Mike Minutes Mastermind 03/19/2024

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Questions present.

All right, we got six questions today. Happy Tuesday. It's rock and roll. First one's from Chad Valparaio. One who would I speak with to adjust the task command center takes on with me as a solar operator, I'm still not at capacity and I need to save every penny to put back into the business. Great question. So on your on the when you go to to command center and put modify command center tasks on there, it has a list of all the services and most of those are full service tasks. However, you can email right there and say, hey, I want to do X, Y and z other services. So for example, the biggest one I see solo operators usually remove for the sake of costs is going to be the web chat because that does take a little bit longer. It takes almost double the amount of time as a phone call would. So that's a little more pricey and some people, a lot of customers will use it as customer support, which again is better for them. It's just what do you want to spend the money on that it's up to you. Or if you want to do your own estimates or anything like that, you're more than welcome to put that information there. By the way, if you would want to do your estimates on your you actually want to edit your website because then the forms can come to you. So but always reach out help gustaloncaservices.com they'll point you in the right direction. Just tell them what you would like to modify. Totally fine.

Vince from Medicine Hat. Hey Mike, here's some context for my question. This season my GM and I are splitting the GM role down the middle. Okay. I'll be responsible for sales and he will be responsible for operations Net. Next season we will switch so he can learn sales and marketing while I manage operations. He currently earns $6,000 per month from April to September and is off for the winter which will change this winter likely with reduced salary of $3,000 a month during the off season. He's a big part of and help part in helping grow the business over the past three years. And I am planning to be an absentee owner in two to three years with him as a full gm. Okay, that makes more sense. Now my question is what should I pay him with profit sharing just to cash season this wise? Cash wise this season I am thinking 5% this year, 7.5 next year and then when he takes over sales, marketing, and then 15% when I'm no longer involved in the business. What are your thoughts on this plan?

I like it.

Yeah, I like it.

Yeah. You know, again, we're assuming that in, you know, two to three years, he's still going to want to be here, still want that role. That's the big assumption we're making right now. But assuming that checks out, I think this would be a good plan.

The reason, at first I was confused, like, you switching, like the whole operation and sales, like, why would you switch? But if your whole goal is for him to learn and then you move on, that would be a nice transition. I have a feeling you'll probably start merging sooner in terms of like learning the other aspects of the business. But.

Yeah, I would tie the 5%, 7.5% and 15% to objectives in the business instead of time. So instead of saying you're gonna make 7.5 next year or 15% the year after that, or whatever it is, I would tie it to when these things are taken off my plate, when you are fully doing these, like sales or operations or whatever. Because if you slow down or speed up your process, you don't want that percentage to be demotivating to him.

So, like, because if you attach it to objectives, he'll go for the objectives instead of just staying longer. Right. So that'd just be my only addition to that. But good work.

Kurt Kyler from Plainfield, Indiana. If I wanted to buy my next location, how would that work? Do you go by zip code, name of town, or size of population? For example, could I buy all of Indianapolis, Indiana market and be one location? So you cannot do indianapa. Oh, we got a picture. You cannot do.

Picture view. Okay, got it.

You cannot do Indianapolis, Indiana. We look for a hundred thousand people inside of a territory. That's the main thing that we're looking at. And then we are looking at then what town or city name is going to work for that. So sometimes we'll have to go north, south, west, east to break one up. Otherwise we can go after a specific city or town name. But we're looking for a hundred thousand people. We've consistently seen the locations, like from the very beginning, we allowed some very large population territories, had multiple millions of people in it. And each of those took way longer to find traction. Some of them are just getting traction now.

Because they couldn't get any market penetration. There were so many big players that had been for 20, 30 years. Whereas in some of our smaller markets that have between 50 and 60,000 people. Like we can be in the first page of Google within a matter of a week or two now with Augusta. So like it's super beneficial for new locations to be in the smaller areas. And so that's part of it. And then the other part is most locations don't grow a size enough to actually serve a 2 million, 3 million population. Because to do that effectively, you'd actually have to have 50 trucks.

So.

Hutchins, Connor, Hutchinson distributed cash you had defined as the average of last three months. You also mentioned one month's revenue in the bank yesterday. These numbers seem like they could fluctuate significantly based on the time of year. Thoughts on using 10% of the trailing 12 months? This seems like it would allow digital cash to increase as you grow. And it seems easy to calculate the CRM. Yeah, I, I get this. The trouble. 10% of the. The only problem with this is the numbers gonna be too small.

And I guess, I guess what you're thinking is 10, 10 of the trailing 12 months is how much money should be in the bank.

Yeah, the only problem with that is if you're say last year you did 200000 in revenue. Okay, so we did 200, 000 in re.

And let's go like a new location like the. Yeah, 200,000. Okay, great. Divide that by 10. So what we're saying is that $20,000 should be in the bank at all times. Great. Anything above that is distributable cash. But what happens is in year two, let's say you go to 500,000. Now all of a sudden you have a $500,000 business and you're going to have less than $20,000 in the bank. I don't like that. That's really a little risky. So that's why I like looking at the last three months. Because if I'm doubling or tripling the business, it stays up with me faster for working capital. I like your, your idea though, because it's much more simple. I always like simple, trust me. But I just see too many locations that are growing quickly. They're getting too much distributable cash. They use 12 month trailing. If you're. If here's a good one. If you were in profit mode, Connor, I would say go for it. This would be an easier way to make that number that's more consistent where you're only growing like say 10, 15% a year. But if you're doubling or tripling the business and growing really fast, you're going to take way too much cash out of the business. Way too much. Especially in Q4 because you'll be looking at last. You'd go down to $20,000 in your bank account on a $50,000 per month business from last year. Because the last year's revenue going into the winter, I bet you'd basically get down solo. You'd have to put money back. Like the goal is that you don't have to keep putting money. You don't ever want it to be that during the slow season, you have to put money back into the business because it messes up distributable cash. But if you were in profit mode, I would agree with you 100%. And that is, look at the last 12 months and, and get a more solid like divide up. And I like that. That's, that's pretty cool. I like that a lot. Like, in fact, as I'm thinking about it, this would work probably for like a Bellingham location that is more established and they'll probably grow like 20%, 30% this year. But for a location that's going from like 100 to 250 or 200 to 400 or 450 or 400,000, you're going to take out way too much cash out of the business. If you're using last year's number divided by 10, you literally might not have enough to hit payroll. Like, you'd probably just barely have enough hit payroll because if you take out at the end of a quarter distributable cash based upon last year for a whole quarter, and then all of a sudden you have to file your 940s, your form 940s for payroll. So your taxes come out that could be 8, 10 grand on a $500,000 business. You could then, you know, something like payroll hits and you're out, you're out of money. Right. So I always look at like your Form 940s and be like, that's, that's a quarterly income tax that you're going to pay for based upon payroll. You got to have that in the bank plus payroll at least twice. Like to be really comfortable. Right. So.

But I like that idea. I would agree with that idea for more established locations. Like I could do that for Bellingham and actually make it sense of it. It's like as Lee and, and Corey are listening to this, if they want to do that, I'd be more inclined to do that or even Mount Vernon location because they're, they're, they've been more steady the past year and they're not trying to grow by 50, 60 more percent this year. Right.

Nick? And I guess Connor, the reason I would say that too is most locations in Augusta are still in growth mode.

And if you have a general manager in growth mode, you just want to be careful with like making incentives that they can't actually cash in on. Nick from Mary's well, is there a way to skip or at least mark meetings in complete on the dispatch board? I do my own estimates currently and you don't want to click complete on them because it notifies cc, but I also want a way to mark them as I know what's done or not. Let me think about this for a second. I do not. I do my own estimates currently and I don't want to click complete on them because it notifies cc, but also want a way to mark them so I know it's done or not. Okay, so I'm guessing you want to like mark a job complete somehow to keep track of whether or not you finished it, but you don't want it to notify Command Center.

I'm just trying to think if you can make another status or something.

In the comments. If anyone knows a better answer than this, let me know. I'm trying to think. Nick is like is there a way you can make a different status or add a tag or something like that, but there's no really way to complete it but then not complete it for Command center not to see it. Potentially what you could do inside your automation for Command center is have it where it gets blocked by having a tag on it. So for example, you could add a tag that says like pending to that customer that then blocks that automation from getting fired off to Command Center. So you just are getting creative. Whatever is easiest for you. Though there's probably 10 ways to do that. It's like which one's going to be easiest for you? Because what you're probably doing right now is either using memory or screenshots or like a notes app to kind of keep track of which ones you need to go back and complete later on. But you could probably work with the automation to somehow block it using something like tags or using a different type of status or something like that.

Another question from Nick from Marysville. How would you answer the question? New hire caught me off guard in a good way. He asked me what if I I bid a job for the budget hours are so far off, are they still responsible? I didn't have a great polished answer for him at the moment. But I was happy that he was asking this question. It means he is getting how it works. But I said something along the lines of the system being nearly 100 upside for him. But the only downside is I might mess up an estimate every once in a while. And damages to me that's a solid deal. I'm just worried he is going to use his ammunition first time he misses PvP. Blame the estimator. I explained to him why it's important to practice ownership over your job and never blame the estimator if you fail to hit budget hours. I suppose the same logic applies to me. I have to take ownership over my estimates too. I think it comes down to their track record. If they are always crushing it and they bomb this one job, I can work with them on that and reach a compromise. What are your thoughts? Yeah, I think we've compromised one time on a big project because the estimator like we just got into a job that we shouldn't have. This is like right when we started P4P and we were doing projects that we shouldn't like we're still really big. It was like a $70,000 job. So we stepped in on the budget hours. I would say in general if someone has this question is like, that's why base pay exists is to protect you. If we mess up a job, it's not in the best interest of the business because we will lose our shirt. We make sure that you at least get base pay, right? That is the protection that you have as a team member versus an owner. And if you are an owner, if your job's not completed as ass actually the customer and you promise something and it's because your estimates are off, you eat it, right? You take the bullet as a team member, you get base pay. That is really the simplest way to do it. Now what kills you is when all your crews are making crazy amounts of PvP and then one crew gets stuck on a really bad job, it's because your fault. I would probably step in for the sake of morale and just be like, hey, I did X, Y and Z wrong. This is what the budget hour should have been. I'm going to. I'm going to. I'm going to edit that. I'm going to eat that one. And I would just not make that the habit. Like I think we've literally done it one time. I think to. To my knowledge there could be other times they might have done that, but to my knowledge we've only stepped in one time and ever done This I would avoid it at all costs because you don't want this to be the de facto because then it just becomes a matter of like how do you convince the estimator to give you more budget hours. Their. Their backstop is base pay and it always has been so.

Cool.

All right, I hope you all have a fantastic rest of your day next week. We got some cool stuff with the P4P integration specifically that'll actually help with this a little bit. Nick.

Right now not everyone is syncing and I don't really blame them because it brings over every single job from copilot as a separate little like part on the time card inside P4P. So next week that'll consolidate and then what will happen is you actually see the customer's names.

Inside the time card. So it'll be like anything that was $80 per hour inside of copilot will come across as one time part into the time card of P4P or make it so much better and then you'll be able to toggle over it and see all the customers names. So even if you want to still go back into copilot and compare, you can. So that'll make it way better because right now like it syncs but it brings all the data as job specific and makes it the time card really long and gets kind of messy versus just showing stats in on the dispatch board or copilot bringing the budget hours and doing it manually. It's just a bit of a pain right now. So that that sync will get much better next week. Then we got a lot of cool stuff coming with P4 feet. I'm deploying more energy towards that, making sure it's really, really solid for all of us. And the integration with Copilot solid too because really if you can get your employees to be able to see that thermometer where they can see how much money they're making and it chips away at how every single job they complete throughout the day. I really think it's going to help a lot understanding P4P getting it quickly, seeing their dollars per hour for the day. I really want everyone to be able to use that. So I think it'll be even more impactful when the employee is able to then take same day pay based upon that thermometer.

They'll even care more. So that'll come down the road. But anyways, that's all I got. Thank you all and have a fantastic Tuesday.