Mike Minutes Mastermind 01/09/2025

Hello August Nation. Let's get started. We are one week away from conference. Looking forward to it. Let's go ahead and jump right in. We got four questions it looks like today submitted.

Boom.

All right, first up on the list is from Mr. Anonymous. How much do locations normally charge for dispatch fees? I think you mean disposal fees. I'm guessing disposal fees. How much do you think is warranted or excess acceptable? I'm guessing you're meaning disposal fees. I'm probably on the higher end of my locations, but I'm also in profit mode. So we do $50. Sorry, a hundred dollars. 99. I should say 99 per pickup of debris and 199 for a dump trailer of debris. Again, you know, we're in profit mode. We're not trying to close every job. You could definitely bring that down if you have an ability to be able to dispose of that for a lot less. Just keep in mind if you are disposing on your shop space, you do have to manage the material still. And that does cost money and time. Like renting a piece of equipment to manage it, burning it, burying it, whatever. However you're managing it like that material waste does take time and energy to. To manage. So I would, I would say it's probably like relatively on the higher end, but I've seen some people be. Basically, I'd say the vast majority of people have used that same, you know, $199 for pickup debris, 199 for trailer debris. And then you can always have halves or quarters if you have a really small job. Matt Bedela from Delta bc. Hey Mike. We have a question about our territory and future expansion plans. Can and should we split our territory into two distinct locations? Context. Our current territory is the city of Delta. With a population of 115,000, a growth rate of 6 to 7% per five years. Delta is divided into two towns of South Delta and North Delta. Each with a population around 50 to 60k. These areas are separated by sparsely populated farmland and a bog. It's about 15 to 20 minute drive from one to the other. Yes, I know. I know this area pretty well. Our shop is located in the center of South Delta. We currently operate only only in South Delta with a revenue of 1 million. And the plan to enter profit mode this year. Raising prices and simplifying our service offering while staying around. And 800,000 to a million dollar marker. Let's go. We want to expand in North Delta in the near future. But if we don't split the territory, we need to target 1.5 and go for the GM plus model. If we split, we can stick to the optimal 800k model for each location. This seems the ideal setup for us. I've attached a map of our territory outline in black with North Delta highlighted in red and south Delta in blue. The shop is located at point A, while the nurse house in North Delta is at point point B. Okay. We're also looking to expand our nearby Richmond and South Surrey, White Rock in the near term. What are your thoughts on splitting the territory? We understand it would come with cost, but would be a full fee, like open a new location. Have you thought about this being an option? Thank you. All right, so let's look at this location. Share this tab. Okay, so you're down here. Basically you're wanting to attack this area up here. So for those who don't know, this area right in between is a lot of farmland. There's a big. Yeah, he's the same bog. There's a few major roads that get over to then. Sorry. This area is very, very populated over here as well as. Obviously Richmond is like all this is downtown Vancouver, essentially. So Delta is a very unique area. Honestly, it's a great market. I like it a lot because people who don't want to live in the city can live out here and there's plenty of money in this area. So.

So in terms of your territory, I would probably just do two things. First, I would probably go ahead and I would. First off, I'd be looking at making sure that this area is available and I would be talking with Lee and making sure that someone doesn't buy this from you, buy this out from underneath you. Mostly due the fact that if you're going to do this strategy, you will eventually want Surrey, and Surrey is like huge too. So, like, you might want just a north or south end. I'll leave that up to you guys figuring that out. Like, the reason I say that is because what I don't want to happen is you expand over into here and like North Delta becomes Surrey very quickly even though you're using this main highway. So that would be what I'd be kind of somewhat concerned about, especially if, like, if you're currently Delta and you're not getting a whole bunch of leads from this area, or maybe you are, I don't know. You didn't really clarify that. So I would probably, if I was you, I would probably do it in two ways. Number one, I would probably start putting. Accepting customers in this area. I'd start doing some marketing. If your Domain is slash Delta. It's still work. And so I would just start marketing this area and getting a crew a route going. By marketing this area, you're probably get some overflow in a surrey, but you'll be able to kind of quantify how much of it is, is actually happening. Because if, if you were able to do Delta and you're able to just stick inside of this small little sliver area, which I don't usually see this happening, mostly because you can target this area but then it's all a crossover. Like you start rippling effect like of referrals. You'll get a customer here and then here and then here and it'll start trickling over and people see your truck etc. So I'd be careful about that. But what I would probably do is start with that. No making sure though that this area isn't going to get bought out. So I would talk to Lee like hey, I just knew one, I want to know if this ever is about to get sold. I would buy it first. And then what I would do is just work within your current market. I would try to get customers over here, a one full crew ideally and then I would split the location. Because you getting 30, 40, 50, 60 mowing customers, for example, in this area, you're not going to be profitable on it with a 20 minute drive between it. Just you're not going to make a lot of money. It's going to be, you're going to get done in a couple days of a route. But then if you're like okay, we're ready next year we're going to profit mode, whether it be the year after that or the year after that, it's like okay, we're going to expand and we're going to go ahead and we're going to go ahead and get another location. We're going to split this one off and we're going to go big in this area. But now you're going to start with 50, 60, 70 mowing customers already and then split it off then, and then I would just then adjust my territory line between the two territories to be, you know, here probably and everything over here would be one location, everything over here would be a second location. But I would not rush that. I don't think you need to rush this. Just know that you're not going to be profitable in the first 50, 60, 70 mowing customers likely that you get in this area. So I'm assuming right now you're only servicing in your service area. Is this Blue. I would just expand it when you're ready to start getting customers in this area and I would start marketing over there and just see how many leads are coming in. I'd start building out my route knowing that this drive over here is going to be, is unprofitable. But you're, you can handle it because now you're making this location more profitable. You're cutting out services, you're raising prices like you're going back into profit mode. But the reason I say that is cheaper to take the year of, you know, 40, 50, 60 million customers being unprofitable, then starting a completely different location, having to get a shop space and spending, you know, 100, $150,000 ramping that location up or without having a base of keeping at least the general manager busy. So that would be my recommendation.

You could absolutely just have two shop spaces if you ever wanted just to stay inside these confines. But I just know this market enough to like this is going to start bleeding over into this market. And so there's just so much pooling of demand over here. And so I would just be careful with going beyond this line and I would, to be more, to be conservative, I would just stay inside your territory for one year and then, then make the determining factor. Okay, is this worth to a start a second location with a different territory and try to encompass more of Surrey B. You just have two shops inside one territory. You could do that too. So if you're like, hey, like there's 20 minute drive in between here. Let's just get a cheap storage space over here, run two trucks out of it and you know, go to that 1.5 million marker and go to the GM plus model. But then you'd be able to make that jump pretty quickly because you would have defined, okay, we are able to get defined inside of North Delta. We're not getting a ton of bleed over nursery and you know, 10 or 20% we're willing to just let those leads go. Who cares? Then you just stay inside one territory. That would be my recommendation. And then if you ever did want to break it apart by getting this would honestly be an operational thing. Like if you had a really solid GM candidate and you're like, hey, this drive is getting annoying. Let's go ahead and just break this off. Let's try to either a stay inside this market and just like operate as two different locations under one one location, like one locate one territory, two locations, like in terms of parking or I would probably be more inclined to just chunk this up and make a second location. So I hope that made sense. But in essence my recommendation would be test this out before you jump in. I would send one crew over there, get 40, 50, 60 mowing customers, see if there's a lot of crossover going into Surrey. If so, I'd be careful about moving over there until you know, you could pull the trigger on a territory because you just don't want to be investing in this for a year, two years, getting a bunch of customers a bunch of overflowing in a surrey and then someone comes along and gets this territory. That'd be my.

Apprehension or like the caveat to all that.

So I'm. I can't wait to see you guys in profit mode though. It's me. Really, really good. The first one there. Mr. Anonymous. The other day I saw a coaching video you do with a guy in college and he's basically trying to run his lawn business remote. In this case he had a main guy he was paying $30 an hour and a helper he was paying $20 an hour. I prefer to give more of a P for P percentage bump rather than just increasing their hourly rate. But curious how you would set this up if you had to run a location remote. How would you set up compensation for the employees to allow you to do this while still making profit? For this example, plan on having 250,200 to 250,000 revenue business, one main crew lead and one helper labor. The employees would do all site visits for jobs and estimates, equipment maintenance, et cetera. All you would be responsible for is customer communication, scheduling, billing, online tasks. Okay, so at this point.

The role that you're asking this person to do is really still a general manager even though they have a helper, one helper. There's still so many things in person you need to do. You know, equipment wise, purchasing things, handing out door hangers. Like all of this because you're not there in person becomes a general manager. And so that's why like, you know, I think this gentleman, if I remember correctly, the one you're talking about, there was something around.

I think it was the offseason. We want to lay them all off so we couldn't do salary. They. I think he had worked with these people for like years and years so he wasn't worried about P4P but like I would always recommend P4P also. What happens if like. And I think, I think I've talked to him about this. This is a, I think there's a couple years ago.

If that helper leaves, you're in a really bad spot. Because this GM quote unquote, he was trying to treat like a crew lead, has to hire someone and train them up. And so I rarely see this work out. I do not believe that a location at 200 to $250,000 in revenue can sustainably have an absentee owner. This is why we try to sprint to 500,000. Because you can make it work. Like you can get someone that's in charge, etc. But time, you pay them $30 an hour and you pay them $20 an hour. If you just take out their wages.

And you got to be in massive amounts of profit. Like if you're charging $120 per hour or more, you can make this work probably 120 to $130 per hour. You could probably make this math on this work. But where it breaks down is where something like one of these people leave or they call out for one week, your, your labor just got cut in half. The amount of production you can do just got cut in half. And so I don't think this is a sustainable model. And so if he was going away for that college for a quarter or a little time, I probably had more confidence in this. But if I remember correctly, he was saying he was going to pay that guy $30 an hour because he thinks if he really had to, he'd probably get the work done himself and his other helper would help him occasionally kind of thing. And he had so much Trust in this $30 per hour guy, if I remember correctly. But I rarely see this working out in the long term because you are one person leaving your business away from having no business. If you do this and you're one person being sick for a week or two, from being literally the business being halted by 50% of production having to stop. So I rarely see this work out. I've seen some people at 300 to 350, after optimizing for two to three years in profit mode, be able to run their business semi remotely. So where they check in maybe once or twice a week. But when there's a big calamity or there is a hiring issue or, or a training issue or an HR problem, they still do get involved. So I would just put that as a caveat. That's why I recommend getting to the 500 marker. That's when you're going to get three, four or five employees. One of them leaving isn't as big a problem. You can then afford the general manager if you build it in profit mode. The general manager is still out in the field working and producing revenue. They're not quite yet to be able to be overhead. So that's why I like that range possible, but I rarely see it actually work out. Augusta Lawn Care of Stone Oak I'm setting a goal for this year to fill capacity of 200 mowing customers. Should I continue to keep advertising passing door hands for winter services or should I just wait till mid February to start pushing hard for spring rush?

Well, it's a matter of like alternatives. What are you doing alternatively if you're not passing out door hangers for winter services? Are we tooling our thumbs at home? Are we doing other services and we're booked out? So I would just say default aggressive because even if you're we'll talk a bunch of this next week at conference. Like even if you your customer acquisition cost goes up during the off season, you staying out in the community doing work, getting more customers in your database, being able to upsell them in the spring rush has residual value. And so again it's like what what are you currently doing? If you're currently doing nothing, then hanging out door hangers for winch services is better than that. But if you're busy doing cleanups and you got long landscape jobs coming in, I would not be going out and doing passing out door hangers when you have revenue to be collecting and people are giving you money during the winter. So in terms of passing out door hangers for mowing customers, I would definitely wait till February, but right now I'd be staying busy. I'd be trying to default aggressive. And if you're not doing anything, then yes, door hangers for when surfaces would be added to nothing.

Johnny from Denver, NC I hear from a lot of homeowners that it's not a quality issue with their previous lawn care company, but instead they just stop showing up as often during the spring when I'm meeting a customer and they ask how big my team is, I tell them me plus one guy and they have the same worry that I won't show up. I don't think this will be an issue after this year and the growth expected. But what's some ways I can lean on the franchise to ease the customer's worries? I would not say that you have one person. You would say that you're part of a 150 location or 170 location chain. And then I would lean, I would drop in hints like when you call the office, et cetera. These are Things that are going to make you seem larger. If this is something that you're trying to seem larger in. Again, I believe that these customers that you're talking about are more frequent than we actually believe. Because what happens is we hear from the 1 out of 10, 1 out of 8 customers that are like, I want that small local guy. These people are. The people are willing to pay and they're price insensitive. They have gone. They're tired of people leaving. They're tired of the boy, the kid down the street charging 20 bucks for the lawn. But then every single spring they gotta find someone new. And every single week it changes. And more importantly, when you have less team members and you're not as organized, what happens during the spring rest? The reason why they don't show up or they don't show up as frequently is because they're just crazy busy. And so instead of showing up every week, they show up every seven or 12 days. So this is very, very.

Common. And so assuming you're actually going to be able to stick to the schedule and you're going to stay organized at all costs, even when you're smaller, I would just lean on those other elements of the business and I'd put it in your marketing. So in your marketing, don't be like the small town Johnny from Denver, North Carolina. North Carolina. I'd be saying, hey, if you're tired of your landscaper not showing up to work, hire us. We're part of 170 land location chain. We've been around for years. Like you can lean on that aspects of the brand. And even just the way you do the marketing, like if you're trying to go that direction, you, you keep it more professional, you're not going to do more gimmicky things because that's usually what a new up and coming landscaping company is going to do. So determining where you want to have in terms of your positioning, that's really what you're doing here, is positioning the brand. You know, you can, you can change this in your marketing, you can change this in the way that you present yourself, etc. So like I had the same thing in my market when I first got started because there's so many other, you know, younger guys getting started. So I just started showing up to estimates in a suit. I did it for like three or four months after that was very difficult operationally to get changed into a suit and tie. But I'm gonna say like, my close ratio is pretty high. So.

Yeah, I would not recommend that by the way. All right.

Okay. Mr. Anonymous versus spot dispatch fees, as in someone canceled within 24 hours. Oh, okay. Yeah. Like, usually if this happens once, we're going to reward the person. If it happens again, we're going to be like, hey, if this happens again, we are charging you. And we. We just charge them the entire fee. So instead of trying to make it all complicated or having like a set dollar amount, if they don't give us 24 hour heads up, we're going to charge them now. I'm going to give them one warning. And honestly, to be perfectly honest, usually I give them too, to be honest. Like, I think we've done this just a couple times. Because once you charge them, they're usually going to leave. So it's just a matter of like, do you. Are you at capacity where this is actually going to. You know, this is killing your schedule? If so, then just charge them. I would charge them like, the second time I would give them the warning. I would make sure it's in my estimates. And then I would just. I would just charge them the full amount if they. If they cancel within 24 hours. And then same thing with, like, deposits. If it's on a project, like, I'm keeping the 50% if you cancel within 24 hours. Again, I'd make sure that's in your estimate, it's in your notes, etc. But in terms of the fees, I just charge the amount. Like you're gonna get charged the amount if you don't cancel within 24 hours. We've deployed all the materials, the trucks, the equipment, the crew's ready to roll. We have had to pay all of our overhead like you have. We're keeping the 50% if you cancel on us and. Or I'm gonna charge you for that recurring service. Just know if you do it and you don't give them a warning, you're probably gonna lose the customer. So I usually do two warnings to be. If I had to be honest. That is the truth. All right, everyone, I hope you have a fantastic Thursday. I look forward to seeing everyone in exactly one week. One hour and 32 minutes. We will be starting and I look forward to it. Take care, everyone. I'll see you tomorrow. Take care.