Mike Minutes Mastermind 02/19/2024

And we're live. Hello everyone. Hope you're doing great weekend. Let's go get started here. Facebook. I figured start with a couple meetings. So I had written down last week from.

Conference.

All right.

A couple things. So these are just random stuff that I got when I was talking to people and stuff. One is low hanging fruit, is low yield fruit. So too many people say, I'll go for the low hanging fruit. It's typically a good option to get started.

Usually your best fruits, not necessarily on the bottom. And it's also low yield. Things that work quickly don't usually last long. So if you think about things like fulfillment by Amazon or flipping things online, or like, hey, you can do this overnight. Anything that goes starts quickly, you can end quickly. It's not as long and enduring.

Something to think about. If it's not hard to grow your business, it means it's easy for your competition to take it. Also an interesting thought. Oh wait, did I put my audio on correctly? I did not. All right, there you go. Much better. Very good.

All right, there you go. Now we're all good.

So those are a couple of my musings just thinking about.

If you look at businesses valuations, there are some businesses that literally are worth basically nothing.

They are typically the ones that are easiest to start and they have no moat and it's easy to get started in them. And so traditionally, if you look at lawn care or any home service, the multiple isn't great because people look at it as a low barrier to entry, meaning quote unquote, anyone can do it. And so that's why enterprise values typically lower than something that you have to build massive infrastructure like a data warehouse or like.

Even a manufacturing plant or something that has, you have some sort of technology that is unique, you have a higher multiple because it's harder to replicate, in my opinion. We can use technology though to create a moat inside of the industry.

That cannot be replicated simply due to cost and time and so which will impact all of our valuations. But more importantly, it will be in your localized market, something that.

If it's easy to do, like if you can just go pick up a mower and get started. This is what everyone kind of like thinks about this industry. It's like, oh, well, it's not a good industry because anyone can do it. And so, um, the, the whole point of, you know, all the software they're trying to build, instant quote stuff, AI with Macs answering the phone, integrating with Copilot, et cetera and stuff that we want to do down the road is so that.

Yes, you can go get a push more, you can also go pick up a computer. It doesn't mean you're gonna build software. It doesn't mean you're going to, you know, build the next whatever big business that's code wise. And so, you know, just having the tools like mowers, et cetera is actually usually not the thing that makes your business unique. The same way that having a computer doesn't mean you're going to build the next Facebook or Google.

And so.

That'S really the goal. And so I've been thinking about. And that's why it was in the educational segment. Let's move on to questions.

Boom.

All right, nine questions on Marathon Monday. Ben Collins from Arnold. Hey, Mike, I'm doing a price increase on existing customers from last year here. One second, Let me move this up.

There you go. Much better. Now I can see that.

When doing this, do you typically raise the advertised price by the same amount or would you keep new customers prices lower just to get them in the door, or does it only depend on whether you're in growth mode versus profit mode? Also, how long do you typically wait before raising prices on new customers? Have you ever done this within a few months of them signing up?

This is not traditional, and that is to raise prices on only existing customers. The reason for that is, the reason I would, I would say it's not traditional is because if you lose any customers due to the price increase, you're essentially going out and getting other customers that are not going to be higher priced. And so I'm not opposed to it though, because the whole mentality is that you can keep 95% of them or 90 or 95% of customers by getting them a lower price, getting them in the door, proving your service and then raising prices on them. So I'm not opposed to that. Just, just know it's usually not typical because you're kind of going against the capacity based growth. Because if you, if you're at capacity, you should raise prices, period.

And so you're kind of, by saying that I'm going to lower my prices to new customers, you're kind of saying I'm in growth mode. But then by raising your prices to existing customers, you're kind of saying you're in profit mode. So you're a little bit speaking out of both sides of your mouth. However.

I'm not opposed to this strategy because it works, it 100% works to do this, and that is get people in the door and then raise their prices. So I'm not opposed to it. Just know you're kind of talking about both sides your mouth by saying you are going to raise prices, I. E. Profit mode and then secondarily you're also doing a growth strategy which is get them in an entry level price and then raise prices on them within six to 12 months. So I'm not opposed to it. I think that you, you probably.

What I would personally recommend is take your close ratio from last, you know, say March, compare it to this March and raise all your your prices on new customers as well and see what happens. I think it'll be less than you think and it'll also prevent you from having to have the admin burden of having to raise their prices in six months. Also if you're at capacity, you now are going to be getting a whole bunch of customers that are a lower price and that's not what you want to be doing assuming you're at capacity. So I'm still a big believer in like hit capacity, raise prices. But if you're concerned about getting on, you know, backfilling the number of customers that you lose with new customers that are at the higher price, you could potentially do this strategy. I'm not opposed to it. This is literally like the Comcast strategy that they use a lot in the early 2000s and that is like get you on it's 50, 50 bucks a month and then on the renewal you it's 200. Right. Obviously we're not raising our prices that much, but that is the same similar strategy that they would be using. So not opposed to it. It does work. I just think that you're kind of speaking it. It just if you're at capacity you should be raising prices. That should be the determining factor. And if you're not, then keep your prices all the same until you hit there and then with confidence raise all your prices.

Mr. Anonymous, small request. Can we arrange the calendar on coplat to affect every other calendar layer on the planet? Sunday being the first day of the week instead of Monday. My OCD is flaring. Lol. I thought there's a way to do this.

I'm trying to think is there a way to make it six days and only show the one day?

I remember thinking that because.

I think there's a way to do this in settings. I could be wrong though. One second. Let me make a note.

This is not a note to make any changes. This is a note to see if it. Because I vaguely remember being able to do this myself change Calendar, first date of week.

All right, I'll check on it. I'll make a comment if I find it. I vaguely remember thinking we could do this though. Mr. Anonymous, my tax person says if I take a Section 179 on a used truck I purchased this year that I won't be able to use in mileage for deductions at any point in the future, they recommend that I go this route. From watching your video it looks like you do the opposite. Curious as to what the best route is. The truck costs 10k.

So section 179, you're depreciating the whole value of the truck. If you're doing, if you take that deduction like that, yes, you're losing the value of the truck. The cost per mile issue is totally like you're using a totally different method. And so for example, I might be getting a different Honda car. And so if I do that I will probably take the cost per mile so that I can take what's business versus personal and write it off. However, when you're using a company vehicle, typically most people will just write the entire thing off either on a section 170 or a five year depreciation schedule over the course of five years. If you're doing it by the m, by the mile, it's based upon the calculation that the government gives etc and typically I just keep it simpler by like all my fuel, all my maintenance, everything is just cash basis and I move it and I transact that way.

So I don't usually see companies under 10 million doing that method or companies that aren't using like massive trucks, like semi trucks. They do this a lot. They do it by the mile a lot of times in terms of how they do the taxes. But you know, if your tax person is saying that I would defer to them if they know what they're talking about, they're an accountant so they would know what's best for your situation. I would assume if they're recommending this to you that you've. You made a good amount of profit last year and so taking the section 179 could potentially save you less than if you just take a smaller deduction over the course of the lifespan of the truck. Right. So.

Tim, I am sending out right now invoices who those who don't pay from the beginning of the month. I am adding the new title as suggested. The big issue customers are having is that says they owe more as their outstanding balance is including their pending invoice from February. Example customer invoices they owe 360 but they actually owe 240 for January services. It would be very nice to have this change as it continues to confuse clients when they see a higher amount out and also see an outstanding balance after they make a payment. Just a suggestion as I would like for the invoicing to be more streamlined for the customer. Thank you.

Well, you're making, you're making invoices that the services do upon being completed and so that's why it's showing as outstanding.

In terms of on their client profile portal. I'd just be saying like got to get cards on files like regardless of what they see, like we are getting payments right away immediately upon our demand. Right. So I, I'd be pushing for that. But furthermore they do owe you the 360. The 240 is for the invoice from last month. And so.

Yeah, down the road we could look at a feature request to be able to change that where it's like okay, until I send them an invoice, I don't want them to see an outstanding balance. But if you have in your settings where it is considered due once the job is complete and you're adding it to invoices, it's going to do that.

Joel, thanks for having the media team showcase the new postcards and upload the Lawn Care Media canva files. I asked the Facebook post and didn't get a reply. So have you seen the multiple offers postcards working with CC answering phones? Since we can put whatever offers we want on them, do we need to add the offers to our wiki or will CC just rely on the client telling the truth if they call in? I'd be very careful about adding a bunch of random offers on anything that is going to be contacting command center because they, they do not know what you're talking about. And if you're doing a bunch of different random ones like first mo free 20 off of this like be very careful if they're not, if you're not going to be sending having them send that in to the office because if, if you have it as part of your every door direct mail strategy or your door hanger that you take a picture and send it in, that's easy but they'll, it'll simply be a matter of that what that customer says if they are calling in. And so.

Like I just can't guarantee it's going to be handled the exact same way that you want every single time. If you're changing the offers on, on your postcards and door hangers, etc. So I would make it where they have to take a picture and send it in. It also saves you money from though you have to contact command center if they just take a picture and send it to your email. Email. And so, yeah, there's things down the road I want to make this streamlined so you can make more offers. But like, if they're talking to someone at command center, you know, there's 75 people here and for them all to know that you are, you specifically are giving your first mo free is just going to be very difficult. And even if you put it in your wiki, there's just no guarantee that they're going to actually go look there for a discount or special promotion that you're running.

Because especially if you're changing those and if every single location is doing one differently, it'll just slow everything down. So I would, I would say if you're trying to change up and test a bunch of different offers, make it where they have to send the picture in. It'll save you money in the long term and it'll be more consistent. If you're trying to change up the offer, like you're trying to give giveaways or discounts or freebies or promotions, things like that, that would be my personal recommendation.

Because otherwise they're going to follow what the customer says and they're going to make the notes on your estimate for you. But it's a lot more difficult for command center to trust the customer and sell the job and get their card information, everything. If they're going off the basis of like the customer just saying that they get their first five modes for free. Like, you know, we're just going to trust them and like set. We don't want to like accept the estimate, get their car information and then like, oh, I don't want to give you my car after the freebies. Well, now we don't know what to say because we don't know what, what you want in that scenario. Right. So I would just be careful with that. Keep that in mind and make offers that if someone customer says it, you'd be okay with, you know, Command center trusting them. But just know that they're going to, they're going to walk, they're going to tread softly on getting card information, accepting an estimate, getting it on the schedule. If they're just taking the strict, you know what the customer is telling them.

Devin Sheridan from Red Deer, Alberta. Hey, Mike, how much money should we have in stocks and real estate as Augusta Cash cow. I want to put some money away. What's a good percentage? I would say, you know, follow the steps of wealth, like until you have a full year where you're in stage stages six and beyond. Really diversification into other stuff is not something you even want to think about. Because if you're making a cash cow Augusta, there's a really good chance that your percentage return is so far greater in that business vehicle than trying to put it in stocks or real estate. And so it's like, you know, instead of trying to put 20 grand into stocks and make 5%, 10% market, you know, returns, you know, it's $1,000 a year. If you spent that $20,000 on another truck, would you make an extra 20 or $30,000 in your business? Right. So like until you're later on in the stages of wealth, I would. I would table that idea. Papa Pain. How come when it comes to credit card fees, you tell us to consider a cost of doing business, but on franchise fee ice pay $12 because we pay the ACH fee. Should that be cost doing business or the logic and difference between these two concepts? I didn't think they're oh because the processing fees are moved over.

Also talk to command center about this. This is not intentional. It's a matter of the the we gave the ability for people to use credit cards for the first couple months moving over into copilot. And so because of that we had the processing fees checked box like so if someone needed to pay, it's like, hey, you gotta pay the extra 2%, 3% or whatever. And so a couple people did that. But because of that, you're right, it's probably moving the ACH fee over. So I'll talk to command center and see if we can get that changed and just whole goal is like not to have cards on file. Allow credit cards anyways and then we just eat the the five bucks. So I will talk with them and see what's up with there. One second. Let me know.

Gracias. Down the road, it'd be nice if we could just have it with a where you could only charge say credit card fees and the ACH we'd eat for all of our businesses stripe is not super good Delineating between the two. To be perfectly honest with you.

Audie, the questions in the picture or in the file. All right, let's see we got here.

What is this? Share this tab. Mike, are you going to buy a pair of Trump's new shoe line? What in the world? I don't know if this is a joke or not. All right.

Let'S see here. Number 9 Mr. Anonymous what do you personally as a CE do when there's a change made that no one I've talked to likes? What do you personally what do you do you you I think it might supposed to be say do what do you do personally as a CEO when there's a change.

When when there is a change made that no one I've talked to likes like the email folders and Gmail. They're far more common than it should be. Emails are getting lost, the tabs are way too many in number. CC will move Nema open it and it doesn't show in our inbox as a notification unless we are double checking their work and there's possibly made something. Also CC needs to work on context and read the entire email chain before responding. It seems everyone I've talked to dislikes the new system and found it very unnecessary. And it's a busy task for Command Center Agent over the winter with no why the change is beneficial at the end of the day is confusing owners good luck or reducing command bills with efficiency, et cetera. Okay, this would be something you could bring forward to Liz lizastalongases.com and she would be able to walk through this or even potentially talk to Command center and see if there's ways to make it more efficient for you and then they would take that feedback accordingly. And so what do you do personally as you when you do entertain me that no one else I've talked to likes. Okay, there's, there's different tenses being used. I'm not exactly sure what you're asking here. I would say if you're talking about like what should you do it would be communicate with the person that is in charge of that department. And so in this case if there's something that you feel like this, you can talk to Liz if you would like, send her an email and or you can even book a call with Command center and ask them to explain it. For example, I know a lot of thought went into this and there was very specific reasons as to why they did it this way. So if they need to do a better job of making video training or et cetera to help go through that process, that is fine. I know that they're the reasons that they did the change would seem to me very logical in terms of why they're making the change. And I know there are a lot of meetings about it. So it definitely wasn't done briefly or Quickly, so. But yeah, feel free to communicate your questions or concerns about that and Liz will act accordingly.

Jake, from Rexburg, we're expanding our service area to another city about 25 minutes away. It's about three times bigger than Rexburg. Is there anything we can do to improve our website ranking in that city? Well, if it's that far away, we probably are not going to put on the website.

Because far outside of your territory.

But if you're trying to do it just as a matter of like, hey, I want to go test the market, see if it's good and start a second location down the road, that's totally fine. As long as it's not in someone else's.

Territory, you're fine. So in terms of on your website, there's not a lot you're going to be able to do in if it's way outside your your territory.

So in terms of like the website that you have from Augusta, we will not put something that's like 30 minute drive if it's way outside your territory, assuming it's in it's outside territory. Again, 30 Minute Drive could also mean a few miles away, depending on where you're at. We're hoping to start a location there in the future. Yeah. So it'd be for now, Jake, it's like get your ranking, get your some. A couple things you could do. You could start like a Google my business page there or Google listing page there if you wanted to like get it verified and everything like that. Just note that like the reason we don't put it on your website is because we have no guarantee that someone's not going to want that location in a year or two. And if you haven't pulled the trigger on it now they're in a weird sticky position because you've got a website ranking there and everything else. So it's important that we do that because otherwise we will start getting cross.

People ranking in different markets. And like it's very important that when you run ads and when you're ranking in your market that you don't have other Augusta Lawn care showing up. And so this is the number one reason why like this happens is if people start mentioning other city names in their their website that are outside their, their territory, it'll start making that happen. So that's why we do that. But you're more than welcome to market in the area. As long as it's not in any else's territory, you're good to go. I would communicate definitely with Lee about your intention of that. Market in terms of starting at second location down the road. So that way if someone ever thinks about.

Starting one up there, he would contact you first. Usually he does that if it's like adjacent. But if it's 30 minute driveway, like 15, 20 miles, you might want to just like, hey, we have this on our radar. It might be a couple years away. We're going to start marketing in the area. But give us a heads up if anyone ever wants that. And he can make note of that in your profile and stuff. So that would be my recommendation. But we don't put on the website just because it can lead to a lot of confusion. If you start getting that far away on your website and all of a sudden, now, all of a sudden it will go another 25 miles and that's someone else's territory. And they can, they're trying to run ads and it's, you know, you're starting to rank in their market, so hope it makes sense. Cool. All right, everyone, I hope you have a fantastic Monday. I'll see you tomorrow. Take care.