Mike Minutes Mastermind 05/14/2024

Hello guestination. Let's get started. I am starting right away so I apologize you will not be probably live. I had to get started right away. Okay.

Some questions. As a reminder, this Thursday there is a webinar that is live with the founder of Certified Lights walking through that program all about discounts what their portal has in terms of training etc. So any questions about that highly recommend being on that. It is on the Christmas lights page of the dashboard so you do need to register for that zoom call so recommend hopping on there. Registering for that is Thursday afternoon evening.

All right started.

Oh real quick. Some people applied to be on the turnaround show and the media team wanted me to let you know we are booked out quite a ways. There's a lot of.

Scheduled already turnarounds so I'm sorry. Usually we do prioritize Augusta ones. We'd only had the one from Ken Lynn before but there's a few that applied. We're a couple months out so they'll probably reach out to you later. They're not ignoring you. It's just a matter of we are booked out pretty far for the turnaround show. Okay, numero uno's from Derek Doran, Allen Park, Michigan Christmas lights. I've done this and love that. Augusta is bracing it for markets like my own that have very short mowing seasons. Ryan Payne was very kind to train me and Dylan Martin fall of 2021. How will it be handled for our service territories for lights? My 5 mile radius is not a good market for lights. We drive 45 minutes 45 to 60 minutes for light jobs. At times seems like it'll be a challenge to scale multiple locations offering this like our mowing services. Thoughts? Yeah, so it'll be treated just like your project service area. And so if you're already you know, if you come up in October November you might want to just change your project territory inside for your monthly change. So for example your mowing ends October. Whatever it is it's we're going to probably follow the projects service area. So some of these things with command center and for Christmas lights we are nailing down still as we're building out the site and working through the forms and all the rest of it and so more on this will come down the pipe. But for now the idea would probably be just to follow the project service area. So even if your territory is only 5 miles radius, if you have a project area that you service you can go and service those no problem. But the leads would be guaranteed still inside your five mile Radius per usual.

Kyle Tarvin, the other day you mentioned we need to leave our Google Ads up for multiple weeks to start seeing results. What would you do here? 146 impressions, 19 clicks, one cost conversion, $120. We are running $10 per day and the ad has been up one and a half to two weeks. I'm new to running ads myself, so I'm having trouble figuring out what I should do from here. Do I increase ad spend? No, don't do that because you only have 146 impressions. Adjust Ad copy, slow down the complaint, continue waiting for more data. We need more lead flow. So I'm fine putting more money into it, but I just don't want to put more money into a failing ad. Just a loss was due. So I don't believe it's a failing ad. The thing is you have 146 people that are becoming or even looking for your keywords. So a, you could increase your keywords, like the number of keywords you have in there.

But like the fact of the matter is like you only have 146 people in two weeks. That's like what, like 10 per day. So 19 of them click. So the actual ad itself is decent because like literally 15, 10, 15% of people. 15% of people are actually clicking on the ad. And so really it's just a matter of I would say this. With this number of clicks and impressions you could have one day we get two conversions and all of a sudden your customer acquisition cost goes from 12, 128 down to like 40 bucks. Right? So there's just not enough data here to actually make a statistical inference. Does that mean you should spend more money on ads? Typically not when your impressions are this low. And I'd recommend watching the video from Evergrow Marketing Jake at conference. He talks about where to look on your ads and see are you over saturating. Like increasing your ads fit is gonna do anything. You know, $120 conversion, not horrible. You know, I would like it under a hundred dollars, but what I've seen so many times is people with a low budget, they'll stop the ad and then what happens is what could have happened otherwise is literally one day goes by and two conversions come in. If two conversions come in and you spend $120, literally your cost per conversion would go down like 40 bucks. So.

I just, I would keep running this one and seeing if it improves with just a matter of a couple conversions. I would also probably look at if you want to expand how much it's being shown like some of the keywords, etc. I would watch the webinar or the video keynote from Jake at Evergrow and look, okay, is should I spend $15 per day? Would that help at all? It's not gonna increase it decrease your conversion cost, but it might improve your impressions. But if only so many people are searching for the ad in your area that you're targeting, spending more money isn't gonna do much.

Kevin Tanis from Bloomingdale, New Jersey. Do you have any book, podcast, or video recommendations for finding interviewing great team members? This is 100 my weakness right now. At this point, I think I figured out how to sell and get work on the schedule. But hiring has been an issue for years. I have a hard time getting a read on interviewees and I always think they're more qualified than they end up being. Looking to deep dive in this subject and figure it out how, how much has to do with head knowledge and how much has to do with getting in the reps in. For one thing, I know I need to do a better job in the winter lining team members up for the spring rush. Any recommendations would be appreciated.

In terms of like the head knowledge part. Like, I would recommend the document on the dashboard where it literally has 17 questions for an interview. I'd print it off and just write your answers next to it. So if you're not asking in depth questions, a lot of times if you just feel good about someone, you'll glance over like more in depth questions because you're like, oh, they're pretty good. And it was going to glance over questions that would otherwise have revealed issues. And so having a predetermined question that you ask every single interviewee means that regardless of how you feel based upon first impressions, you're going to ask them the same questions. And it'll either unearth greatness because they weren't expecting it, or unearth problems that you would have otherwise not encountered because you didn't ask the right questions. So being able to strip away the emotion and just know, okay, what are the questions I'm going to ask is super helpful. There's a list of 17 of them on the dashboard as a document, and I know a lot of people just print that off and that helps get the reps in and then you can adjust them. You're like, hey, I want to add this one in. Or this one is a little bit too direct. I want to like change it a little bit or whatever. I know if I was smaller, like if I had under three or four employees, I'd probably be in the in the mood for doing working interviews.

And then just a matter of like what risk level do you want to take? Do you want to just want to pay them cash and start tomorrow or do you want to put them on payroll and make sure they're actually covered by workers comp, etc. Higher liability if you're going to pay them cash. So.

Yeah, getting reps in is huge. Like you'll have more confidence honestly asking harder questions and you'll have a better read on people. But the thing is like if you can have a system for asking the questions, even if you don't have the reps, you can just follow the same thing every single time. And then it's just a matter of okay, like if you fire someone, that's bad. Just ask yourself what question could I have asked during the interview that would have unearthed that problem with that? The employee for example, they never, they stop showing up on time, they have no shows. You can just literally ask them like so when I called your last your. Your reference, what will they say about your performance in terms of showing up? Did you show up on time? Did you call out often? Are circumstances in life that are requiring you to call out and be less reliable? Those that maybe that question would have brought something up, maybe they would have admitted to it. Maybe they would have been a little sheepish about giving you that reference if you would have asked that question. So always ask yourself a question like if you feel jilted or jaded by an employee and they were surprisingly bad, ask yourself what question could I have asked that would have that potentially could have smoked out that issue in the interview process and then add that to your list of questions.

Mr. Anonymous, sorry if this has already been an at has already been asked recently, but could you over your most up to date philosophy on GM compensation if you're hiring GM today and specifically how much would you pay for base salary and how much would you structure the bonus portion of their compensation? What percentage of profit, revenue growth, cash would you give them? This location has been built up by the owner to over 500k in recurring revenue and will easily do 700,000 800,000 when factoring in projects too. The GM will be taking over the day to day operations with the owner shifting his direct focus away from this location. The owner will be somewhat involved by supporting GM and occasionally being involved in selling jobs and contracts which will not be in any of the day to day operations but will not be in any okay So I don't know who's asking this question. That's a bit of a challenge. So I don't know if this is an owner or if this is a gm. So I'm going to answer this based on what I have in front of me, knowing that I could give a little bit better of an answer. So.

Gonna do 700 to $800,000. Okay, great. So this is the thing. If the owner's involved at all, the amount of distributions are more than cut in half. Like the amount of money I'm willing to give someone in terms of profit sharing, etc. Is like literally less than half. So for example, if I start a location from zero and the GM started with me at zero, I am willing to give them 35% of profits. And in terms of distributions, I should say now because distributions are going to take a couple years to probably get to. Because they're starting at zero, I am going to give them a bonus based upon monthly revenue and it's going to step up as they increase in revenue. So like $200, $400, $600 per month as a cash bonus on their paycheck based upon the revenue that the location is having. So they're incentivized to grow the location. And there's not a lot of profits or distributions being had. So there is a two page document and there is a video on the academy walking through. My, my logic on this, it hasn't changed and that is I want the majority of the upside of a GM to be in profit sharing or in sharing of distributions. On an $800,000 business. The GM would likely be full time out of the field if they were doing everything. But it sounds like the owner's still involved. So in my, my case I would probably only give.

Are they in profit mode? I don't know if you're in growth or profit mode. Assuming you're in profit mode, I would probably put like if you joined at this, like if a GM started and they started at 7,800,000.

Maybe 10%.

I'd probably do 10, but the owner's still there, like probably 5%.

Now if someone was starting there and the owner wasn't involved at all, it never showed up and they were an absentee owner, maybe more like 10 or 15%. But again your location is already. I don't know who I'm talking to, GM or owner here, but if you're doing 100,000 revenue and you turn it into profit mode, you could easily bring $150,000 in distributions if you really turn it to profit mode, especially because so much of your revenue is coming from recurring work, which means if you get 10% of that, that'd be like $15,000 in extra money. So if you had a base pay of, say, 50 grand, now you're making 65,000. Right. But if you were doing all of the work yourself, you might get 15 or 20%. So now you're talking about, you know, 75, $80,000 in terms of total compensation. So it's very flexible due to the fact of when you joined. I feel like I'm talking to GMs here. So that's how I'm going that path. If you joined at zero, you'd be getting higher percent from me. If you joined at 7, 800,000, it's just going to be lower because you've already joined. When the company is already in profit mode, they're already of size. You didn't really like sacrifice years while it wasn't distributing cash to get it to that size. And so if someone's in growth mode, I'm going to give an incentive based upon some revenue for the GM to still be incentivized to hit those revenue targets while we're not making profit.

Corey from Bellingham. Hey, Mike, I had an. I had an objective political question if you're in the mood for it. I'd love to know where you think about this. Do you have any thoughts on isolationist foreign policy as a solution to some of America's financial problems? I was doing some. Some chore shopping in the mall this weekend and saw eight sales representatives standing around inside an empty T mobile store chatting away. Totally shocks me to think that the markup on their products are high enough to afford that. And I wonder if you think removing that capacity from our economy would be beneficial overall for the market or not.

Okay, I'm failing to see exactly the connection of a foreign policy of isolationism versus this thing.

Okay, so we address the first part. Do you have any thoughts on the isolationist part? Maybe these are two different questions. In general, whenever you reduce the amount of trade in a market, in world trade, whenever you have like sanctions, tariffs, et cetera, you usually the person who loses is the customer, and you usually drive up inflation. Because if you inhibit any sort of free trade, you're inherently going to reduce the amount of suppliers. And when you reduce the number of suppliers, you reduce competition. And when you reduce competition, you increase prices because monopolies are formed. So traditionally, in terms of not having foreign trade.

You are going to increase inflation, you're going to, you're going to decrease competition and you're going to increase cost to the consumer. And so that's why in a free trade environment, you know, that's why China's taking so much of our manufacturing over, is because we cost so much more you yet they have to ship things across the entire ocean and it's still cheaper. So then the question is, well, why is that? Well, if it cost us a hundred thousand dollars to build a factory in China and $3 million to build the same factory in, in the United States, we have a problem.

If it's going to take me six months to build it in China versus six years in the United States, we have a problem. And so in my opinion having open and fair trade keeps everyone honest because you can't use regulation to then jack up prices in other area. The reason that a lot of the manufacturing for example has come back to the United States is because of, you know, concerns over the foreign policy with these countries. And as the cost of transportation increases and transportation becomes much more logistically having issues like things like what happened with the Suez Canal, shipping containers backed up for days, et cetera. When all these things happen, the trade offs of lower cost in China suddenly now starts to not look as good even with the increased cost of labor, building etc in the United States. So in my opinion though, it's not like we should cut out the China and like put a bunch of tariffs on them simply to force people using United States products. Because what's going to happen is the cost of our products and services will go dramatically higher due to reduced costs or reduced competition. Because no longer do we have to, if we just block out every other, no longer do we have to worry about competing low price offers and low, more, more efficient ways of production. And so if we don't have that competition then we get bloated. And if we get bloated, eventually that economy, maybe China or anyone else will become so efficient that they'll be able to dominate our market and they'll be able to dominate our economy.

And so that's why I'm just against regulation in general, whether it be building stuff, whether it be all sorts of regulation, because it almost always drives cost up. So in terms of people standing around at T Mobile, a lot of times their booths and those things that they have at the mall is actually not a great use of their sales. It is a way for customer service as well as branding because the vast majority of their revenues are recurring. Once they get someone they Keep them for a very, very long time. They're in massive contracts so they don't necessarily need to sell a lot of. They just need to keep the current customers. And so one of the things that sells cell providers have seen is that customer service dramatically increases when they have a store they can walk into.

Even if that store is rarely used, they'll still think in terms of like, oh, there's a T Mobile store close by. Me, I will use T Mobile just in case something bad happens. I have a place to walk into. That's why a lot of these like virtual providers still haven't taken off like a ton even though they're way cheaper, have decent networks and actually use a lot of the big providers network and do third party off of them. They still won't take off because like Cricket for example, there's a whole bunch of them. But you still think about Verizon, att, T Mobile, these all have stores.

So do I think that'll change in the future? Potentially. But I think a lot of times those stores aren't really there for the sake of sales. They're there for the sake of branding, customer awareness and sales psychology when it comes to getting new customers. But they have a ton of recurring revenue. Matt, Salem, Oregon how do you plan to preserve the company culture at a thousand locations? What are the challenges you foresee? Do you think that current actions or activities will scale up with 700 plus franchisees asking? Because it seems like a pretty good thing we've got going. Yeah, like scaling any company. Like if you, if you have one or two employees, for example, the amount of culture that you can have with them is pretty off the charts because you literally see them every day. You're able to talk with them all the time. You get to know them really well. You intimately know what they do on the weekends, their boyfriend, their girlfriend, you know what they like, what they don't like, their preferences of music, food, etc. It's really easy to have a great culture because it's just so much smaller. The question is, does the business objectives align with having one or two employees? Right. And so would I love to just stay here in terms of size of Augusta because I enjoy still having everyone's phone number and people being a contact me and it's easier to have Magnify Mastermind. I can still answer every question. Like I don't know if that can scale to a thousand locations. I'll hope hopefully I can make it work or I can still answer every single question. I might have to shorten my answers down. But I think I can make it work. So my focus is like, how do we do things that can scale to this size? And so I actually think, though, the culture can actually improve dramatically as we get more owners out. And in Augusta, what I've seen is about 1 out of 10 owners, like you kind of have like 80% of like any normal distribution, right? You have 80%, 10%, 10%. So you have 10% of people that. It's just going to be very difficult because they're very entrepreneurial and they're going to always be kicking against kind of systems or any sort of any sort of constraints. Right? Very normal. It's. It's difficult, I understand, as entrepreneurs, because you want to do everything yourself. That's gonna be that 10%. On the flip side, you're have the other 10% that just constantly are helping other people and they're giving and they're supporting the culture and they're creating meetups and they do free things for owners and we'll talk to them on the phone, just help them all the time. So you have these two kind of opposite ends of the spectrum. And so what will happen is both of those audiences will get larger just because you're growing in size. So 10% of people that are very, very hesitant to change or they need prodding, like, it's very difficult to keep them in the Systems.

If they're 10% of 150, that's 15 people. If you have a thousand locations now all of a sudden that's 100 people. So this, this number of people get much larger. But then on the flip side, I think the culture can become much stronger because now you have a hundred people. Let's just assume this 10%, 80%, 10% distribution. You have a hundred people that are constantly giving and giving and giving. And that's how it is in every community, any sort of. Any sort of size and level. So if you look at like taxpayers, really there's like 10 of the population that pays all the taxes. 80% kind of pay some taxes, usually income taxes. And then 10% probably more unfortunately now massively take from the system and it's like really, really absorb a lot of the resources. And so because the, because the longevity is the, the focus of augustination, it is much more like a country which, like, the reason for a country to exist is to thrive and exist. It is not to conquer or destroy other people and is not to like, have an exit, right? So because that's not our objective, like, it's about how do you build a sustainable community. It is realizing that there are going to be people that need extra attention and take resources. There's going to be people that, that can give and be able to do coaching and help other people. In any healthy community, any sort of healthy culture, you're going to have that dynam. The. The qu. The real question is how do we keep the distribution more towards givers than takers? And that's really something that even in the past like six months, Lee and I haven't got better at like weeding people out of becoming part of augustination. Because if someone joins and all they want to do is take, take, take from the community, there's stuff to be to. To take. Like you can take my time, you can't take other owners time, you can take coaches time, you can take all the done for you ads and you can take a lot from the community. But the real power of a culture, community or any sort of organization is when you have more people trying to give back. And that's why.

The saying ask what you can do for your country and not what your country can do for you is so powerful is because that's actually the fundamental of how a country is born and thrives and grows and becomes a world. Power is more people simply contributing to the community than taking from it. And so that's a very tough thing to do though, because in any society, especially as you grow.

In a country, an organization or employees or whatever, it's constantly a matter of like employees want more from the company. Well, eventually, if the company doesn't have anything to give, the company does not exist. Anything with a country, a country. Now if we look at that, it's like everyone wants more money from the government, they want handouts, they want Social Security, they want free medical, they want all this stuff. But eventually, like the system will fail if there's more detractors and people taking than giving. And so what's a healthy community in my opinion is times when you need to take, you can take and times when you can give. The vast majority of time is giving. But then there's times when the community steps up and helps someone who's really in need and needs support. So for example, there's times when I know there's owners that go through a really, really difficult two, three, four months and they really SAP from the country, from the the community. They're asking for help and they're on the forums and I'm helping them out. And like the leadership team is constantly Talking about them, et cetera. But then there'll be 95% of time they're, they're, they're the ones helping other people. And that's healthy. That's like, fine. That's what it's good. And that's why we have community. That's why I have families, that's why we have relationships, is because what you're trying to do there is you're trying to not give up in the low lows. And when you're really, really doing, you're doing good, you have something to give.

And this is why in general, churches are built on tithing is because if you have something to give, it means you are coming from the place of abundance versus scarcity. And that's why a community is so healthy to be part of is because you have to give in order to be able to receive. And it is looked at like a church is looked at as like a storehouse. It's like when you have, when you have excess, when you have wealth you put into the storehouse and there are people that will need, you know, the, the fatherless and the, the widows, for example, in a church environment, they have, you have something to give to them. But the actual mechanism isn't necessarily there to gain more and more storehouse and more and more in, in abundance. It is a matter of. It's a distribution. And that's how a healthy community operates. In my opinion. It is. We must, we must take and we must give and in. As the company, as the, Whether you, Gus, or any organization grows, you have to usually build up the infrastructure. So like, you need more working capital as you get more employees, right? So you're like, why are we so profitable? We want to do profits, profit sharing. It's like, look, look, look, we had two employees. That's why we had $20,000 in the bank. Now we need $200,000 in the bank because we have 40 employees. We need more cash in the bank. Like, so there's a balance in all this stuff. We off balance there. Whatever. Sorry.

Great interview question I might have gotten from C Suite. If you were the boss, what would you have, what would you have to fire yourself over? If you were the boss, what would you fire yourself over? I've. I'd probably have fired myself a few times. Usually, like, okay, I can give three right off the bat. Okay, so one would be.

Two and a half. Three years ago, how I handled when command center was drowning and working. Like, we switched stuff up. We had to cut off a bunch of stuff we like I knew why we needed to do it. I just handled it incorrectly in terms of my pacing, my timing. I'll probably would have fired me for that. I probably would have fired myself for switching over to co pilot.

And I probably would have fired myself.

Over how I rolled out Max. There you go. I don't know if I'd fire them though. Like I was doing my very best, so I probably wouldn't fire myself. But those are like definitely like the three lowest points of my, my career, that's for sure. So I would have fired. If I would have fired myself, that's when I would have fired myself. Probably. Honey Harbor. Oh, I haven't heard from Honey in ages. It was Dylan Martin and Baton Rouge that asked a question about GM compensation. He just forgot to put his name. Oh, okay. Thank you, honey. Okay, let me think about that question. Great. So you've been growing a lot. Good for you guys. Let's go.

If you're having a GM okay with that now knowing it. Dylan, if based on what I said, feel free to submit another question. Based on what I said, if there's more clarity you want me to add about that knowing your location, that's positive. What I said today, if there's another question, like follow up to that, just put it in and I'll get to it tomorrow. If you need more clarity on that.

Augusta Longcur of Hudsonville. What is your favorite non corporate location based solely on financials? Ask me because I want to consider how your next location look. How our next location will look. Oh, this is a great question.

Oof.

You know what? There's, there's so I don't want to out anyone's name because I haven't asked their permission. So I'm not gonna say anyone's names. I'll try to be general.

There's a solo operator that had built their business all on mowing like 100 and they're super profitable and they just raise prices and they're going to be switching to growth. But like they'll probably keep doing what they're doing because it's just like they've just optimized in profit mode for so long doing basic services and it kind of runs itself at that like $200,000, $250,000 level. That's one.

Non corporate anyone that's in the area where they can Mow for like nine to 10 months of the year and then this. The, the winter is super mild. I like those areas like my North Carolina locations, we could still very easily be profitable in Q3, Q4 and Q1, it's a lot harder when we go way north because of snow, etc. So you just gotta get more creative with other services being added. So those would be like the ideal ones. But again in those markets you're gonna have, you're gonna have more price pressure because there's more competition. It's just harder to run your business.

Outside of that. So if it's easier to run business in place, more competition comes, more competition lowers price. That's why it all usually evens out. Everyone's like, oh it's, it's so much competition here. It's like it's a. Yeah, because probably a market that has more consistent revenue like you don't have where you only have a five or six month mowing season. Like Derek from, from Michigan. Right. Like that's a harder market. So less competition, higher prices but just like way harder to run that type of business that with, with the seasonality. So. All right, great, great mastermind. Good questions. I love it. I love good questions. Makes it so much fun. All right guys, you have a fantastic Tuesday. We will see you tomorrow. And remember that Thursday is the webinar for the Christmas lights.

We are still working on the website. Hopefully by end of June, beginning of July for sure we will have the websites done for augustalights.com there will be a commercial services page on there. We're just finalizing a lot of the back end stuff like how command center is going to handle things, how the form is going to look. All that stuff will iron out. Make sure that by July all that's been ready to, ready to go. So do you recommend though if you're thinking about doing it at all, Thursday's webinar will be super helpful. All right guys, take care.