Mike Minutes Mastermind 04/29/2022

Good morning, Augusta Nation. Hope you're doing great. Hope you're having a great Friday. Let's go ahead and jump in. You change my microphone over my AirPods. There we go. Cool. All right, I saw a few questions come in on the form. Let me go and pull that up real quick.

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Why is this not working? Give me a second here.

All right. I had three questions that popped in and I read through them actually really quick before hopping on. So let's see here. First one. Is this the first one? Yeah. Okay.

So I read through this whole thing. Basically, the long and short of it, is it possible for Command center to choose yes on the default when adding a car and file? We do always do this.

And so.

Okay, so after this card. Yeah, so we do, we do always submit. If we put a car on file, we're going to make it the default one to be able to use on card on file. And so I'd have to see what you're talking about with this automation you've built exclusively if you use the car update formally and not the client portal. Because yeah, this is smart. Yep. So, okay.

Yes, so we do do that. So I, I don't know exactly. Potentially if someone was able to somehow get into the client portal and turn that off. Potentially. But I'd have to see what kind of how you're. You're removing that automation to understand fully. But basically the question is if someone calls in with a cut car, a card, are we going to use that.

In the future? And it has a pop up in service off, would you like to use this car in the future? And we always click yes. So yeah, you have to just show me, Nick, what exactly you're talking about. Send me an email if you like. All right, next question mark. Max, will command center staff start signing off on emails to clients with their specific signatures and headshots? Again, I've noticed that most are the generic signature that just say office staff. Curious to hear more? Yep. So we typically want them to use the generic one because again, otherwise what's going to happen? The customer is going to call back, they're going to say, I want to talk to Mike, because that's who was sending me an email. And Mike is gone for a week. And so literally now communication grinds to halt. So we try to keep it as generic as possible. And that's the one that says the office staff, et cetera. And I know that it's like, well, wouldn't we want to make it more personalized? Theoretically, yes. But again, if Someone's gone. If someone calls out sick now, communication grinds to a halt on that account. So it's a matter of the fact that as long as notes are taken across the account, anyone should be able to help them. And the ones that are sent that are more personalized are more than likely your full service reps that are in your side, your account, inside your actual email, when it's actually sending out a client, you know, just information about an estimate or about an invoice that's going to service Autopilot or Zooper, that's going to be more of a generic email signature. Just because that is can be handled by anybody. It's very, very specific. And one of your full service reps that are inside your account, they might send their personalized headshot and that's fine. But anything, invoices, estimates, things that can be handled by anybody, especially we want to always default to having the generic email as much as possible.

So.

Back to this one, actually, sorry, real quick. The whole goal with all of this, the system at Command center, is that if someone calls out sick, if someone's gone for a week, if someone leaves, there's no change in your business, right? And as we add more people to Command center, as we add more franchisees, that it doesn't constantly always be changing for you. That's why we have the larger groups. Because if you only had one or two people inside your account, every time people would leave at Command center, we'd have to shuffle all the teams. Every single time we add new franchisees, we have to shuffle all the teams. So it literally be where you would have a couple people in your account and then every couple weeks you'd have a different person. So instead of having that constant shuffle and having that issue, it's a matter more of just having a larger team. And when they get inside of your account, then they should be assuming again that everyone's following the systems and that they're taking good notes along the way. Anyone should be able to pick up that account and run with it and actually get the customer the communication that's required.

Augusta of Madisonville wanted to know for sure to hire. Just started this year and currently have 50 something recurring customers mowing customer accounts and picking up 13 new ones just next week. Also have landscaping jobs on the side starting to get bunched up and behind a little bit. Do you. How do you know financially you're ready to take on someone else? Considering right now, in just mowing clients, I'm doing about 9,000amonth with landscape jobs. We should hit 14,000 next month by myself. Wow, that's probably pretty good. But the spring rush will be over soon and the landscape jobs will be not as plentiful. Just wanted to make sure if financially it's the right move right now. I know you're probably take. I know you probably take a small hit on the front in hiring someone and hope that if hiring that it pays off in the long run for them making you money. This would be my first hire and definitely makes me a little nervous. So just realize that right now you're hitting capacity. And in terms of spring rush, you still have a couple months of spring rush to go. And so if you actually were able to accelerate during that time, you'd probably go from 50 accounts to 80 or 90 easily at the clip you're going now, which would easily fill up you and one other employee. And so the fact that you're doing $14,000 per month right now is fantastic. And I would imagine you're probably not having to spend much money on marketing because you're already full capacity or potentially you're spending a lot marketing. That's keeping the leads coming in like they are now. Regardless, though, it's a matter of if you slowed down growth, if you stopped growing and you raised your prices, you stopped all marketing, you could do. You know, if you're doing $14,000 a month by yourself, you can bring a lot of that home in profit. If you just stopped growth and stopped marketing, et cetera, and then do that for the rest of this year if you wanted to, or if you said, hey, I'd rather just grow, you could easily get to 25,000, I would say within a matter of two or three by having that employee. And so you're not going to have the same profit margin on the 14,000 as you would have on the 14,000 to 25,000. Right? You might go from a 40, 50% profit margin on that 14,000 to going from 14,000 to say, 24,000. That extra 10,000 in revenue, you might only be 20 or 30% profitable because you get a new employee, you got another truck, you might have to upgrade your storage, etc. So I would say, though, again, it comes down to how fast you want to grow. Either a, slow things down, raise prices, stop marketing, and then take one year where you just stay around that $14,000 level, you'll be really profitable, or B, jump up now and realize if you do that next spring rush, as always, your second spring rush is really when you can grow like that's when you'll take off. And so if you, if you get to 25 grand, say this year, next year, you could easily get to 50, 60, 70,000 in the spring rush. It really just comes down to, you know, your tolerance for risk. If you go out right now and got a loan, for example, on a truck, Maybe you're paying 3, $400 a month on that truck, plus another $150 for insurance, plus some maintenance, like you're looking at 6 to $700 at least in cost for a new truck if you're going to go finance it, at least, you know, fuel, et cetera. So then if you get an employee, you're looking at maybe $4,000 more in cost. Then if you get more shop space, probably another, let's just say a few hundred dollars. So you're literally looking at probably a $5,000 increased overhead and cost of labor. But if you can increase Your revenue by 10,000 or 8,000 even, it's incrementally better and you will make more profit. It's just going to be that first couple months of, you know, growing pains and filling up their schedule and making sure they're efficient. ET.

You know, in my opinion, if you're getting 14, 13 new customers next week, you got a couple more months, you could easily get another 50 customers. You've already done that in a couple months time. So good for you. Ultimately, this is the best problem to have. And just know that if you're having that this year and your first full spring rush, your second spring rush is going to be, is going to be substantially more in terms of the volume of leads coming in. So I got another question come in here.

My minimum cut is $35. Currently I'm getting a decent amount of pushback that this price is too high. At $35 minimum, that puts me at about $70 per hour. Would it be worth going to $30 minimum strictly for the sake of momentum building? Or is it more applicable for projects instead of maintenance? Or is this more appropriate applicable for projects instead of maintenance? I don't understand that part a whole lot, to be perfectly honest. The last little bit more applicable for projects, I'm assuming you mean like is lowering price more applicable to projects. It is. First, if you're trying to schedule out work, right? Like if you're trying to schedule out work, you're going to cut your prices in projects because it's short term and you just need momentum. You get people on the schedule, right. When it comes to mowing, I would Only lower your minimum down to 30. If we're talking about postage size lawns. So Burnaby and Coquitlam are close to us. They have very metropolitan urban areas, small lawns and they all, they both had like 35 and $40 minimums and they both have gone down to 30 recently and seen much better traction of close ratio. I shouldn't say much, but they see better traction on those just because Those lawns like 2000, I had one yesterday was like 1400 square feet of lawn. Like you can have a lower minimum, but if that 30 minutes, because if you're doing $70 per hour and your minimum is 35, that imputes a minimum of 30 minutes per mo. I'm not against that. It's a matter of, I would only lower that if you are literally taking 8, 9, 10 minutes at a property, then maybe you would lower that to 30 just to gain momentum and.

Getting some growth and more customers in. But if it is taking you 30, 35, 40, 40 minutes to get those lawns done, I wouldn't lower that to $30 as your minimum. I would only lower your minimum if you were just like annihilating budgeted hours at your minimum price and you have consistent like I'm talking 30, 40 of your mowing customers are hitting minimum price of mo. And then of course, assuming that your, your, your close ratio is low, I don't worry about pushback. The amount of pushback that you're getting, I wouldn't be concerned about, I would simply be concerned about your close ratio.

That really in my mind determines whether or not a price is correct, not pushback. If you're getting pushback, realize that the only real.

Barrier for most customers taking your service is price. Because if everything was free, if everything was taken to zero, they would accept. And so realize that any pushback you get is probably going to be around price. So don't just assume that right off the get that you need to lower prices. I would look at your close ratio. If your close ratio and you're trying to grow like you're trying to get momentum right now is not above 50%, then maybe think about lowering that to $30 per cut and with an asterisk next to assuming that those 30 minute, those $30 mows you're getting done in like 5, 10, 15 minutes, if it is taking 30, 35, 40 minutes to get those $35 lawns done, I wouldn't be lowering the price because then you actually start losing money on them. Substantial. So cool. It's all the questions I got for today, Hope you all have a fantastic weekend rest of your Friday. And yeah, I know there's a lot of, a lot of us right now that are behind on estimates that are behind on jobs. We got weather in the Midwest, we got drought over in Texas area. So like we got some crazy stuff happening. A lot of people are just struggling to find employees. There's a lot of churn happening. So if you feel that way, just realize you're not alone. Like this is across the industry, massive amounts of churn. It's not even our industry, it's across the labor force right now. You got people at big tech companies that are struggling with churn right now. Their most recent quarterly earnings reports. You listen to CEOs, their biggest fear right now is churn at high level positions. So this is just a crazy labor market. It's going to continue this way. And I know a lot of us are cutting out services and simplifying in order to be able to accommodate more entry level employees and that that's the right move. It's not to just keep raising price, raising wages, paying people salary. I don't think that's the solution. That is a short term solution to keep people on. Yes. But the long term solution is keeping them on P4P and simplifying services. They can hit P4P faster. And so just know that everyone's into this problem, everybody, right from command center to every location, especially the larger they get, the harder it is to find people right now.

And every industry, every single, it's everywhere. It's not just the lawn care industry. Don't buy into this goofiness. That lawn care is somehow like the brunt of the joke when it comes to labor. It's not true. You talk to any fast food restaurant, you talk to any entry level position.

Any industry. This is what they're struggling with, this churn. People finding other job, people moving, people getting out of their line of work. It's just, it is what it is. People have still more cash on hand now than they did three years ago, the average person. And with tax returns and everything right now I've seen more of a bump in it too. So yeah, don't feel bad. Don't feel like, oh my goodness, I'm never going to find employees. Like people in my state are just weird or different. Talking with one owner the other day like, oh, people in my state, like, they don't care. I can never create a great culture here because people don't care. It's like, no no, people are humans. And you cannot use the excuse that we're in a different industry, different area, different state. We're all going to have problems finding employees. It's very difficult. It's never going to be easy. And so I just recommend us look inward and start fixing the services, simplifying the services, simplifying, cutting out services, being more efficient. And I know the other half of us are in situations like Kyle was mentioning where there's so much work and you're determining whether or not you should be buying trucks. I still believe if you have, if you're mowing lawns, October, November, you still have six, seven months of profitability. I'd be buying trucks right now. If that's something you're trying to weigh out right now. If we're talking August, September, October, and you're starting to get a lot of work, that's a different conversation because you're only going to have a couple of months of profitability on that truck before you now have fixed costs going into the winter months. Right? So again, like I talked about the other day, trying to reduce your fixed expenses is extremely important as you go into the decline of a season or an economic decline. And so as we head into the winter, and for most of us, that's our slower times of the year. As we head into the winter, you've got to be considering the fact of I don't want fixed expenses, but if I can get fixed expenses now, May 1, I got May, June, July, August, September, October, November, I got seven months, six, seven months of really good profitability on that truck, on that piece of equipment, on that new hire. And don't be, not, don't, don't say, I'm not going to hire anyone now because I'm not sure I'm going to have work for them in the winter. Don't do that. Trust me. They'll have five other jobs the day after they leave your place. If you have to let them go in October, November, you'll give them a couple weeks heads up, they'll have plenty of opportunity to get another job. Don't. So don't use that one. And don't use, don't say, oh, well, I don't know if I can. Like right now, I would be buying trucks. I'd be buying equipment. If your growth is just going through the roof and you're just trying to juggle jobs between one truck or two trucks or three trucks, I'd be getting more trucks again. August, September, October, that might become a different conversation because you don't want to grab a fixed expense going into a slower period of the year where your revenues will go down. So hope that made sense. Hope you all have a fantastic record weekend. We'll see you on Monday.