Mike Minutes Mastermind 04/03/2025

Hello everyone. Welcome to their Mike Mince mastermind to get this party on the road. Quick announcement. We are working with the media team on trying to figure out a voting mechanism for getting new design projects recommended and then upvoted. We tried to use ClickUp because that's the system that they use inside the media team. But it seems like it's going to be where every single person has to create an account and it's a paid account. So we're trying to figure out but most almost every single system we looked into like you got to have an account whether or not it's paid or free. So we're looking at Trello now. We'll be look working on that. Like I mentioned last week, this is a way to be able to have her. If you have an idea for a media product that you want done, you can put it in there, people can upvote it and then the media team has a really good understanding of what's everyone's wanting. We're looking at getting another designer so we're just seeing if we can can get that in the budget in terms of having another designer on the media team since just there's so many projects to be done we would like to do so stay tuned for that. I'm hoping next week we have it finalized in terms of the the board putting it in the dashboard so everyone can.

Vote on those projects. Cool, let's go ahead and jump in.

All right, first question is from Mr. Anonymous. Can my general manager be part of the MIC investment or is that just for franchisees?

If they have access to the dashboard, technically they could put their name in. Anyone that has access to the dashboard can technically do that. I don't think anyone has that's not an owner. So this is somewhat theoretical at this point. I think 1.2 is committed and it is all everything's been owners so I don't think that's a problem right now. But if someone has access and you trust them enough to be inside of August Nation, it would be a great retention mechanism if your general manager, you know, if my general manager wanted to invest, I would be allowing them because it's a great retention tool. They aren't going to be going anywhere and they have vested interest in making sure everything goes well. So that'd be my two cents on that.

Mr. Anonymous, if you were a franchisee and any type business in the first 170 locations and were offered a chance to invest in a private funding round, would you have done it? Why or why not? Well, in Hindsight, that's kind of easy because now they're at 5, 000 locations. They just bought Orange Theory. They own Base Camp, they own.

Wax the City and a couple other franchises now. But they've had eight funding rounds. They've been passed around from private equity firm to private equity firm. So it's been a huge win in terms of if someone got in 107 locations, I would imagine it was, you know, 40, 50 million and now it's probably billions. Well, I know it's billions but like yeah, this is a hindsight question though.

What's more difficult is.

You know, would would 15 or 20 years ago someone actually have thought that they'd be able to get to 5,000 locations. Right. So.

Also finding they went the private equity route and then like got buyout by conglomerates and mergers and acquisitions and LBOs. So leveraged buyouts, tons of debt. That's not the way we want to go. We want to go public. So just a different liquidation mechanism for the founders. They just left. So it'll be interesting to see what happens. They've really gone the the conglomerate route. So they're getting to their big acquisition of.

Of Orange Theory has been their big. Their most recent kind of big, big purchase. Thomas and Clinton Prayer Guidance I once again asked ATC regarding estimate acceptance notifications. Not getting sent. I've not examples on three occasions and each time EDC has either told me it's a small hiccup or it's a known problem. There's nothing can do for me. In total, I've had about 18 different estimates got accepted not alert me. This has severely impacted my business and the customer experience. It also results in numerous to dos from command center from customers that call and ask about their job because they accept the estimate. Haven't heard from me. Yeah. So I know they have been in full engineering. After you give us information Thomas, they were able to. They have a whole meeting on the engineering team about this today in your account. So thank you for doing that. I did look at all the correspond. Oh, sorry.

Sorry. One second.

Sorry.

One second. Present Share screen this one. I was looking at the correspondence with ATC and and like as a support person, they can't actually fix the problem, but they absolutely take every bit of information you give them and what they're doing is they're putting it on the ticket for the engineers. So engineers have that information. And so like when yesterday you submitted the thing here and I didn't know who it was, I immediately put that in the engineers and they're like, well, we don't know where to look because we just tried this across a hundred accounts and we can't replicate it. So we need account information. So as soon as you give them the account information, what they're doing at support is they can't fix the problem. They don't know when it's going to get fixed. But what they can do is take that information and give it to the engineers in a way that's digestible for them to actually work on the issue.

So it is not a function of not wanting to help. It's just the support team is not equipped to do node JS and PHP code, but they are there to gather information, collect it and document it for them. And I know today you had probably six or seven engineers working on your one account because we can't replicate it outside of it. So they will work on this hard as they possibly can. That's all I can promise. So.

Thank you for. Thank you for submitting the information, the specific estimates and customer information, because then they can actually dig in and they can figure out what's happening and recreate the. Try to recreate it inside of your account. So thank you. Hey Mike, I got my first Command center invoice and saw it references May 2nd. I know the automatic draft will be happening soon, but I was wondering, would it be an option to pay manually by May 2 instead? Trying to manage cash flow on my end, yeah. So I think you have 14 days before there's fees applied. So I think it's 1.5%. And then like after like 30 days, 60 days, like you stop service stops kind of like we use copilot. Right. So it's exactly the same way. You all have it in your accounts. After 14 days there's a little bit of a fee. And then after 30 days, etc. So I would not recommend, you know, 1.5% is 18. It's like a credit card. So it'd be like running a credit card bill up. So I don't recommend it.

Just like I would recommend anyone else if you have overdue invoices, like if you're not collecting within three to seven days, we have a cash flow problem. And so. And then you need to turn off service to them as soon as possible within like 28 days. So you follow a similar pattern at Command Center. So I think 14 days you have to pay it. Essentially we draft it, I think usually like three to five days after we send it to you. So if it bounced, usually kind of get that Extra one week of we try one more time before fees get plied. So I think, I think they always retry on Fridays. If I remember correctly.

Number five from Marietta Ann noticed a $13 ACH processing view for a 420. $425 pine straw job for a customer. Tried reaching out to ATC but there's a m major delay in chatting with someone. All the bot responses don't give it any support to that charge. And my customers wanting answers as am I. It should be a 8% cap to $5 transaction for payments over $6.25. The fee is $5. Please help me understand what I might be missing. Did something recently change?

Not that I'm aware of. Unless you're charging. What that looks like to me is you're charging 2.9%.

So that looks like a credit card. So 425.

Times 0.8. Oops, sorry. No, I would do.

425 times 0.08 equals $34.

For payments over 60ft.

I'd have to see. I'd have to see this one's transaction. I don't know why because it should cap it at $5. It's ach.

So if it is not, I do not know why it is not doing that. So it just be something inside your stripe account because we didn't change anything on our end. So yeah, submit this to atc. They would eventually have to look into the exact transaction that you're mentioning. I think they'd be able to see and do inside your account and see what's going on. So yeah, I don't know to be honest. Okay. It should be 0.8% for ACH transactions and cap at 5 bucks. I'm assuming you're charging your customer. Okay, I'll have to look at it. I'll make a note. One second.

All right, I will take a look at that later.

Mr. Anonymous thoughts on truck leases rather than buying new or slightly used vehicles. Pros and cons maybe. Yes, this is something I'm actually having meeting right after this about this topic. We're hoping we can get actually some commercial lease stuff set up, preferred vendor stuff. I would love it. I would love if we could get like a 0% financing for 24 months or something crazy awesome. Or some lease program that will allow some really good financing terms. Because if you're going to be in business for 10 plus years, it actually makes a lot of sense from an amortization perspective with the cost of used trucks being so high now like when I first got started and even like six years ago I would buy, I bought all my trucks for under $7,000. Every single one.

Take that back. I think I had one truck over, it was 9,000, but every other truck was four, five, six grand. For used trucks, hard to beat that if they last four or five years, six years without any problems in terms of just the cost per month. But when you start taking a used vehicle that's now 20,000 or 25,000 for that same vehicle new and, and Lee starts to look better and better. So I recently got new trucks all at my shop.

Because like I know I'll be in business for 10 years. Generally my thesis is if you're going to be in business for 10 years, having newer trucks actually makes a lot of sense. The reason I don't talk a lot about it publicly is because the small business rate success rate is so small that more than half the people I'm talking to not be in business in five years. And so if I tell them all to go buy new trucks and they get a bunch of debt, we have big problems. So but that being said, especially with the truck rate like I, I thought for sure trucks in the past couple years have come down a little bit more. They came down a little bit from the craziness in 2021, but they're still like comparatively what they were in 2019. So expensive. So it's starting to make more and more sense. Yes. And also from preferred preferred vendor perspective we're never going to be able to get a preferred vendor for like a used vehicle. Right. So new orleases what would be happening to go after. Anyways, so I have a meeting about this. I am reaching out to several people have I've heard do this before.

And seeing what we can do here. So I would love it because like if you're in business long enough, if you can finance, get it financed or somehow Instead of paying 20, 25,000 for a used vehicle, instead you pay pay $5,000 down and you're on some sort of payment and that payment is really really low interest or lease that you can buy out after three years and that then that, that is not such a. Like if you can start a location for half the amount of cash, put the money towards marketing and then three years when you actually have to pay out the lease, for example, you have a business that's doing in profit mode, then matter of like can you just simply focus on grow, grow, grow from 0 to 500,000, throw it into profit mode and then pay, pay your trucks, right? And like, I think most of us within three years can do that. And so, yeah, there's definitely math that makes a lot of sense around that. And so I'm looking at it a lot just because, like, I thought for sure, even last year prices of trucks are going to come down, but they just haven't as much as we had hoped or thought. And so it just comes more and more making sense to, to get new. Braden asks what are your thoughts on the tariffs that were put in by the administration? Yeah, it's really interesting. I think it'll probably mostly negotiation. I think most of them will not actually end up becoming in place. Obviously, the stock market freaked out today over it. Stock market's kind of been in turmoil for the past two months over it. So I think the averages are down 15 year to date, something like that. So realistically, the stock market's still at like what it was last July. So it's nothing crazy, honestly.

But in terms of the tariffs, you know, 13% of our GDP is imported. I think it was like.

70, 80 years ago, that was like 3%. So, like, we depend a lot more on foreign trade. And so if you have 13% of the, of our GDP and all of a sudden you just call it a 10, 20% tariff on that, that affects GDP by 1, 2%. And if that's a negative 1 or 2% print on GDP, we now are in a recession. So.

Whether it be negative GDP or just even inflation. So if you have 13% of trade and everything's 20% up, that means like a two and a half percent increase in price just by the tariff. Well, if you add an extra 2 and a half to 3% of inflation on top of right now, inflation is like what, 3%, 4% right now. Then we're going to jump back to 5, 6%. Like, we're back into hyperinflation. So at risk, you know, from a political and, you know, perspective, there's, there is, there is a theory that tariffs could work and allow for a boom in the economy. But if, if these tariffs go into place, it will absolutely lead to a lot of pain this year, whether or not we come out of it a lot stronger. That can be debated in terms of can we build a more resilient economy by depending on manufacturing in house, artificially essentially propping up the manufacturing in our economy to be able to give them more price protection. But again, that's going to be inflationary. So then it's a matter of, well, can you can you use tariffs to be inflationary but then at the same time bring down taxes which would then be allow the market to run hot and people would spend more money. So it's like well yes, things cost more, but we don't charge taxes. Instead of paying income taxes, you're going to pay the people bring goods in, are going to play tariffs. So that's the economic theory. Do I think it will work? I have no idea. So we will wait and see. The entire the country for the past 100 years essentially, well, 80 years has been free trade. And so because of that there's been a lot of prosperity. Go to company, to places like China, Thailand, etc, Mexico. There's, there's been a lot of money, move those places. So the economic theory now is like okay, well we stop globalization, we stop free trade, we have a trade war.

How do we come on the other side of that? We have no real evidence of that because for the past 80 years we haven't been doing that. And my concern is that I don't think four years is enough of a term to actually see the real impacts that could be positive from this. So I think that's my concern is like whatever the next administration is has a high likelihood of increasing free trade and kind of undoing any good that might come out of this. So I don't know, we'll see. It's really interesting if the tariffs stick, if they stick, which means they're not just a bargaining chip, they are going to, it's going to increase inflation, costs are going to go up and then the only way to counteract that would be to bring taxes down, which is something that's becoming very popular trying to get no taxes on people that are making 150,000, for example, if you unleash all of those people to go spend more money because now they're not taking 15, 20% of their money on taxes, well maybe they can afford the 15 or 20% increase in costs of things which it just, it's a different economic theory. We have not played this anyone that says like with confidence what's going to happen, they have no idea what they're talking about. So if I was to give an opinion right now, you should doubt me because we have no evidence for 80 years of what like the opposite of globalization does. And so you can theorize about it. People will point back to previous year, like way back, like back to the second World War and say like, well back then X, Y and Z, or like we, we didn't have income taxes we had tariffs, but like you have to Remember, we've had 80 years of going a different direction so we have way more reliance on foreign trade. And so the economy is in a precarious position where you have high interest rates relative to 2021 and you have still lingering inflation. And so to add more inflation to this economy is very risky, very risky. So the, the, the, the other economic and political theory is well okay, let's assume that's really bad. Inflation drives up, we have a recession and then in order to save us from going into recession, the Fed goes and slashes interest rates like the current administration, what administration wants them to do, but now they're forced to do it by reducing interest rates and then we go refinance the debt of the United States at a lower interest rate like we should have done back in 2020 and 2021. We should have done that. If we would have done 100 year notes on our, on our debt, it would have been so much better. But anyways, that's the grand theory. Do I think what I think is happening? I have no idea. Anyone that has an opinion on this and is like super straw staunched on it, they have 80 years of not knowing because this has never, this has not been played with before. This is not like yeah, it's, it's never been done like this before. And so even like it's all branding, right? Like reciprocal tariffs sounds good, but if you actually look at like the actual goods that are actually being tariffed, like it's, it's, it. Yeah, we'll see. It depends. Like are you an advocate of free trade or where it's like basically hey, reduce regulation in order to be able to allow things to flow as quickly as possible. Bring down the cost of goods to everyone because like getting things from China lowers the cost things here in the US for us because cheaper. So if you reduce that, you charge the Chinese to bring things in. Yes. You will reduce the amount of things coming in. Then it'll have to be made here. Well by making it here, it's going to cost more to produce here because we don't have the free access to labor, we have way more climate restrictions, et cetera. So then what, who ends up paying for it is the consumer. So that drives up inflation. So if inflation goes up, well we can have our, have a, you know, recession pretty quickly. So anyways it, we'll, we'll see what, what plays out. But we are certainly walking a very precarious and fine line between lingering inflation, a massive amount of debt, inflated interest rates and a threat of extreme inflation, with tariffs affecting 13% of goods. So we'll find out what happens. All right, everyone, I hope you have a fantastic Thursday. We'll see you tomorrow. Take care.