Mike Minute Mastermind 05/26/2023

Hey, everyone. Hope you're all doing super well. Get things kicked off. Here, let me just.

Oops, that one's wrong. Oops.

Save that 24th.

Okay. Oh, that threw me off. Okay. I was like, why is the 25th? We didn't do a mastermind the other day. Got it. All right, we're good. Mike minutes. Put that in the file. Save that. Pop on over into here. Okay, so tomorrow I fly out.

Right, For North Carolina. How am I feeling? Let me think. Not too optimistic. Perfectly honest with you. We had Google Ads running all week and I didn't get a single lead, get a single customer, didn't get a single call. So it's gonna be a. It's gonna be a grind set, baby.

So we'll see how it goes. I am sort of wishing I would have done it three months ago because it's spring rush, but obviously can't do that. Just it's too busy here. So we will make it work and it's gonna be quite interesting. Otherwise it'll just be a public embarrassment. So we'll see how it goes.

All right. So, yeah, I have my onboarding stuff with command center this week. Ready to rock and roll. Gonna use co pilot. I'm honestly feeling quite drained, so I'm really banking on a good long flight to catch up on some sleep.

Let's jump into questions.

Vince from Medicine Hat. We're down one project crew for two to three weeks due to an injury, and our team is currently working 10 to 12 hours a week. With this happening, I'm thinking of the phone ODP only for one week to help out with the field.

With projects and also prioritize equipment maintenance as we have been getting a bit behind on that and it's affecting the speed of our mowing crews. As my GM has been in the field on projects 95 of time. While I do estimates, I've turned off our active ADS to slow down lead flow as we currently booked out the middle of July with projects. Would you recommend going to OGP only to get help get through the next couple months or do you have any suggestions? Thanks in advance. Yeah, so I would recommend doing ODP for mowing 100% of the time. That'd be my personal recommendation. And then in terms of estimates, if you have a couple week gap like this and you're two months booked out, you might just want to tell command center, hey, I for next weeks, I'm not going to take any project estimates. And then if someone wants estimates done, it's like, hey, June 15, I'll start taking estimates again. So that way, if someone's like needing it done right away, they're also the type of person that they're not going to wait till the middle of July anyways to get the project done. So that's probably what I do is just like, hey, I'm not going to do any estimates over the phone for mowing. And then all project stuff, I'm not available till like June 15. It's not like you're turning them off. You're just saying, like, the next available time for you to do estimates is June 15th or whatever. And yeah, you're going to lose a lot of leads. But being booked out almost two months, I wouldn't leave too concerned about that, honestly, because you're going to start to lose a lot of those little projects and like cleanups, especially when it comes to being booked out two months. So I would personally just switch OTP for mowing. I'd probably delay no project estimates for two weeks. And I wouldn't say there's no estimates. I'd just say the next available time to book is the 15th. You really need to make sure you communicate well with Command center on that because you're taking the estimate, but you're like going to have two weeks of like, where you can't book. And that's very irregular. But you just need to make sure that's communicated well in your wiki and on your calendar. Logan Alpers what do you think about having CC speaking Spanish with clients? I know we've had a few clients that don't speak English, want service, but no one on our team speaks Spanish. Do you think we're losing leads because we can't communicate with some clients? Have a great weekend. I would say it's very marginal in terms of number of leads you're losing. It is quite infrequent that the type of, you know, client you want can't speak English. It's just very rare, honestly. And so.

Don'T, don't speak. And honestly, most of the time those individuals are going to go and get Hispanic providers on their property that they can also speak Spanish with on the, on the property. This is just the fact. So it'd be such a subset of a subset. And we've had people that can speak Spanish at Command center before. And I think to my knowledge there's only one time we ever transferred to them because of this, of a language barrier. So.

Nick from Marysville, we've grown a good bit this spring and I am planning for us to Switch to profit mode going into summer through the rest of the year, so we can actually make some money. Total for March through May. After this month, we will be close to break even, which doesn't surprise me. A lot of the new mowing clients we onboarded are underpriced, some by a significant amount. My question is, should we do a price increase mid June on clients that have been onboarded in the last month or two? Don't want to lose them right away, but also don't want to continue to lose out on them going into the summer. The price increase on some will be significant and probably drive them away. Or should I wait and if so, until when? We are fine from a cash perspective, but we definitely need to switch into profit mode. We are essentially breaking even for this year to date, and I don't want to try to fight the demand curve like last year and push for growth in a slower season. Yeah, so for the vast majority of landscaping companies, you start becoming profitable end of May and into June. The vast majority, the companies that become more profitable in like in February, March and April are typical ones that have been around for a long time and they've mastered the demand curve and they're not.

Marketing at all. So if you hear people like, man, make a bunch of money and it's like usually February, March, and they're above zero year to date, they're typically been around for quite some time. Otherwise, if you're growing at all, it's very common. May, June, July, you get above zero and then you make all of your profit basically in the second half of the year. I've made videos about this before. In terms of your question specifically, I would be much more looking at your capacities to determine this. If you are booked out three or four weeks and at the same time you're like, we need to switch into profit mode, I would raise prices across the board, even if they've been for a month or two. Especially if you're getting leads coming in and you're accepting new leads. I would raise your prices to new customers so anyone coming in is now at the prices you want. But then if you're getting a flow of leads without spending money on marketing, that should give you the confidence to go out and raise prices to people regardless of how long they've been with you, because you're at capacity. So whether that be a truck capacity, a personal capacity, or a labor capacity, if you're hitting any of those three, you should absolutely be turning to profit mode regardless. And you should have even more confidence in doing that, if you continue to have a lead flow that will be able to replace any customers you, you lose from that price increase. Price increases should come down more to your capacities compared to the timing of the year. The only reason you would do timing of the year like I think timing of the year becomes important is if you're already in profit mode and you know you're going to raise prices like sometime this year and you're at capacity and you just kind of like are timing when you want to raise the price. But if you're like growing very quickly and you're starting to like do this and grow in, you're starting to get above a capacity limit of any sort, labor trucks and equipment or personal capacity, that's when you should just like without abandon raise prices. Basically.

This is just some interesting stuff I found when valuing a company. Not real questions. So if you're pressed for time, go ahead and skip. So the accounts I was looking to acquire, the guy said it was 40 accounts bringing 120k annually which caught my attention.

So it'd be 33, $3,000 annual value. After diving into I found only 15 are in my service area. Out of those 1510 of them need a significant price increase. He had no client intel, no job notes. Some were full Service, some are 12 month contracts, some paper service. And he had no idea what service he did for each client. He had no idea the service frequency. I guess he had been paying a guy $35 an hour to manage the route for the last two years. And he had to get his VA virtual assistant to send me the information for his clients. He wanted 25k for the 40 clients spread out across 4 cities and roughly 9k for the 15 I was looking at. After diving in and doing projection everything, I came to the conclusion I would not pay more, more than $550 for all those clients just at just sharing. Because this was my first time valuing a potential acquisition and I was shocked at what he was asking and how much it actually made sense and how much it actually made sense to buy it for. I would actually be, it would actually be more time and hassle to acquire these clients and plug them into our system than it would be just to acquire my own. So I'm not going to do the deal. If someone did buy these clients, he would have to find four different buyers because there are no big companies that serve all those areas. And he would realistically maybe only get a hundred cup, get a couple grand for the whole list. And he was asking 25k. I just find that so interesting that when I asked him how he came up with the valuation, he said he knew a guy who sold a familiar a similar number of clients for the same price. And that's all he said. Crazy. Yeah. It's the vast majority of people selling lawn care and landscape businesses. It's literally they pull evaluation out of their hair. And for the vast majority of them, when you run the math, it is a 5, $600 customer acquisition cost. And then it's like okay, well could you get a customer for 300 or 400 if you're really bad at marketing? Yeah. If you did every door direct mail and it still did really poorly, could you spend $500 and get a customer? Most likely, yes. And you get brand awareness and you'd have the fact that you'd have the pricing the way we want and you wouldn't have to spend the hassle of trying to plug them in the new system. And we're assuming that we didn't lose any customers with this 550k or 550 customer acquisition costs. So it's very rare that acquisitions actually make sense. It usually only makes sense when someone is getting out of the business because of retirement or they're failing or health concerns. And there it's like a fireside sale. And it's basically like pennies on the dollar. It's very rare that any acquisition in this industry is decent.

Mike, are you coming down to Augusta to visit us or do we have to make the drive down to South Park? I don't know who this is. One second, let me check.

Oh, Jeremy. Yeah, I'm not going anywhere. Dude, I gotta work. So yeah, our estimates went from 153 estimates in April to 70 so far in May. Similar marketing spend. But I wonder why. We are hardly getting estimates. I'm getting like five drive bys a week. See this is, this is Connor. This, this is likely just a matter of, you know, natural supply and demand and like the curve. Right. So let's just say last year month was 150. This month you're probably gonna be at looks like probably 90 to 100. Right. So you know, a 30% decrease in leads coming off of spring rush is relatively common. And this is why as you do this more and more each year you'll, you'll start. Okay. When I have this spike, I need to make sure I book myself out X amount of weeks to be able to then work through that backlog over the course of the summer when I do have less lead but keep the crew busy. Right. Because people will hire, hire, hire throughout all spring rush. And then they literally get end of spring rush when the leads start to die off and either A, they have to spend gobs of money to keep that lead flow, or B, they are then left with no backlog and therefore they have to let people go. Or typically I see is people overspend on marketing throughout the summer trying to keep their guys busy.

So, all right, everyone have fantastic weekend. Have a great Memorial Day, and next time I see you, I'll be in North Carolina. So say a prayer that things go well. Anyways. All right, we'll see you guys. Take care.