Mike Minutes Mastermind 04/03/2023

Hey everyone.

YouTube. Well, happy Monday. Get started.

All right.

Okay.

Okay, five questions that look like we came in. Let's go and get things kicked off. I didn't have much to go over outside of that Internet went down at the command center this morning for a couple hours, but we didn't miss anything. It wasn't down.

I shouldn't say that.

It was just really weird and spotty Comcast and our whole county was down. Fortunately, our virtual team picked stuff up. I don't think we missed any calls. Last time I checked we had not, so. All right, let's go ahead.

First question comes from Ben Collins.

Hi, Mike.

We charge 1.5 times the weekly moat price from residential customers when they switch to biweekly. Would you recommend the same pricing structure for large HOAs? When submitting a proposal.

You might want to take more of the. It just depends if you're doing per cut pricing. Yes, absolutely.

If you're thinking more in terms of.

Contracts then you're gonna probably like, you're gonna probably just think more in terms of budget hours, right? So if you're doing a per cup basis. Yes, I would still use that same sort of strategy. If you are doing some sort of.

Contract and you're like, hey, we want.

Bi weekly think more in terms of budget hours and usually go into a fall into about a 50% increase. I'm promoting.

But it just. The numbers get really, really big, really fast.

Number two also, do you ever offer.

A volume discount for large HOI properties? I know there's a no drive time, so this will help employ the PRP.

If we don't give a discount.

But I also don't want to demoralize.

Guys since they won't get a break. It's an apartment complex with about 3,300,000 square feet of church.

It is just the question of which.

Direct you want to take the business, right?

Like yes, if you're going to try to get the deal, you're probably going.

To have to bring down the price.

Simply due to the fact that your.

Audio is not done correctly.

Nice, Michael. Okay. Simply due to the fact that you're probably going to price yourself out of competition if you are not lowering your price on an HOA compared to residential. So it's not to say it's bad, it just know that if you're going to get beyond competitive, you're probably have to lower your price compared to what you're typically going to charge. But there are inherent economies of scale and there's inherent efficiencies gained by not having to have to drive between every single service. So you know, if you can cut out, Instead of having 25 waste, you have 10 waste because they're all close. You could theoretically then 15, well on 80 per hour, that's $12 an hour you could go lower on, right? So that technically you could charge six to eight dollars per hour and still make the same amount. It's going to be a little higher because if you start changing the hourly rate because now it's going to start messing with P4P. I would recommend just making your budget hours a little squeakier if that's what you're trying to do, right? So if you're budging this, it's like it's going to take 10 budget hours, maybe do eight because you're like, okay, well we, I'll make it difficult for the guys hit P4P but they're not having any drive time and no waste. So that's what I'd probably recommend doing is just be skinnier on your budget hours knowing that there's no waste and you're going to be saving an extra 15, 20% of your day by not having to drive multiple, multiple places and then knowing that the guys will be okay on P4P with that. But if it's a really, really tough property, you might want to take that account and make sure that they are getting paid Significantly more on P4P by having this inherent efficiencies push towards them. Kyle Tarvin, at what revenue number should I should a location get a second employee to help the gm?

Depends on your growth rate. Like if you're, if you're plateauing in growth, I think a solo operator can do $15,000 a month in revenue. If you're growing though, probably 10 to 12, you need a second employee because. Oh, I see what you're saying. You help the gm. Got it, got it, got it. Which is similar, I would say actually. Yeah, if you're platinum growth and just optimizing for profitability, I think you can do $15,000 a month. There's multiple solo operators that are doing this in Augusta right now. $15,000 a month with just themselves. But if you're growing because you're getting all these leads and there's just way more happening when you're growth. Like if you're going from 6,000, 9,000, 12,000, 15,000, you're not going to be able to handle 18,000 by yourself because you're growing so quickly.

So in that case, I'd probably be thinking about an employee around 10 to 12,000amonth in revenue is when you're probably going to start needing it. Typically just the average breaking point obviously depends on your pricing, depending on your personal capacity, etc. But that's typically when I see it, just a round figure. Clarification. My last question, I'm talking about if the GM is in the field full time doing all the work, at what revenue point number should the GM get? Employee? I think this number is. I think this question is actually the same as if it's a solo operator considering their first employee. Right. Because this GM should be treated like a solo operator in that yeah, they're doing all their jobs out in the day and then doing a few estimates at night. Right. If you're getting 3, 4, 5 estimates a day though, you're not going to be able to get as many much work done. And that's why I say 10 to 12,000amonth revenue, you're going to be needing an employee versus if you just optimize for profitability and you stay at, stay at the same size for a long time, you raise prices. Everything's done over the phone. There's no in person estimates being done. Most of your day has been out in the field working, you could do I believe 14, 15,000amonth in revenue. I think Mount Vernon, that location did 27, 28,000amonth in revenue in March and it was just the GM and one employee. So.

They'Re in profit mode though, right? So they'll probably get one or two more employees as we head into the spring rush and beyond. But they're not like trying to double or triple in revenue this year.

Nick from Marysville. I'm considering raising my base pay base wage to attract more people. I'm looking at all the other job postings and more of them are offering the same dollar per hour for way less difficult jobs like fast food. We are currently paying $20. Part of this, Nick, is Washington state going into 1550 base as minimum wage. So a lot of location, a lot of like fast food has to go to 1550 or at least like 16 bucks an hour. So yeah, it's going to put upward pressure. We are currently paying $20 per hour. Our project rate is 80 and our mowing rate is 90. We are trying to grow to capacity. So I'm not too eager to raise my project rate. But as of now we have way more work than we can handle for the next month and a half until I hire and train more guys.

So yeah, this is, you're kind of Contradicting yourself here, Nick, because you're saying that you're trying to grow to capacity, but you have way too much work than you can handle. So I'm guessing you're trying to grow to a asset capacity, but your.

Your team capacity, like your. With your employees is lower because you can't find people. Okay, so that makes more sense. Okay. We are just. We just are not getting a serious or qualified quality applicants. And the ones we are getting are just not good. It's hard not to get frustrated. It's the same problem year after year. Plenty of work, not enough guys. The TikTok guy lasted four hours. Oh, that sounds fun. I just can't seem to solve this problem year after year. It's driving me nuts. Is BM still $18 per hour? And how are you still attracting people at the rate we still are at? $18 per hour, I think we will have to raise that soon. The thing is, at Bellingham, we also have paid time off, healthcare benefits, gym reimbursement, profit sharing. That's meaningful.

And we really. Highlighting those things is important. In your job ad, like the $100, whatever gift card you're giving away, stuff like.

You could. You could even say like $100 per month for a gas card, for attendance or whatever. Putting all those things in the job ad would help you stand out. But even if you're doing all that, like, a lot of people are just comparing what the base pay is. That's all they care about. Right. The thing is, at Bellingham, we have track record to say that, hey, three out of the, you know, three out of four quarters were profitable and you're gonna get profit sharing. And I average that's been, you know, 11, $1200, whatever it is. So we actually have real estate numbers. To be honest, you're like, this is what you're gonna get. And like last year, here's the average people are making 24, 25, $26 per hour relatively consistently, especially from, you know, May through October, November. Right. So there's just more data. And so we're able to say, hey, look, yeah, $18 per hour is base. That's going to. To deflect all the low performers that you don't want to work with. Here's what you're actually going to make, and. And here's what last year's averages were. But yeah, you're going to have upward pressure on this number, I think. I'm just guessing that next year, Bellingham will probably have to move to 20. But we are still at 18. Just remember, though, that Bellingham is a location that's been around a little longer. It has a lot of benefits and other things it's offering people beyond just the paycheck. Right now. I know for a fact I'm doing all the right things, but I can't progress. I just have to hope the right person applies. And I can't stand that the only one thing holding me back is beyond my control. I understand it's frustrating. It's never easy. This is. This is the hardest part of our industry. And I know it's frustrating because you're like, man, I figured out all the lead stuff, I figured out my pricing stuff. I figured everything. I got lots of jobs coming in, but I can't figure out the hiring.

This is a problem. It's always going to be a problem. So we need to get over the fact that this is not like of the thought that this is not going to become an issue. Right. Even in a. If unemployment goes up, I do not believe this is going to get better. All right, this goes back to what we talked about conference with when Gary Vee was like, oh, this is going to solve itself in six weeks or whatever. And like, no, no one wants to go out and work in the blazing heat and in the freezing cold. Those people are going to go work at Amazon and because they're now laying off, they're going to go work at a fast food restaurant. So.

I think in terms of finding people, some of this has to do with like, I'm not, I'm just not towards you, Nick, by the way, is like, determination to make it happen. The reason I say this, for example, is like, one of our franchisees last week had a passing in their family and command center stepped in to kind of help raise prices and hire people. And so, um, I, I see kind of firsthand when, when someone like Liz is like, okay, I'm gonna hire somebody, like, she just piles on. On interviews. She goes through people and yeah, it's super frustrating. People don't have licenses, people don't have phones. They. They're not allowed to drive, they have DUIs, whatever. Like you're going through all these people. Yes, it's frustrating, but like, the determination to make it happen, find the person and then just immediately close and then get them in and get them set up and then realizing that, yes, they're gonna. There's going to be some show up and four hours in, they're not going to work out. Like the only way to solve the problem when it comes to like your business a lot of times is closing more jobs and getting more leads. The same is true for hiring. The way to solve this problem is to have such an inflow of leads and where you're constantly hiring, you start to really, really, really find that process. You jump on Indeed. When an indeed ad comes, lead comes you immediately on it, like, immediately. Like if you have a push notification, get the app, put it. Put a push push notification immediately. Have a text that you can. You're going to send them, call them, and email them within like a minute of them posting. Realize you're going to do that 15 or 20 times. Three or four people are going to show up to an interview. Two of them are going to be good. You're going to hire both of them, and maybe one shows up to work, and that one half the time isn't going to work out more than a couple of days. Just realize it's a numbers game and realize this is like, this is the game. And what we had to do in the past is spend thousands of dollars a month in advertising and getting new leads for the vast majority of us in April, May, and June. That is not going to be your problem. The problem is going to be, how do I find more people to be able to increase my capacity in terms of labor so that I can get these jobs done? That is going to be the problem, right? As we head into spring rush, that will be the problem. And so what you have to determine is the same determination that you had. I'm just talking to you, Nick, because I can kind of talk to you this way. The same determination that you had when you first got started, like, you didn't want to go to bed. And we're like, you're going to go pound on doors for four or five hours a day, and you're going to make this happen. And with a matter of two months, you made it happen. That same determination to go get customers has to be the same approach you take for finding employees. Okay? And so I hope to get. I hope it's really, really difficult for me to find people in June when I have to find employees, because I want to document the whole thing. And just the way that it is that the mentality of flooding yourself with leads the same way with jobs and then realizing that there's not going to be a lot to stick, and then you have way more. Not leverage, but you have way more options and ability to choose the best person when you have too many people showing up to work. Right? That's a good problem. To have. So yeah, I think part of this I 100% agree. This is the hardest problem. I'm not diminishing this problem at all. I'm just saying that I see some operators. This is less of an issue. It's a issue for everyone, but it's less of an issue because the way they approach their mentality of marketing to customers versus marketing to employees. And it's the same thing. The same way that you would not expect to take down your website and your business. Just do well and still get more leads. You know, turn command center off and turn your phone off and expect more leads to come in the same way. Should be true for employees. It's like just to turn off your job ads. You know, don't get back to people on indeed after two, three days. Like that's not going to work. Well. You've got to take the same approach to getting new customers as you do or to getting new employees that you do for getting new customers. All right.

This is a numbers game. And what we the problem is we get too emotionally attached to the good applicant of the person we interview that's so great. Or we hired them and they don't show up and it's like just like feel like a punch in the gut. You gotta detach emotionally and just realize this is a numbers game. The same way when it comes to customers, the same way that your first few customers bad reviews or people saying you're too expensive was also a punch in the gut.

And From Marietta, Matthew McCarroll with Site One said he looked at the most recent document you sent him as far as franchise documents are concerned and he doesn't see ours listed. Will you send him an updated document? Oh, oh. With your location. Gotcha. Lee, you're probably listening to this. Could you please do this for me? Matthew McCarroll, I think is his contact is on the site on the deals page. Just send an updated document. I appreciate. Thank you. And I appreciate that usually they reach out to us asking for updates.

So yeah, they haven't probably done that this year yet. Landon Smith from Tallahassee, Florida. What are you all doing as far as as ad spend? On my call with Chuck, we discussed my budget being $100 per day on Google, but you've. But after talking to Jake with Evergrow, it seems that spending like 40 to 50 today will have similar return. What do you all plan on doing with the remaining marketing budget? P.S. i did fumble and write the same question twice last week. So good job figuring it out. Okay, good yeah. So if you're in a smaller market, Evergrow will be honest with you, and those be like, hey, look, there's no point in spending more than X amount per month, per day. So, for example, in our markets in North Carolina, we only have two, three mile radiuses for our territories. And so they're saying, okay, if you only have 20, 30,000 people, it's not worth spending a hundred dollars. Just spend 50, 60, whatever it is. So follow their advice. They're being honest. Thank you. 100. There's no, there's no incentive for them to. For you to reduce your budget. So take them up on that. I would then parlay that if you're trying to actually spend a certain amount, is parlay that with dork.