Mike Minutes Mastermind 04/16/2022

Good morning, Augusta Nation. Welcome to another special edition of Weekend Mastermind. So thanks for hopping on. I know some of you probably watch this as a recording, but I did want to go through, there's like four or five different questions that came in on the forms. So we'll go through those and if you have any questions, feel free to post here. I did have a couple things I was going to mention earlier this week, but we had, didn't really have much time. And then yesterday obviously I was cancelled. But so let me just go through these real quick. So a couple things. Core inflation numbers on Tuesday came in a lot lower than expected actually. So inflation, like the headline number everyone's talking about is 8 point whatever percent inflation, but that includes energy which is, you know, oil and gas and food which has gone up crazy because of the war in Ukraine. And so those are up like 18, 20%. And so that skews the inflation numbers. So corporate core inflation, which strips out food and energy and really just looks at commodities was only 0.3% month over month, which is a, if you, if you annualize that's like 3.6%. So it's not bad. So that was a really good surprise. The upside in terms of like lower inflation numbers and that's a good thing for the, for the, for the economy. So that was a positive sign. But then, you know, on Thursday the, the producer price index came out and it gets still super crazy, the inflation that the producers are seeing. So you have consumer price indexes and then you have producer indexes and the producers are like the people who make the goods and services and you know, they, you know, basically the parts of the supply chain. So it's still, still a very, you know, very inflated market we're seeing. But yeah. So I wanted to talk a little bit about that though, that the core inflation is a lot lower than expected. They're expecting 0.5% month over month. There's only 0.3. So kind of a good, you know, some good news there. Let me go ahead and show some questions that came in on the form. Share this pop into here.

Right, this one came from Max. Sorry, I haven't gone through these all yet. Here we go. Would you recommend sending different one click estimates to. I'm guessing you mean one estimate emails to different segments of clients or leads. For instance, I could send one to all the mowing class clients to upsell them on cleanups and another to all the non mowing clients. Upsell them and mowing. That way people are still just getting One email per month. But I'm able to target more of the clientele at once. 100%. 100%. So this is why we usually, we don't. I don't give like one email a month. I usually give you in batches like three or four because then that way you can cross exactly what this is here. So I would definitely do that. I do treatments. I'd be trying to get, you know, people on mowing route to try to get them on treatments and I'd be trying to get people that are on, you know, you've done one time jobs for. They're in your database. I'd be trying to get them on mowing. Right. So it's always the same thing. You're always trying to, excuse me, you're trying to upsell people that currently have.

You're trying to upsell people that you've done like a one time project for, try to upsell them into mowing and you're trying to cross sell people that already have mowing and trying to get them on things like property cleanup or a mulch job or a fertilization. So you want to upsell and cross sell. And so the best way to do that is going to be looking at.

Just your, you know, filtering out inside of your clients who has this service. And if they have recurring service, we're going to be trying to cross sell them into a different one time service and if we already have them for recurring services, we're going to try to upsell them into.

A different service as well. So yeah, great. Let's see here. Hop into this one. Next one here. It wasn't for Max too. Can you automatically attach maps to all jobs for a client and service autopilot or do you have to manually add the map to each job? It would be nice if I could attach a map in one place and it would automatically populate to all jobs associated with the client.

I'm not 100% sure what you're asking here. When you talk about maps, if you're talking about a picture, you can't automatically attach a map or you have to add the map to each job. Add the map to each job. I don't really know what you're saying here, Max, I apologize. I don't know if you mean a map of like the area, like a GPS map or if you mean something else. What is nice inside of Zooper is every single person in their client portal page does have an actual map that shows the address, which is cool. But I'm not sure if that's what you mean here, I apologize. I don't know if you mean that or if you mean an attachment of some sort to that specific client. Should I drop clients that are 20 to 25 minutes out of my service area to spend that time passing out door hangers and get more clients, or should I hold on those customers and pass out door hangers in my free time to fill schedule of clients outside my service area and then drop them once I get clients in my service area? Yeah. So you know, when it comes to recurring services, when you have to drive 30, 40, you know, even 20, 25 minutes out, it really comes down to the size of your business, right? If you have 500 mowing customers and you're driving 20 minutes away, probably not a big deal because you're probably gonna have 100 mowing customers in that other area where it makes it well worth your while to drive 20 minutes. But if you have 50, 60 mowing customers and you have five or six of them 20 minutes away, I can guarantee you're not making any money on those. And your guys aren't going to hit P4P very well unless you charge extra on those jobs because they are far away. So I would say if you're really stuck in between, like should I cut these people out or should I not, Is make sure if you're going to accept jobs in that area, you charge like $5 more per cut. And then that way they can make P for P dollars. It's worth your while. And then if you start to grow in the area, great, like maybe you start to shift more towards that direction. But if not, I would definitely recommend cutting them out just that 20 to 25 minutes. Like let's say you're a solo operator, right? You and your one employer driving out 25 minutes one way. So that's 50 minutes a day. The question is, if you spent 50 minutes per week instead of driving to that location, doing door knocking and talking to customers in your target area, where you're going to be more efficient, more productive, more profitable, I feel like you, within a matter of a few weeks be able to get many, as many customers as you're cutting out that are far away. So drive time and windshield time when it comes to recurring services is going to kill you. You know, if you're talking one time projects are five, $10,000 jobs, driving 20 minutes isn't going to make a big deal. You're just going to put that into the budget hours on the project. But when it comes to recurring jobs if you have 4, 5, 6 customers that are 25 minutes away, you just are not going to make money on those. So you either a, you need to get to 30, like a full route inside of that area or you can just cut them and then take that time and govern it someplace else. Ideally what you do is you do the. You start marketing and doing door hangers and talking to people in your local area. Get to the point where you just literally cannot take any more work. That's when it's really easy to cut people out. It's the easiest time to raise prices and cut out, cut out customers is when you have so much work on your hands that you just cannot get to it. So make that happen and then you'll be, it'll be a very natural decision. I'm cutting out the customers that are furthest away and I'm the least profitable on.

All right, what happens when a customer text Twilio phone number? Okay, so this is for, for everyone on Super. And so this is going to be governed inside your Twilio account and you can govern it to where you own that phone number. When they text back, you can see those messages inside Twilio.

I'm not a big fan of texting back and forth. Honestly, I like it to me more it's notification based, like, hey, here's your invoice, here's your estimate. We're on our way. You know, this specific service happened at your property. A reminder, things like that. I'm not a huge fan of them texting you back because it's very, very, very hard to track that. And then keep, keep it organized and inside the CRM and then also notifications back to you. So there's some cool stuff that I know Zooper is working on to make this more integrated, but I'm still a big believer that texting is more one way. But that being said, inside your Twilio account, you should be able to adjust this Feel free Winter Garden to reach out to Kevin and Siraj gives questions. But inside your Twilio account is where all this is going to be governed.

Kevin, how do I. Excuse me guys.

How do I categorize in QuickBooks the money that comes to stripe and into my bank account, Do I just categorize it as sales? How also how much, how do I know how much of it is sales tax? So there's a report for your sales tax inside super and Service both have a, a sales tax feature. So you know, at the end of the month you basically run that report, know exactly how much you need to send out to sales tax. So it's going to happen. You're 100% right. You're going to see all that money come in a stripe or clear it either way. And you're going to see all that money come in. You're going to going to put all of that as sales and then you're going to run your sales tax at the end of the month or quarter, some people are even annual. But you're going to run your sales tax and then you're going to take that as an expense for sales tax. So that, that's what I would recommend. So like clear it, for example, at the end of the month you see one big draw come out. That's all your credit card processing fees, right. But you're going to save sales tax so the whole amount comes into your account market as sales. Then you're going to see credit card processing come out and that's going to be, you're going to categorize that as sales processing or credit card processing. Then you're going to have your taxes and if you submit your sales tax, you're also going to mark that as taxes. So I actually like this the best because the worst is when they submit money in that already has their fees withdrawn. And so there's certain ways you can get around this inside stripe. For example, you can govern how this is taken out and things. But yeah, categorize all the sales and then any sort of credit card processing or sales tax, you'd be categorized as an additional expense.

Kevin South Haven, Mississippi. I have not been this far behind on work well, ever. How do, how do you do first? Weekly mo's, biweekly moves, small projects, new clients, old clients. Who takes priority? Have two new hires starting Monday and I'm borrowing a worker from another company to help Monday. Well, where should we start it? It keeps raining hard, storming every other night, including last night and raining some. Some now. Yeah, so this is brutal. This is comes down to you're literally just trying to figure out, you know, who gets the work done because you have to prioritize somebody. And what's brutal, I know for you, Kevin, is you're actually, you could be growing a lot. Cause you have so many leads coming in. So this is the part that kind of hits the gut because it has nothing to do with you or your hiring or planning. It's a matter of simply a fact that the rain is keeping you from doing any work. And now you have to start prioritizing. I would definitely Prioritize your old clients. Whoever has is on service. I would focus on them first. They would take priority in my mind, and I would, I would probably focus on your biweekly mo's first before the weekly ones even, just. Because if they get out of hand, you got to ask yourself, when you get in damage control, who's going to complain first? Right? So biweekly mows are gonna complain first because it's gonna be overgrown. Weekly modes are going to understand because it's, it's, you know, raining. They get, they get it. You're behind projects. It'd be a matter of like, trying to figure out which projects can be done potentially in the rain. But if there's projects that can't be done, yeah, that's when you got to just be honest. Like, I was talking with Thomas the other day down in Issaquah, and he was saying, hey, we're, we're sick. And we're, we've been working seven days a week and a whole crew and us, we're just beat. And we have a $3,000 job the tomorrow, like, we just cannot do it. I said, look, just be really honest with the customer. Just say, hey, look, we're sick. We've been working seven days a week. We're trying to get work done and we're just falling behind and we're really, really sorry. And we understand if you need a refund, but if you can, if you're willing to work with us, we can. We will do this work in X amount of day, like two weeks. We'll get it done this specific day. We can reschedule you. And if you don't like that, if that's not going to work for your schedule, we will refund you. I believe that most customers, if you just really honest with them and you call them and just really honest with them, they'll be okay with it. There's always gonna be that one customer at least a bad review because they promised me a certain day the day before they canceled something like rain. It should be pretty explainable. Something like being sick is again, something that. Something some people could look as an excuse. But I believe if you, if you approach it correctly, pushing them off, you won't get a negative review. But yeah, in terms of prioritization, I'd be looking at who's my existing customers, who are the ones that are going to complain first, which typically your biweekly mows. And I'd work down my weekly mows and then I would just, I'd try to Give yourself some breathing room by conducting your projects and just trying to push them all off, right? So if you have, you know, five to 10 larger projects, I'd start with the biggest ones first. And I try to reschedule them for like three weeks out and just be really apologetic. I remember we had to do this a few years ago back when I was still at the local shop all the time and we were just way behind, just rain, the guys were low morale, the lawns were taking way longer to mow, no One was making P4P. And Liz and I just had to make the conclusion, like, look, in other words, if we don't work 55, 60 hours a week for every employee in this kind of weather, which no one's going to want to do.

Then we're going to have to move the jobs off. So we literally just contacted all the projects and reschedule them for like two weeks or three weeks away just to give ourselves breathing room. And I don't, I don't remember, but I don't think we lost any of those jobs. I think they all just rescheduled. Because remember, if you've already collected a deposit, if you've already, even if you haven't collected deposit and you've just, sorry. And you've just. They've accepted the job, they're on the schedule, they know exactly what's happening. They don't want to go and get another provider and find, you know, get new estimates, set everything up. They've already accepted you. So like, the emotional and psychological, like, burn of them having to go and find another contractor is significant. So it's not ideal. Obviously we don't want to do that to our customers, but you have to prioritize sometimes. And yeah, I would just look at your larger projects and see can you get them two, three weeks away from now? And then by doing so, give yourself a lot more breathing room for the mowing.

A brief description of your eating habits, choices and schedule a typical day, for example. Oh, mercy.

I, I don't have very good, like, habits, honestly, in terms of, like, I go to bed this time, I wake up at this time, it's very, very chaotic and sporadic. And partly that's due to the fact that I don't have a family, like kids and a spouse. So if something needs to be done, I will stay up online if I have to. And then if, you know, in the morning, I can wake up anywhere between 4 or 5am but usually more like 6 or 7am and just kind of all over the place. In terms of my eating habits, I've really found this thing really helpful. Recently, I know Thomas Salazar on the Facebook group had mentioned about eating, trying to eat healthily, but, like, not having the time or, like, not wanting to cook at the end of the day. So factor 75 is a meal prep company that Liz and I have been using the past several months. It's really, really helpful. It's really good food. And I've never had a meal I don't like from them. You can get keto options. So if you're trying to cut out carbs, that's what I kind of use, and that's the keto options. So they have chicken, they have pork. They have, like, really good food. Each meal is around 700 calories that they prepare. You do have to microwave it for two minutes, but it's good food. Like, really good food. And I'll try to put a coupon on the Facebook group for people asking. You can save, like, $120. And they give coupons to, like, existing members for other members. So I should, next Wednesday, get my next box in, and I'll send. I'll put a code on the. On the Facebook group, and anyone can use that. You get $120 off your first, like, six boxes. So it ended up being, like, $9ameal, I believe. After that coupon, I think it's 11ameal, which is not, like, cheap, but it's good food. Like good quality chicken. It's a good, solid meat on each one. And that one's. Those are really helpful because if I have two of those a day, and I know I have those, I can literally just like, punch holes in the Saran Wrap. So it comes in a box with dry ice, and then you got to put it in your fridge, but then you literally just take those, throw them in a microwave. If I didn't have those two, that's 1400 calories. And then I have a protein shake, which I put, like, the three different types of greens and protein and collagen. If I can have all that stuff, I'll be well over 2,000 calories, and I'll be happy and super convenient. And so it's good food. Like, really good food. So that. And then working out. If I have to work out at some point, like yesterday, I didn't work out because I was sick, but usually, like, every day, seven days a week, I have to work out. And when I say workout, I don't work out long. 20 minutes, 25 minutes is all you need. Break A sweat. I alternate cardio and weightlifting, and I don't lift very heavy. It's usually high rep, too. South Haven, we prioritize weekly modes and initial modes. Everything else. Yeah, sorry, I didn't even think about initial modes. Initial modes are the most important. Excuse me?

Initial modes are important because not servicing that customer means you're going to lose out on a recurring customer in the future. So I would prioritize them for sure. Everything else is pushed back for two weeks for us, everyone. Understood. And we are now able to begin scheduling projects. Don't fret about it. If you have a plan. Yeah. We also only do 4:10, so we have a Friday as a flex day. Highly recommend it. The guys don't care about working Friday here and there if we have to. Yeah, it's a great idea, you know, having the 4 tens and then Friday, the flex day. What we found is challenging. The benefit of having a Friday's off is that they can schedule things for Friday like their doctor's appointments, bank appointments, tires, optometrists, dentists, et cetera. So the problem that we had is unless we know a week in advance that they're going to need to work Friday, it's tough to, like, Thursday afternoon. Like, hey, guys, we're running behind. We're gonna need everyone to work Friday. Like, that was a pretty morale killer. But this is absolutely a great idea. And I was like, look, four tens. But then being really open with them, like during the spring rush, we will need to work Fridays occasionally, and we will expect you to come in. Just being open, really, I think that's important. Otherwise it can be a morale killer when they're expecting Fridays off and they don't get it. So cool. I think that's it. Quick update on. Just on the other side of this wall, actually, is that unit that we're working on, the Airbnb. And I'm kind of doing that in part because I feel like it's a really good starting point for anyone that's wanting to one day get into real estate, is doing Airbnb because it cash flows so much better. And so I'm kind of doing this one as a test, and I'll share the numbers with you guys on here as it kind of go into the project. But basically, what's nice about Airbnb is the fact that you can get. Let's just say I can rent this place out for probably 15, $1600 a month. But if I do Airbnb and I rent it out for, you know, 150 a night, I can probably make 3,000 to $3,500 in rents per month using an Airbnb. So what that allows you to do is get property and cash flow much easier instead of focusing, okay, well, If I put 25% down on a house or if I get 5% down on an FHA loan, for example, and then I have property, mortgage, insurance, and I can actually make it cash flow. And this is very, very common right now. If you were to buy a house in this market, with the interest rates being high, the cost of real estate, it's almost difficult to find a rental that you can or piece of real estate that you can rent out and actually have cash flow. It's actually relatively normal right now for investors to buy properties with the expectation that they're not going to make cash flow, they're just going to break even. And so that's typically with the indication of a bubble and speculative market. However, with Airbnb, although it is a short term strategy, the fact of the matter is you can take that same property, rent it out on a per night basis and get twice as much rent. And so you can make the numbers work. So I'll kind of document kind of this specific unit. What we're doing in terms of numbers I won't, probably won't talk about a whole lot on the public channel, but I'm doing this one mostly because I feel it's a really, really good way to get into real estate. And I feel like for a lot of you, the next year or two, you'll be trying to think about that. And I want that to be a good first step in. And even if it's a matter of you build a house or you buy a house and, and there's like a ADU or accessory dwelling unit, and you make that into a, an Airbnb to get some passive income, really, really tax efficient way of getting income. And so, yeah, some really cool stuff. And of course, I have to pay homage to Kevin Fairburn for coming up with the Augusta Rule. Every year we'll post right around the Masters. The Augusta Rule is about taxes. And it's basically a matter of where. The reason it's called the Augusta Rule is because Augusta Nationals, where the Masters is held. And what happens is people rent out their houses around Augusta national for like that whole week. And so the tax code, the Augusta Rule is basically that you can rent out your house for a week and not pay taxes on it. It's not taxed the same way. And so what you can do Though the Augusta rule allows you as a business owner to rent out your house to your business without paying taxes on that income. And so this is like if you did off site meetings or you did, if you had a party at your house with your crew or whatever, if you had some sort of team meeting at your house, you could write off that, that cost of your house and take that money from the business to you as an expense from the business income to you and not pay taxes on it. So that's the Augusta rule. When you have an Airbnb, again, another option that you could do is you go to the Airbnb, you pay, so it's an expense for the business, but then you get that money personally from the Airbnb and you can use the Augusta rule, etc. So there's some pretty cool stuff. Just. And so I want to make sure that as we look in the next couple of years and some of you already build million dollar businesses and some of you are getting there and you know, last month some of you broke $50,000 marker for the first time. As you start thinking about year two, year three and you start becoming more profit needs to be where that profit can then go into something that's tax efficient. What's really cool about Airbnb is if you set up a separate LLC and then you run the Airbnb as a business, you can write off every single expense of the Airbnb in the year that you take it. Okay, so stay with me for a second. If you were to do it on regular real estate, like you take a rental property and you fix it up, you cannot write off all $30,000 of repairs on this year's tax return. Like you can't take a section 179. It's not what it's called. But you can't take all those deductions this year. If you do did $30,000 in renovations on a rental property, you would have to take that $30,000amortized over 30 years. So you get $1,000 off per year. So that's, it's not great for taxes. Whereas with an Airbnb, because it's considered a short term rental and therefore a business and not real estate, it's considered a business, you can take that $30,000 in this year's tax return. So what this means, this is the part I'm trying to figure it out. Because what this means is like in 2023, a lot of you are going to become very, very profitable end of that year. I know that Just from what we're seeing. And so the end of 2023, let's say it's like October, November, and you're like, man, I'm going to have a crazy high tax bill. This is what I'll be telling you to do. Go buy a property and get one that needs work, like, needs a lot of work on it. Like it's a rehab. And then you're going to spend 30, 40, $50,000 on rehabbing that property. And instead of that being amort going to be like all of that, all of those repairs and that year's tax return as an expense, because you're going to run it like a business, not like a rental property. So this is why I'm trying to figure out the Airbnb thing. And it's, it's important that that would be a separate llc, a separate business. You treat the Airbnb as a business, not as a rental, like a rental property. And you wouldn't run that into your personal tax return. So anyway, those are kind of things that I'm thinking about. That's kind of why I'm doing it. And I think it'll become extremely helpful. And I figure out this year and then next year, some of you will need to deploy this, especially towards the end of the year when you start looking at taxes again. Buying real estate is great for taxes in the long run. You know, appreciation in the long run. But Airbnb being that it is a business, you can write off everything this year as an expense. All the improvements, all the repairs, all the renovations. You cannot do that with a regular rental property. You've got to amortize that over the course of 30 years because you are not a real estate professional. A real estate professional that they have a job in real estate, like a real estate advisor, a real estate broker, or real estate, a realtor. They, as a real estate professional, are allowed to take those deductions in the same year because real estate is their business. But we. Because it's passive, because something investors is basically. Government doesn't want investors to be able to get these type of tax benefits when they're not invested 100% in real estate. And they have. It's all passive. But this is a way to get around it, and that is make it into a business and then write those off in that year. So hopefully that's helpful. And I hope you always have a great rest of your weekend. And I apologize for yesterday being off, but thank you for letting me have the day off. I was sick as a Dog in the morning. I kind of recovered a little bit. I had to get into the office because we got to Inbox Zero and so we had a bit of a celebration about that. So we are going to be doing some things next week with Command center now that we've caught up a little bit. As I said last week, the three prong strategy of kind of turning things around is, number one, you gotta cut things fast in order to stop the bleeding and stop people from leaving. So this works again, like I said last week, for any organization, even if it's for you, if you're losing a lot of employees, is you've got to figure out how do we keep employees first. So that might mean some really hard conversation of why are people leaving? And then secondarily, you got to work through the backlog. So for example, like in South Havens, like, we got to get this work. We've got to get, like we've got to catch up. So like hitting Inbox Zero, the reason that was a big marker for us is we're getting through the backlog. So even this weekend and into next week, Liz and I are creating programs for training and reason we haven't been able to do that the past six weeks is because we're so buried in backlog that time spent training just means the backlog gets bigger, which causes more stress, which causes people to leave. So what we're doing now is a really rigorous program for retraining, constant improvement and really, really honing in a lot of stuff. So we'll be starting to work on that. And then last year I posted on the Facebook group, but we have now devised a strategy for on Google Earth to be able to see where your territory is instead of just looking at a map inside of your wiki, because then you're basically trying to compare two maps. It was too much subjectivity because like let's say, for example, it's half a mile outside your territory. They're like, man, it seems like a good job. I'll put you put them on the schedule. Well, they put them on the schedule and then you say, hey, it's out of the service here. Now we're calling them back and trying to apologize the client, etc. So now it's going to be like, hey, look, excuse me. Every time someone calls, we put them into Google Earth and then it's going to show the franchise territory and then the service area, right? So the reason we're going to have both on that map is because the franchise territory for the growth model supersedes anyone else's service area because you can serve outside of your franchise territory, but that supersedes everything. Right. So we're gonna be able to see both of that and we'll immediately be able to tell if they're inside or outside someone's service area. So you should not be getting. You will occasionally, let's just be honest, but it'll cut down 90% of people outside service areas. And now as we've gotten a lot of locations that are relatively close to each other in the past, we basically said, look, if it's not in your area and you want to get to someone else, you got to contact them. That's not super efficient. Especially that because come like yesterday was five of those. I didn't like that. So shout out to Jaden at Command center for figuring out how to do this. We're going to be. We have to do it manually inside of Google Earth for every location. So we'll be working on all throughout next week. I'm hoping by next weekend that is nailed down so every time someone calls, we can check your service area. It's. It'll cut down by at least 90% of the mistakes of being sending up clients for estimates outside the service area, which is always embarrassing and bad for reviews. And that is we set up a client, we set them up for an appointment, and then literally an hour before the appointment's supposed to be started, you just put a comment on the estimate notes that says out of service area. And it might be two or three hours later, Command center sees that and is contacting the client, basically apologizing. So that's not good. So we'll try to cut down on that dramatically. So I appreciate everyone's patience. The past five to six weeks, I know it's been as we got the first stage and second stage of the turnaround that it's. It's not an easy process for any of us. And so I appreciate that. And now we head into the third stage of really nailing down some stuff, improving them and making everyone at commands and like rock stars on the phone and sales people. That's really what it needs to be. It needs to be when people call in, they like man is a professional sales team that's calling, not just someone who's answering the phone and you know, giving information. Like technically a voicemail could do that. So we're really working on that. We're creating some very rigorous programs, training and then analyzing calls and doing things like that. So our goal is to massively improve it over time. So thank you all so very much. Have a great rest of your weekend. 30 minutes. Sorry for being so long, but we'll see you on Monday.