Mike Minutes Mastermind 04/06/22

Hello, everyone. Welcome to another mastermind here. Going get started. I have a few questions that came in on the form, but I want to kick things off and talk a little bit about something I mentioned on the Facebook group yesterday, and that is Nextdoor. And Nextdoor has switched from local deals to Nextdoor ads. Pretty standard move, honestly, for a company like theirs that went public several months ago, trying to make it more broad instead of it so centralized on local deals and sponsorships. So pretty disappointed though. So far it's a very weak product. I'm hoping they added this or edit it, mostly due to the fact that they took out the one thing that I love most about Nextdoor and that is the ability to target by the neighborhood. So now you can only target by the zip code, which in my opinion, just dilutes that product dramatically. So we're gonna test it. But now it's very, very difficult to get good metrics because they're. It's just a very undeveloped product right now.

So I wouldn't. I wouldn't say not to use it. But when you're targeting zip codes, you can be targeting like a zip code that's long and narrow is massive, and half the zip code you don't even want to target to because not your ideal customer. So not too thrilled about it. But we'll see what happens in terms of the production once we kind of start testing on some things. But just the metric and everything is very much built for your phone. I know what they're doing. They're going after Chuck in a truck, basically trying to advertise on Nextdoor right now at least, because if you look on the mobile device, it actually looks really nice. But when you get on desktop, it is just a very weak product. There's not a lot of analytics. And the worst thing is that it's just not being done, but it's not. You can't target by neighborhood anymore, which stinks. It's massive disappointment. Very disappointed. So I'm hoping to add it back. I know Nextdoor has been reiterating their ad product a bunch the past month or two, and a lot of people have been seeing things change and like, move around. So I'm hoping they somehow add this. This functionality back in. I think they're gonna get a lot of backlash from people over this. So hopefully they. They listen and we'll be definitely be a voice of concern and worry in their ear that we're. We really want to have neighborhoods back. So a couple questions came in on the form. Let me submit this in here.

Share screen window. Boom. All right, let's see. This is the first one for Kevin. See, I'll bring this up here. I have one employee who just started this week who seems solid. So far. I'm planning to do 200 to $250,000 this year. I'm wondering if I should hire another employee in two weeks just to lower the risk of one of them leaving and to help with spring rush. I just don't know if I have enough work the rest of the year to keep them both busy. If they both stay, I won't need to repurchase more equipment trucks or trucks for the second employees. I could put the money they pull in into marketing. Yeah, so this is.

A common belief or concern that a lot of owners have when they have their. They're getting their second or even third employee. And we always somehow fail to remember that employees leave very quickly. And what I mean by that is not only is your thought process around getting an insurance policy of your second employee very, very accurate. But also it's a matter of when you get your second employee. Like, oh, man, what if. What if they don't stay? Well, like, they probably won't. Like, if you take two employees and you hired two employees this spring, the chance of them both being with you in six months is relatively low.

Honestly, for both of them. Like, the probability of both of them being there. So I 100% agree with your premise. Kevin. Put them both to work during spring rush. You know, you'll have enough work for them. And like, literally the worst case scenario is you two, you got two solid, really great employees in three months that are trained up and you don't have enough work for them. And like you said, you're gonna funnel that money for the marketing. Having the extra employee will at least produce a few thousand dollars more of profit every month, which is going that you could just take put towards marketing to keep them busy. But if the very worst problem you August and September is, man, like, I got two solid, solid employees, and I just can't find enough work for them. That's a better problem to have than having no employees. And you going taking your benchmark from 250,000 down to 180 simply because an employee left that one employee, and now you got to train someone up brand new, etc. And 250,000, you know, with just you and one employee is really, really good. If you've got a third, a second employee, you might be on the like, 260, 270, 280 marker. Just based upon the law of numbers and averages. With that employees.

Let's see here. Nick from Marysville had this question. I have five, $55,000 in the bank, four crew members and four trucks. I use one truck full time. They have three trucks among four people. So basically you have one truck that is. Has two people in it and the other two trucks are solo. And then you have your truck for estimates. I removed from the field for the most part. I plan to hire two more guys. Should I buy an estimate vehicle so they have a fourth vehicle to utilize or should I just have three trucks with two guys each?

I would say at the rate you're growing, it'd be okay to get a car for your estimate because if you're just driving around all day doing estimates and that's the majority of what you're doing, and if you're going to have, you know, four trucks and six employees, like that makes a lot of sense to buy a car, honestly. Now, that being said, you. And I say it too, because you have 55,000 bank, which is pretty good. If you had 20,000, the bank, I'd probably say let them that the guys double up and go in three trucks. So it's just from a cash perspective where you're at. But I would get a cheap car. You know, you can still get cars for a relatively cheap price, relatively, compared to trucks right now. So if you need to spend, you know, five, six, $7,000 and a cheap, you know, Civic or a cheap, you know, Honda, Ford Focus or whatever it is, I would do that before I go buy a truck. That being said, I would go get your. The guys before you go get the car. Right. So I would get the guys, make sure they're solid. The last thing you want to do is go buy a car, have four trucks a car, and then you get a few people leaving you like three employees. Like that's when it doesn't make sense. Right. So I would recommend you get the employees because they're going to be doubled up anyways while they're training. And then, and then you can always pivot to, okay, they're all really solid now. They're. They're ready to go solo. In that case, that's when I would then think about.

Getting into the car and then allowing them to go solo, make more money on P4P etc. Out of March, April, May. What's the split for when you'll get mowing customers in spring? So everyone's market's different. Tyler, you're. You're in our market. Right. So March is how I kind of look at is if we look at spring rush as a percentage of 100, I look at March is like 25% of it, April is 50% of it and May is 25% of it. Obviously you have a base of just natural demand. But the actual like if I'm looking at spring rush and what percentage of work comes from spring rush in your market, which is my market, that's what I would say and most for most of us that you can kind of shift that left or right depending on your market. So for example, in Midwest you guys are just getting started mowing now. And so you could say, okay, well 25% of the spring rush in April, 50% of it in May, 25% of it in June. Every market's a little different and some of them shift faster and so you have a bigger spike. So for example, in the Midwest, their spring rush doesn't really go three months. It's shorter because the weather changes so quick.

Hey, Mike Connor and Evansville. I feel like this cold weather and rain has pushed our spring rush back almost one to three weeks. We typically get a large influx for mowing in March and we probably only got dozen transition the brand but kept the phone number. Any thoughts as to why the rush is lower than anticipated? Yeah, so I talk, I was talking about Logan with Logan the other day about this over in Columbus, Nebraska and we are seeing a dampened.

Like not just at Augusta but even with longer web design because we're able to track all of their their leads. We're seeing a dampened number of leads as well as close ratio. And I have a feeling and I this is going to be a hard one to prove. I won't know this for two months at least until the data is in and everything's solid. Like I have, I have a very good feeling that the spike in energy prices right now, people are really on their heels when it comes to spending money. And so what I feel is going to happen, Connie, you're 100 right, it's going to push your spring brush back. But what's furthermore going to happen not only if the war ends and oil prices come back down, but it's also going to make all the lawns that you get in like end of April maybe going to be overgrown because people have pushed it off. So I think with inflation, oil prices going up and then just overall fear with the, with the war, people are being less inclined to spend money right now. And there's several of Our markets where I've seen a big dramatic shift since last year. And it is reminding me a little bit of what happened we had in spring 2020. Same thing happened. People pushed off their mowing season because you know, with COVID hitting in March, everyone just start pushing things off. We had a really much lower close ratio. We had less leads coming in. So I do feel like that is the cause. And when people have to spend an extra 3, $400 a month just on gas and then everything else is going up in price, they're going to push things off. They can only push lawn mowing off so far though. And so what I expected, I expect to happen and the same thing happened in 2020 is we, we have, we had a delayed spring rush by like a three to six weeks. So. And then with the weather, you're. You're probably. Most of what you've seen so far is probably the weather. But I expect this to kind of continue. But I do feel like once the fear catalyst, like right now, people look, turn on the news and they just see like prices going through roof, a war on the other side of the world, like nuclear things. People just freak out and they stop spending money and the first thing they're going to do is just try to push off buying decisions. So people that thought they were going to buy a house, now let's push it off. People that, you know, they need to get lawn care, they're going to push it off. And so that does definitely create a dampening on close ratio and just total number of leads. And we're seeing that not to the extent of 2020, March 2020, but we are seeing a similar pattern. Is nothing like last year where it was just like, you know, half, half the half of Augusta last year turned off their leads and said no more estimates. We're not seeing that this year. So I believe it is those fear catalysts and costs and fuel and things like that.

Reassured to hear leads and close ratios lower. I was worried and wonder I was doing wrong. Yeah, no, we're seeing this across the board. There are several, you know, if I made a video about this online, for example, people like, come on. Oh no, I'm getting tons of work. And like I have like, yes, you're right. You got started last year and your brand is now starting to get some traction. And there's obviously, you know, even Tyler, you're grown still a lot since last year. It's just a number. It's just a matter of, you know, comparatively right close ratio of let's say 60 now becoming 45 or 40% and people being more price conscious or this is what I saw, I've seen a little bit is an extended time horizon between estimate sent and estimate accepted. People literally just pushing things off. So a lot of this I, I can't like hang my hat on certain things right now, but I believe that's the cause right now.

Just scares me as I've hired for a rush and it's delayed. Might lose one or two employees as the work is not coming in like I predicted to go full time. Yeah. So if you have really good employees and they don't want to leave, I would just reduce your hours to some extent. So instead of them all working 40, maybe they work 35. Usually employees will not complain about that. And that will allow you to accommodate all of them and keep them all. Because I do believe, I really do believe that like literally if tomorrow we had a peace treaty from Russia, oil prices will go down 20 to 20 to 25%, the stock market would take off. We'd have a lot of positive catalysts in terms of just the consumer not getting inundated with negative, negative news. And negative news just causes people to hold on to cash. They don't make buying decisions. And there's still a lot of cash on the sidelines from, from 2020 and 2021. There's a lot people have a lot of money right now. We're like all time savings amount of cash on, on the sidelines right now. So close ratio was 60 in February and high 40s in March. Yeah, that's almost exactly what I said. So 60 down to 45. Yeah, like that. That's kind of what we're seeing across the board right now. And so again, February, you know, it was end of February. Is the invasion something like that, yeah. And I think it's February 29, February 30. So again, when people see really bad news all plastered across their television and stock markets tanking and real estate prices are starting to be funky and mortgage rates are going up and they go to the pump and spend $125 to fuel up their truck, they start conserving cash. Right. And especially middle class America, they're the ones that react to fuel prices the most because the lowest class, like, you know, the poor class, like working class, for example, and they typically have smaller cars. They trap, they do not travel as far for their job. They live closer to their jobs as well as they take. They have public transportation, they'll carpool. Middle class America, that has two or three vehicles in their front, front driveway. The majority of what we service in the suburbs. And they, because they live in the suburbs, they travel further for work, that gas prices actually affect them. They have a truck. That's what's causing, you know, 3, 4, $500 extra in cost right now come March when prices go up like that. So I do expect, again, like I said, if a peace treaty was signed tomorrow, I do believe we'd have a massive influx of work of just people accepting jobs. And unfortunately, you know, in the country, we've really tied our whole buying psychology to what we see in the news. So if we see that people are shutting down businesses because of COVID we'll stop spending money. You know, things like that. Even with this whole thing in China right now, they just shut down Beijing over another variant of COVID So there's people watching that too, like, oh, I guess, are we gonna go back into the shutdown? I gotta save my cash, right? So that's what I feel is happening. But. All right, that's all the questions I had for the day. If you have another one, feel free to pop it in. Just make sure that no one submitted a form throughout the last few minutes.

Cool. I think that's all I got. I will definitely, probably week after next, have an update on Nextdoor. And so that should be helpful. But, yeah, right now, I'm just really disappointed that they took away the neighborhood feature. And we'll see what happens there tomorrow. We will not have a mastermind in the morning. And the reason for that is because we have the evening. We have the roundtable. I'll be sending an email out here shortly with an invite to that Zoom link. So it's a Zoom. It's not one of these. It's a Zoom meeting. So everyone will hop on there. You can. Everyone can see each other. And then at the end of that meeting, I'm gonna have Kevin Fairburn talk a little bit about the meetup down in Tennessee coming up in July. So it should be fun. It's gonna be a little bit of a recap if you've watched every single one of these morning masterminds. But I will have some new stuff in there, too, and going over some of the stuff with the economy as well. So thanks so much, everyone. Have a great day, and we'll see you tomorrow evening. I'll send that email out here just a second with that Zoom link.