Mike Minutes Mastermind 03/26/2024

Morning destination. Hope you're doing well. It might be a little bit blurry because I am having to use my hotspot for this for some reason. I don't know if it's early. The hotel wi fi has been brutal this morning. That's the only time I could get this in. So let's go ahead and jump in. I'm going to do questions first actually, and then I'm going To recap day one of acquisition.com's work scaling workshop that I was at yesterday. Today is day two, so I'll go through some of the lights from yesterday after the questions. So let's see what questions we got.

All right.

Let me just drop this in the Facebook group real quick.

Okay.

Okay.

Question number oh, there's five. Let's go. All right, Nick, from the peen, do you have any ability to jump bump up the priority feature request for copilot? I understand the main concern right now is fixing bugs, but once we get back to work on features, I think adding meetings as a trigger and action in zapier would be a key feature. Currently only to do is available. I have been using calendly for years to schedule in person quotes against common sense wishes. Oh well and it was one of the features I was most excited for. The inability to integrate with meetings makes it next to useless as of now as well as many other cool integration problems after that are limited. Because of this I imagine Command center spends a lot of time calling back and forth customers to schedule an in person quote presumably as backlog Command center Instagram rush cost franchise dollars when we could simply automate sending a calendar link for any in person estimates links with the Google calendar and can unify you. This would also prevent franchisees from missing in person quotes and customers absolutely love it. They always tell me how much they love the simple booking system. Just a thought. I think this could save commands and unnecessary calls and franchisees money for those calls. This is also used for sending one clicks that require in person estimates turns an extremely tedious and overwhelming task of quality all one clicks and completely eliminate that step. Yeah, so we do have it on the roadmap for to add meetings to the zapier integration. What you could do right now Nick, if you wanted to is just make it to do. It could work the exact same way as a meeting and then you could just literally have an automation that reminds you to change it over to a to do or to a meeting if you wanted to. So you could actually make the to do like the reminder for you to make it into a meeting because literally there's not a lot of difference between a meeting and a to do inside of Copilot besides literally the way it's tagged and like the categories and things. So you can make it work for now, but we do have it on the roadmap to add meetings. But I'll just be perfectly honest, I know it's not what everyone wants to hear, but like this is not super high priority because adding to Zapier.

Is like less than 5% of Copa users use Zapier and so there's a lot of functionality in there. There's not meetings though, and we do have that on the roadmap and down the road. The thing, the thing is calendly is giving the customer full ability to be able to book things in your schedule means you could be driving all over the place. And so it's not a bad thing. I agree with you 100% and we will eventually have this. But people that have longer and wider territories.

Could literally be driving 30 minutes, then 40 minutes and waiting an hour and a half or waiting four hours like and kind of be all over the place.

If you really good at calendar, there's certain things you can do to kind of eliminate some of that stuff. But for now I definitely want to do this, but it's not like highest priority and that is basically adding.

A trigger and action around meetings instead of to dos. I'd say for now if you want to use this, you could absolutely do it. Just use to dos instead of meetings and then just change it once someone books a to do for you. I think to DOS can be assigned to a customer. I don't remember. Maybe I'm wrong there, but.

Yeah.

I did specifically see this yesterday on the roadmap. It's just not like it's happening right away. Jeff, Sandwich, MA Mike, when you manually adjust P4P for non revenue producing work, how is this number calculated? Is it 32% hourly rate times clock time? Thank you.

If you're adjusting P4P for non revenue producing work, there is no.

It's not 3300 hourly clock rate. No, it is just the base pay.

So if you're doing non revenue producing work, you're going to do a manual adjustment to P4P only. But it's at base pay, so it's not 32% of the hour rate, it's your base pay times clock time.

And Bentonville. Is there a chance that we lose out on leads because the instant quotes on the website? Yes. My thought Is that if someone looks over the price and decides not none are a good fit, they may never hit accept or decline, but leave the website altogether. Yes, this is 100 true. And so it really just comes down to what are you trying to optimize for? You're trying to optimize for number of leads. Here's the thing. You're going to spend a whole lot of money getting this estimate out. Say someone wants a property cleanup, they want a a mowing quote etc and they're cheap. You're going to spend time and money for command centers and the estimate. You go out and do a property cleanup and then they're going to say no anyways. So my argument is yes, you will lose the leads that would otherwise have submitted the form. Yes you will. I would, I would argue that you are weeding out all the people that would otherwise have said no anyways, that.

You now don't have to even spend a cent on them. They came to your website and got weeded out. Instead of submitting a form command center setting up an estimate, doing over the phone estimate for the mowing, setting up an in person estimate for the property cleanup and doing this whole rigmarole, you go out, drive to their property, all this other stuff and then they're not going to accept anyways because they're price sensitive. So there's pros and cons. And if you were going to optimize for the number of leads that you got, you would probably not have the instant price form.

This is Mr. Normal. I got the Google form regarding overdue and collection times lines. Will you clear for how it works if a client pot services are paused due to non payment when they pay, are they automatically unpaused? Mentioned that. Are we supposed to know and do something, will you you let us know how this works. Thanks. I got the Google form regarding overdue and collections timelines.

Okay, I don't know what you're referring to there, to be perfectly honest. I don't know if you're talking about from the department or if you're talking about.

Getting into that into that department at command center or if you're talking about on the Google form where you ask for like you change up your services. I don't know which one which form you're referring to.

Yeah, if someone calls in and says hey I want to restart my services, I need to pay my bill, command center will do that for them and they'll make sure they leave notes for you too.

But what we won't do is someone's Been paused and a payment gets paid and just paid on the back end. Like unless you have command center actively going through your email and going through your dispatch board, they're not going to know to like restart services unless the customer calls in. They call in. Yes, I can, I can affirm that part.

Ken Kenton, Michigan just watched a video that contradicts what you have been teaching. Rate of training, service is good. Specialized work is inconsistent. If you have time, could you watch and let us know in the next mastermind? No, I won't watch this right now. Just watch the contradictions. You've been teaching your experience.

So that's very different than what I say. So what they're saying, I'm going to go out on a limb is that specialized allows you to charge more because less people do it. So.

Let's see here, see if I can open this up again.

Which actually yesterday we talked about it.

Here.

One second, one second, one second.

Okay, this is a Stan genetic video. I'm talking. Okay, it's 30 minutes long. I'm not going to watch this.

Because let's see here. There you go.

So I'm guessing he's talking about like being very specialized allows you to make more money. I agree 100%.

It comes down to what kind of business are you building. I do believe you will be more profitable if you have highly skilled and complicated work that you're doing and project based works. I agree 100%. The question is what kind of business are you trying to build? Are you trying to build a business that you can leave, that can be managed by other people, that if that manager drops out you can replace them relatively easily? Compared to having to have someone that knows excavation and building walls and drainage and all the rest of it. I'm willing to take a lower profit percentage for something that scales much faster. If you look at the largest companies in the lawn and landscape industry, top 100, the vast majority primarily focus on maintenance. Whether the commercial, residential, pre trimming, etc. The vast majority of them do maintenance. And the reason for that is because it scales. And so.

Yeah, hope that makes sense. That's like the general gist of it. It's not a matter of what's good or bad. Like we can argue to the cows come home about that. And I'm sure Stan is talking about being very specialized in projects doing really specialized irrigation or really specialized ponds or very pre planting and like horticulture. Yes, you will make more money, I can promise you that.

And I would just say that influencers that are Saying that I would just be careful to, I would want to see, see how much money they're making from social media versus their business when they're not there.

So that's my, my comeback. But yeah, you'll make less money. You'll just be able to do it without having to be there. And you won't have to have a social media following to pay for the equipment that doesn't get used very often.

And I'm not referring to Stan, by the way. He owns a good business. He scale it to the point where he can delegate a lot of stuff. But I think a lot of people would probably have not been able to afford a lot of equipment that he got early on to do the big jobs if they didn't have the money that I know he makes from brand partnerships and free equipment, etc. I just don't think that most people, not saying everyone, most people I don't think will be able to get to that initial inertia of 0 to 2 million in projects without all the backing he got. When you have four or five hundred thousand subscribers, you're getting equipment for free. You're getting paid to use equipment and that is straight profit compared to the other guy who hasn't just do the job and make money. So nothing against. Stand a cool dude. All right, Today we have entered the land of education.

Okay, so.

Acquisition.Com scaling workshop, day one. I'm going to give you my recaps.

I'm giving feedback to Dr. Cash. He kind of made the program. One of my takeaways or one of the things I'm giving him is like, hey, don't allow people to come here that are, are smaller. They're not getting much out of it. So I would recommend this event for anyone that is either a doing over.

10 million revenue or 100 or at least $1 million in profit per year.

The people that are making less than that, I see a lot of them checking out, so. But man, I'm eating this stuff up. It's good stuff. So.

Some of my takeaways, I took a lot of notes.

They don't allow us to have our laptops. They don't allow us to take pictures. I don't have any pictures for you. Several people had, were taken out and their phones were confiscated from security. It was a little over the top. All right, day one takeaways.

So, okay, these are my notes. I haven't censored these, so I'm gonna read them as they came to me. Well, technically not as they came to me. I had 15 pages of notes on my remarkable. And then I made a recap at the end of the day. Before I left, I just wrote out two pages of like bullet points of things I needed to do. So I guess these would actually be more like what I need to do. Let me go back, see if I can't quickly summarize these 14 pages. So if you're not interested in the recap, you can log off. I'm just going to share what I have learned the past couple days. Okay. These things were just people I met, Right. Great shows think more like investors than managers. They focus on resource allocation being the best ROI for the time money given. This is a note I made. Dr. Cashy. So basically I, I wanted to kind of do a similar thing at conference this year. Instead of doing a whole bunch of speakers, I'll have speakers, but I want to do some sort of a workshop where there's a much more linear process and things are tied together.

Revenue equals unit sold times price, which means you can only sell more of something or raise the prices on something in order to increase revenue. Shocker. And then we basically went through all the different, what they call VAM value acceleration method. But really it's just, you know, if you look at a, all the metrics of things that you got to do in a business to make it successful.

Such as revenue, EBITDA revenue growth percentages, yearly revenue retention, EBITDA margin, lifetime value to cut CAC, LTV to CAC ratio, etc. So went through those. I'm going to go through some of those with you. Things that I specifically learned. Here's a good one. Recurring versus reoccurring. This was interesting. So they focus a lot on enterprise value. Until you're at a certain size, enterprise value doesn't mean anything. If you were to sell the business, you simply just get a percentage of you get your assets and then some sort of, you know, whatever the value to the buyer is of your contracts and contacts. However, when you start getting, especially above.

In their opinion, a million dollars ebitda, that's when they really start to kick in a lot of the stuff they're talking about. So a million dollars in profit. But they talked about recurring revenue versus reoccurring revenue. So, you know, I knew this part, but the valuation part is interesting. So recurring revenue is I go every single week on mow their lawn. Reoccurring would be I do a annual cleanup for them in fall. Right. So reoccurring is I go show up every single week and I Bill their card reoccurring is like I do one time projects infrequently but I do them consistently. So the enterprise value of recurring work is 2x so twice as much as reoccurring work. So you kind of have, you have good which is very reoccurring. Like you do projects like every year for someone, for example, then you have recurring where you're billing their card automatically and it'd be something like mowing, for example valuation. From a valuation perspective it's twice as high for recurring revenue as reoccurring revenue. And like the worst kind of revenue that they see is one off projects in terms of valuation because there's no reoccurrence and there's no recurring revenue and they just basically push every get on everyone on the recurring revenue. Just kind of something we've always talked about from a lawn care perspective. They talk about how to change revenue retention. There's a whole like different things you can do to increase that. Okay, billing frequency increases. As you increase billing frequency, churn is going to go up. Pretty phenomenal some of the math. They said.

There'S a balance here. So it's crazy. If you have someone on a say you're doing annual contracts and you're billing someone 12 months a year. If you simply move that to biweekly, you would get an extra billing in every year. This is what we do at the gym, right? So we switch from monthly to biweekly memberships at the gym because I know I'm going to get them for the entire year. They can't miss a payment. And so just by going to biweekly I now get 26 billings in the year. Not 24 like you would think. It's like two per month every two weeks. Which means I got 26 billion instead of 24 billings. They talked about just being able to switch to weekly or biweekly. You can immediately increase revenue like 8 or 10%. However, if you're billing where you're invoicing people and you're not where the entire year they're on the same schedule of billing frequency. But as you increase your billing frequency, so going from like say monthly billing to weekly billing, your churn is going to go up across the board. And, and so they're, they're really trying to push, you know, trying to get people to commit to longer term commitments.

I thought about like for lawn care if it could be applied to like trying to get someone to getting discounts for people to buy their entire year of mowing.

I'd really be interested to see how that works. I don't know how many people would bite on it but if you said hey look like I'll give you a discount if you pay for the whole year up front. I just have never seen anyone do it. I wonder if there's more consumer protections around our industry around actually doing the services and if they could say well these services were not provided. I think there's a valid argument for that. You'd need to have some sort of terms and conditions signed off on that too but which adds a little friction.

But anyways that was something that they talked about is like billing frequency. As you increase it, your churn will go up. This is exactly why I've stayed on monthly billing even though it's better for cash flow is churn perspective in my market because during those months of the year where I would lose those mowing customers.

So this did get me thinking though for future members probably in 2025 for co pilot to charge on a more frequent basis either weekly or bi weekly and then giving a very high discount for annual subscriptions. So kind of thought about that key man risk. This is one that hit home a lot.

Two ways to kind of risk. It is like if you're gone, what breaks while you're gone. I need that part time study.

Basically they have a time block of like every 15 minutes write down what you're doing and then you replace yourself for all the tasks that you're doing basically throughout your day. So you don't have key band risk. And so the big thing is for me when I look at enterprise value, the important part is like it's not important to me now but in 10 or 20 years it will be since I want to take Augusta public with everything combined. And by doing that we'll have a lot more capital to be able to go after.

Different stuff that we want to build and do that take lots and lots of money. And so if I'm going to build it to to go public, no one's going to want to buy be a shareholder if everything hinges on me. So that's what keyman risk essentially is is if things break when you're gone and if you're kind of like the bottleneck for a lot of things. So I'll talk more about that because I have some of my takeaways. Key customer risk. One customer making more than 20% of your revenue revenue in theory. If they leave and you have like a 1015 profitable business now all of a sudden you're losing money Single channel risk. So when one customer makes up 70. Sorry, when one customer source makes up 70% of your revenue. Most of us don't have a problem with this because as your business grows, a lot of us get referrals, we get one click custom emails. So we're not really tied to one channel. It's not like we're getting all of our leads through Facebook or all of our leads through YouTube ads or something like that. High revenue retention mitigates single channel risk. So if you can retain every single customer, it mitigates having only one single channel because you don't lose customers. Right. So that was kind of cool. How you can reduce single channel risk is having multiple platforms, a referral network, an affiliate program, etc. Single channel risk. Don't worry about it. They say until you're making at least a million dollars in revenue and then you can, then you can start diversifying. Until that point, just like take the one thing that's working, just keep hammering it. So that's important for everyone to know. If you're not at a million dollars a month in revenue, they say, look, just keep taking the one thing that works. But once you cross that threshold, like you need multiple ways of getting customers, otherwise you're leaving yourself vulnerable. So I'll talk more about that in a second too. Market risk, how large is the market? Is it shrinking? You can either out execute someone, like pushing them. So in my mind that's a K for performance. You can innovate or pivot. And it'd be like AI and kind of like suffer genetic max, instant quotes, etc, or you can switch markets. And that's like a super pivot for robotics, for example. So that's where like the disrupted becomes the disruptor. So I have pretty good confidence. Like the long hair industry, it's growing pretty smoothly. It's also the fact that like the baby boomers are getting older while at the same time millennials don't want to do their lawn. So I feel like we're in a good market. It's still consistently growing like 8 to 10% a year. Great. But then like, what could potentially disrupt us is like AI, technology, robotics, et cetera. It's like that's why we're investing so much into that and making sure that we don't get caught with our pants down in 10, 15 years because we didn't do that.

Data risk, not knowing your numbers. If you're using your gut feel on stuff, that's a problem. Then talking about like risk adjusted returns. So you have 6, you know 5, 6% treasury bills is guaranteed money. 5 5, 6% S&P 508 10% low risk. So you have a guaranteed 5 to 6% low risk, 8 to 10%. Then it's like okay, well what is your risk adjusted rate of return for your business? Because if you're, if your return your business is a 20% well really that's 10% higher than a low risk investment of like the S&P 500 and and it's like 15% higher than you know, the treasury bonds. Is that worth it? So really thinking about like the alternative of putting my money into my business is putting it into something very safe such as treasury bonds which is guaranteed money or lower risk s and P500. So risk adjusted rate of returns. Some of the notes I put here onboarding return onboarding surveys. These specific stuff for me for copilot. How many dumb decisions can your business survive? Bunch of stuff from Layla about job ads. Don't abbreviate it in the in the search in the title. Don't use cheesy things like Rockstar or put the dollar amount in the title. It get downgraded in indeed. And other platforms. Number one, you got to call them out. Number two, you got to clarify the why time commission stuff and then three communicate the benefits for them. That's how you attract people. And then interviewing process. Remember that interview skills do not equal job skills and that the best candidates have been employed somewhere for a long time and haven't done interviews for years. So the person that has is really solid probably hasn't done an interview in five or 10 years. So keep that in mind.

1 3rd of time an interview should be left to giving candidate time to ask questions. That's the second stage of the interview. Third stage is select and I took a picture of the screen which I didn't know I wasn't supposed to do but I got a bunch of screenshots of this like pictures of the slides. They don't give us slides. They don't allow us to take videos or pictures. I didn't know that until this point though. So I was taking pictures like hardcore.

See here. Then went to the selection process some of the questions to ask them.

And that was good. Just some like more tactical stuff. Nobody is 100 out of 100 fit but make sure they are 80 out of 100 and know what the other 20% is. Alex came up, he talked about oh it was funny is.

Layla. So no one is very good at interaction here. I'll just Be honest, in terms of the audience, no one's like, I shouldn't say no one. There's not as much interaction, like people saying their answers and like willing to communicate. So we did this exercise of like, who? Like who. Who do you need? Who's your next hire? An executive perspective. So I know that's like a, I mean more like extremely technical perspective, like someone I had to pony up and pay gazillions of dollars for. And it was cool because she actually gives me an example of when they are going Alan. And they had all sorts of issues and they needed to find a CTO. So she went out and spent like $105,000 on recruiting people. And they shot people from like Google and Nike and all these crazy places. And then within like three days she realized they were bad fit. But anyways, reframing like your problem in terms of who do you need to find? So for me it's a cto. What's interesting is one of the parts of the interview process and the exercise was like, what are the three expectations that you have of this person? And no one was raising their hand, like giving their answer. And I knew because it was like, it's a little bit harder. It was a hard question. And you don't really think about that sometimes. Like what three things are non negotiables that you're looking for in this person? So I was like waiting. I was like, okay, whatever. So I raised my hand. So I gave this one. I said, ability to push back on me as a founder. And is because it was a CTO level position that that was the who that I was looking at. And it was. What was crazy is this is I. So I was in the back mostly because I wanted the ability to have Dr. Cash next to me.

But.

Next to me. So I said that and everyone was really quiet because everyone wasn't really sure what to put in the spot. And then the ability to push back on me as the founder. And she's like, are you sure you would want that in the job description? And the guy next to me who has a business, like, I don't think so, like underneath his breath. And I was thinking, I was like, I was about to like, maybe not. And then I was like, I actually thought about for like good three seconds, like, yeah, I think, I think that would be valuable for me. And she's like, I think that is an excellent decision. I was like, okay, thank you. I was like relieved. So anyways, that was some of the stuff there.

Go through my notes, Alex Talked about a bunch of stuff, honestly, not a lot of new stuff. I had heard most of it from the podcast things.

So the main takeaway I actually took away from this is his story of when they first started gym launch and they were selling in four to one. So they, they didn't have time to do one on one calls. So they would put four people into a call and sell them. All important for copilot because we were booked out six or seven weeks. From a sales perspective in December. I don't want to hire a sales team. I'd rather do that. So that was my takeaway, honestly, from his whole talk. All right, few pages now of takeaways for me that I specifically need to do. I haven't censored any of this, so let me just read it as it is and don't hold me to doing all these things. It's just me thinking of things I could potentially be doing. So I identified lots of key man risk in the businesses. So the fix for this for me is creating a manual for initial training. We kind of already have this. We have like if I got hit by a bus we could still do training for the new owners. Um, it's more of like a note perspective though. I like to create a really good kind of workshop style training for initial training. It just took a lot of time. So I then we'll work on it with Dr. Kashi after we finish the book.

And that would be like helpful with keep taking key management out and like delegating more of the training to other members of the team. There's no reason like the copilot team can't train parts of the copilot CRM side of things. And Liz and Lee can take more on other members of the command center that for years can take more on 2025, include others the ads and in the turnarounds and content. So not this year but like probably next year. I'm thinking about doing like breakaways during the turnarounds to subject matter experts. And I could include owners of Augusta Nation, which would just help with the overall vision of trying to change the level of professionals in the industry. Is like instead of me explaining something like advertising, I know most of what the owners are going through. Okay, this person went through this specific thing. I'm going to like get a 10 second clip of them what they did and insert it into the video. That way if I get hit by a bus, there's less key man risk. And the mission of aggression still continues because people have been including the content and like, not everything is revolving around me. And honestly, from an operational perspective, I feel like we really de risked on this side of things. But like from an advertising perspective and like vision perspective, this is still like a lot of revolving around me. Focusing. These are again my notes focusing on scalable communication. So like, things like this, the mike minutes, mastermind, and office hours.

Instead of trying to do as much one on one stuff, I've always tried to do it. And I I still do a lot of one on one stuff. But there's only so much you can do, and if you focus on doing that, you're not doing the things that will actually affect more people and generate more.