Mike Minutes Mastermind 03/30/2022

Hello, everybody. We are having some serious issues here in the media room for WI Fi. So I apologize. I hope at least you can hear me. But we are going to be changing the modem over here and hopefully getting a better signal. But I wanted to hop on. So good morning and good afternoon for those of you on the East Coast. But feel free to use the chat, ask questions there. I'm also going to open up the form that you can submit questions anonymously if you like. So let me go ahead and open.

That up real quick.

And we'll jump in.

So kind of laying the groundwork for these.

Mike minute masterminds. I want it to be where you can submit questions, we can go over things together, and.

Also where I can answer any questions. So like I mentioned Yesterday, usually about 15 or 20 of the owners I am talking to on a daily basis via text, email, phone, etc. And so it'd be better, honestly more efficient if all of us can hear those things and learn from them and also just talk more from an economic standpoint, what's going on and any questions you have about just general finances and investing, things like that. I can definitely make myself available during these times. So as per usual, I can. I'm not. I cannot guarantee every single day just because my schedule, but I will stick to as much as I possibly can. And there's gonna be days where I'm a minute or two late because I'm A meeting goes over or something like that, but I'm gonna make it my priority to try to get in here. So I apologize again today if it's blurry or if you can't hear super well. Most of the blurry part because for some reason our WI Fi is slow in this room today, but we are going to be getting a different modem hopefully next week. Let me go ahead and open up the forms.

Okay, these are the big questions.

Okay, let me see here.

Did.

Okay, cool. There is.

These are some really long ones that were submitted on the form. So I don't want to read these necessarily live because they're long. Let me.

Responses. Cool.

I'm just going through some of the responses. A couple of them are just really, really long and so I'll have to address those once. I don't want to read those live for you guys. So feel free if you want to do a shorter comment here. But these ones that are longer, I will read them and then submit them and then on tomorrow's call go over them directly.

There was.

See here.

I don't. Yeah, some of these are just really long, so I just have to read through them and then kind of paraphrase them because I don't want to read it all in super depth live.

So cool.

I know a couple people last night were texting me about.

Getting a business line of credit. So if you are looking to get one, I do recommend doing that when you do not need a line of credit and that's when the bank is going to want to lend to you. If you have a secured line of credit, it basically means you have collateral. And so if you have a truck or equipment you can put as collateral, you'll get a better interest rate and it will get better terms on that line of credit. That's typically called a revolving line of credit, which means that you pay it off as you want. It's not like a fixed where you get a, like a refinance in your house, for example, you're going to refinance the entire loan, you're going to get the entire amount out, like cash out, refinance, for example. Whereas if you do a home equity line of credit, it's like, hey, here's your line of credit against the equity of the home. And you can revolve it's revolving door. Like, think about like you can put money in, you can take money out. It's basically an account that you can use and you only pay interest on the money that you are currently being lent and on a rolling basis. So even if you don't need the money, this is what everyone always says, well, I don't need the money. Like why would I go get a business line of credit? That's when you need to get this line of credit. And then when you do need the money is when banks don't want to give you the money. And during recession, the first thing that banks will do is lock up lines of credit because they don't want to be lending at a time when, when people are defaulting. So in 2007, 2008, that was a big time when banks just stopped lending on things like lines of credit. And you hear the stories of people getting called, their lines of credit are called, theoretically a line of credit can be called and that is, hey, you don't, you don't qualify for this loan anymore. We don't want to do business with you or we're going out of business for a bank. You have to pay your line of credit off. So lines of credit can be called and there's certain things that you might want to read inside of your terms. And terms and conditions of a loan around a home equity line of credit or a specifically a business line of credit. But again, typically, like someone mentioned in the Facebook group yesterday, you're going to have a prime plus a percentage in terms of what is considered your rate of your business line of credit. So prime is what the Federal Reserve and kind of like what is the, you almost look at base, it's the base amount that is paid for interest and that's the number that's going up right now. So when we see that like Fed rates are going up and interest rates are going up, that prime rate is going up. So Instead of being 2 and 3%, if it goes up to 4, 5, 6%, then the bank tax on usually 1 or 2% on top of that and that's where they make their money. So basically most lines of credit are variable. It's going to depend on the interest rate from the Fed, what the interest rate is on the money that you are borrowing. And so if you have any questions though, I'm more than happy to answer those here.

Just see here if.

Yeah, sorry, I don't know who, who got some of these, but they are really long questions. I will read them through and then tomorrow I can address those ones. There's a shorter one here, it says if low on cash. Dude, I'm reading by the way, if you want to submit a form form, instead of just commenting in the description of this video, you can see a link and that will take you to Google form. You can fill that out. And so I got a couple here, one just came in. Now if if low on cash due to a long winter, but still want to have a successful spring rush with growth, how do you recommend going about that successfully to ensure backing, ensure backup cash reserves, but also facilitate growth? It is a good question because like the videos I made yesterday for example, like paying off debt, focusing on profitability, et cetera, you have to keep in mind the stage of growth that we're talking about. If you're in stages of growth, 1, 2 and 3, like when it's like literally just it's all about growth and it's all about close ratio and like literally in training we talk about like all that says sell, sell, sell, do not worry about close, about profitability, that needs to be, that needs to be surmount, that needs to be paramount above the ideology. Like oh, I need to get like highest value customers, I need to get higher profit margin, I need to raise price. Like all of those things are inconsequential. If you're just getting started because that, that you don't have any traction. And so just keep that in mind. Like when I talk on the Public channel, I'm usually talking to existing landscaping companies. I'm not talking to people that are just in their first year or two where you're really trying to just scale. And so like, like we talk about it, training and in the stages of growth, those first couple stages. All I care about is close ratio. I literally don't care if you had 50% off of everything and booked yourself out three or four weeks. And that can happen very quickly. Down in Issaquah, Thomas Hickey a few weeks ago was like, man, there's just nothing here. And literally they're booked out a couple of weeks already. They got lots of work coming in. It can happen very quickly if you just focus on close ratio. Just close every job. So I told him, like, hey, like, every single job you're going to close. I don't matter what, what you got to charge in terms of discounting to get those jobs on the schedule. Because when you hit three, four weeks booked out, you get that momentum. You're either going to go higher and keep growing, or that's when you raise your price and actually start becoming more and more profitable. And that's just a decision you make based upon how much cash is available to grow. Because growth does take the cash. And the video I made this morning that's public, I recommend everyone really watch that. It's extremely important about profitability and what you should expect from profitability, like take home pay after your salary's been paid based upon your growth rate. And that, that's very, very important.

Cool. I'm just looking through here, see if there's any more responses. There's four. Just refresh here.

I'll get better and better at this.

In terms of navigating around here. All right, Submit question here.

Cool. Yeah, there's one question here. And again, you can submit these anonymously. So there's a short one here. It says, do you know that There are several WhatsApp groups of franchisees that are filled with us talking about how you need to stop growing and you need to pause and refine what we have now. Yep. I addressed this last week specifically and the balance that I'm walking between that and we are not selling any new franchisees that are not already in talks with Lee and have already scheduled for April and May training. We're not selling anymore until September and that's when we'll have the next training. So we are slowing down growth and reference last week's call that I had in video in terms of a little bit more in depth, in terms of balance that we're walking in that, realizing that the real moat and the real advantage that we will have is the number of locations down the road and is the scale and the brand awareness. So I have to walk that tightrope with the fact that you're 100% right. And I talked about that on last week's call in depth.

So let's see here. Fresh this again.

Cool.

All right. I'm not getting any comments. I don't know if it's working or not, but you should be able to comment on this YouTube video. I did get a couple of those forms and like I said, there was two large ones. And I will read through those and summate them for tomorrow just because they're so long.

I don't want to be reading just on these calls.

Cool. Anything else anyone would like to address? Any questions whatsoever? Doesn't have to be just about lawn care, landscaping, or even Augusta. There's any other questions you have. Otherwise, we'll call it a day. And if there's not a lot of questions on things like this, we can always have a more abbreviated one. But I think the big thing right now is we. I really do feel like a lot of us need to be preparing for a downturn and making sure that we do have our lines of credit open. Yep. Thomas, thank you. Appreciate it. I see it testing. Thank you, sir. So I do. I do believe everyone should be getting a line of credit. And it's pretty normal for a line of credit to require a point. It's called a point. In. In financial, to speak, is basically 1%. It's one point. Uh, and so. Or sorry, depends who you talk to. If you're thinking to banking versus stocks. But like in general, when someone says there's a point on top in terms of fees, that typically means 1% is what you're going to pay of that line of credit. So, for example, if you're like, I want $50,000 line of credit, great. Your fee for that is going to be five grand, for example. Or sorry, 1% would be 500 in terms of fees. So typically, the fee of line of credit is going to be determined by a percentage of the. The size of that loan. And then what we do is every year I just try to up that. That amount. I just submit new financials to the bank and say, hey, we want to increase of 20, 30 grand. And like I said, we've used I think once or twice ever for short periods of time. But the goal to not use it, it's a matter of it's the cheapest form of insurance. If something crazy goes bad in the business, if someone make a big damage and your insurance doesn't cover it, if someone gets hurt, it's not covered something like that, it's the best form of insurance is that one point that you might pay in terms of a fee.

Cool, let me just submit this. Cool.

I don't got any other questions coming in the forms. Like I mentioned, there's some big ones here that I will read through and then we can address those tomorrow morning. Derek Smith doesn't matter the size of company to get a line of credit. Do you do it on the business or personally or both? Typically if you're just getting started, they're going to require you to guarantee that line of credit anyways. So you're going to be kind of personally guaranteeing that loan. They're going to look at your, your personal finances a lot too because you're brand new. You don't probably have a credit much of a credit history with your business. So they're going to look a lot at you personally. The size of your company does matter because they've got to justify the size of that, of that line of credit. So if you have a $50,000 business because you just got started last September and you only did $50,000 last year and you say well I'm going to do 300 this year, they're probably not going to give you a line of credit for 100 grand. They're going to want to see traction of a certain amount of revenue. So I would really start with a low amount, right? I'm like hey, I want 10 grand line of credit and then get that passed. And then every few months if you want extended or we just do annually, just submit all the, the financials end of the year once they've been audited and then I, I send them in and then that's when they will say okay great, we'll move it up to 20 grand or 30 grand. So I just do that every year. So now I think we're up to 150, 50,000 for the line of credit for the local shop. And like I said, we only used the last time we used that was March 2020 when I pulled all that before people could lock anything. Okay, cool. We got questions coming in long care week. Mike I have Google local services, Google Ads next door Ads and Facebook ads all running, but almost no four estimates help. Thoughts? So first and foremost when you say four, are you talking total? Are you talking like on today's schedule? And what I would be looking at, I want to know too is what's the budget on those? I'm assuming you're kind of using what we start off at training in terms of around a hundred dollars a day total budget. And what I would be looking at is keep in mind total.

Total.

Okay, total. Okay. So let me see here.

Okay, let's do this live.

Cool.

So obviously you're new. So the. So there you're at number one for. Well, you're on Google local services. I see that and I scroll down here. I'm just looking up your website on Google directly. So obviously SEO is you're just getting started. So you're still on like the third or fourth page.

See here.

See here.

I'll try to share my screen just a second here.

Let me just pull up.

Waco.

Two things jump off at right off the bat. One would be the number of.

Number of Google reviews. I don't even see you on Google.

Maps and that is concerning Bitco, Texas lawn care.

Just while I have you, if you're live here still, just let me know how many Google reviews you have. And then also do you have an address that you could use for Google Maps? It's very hit and miss right now. Some of the accounts are able to get an address into the goomai business and it's just their house. Other people, if they have a storage facility, they've been able to get it. Typically they want some sort of store frontage, like a sign or something so you can prove it with a sign. I know Ryan's done it before with just taking a picture of like the office emblem that says where they're at. So getting on that though is going to really help with Google Maps, which is tied in with Google my business. So from a ranking standpoint, that's what I'd be looking at. The second thing is have you done any door to door like door knocking or door hangers in the specific neighborhoods that you're trying to target? I know there's certain parts of Waco where there's a lot of HOAs and you can't do that. But one Google review only have only have house, not In Waco, about 20 minutes of Waco. Got it. So the one Google review is where I would really be looking at. Right, Like a checklist at the end of training. I say 20. But honestly like I'd be shooting for 30 or 40. Like this is the number one thing to get on the second page of Google. Like if someone can get 20, 20 to 30 Google reviews will almost instantly on the second page and then when it's source of time and traffic that will usually get to the first page and beyond. So the one Google review is the part I'd really, really focus on. I can guarantee if you got 20 of those, you'd immediately see results. And so that's why I have it in the checklist at training. Like when we leave training, it's the number one thing you can do for SEO. It beats out any sort of keywords, any sort of speed stuff and any sort of traffic in that first six to 12 months because your site is so new you don't have enough traffic coming to your link so you're just not going to rank well. And it's not even showing you right now on Google My Business, because there's just not enough proof. I see the one Google review you have and that's actually through Google Local Services and you did that to validate your account. But I would really work on the regular Google my business, link that link inside of there and send that to friends, family and just again, like don't ask them to review and pretend like you did a job for them, but just say, you know, hey, please comment on, you know, if you didn't do work, if I didn't work for you, please comment on my character or the business or you know, the owner, quote unquote and speak to that because that's like the number one thing you can do right now in terms of ranking and then in terms of other ads, those other ad platforms, they'll perform better when someone goes online, searches your name and you actually are there. But right now, only place I can find you is Google Local services. So if you got 20 plus reviews, I'd see you in Google My Business. And I also start to see you starting to rank probably on the second page right now. But that's typically the first step to then getting on the first page with time and with amount of volume of people clicking onto your site.

So see here any more forms are submitted.

Okay, here we go.

Would you recommend a new franchisee to apply for a line of credit? You could apply, but honestly it's, it's, you're probably not going to get much. A bank is looking for financials and typically you do need at least a year like 2021 to be able to show them. For now Lines of credit are going to look more like in the form of credit cards and their interest rates are going to be going up so much that I wouldn't be touching those.

So it's just, it's one of those things starting new. It's like Ryan Payne was said yesterday on the Facebook group, he took his first loan, like 20% interest on his cat on one of his piece of equipment, just so that he could start building the credit. And it's just part of it. Your business needs build credit. And then if you personally can't back a loan, back a line of credit with a lot really solid financials and credit score, it's gonna be tough if you're brand new.

What's the point of having line of credit if they can just call it back after you spend it on marketing or other sunk costs? Yeah. So there are certain protections that you as a consumer have, and.

In terms of them not being allowed to do that. And so the big thing is what happens, like what happened 2008, etcetera, is they're looking for the ability to be able to say that you no longer qualify. So for example.

If you had all of a sudden a debt that goes bad and your credit score tanks or your business all of a sudden starts getting way less than money or something like that, they could then say, okay, you don't qualify. This loan is now unsecured and we're pulling it. But there are protections against them just randomly doing that. So assuming that you're not like going bankrupt, then they can't. If you've, you've like declared bankruptcy, like, there's a lot of things that protect you as a consumer from them doing that. But trust me, when, when they start doing that to people, they're not opening up new lines of credit at that point. Point. Right. So it's a matter of open up the line of credit, get it established. You know, you send your financials in every year, that bank, and they won't drop you though. You'll be the last one to drop it. Create that good relationship with them. And they know that, hey, every year they send in our financials into us. We know their equipment's good, you know all the rest of it. And you might need to secure that line of credit against your trucks at the beginning, which means like you literally will have to add them to. If you buy any truck and you want to secure it, they'll be on the title. But again, unless you're selling the truck, it's not a big deal. But if you Go to sell that truck and you've secured the line of credit with that truck and they're on the title, you'll need to get them off the title before you sell the truck. So that's a bit of a pain. But that's what I did at the beginning in order to get my line of credit established to say, look, I don't want an unsecured line of credit that's going to higher interest rate. I can't even qualify. So I said, hey, I'll just, I will simply have a everything secured by having collateral as the trucks, etc. One zip code is busy in the other causing us to mow Tuesday, Wednesday, Thursday in that zip code and just Monday and the other. Normally the modes are done on the same day every week.

Was there a question prior to this?

Oh, sorry. I service two zip codes, Monday to Tuesday on one and then Wednesday, Thursday. I typically say Monday plus or negative one day and Wednesday plus or another day. Now that we are doing the scheduling, should we be more specific by saying each day of the week plus or negative? I really, I really am a big fan of Tuesday and Thursday plus or negative one day because that gives you on the first side Monday through Wednesday and the second from Wednesday to Friday. I like that buffer more because if you say plus or negative one day on a Monday, you're probably not mowing on on Sunday. So it kind of just gives you two days a week. That being said, this is absolutely going to happen as you scale out and that is you're not going to be able to put all the jobs on just two days. You'll start price. Okay, we'll put these ones specifically on Monday, then we'll leave most of them on Tuesday. So you start breaking it apart as you grow and start getting 50, 60, 100 plus estimates or sorry, jobs. But if you keep them on Tuesday and Thursday, as long as you know you can move them one day in either direction and based upon weather, based on how fast you're getting job done, et cetera, you can, you can allocate resources a little bit better.

But one zip code is busy in the other. Normally those are done the same in the. Yeah, yeah. So the, the main part is your last, last portion, last sentence. That is if you're moving from one side of your territory to the other or from one zip code to another and you're moving the same direction, honestly, you're almost always going to fall on the fall on the same day for service. And that's what the customer mostly cares about, especially if you convey that, hey, it's plus or negative one day. But it just like if you, as long as you're moving from one direction to the same in the same direction every time, you almost always hit them on the same day. It just ends up being that way.

Does the franchise still have access to the loan company that we're dealing with? A year last year or so. It's been a while since I looked into that. If so, can you remind me of where to find their info? Yeah, it was with Phoenix Funding and it's not like we don't do business with them anymore. It's just that we don't make a cut or anything like that. And we were just referring people over to them. That being said, I found that like going to your local SBA department in like at a.

Local credit union, it like was just as good to work with. And honestly their rates are somewhat, sometimes better. So that, that would be what I would do. Especially if you already have a banking relationship because they already can see deposits, they can already see a history with you and that level of trust is going to help you when it comes to qualifying for Atlanta Credit. Since do you know, since we have account now, do they report to any of the business credit bureaus? Could be easy way to boost. I would assume so. Most companies that have a.

Credit system or like an account system, they potentially would report to a bureau, but typically only if you're going to go overdue. There is a really cool way if someone's out there. Like I saw someone was just paying cash the other day. If you, if you have that. Give me one second here. I just realized that my AirPods are not connected.

Here we go. Boom, Mic. There we go. Sorry about that.

So, yeah, there's a really cool card called Extra. Just look up extra debit card. And it works like a credit card in that you can build credit. However, it's a debit card. And what that means is you'd have a checking account. You have a bank account with money inside like a regular checking account and you'd use it like a debit card. In other words, there's money in your, in your bank account and you're just using like a debit card. However, what they do and service that they provide is they take a daily loan as if it's credit and then take it from your bank account. And what this does is actually build your credit using a debit card. So if someone does not have a credit card and you not build up credit and you have like your credit score is zero. I would start with that. It's called extra and just type in extra debit card. It's a way to basically build your credit using a debit card, but build up your credit score. And how they're doing that is simply doing one day quote unquote loans. And so you can essentially build up your credit that way.

We only mow Monday, Thursday. Okay, Edward? Yeah, so that would just be a matter of exactly what you said. I would probably do like Tuesday, Wednesday plus or negative a day though, so you still have a little bit of variety and then start segmenting if needs be. So like, okay, well now we're going to start doing Mondays. We're going to this part. Like as you get more and more modes, you're going to segment, right? So you do Mondays, Tuesdays, Wednesdays, Thursdays. Right. The more you can segment into just two and then move them left and right, you give yourself a little more flexibility. But especially when you're moving four days, the day that you actually do service to the customer almost always will fall in alignment and start being on the same day. And that's what they're mostly concerned about, to be honest.

Refresh this.

See if any other questions.

And should we lean into some marketing with the Masters tournament coming up? Sorry, I'm. I'm reading from the forms that came in. Should we lean into some marketing with Masters tournament coming up? So two things. One, we have to be somewhat careful in terms of using golf and associating too much with the Masters golf tournament because of our name. But on the flip side, down the road, especially since we have a national.

Brand, that will be the one time when we start to think about, okay, is this the one week where we potentially put money all together and do something a little more national? That's definitely in my mind because obviously Augusta national, the Masters, et cetera, and trying to align with that right around spring rush. But right now we will probably create content like from a Facebook standpoint for you to be able to post things like that. But we're not like creating a campaign around that right now. But down the road, that's the advantage of having more of a national brand, is being able to pool our money together and say, okay, we're going to run something on the Masters tournament or something like that around specifically Augusta Lawn Care.

See other questions here.

Let's see here. I think that's all the questions for today.

Cool. So again, there's two really long ones. I'll read through them and then make sure that tomorrow we address those. And thanks all for being on here. Last question here from Thomas. Is there a way to simplify determine the close ratio for over the phone mowing estimates? I wonder if we are meeting more resistance because of our new price increase structure. Yeah, Thomas, what I would recommend right now is filter out your mowing the estimates that have mowing on it. And then the challenging part is determining which ones are over the phone.

So if you do drive bys and you do some over the phone that might mess that, that sort of close ratio determination up. But definitely I would look at those and you say they're 15 or 20. Pick out the ones that you might have done drive bys on and then run a close ratio on that specifically over the phone stuff. And then if you see it being low, that's when you potentially would go tweak your estimate calculator and say okay, well let's move down our rate matrix a little bit. I know most, most owners indexed higher on price as a way of precaution. So if you say okay, like hey my close ratio is only 30, 40% on over the phone, let's just bring my rate matrix down like one step so everything comes down a few dollars. Because like I know locally at our shop we really put a lot of padding into our rate matrix for over the phone estimates. So cool as always, feel free anytime you have a question that link in the description will be the same all the time. So just comment there anytime throughout the day of a question or anything like that. Tomorrow, assuming nothing crazy happens, I'll be here tomorrow morning and I'll answer not only those two larger ones that I'll summate and then I will also any other questions that come in that form. So if you think of anything about the day, just post it on there and we can address it tomorrow. Thanks everyone. Take care.