Mike Minute Mastermind 06/02/2023

Hello, guess the nation. Hope you're doing super well.

Let's go and get things kicked off. Make sure I put that in there.

Today is one of those days when you don't feel like you're getting anything done because you're just chasing your tail and everything.

Let's see here.

Oh my goodness. Everything was going hunky dory. I was like in bed at midnight. And then.

Yeah.

We decided to deploy.

The new email builder and automations inside of Copilot.

It was problematic, so it was a long night. But today I'm doing every direct mail. That's kind of my goal. And I'm interviewing another person. Even though you're gonna see like I hired someone on the videos because it's not like they've been mia. They just guaranteed me a date to start because they're moving into town. So like I've got to have someone to back me up because the goal is like next week continue to sell and then the week after that like fill up with work. So anyway.

I gotta do that because.

Things like last night happened and I've got to jump in. So let me just copy this link.

All right.

All right, sorry it always takes so long.

Bring that in. Percent and then the Poly AI company that we're working for, the AI after hours phone call stuff, their office in London. So.

Usually like 2 to 3am our time is when they kind of get kicked off. So we did a bunch of testing last night too on that. It looks, it's looking really good. We're hoping to start doing some localized test probably in three weeks where we will start writing some calls that are after hours to their system and then just getting all the kinks out. And then my hope is that by like first or second week of July that's able to get installed. So it'll be really, really nice. A lot of work gets gone into that and expense. I'm really looking to see what that return on that investment looks like for all of us. And yeah, should be good.

All right, present. Why is this not pulling up? Thank you.

Oh, bad.

Okay, first one is from Devin.

When giving price giving estimates, do you always say the price plus GST every time even if it's $40? Because I haven't been able to saying the price plus GST and lots aren't paying the GST. What does command center say or do? Thank you, thank you, thank you. Have a great day. Yeah. So I'm guessing Devin, you know you're still coming to training in next month. So I'm Guessing right now you're not using some sort of, you know, something that is automatically calculates the price the taxes in on the invoices. It should be something that is already being done for you and you know they're not paying you means probably you're taking check or cash. So I just make sure it's like most good customers just assume that taxes are going to be on top of whatever you bid them prices price wise. So I wouldn't overthink it. Nick from Mary's well how do you do profit sharing using BM in this example? What percentage are you using and why is that specific percentage? How do you determine how to divide it? Like the total profit sharing would be like 10 and then it gets divided by that amount of people. But then what happens when I've had over 12 people ask for but only one is getting profit sharing and most of those people weren't around more than two weeks. How I determine what to divide the 10% by? In my situation I think I'm going to get 5% ultimate because he deserves it. But in general I are you basing it based off of how many people are currently on staff at the end of the quarter? Are you divided by the percentage but that people total people and then giving only the qualified person their portion? I'm also curious as to why there's specific percentage because I feel like five isn't enough even when people are qualified for it to be meaningful. Great. Okay. So yeah, let me give you the breakdown and then like asterisks next to this, you need to be flexible. For example, if you only have one person that is eligible, you're gonna probably do something like you thinking Nick. So profit percentage, ultimately it is your discretion. You can do whatever you want. It's your money, it's your profit and determine how you want to give it away. If you want to give them more than you know what you've told them because you feel specific people deserve it, fine. My, my goal though is that it's very clear that in order to be participant in profit sharing, three things must be met. One, you're there for the entire quarter. Two, you're not late and three, you don't do call outs, right? So anyone that doesn't have those three requirements is going to check out. They're not going to care about profit sharing at all. They might care about P4P and making more money. That's fine. I mean check out in terms of like looking at your math and how you who you who you gave money to and all the rest of it. So it's happened before when we were smaller where, like, there was only a few people qualified, and I just gave bigger amounts to them because, like, so few people were qualified for it. And I'll probably honestly do this this coming quarter at the Bellingham shop. Because they had so many new people, we kind of have to flush quite a bit of people out. And the new group is good, but it's like, okay, well, who's qualified or who qualifies for is like, only probably six, seven people have been there the entire quarter. So let me break down how I would, in the perfect scenario, do it in terms of breaking down, and then I'll talk about the 10% in terms of breaking it down. If they have been there the entire quarter, I would consider them eligible. All right, that's the number I would divide it out by. So let's say that there is $5,000 worth of profit that you want to distribute, right? Not profit total for the business, but $5,000 you want to distribute to the team. And let's say there are 10 people that have been there the entire quarter.

In terms of just employed.

Then you're gonna be 500 gonna be on the table for profit sharing. Then it's a matter of, okay, were you late? Did you call out etc. Then it'd be taken off of that 500. Okay.

The reason we do that is because that money for them being late and.

Calling out etc goes back to the company. Because essentially what happens is because they were late, because they called out, that led to overtime, that led to people getting burnt out, et cetera. It should be going back to the business that had to ultimately pay that price. I don't want it to be redistributed to the team because then they're going to start vouching for everyone else to, you know, be late, call out, they're going to push. You don't want them vying against each other. That's the last thing you want. You want profit sharing to be where we're all like a team here. So if they lose it, it goes back to the business. And typically that is the most fair. Because if someone is late or they call out, you're leading your entire team into overtime, which cost the business a lot of money. So that's how I look at it, is like, who is here the entire quarter? Great. We're dividing, however, what are the profit share amount is by that number. Then that is what they are eligible for. And then we look at lates and Call outs. So I hope that was clear in terms of why it's 10%. There's really no rhyme or reason to it. I will move that number up or down based upon the. The location. So same thing with general managers. Like, general managers get 25 of profit sharing at my locations.

The. Their crew gets 10. Now, if someone was with you for two and a half months, you're just getting started. You have one guy for four months, and one guy's been for two and a half months, and they're both rock stars. I probably would be stickler on the quarter. I'd probably be like, okay, let's just split it between the two guys. So just remember, you ultimately are the owner. You can do whatever you want with the profits, and people will not care if you change the rules. If they're being late and they're calling out, they will care if they've been there every single day, etc. And those are the people. You're like, you're doing that, you're probably giving more than they would otherwise get. So. But however, if I. I would imagine, Nick, if I took your crew, for example, I think you have like six guys working for you now. I would imagine that probably Matt and one other person are the only people eligible because they've. They're the only ones that work the entire quarter, right? So then if you're giving 10 to your team that is eligible, technically now they'd both be getting 5%, right? So I hope it makes sense. It scales doing it that way, because then as you grow the company in size, more people are cutting into that pie of profit sharing. So that number, quote unquote, would get less. However, you should also be coming more profitable, right? So in a location that profits $250,000 a year, it's not like I'm giving 25k to one person. Whereas if I have, you know, a location of doing $50,000 a year, you know, four or $5,000, not going to one person, right? So. But there's only one employee. Great question. Great question. And this is something that has changed over time, even at the Bellingham shop, because we used to do where we take the number of people at the beginning of the quarter and end of the quarter and. And take the middle number of that and divide it out by that. Because that we figured, okay, that's the most fair because, like, how many people started the quarter, how many people ended? Like, we'll take an average divide out, but we're like, you know what, let's just take it by based on how many people are eligible based upon just being employed here for the entire quarter. So, and just, just to clarify too, for us, the crew doesn't have to worry about cumulative losses. The general managers do. What that means is if in Q1 the company lost $10,000 and then Q2, we made $100,000, all right.

Q $200,000. The profit for the crew is going to come from a hundred thousand dollars. That's the pot. Whatever your percentage you're giving them doesn't matter. It's coming from the hundred thousand. I'm not going to just give them nine out of 90,000 because the crew, in my opinion is much going to be thinking about their more shorter term and they're not responsible for the losses of winter or winter. What was done. The general manager is. So management is going to be cumulative. So in that case, if I lost 110,000, lost $10,000 in Q1, made $100,000 in profit in Q2, the general manager is only going to get profit sharing on 90,000. Right? Because they, because otherwise if you don't do this, and I found this out the hard way a couple years ago, I had a location that did horrible during the winter but then crushed it during the summer. And I'm giving 25% of the profits in the summer when in reality we're still digging ourselves out of the hole for winter. That was created. Right. And it also just, it leads to resentment. Like seriously, I'm getting profit sharing and the location hasn't even got above zero. So you don't want to be in that situation. And to, to mitigate that, you're going to make sure for general managers you do cumulative profit and loss. I will probably clean the slate at the end of the year. And that makes the most sense. Like I'm not going to let follow them. Right? It's all kind of like, okay, because like first year you, you went 50,000 negative in the first three months. Then it was 10,000 positive, 20,000 positive and 10,000 positive. I'm not going to carry the 10,000 loss from year one into year two. I'm not going to do that. But from, from the beginning of the year to the end of the year, like they're not going to get profit sharing Q4 if they have, if they're still negative for the year. But because Q4 was positive, like I'm not going to do that.

But just remember, flexibility is the most important thing. So for example, like on my new locations that are brand new, I I kind of swiped the slate after Q1 for the general managers. Like, hey, the first three months you can make losses. After that, I kind of expect to be near or above profit zero. And so if someone makes good profit here in profit in quarter two and three and four on a new location, but Q1 was massive losses because they're buying trucks and equipment, I am going to give them profit sharing. All right? So don't get too locked in on what your profit sharing is going to be because that will. You need to keep it malleable to the incentives of your general manager. The amount of crew members you have, whether you're in profit mode or growth mode, it needs to be flexible. Ultimately, the only people that will care are the people that are eligible for it. And as people who have not been late and haven't called out and they've been there the entire quarter. So as long as you communicate well, you'll be okay. We change the profit.

Sharing thing quite often and some people would say, oh, you're moving the goal post. But whoever would say that are not the ones that are in the conversation of actually getting profit sharing because those people know what's going on and they understand why it's happening. And so there's never a moment where someone's like, oh, I. I was going to get this and I didn't. It's always a matter of no, you reason you didn't get it is because you were late three times. Right. Four times, whatever it is. Right. So, great question. I would say talk about this with your coaches. I know a lot of you are just finishing up. We just finished Q2 for your crew. So definitely, you know, go over those numbers as you get your P. Ls wrapped up in, you know, mid June and you're trying to look for giving out profit sharing, definitely something to go over with your coach.

Kyle tarvin. After hitting 25 to 30k in revenue, what's your location? You producing profit or cash on a monthly basis? Honestly, at 25 to 30k a month of revenue, it really depends on whether they are again their first year. They're probably not going to be profiting a lot. I would say if they're making 25, 20 to 25, they're probably breaking even in their first year. I can make that profitable in year two when there's no marketing. I've raised prices, close ratios down a bit more, less leads are coming in. I can do that in year two and beyond. But in year one, when you're buying trucks, buying equipment, hiring People and your prices are somewhat lower because you're trying to increase your, your revenue. I'd say you have to get above 20 just to be, you know, break even. And that's what we're seeing kind of right now. With all my locations that are kind of either just getting above 20 now or getting to 30, it's like that's when they're kind of right. So like all my locations that I started three months ago, they're all right around zero. Chuck said this, this quarter, like this month, they're all right. Getting close to it, but we're still spending a good chunk. I think at least five. I forget. He told me the other day. Sorry. I want to say it's like 500amonth on ads and stuff like that. Like those, there are things, you cut those out and then we're like $10 lower per hour on per hour labor because we're trying to grow, grow, grow. Right. So it's like you can go 10, 20, 30,000amonth in revenue over the course of those three months. Great. You're not going to be profitable in that, but you can definitely take 25 to $30,000 a month in revenue, have one employee and yourself, and absolutely make $10,000 in profit in years two, three and beyond, assuming that you raised prices, lowered close ratio, stopped marketing and focused on profitability.

By the way, just. I know I said yesterday, but I want to clarify. It is not normal what I talked about yesterday with one of my locations that's in profit mode. Having one general manager, one employee in 35,000amonth revenue. That's not normal. Don't expect that of yourself, that locations. It's, this is now its third year. It's, it's first year in profit mode, but it's third year in business.

So don't have the expectation that you and one employee in your first year can do 35. It's not going to happen. You'd be lucky to get to 20. Right. That location has no marketing spend. Very optimized. We cut a ton last year of, of jobs that were far away. So just, just want to make sure everyone's very clear on that because I know that's a very tempting model and it's very, very profitable, I would imagine. I haven't seen the numbers, but I imagine they're probably 30% plus profitable last month.

But just keep in mind like that is a location that has been optimized and tweaked in terms of pricing, cutting out everything on the exterior. Now it's third spring rush, so they obviously, you know, get things nailed down. The employees are crushing on paid for performance, etc. So.

All right. It's interesting that there's only three people on here. Did I do something wrong?

I hope I didn't. Okay, good questions, honestly, about profit sharing and all the rest of it. So. All right, we'll see you guys. I'm gonna try to get muster up to energy to go do holding a sign, every door, direct mail. It'd be great. So I gotta make up for on the weekend though, just last night. All right, guys, take care. Have a good one. We'll see you on Monday.