Mike Minutes Mastermind 04/11/2024

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Audio.

Okay, cool. All right. A couple people already commented saying they like it that I keep my eyes up. Okay, I'll try to do that sometimes. Just not easy to have 10 minutes of me waiting for the text messages to get to everybody. All right.

Sent everyone an email message a Tuesday night with some of the updates that have been most recent. One of which is next Tuesday is going to be a roundtable meeting on Zoom. I will send a link out the day of everyone. I'll probably send it via text message, too. We have copilot, so you have that there. And that will be some updates. There are two kind of major announcements. And then we'll do some Q A in person, face to face. Let me drop this into Facebook real quick.

Boom.

Oh, Vlad just say has a $2,500 truck repair coming this weekend.

So bad. So sorry. A couple of trucks, the Bellingham shop, the older ones that we haven't replaced out, their dashes had to be replaced. Like all the speedometers and everything. It was like affecting the electronics of the truck. They're not. They're not cheap, man. Mercy goodness. All right, that's all. We didn't really have announcements. Okay, let's present share screen. Let's jump into.

Questions.

Let's show there. Sorry, guys, one second. Okay, good. All right.

Question numero uno.

See, we got going on versus from Sal Tracy, California. Sal from Tracy, California. Got it. Hey, Mike, when, when and how do GM's payout happen for current month? We had our first 20k month in March. And what is the bonus based on payments received or jobs invoice. And how do we see this data? Typically I do it based upon received.

But this would be completely depending on your owner and what the agreement is. Some people change this however they like. As long as it's consistent, it doesn't really matter. And in terms of where to find that I would personally use. If you're using like, how much money did you actually collect? I'd use QuickBooks because I want to know how much money actually hit my account minus free funds and everything else.

All right, one second here.

Good. All right. Eric from Largo, Florida. I know a while back, the Bellingham location switched their excuse call out window in the evening before the call that day instead of a couple hours before the shift. I love this idea for planning purposes, the business side of it. But on employee side, if someone truly wakes up sick the day of, how does that play out? I think you have to use your discretion at that point if you really wanted to.

And like if someone messaged you 10 minutes before work and said they're sick, likely that they're not sick. If they message you at two in the morning and say hey, if they tell you the day before, like hey, I'm not feeling well, I'll keep you updated. Or if they even wake up at like 1 or 2 o' clock in the evening or in the morning and they're like, hey, I've been throwing up all night, can't make it in, then you use your discretion, right? Because that call is usually actually they're not sick, they just had a really big party and they realizing they're not gonna be able to come into work. But then if someone's never called out and like that's their first time doing it and they're saying hey, I'm sick, I've been throwing up all night, I'm gonna go to the hospital, we're probably going to give it to them. So some of it you can use your discretion on for one off cases like that, but you're weeding out the 80 to 90% that are not legitimate when you have the, the more stringent policy in place.

Eric Largo from Florida Scenario two men crew is mowing. One team member wants to take a lunch break, but the other doesn't.

Usually if it was me and we were having a busy day, I tell the employee to clock out or break to eat while I keep working. Seems like this makes them feel bad for taking a break. So may not be good for morale. More concerned for this happening with two employees, what is the best way to handle a scenario? Okay, so technically what you could do is you could have one job where they say okay, this, you're going to take a like lunch break. They're going to do this one job solo and then you could just change in copilot to be on that job, take that one at the employer taking a break, you could take them off and then everything on P4P would line up in terms of if you're synced to P4P, it would pull over the data correctly for if as long as that job is assigned to just one person. So you could do that.

And if you're, If I'm assuming P4P is sort of your biggest concern right now. If one person's taking a break and the other person's not, just unassign them on copilot for that job and you should be good. And then if you're not synced, just run your Stats based upon all the jobs and take away that one job and add that one job as an additional rate inside of P4P. That'll happen automatically. If you're synced with P4P. It'll automatically create an additional rate with a crew size of one for that one job. And you'll be able to see in the little info icon that specific customer's name and the budget hours assigned for it. So that's what I would probably do in this case. Usually what happens is that person could just not drive and they could be taking a break between jobs because still, like even on a tight route, you're still gonna have like 45 minutes plus of drive time. So they can take their breaks then. But if they really wanted like a good chunk of time, I'd do a job like that.

This is Jason Murphy from Milton, Kentucky. I'm seeing a dramatic decrease in lead flow year over year. March 23, 93 leads. 3-24-42 leads. April, 122 leads. April 16 is lead flow down across the board. Yeah, so I actually was emailing you back and forth, Jason. Yeah, this is two days ago. Sorry. So I'll fill everyone in. So Jason has a pretty good sized business out in Louisville. His company's like 4 years old, doing over a million dollars in revenue. And so having a new site like Augusta, you're not going to replace a four year old business lead count that's doing seven figures immediately. So Jason just came to training two trainings ago and this is his first spring. So you know, I'd give it at least a year to replace the four year website that's currently up and running. And then what most people do if they're transitioning brands is next to on their old website, just put like a department of Augusta Lawn Care next to the contact stuff. So when they click on it, it still goes to command center and the customer is not too like alerted by it. And then you can just track your leads from both sites until eventually it's like, okay, I guess this is making more leads. I can now bring down my site if you wanted to down the road or just leave it up. Like if it's, if it's producing tons of leads, that's awesome. And so I would just probably keep both of them for now and then eventually sunset set it once it makes more sense.

In terms of across the board. What the numbers that some of the numbers I was sharing with Jason, I was just going to share with everyone.

Excuse me. We are seeing like.

At lawn care Web design, we're seeing on average right now about a 10 to 20% decrease in leads. The bottom quartile is seeing almost 50% reduction in leads. Long care web design. So there's like 300 sites that we monitor.

At Augusta right now we're seeing between about 5 and 10% decrease in leads across the board. And then similar distribution. Like, they're like the. The bottom quartile is seeing like a 15 to 25% decrease in leads. So, yes, it is the economy. And even yesterday with CPI data coming out, inflation is still running rampant. It's going back up.

So they just. It's gonna be tough for the feds because they got election year. So election year, you typically don't want to be raising rates or keeping them high because it really hurts the economy. So that's likely what's going to need to happen though, for them to prevent inflation from running away again. So that's going to be interesting.

So. So in terms of lead flow, yeah, I'd say across the board in. At Landscape Business Course, we're seeing that 10 to 10 to 20% decrease across the board. And Augusta, we're seeing about a 5 to 15% decrease across the board. And then the bottom quartile is getting whipped with as much as, you know, almost half of MATA leads last year. And.

It'S only safe to compare if you were in business last year.

So I don't know for, you know, the vast majority of newer owners, it's like, well, I'm having like double the amount of leads as last year. Right. You're on this growth trajectory. Assuming, though, that you're not in growth mode and you're in profit mode, you compare two years against each other. That's where you actually compare the lead difference. And it's not even size of business. Like I was talking to Ryan Payne the other day, I think they're up like 30 or 40% year to date compared to last year. It's not about the size of the business. It's a matter of, okay, if you last year were in profit mode and not spending a bunch of money in marketing, and this year you were as well, is there a decrease in leads? So, like the Bellingham shop.

Similar number of leads, but we've had to spend money on marketing, and we haven't had to spend a lot of money on marketing. We've never been spending money on marketing during spring rush for probably three or four years. And so even though our lead count is the same, we had to kind of go back into a Little bit of growth mode, I. E. Spending money on on ads to achieve that. And they needed it like to fill the schedule. They needed to get some ads running. So. Forest from Modesto. Hey Mike, I'm looking for looking to hire an estimator for the Modesto location. I'm spread really thin with doing the estimating project, managing for two landscape crews, pick up materials and doing equipment maintenance. I'm behind on all the important things in the business. I haven't watched any masterminds, can't do door hangers and can't be a good mentor to my manager and Tracy. My thought is to hire someone full time to handle all the estimates and drive sales ahead for Modesto. So I'm not running all the place over the place 24 7. What quality should I look for in to to fill this position? What should be their pay structure? My thought on pay should be something along the lines of base pay plus salary. Base salary plus bonus is based on new leads picked up by beating the streets, door knocking, etc. Please be very thorough and elaborate in your answer. I do not want to make the decision that can sink the ship. In order to fill this position, I have to have someone who knows how to quote the simple services and also landscaping installs. This position would. Would need some type of incentive in order to retain someone with the appropriate knowledge I feel and for it to make worth my time training looks. Looking forward to hearing your thoughts. So I don't think you need an estimated position based upon you wanting them to beat the streets and do door knocking. That's not an estimator. An estimator is you have a whole bunch of leads that you need to give pricing to. And what I'd be careful of is trying to find an estimator. They think like I'm gonna get this estimated position for this big business. And then you're like, yeah, you're gonna do door hangers and door knocking. Like the expectation is you're going to lose that person. Like 95% of people will not join as an estimator having knowledge of excavation, hardscaping, massive projects. And then you're like, yep, so now you're gonna do door knocking there. It's like a completely different skill set. So you gotta ask yourself which one do you want? I would also say that that is a higher level skill task than doing the other things that you mentioned, which is picking up. Picking up materials and doing equipment maintenance. Like you might need more. More of a around the shop type of person instead of an estimator. Because if your secret sauce and the thing you're good at, which I think you are good at, Forest, is sales, stop trying to delegate that. Take everything else you're doing that is cheaper and easier to find someone to do that job and then focus on the sales. So in my opinion, I think that sales is more important than picking up materials and doing equipment maintenance. I would delegate those things first before I go out and try to do the other. Equipment maintenance is something that someone's just a head on their shoulders that's decently. They don't need a lot about mechanics. And Forrest, I don't think, you know like a ton, like they just need to like do oil changes, sharpen blades, like all the maintenance stuff that's to be delegated far before you go delegate sales.

And sometimes people do this because they don't have confidence that they are doing a good job in sales when reality, like I think personally, forest, that's your strength. But you running around doing pickup materials and doing equipment maintenance and having these two landscape crews. And furthermore, keep in mind this is why the cost of an estimator when you're doing these big projects is going to be double that of getting someone that's doing simple, simple projects. And I don't know if he watches these, but Danny from the Bellingham shops, the estimator and he was hired on and within two weeks was full time doing estimates. It's the first time we didn't hire someone from the field in our current crew. But he's like up and running and like this morning he talked to the team union. The guy's fantastic, like, yeah, awesome. But he doesn't have like enough experience to do drainage or the hardscaping stuff and things like that. And he's paid the exact same way as all the team members out in the field. I didn't have to go get someone that was 40, 50 bucks an hour because they had all these, you know, years and years of experience. So just keep that in mind. I'm not again, I'm not against these massive projects. But right now it's sapping your time because you are picking up materials, you're doing a bunch of equipment maintenance for these two landscape crews and you're looking to hire a full time overhead position to also know how to do this for the landscaping crew. So I would personally force right now, go all in on your maintenance. During spring rush, allow the landscaping crews to keep making, getting jobs, et cetera, do upsells for smaller cleanups and the small projects to keep them Busy and then go ham on sales on the landscape crew once the grass stops slows down. Like right now, it's time for, like, focus on the recurring maintenance side of things, which will mean less of your time as a salesperson doing big project estimates. You can still keep them busy with the smaller stuff. There's plenty of work to do. But, like, try to build the recurring side of the business that doesn't require.

This highly skilled salesperson. You can sell these over the phone, you can sell these instant quotes over your, over your website. That'd probably be my 2 cents. But in general, when you're looking to delegate things in the business, look for the things that are lowest cost. And right now, picking up materials and doing equipment maintenance is not the value of an estimator. You're trying to delegate something that's a higher value task, which is fine if you weren't good at it, but I happen to think you are, and I. And in general, you want to delegate the lowest value task first.

Nathan from North Pensacola, I'm looking to answer these questions for myself, hopefully earlier in Spring rush.

Number one, should we grow and then hit profit mode later or should we hit profit mode now?

All right, I'm gonna keep reading questions because there's not a lot of context there. Let me keep reading. I would like to. To get the business in prison to switch to the growth model as quickly as possible. Okay.

Recent question for you recently on the C Suite podcast, when talking about bringing Nick on for the new position, you briefly mentioned that he kept his location between 300 and 500,000 and remain profitable. I also know that you talked about the area between 300,000. 800,000 could be tough. Ideally, what does the structure of 300,000 to 500,000 location look like to maximize profitability? What is the main service area? Is it just four guys plus the owner, general manager? Great question. So if you're kind of hanging around the $200,000 to $250,000 marker and you just keep optimizing pricing, you will typically trend.

Towards 3 to $350,000 and still be very profitable. We say 200, 250,000, because most people don't stay there for three or four years like Nick has. Like, Nick's basically stayed there for several years. And it's just because he's like, I'm not going to get 10 trucks, I'm not going to get 10 employees, and I'm not going to go for that. And so, you know, focus on a general manager with a couple solid employees. You can absolutely do 200,000 as you begin to optimize the profit. And instead of charging $60 an hour, you're charging 90 or 100 or 120 an hour. Now, all of a sudden, that same $200,000 business could be $350,000 because you've been optimizing the pricing for three, four, five years. So whenever you're in profit mode, like all those bands of revenue get stretched simply because you're raising prices.

So your question is, should we grow and hit profit mode later or should we hit profit mode now? This simply comes down to how much cash do you have on hand? I'd say if you have less than $30,000 in cash, you probably are going to be more like, hey, let's take one year, make it profitable, stack another 30, 40 grand at the bank and then I'll take this chunk of cash, spend it on marketing next spring and jump and immediately grow above be able to go into growth model. Or if you're like, I have plenty of cash now, okay, great. Stay in growth mode. Keep growing consistently this whole year. Realize that winter is going to be pretty tough because you're stretching yourself thin the whole year and you don't have a lot of reserves. But then the only next spring, you're already going to have a big leg up on growth. So there's no right or wrong answer. It simply comes down to your risk tolerance and how much capital you have on hand.

Allison from Modesto. Good morning, Mike. Have you ever used QuickBooks terms loans? What is your opinion on them? I noticed the credit score only needs to be 620 and it goes based off your QuickBooks which is really nice. But I know there's always a catch. We've been really trying really hard to get a business line of credit and our business loan for our new site and cannot seem to get approved. Do you have any recommendations? We bank with a Bank of America and they have nothing to offer us. Thank you in advance. Bank of America is very tough for new businesses. I have tried with them in the past and ended up not using them.

I would recommend a local credit union and then I would realize that because of you guys have just grown so quickly in the past few years. I know there's not a lot of cash and everything's very tight. Especially as you're going in a spring rush, you're still collecting on big projects, etc.

Getting a line of credit can be difficult. If you go to a line get go to a credit union though, and you collateralize it with equipment that's paid off, you'll probably get it. Now is that ideal? No. It means if you don't pay off the loan, they're going to come pick up your trucks and equipment, I.e. remove your business. But it might be the only way to get a line of credit until you have profitable years underneath your belt. And you all don't because you have grown very, very quickly. If I remember correctly, I think forest got above 90,000 like the first couple months of business. Now you guys have three locations. You have a lot more general managers. The last six to 12 months has been simply a matter of figuring out how to manage GMs. And that is a completely different skill than it is managing a crew member. And there's a completely different skill than being a field worker yourself. That's why it goes from like, the first stage of stress is like the labor, tons of hard work. You're physically exhausted. Stage 2 stress is the management side. Figure out employees and all their problems and all the mistakes they made, all the rest. Stage three is the psychological side because now you've grown to the point where there's cash is going to be strapped, there's going to be problems with employees and customers every single day, and you're now moved into that level. And so I would highly recommend figuring out what revenue you guys want to be at and then stay there for one year. Like, I just, like, I'm, I'm saying this somewhat more directly, Allison.

Like, you do not need to keep growing at such a breakneck speed. Figure out the revenue. I understand it's like more jobs, like, more like we need to do door knocking. We do grow, grow. Like the amount of stress the business is under right now can be alleviated if you just take one year and slow down a bit. And I know that's like a completely different mode to be in, but to be like, okay, we're not going to keep going from, you know, 400 hours a week to 500. We're going to go from 400 to 420 and we're going to raise prices. Like, I'd really, really encourage that. The, the, the speed which good guys have grown is fantastic. And if you can handle that much stress financially and stress psychologically, you're, you're golden. You'll probably have 10 locations in five years. But just know that you are making a very harsh transition or very hard trade off of like, more stress and less money for the amount of growth that you're experiencing. And I would just be careful with that because you're really having to learn this GM thing right now. And there's been a lot of churn in those rules and you're gonna have to figure that out. Otherwise you're just gonna keep. As you grow, more pressure is going to fall on you. So that just be my 2 cents. In terms of QuickBooks. I've never used their loans. They're very high interest. What they're typically going to say is like, hey, we'll give you 10,000, you pay us back 12,000. You're like, that's not bad. Over the course of a year, over, say they give you six months to pay that back. You're paying 40% interest. So. But you know, between a rock and a hard place, sometimes the only place to go, just know that you're paying an exorbitant amount of interest on those, on those loans.

Two part question from Chad from Valparaiso. By the way, Chad, I noticed several things inside the dashboard you're trying to get access to. You do need to download them from the dashboard and then you'll be able to edit them. They're not editable inside of the Google Drive because otherwise everyone would mess each other up.

Number one, instant quotes are flowing in. If a customer chooses a smaller yard when they have a large yard, should I honor the price until I'm at capacity? Or tell them.

Where is I at?

Or tell them their yard is bigger than the one they chose? If I honor the price until I'm at capacity, the price difference will be a significant increase. Or would letting them know I will be honoring the price for a certain amount of time be a good idea?

It really depends how far you are for capacity. If you're like, hey, I'm going to be hitting capacity in a month, I just leave it all to like tearing the band aid off at the same point in time. If you're like, hey, I'm probably six months away from being capacity. You, if you're losing money on every single visit, realize you might now burn an extra 150 or $200 on this customer. So that's keep that in mind. And then also keep in mind like maybe you have the capital that you're like, I'm okay with that. I'm okay with losing a little money. I just want to raise the capacity as fast as possible. Great. So it really comes down to again, your amount of capital you have at hand and how far away you are from hitting capacity. If they're flowing in and you're like, hey, in three to four Weeks, I'm going to be at capacity, I'm going to be raising prices. Then don't worry about right now. Just wait till then. Otherwise you could be like, hey, just FYI, you know, in a month or two months or whatever, I'm gonna have to raise your price. And this is why a lot of people wanted the square footage ranges on their instant quotes, so they could actually have a tangible thing to tell the customer. Like, hey, here's a screenshot of your, your property on Google Maps and it is 7,000 square feet. Here are ranges. And you can just do a screen recording and be like, hey, our range is zero to 5,000. You're actually 7,000. And so we gotta charge you this other price.

That would be a bad day. I would personally do that. By the way, if you're using a square footage thing on your instant price form, I would personally do a price increase with a screen recording, showing it to them, and then showing them an actual measurement of their property. I think that'd go over very well. And not done, done, like I told you so way. Just like, hey, just so you know, when we do instant price forms, we do that because we want to make it as super convenient for you. We, we know it's a headache to try to get a whole bunch of people to your house and walking around and trying to get estimates from people. We try to make it as easy as possible. We give you the instant pricing on there, and we do it based upon square footage. And so yours is significantly above we. We were going to try to eat the cost, but we just weren't making any money. And so to be able to provide a sustainable service, we need to raise it up to the medium. As you can see, it falls within that range. And so from now on, you'll be charged this price. I think most people will be pretty okay with that, honestly. Number two, when hiring, should I have a grace period to ensure that an employee will work out, or should I go ahead with all the necessary steps right away to make them a legit longtime employee?

Either way has downsides. I think if you're going to do the quote, unquote, grace period, I do it for no more than a day or two. Mostly from a legal perspective, you got to make sure they're covered. And if they're not a legal employee, they do not have workers comp. They're not insured, they're not paying taxes. You get in trouble. Is that, is that, does that happen often? No, it's very rare. In the first day, someone Gets hurt the first day someone tries to sue you over something. But I've seen it happen and I've had it happen to me. So personally, I don't want someone working until they are a legitimate employee and I am willing to forego. Yes, I will lose a couple people because of that. They'll get another job in the meantime, while I'm getting everything set up, takes a few days, but usually if they're like job hoppers, they like and they don't really care about your job anyways, they're gonna leave in a couple months anyways. It's likely they're gonna hop to the next job because, like, they can get. I can start working with them tomorrow. You're gonna take an extra couple days to set me up in payroll. I don't want to do that. Like, probably not gonna be a great fit long term anyways, to be honest. So.

All right, thank you everyone for bearing with me as I've been a little bit under the weather. I know it's sometimes hard to listen to me hack away as I go through these.

What key indicators do you look for when hiring a field crew member? The biggest thing I'm looking for is like, can they present themselves well in an interview if they can't?

And when I say present, I just mean show up on time, look me in the eye, like, basics of communication. And then like a high performing employee I'm looking for is like someone who's actively.

Actively trying to improve themselves. So if they're listening to books already, if they're already.

Looking at podcasts, they already knew Jocko is like, little stuff like that. Usually I'm like, let's go.

And I know, okay, this person's gonna be a great fit. They're gonna love the culture, and I really lean into it. And then there's other times, like, look, some people just want a job. And if they're a hard worker and they've been at their places of work for 2, 3, 4, 5 years on average, I'm thrilled. If I can get someone to stay for two or three years, that's a huge win. What I'm looking for then is, okay, I don't think this person's gonna ever be a gm. I don't think they're ever gonna start their own location through the 3F program, that's fine. Not everyone wants that. Then the question is, are they going to stick around, actually do a good job? And a lot of times that's where references, that is where.

How long have they been at all their jobs, if they've been at the last three jobs, like two to three months, guarantee you you're not going to be any different. But if they've been at two jobs since they graduated from high school, both of which were for three to five years, and I called the references, they both say they worked hard. I don't really care if they don't look the best or they don't look super well kept, or they're not going to be GM material or owner material, that's fine. Not everyone wants that. So.

FNBO gave me $9,000 with just a credit check. Yep. So it's all a matter of the terms, so just keep those in mind. And that is whether it is from Stripe. Like, Stripe's going to start offering all of you loans, too. They're honestly usually a little bit better than QuickBooks. Again, not an ideal scenario. You're going to. Usually they're going to give you, say, 10 grand in exchange for $12,000 repayment in three to four months. And when you run the. The math on that interest rate, it's very high. However, if you need 10 grand and you know that having that 10 grand is going to allow you to make 20 grand in the four months, maybe it's not a bad situation if it's the only place you can get money. My thing is, could you just get a credit card that has a $20,000 limit or $10,000 limit, max it out and pay interest on that? Because usually that credit card is about the same interest rate as you would pay on these term loans. And those term loans, you have to pay the interest to completion versus on a credit card, if you get a really good job next week and you're able to pay it off, you paid very little interest. So because it's a revolving line of credit on a credit card. So.

Cool. All right, everyone, have a fantastic rest of your Thursday. We have a leadership meeting tonight. It's gonna be a lot of fun having Nick for the first time there, having the. His significant other. Lee's wife's gonna be there. It's great. I talk all. All fun things of Gusta Nation. All right, love you all. Have a fantastic day. We'll see you tomorrow.