Mike Minutes Mastermind 01/03/2025

Ladies and gentlemen, boys and girls, welcome to another Mike minutes Mastermind. Let's get this party on the road.

Oh wow. We got nine questions for the day. Let's go ahead and present share screen and we'll jump in.

All right, first one up is Mr. Anonymous. How does paying taxes work? If a business primarily uses contractors perform work, are we still only taxed on the profit made? Let's say we sell a customer on a $5,000 new sprinkler installation. We have a subcontractor that will charge us $4,000 to complete the work. We pocket $1,000 from this transaction. We only pay tax on $1,000. If this is the case, why not just start a company, only the subs instead of having to go through the trouble of hiring employees. If you could get enough leads for this service, all you'd have to do is manage the customer payments, etc. Yeah. So two assumptions here. First. Well first off, to answer your question, you do pay taxes on just the thousand dollars because the $4,000 is cost of goods sold. It is an expense on the business. Now when I say taxes, I'm saying.

Income taxes. You're going to pay sales tax, you know, depending on your state and what kind of work you're doing depend independent of this. But for my income tax perspective, you're going to send.

You'Re going to pay taxes on just $1,000 of your profit.

So that's that. Now in terms of why would we not just use subs is because first off, you're taking all the admin on for in this case 20% of the revenue. So.

You know, we just assume that it is super cheap to do that. Like for example, most businesses spend about 10 to 15% of their revenue on admin. So if you take 20% of the revenue you're currently making and like oh, we're just new subs, great, 10 to 15% of that system we sucked up in admin of servicing those clients. And now you also are going to have to bloat the amount of management of the subcontract. That work doesn't just get done. Right. So like in this example, basically you can think of this. Let's just assume direct your labor is 80%. Essentially that's kind of like subcontractors. Another cost of goods sold, it's 80%. Well like if you're doing it all yourself, it's usually like 40% but then you have employees to have to manage them, et cetera. So.

This whole idea, like I only use subs Is okay. There's definitely people that make it work. Actually my cousin does a huge roofing company. They just sub everything out. He can't sell his business.

It's also super fickle when it comes to the jobs. Akee is a sales organization, essentially your top of the funnel lead gen. Right. There's just not a lot of value there. And you're the one first one to get hit when it comes to recessions because you only control the top of the funnel. So it's harder to do recurring revenue this model. As soon as you start adding recurring to a subcontractor model, usually you start have leakage, you have people leaving to the contractor. You also have lower margins. Usually it's not sufficient enough to be able to sustain this model. So yeah, I'm not like opposed to it. I'm just saying it's harder than it appears. Everyone likes to think it's like, oh, I just sub stuff out. No, I don't have to do any work. You still have to manage the subcontractors. And that is something that would otherwise be employees that are, you know, governed to come at a certain time, wear a certain uniform, have certain standards and you can enforce them. You can't do that with subcontractors. So.

Mr. Enormous, I've seen a few owners starting to offer pest waste removal. Is this something we could start offering marketing under the Augusta brand? Nope, we cannot do that underneath the franchise agreement. It's only for green green industry services in terms of using Augusta. So I would not recommend. Because you can't. It invalidates your trademark locally if you do that because a trademark is based upon certain things and it's in your franchise agreement and that's what protects you. If someone's ever starting Augusta Lawn Care in your local area, I can go after them if you stay within the confines of the trademark. If you haven't, then first off we have a problem with it because it dilutes our brand for agrastination. But then secondly, it would be a matter of.

You would not be able to enforce the trademark. So. Anthony Agodello. Mike, I would, I would like to get your opinion about offering more than one package for laundry. We currently offer a six application package without including aeration and seating. Yeah, you know, I'm not opposed to it without more than one package. Yeah, I like two packages. Kind of like a good and bad or not good and bad, like good better, best model. Essentially. I would, I would call it. So two, three packages usually makes a lot of sense to the customer. Honestly A lot of times they come into it, they're going to spend a certain amount in their brain. And so having different packages allows you to be able to accommodate the person that's willing to pay more. Like some people like hey I want my grass green cool and in their mind they're thinking $300. So they're going to be in your lowest package no matter what other people like I'm willing to pay whatever, like a thousand, $2,000, who cares? They're just going to take your top package. So having the ability to capture that extra income only happens when you have good, better, best model. So I would definitely have that. Whether it be like a three step, six step and nine step, for example, in terms of the plans and like maybe the nine step does include the aeration, et cetera. I'd have those at different Packages for sure.

Mr. Anonymous, is there any contract when hiring Lawn Care Web Design to design a site? What happens if someone subscribes and cancels one or two months later? There is no contract. If someone does that one or two months later thing, usually they're trying to rip us off in terms of our design and I earmark them in terms of beware of them and we avoid them in terms of letting them in the franchise, etc. Etc. But there's no consequences, there's no contract.

Javier, Stone Mountain, Georgia hi Mike, should we change our Google my business profile's name back to Augusta Longcraft X or keep Christmas Lights in the name year round? Are there any SEO advantage or drawbacks to either one? We haven't seen a huge delineation of changing it to or from. I would definitely recommend changing it to Augusta Christmas Lights during your, you know, September, October, November, you know, Sprint for Christmas lights. But I would change it back honestly because the other nine months of the year you don't want people getting confused. You don't want that long name being in there. I would change it back if you can realize you might have some reinstatement like re validation issues. So I might avoid that. If you are, you somehow got grandfathered into a cool situation with like a P.O. box or a sweet box or something like that. But if you're okay with validating your address and that's never been a problem, I would probably change it back honestly if I was you.

Mr. Anonymous tweaking my email, my sequence automations and I'm curious what your thoughts on practice are on the following Text and emails before recurring service as a reminder text and emails before a one time project text and Emails after a recurring service or project. Yeah, so I usually don't like doing it around recurring where I'm always reminding them before or after, mostly due to. Unless they ask for it specifically. If they ask for specific, like, hey, I want you to know, I want to know once you leave so I can, you know, let the dogs out or something like that. Cool, fine. I want to minimize that much of that stuff as much as possible. Mostly because it impacts my open rate when I am sending out marketing emails and text messages. Because every single week they're getting a text from me. When I finish mowing that lawn, the likelihood of them opening and responding to a not automated email, our text message is lower. Right. So if they're saying like if they, if they scroll back and it's like, we have just finished your service at XYZ Property, thank you for your being a customer. And that's five times for the past five weeks. And then I send them a message saying, hey, would you like us to go ahead and get your property clip on the schedule? They're going to just assume this is another automated thing. And so I want the response rate to be as high as possible, my engagement to be as high as possible and communicate with the customer around sales. That's why same thing with like sending invoice receipts. If you're doing weekly or daily billing, don't recommend it, just charge their card, they have access to the customer portal, you're good to go.

So I'm usually trying to not restrict but keep my communication as low as possible. So that way when I send sales messages, they don't come across like they're automated, they feel more personal and people actually open and respond to them like click through rate and response rate. So like for example, on my, I'll just use my personal brand for an example. When I send out daily emails like I did last week because we were giving away a bunch of stuff and end of the year and stuff like that, click through rate is around 32 to 36%.

When I do it like once a week, it's like 54%. And so it's simply the volume of emails that I'm sending out now. The question is, should you just not send as many emails? We definitely got more on subscribers too. Like when you start sending that cadence of more frequent. So I have a good case to say that, hey, because they were not sales pitches, they were all just giving stuff away, there's more value to the consumer. But usually if you are.

If you increase frequency of communication, you will Decrease engagement. That's like general rule of thumb. So if you if I post every single day on my YouTube channel, I will get 20 to 30% less views than if I just posted it once a week. Same content but just once a week. Simply because the people that are subscribed to my channel, if I'm getting every single day, they're going to pick and choose what they want to watch versus being like oh it's once a week, I'm going to listen to it. So there's no like a right or wrong answer. I would just say in general I try to stay away from it unless they ask for it. If they ask for hey I want a reminder etc, I'll automate that. That's cool. But just know that your automated message of the past 10 visits, once you send a sales pitch or you ask, you try to make like a very personalized text message to them saying like hey X, Y Z name. Would you like us to come to a property cleanup? Your response rate would be dramatically higher if you haven't been sending a bunch of automated reminders in the past.

Abraham.

Always been impressed in your ability to keep and keep and create spots for leaders like Liz and Lee. On my move to Vermont I have Eric which is my right hand man that's also willing to relocate and work for me. With a tried and True roadmap to 500 to 600k then adding a GM. My plan is to open 2 to 3 locations in Vermont in the next 10 years. My headspace has been partnered with Eric who has much but how much equity do we share? Does it have to be 5050 or it can be 80 20? What are your thoughts? Two don't art partner but offer him a good bonus after hitting certain markers and just start training him to be gm. I'm starting the Vermont location from zero. Where can I fit him in? The systems of Augusta don't call for a first employee until reaching my capacity. I also wouldn't want to lose the opportunity to have someone I can trust reliable and that loves snow plowing. Yeah. So.

If you, if you, if you have a great first employee but you don't have like the capacity for it. It's just simply a matter of how fast can you get to capacity because you can fill one person's schedule like literally within a matter of a week or two like I did this in south park is like you need to figure out one strategy for marketing that works and then you just start pounding it. Usually like especially during spring racks, door hangers is A great strategy simply because the math gets you on the side of you need to sell a couple projects a week to keep someone busy. And if you have recurring coming in throughout that, all of a sudden in a matter of a few weeks, you can fill their schedule. So you can use projects to book someone's schedule out pretty quickly. In terms of equity, I'm a big believer in only giving equity if they are contributing financially. Unless right from the get go, there are clear demarcations of I am a financial partner, you are a sweat equity partner. And so they earn their equity through working 10, 12, 14 hours a day to get it off the ground.

I would also have that equity if they're not contributing financially, to be vested, which means over the course of time they get that equity because I'm not going to give them, let's just call it 30 or 40% of the business simply for equity. When from day one, I give 100% of the rev of the upfront capital. So like let's say for example, I'm starting location, which I've never done this by the way. But if I had to do this, this is what I would try to, okay, it's going to take 100, look at $100,000 to launch this location. And I want to give some equity to this person. They're not contributing anything up front. I am not going to give them 30 or 40% upfront. Just not happening. Because what happens if they want to leave in three months? So what I would probably do in this case, if I wanted to be like, really hands off, there's sweat equity. I'm financial equity, for example, or financial only. I would be like, okay, I'm going to contribute all the money and then over the course of the next 12 months, 24 months, you're gonna 1% every single month. So you're gonna get up to 24% of the company, you're gonna earn that at 1% every single month. And around that 24 marker period. 24 month period is probably when we'll start having distributions. So 24% will actually mean something. So I would do something along those lines because sweat equity gets invested in over time, whereas the capital is required up front. And so I would just align that with your equity positions.

And generally though I keep it cleaner. Do profit sharing, do distributions, give them a good paycheck. Like I would recommend that highly. So first off, I just talk to him, like, what motivates you? Is it earning equity a piece of business over the course of time or is it you know you want to actually invest with me. Like you invest half the money, I invest half the money and we go in together. More of a partnership. 50 50. Or do you want to invest say 20% of the capital? So you invest 20,000, I invest 80,000, you get 20%, I 80% we go that way or do you want to do it where I just pay you more? You have better, better bonus, better incentives, better paycheck and would you more of a gm right. So there are just so many different routes there. It really comes down to if you're really trying to.

Get someone to retain with you, you just gotta like talk to them. Like what what, what what? What's incentivizing to you? What do you want to your career? What do you want? Do you want money more? Do you want a piece of the equity? Do you want a piece of the action?

And just like modifying their comp plan that way. Do you know when you will have a decision on whether or not the guest nation will be able to invest in Augusta Corporate? Just want to know where I should be putting this money in the meantime. Thanks. Yes, there'll be announcements on this at conference in two weeks. Well exactly 13 days actually.

Cool. Number nine. Well, we have all Mr. Anonymous today. When CC gets a customer that says they found us on Google do how what did they click for? How did the customer hear of us? Google lead doesn't quite fit since it is organic and there's nothing else on there that seems right. You could create more if you really wanted to. Just keep in mind as soon as you get above usually 10 I've seen where this becomes almost useless because if you're like this one's 3%, this one's 8%, this one's 9%, this one's 4% all of a sudden all your numbers are all over the place. I generally see the most people who know their numbers they generalize this in like four or five categories pretty simply. Also because people will say they found you on Google when reality they searched you on Google because they saw your truck. So that's why I don't trust a lot of those times when they say those sort of things.

Especially when yeah, there's several reasons. Like when you ask them this question is also indicative of what they say. Where did you first hear about us versus where did you hear about us? Changes have you seen our trucks throughout around town also changes things. So there's so many different ways to complicate this unfortunately especially when it comes to Google because if they Click on Google Lead or Google Ad. Do they click on your Google listing? Do they click on your native website? It's just very difficult. And so.

If they said they're from Google, they're probably click on the Google Lead. I would imagine if that's what's in your list. If it says Google, they're probably going to click on it.

But also keep in mind most customers aren't even going to know the difference between a Google Ad and what they see in the native search. They just don't. We all do because we're business owners. Just keep that in mind. We have this massive, we all know like oh, that's a Google listing and that's a Google Ad and that's Google Local services and that's native Search. The customers just see blue text. So keep that in mind too. I wouldn't trust a customer ever to tell me where in Google they found me.

And then use that as like empirical data. Mr. Anonymous. Hey Mike, I listened to an older video from Landscape Business course around hiring. Some of the video focuses on the action, the attraction or retention side of hiring. One of them gave more focus on the actual process of hiring. Can you shed any recent or new light on how you focus your efforts on this particular area? We know that going into this next spring rush our ability to grow will hinder this aspect of the business. I don't think selling is our problem in the business. Yeah, so.

Attraction and retention is very different. Right. So attraction, you're mostly thinking about what are the ways to get more applicants.

That's your top of the funnel. And then you can kind of, you can segment your funnel, like improve your funnel by looking at like the interview process. Which questions am I asking them? Do I do bulk interviews with like five or ten people? Do them one at a time. Do I do an automated email sequence or text sequence to existing applicants, for example, you can put them inside a copilot as a just change the customer type to applicant and put them on a sequence up to three days prior to their interview, for example and send them information about pvp and their compensation packages and looking forward to meeting you. Like you can do that and improve your attraction process. You know, posting on post, making a post on Facebook and then just basically making a job post but putting it in a post in your Facebook page and then boosting it to local people in your 5, 10, 15 mile radius only targeting your demographics like males 20 to 40 for example.

Great strategy. Drive them to your website in terms of, you know, GustAlongerServices.comcareers your location. So you'll get a bunch through there. I've seen people get 20, 30, 40 a day just from doing that. So that's that ho is an attraction. Retention is a very different process. So in terms of my efforts there, it's mostly, mostly like, I just know everyone wants more money, so that's an easy one. As a absentee owner, it's like, how do we optimize the numbers to make more money? And then being able to offer them paid time off and medical benefits, et cetera, is always helpful from a retention perspective. You can start a 401k plan for really cheap too. Again, these are for frontline team members, honestly, mostly actually using an attraction tool because they don't use them, unfortunately. They usually won't use healthcare benefits. They usually won't use a 401k plan. But you can use it to attract people. So just keep that in mind. Especially if you're thinking like, man, what's the cost? And you're running like the math, as if everyone's gonna use health insurance. A lot of them won't. A lot of them will have plans through the state that are better. They'll have their parents if they're younger, they'll. They won't want to spend. Even if you're paying a percentage of it and they have to cover some of it, they won't want to cover anything. So they'd rather just not have anything because they haven't gone to the doctor in five years. So yeah, it's actually most benefits as many times an attraction tool. Retention is mostly like, again, the reason people quit businesses is because their manager. So like I probably focus most of my time on retention. Like do you have a decent, you know, leader manager, communication, meetings, cadence of style. Like that would be like the thing that actually retains people usually the most. From a, from a employee perspective, the benefits all is kind of like honestly table stakes to get them in the game. Like you've got to pay them enough to get them interested. You got to, you know.

Have enough hours for them to stay interested. P4P's got to make sense to them. Like those are table stakes to get them in the game. And keeping them in the game usually has. It has to do especially because you have P4P in place. It's a matter of like, you know, retention is. Compensation is simply tied to their performance. So really retaining them simply comes down to.

What'S the manager like. So, you know, you got to kind of figure out your own style. Like some people are a little more laid back, they kind of more chill. They let people kind of do their thing and then that will blow up once every three years where you have a mutiny because someone was not hands on enough. And then there's other people that are like, so much in the weeds and down their throat to their employees. No one wants to work for them. So, like this, you just gotta figure out what your cadence is and then be true to it. Like, when you swap is when you usually get will get blowback. So. All right, everyone, I hope you have a fantastic rest of your Friday and awesome weekend ahead, and we will see you all on Monday. Take care.