, very wide, it's casting a very wide net when there's a lot more information that needs to be gathered to really determine whether or not your close ratio is accurate. So I'm really, really looking forward to sharing some stuff. I do think it's going to be our best one yet and I can't wait for it. It is just less than six weeks away. We have a whole bunch of speakers. Usually we have like three or four speakers, maybe five or six. This year I think there's almost 15 speakers. And we're tightening up how long everyone's speaking. So the most anyone is speaking is one hour. Most people are just speaking for 30 minutes. It's gonna be tight, it's gonna be really good. You got veterans from the industry like Jim Huston or Houston and E.J. mcCoy, he has multimillion dollar businesses and then all the way down to solo operators. We got influencers like Brian's Lawn Maintenance and the Spencers are going to be there. So lots, lots to look forward to. Really looking forward to it and it's going to be a great event. So if you haven't already, make sure you're to mike gannies.com summit. But today, today we are doing a call in show and if you would like to call in and ask a question live 361-733-3333 give me a call. I would love to help however I possibly can. And we already have someone, we have a few people already in the waiting room. So without any further delay, let's Go to area code 904. Welcome to the show. Thanks for coming on.

Am I live with Michael Andy?

You are. What's up?

This is Brad Baer with Copper Creek Cut. How are you?

Hey, buddy, how you doing?

Good. So listen, here's the question. If I've got some bi weekly lawns that I want to turn into weekly for whatever reason, because, you know, people are complaining about the clippings or I'm, I'm on the lawns for too long and I want to, you know, tighten up how long I'm there. What is the formula for figuring that out so I don't lose money? If I'm also trying to do, you know, a little bit of a rate increase with that change, would I try and find a weekly lawn in that same neighborhood and say, well, this one takes about this long. So I'm going to guess the bi weekly. If I did it weekly, would take that amount and then figure out the hourly rate based on that. What's the best way to get a bi weekly yard and turn it into a weekly without losing money?

Are you worried more about losing the money side or losing the customer in general and them just leaving?

I don't necessarily care about that because I'm the legitimate side of my mowing business. That makes it sound like I'm a front for the mafia. Aside from the projects that I do, I'm mowing two days a week and I'm at capacity on those. So I'm looking at lawns that I spend more time on. I'm looking at lawns that I'm beat because there's a lot of string trimming and I'm tired at the end of them. And a lot of the ones that I'm seeing that I don't love are bi weekly. So if it's something where I switch them to weekly and they say, no, I really only want bi weekly, sorry, that's not going to be the end of the world for me.

Yeah. So what you could do is just put align your incentives with the customer. Right. So you could say, hey, look, going forward, if you want to continue it bi weekly, this is the new price. Due to the increased amount of wear and tear on both our team members as well as our equipment. And if you would like to go to weekly, we can, we can honor the same price. But in order to go at biweekly, this is gonna be the new price. And so I'd say like half of them will be like, okay, just put me on weekly. That's fine. I Kind of am annoyed by the clippings anyways. And I want it cut more often. And then the other half are gonna be like, okay, whatever, I'll pay the extra 30, 40% more for the biweekly service. And now you don't care as much because you have that much more margin when you're on the bi weekly cuts.

Got it. So instead of phrasing it as here's the new price for weekly, just be like, what you're paying now, I can give you as weekly. Or if you want to keep it the way it is, here's the increased price.

Yep. And then they can make the decision. And then either way they have to leave that exchange happy or they're just going to cancel on you. But it ultimately kills two birds with one stone, raises the prices of the bi weekly while at the same time incentivizing them to go to weekly. And either, in either case, you win.

That makes sense. And then just one last follow up to that. I know on your video where you help that one guy raise prices on everybody, I think you said something along the lines of you like doing that when it's difficult for them at a time of year where it's difficult for them to find an alternative service. Would what I'm doing kind of fall under that same thing where you would say either do it now or in the middle of next. What's a good time frame for that kind of conversation in your opinion?

Yeah, I used to have two very distinct times of the year that I'd recommend doing this. But more importantly is what you said, and that is you said you're at capacity. And so in my opinion, whenever you're at capacity, I don't care if it's in the middle of winter, if you're at full capacity, you should raise prices. Because if you are at full capacity and leads are pouring in and you can't even get to them, there's a very good likelihood that all of your competition is in the same exact scenario and they can't get workers or, and they can't fulfill on the work themselves or get back to people fast enough for estimates. And so whenever you're at full capacity, you should raise prices. And ultimately like the scenario is, hey, you want to raise prices by 10% until you lose 25% of your customers. And that is a challenging thing for a lot of people who for five, six, seven years didn't raise price. And now with inflation the way it has, if you were not raising prices every year or two, you're Almost falling behind. And so I would just really focus on, okay, number of customers that I can serve, at the very least, more accurately, budget hours. But even if you say, hey, number of customers, number of lawns that I mow, anything above that, I know I'm at capacity. As soon as I hit that number, I'm raising prices across the board. And that might mean you raise prices every year, but that's going to just optimize for profit. Unless someone's trying to grow top line revenue and then you're going to go get, go quote, unquote, buy more capacity in the form of buying more trucks and equipment and then also labor because that would increase your capacity. But in my opinion, you hit capacity, you raise prices. Obviously, it's more ideal to do that during a period of time when your competition is drowning in work. They can't find employees because it's 110 degrees outside. But regardless, if you're at full capacity, you should raise prices in my opinion.

Makes sense. Thank you very much for your time, sir. I appreciate it.

You got it, brother. Take care. Have a good one. All right, next caller is coming in from three three zero. Welcome to show. Thanks for coming on.

Hey, Mike, how are you?

Good. How you doing?

Pretty good. Pretty good.

Paul Woolley, Woodley's Lawn Service. We're in Ohio. Hey, I just had two quick questions for you.

So what do you do about laying.

People off in the winter? Is laying people off something you do or is it, you know, do you have additional side work for them? I know you, Augusta might do some snow plowing work. We don't do that. But even still with some snow plowing work, it seems like it's not, it's not as consistent as I'd like it to be.

Yeah, like the vast majority of our, when we talk about Augusta actually does not do snow plowing, including all of my locations. And so, you know, you know, we had this, this, this morning on our daily mastermind with Augusta. We had actually talked about this and that is like, in my opinion, in my opinion, during the winter, it really is going to be the determining factor of how hungry you are because during the spring rush, we're all drowning in leads. During the rest of the summer, typically, we're just burnt out. We don't have the time or energy to go out and pursue leads, pursue new cold customers. And so in, during the wintertime, if someone's hungry and they're willing to pound the pavement, knock on doors, really operate on a lower margin because more of their money has to be spent on marketing, whether that be knocking on doors, doing every door, direct mail, doing ads online. Doesn't matter. If they're hungry enough, they can keep their guys busy. Now, when I first started Augusta, my first five years, I lost all of my profit, mostly due to the fact that I would burn the time during the winter just to keep my guys busy. And what I mean by burn their time is we just make up stuff for them to do. Literally we would make cookies and give it to property managers and have them hand delivered. We would literally go pressure wash the driveway of our customers for free because I was simply trying to keep the guys busy. And so what I highly recommend most people in this industry do is either a, do things at a much lower margin and go ham on marketing. And when I say like go ham, I mean that you're probably spending 10 to 20% of your revenue on marketing and that's all of your profit, basically. And that's going to keep your guys busy. What's really cool though, that's keeping new, new leads coming in, you're adding your contact database and you're keeping momentum. Like everyone's staying busy now. Not for, for every, some people, they want to take the winter off, they want to slow down, that's totally fine. But if you're actually just trying to maximize the business revenues and profits, that's one way to go. Another way to do it, and this is what we started doing, that immediately switches to profitability. And that is I realized that most people don't want to work outside in the winter. And so what I told my guys, like, look, if you need full time work, you can leave. And in December, January and February, go get a job someplace else, 40 hours a week. And then I can guarantee you can come back here on this day in February and have full time work. But if you need full time, you're probably not going to get it here. It might be 25, 30 hours a week, but if you want full time and you want to come back to us in spring, we will be ready for you. You will have a guaranteed position. I'd be even happy to continue paying their health care benefits throughout those few months.

And what happened is massive unlock. All of a sudden I kept thinking I need to keep the guys busy. When reality, half of them wanted to go work inside indoors during the winter and not deal with outdoor weather. And so what happened is just due to natural attrition. And then the people that wanted to not work outdoors during the winter, the half of the crew that did Stay. We had enough work for them and they stayed busy and efficient full time throughout the entire winter. And so that took me from being able to go from, you know, having to put $100,000 plus in cash set aside for winter versus being at least break even and get through the winter without having to have all this cash reserves being burnt up. Does that kind of help a little bit?

Yeah, absolutely. That's, that's fantastic. What types of, what type the guys that stay with you, what types of low margin stuff did you end up doing?

Yeah, so like, yeah, so I'm really focusing on upselling my existing database. Right. And so this is when like upselling. Exactly. It's like I want, if I was you, I would take a list and a list off the 20 services that you can do for your customers without adding a services. What services can you do during the winter? Can you clean up leaves? Can you trim bushes? Can you clean out gutters? What can you do? Can you define edges? Can you tear out grass? Can you install gravel? What are these things that you can do during the winter? And then those are the tasks that you literally start to pitch your customers every two weeks on throughout the entire winter season. Because let's just say you had eight, eight services. You're like, okay, I can do leaf cleanup and I'm gonna do that two or three times. Cause people get lazy and they wait until January. Great. So I'm gonna do that two or three times and then I'm going to do bush trimming twice. Okay. Once all the leaves are off, I'm pitch, hey, this is the perfect time to do it. And I'm going to do it kind of late winter because it's before the buds come up. So I can do two of those. Okay, now I have five marketing opportunities. Then I'm going to look at, okay, do I want to do any of these other services? Like do I want to put Christmas lights, do I want to clean out gutters? All these other things. And all of a sudden you have 8, 9, 10 different times opportunities to reach out to your existing database and upsell them into services that can absolutely be done during the winter. And what it comes down to being a keep your database warm. And that is sending them these monthly emails, sending these monthly one click estimate emails every single month. And so when the winter comes, they just expect that every few weeks they're going to get an email from you saying, hey, click here for this button. You click here. I'm going to give you an estimate within 24 hours. And so if you're using Copilot inside Copilot University, there's a video they made a couple weeks ago explaining exactly how to do a one click estimate email. But the vast majority of our work for our winter time comes from our existing database. And as you grow your business, the number of contacts in your business becomes the value of the company. Because If I have 10,000 emails and I know I can send an email to all 10,000 of them, there's a very good chance I'm getting 50 to 100 estimates. Which if you extrapolate that against 20 or $30 cost per lead, that value, that one opportunity is a thousand plus dollars that I just saved by sending out that email. So keeping track of all your customers in a database like Copilot or any other CRM and then keeping them warm by doing that is extremely important. Next caller is coming. 208. Welcome to the show. Thanks for coming on.

Hey, can you hear me?

All right, I can. What's up?

Hey. So I started out this year running as a solo operator and then brought on an employee.

Back in July. And I was just curious, running for next year.

I listened to your videos about the wilderness period that you talk about having a difficulty growing in that first period.

Anyway, I already have all the equipment to run a second crew, so just curious what your thoughts were on that.

Yeah, in regard, I mean, like, you know, there's the expense of training and the downtime for that, but as far as equipment and all that, I'm already set to go, so.

Okay, cool. Yeah. So what it sounds like to me is that when we look at the three capacities of the business, right, you have labor capacity, then you have asset capacity, which is like your trucks and equipment, and then you have personal capacity. It sounds to me like from a personal capacity standpoint, you think you can grow the business. Is that, does that also align with your goals? Like, do you want to grow the business?

Yeah, yeah, I definitely do. And last year I had tried, but got in over my head, tried to grow too fast on four employees all at once and got it. Made some big mistakes.

But so it sounds like from a personal capacity, you think you have it. We have asset capacity, your trucks and equipment that you have sufficient enough to grow. The next question is simply the labor side, right? Can you find the employees? Can you plug in? Because those are the three things limiting your business, right? Assets, labor, and then your personal capacity. And so if you, if you think that you can go find employees and it sounds like that was the hurdle last year, if you think you can do that in a more controlled way this year, I would definitely give you the green light to go ahead and grow. The big question is whether or not you are constrained by capital and that's what's keeping you from expanding the labor capacity. So like, if, if you have enough capital to get through a couple months of training someone up at being efficient, like inefficient, like you just said that, then I'd give you the green light. But if you're like, man, I've got it like every single week, I'm really scraping by. What I'd rather you do is stay at the current capacity of labor because you're bumping up against right now, you're filling up and just raise your prices like we just talked about with Brad. Raise those prices and increase the margin so you don't have that cash crunch. Because that cash crunch will hurt you if you start to raise your labor capacity without having any money in the bank. Does that make sense?

Yeah, it makes a lot of sense.

Cool. Cool. Are you planning to hire again next spring? Is that your plan?

Yeah, I already have some guys who want to come back and work for me again. I just, I told them no this year because I needed to get some stuff straightened out.

Well, good for you. It sounds like you're very self aware in terms of where you're at, both from a business standpoint and just like where your systems and the structure of the company is. So I think you'll do fantastic. And looking back at this past year as like a learning experience, like, hey, I grew too quickly. What is my threshold of my skill level and my abilities? Maybe just one employee a year that you grow instead of trying to go three or four, that's totally fine. And so good. Good on you for figuring that out. Next caller is coming from 530- area-code. Thanks for coming on. Welcome to the show.

Hey, Mike, this is Carter from business boot camp. How's it going?

Good. How you doing, Carter?

Well, not too bad. I got two questions for you. The first one being, so we've been. I have one crew of maintenance still one crew on projects, project crew. We're finally getting trained enough so that way they can kind of handle that. They'll have to show up in the morning, show them how to get started by not having to babysit them all day.

But what I'm trying to figure out, still want to do Augusta location. Obviously that's more of the recurring base is the, you know, you guys kind of business plan. And what I Would like to go with.

But I guess my question is, am I wasting time trying to do the projects if the end goal is Augusta? Because I guess my original thoughts were if I could do projects, start making enough money from them to, you know, open in Augusta completely as a business and then, you know, not as a job. Working in it all day long. Getting someone, you know, my maintenance guy now, who's my lead, having him kind of step in his GM pretty quickly as it's starting. And that way all the profits I'm getting from the projects can go straight into that. Or should I just completely cut out projects and go to maintenance?

So let's kind of, yeah, fine.

Let's take a simple question.

Yeah, let's take Augusta off the table and just address it from a business perspective. Right. So why, why would you want to get a project? Mostly just feel like, because it just feel like you're managing the jobs all the time and just kind of like always chasing your tail, but it's really profitable. Is that kind of where you're at?

Yeah. And yeah, I had a few jobs that I bid wrong in the spring that kind of messed me up. I'm finally getting caught up. Next week we'll have like the end of next week or the end of this week. Actually, all of our projects are done. So I don't really have much work coming up. I'm just trying to decide, you know, for advertising, I guess.

Do I stick with trying to keep projects going and growing that, or do I just, just do simpler?

Yeah, like, I, I, I think you can do both. Right. Like, I don't think that you need to think about doing it one or the other, like, oh, I've got to do projects or I've got to do recurring. I'm a big believer in having both in this industry because when you're done the projects at the end of the week, you're not going to go get enough recurring jobs to fill your schedule. You're going to need projects to fill the schedule. And so I think of it more as a matter of, like, my recurring is that long term, I'm building the business on the back of my recurring base. And ideally, you know, if you're say, 25% of your revenue right now is coming from recurring, hopefully that becomes 30, 35% a few years. It's 40, 45% slowly transition out. Yeah, well, not even transition out. There's nothing wrong with the projects. What I'd be doing though, is as that percentage of your revenue becomes more from recurring, start Cutting out the projects that you know are causing you to have to be there for every single aspect. You can't make a video and estimate notes and hand it off to a project manager. The ones that you constantly are even just looking at this past spring, what type of services were the ones that you were losing your shirt on? You weren't confident on budget hours, you lost your shirt on materials. Just cut those services out and keep the other 80% of services. When it comes to projects that are extremely profitable and you're making good money on and you have all the assets and labor for keep those, but just cut out the other 20% right now that you're taking on because it's good revenue, but you're like hit or miss on profitability and then you'll be able to make up for the subtraction of those services by just slowly increasing your recurring. It's not a zero sum game like you can do both. And I'm a huge believer in having both projects and recurring services. And everyone looks at what we do at Augusta like, oh, they just want recurring. I would say 55 to 65% of the revenue that comes to Augusta is still from project based work. The. But the bottom line is because when you're first starting out, first year, first year or two, from a percentage standpoint, a lot of your revenue is going to come from projects. And I'm a big fan of having at least 20 to 30% of your revenue coming from projects because you can fill in the gaps. And so we've had a few, a few different franchisees join Augusta thinking I'm only doing mowing and almost all of them within their, in their second or third year, as they get employees, 3, 4, 5, 6, they get multiple crews, multiple trucks, they start realizing, oh, I've got to add some simple, at least some simple projects and to fill in these gaps when mowing slows down or the winter. And I can't go market services when the grass isn't growing. Now you're in California, so it's a little bit more consistent, but still there's lulls.

Yeah.

And you can't fill next week's schedule with mowing. If you have three guys sitting around, that's I would literally need like 60 or 70 lawns. So projects are a really great form of being able fill the schedule quickly. And I think you can do both.

Now my second question for you. On all of our accounts for our area, everyone likes one monthly price. That includes shrub trimming, mowing, pretty much everything with their Property in one one price. I'm losing money like crazy. I raised my prices last month. Not enough.

How do you guys typically bill for like, those added, like shrub trimming and stuff? The mowing, I'm not worried about doing, you know, a flat rate for the year, but the shrubs, because everyone's different. Some people want it, you know, come out and complain that the shrubs weren't trimmed last week when they were trimmed the week before. And one done every week. Others, you know, when you go every three, four months, they need trimming. How do you guys. You just bill them separate or how does that.

Yeah.

So how does that go?

The worst thing you could ever have in a contract or any sort of scope of work is as needed. That is the worst terminology. And if I ever see it in a bid, I just cringe because I remember having those in my contracts. And it's easy to sell and it's.

Horrible to fix online.

Have as needed. It's horrible. So what you wanted to do is define every single service schedule for every single line item. So, for example, trim bushes every other week from July through January, for example, and then weekly from February through March, whatever it is. And then what happens is if the customer wants it done more or they think it needs more, you say, great, we're going to do a work order change and adjust your. Your level billing. Right.

Contract.

Exactly.

Okay.

And so. But you have to go into the bid with a definition of service schedule on every single service for that contract is extremely important and it will loot. This is why a lot of people lose their shirts on. On commercial contracts when they first get started and they get scared away. Even if it's small, commercial, or even just residential, like you're doing level billing, they'll get scared away from it because they put trim this in this. This price includes trimming your bushes, edging your lawn, mowing your grass, pulling your weeds. Like, you've got to put definition, even pulling the weeds weekly, bi weekly, once.

Per month or whatever.

Which month of the year is it? White Weekly. Which month of the year is it? Monthly. Like these have to be defined because otherwise you're going to have varying expectations of the customer. You're also going to have varying expectations or varying standards of what the. What the employee thinks the bushes need it. Right. And if you do P for P pay for performance and you have as.

Needed, they're not ever going to think it's needed.

Exactly. Your quality control just got shot in the mouth. So you definitely want to make sure that you have definition for both the customer's sake, your pocketbook sake and the employee's perspective when it comes to paid for performance. Does it make sense?

Okay, yeah, no. 100%. I got one more thing for you real quick.

Go for it.

That I just thought of. So, so I'm in California, obviously this year is the last year I'm able to buy gas equipment.

How do you see that affecting.

Like a business that's wanting to go more towards events, you know, eventually obviously if I'm going Augusta route and I'm going to do the recurring.

Model that I'll will need electric equipment and there's really not the technology for some of it. Where do you see like you see that as a challenge or do you see that as.

Like it's just going to make it harder to get into the industry making it better?

I don't even see it as an issue. I literally don't spend any mind space on it because all my competitors have to do the same thing. Right. So that's the thing about regulation is it usually just drives up the cost of everything. That's what California is known for is like all these things just make everything more expensive ultimately for the customer. Right. And so if it's going to cause you pain and it causes you, you know, you have to charge thing that is more expensive to buy, et cetera, really, ultimately you're just gonna have to raise your prices and it's going to cause more inflation. Right. And so this is, you know, textbook 101 for California.

But it's across the board from me and every single.

Exactly. So anything that affects the industry as a whole I don't pay any attention to mostly because it doesn't affect my ability to be competitive. The only thing I want to focus.

On is now what about. Sorry, go ahead.

No, you're good.

So like what about the big companies in town that I know a couple of them and they've been the past couple of years just paying cash, buying. I mean the one guy, he has 24 stand on mowers and 100 and some weed eaters that he's bought over the past couple years just every time he has cash. So they're going to be fine to not have to really raise their prices for, you know, years to come and sell all of that equipment.

Done. Because we can still use equipment as long as it's purchased before 2024. Okay, so how do you like that's. I guess that's what I'm more worried about is.

Like the bigger, the smaller competition I'M not. Because they won't be able to go spend 20 grand on a little electric mower. Whereas the big guys who have, you know, 300 turns that have been sitting brand new, that's what I'm more concerned about.

Yeah, but I wouldn't worry about Carter. You're, you have no control over whether or not they've bought mowers. You have no control over any of these things. Right. The only thing you can control is your level of profitability to be able to afford this regulation. Right. And so yes, they are going to have an advantage if they've been in business for 20 years and have way more profit and have been buying all these mowers kind of stockpile for it. Yeah, they're going to have a big advantage. They, they're, they're also not going to be as nimble as you. There's other things that you got to different. You got to focus on the things that allow you to differentiate, right. Everyone in 10 years is going to have the same mower in California. Right. Because that's the regulation. So focus on in 10 years that you'll be way more differentiated. Other things. And instead of stockpiling, like if you were, if you, if the question is like, should I go buy a bunch of mowers? Like I highly don't, I don't recommend doing that. You're, you're buying a commodity, you're buying a thing, a tool that you just need to go to get the grass done. And the thing is the people that, that maintain these pieces of equipment are also going to have to adapt, right? So in three or four years you might actually struggle in California to find someone who knows how to fix these mowers or even has the parts for these mowers. Right. So he might be big enough to be able to warehouse these, ship them in, have his in house mechanic take care of things. But if you go out and buy a few of these because you're going to stockpile while there's gas still available in a few years, you might actually be shooting yourself in the foot because every, all the dealers have moved all of their, their supply chain and their mechanics to a much more EV type of deal. And so I would just, okay, I would just focus on what you can control and you definitely can't control what your competitors have done in the past, that they're way ahead of you in terms of profitability or longevity. So I just wouldn't, I wouldn't spend any time on that whatsoever. Next caller is coming from five Five one. Welcome the show. Thanks for coming on.

Hey, what's up, Mike?

What's up, brother?

So I have a cool question for you.

Monday. I just want to give you a synopsis. So on Monday through Friday, we Wednesday through Friday we mow Monday, Tuesday we do projects. And I just had another guy a few months ago and I was planning to grow with him. However, now, like I thought, it's hard to have the cash reserves for another truck. So I'm going to have to wait till spring. And in the moment, there are times where it's hard to find.

Work for Monday and Tuesday. So let's say, and the projects we invoice as, I mean, once they're completed, Boeing, we build them on the first. So I'm wondering what I can do if I don't have any projects for that week.

It's going to be hard to pay my employees when that's the money that I use to pay them.

You understand?

Totally. Is this your first employee then?

No, no, I've had, for the past three years I've had one employee. And then, you know, I've been running through employees trying to find the best one to move forward with the next group.

Got it. And so now you think you found that person and you're wondering, like, how do you keep them busy sort of thing, just because now they're going to be full time on their own truck.

Well, that's the thing. I can't afford another truck right now.

Got it.

Until. Until spring.

Okay.

And then. So there'll be, there would be some weeks where it's. I don't have any projects, so it's going to be hard to, to pay my employees for that week.

I got you.

And by the sounds of it, you're. No.

By the sounds of it, have you guaranteed, guaranteed him a certain amount of money or hours per week?

No.

Okay, so this is, there's two ways to do this. One is you go the more lower margin way, and then the second way is you just gotta have a harder conversation with this person. Right. So number one is low margin, and that is you're gonna go spend money on advertising to get the leads required to fill the schedule. But that extra cost of marketing is going to bring your margins down on that additional work, but you will then retain that person and be able to keep them full time. The secondary way is having a hard conversation with them. And I was like, hey, look, there's gonna be sometimes I have 40 hours a week for you, or even more if we have some big projects. There's gonna be other days. I only have our other weeks. I only have three days a week of work for you. Are you okay with that? Is that a problem? Because I find a lot of times owners have this in their mind and then when they go talk to the employer employee, like, yeah, I don't mind that occasionally having a couple extra days off a week. That sounds awesome to me. Has he already given you the inclination or talked to you about the fact that he's concerned about not getting work on a couple days a week here and there or not?

No, no, that's fine. He completely understands that. So my main concern is the, the money that I get from the project that I do that week is the money that I use to pay them.

Got it.

A job that week.

Got it.

Yes. Very, very tight.

Got it, got it, got it. And so what's your hourly rate right now that you're charging for these projects?

70.

70.

70.

Okay. And what are you doing for marketing? I know you've been doing this for a few years. Is it mostly just people calling you up and then like it just kind of referrals? Is that where most of your, your work is coming from right now?

This year?

Yes.

I haven't done much marketing at all. Only in the spring. But usually I do Google Ads or Craig List and stuff like that. But yeah, this year I haven't done any marketing really. It's just organic.

Totally. So I would really recommend is really spend the time to educate yourself and test and figure out channels that work in your market to drive leads when you need them. And so that way you have the control of the faucet. And that is when, when you're crazy busy, you're not marketing. And when you don't have enough work for in a week or two and you have a backlog, you don't have a backlog of more than say a week and a half or two weeks of work. You know exactly what steps you're going to start taking to fill that backlog. The number one place I'd be looking so you don't have to spend more money. Because that's probably the struggle right now. Just in terms of being tight is your database, how many, how many contacts do you have in your database? Like 3, 400. Like how many do you think you have?

Right now I use Copilot, so it'll tell me. I have about 750.

Awesome. And have you sent any one click estimate emails out yet or not?

Not one click estimate, but yeah, all I, all I'VE been farming is my, you know, like my mowing clients, your existing, the ones that I've been surprising.

There's probably what, 50 to 100 somewhere in there.

Yeah.

Cool. So, well, I'd highly recommend like if you need to book a call with air traffic control with copilot, that's fine. But like you gotta do the one click estimate emails. I guarantee you with 750 contacts, if you send a well placed, well timed and well written one click estimate email you, I guarantee you have 10 to 15 estimates on your doorstep within 48 hours. And that's what you need in order to be able to, when you hit a slower week or a slower month, to instantly be able to tap into something that can book you out for two or three weeks. 15, 15 leads and estimates coming from customers you've already done work for or at least have interacted with in the past, you're probably going to close 60 to 70% of those. And so if you got 10, 15 projects on the books whenever you want at the drop of a hat, it's extremely valuable. And so I would recommend that above everything else because I think if you, if you figure that part out, you're going to have a big unlock of feeling more confident with this employee and you'll feel more free when it comes to finances, knowing that you're three or four weeks booked out, you have lots of work on the schedule, and you'll just start to really think in terms of abundance because the leads are stacking up. And right now you're thinking in terms of conservation because you're worried about just putting jobs on next week's schedule.

Yeah, but the real value, the real.

Value makes sense, right?

The real value of your business is in those contacts. There's been times when we have looked at acquisitions and I put more value on the contacts than I did on the contracts of that business simply due the fact that there were so many contacts in their database that had not been talked to for so long that we simply needed to send them an email, reengage them, keep them warm, and we were able to continually farm those leads over and over and over again. All right, that's gonna be it for the calls. I'm gonna go ahead and answer some questions in the chat real quick before we wrap things up and we'll call it a day. Will you record an updated video about the end of season report on the location you started during the middle of season? Yep. We'll probably do it next year as they go in their second spring rush. When they usually typically grow very quickly. Should I pay myself throughout my. Should I pay myself through my business? I've never have. I never have. And it's hard to get a MasterCard. We're at 150k this year, one truck. I'm solo now, but we'll get help when needed, projects, etc. So, you know, ultimately, in terms of how you're paying yourself, it doesn't really matter if you're an S corporate llc. The profits of the business or you taking distributions is going to be taxed the exact same rate. If you are an S corporation, then you're going to take W2 income, which I don't think you'll need to do. If you're not making 50, $60,000 in net profit, I just take it as distributions and do a schedule C on your personal tax return. But if you're doing an S corp, you have to pay yourself a wage and then you'd be taking it as a W2. So. That's my dad. Let's go. All right, everyone, have a fantastic Labor Day. We will see you soon. I'm really looking forward to later this week. We have an awesome turnaround video coming. Really looking forward to it. And I'm going to be traveling here in just a few more weeks and going out and doing three turnarounds in one week. It's going to be crazy. It's gonna be a lot of fun. I really look forward to it. So probably Friday this week, that's what we're shooting for, to release the next turnaround video. It's like a whole nother level, a whole nother step up from what we've been doing in the past. I think we're just going to be able to keep making this better and better. But until then, make sure you go to mikeanny.com summit. There's less than two weeks for you to be able to get the discounted rate for the hotel. So Omni Hotel, it's not cheap. I understand. I'm very sorry about that. However, they give us a discounted rate only until September 15th, so you must book by then. So bring your spouse, bring a manager, bring your key employees, and I promise you, this event is going to just annihilate. I have spent a lot of time. I'm spending more time and energy on my keynotes than I have for any presentation ever in the past years. And I truly believe it's going to be an awesome time, an awesome event, and some awesome speakers. So looking forward to seeing you there. If you're planning to come to Equip Expo, it's just a no brainer. Come a couple extra days. It's literally at the hosting hotel of Equip Expo. You could stay there the rest of the week if you wanted to and it's going to be quite, quite the experience. So looking forward to seeing you in Louisville. Until then, hit subscribe and we'll see you hopefully at least one more time on the live show before then. Take care, guys. Have a good one.