Mike Minutes Mastermind 05/16/22

Hello, Gust Nation. Welcome to another mastermind this morning. Let's go ahead and jump in. I have a couple quick announcements just from an economic standpoint and then we'll jump in. I saw a couple questions had come in on the form. First things first, this morning.

Empire State manufacturing data came out. Basically kind of gives a throttle of manufacturing. What's happening. They're expecting a 16.5 year over year increase in this tracks like a lot of manufacturing, transportation of manufactured goods, etc. They expected it was at 16.5% increase. It was negative 11% year over year. So again, just a big indicator that there's a lot of slowdown happening. And then also in terms of construction equipment, this morning the Bureau of Labor Statistics came out and they show a breakdown of every single sector and industry of new jobs. And this past month there was only 2000 new added jobs in this construction industry. That is compared to just a couple months ago being $60,000, 60,000 new jobs being added to the construction industry. So in my opinion, the construction industry is kind of competitive with lawn care and landscaping because usually our best employees will move on to that industry. And so the fact again that that dip that far is a very indicative of a slowing down real estate, a lot less houses and going to start being built again. It's not negative. So people aren't getting laid off in the construction industry. We're still hot, but it's slowing down. There has been every single time that a recession has happened, it has been where that industry goes negative every single time. When that number goes negative, it leads to a recession next 12 months every single time. And so again, we're not, we haven't hit that number. It's obviously there's always a first time for things like that to happen where it doesn't. But a slowdown in the real estate market in my opinion is eminent. We talked about this before, but they're just, these are just economic indicators that came out this morning that kind of prove this point. So you know, we've been talking about since January, this is not new data or, you know, nothing surprising. Slowing down in manufacturing, a slowing down in construction. And I feel like again, like I made the video this morning that was public, I feel it's going to lead to an opportunity to hire. I understand that right now there are so many of us that are struggling to hire employees and find people that want to work. And I really do believe we're going to have an opportunity to hire some people kind of like we had there in February for That window of time because of the delay of Omicron and the further lockdowns and shutdowns. So I think we're going to have that again in June, July. There's going to be another brief window of opportunity. You're going to get more people applying, people showing up to interviews. I feel like the unemployment rate's gonna tick back up when that happens again. That's another form of what happens in a recession. So I think it's gonna happen later this, you know, this summer. And if that it's gonna correlate with all these layoffs come from large companies that their stock price been mutilated and then they're slowing down. The real estate market, which has a huge amount of jobs are wrapped up in the real estate market. Everything from appraisers to real estate agents to the construction side of things, attorneys. Like every, every real estate transaction has so many people involved that, that when the real estate market slows down and we're seeing like right now like a massive slowdown in sales, if that's a lot of jobs. And so I feel like there's gonna be an opportunity. And I know it's frustrating. I know for I'd say almost half of Augusta Nation, we are overbooked. We don't have enough employees. We're slowing down our leads. We can't get to estimates in time.

And it's, it's tough. We now have lower unemployment than we did prior to Covid. But at the same time, which was already historically low, unemployment is now even further as well as now those employees that are potential applicants have more money in their pocket from all the benefits that they've experienced throughout 2020 and 2021 in the stimulus. So that's why they're so reluctant to work. And so I think just about realizing there's going to be opportunity and this is going to flesh out a lot of people out of the of competition. Honestly, a lot of the people that are very, very heavy in projects are going to feel this one as the. We. We really see our first slowdown in the real estate market since 2007, 2008. And this one's not going to be like a short term little blip on the radar because interest rates are driving this. It's not going to be a collapse. I don't believe we're going to see 30, 40, 50% decrease in real estate prices. But 15 to will impact everyone that's purchased real estate in the past two years and they will be upside down if they got in on an FHA loan that was 5, 10 down and now all of a sudden their Property goes down 15, 20. Not a big deal for investors. But if you bought that on an FHA loan at the top of the market in the past 12 months, you're going to be in a world of hurt. So when those foreclosures start hitting the market, when that starts happening, unemployment will go up a little bit. And that's again, I think it's an opportunity for us to get in and start hiring people. So that is my little two cents for today. Let me go ahead and share my screen. I saw a couple questions pop in on here. See here first one here. Foundation. How do you get a full night's rest? It's. It's like it's always so hard for me to get my rest. Even after a full day of work, I would still be up until 1 or 2am I can still get up on time. It's just the going to bed part. Between work, dt, even personal things, I'm always doing something or having FOMO so my body won't shut down. Just keep going. Coming back from Russian didn't help any bit. How I'm adapting to time. Thanks in command. Yeah. So first and foremost, you have to realize that spring rush is going to be this way and what you want to do going to spring rush that I have found really helpful is eliminate distractions going into spring rush knowing that you're going to have to be working a lot. It's going to be physically and mentally straining. So like I went into a spring rush this year and like cut out little things like, for example, the news app on my phone deleted it all. News I'm out of. I literally listen to a couple YouTube videos that get me up on economic data. But I know where the economic day is coming for coming from. It comes from the Bureau of Labor Statistics. It comes from the Fed. Like, it, it's easy for me to find that stuff. I don't need to go to the news. I don't need to hear what CNN or Fox News or anyone here has to say with that stuff. And I don't need them pumping fear into my brain right now as we head into a recession. We are heading into recession. Like, okay, we get it. I don't need people like crying in the streets and screaming at me that, you know, the world's falling apart and everything with the war and politics. I don't need to know about it. I don't want that, you know, weighing on me. And then same thing with like your YouTube subscriptions, clean them out. Don't be. One way to have FOMO is when you all, you're, you're using all these videos coming in that you usually would watch, but you're busy working. And so you start feeling like, oh man, I'm behind. I'm not able to do what I want to do. So, like, just clear that stuff out. You can only do so much in a day. And so ultimately it's your decision to work hard on the business. And if that's going to mean a long day, then clear out the other junk that's making you have fomo. Right. And realize that it's just all about prioritization. We all have 24 hours a day, and if I'm going to prioritize working out, like, I'm not going to compromise that during spring rush I got to work out well, then that means that I'm not going to be able to work that extra 20 minutes in the day. So determine what the priorities are and then clear out all the minutia junk things like news apps, videos that you're watching on YouTube, you know, delete your social media if you need to. Like I delete. I deleted Robinhood, the app, because, like, I know what I have in my stocks, I know what I want in my stocks. I'm keeping it there. I don't want to check on it every day. I looked at my screen time. I had spent like an hour in a week looking at Robinhood. I, like, forget that. Delete that. I don't need that. So just clear that stuff out.

Anyways. Cool. Next question.

Will the five people you selected be based upon regions? Oh, this is for the Franchise Advisory Council. I would recommend Brian C. From the South. Great guy. And his market is just about the same as ours. Just recommendation. Yeah. So in July, we're going to have the Franchise Advisory Council. It'll be based upon people that are nominated and people that are accepted are willing to be in that position. We'll try to get diversification of size of, of, of.

Their, their location as well as geographically having some dispersion. But I'm mostly going to rely on the votes. That's going to be the primary way to do it. I only step in if, like, all the people that are accepted are all together one spot, the country. I want some diversification a little bit, but I don't think I'll need to step in. I think it'll be a matter of. I do want whoever's voted the highest because that's the person who's in contact with the therefore is going to have the pulse on everyone. The best. I'm very aware that not everyone can communicate with me every single day. And so I can't. I don't want to lose that pulse. And the best way to do that is have the people who are most connected be in touch with myself, at least on a quarterly basis and giving me feedback and things. So I wanted to know, do you guys provide ice and water for your cruise or do you have them bring it or get their own? So we bring in drinks occasionally. We do not make them depend on it though. Same thing with snacks. Like we will bring in pizza and donuts occasionally and things. But the guys know, like they're not showing up to work grabbing a bunch of bars and drinks for their lunch. We used to do this. We ended up spending like 4 or 5, 600amonth. And I told Liz, I said, look, at the end of the day, this is coming from the bottom line, which is going towards profit sharing. And if we're giving out say 25% of profits to the employees, that means that every single day that someone's taking money or taking a bunch of bars and drinks and all the rest of it because they didn't pack lunch, it's taken away from the guy that did meal prep, you know, packed his lunch correctly or is paying for his lunch throughout the day. So it's not really fair. And so I really do like the ice and water though, because more of a liability thing for you. You can't have people like being dehydrated. So we get those, those jugs, like those coolers with the bottom of the spout like those, they're really, really hardy plastic. You fill them up, screw them on top, I think they're about 2 gallons. And then that way you could, what you could do is just put water and ice into that and then give it to them throughout the day or have them up on, hey, if you guys want them, you can take them. If you don't, they just stay there. I would do that. I like that idea. I don't like the idea. They're like bottled water and a whole bunch of stuff like that. You could literally spend hundreds and hundreds of dollars. And again then you got trash rolling around and all the rest of it. So I really, I'm a big fan. It costs a little bit. You're going to probably pay 20, $30 for them. You know, two gallon little jugs that have the little dispenser at the bottom. Those Are those work well and then they keep the ice relatively cold throughout the day. But yeah, I would do that because especially in June, July, August, when it's just crazy hot, you don't want anyone having heat exhaustion or getting a heat stroke or anything crazy like that. And they forget. They forget and what they do is they'll go buy a Monster or they'll go buy a Red Bull and now they're dehydrating even more because they're peeing and all the rest of it. So yeah, I think it's more of a liability thing. That's why I would be giving them water. But I don't want them to rely on drinks every day, food every single day, and all of a sudden only like a third of your crew is utilizing it and they're abusing the fact that that's supposed to be like if you forget, but then they start depending on it and then if you run out, they literally don't have food that day. And that's their excuse why they can't finish their job. So we bring in food occasionally, but it's more of a one off thing for birthdays, for appreciation. But they're really, it's up to them to bring their lunch and their water, etc. But July, August, September, you know, it's really, really hot. We like those jugs that you can just put a bunch of ice in, throw water in there. We put them on the desk. If they take them, great. If they don't, it's up to them. And then we just remind them to make sure they do get water. And we make it, we provide it just in case they can't afford it or had struggles getting it that morning. So that's all I got for today. Thanks so much everyone. Have a great rest of your week. I know it's tough. This is the middle of spring rush for many of us. Hiring employees right now is very difficult. There's a lot of owners right now that are reaching out, employees leaving, not able to find employees, mostly people just employees walking off the job, just not showing up. And that's brutal because you scheduled work, you scheduled jobs and you feel like you're disappointing. And the customers, I understand is very, very difficult right now. And like I said, I don't, I don't think it's a pipe dream to think that there's going to be opportunity to hire going forward. There's, I really feel like the past few months has allowed. Has made a lot of larger companies become much smaller because they haven't Found. Found employees. And it's going to be even more fragmenting in this. This industry because more and more smaller companies are able to make it. Solo operators are. They're making it. They're doing well. So the larger companies are feeling a really big squeeze. But I really feel there's gonna be an opportunity here to suck up a lot of that talent. And as we go into a recessionary time, the. The person that is.

Working a corporate job right now, once they get laid off, because no longer is Netflix able to afford them or Amazon or Walmart executive, like, they're making 60 grand, they're gonna go. They're gonna go. Start mowing lawns. They'll. They'll go. They'll get started there. So I think there'll be some really good opportunities coming up here. And so I think just keeping your feelers out in the market. Keep ads up. You can keep Facebook ads up for hiring for free. You don't have to put money behind the ad. You can put up a Craigslist ad, and for a whole month, it's cost like 25 bucks. So if I was you, even if you have enough employees, put a Craigslist ad, it's like 25 bucks a month. Facebook put the ad up and then put no money behind it. Just put a posting, a job posting, and you'll get like one or two random people applying every couple weeks randomly. Keep doing that. Keep hiring when you don't think you need them right now because there's just so many people that hired a bunch of February merchants, got your crew, and now they're. They've left, and you're in a bad spot. So, like, just prepare for the people leaving. Prepare for that happening by getting some extra employees right now. Which I know is easier said than done. Trust me, I know. So we were very deliberate. The Bellingham shop to really slow how many people we had on the team earlier this year because so many of them were new. Several of our most experienced had left to go start their own location. And we had to let some go at the end of last year in terms of firing just culturally. And so we really only had like eight to 10 people. And we really locked in the culture and now we're adding. So I think today they have 16, 17 people. And that's just been slowly adding like one a week. Anything more than one week, one new employee a week, starts to really put cultural drag as well as a lot of time restraints on you to train them up and actually get them efficient onboarding them. There's a lot of like inefficiencies those first few weeks. So that's worked really well for us. It's hurt us our revenue from our top line revenue standpoint in the spring rush for sure. But from an efficiency standpoint and a cultural standpoint, it's extremely strong. And we're not having people leave there because they're not working 50, 60 hours a week. We aren't way behind. We're solidly booked out four weeks. So kudos obviously to Marcus who's crushing it and just working his brains out over there. But it was a deliberate strategy this, this year that we knew we'd make less in revenue, but we, we took it slower by adding only one employee a week max. And we just had way less attrition than usual people leaving and things because of that. I believe getting a really core group, training them up. And that's why I've told several of you that are really struggling, like, stop hiring, stop trying to get new jobs, turn off scheduled estimates and just focus on your current crew. Even if you go out, work with them a little bit and really lock in that crew and then slowly add employees, then you can turn your scheduled estimates back on, then you can start taking more work, Then you can keep growing, but take a month, take six weeks, turn off your scheduled estimate, really get out there with your crew, train them up, get that core group strong understanding P4Pmaking money on P4P and then start adding to the crew one at a time, not in like, okay, I'll hire three people. If you hire three new people. Even if your crew is five or six people right now, hiring three new people is like literally restarting your culture. It's like too many new people at the same time will just completely make it difficult to be efficient, profitable, or have a cohesive team, unit and structure within the culture of a company. So this is my two cents. So for many of us, I know a lot of you have consolidated just because so many people have left. Okay, consolidate, Boil down that team. Get time in your schedule by taking off scheduled estimates. Let the phone estimates happen. That's fine. Add scheduled, add recurring work, but not projects. And then just lock in with you, make them solid so that when you bring on one employee at a time, they actually are joining a cohesive unit that's already efficient and profitable and understands and experienced and trained up. Adding 2, 3, 4 people at the same time can just be an absolute chaos when it comes to yellow subs and callbacks. And then you're chasing your Tail. And it's a vicious cycle that just self fulfills itself because all these new employees create yellow slips which caused them not to get P4P which causes them to want to leave, which causes all these callbacks cause long hours. And when they leave now there's more long hours on the people who do stay. Now there were overtime and they leave. It's like it's this vicious cycle to jump out of that. You have to, you have to cut things out. What type of service you do. Last week, several people have cut out some of their big services. You have to potentially turn off some scheduled estimates. You're booked out four, five, six weeks right now. You have a few weeks to lock in with your team. I talked to someone yesterday, they're doing this. They have grown really well, growing from zero to no, not zero. They already had 5 or 6,000amonth. So they like 5x in the past few months, this spring rush, right? Have a few employees, but they just feel like, man, the standards are just not there. It's like horrible, but it's just not where it's at. Hey, just, that's fine. Take one week, turn off scheduled estimates, get out there with your crew, train them up, make them really solid. And then that way you can go hire someone else, bring them in, know that the person that you trained is going to train them well and then you can go back to really trying to grow the business down the road. And if that's even like, oh, I'm just going to stay at 30,000amonth in revenue the rest this year, that's fine. Do it next spring once you have that cohesive group of guys that you can add to. But a whole bunch of newbies with your average tenure at one and two weeks, just a whole bunch of new people out in the field. Unless you're doing mowing only like that's it. It's extremely difficult. If you're doing bush trimming, if you're doing weeding. Even those simple services can get convoluted and messed up with new employees that have no idea what they're doing. It's not like they're incompetent. It's just they don't understand your systems. They don't understand service all part or super. They don't understand those things. It takes them a while to get adjusted to that. So anyways, hope that was helpful. Take care everyone. Have your extra week.