Mike Minutes Mastermind 05/23/2024

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See here, we got three questions today on the form. Oh, quick reminder, you'll see it in like a month and a half, but when you do the yesterday. Like, our last turnaround was a.

Multi unit franchise operator for a math nasium. They do like tutoring. They asked us to redact, like, not include a whole bunch of stuff about a potential acquisition. So if, when that comes out, if you have questions, ask them here because I can share a lot more here privately versus what was on the turnaround. It's very interesting. I really wish we could have shared a lot because there was a ton of info on there that I was able to dig into really deep with them, but they kind of wanted it out, left out. So we will do our best to be.

To not share too much for them. But man, it was. It was a lot of good information. So anyways, feel free to ask when that time comes. All right, questions.

Boom. All right, we are in business.

Did I put the right one up? Let's check. One second.

Sweet eight. Is that the right one? Eight. Yes. Okay, good. Okay. Question numero uno. First One is from Mr. Anonymous. After I finish lifting heavy in a workout, should I always feel a pump? If I don't, is it because I didn't push myself hard enough?

Who.

Should you always feel a pump, really? It's a matter of like, shoulds is a bad thing and musts are a bad thing. So I tend to never actually say someone should do something or they must do something. So definitely should not always feel a pump. No, but it's likely that you will usually feel a pump. If you are dead tired, though, and you work out, you will likely feel just as tired afterwards.

But it is not a matter of feeling anyway. For me, when it comes to working out, it's like it must be done. It is a priority, therefore it must be done prior. And I'm going to push myself typically to hypertrophy, like to the very end. Not necessarily the best form of working out if you want to do certain types of bodybuilding, et cetera. But for me, I'm going to always push pushed to failure almost all the time. That's just how I like to do it.

Jason starts from Knoxville. Oh, we gotta. We got a banger. All right, Mike. I have a bit of a llama that I would like your input on. I have been in business a lot of years and have always been a worker bee. I grew up business to roughly $470,000 a year through sheer determination and work ethic, not business or leadership smarts. Over the past year and a half since joining Augusta, I have made a lot of changes but have so much more that I need to do. What I am currently struggling with is with it. What I am currently struggling with it is this. Got it. Okay. A couple of weeks ago we had a we had to let a couple of guys go which dropped our workforce down to five. We need eight to be able to stay on track with mowing and be able to do at least a couple days worth of projects each week. So I set up interviews for Caleb to do and we hired a couple of guys for him to train on mowing and have since hired two guys to work on projects. I we thought they had a good basic understanding of project work, but they don't. I am currently in the field overseeing and helping on projects instead of focusing on sales and hiring. This is easier for me to do but not what I should do for the business. Man, this is like literally where I was at six years ago. Man. I want us to hit that seven figure number, but I feel like I probably need to let a couple of guys go that don't have the skills required needed focus on hiring a project manager and staying on track with sales. We are booked out several weeks and I hate letting customers down. But pausing projects for a week or two hopefully while I find a good project manager is what I'm feeling like I should do. What do you think? Thanks for all you do. Okay.

First question is can we get temporary labor for temporary demand? So if it's spring rush, you have tons of amounts of projects. Can you go out and pay someone an extra $8 an hour to be able to find someone that has the actual project experience, to be able to pick up where you are lacking and take these projects to completion? Now this is why. This exact reason is why it took me three years to unwind all of the revenue and big projects that I had been building at my first location. You can grow so fast with projects and I know man, the appeal to get to seven figures and above is so, so awesome. Like this is the thrill of doing that. I have talked in the past two weeks to probably three or four of the largest operators in Augusta, all of which are contemplating over the next three to five years doing the same thing as unwinding projects. It is not that you cannot make money on projects. It is that it is so difficult to simplify and systematize massive projects.

And it's not to say that they're bad. You can make so much money doing it. It's just going to be harder. Like, if you find someone that has the skills to run projects, they're going to cost a lot of money. And I'm talking about like paver patios, retaining walls, grading, excavation, sod installs, like all the larger stuff, they're going to cost a pretty penny. And it's not a matter of the soft skills of say, sales or leadership. It's going to be like they have to have technical abilities and skills that are in demand in construction and in much larger use cases that we're competing with, not just lawn care and landscaping. And so they're, they're expensive and so your margins get hit. If you're going to hire someone that actually has the skills or you're going to be doing it yourself, that's what the vast majority of us do. And so this is what I would personally recommend, Jason.

A offer 8, 5 to $8 more per hour for Project Cruise. And, and what you're going to, you're going to tell them is this is a three month gig, so you could even pay more. You're like, well, what's that going to cost me? Okay, let's give them $8 more than what you're currently paying everyone else. Multiply that by 40 a week, times it by four in the month. That's $1,280 per month, times that by three. So it's going to cost you about four grand to get this person to work for the next three months. In that three months, you're going to be able to catch up on projects and get your feet back underneath you. So let's call it 10 grand. If you hire three of these people, all right? Extra, it'll cost you 10,000 extra.

Stopping projects for two weeks will probably cost you more than that because you're doing, oh, I think it's around $100,000 a month in revenue right now. So you would also alleviate some of the pressure on you and the pressure I know that you're going to face in terms of having to push customers off and tell them you can't do their service. Another option is to hire people. Frontline team members, not leaders, not managers, frontline team members that have these skills. You're going to have to pay more also, right? You're going to have to increase base pay just to attract them and you're going to give them a short window of time that they're going to work for you, but they're going to come in with experience. And these are typically people that don't want to work on P4P. They would typically do that, just want to do projects. They want a higher base pay and we're going to accommodate for the next three months. It's not ideal. We don't, we want people on P4P. And then for your rest of your team, they're going to have to earn that extra five or eight dollars an hour on P4P. However, they have guaranteed work and that's how you pitch. This is like we are bringing in temporary labor to help us get through this time. They are not guaranteed work during the fall or the winter. They're just here for the next three months to get us help on projects. So this is like kind of like a break glass type emergency situation when it comes to projects. But I would be trying to look for temporary labor or go out for that all star, you know, manager. But you're gonna have to pay up if they're, if you're doing bigger projects. That's like you have 10 years of experience doing this. That's why you're the manager of these projects. That's why you did the management of the project and didn't just throw someone else into it. Because like it takes that much time. And usually if someone has 10 years of experience doing big projects, they're running their own business or they're like a manager at like a construction company. Because if they can run excavators and grading and like manage large projects and massive amounts of materials being delivered and manage that like it's an expensive person. So it took me three years to unwind. And I did not do it because it was going to make us more profitable. I did it because I didn't want, not want this happening. And that was when stuff when a project went wrong or a couple employees left, I had to step in because I was the only person with a skill set to actually do the work and knowledge of how to do grading, how to operate the excavator, how to do skid steers and track loaders. Like yeah. So that would be the two paths. One, go out and overpay temporary labor for out in the field to get projects done much more efficiently. And you're going to overpay them. You're going to spend ten grand because of what's happened per person. But if you spend 25 or 30 grand on extra wages on three really skilled people, you're probably going to be able to get through this and still hit your goals. I would also say in the long term, we start looking at what are these projects that require you to be on the job site and slowly cut those out. Don't do it immediately. I know some people are like, you know, one of our larger locations, like, I'm going to cut everything out. I'm like, whoa, whoa, whoa, take it easy. Do this over the course of a year or two so your revenue stays stable because you've, you've built a business with infrastructure and trucks, et cetera. And so you want to slow it down. So that just be my two cents, Jason, especially as you are getting older. And I know you're okay with me saying this, like, as you get older, like, you do not want the stress of like one or two employees leaving and you're back in the business. And so the only way to be able to create, like, the easiest way to create systems is standardization and simplification. And so I'd be looking at all projects through that lens. I'm not against projects. You can make so much money. I just hate to see this happening where the amount of stress that is compounded when you're the only person that has the skill set to actually manage the jobs. Kyle Tarvin, the other day, I believe Brian Connor asked you about price increases and he told him you should be raising prices at least seven to ten dollars per cut, minimum. Is that pretty standard price increase? I've always only done $5, but I like to squeeze more profit out of our customers as a lot of them are underbid and it's a struggle for the crews to make P for P at the current prices. I'd raised them all $10 per cut, but I'm too chicken. Like, here, look, if someone's gonna leave over $5, if someone's gonna leave over $10, they're probably gonna leave over $5. Like, if you raise it by a dollar, you're probably gonna get most of the people that are gonna leave on a price increase because, like, they just see price increase and they would leave anyways. So. And it's gonna be your worst customers. And so as you raise up from 2 to 3 to 4 or 5, 6, $, you're just weeding out all.

In the past 24 hours, I've talked to a large, large operator that has multiple locations that's never been in profit mode, that is thinking about raising their prices, their base price, from $30 a cut to 50 because they've always been gross mode. And they're gonna, they're thinking about switching just immediately 50 price increase.

And they are sorry, going up to $50 base base costs. That's on some of their customers. $20 increase on cost on, on price. The transformation that would happen because let's just say that they're right now that their, their cost on that job is 27. They're running a 10 margin by cutting that, that lawn for 30. If you raise the price to 50, you are literally have gone from 10 margin to like a 40 margin. That's profit mode. And I want to make a video. I made a comment on in my notes the other day. I was on the plane. Like people just stay in growth mode way too long and it burns them out and then they quit. It's like if you just switch to profit mode and you actually raised it at least $10 per cut. Like it's transformative to your business. And if you're growing and you're getting a bunch of leads coming in, like if leads are coming during spring rush, it is likely that if you spent one third of the extra profit that you got from that price increase on marketing, you'd get the leads to replace any lost customers within a matter of one month. So if you said, okay, if I raise my prices up by $10 per cut on my 150 lawns, okay, that's $1,500 per week. Let's just say on average people get cut three times a month. That's $4,500 per month in extra profit you're going to tack onto the business. If you spent 1500 of that, that's $50 a day. On Facebook ads, Google Ads, door hangers, paying someone to do door hangers, basically like part time, you could pay them to door hangers. I guarantee you that whatever customers you lost, let's say 10, 15 people leave, you'd be able to replace them so quickly just if you spent a third of the extra profit on marketing. So yeah, I would, I would just recommend if you're going to raise prices, do at least by $7. I think 5. The difference between 5 and 7 is nothing to the customer, but to you, you literally like five to seven dollars. That is a, like a 38, 39% increase in, in like differential. Like it's huge. It's, it's huge.

So yeah, like I just think so many of us are in grow, grow, grow, grow. And then we never actually step back for even one year and raise prices, stop marketing. Like if you just took your marketing ad spend, cut that out and raised prices and for one year, yeah, you wouldn't grow revenue a ton even if you lost 20% of your customers, but you're able to increase your prices by 20% there. You're basically at the same amount of revenue. And then you cut your marketing spend. Well now that's all straight to the bottom line. You're like, well why would I cut my marketing spend? Because I'm at capacity, don't really need the leads anyways. There's stuff coming in organically. So I told one owner the other day I was multiple locations. I literally in the same 24 hours told someone else that has plenty of capacity. But like I had the feeling they're just getting completely burnt out and they have tons of mowing customers and their teams struggling in terms of efficiency because they're all new. They're all in the past two weeks and it's like, hey, think about raising prices because it's going to help them on P4P. They're now going to get actually the taste of it. They're getting incentivized to actually go faster, be more efficient. It's also going to give you margin where some customers left. You'd literally take some of that margin, deploy against marketing and be able to get all those customers back literally within four to eight weeks. So big fan, big fan of going to profit mode. I know it's. I know it's tempting to grow. Trust me. It's like, it's almost like weird in your psychology they take a year of and not grow the business. Especially in that mindset like I gotta get to this level.

But the main thing is don't burning out in that process. Like I know like we want to get to a million, we. I know we want to have a general manager. I know we want to work on the business but if we burn out on the way there simply because we never raised prices and took a year to stabilize and get a team that is paid well on PvP and like you have higher margin. Like quitting is the ultimate failure. Failure is like yeah. So anyways, some of my thoughts. I hope you all have a fantastic Thursday and I will see you tomorrow on Friday.