Mike Minutes Mastermind 05/10/2023

All right everyone, let's go ahead and get started.

Just drop this in from YouTube.

All right, we'll jump right into questions this morning. Let me just get this link. Copy.

All right, Facebook.

Sorry. All right.

Sorry. Give me one second here.

Okay, Sorry. Okie dokie.

Boom. All right.

Share this.

Sorry. It takes me a solid minute now to actually do this, but I can't do it live. I only can do it live. All right, jump into questions. One second.

All right, first question comes from.

Garrett.

We are in profit mode and are raising prices on running soon. Last year we ran a one man crew and it was common in a day for more budget hours to be completed than there were working hours greater than 100 efficiency. Right now we are doing two man crews, training new hires and getting our density back where it needs to be after the winter attrition. Me and someone with 3 weeks experience are hitting 60 efficiency. The lawns currently, with the lawns currently where they sit. In terms of price and budget hours at 80 per hour, I know I can hit times solo. I can hit times solo or with another experienced time team member. Especially in summer when the grass isn't growing as much. When we raise prices, is it better to just to not adjust budget hours and increase to 90100 per hour or is it better to increase budget hours on each job and stay 80? I don't know if it is better for BH to be easy obtainable or a little harder to attain. Either way my team will make good money. Yeah. So either way the price isn't affected. Right. So like if you're going to raise prices, you can either a keep your budget hours fixed and increase your hourly rate or you can keep your hourly rate fixed and increase your budget hours. Either of those things are going to raise your price to the c to the customer does not matter. It's up to you whether or not you want budget hours to be higher or lower and whether or not you want guys to be beating them. I find morale seems to be better when guys are beating budget hours pretty consistently. So I would probably be in the camp of like hey, keep it at 80 or 85 maybe but then raise your prices so that it gives the guys more budgeted hours. Typically I would be in that camp. Obviously you're raising prices, you're going to be giving them a pretty good boost on P4P. This might be a time like next year you want, you would want to analyze this here, but this seems like a a chance a time when you might actually lower your percentage pay on P4P during those, those summer months and then increase it in the spring. Right. So kind of like we're doing with Bellingham, we're creating more differentiation between regular months and spring. Spring rush, you might want to do that because if you're at 60% efficiency and it's going to 100% efficiency, it means that right now your guys are struggling to hit P4P above base pay and in summer they're slaughtering it. So I would try to even it out slightly by saying, okay, we're going to. Let's just say you're at 33 right now. I would say, okay, we're going to get a 45% injuring spring rush, but we're going to give 30% or even 28% during these other months. Be very clear with that. I would do it during the winter when you have way less guys so there's way less drama have to go through and questions and all rest of it. You might even not have to do it to explain to anyone. If you only have one employee or no employees during this during the winter, that'd be my recommendation.

Vince from Medicine Hat. Hey Mike. I'm having trouble increasing the number of mowing clients and on the flip side, I'm flooded with quotes for property clearance and landscaping jobs. We have a few holes in our schedule where I am able to pop smaller cleanups, but we are currently booked to the end of June for larger landscape jobs. I need more time for instant quotes and door knocking, but I'm a large majority of my time is spent on project based estimates. 100% of my marketing budget and efforts have been going to mowing door hangers, Google Ads, every door, direct mail, lawn signs and one click estimates. But we are currently losing mowing clients rather than gaining due to some clients not happy with not being able to speak to me directly anymore. All have been clients that have not been a good fit in the past. So I am happy they are canceling. We do have some local competition that's priced around 30% less per cut than us, so that may be a factor. But I have lowered our pricing by about 20% on mowing to be more competitive and try and to try and fill our schedule. The capacity, all of that to say should I go with the flow and assign more crew to project based work or what other options would you recommend? Yeah, I don't think it's a bad thing. Like obviously the goal is more recurring as time goes on, so it's a little bit less project intensive, estimator intensive Management intensive. However, don't try to force that. I think that what you can do is build up your projects, build up your, your property clamps, building up your database. And then over the course of time, maybe you go from 20% of your revenue comes from recurring to 25% to 30% to 35% to 40, 40% to 56%. Like, that's okay. I know that it's also appealing if you're just getting started to be like, okay, well I'm just going to do mowing and recurring and it's 100% from day one or like 98% or like 80% even just going to limit your growth. You've got into like, hey, you're growing very quickly and that's most of the time. Your growth spikes come from project based work. So you have the right idea and that is like you have your eyes set on mowing. And I would just be confident the fact that as your brand grows, like this is your first year in Augustus, like as your brand grows, you'll get more leads for mowing more organically, but focus on what's paying the bills and what you're getting. Customer acquisition cost for zero right now, which is just leads coming in for property cleanups. The struggle that you're facing, as I can see, is you're six, seven weeks booked out for big projects and then you have these property cleanups. And that's like the big thing when it comes to your spring rush is knowing which projects can we push off to July and August versus which ones do we need to focus on now? Which is usually mowing, initial mows and property cleanups. Because property cleanups, people is not. People are not going to wait 8, 9, 10 weeks for a property cleanup. Typically if it's overgrown now, you basically have to double the price on your estimate just to figure in what your prices should be when you hit the property. Because now the weeds have tripled, the bushes are way overgrown. So that's a tough spot to be in. So this is the next couple months will be tough for you because you've already kind of filled your schedule. You don't have a lot of time for property clamps. Then you don't really have anywhere to put the cleanups that are coming in. So this is a tough spot to be. But I think going forward, like next spring, make sure that you allow for spring rush to be more centered around spring cleanups and initial mows and then push those big projects, the big ones, off as far as you possibly can into the Summer and then like July, August, whatever, as much as possible. And then.

And then as time goes on and your brand grows, you'll get more recurring, more organically, similar to what's happening with the property cleanups right now. But it's very common for your first year to be 70, 80% project based and one time jobs because the revenue in one job is literally $1,500 versus $30. Mo like it takes so long for that to catch up. And so it's very, very normal, especially if you're trying to offer both services and grow quickly for 70, 80% of revenue from projects, cleanups, et cetera. And then as time goes on, that starts becoming 60%, 50%, 40%, 30% and then becomes more of a recurring base business, which is ideal. But you're not going to scale that very quickly if you're just doing that from day one. So there's no right or wrong way to do that. It just simply comes down to how fast you want to grow. And you know, from a scheduling perspective, if you're doing more of the project side of things, you just really need to make sure that spring rush is guarded for those cleanups that are coming in. Because ultimately you do not want to fight the tide of zero customer acquisition cost. I was talking about with Abraham out in El Paso. I left him a voice note about this the other day. He had to ask command center about some stuff and they don't have much glass. So it's like people want property cleanups a couple times a year. Don't fight that. Let it come in. And that becomes your recurring is that someone every single year, every six months, has you do their property cleanup. That value per year might be a thousand dollars, $1,500. The equivalent is if you mowed their grass every other week for 20 weeks. So.

If, if leads are coming to you organically, you want to listen to that. And that's why you know, his market, for example, 89 of its property cleanups, weeding, bush, trimming, like go with that flow, that becomes recurring as long as you keep that customer and they keep coming back to you every six months or every quarter every year for a cleanup. And they're. The value of that client per year is just the equivalent of a mowing customer. There's no right or wrong way. Just see what comes into you. And then I would only say, you know, go, don't do projects or whatever. If it's like, hey, that's 10% of the leads, that's 15%. But if 90% of your leads are property cleanups. Lean into it. If 90% of your leads are big hardscaping jobs, probably want to think twice about that one. Like, okay, well, I should get skid Sears and excavators. Probably something to think about twice before you actually do that with your business. But when it comes to property cleanups and smaller type weeding, bush trimming, those sort of things, I think that's really okay. Don't fight it. It's just a matter of now where you're at. Now you're going to have to really work with your scheduling and what you're probably. What I would probably do if I was you in this case is try to push off a couple really big jobs and just try to be honest and like, hey, we don't have the manpower. We really got to push you off. And if you do now, you've got a whole few weeks where you can just pile on property cleanups. If they say, no, I, we don't want to do that now, it's in your court because, like, do you cancel them? Because if you do, you potentially know that you're going to fill them there immediately with a bunch of property cleanups. Or do you then honor it and then just say, hey, I'm just not going to be able to do. We're going to have to offer property claims way out into the future and like, unlikely to have a lot of them accepted. And if you're doing that, doing property cleanups that you know are going to be on a schedule way out in the future because you're booked up, make sure you are counting the fact that the weeds are going to be triple, the bushes are going to be way more overgrown. Everything will be way overgrown if you're four or five, six weeks booked out before you can actually get to the job site. So keep that in mind. All right, guys, have a great day. Take care. We'll see you tomorrow.