Mike Minutes Mastermind 04/09/2025

Hello, Augusta Nation. Hope you're doing good. Let's get started. Hopefully with this headset, you can hear a little better in this loud airport. Couple quick announcements. First off, next Thursday we have our round table. You would have got this in your email last week on Facebook last week. And I'll be sending another reminder out this weekend. But next Thursday we have the Zoom Roundtable. So everyone in Augusta Nation, both owners and general managers are welcome to attend live on Zoom. I'll have some updates, things coming up here in Q2.

Bunch of stuff we've been working on, and then we'll open up for Q and A. So questions and answers. If you want to be there instead of just the mastermind, more than welcome to ask those. Then that's next Thursday. Not tomorrow, but the Thursday after. I believe that is what, 8, April 17, 4pm Pacific Standard Time. That's 7pm Eastern Standard Time. So hopefully towards the end of your day and not too, too late for those on the East Coast. Second announcement. Nick wanted me to mention this. There was like seven or eight posts that were held up in the Facebook group, unbeknownst to us. Sometimes randomly, if you like put a link to something inside of your post, it'll just go for like manual review from an admin. And we weren't getting any sort of notifications about that. So sorry if some of your posts last week were like filtered out and they didn't show up. So we don't like censor it at all. It's just a function of Facebook tries to think which what is spam? Or many times if you have a link to something or if you have a long post, sometimes a long text post, they'll just put it in like where we have to manually review it. So sorry about that.

Yeah. All right, let's jump right into questions.

Boom. All right, first question is from Mr. Anonymous. Currently needing good labor. We have a. We have a good candidate with a lot of experience in lawn care and landscaping. However, he lives two states away and wants to relocate his family to take a job as a field worker.

Would you offer a relocation bonus and or room and boarding? Also, how much money should you consider? He potentially can also be a really good candidate for the 3F program as well as step up to GM. He can start ASAP and I really need that right now. Yeah. So like, you know, I'm going to assume a whole bunch of stuff like for example, you've done your serious vetting and interview process, etc. I would not change that process at all. And this is where I think most when people get desperate for labors, they, they start to fudge their interview process, they fudge their application process, they fudge their onboarding process, they fudge their training process. Those things I would never fudge. But in terms of, you know, if this is the bottleneck of the business. So for example, if you're booked out so far, you're starting to like, consider turning down leads, you have a whole bunch of work piling up and you're not spending money on marketing. Then you identified and in the 4L framework, this is not a liquidity problem because we have the money to go hire someone. This is not a leads problem because they're piling up and we can't service them or think about turning them off. This is a labor problem. And so the, whatever constraint you're at in the business in the 4L framework, the reason it's so important to singularly focus on that one thing is because it is the thing. Bottlenecking the business, like getting more leads right now is not a problem. There's no reason to think about marketing if labor is the constraint. If you're booked out five, six weeks, it's continually, leads are pouring in, you're falling behind on jobs, guys are having to work overtime. Like, if all those things are happening, your constraint is labor. So I'm a big fan of like, unless you are cash constrained, you deploy all capital towards fixing the next constraint of the 4L framework. Assuming you're trying to grow. That's the objective. So if someone needs $2,000 for them to come over and work for me, great, I might do something like, okay, I'll give, I'll give you a thousand dol right now. That's going to help you get over here. I'm going to give you $1,000 after four weeks and another thousand dollars after eight weeks. So for example, that'll be a $3,000 moving bonus. It would help with like their first, like the moving costs, like just traveling, then potentially the cost of their first month's rent. It would help out with that with a thousand dollars and then the second thousand too. So I would probably do something like that just so you don't get burned with, you know, paying three grand. They work for two days and don't work out. But I would just say like, in general, if this is a I have capital, I do not have laborers problem, and that is the constraint to growth, and I'm in growth mode, I should be willing to exchange capital for cash and liquidity for Better labor. So sounds like you got a good person. So I would deploy that capital.

Mr. Anonymous, at what point in time does an employee's time card become fraudulent? We're at the end of a day one, we're at the end of day one of a two day mulch job and the customer texts me that he saw the employee hang out around the truck all day and to get anywhere near halfway done with the job, plans to fire this employee, plans to fire this employee after the job. But I think it might end up taking three to four days on this job instead of two.

Okay, so there's not really fraud happening here. This is underperformance. So I'm going to assume first and foremost at A they are on paper performance and because they think it's a three to four day job, they're checking out or B they're on paper performance. So if it is B, which is they're not on P4P, I would take extreme ownership of the fact that we have not implemented P4P yet. If they they is if it is P for if they are on pay for performance and they show up at a job and they think this is going to take three or four days and you budget it for one or two, then it's a function of potentially having to step in and be like, hey, I made a mistake here. I'm going to give you a X more budgeted hours and I'm going to eat the cost on the back end. I'm going to go on a limb and say this is not the first time offense due to the fact that you plan to fire this person already. I don't think waiting a few more days is going to help. Sounds like this person is not doing anything anyways. So I would rather go pay someone significantly more to help me get me through this job or get someone on my crew to work overtime where I pay them time and a half than paying this person. So yeah, like if you're not doing P4P, this is why this is a big problem. And if you are doing P4P and they know that this job is underbid massively, you might need to take some accountability on it if it's so important to get it done. I would also say that if this employee is new, that might be a new behavior. That might be a behavior that is warranted because they see okay P4P great, but now this job is going to kill me on my paycheck. I'm just going to be lazy. If this someone is someone who's been around for six months and they know that with P4P there's times where you have a one or two day job that takes three or four. There's other times you have a three or four day job and you get done on one. They've got to take the bruises and the hits and the ups and downs P4P a little bit if they're that kind of employee where they're just going to check out on a job where they can't make above base pay because there was an error. I also do take that into account more from a cultural perspective as do I want this person around assuming that they typically crush it and they typically make good money. But assuming you're like I need this job done like you're in a pinch. If you're using P4P I would probably step in and offer more budget hours and try to get the job over with. Or secondly I would fire this person. I would offer other people more money to get this job done in a more timely fashion. But in terms of being fraudulent, like you'll never win this. Like if you actually think this is like a fraud case, like you'll never win this in court, it's a matter of like they're underperforming. So if you want to go through a performance improvement plan, great. Or you just simply say you're not a good fit and you at will state just let them go. So.

Which just, just I would recommend if you're going to let them go, don't try to make this like your stump speech of why they were lazy on the job because they could retaliate. Mr. Anonymous on the incident price drawing is with the QR code. When a customer submits the form, does Command center forward that submission to the individual locations or do they just put the customer in copilot? They're going to enter as a accepted estimate. So you're going to get an estimate back to you or like an email saying hey, this person has accepted their estimate, go ahead and put them on the schedule. I'm getting ready to send out a few people doing door hangers and my thought for tracking was going to be using a different color Sharpie to write the date on the door hanger and then pay commissions based off the color of Sharpie used per person. Is there a better way to implement something like this? So instead of doing the Sharpie thing, which is another layer of complexity, I would just keep track of where everyone that you're doing delivery, where they're at then just so much easier so it's like, okay, at the end of every single week, we're going to take all the ones that came in from door hangers and we're simply going to put them on. Like I would also say this. This is what I did. And I'm not saying you have to do this. I personally would give commissions on if you're doing commissions, if you're doing commissions, which there's a good case as to why you don't do commissions if they're just passing outdoor hangers. But if you are doing commissions, I personally like to give out commissions based upon any work that was accepted on those routes. Because sometimes customers will still call even with the instant quote door hanger, they will still sometimes still call and get the price over the phone and get their card information over the phone, et cetera. So I usually just at the end of the week, you can just take all your routes. Okay, so so and so did these neighborhoods. So and so did these neighborhoods. Great. Let me just look at the 15 jobs that were accepted this week. Did they fall into any of our routes? I'm going to then give out commissions. That way you don't have to worry about Sharpie colors. You don't have to worry about whether or not I can see the color of the Sharpie. Is that green, is that blue, is that black? Having to go through them afterwards, I would simply just be like, everyone is assigned certain routes. You know exactly where they're supposed to be at. You can track that using a step counter or like Strava or Apple Watch, et cetera, and then just know that any. At the end of the week, I'm just going to take all my jobs accepted and quickly check, did they fall inside of these addresses? Did any of their addresses fall inside my routes? So I would probably just put them on a map and like, okay, did any of them fall inside of the routes that people were putting out door hangers? And I'd give commissions based on that. But in terms of like the workflow, you're simply going to get an email with an accepted estimate and command center gets that. They make the estimate inside of the copilot, create the customer account mark as accepted and then you get the notification. So.

Next question is from Mr. Anonymous. What would your response be to the following Fairly new employee that's chronically a slow worker. I pull up the job site to check in on him. It's all day mulch job, seven yards. He's got three buddies there that I've never met and they're all helping him. Everyone was friendly and the work was getting done. But seven yards isn't that much. And the three weren't in uniform or on my insurance. Oof.

Interesting.

Interesting, interesting. Well, what's funny is, like, it's not like this person, a super high performer, because you said this part, they're a chronically slow worker. Like, if this person was like, dude, they're just crushing on P4P. It's like, yeah, they got their three friends working for them on the back end. That's interesting.

It's like, hey, guys, I'll give you a percentage of my P4P. What a hustler. Let's go. I could. I could really get along with this person, probably. But assuming the fact that they're actually a low performer, they have a bunch of their friends showing up at the job site, this becomes an insurance problem. This is actually something we're going to be really looking at here in the coming year, and that is insurance requirements and actually having everyone prove it at the franchise level to be able to then market to all of them, the country, essentially, that we have certain limits. So I think the vast majority of home service businesses are actually underinsured.

They usually just take the minimums and just to get legal compliance, but those minimums get blown through pretty easily. And I didn't believe that until I start seeing 170 locations, seeing how often it happens. So all of that to say this becomes an insurance issue because if any of these other friends get hurt on the job, it's now the home on the homeowner's property, and they are going to be unhappy with you. And so.

These are two different issues in my opinion. One is the chronically slow worker part. That's one thing. The second part is the fact that they're having their friends show up at the job site without uniforms. And, you know, they're not in your insurance, but they are going. If they got hurt, they would be likely going after the homeowner and the homeowner's home insurance would come after you. So that's how that would kind of work. And if something were to happen. So I would explain this. Assuming you want to keep this employee. No, this. This part kind of throws me off because I think it's a different discussion. But if dealing with this first, the second part, which is like the three random people showing up at your job site, I would address this like, hey, look, I really appreciate the fact that you're hustling, that you're getting your team, you know, your friends to come hustle at the job. If they want to apply for a job, awesome. We'll put them through the application process. Even if they want to work part time, maybe can help you on big jobs. I'd be saying this, not necessarily doing it, but they need to go through the application process so that we know everyone that's on the insurance policy, they're covered. If they were to get hurt, I would feel horrible if they weren't covered by insurance, I'd feel horrible if it then affected the customer. So, like, I just want to make sure we're covered. And if they want a job, have them apply. I would love to have them have them apply to the business. So I would probably go that route. I would avoid going the pull out your, you know, pull out, you know, all guns a blazing. Unless you don't want this employee. Like, I'd be firing them. So let's go with the assumption that you want to keep them and you think that this first part is a learned behavior that they can change in the future, then I would be attacking this from the perspective of you don't want their friends to get hurt and not have insurance. You want to make sure they're covered, they're protected, they have labor laws to protect them that the customer is protected, and I'd be going after that way. But this first part is more a matter of like, do you even want to have this employee? So I think maybe if you correct this part, this, maybe this part fixes itself because they don't have all these distractions in the job site because not like with the three. Three buddies that they knocked us out in like an hour, which they should. If they have like three, four people in seven yards, they should get us done like a couple hours. So sounds like that's not happening. So it's not like they're super efficient. So you might just want to let this person go in the long run. But if you think that this fixing the second part might cause the first part to be okay, which is, you know, by getting rid of these buddies on the job site that they, they start working faster, then I would attack it from the much more diplomatic perspective, which is concern about them, their buddies and the customer don't bring you up and liability the business and they don't care. So take it, attack it from that angle. If you want to keep the employee. If you don't want to keep the employee. Different conversation altogether.

2 million is standard up here in Alberta. Yes, that's really, really good. 5 million general liability standard for construction on all maintenance or industrial agricultural sites. Yep. As soon as you get onto commercial or agriculture, typically you're required more. I get afraid when people start having like 100,000 or even $200,000 a general liability. It gets like people can blow through that so fast. And it's one of those things that's like a, it's a threat to the, like the long term, just viability of the business if something go bad. And even as like we've gotten more locations, as I have more liability exposure, I start thinking about this more, I start seeing it more often inside of Augusta Nation. People getting threatened with a lawsuit or getting a lawsuit or someone getting hurt on the job or being in an accident. And $100,000 is nothing like you get. If someone lawyers up and they know you have a business with assets, they're coming after you. And so.

To date, I don't think anyone has had to close because of this. But I have seen it take massive chunks of a year, two, three years worth of work to get recover from a really bad injury from a customer, an employee, an employee in an accident affecting another pedestrian or driver. It's just not worth it. Like pay the extra 50 bucks a month, 100 bucks a month and sleep better at night and protect the long term future of the business would be my 2 cents. But this is something that we have in our franchise agreement. We've just never enforced it. But we are probably in the near future going to start requiring this to be proof given to the franchisor mostly. So that way when we advertise, we can say across the whole system, this has been checked, verified and validated. And so that's something down the road. It's nothing right now. And it's not like we want to be telling people, hey, you know, up your insurance policy so you can spend more money. Like I could care less about you spending more money on insurance. It's more a matter of as a protectionary effort for the business as well as the marketability of a professional service.

So what is the gusset of corporate general liability insurance? Well, I'm upping it right now. Like there's millions and millions of dollars from a corporate perspective. And so we're upping it right now. So like we can't get away with like 5 million. It's, it's gotta be significantly more. But more importantly, it's like for me, I have to get protection for if people come after us, like the, the legal part, not just like if someone sues me, but like the Legal part. So if someone says some says something stupid that's gonna affect the brand, I need to be able to like deploy all lawyers and attorneys against it from an insurance perspective and claim it. It can't just be where it's only if someone comes after me do I react. So fortunately I haven't had to do that a whole bunch. There's been a couple times I've made like missteps on legal stuff. And so you just recoil it, you give money back or you just like, you just relinquish whatever just to make sure you're within compliance. But if we ever had to like enforce something, you know, the insurance would cover everything. And it's, it's, it's very large, it's expensive. Like I'm looking at premiums now that are ungodly just because of the amount of exposure, so. Oh, I think you mean my locations. I would have to get back to you on that. But we will be upping them likely. Like if you're under a million and you're especially if you have like 10 trucks or so, like if you have to start getting above that number, you really want to look at, like, hey, is it worth spending extra 50 bucks a month, an extra hundred dollars a month per truck for the, just the peace of mind knowing if anything happens, I'm going, I would rather have a higher general liability and a lower comp. Collision. Comp and comprehensive. Simply because like a comp and collision, like let's say, you know, bad accident, you lose a truck, okay, horrible, that's a $30,000 mistake. Worst case scenario, like if it's a write off, it's they rolled the truck, that's a $30,000 mistake. If they crash that vehicle and there's someone else though, that person, that could be a million dollar mistake. So when it comes to liability insurance, I'm much more looking at like the downside risk and playing defense. I'm not as concerned about like my one truck getting rolled over and I want to make sure I have the 20 or 30 grand. I will forego the truck. I will make sure we double up the trucks and people work in crews of two instead of one if needs be. I, that's fine, I'm okay cutting that corner and saving some money. But when it comes to liability insurance, I would not cut corners. And I've seen it enough now where it's like, okay, even if it's a 1 out of 50 chance of this happening and that is putting in jeopardy your 10, 15 years of business, it's just not worth it. Just not worth it. So we're looking. We're looking. I was in tux the other day with it. We don't really have a. We don't have a preferred vendor for insurance because we don't really have anyone that does nationwide brokerage the way we need it done. However, we're in touch with the broker. I'm in touch with the broker for that. Does 1, 800, got junk and does all their franchisees, their franchisees to use it. I wouldn't require it. I basically told them like hey, you need to make this so good that everyone wants to and then I'll start training. Like this is like part of the process for sign up and like getting a location set up so they're pretty confident they can do a good job just because of our volume. And then more importantly they would actually have training for us around different. Like for example you'd be able to submit your employee handbook for review so they can see like is are you open up for insurance issues here? They have some really cool stuff in terms of training around insurance which I think is a something that's valuable, something we could put in the academy and get some exclusive access to if we have them set up. So I'm working on that. That will take me a while just because they have to look at like every location. They have to look at all of our legal documents and registration in every state. So it's quite an extensive process. But what's nice is they do have Canada and the US and Australia because of one hand or got junk. So I'm looking to them. They're a brokerage so it's not like you're locked in on one insurance provider which is usually where you start paying a higher premium because they don't have access to a whole bunch of different insurance providers. So I'm looking at that. I'm hoping to be able to get that set up next week. You got some announcements about other preferred vendors that are going to be really, really helpful to everyone that are, that are really good. So love you all. Hope you have a fantastic rest of your Wednesday and we will see you tomorrow. Take care.