Mike Minutes Mastermind 03/04/2024

Hello, guess the nation. Hope you're doing amazing. I did not send out a text alert for today mostly because I'm not 100% sure how stable my Internet connection is. Let's go ahead and do this.

Live stream. There we go. And then I might send it out afterwards, assuming that it actually works. Okay, I'll send out the text via for the Mess for the YouTube link afterwards. All right, let's get this started. Let me put this into YouTube and Facebook. Real quick, quick couple things.

Four here, real quick. One second. I was talking with the franchise advisory council and then also just kind of looking at some stuff at any time fitness that's been happening and they had this big blow up because they just doubled their marketing fee on everyone.

Again.

So that was not fun. But what happened is.

Usually once a year we hear from the founders and fitness is usually at conferences or they'd have these things called vitals, which is kind of like, they'll do like kind of sub, kind of like territorial. Three different territories across the country. They'll do like these small meetups. Sometimes the founders will be there. So one of them led into like a shouting match. It was not fun with the, with the founder and some of the owners and that wasn't good. And so this is really why the Mastermind exists and as like direct access to be able to ask me questions, give feedback.

Give ideas, things that you think could be better or things like that. And at least just, just to be able to number one, be heard and number two, be.

You know, I'm not the only person that comes up with great ideas. Part of being with a community, whether it be a franchise or a Facebook group or whatever, is like people come up with ideas. So I'm happy to hear them and happy to hear what you think could be improved. I'm open to that. And so just keep in mind I have to keep not just you, but the other 149 owners and locations that have a destination in mind when I make decisions. And so what is good for you may not be good for the whole. Sorry, I'm kind of stalling trying to get this up. And what seems logical and right for your location to be done a certain way might not work for everyone. And that is part of being a community too is like there's gives and takes when it comes to making sure that the whole community is actually served in making decisions. So for example, like last week we had the. I had put that poll out to see who would want the concrete measured versus sidewalk, etc. And.

There'S, there's obviously some people that would like it, some people would not like it, etc. And so the decision on that one for myself is, hey, we're not doing anything now. It's a matter of collecting the information, though, to be able to know what, what owners, what would serve them best, and then we can act on that down the road. But to some, it seems so logical to do it one way and some, to others, it seems so logical to do it another way. And so just, just, just know that my objective and my goal is to do what's in the best interest of the collective whole and Augusta. And it's really.

The. I will never be able to make everyone happy. But I want to ensure, number one, that you're heard, number two, that if you have solutions that you would like to voice, that you can make those and do it in a constructive way on these masterminds instead of, you know, what happened last week at Anytime Fitness was just shouting and yelling. And honestly, I thought their, their reasoning behind adding the marketing spend seemed pretty logical.

Honestly. And I think it could, just could. As long as they just would have communicated like throughout in a different way instead of just like emailing us all and be like, hey, by the way, all your fees went up $600 a month. Oh, man, I got the email. I was like, oh, they're gonna get some pick back on this one. Just give us at least a month heads up and tell us what, what it's being used for. Because it was a good point. And I was like, hey, look, we, we like. So for example, Anytime Fitness, it was like, we're the number two fitness brand in the country behind Planet Fitness. Planet Fitness, I think they spend, I think it was like $50 million on marketing. Anytime Fitness spend like $9 million of their budget. And out of that 9 million, I think like 6 million of it was actually spent on ads. Maybe it was 5 million. They gave me the breakdown. I would actually share that with everyone just because it's really interesting. Back to Cameron Simpson's question back on the Facebook group last week. It's really interesting how a marketing spend is actually spent. Marketing fund is actually spent. And so, yeah, so I got where they're coming from. They're like, hey, we need to be able to capitalize on things like around the.

New year. And Planet Fitness.

Advertises like crazy during January and they host all sorts of like, I think it's like the New Year's ball drop or whatever happens in New York, whatever they they sponsor that and they do a bunch of crazy really cool stuff during January. And like anytime business is like hey, for us to continue market share we have to spend more. So it made sense. Just just don't get a fighting match with us over it was mostly owner just mad because there was no other way besides you know, yell at conference to get a hold of the founders. So this is why we have mastermind Share your ideas. I'll do my very best if I don't think they'll work for everyone to give explanations. Just know when I get on these questions I I am doing this live. So you're going to get Sometimes it might seem like I'm deflecting or like I'm not answering your question is in part because a lot of times I got to go back and talk to a different department. I need to talk to Liz, I need to talk to a department at command center. I need to talk to air traffic control at Copilot. I need to talk to Brad. On the tax side. Like there's sometimes I got to do follow up. So I try to do my best to make notes that if I need to do follow up but just know that sometimes why it doesn't. I'm trying not to deflect. I really try not to but. But I do try to.

Get the answer for you or do a poll or get to some sort of resolution for you on something. So. All right, with all that being said, just as a preliminary, let me share. I got my YouTube thing set up correctly. Yes, the fourth. Very good.

All right, where's my questions? There's my questions. Okay. Share screen. Sorry, I don't have my secondary screen day.

Present.

Share.

We have seven questions for Marathon Monday. Anonymous Because a stupid question. No such thing as a stupid question. If one of us franchisees were to come into a lot of money, say $500,000, I wanted to buy into the executive model. But we're not good at the admin side of business. Would you recommend we do that? Oh, okay. That's a good question.

I would only do this if you were planning to really focus on the working GM model, which is 400 to 600,000 annual revenue and letting command center keep doing their job. If you're going to scale up a location usually past 800,000 to a million, that's when I usually recommend getting an admin person. Because all the tasks that an admin person needs to do, you can actually fill most of their day for like eight months of the year. And then you can kind of Take a little bit of a loss during the winter. Whereas when it comes to locations that are doing say 4 or 500,000, I'd probably just let Command center keep doing it until say you had four or five locations actually built up and gross revenues really may be 1.2, 1.3 million. Now you kind of set up maybe a home base and then have some of your admin run through that. And I would just make sure whoever your first admin hire is, you pay them well and you kind of set them up on this trajectory of becoming the manager of Command center, like your kind of version of command center as you get more locations. Because if you're not good at admin and you are doing any sort of admin work and then that person leaves, you're just really hand tied. So I just be careful of that. Ken from.

Fenton, Michigan. Sorry, I was looking at something else. Just watched the last turnaround and got me thinking. Would you be interested in Augusta doing a subcontractor think only the areas around existing territories, of course. Yeah. The point, the point that is missed in all of that, that episode is.

How much revenue you actually have to be doing to make a subcontractor model work. Also like insurance, there's so many things like I didn't really go into the details of. You also have a two faced, a two sided marketplace, which is extremely fragile in a weak economy. And that is you have to sell to subcontractors and you have to sell the customers and you're basically the middleman. And a middleman gets squeezed during economics recessions. So that's why like everyone wants to do subcontracting. Like my, one of my cousins does a really good job of subcontracting in the roofing industry. But like he feels the weight of the economy so quickly because the subcontractors, if there's less work, they'll just go straight to the customer for a lower price. And the customers are willing to go for the lower price by cutting out the middleman. So.

It'S also two sided marketplace because you're trying to manage the customers and trying to manage the subcontractors. And it's actually really tough from an enterprise value perspective. Like subcontractors don't get any resale value because all you're, you're kind of like the middleman, like the, you're flipping contracts essentially.

So it's not a bad thing. I just don't recommend it. You're not building a whole lot of recurring revenue that you own. And from an Enterprise value perspective, that's tricky. Even like in terms of getting loans and stuff, it can be a lot more difficult. Ken, again you say no to my last question. I want to try to convince you in a few years, smiley face. Hey, go for absolutely 100%.

Yeah. And it just comes down to can you provide enough value to the subcontractor to where they want to do work for you? And I do believe it's possible. The question is, can you build the business and do the admin and sales of that size of business required to produce this amount of revenue in terms of subcontracting? Because you'll need to do two to three times more in revenue in order to get the actual amount of revenue you make from from handling the admin and the sales side and then, you know, subbing off the operation side. Right. So keep in mind when it comes to just a percentage value, let's say you get 30 or 40% cut, right. That means that 60, 70% you're giving away so that operations can be covered. Well, if you have an efficient crew and you're able to give 40% on P4P and another 10 or 15% can go to.

Overhead, equipment, etc, now all of a sudden that's only 50, 55%. Right. So I'm not saying it's bad, not saying that. That's why I encouraged him. I just was very clear and we didn't show everything. The video that really pointed me in the direction of he's just cannot manage the crew and like even just like skill on the mowing side and things like he's a tech guy, that's what he should be focused on. So Nick from Marysville, question about invoicing. Can we manually charge cards at the beginning of the month like we did today? Our clients automatically getting a paid invoice receipt sent to them that I don't know about. You can't send any emails other than the actual invoice email from that screen. So to today what happened was I charged the customer cards and then send the invoice afterwards. That confused people. Yeah. There's a paid invoice receipt email that you would want to send out with that.

I believe on Academy Command center has the full walkthrough on this and they're adding a ton of videos. They have been over the last week or two. So definitely check out Academy on the dashboard. They're adding a whole bunch of copilot videos inside of there using our systems. So they've basically taken all the service autopilot ones and make sure the. Made sure those are like moved over into the new the copilot and like redone inside of copilot.

So I would watch that. All right, I'm gonna get paid invoice receipt. I think in stripe, you could set this up to where they do get a receipt. And I know there's a way to do it inside COPA too. I'm not looking at it right now to get an automatic receipt. And you could do that. I think a lot of times when people get a receipt, they kind of want to break down of the services. And that's why the paid invoice receipt is usually what I recommend. So they can actually see the invoice, see that it's paid. But you do want to make sure that the invoice. Excuse me, the email part of that paid invoice is very clear that it's a paid invoice. It's not like this is owed. Otherwise they'll be confused by the fact that they're clicking on an invoice at all. Even though it does say paid. Like a big stamp on it that says paid. They might miss that or just be confused by it. So you want to make sure, like in the subject of the email invoice, paid or paid invoice receipt, or something along those lines. Anonymous. Hey, mate. Hey, Mike. Was watching the Mastermind the other day. 221. It sounds like Bellingham is planning on growing significantly this year. If you're planning having 20 employees compared to about 12 to 16 last year. With that being said, how are you planning on having such a significant amount of growth? I think there's only one or two ways to accomplish this. By either lowering prices or increasing leads or a combination of both. Can you elaborate, please? Yeah, great question.

It is what I've been talking about recently. And that is during the spring rush, focusing on mowing, focusing on recurring services. I truly believe that during the three months of our spring rush, focusing on recurring services and time sensitive jobs, I. E. Spring cleanups and, you know, other projects for our existing customers that must be done right away. Trimming bushes, etc. Exclusively focusing on those and then pushing all projects off into the future will allow us to be able to make more revenue simply due to the fact that we'll be able to capitalize on all the spring rush recurring revenue. And then we'll be able to capitalize on all of the projects during the summer and beyond. And our cash flow will be much better because, for example, this year we had way less winter services. At Bellingham compared to the year before. Mostly due to the fact that because we had the previous manager in place and they mismanaged the spring rush, you know, the manager was changed in June, July of 2023 because it was so poorly managed. We had so few mowing customers compared to what we typically have that we had so much then less winter services. And so as much as I do believe we can sell winter services, you're not going to be able to at a location like Bellingham, sell hundreds of winter service clients. I shouldn't say we can't. All things are possible, but it's more difficult. And so they just went into the winter with way less recurring customers because the mismanagement of the spring rush and allowing projects take precedence over the recurring time sensitive jobs. So.

I think that answers this question. And how is it? Yeah, so I just say like they're really focusing on the spring rush. They're also over hiring knowing that you're going to lose a few people during the spring rush. But what you're going to see from last year at the Bellingham shop, this year, similar to what you saw in the first half of the year of 2023, the second half of their 2023, it simply comes down to management. And so if you are the owner of your location and there's problems, like it is your fault. The same way, like there's problems at copilot that are technical, it is still my fault and my lack of experience. And so the same thing is true like your general manager in a location like Bellingham where like I'm completely hands off. I go there once or twice a month now. Um, they. It exclusively comes down to sorry. I know he watches this. So sorry to put pressure on your court. Like the success of that location depends solely on Corey. And so any manager that is there it is the rides or dies on the general manager. And so I think what you saw last year in the Bellingham shop, it went from like way underperforming in terms of revenue, profits, everything, to like very profitable. They've spent a bunch of money this winter. Like I bought them for more new trucks. We completely got rid of zero turns, put all the same mowers. I spent a good chunk of money because I had confidence in the general manager that they'd be really profitable and get back to where it's printing money. Like the year before last. Like in the year before that, I was getting between 250 and $350,000 in distributions from that location. And so we got to get back that form, and I believe we can. So I was willing to spend some money and it's also a vote of confidence in my general manager and that's why I wanted to spend the money. It's like, I trust you, I believe in you, I know you're going to work hard, and I want to prove that to you by investing some back in the location. Because I really haven't invested in that location for four to five years. We haven't bought any new trucks, equipment, etc. It's more just been a cash cow. And so I wanted to kind of just show my vote of confidence that, hey, here's a nod to the last six months of your hard work and I believe you'll be able to run this location, make it more profitable, scale it up to past 2 million, etc. So the thing is, once you take a down year, like.

It'S, it just as hard to grow. So like they went from 1.7, 1.8 million down to like 1.2. Well, it's not like you can just flip a switch and go right back to 1.8. You've got to like regrow back up to that level. So I know they're shooting for over 2 million and the conservative kind of like base case is more like 1.7, 1.8, and then next year go above. But hey, I've been pleasantly surprised with the management there and I look forward to them blowing my socks off. Continuing. Hutch, not sure I've ever heard your definition of this. What specifically is raising the level of professionalism in this industry mean to you? Great question. Specifically actually has more to do with the team members because the team members will define the industry. And so to me, I want people thinking about lawn care and landscaping. When they think about lawn care and landscaping, do you think of it the same way they think about like electrical, plumbing, et cetera? Those are like considered trades that you go to trade school, get a two year degree on, and then focus in the industry. There's also plumbers and electricians that are like under the table and they don't do a great job. We'll never get rid of those people in any labor industry whatsoever. But when it comes to lawn care, landscaping, I want to create that shelf of professionalism that people are like, I'm going to dedicate myself to this for the next couple years and become incredible at it. And in my opinion, that educational process is not how to cut grass or how to trim a bush. It is, I'm going to learn Business, I'm going to learn pay for performance, I. E. Waste management. I'm going to focus, I'm going to learn sales skills and like that's the part that I'm focused on. And so professionalism, in my opinion, to make industry more professional, you focus on the professionals inside of that industry. And so I think that we make that change by changing our teams. And so like we were talking last week, Connor, Connor was bringing up like, hey, 3F program. This one kind of kills me because like I'm going to lose my best team members. I said, true, but we would not be able to attract that level of talent or without the 3F program. And, and I would not have been able to keep a Marcus or a Nick for those two years. They would have gone and done something else. And so my goal is that they are able to stay in grade A talent, stays at a location, matures the organization, build systems in place that people behind them are more successful. And I've seen this in, in a couple 3F locations that have now had an employee move on. And I know it's tough. It's like, oh man, like I'm losing my best guy. That person would not have stayed. And secondly, when they left, I watched what happens. The location, they leave the business in a better state than they found it. And so yes, they might have worked two years, but I look at before and after they work, they massively improved this location revenue wise. And more importantly, they created a basis by which the owner depended on someone else other than themselves to get stuff done and therefore create a pendency on systems instead of the owner. And that's important. And so the 3F program is a way to get higher level caliber people to stay in our industry, stay in Augusta for now. But the whole motive is like, get better people in the industry. And how do we do that? One, we're able to pay them more. Two, we get benefits and we're able to compete with the trades. And three, we change the perception that yes, there's always going to be the electrician and the plumber that can do things on the table and they show up and their butt cracks hanging out and they have cutoffs and smoking inside someone's house that's always going to be there. However, there's less of those people in H vac, electricians, etc. Because there's been so many professionals, especially venture capital, move into that area and spend so much money on branding, training their crew and creating upward mobility inside the organizations that completely professionalize the industry. And yes, there will always be the low bidder. There will always be those people that are not professional. But there's a confident alternative that I am going to H Vac, I can get. A company is extremely professional. Systems are nailed down. They use software, they have a credit card file, they answer their phone, they're insured, their crew is nice, their uniform. They're going to come into my house and be nice. Like, I am very confident. Finding a lawn care provider like that in some industry, in some markets is almost impossible. You will call 10 people and one of them will pick up their phone. You will call 10 people, ask for an estimate, and two or three estimates will actually get delivered to your inbox. So changing that only comes by putting so much pressure on the industry that people have to do those things in order to compete. So you're good? Yeah, you're good.

All right, Nick, I just have two more questions. Just give me a few minutes.

Can you give me like five minutes?

Nick, for the instant price form the website, is it possible to add a square foot range for each size option? That way if we have to go back to a customer arrays on pricing, we can factually show them with a Google Earth measurement that they selected the wrong option. So I've been against this several times. I talked about why, mostly because most people don't know their square footage range. I will, because this has come up several times now. I will discuss with the web team in terms of the technical side of being able to add this to the form.

These forms getting pretty heavy in terms of the web team, we're making like 20 to 30 changes right now a week on these. So I don't know how quickly I could do this, Nick, but I will ask them how difficult this would be because this has come up like three or four times now and that is the option on the form that you fill out to include a square footage range. So I will talk to them about this. I know right now, like last week we had over 25 people add upsells. So I know they're, they're just still trying, trying to figure like stay in pace with all of that. But I will talk to them and see if there's something we could add and how difficult that would be because this has come up a few times now. I don't personally think adding a square footage is a good idea because it adds another layer of complexity. They can't just look at the photo and click. They have to click, look on the photo, run the numbers in their head kind of Guesstimate based upon the fact that last time they were at you know, they saw what 10 by 10 looks like. I feel like it might confuse more people. And yes there's gonna be the 10% of people and yes it does give you something factually to turn back to and so I see validity to that. And I don't have data to say it's 20% less conversion or anything like that. So let me talk to them, see how difficult this would be. Let me just make a note. One second. Sorry.

Web team.

Where the on form? Yeah, I'll go back. Yeah, I don't think this is a great move but I haven't don't have the data. So let me see how difficult it would be to test this and allow you to on your form give ranges.

Coach Connorstead, thank you for putting stat in there. Otherwise I have no idea who it is because there's so many. Well, there's a long question. Okay, Coach Hunter, long question. You often talk about there being three sub umbrellas to the business admin sales and production. So this is the framework I am thinking from and adding efficiency those areas to keep costs down. I know we talk about hitting capacity and raising prices at least every week but when there are times when customers are looking to cut costs and not increase costs, like now, we have a tough choice to make in terms of increased attrition if we raise prices. Okay, I understand hidden capacity and agree. However, why instead do we not commonly look at maximizing client revenue per stop, bed maintenance, mowing and treatments in one stop or maximize efficiency like going from push mowers to 36 inch mowers, standing one from backyards or going from a 21 inch push to a 30 inch push and so forth. Or why are we not or why are we not kings of recurring? I know you say adding treatments is usually a no, but if we want to do recurring work, why not doing multiple service of recurring work and doubling down on the recurring services, Mowing treatments, quarterly visits, shrubs, weekly dog poop removal, etc. I think this is a good idea. One second, let me see. I'm not missing something.

I think this is all very good. I'm not against like optimize efficiency in terms of equipment like 21 push mower, 30 inch etc. When we talk about capacity, keep in mind yes you can. You can increase capacity by improving equipment, right? And so 100% and the degree at which that equipment will affect your business depends a lot on your property size. So for example getting a larger mower Might increase your budget hour capacity from 32 to 35 a week. And so you know you can optimize. Yes, you can optimize efficiency by increased route density, etc. Also, you increase efficiency, I. E. Budget hour capacity per week by. Exactly you said. And that is spending more time on each property. Right, like selling them. Do you extra weeding service or the. The spring or the bush trimming every month or whatever. You're able to increase efficiency therefore budget hours per week in your capacity because you have less drive time. So there's so many things like. And that's why we generally say 30 budget hours per 40 hour week is like a 75 efficiency rating. I see locations that do well over 95% efficiency because they have that tight route. They have their equipment dialed in, they. They upsell customers into multiple recurring services. So I agree with all of this. Let's go ahead and keep reading though. One, sales efficiency that lowers costs. Just like on the sales side you tell us that closing more estimates.

Leads to lower marketing costs. Less estimates need to go to follow up with leads more and more in capacity quicker or growing quicker.

Okay, I'm just. Sorry, one second. I'm just trying to see what these 1, 2 and 3 are.

Two admin efficiencies that lower costs. Adding max AI, automated emails, commands agent, overseas copilot, auto charge, et cetera. Production. Not really something we discuss here that lower production costs like mowing is an average 10% margin. Where we feed is a 60% margin. Where do we add or not add, etc. Or just like the echo and gravely discounts where we save on the operational costs. Okay. Some of these things could allow us to go from $500 a single man route to maybe $800 a single man route and similar timing with not much change in SOPs. Yeah, this is great. This is really, really good. Because what you're talking about Connor, is adding efficiencies. Like there's two ways to. Once a business hits capacity, it's like either A raise prices or B expand capacity. Expand capacity. The easy way to do that is buy more trucks and hire more people. The alternative way, I guess you could say to expand capacity with, you know, I say buying trucks and equipment is like it is increase your capacity essentially. Right. So I always say like you either hit your capacity, you raise your prices or increase capacity. And increasing capacity could mean just like cut out jobs that are further away so that more of your time is spent on the jobs that will increase your capacity of budget hours per week. Same Thing with what you're saying is like add these different services to customers like 100. Agree. This is why I would really recommend using the upsell feature in copilot during the spring rush on recurring services. Don't use it in my opinion for one off jobs because if our focus is okay, March, April, May, I'm focused on mowing. Great. I'm going to make sure that my what my upsells inside copilot are pitching weeding, recurring weeding, recurring bush trimming, recurring fertilization, weed control. And furthermore, I'm a big fan of treatments. I really, really am. There's markets where it is very difficult to get people.

Certified and I see the churn in labor being so high that it makes it almost incomparable to.

Actually make it profitable because you have to get trained people trained for so long before they're actually efficient and profitable for the business. But if you're able to do like basic fertilizer, a lime treatment, overseeding like the basics of fertilization, even a weed and seed and just a basic three to four treatment package a year, you literally might make 500 on that extra to the customer over the course of the year. And you might take them from a 1200 per year client because they only do mowing to 1800 because now you got those treatments in there and then you get them into winter services. Now they're 2,500 customer. So I'm a big believer in like can you take what you currently have and increase your annual revenue per customer? Right. Your ACV and so annual customer value and so highly recommend that. And what that's doing is increasing your capacity because you spend less time driving. So great point. I know things like max command, et cetera will help us cut costs so much that the goal is that we can weed out the competition over time as an undeniable fact that Augusta is the name of the game. However, what are some things operational that could allow us to keep costs for customers low for customers but increase productivity, gain more customers and increase bottom line profit as the business continues to grow? Great question, Connor.

This goes down as the best.

Question of the week. Let's go. This is great. Let's talk about prices. Or you increase capacity and increasing capacity as a flip of a dime is get more equipment, you'll make it more, you can become more efficient by getting the 30 inch, the 21 inch, etc. Or hire more people. And I think what you're saying here, which is a grand upselling customers to do more services because ultimately what you're doing is increasing capacity by reducing the waste of budget hours to clock dollars per week. Great observation. I love it. This is fantastic.

That's like from a technical perspective, from a operational perspective, it is upsell more services to customers and focus during the spring rush. Because like this is a great point. During spring rush, if you're focused on recurring and time sensitive jobs, this is a great point. Up sells should also be for services that are time sensitive and recurring. Answering the spring rush, that should definitely be the focus. So great, great question, Connor.

Dustin from Champaign when is it too late to let customers know we are starting mowing earlier than usual? That we are going to start mowing earlier than usually typically we start mowing start April 1st. Thinking about starting week three or four of March.

I would wait till like a week before because if you leave too much time in between, they forget about the email.

They're less inclined to think they need it. I know like in Washington we just got it dumped with a bunch of snow. Fantastic. We were supposed to start mowing March 1st, not a bunch. It'll be burned off by this afternoon. But it's there nonetheless. And so it's hard to convince customers like, hey, the grass is actually starting to grow and next week we need to be on your property. So I would say like as long as you can so that they're convinced they need the service. But don't go like the day before because then you're gonna have people that say they didn't get the email. Etc. There's always kind of like that fine balance. All right, Augusta Nation, I love you all. Hope you have a fantastic week and we'll see you tomorrow. Take care.