Mike Minutes Mastermind 05/28/2024

Hello. Guess nation.

Let's rock and roll. Happy Tuesday. Hope everyone had a great weekend.

All right, let's jump in. Let's see how many questions we got. Thirteen questions. Share.

Oh yeah, it was the long weekend, that's why.

All right, Numero uno, Logan, Nebraska. Oh, this is the one Logan and I went over. So Logan posted this like literally right after our mastermind on Friday. So he reached out to me and we worked through this. So Logan, how about this? Instead of me reading this long one.

Based upon what you did on the weekend, give us like an update like a week or two on the Facebook group and kind of what the question was all about. So basically he had a couple locations cash crunch trying to determine whether you should stay in growth mode or not. There was a lot of back and forth. So this is kind of old. Some of this is older information now. So Logan, instead of me going through this and regurgitating what we talked about, maybe just do an update video. I think it actually be cooler to watch from everyone's perspective. Anyways in like a week or two after you price increases, et cetera. Can we get an update on where COPAI is in their bug fixing phase? Are we getting close to the beta for to the beta for the waiting list and the other mostly done features that are we rolling out estimate eta? So yeah, end of May was kind of the goal. So on the weekend I made it. On Saturday I made the video for the copilot Facebook group. Feel free to look in there. We are starting to deploy energy towards upgrades and enhancements, etc. In terms of the waiting list, it's still a ways away. There's a lot more other stuff we didn't want to do. The number one thing we're doing right now is guardrails for automations. There's a lot of ways to create automations that are illogical. So that's the number one thing we're doing right now.

And putting guardrails around design because a lot of people are having issues but a lot of it is they're clicking on the wrong things. And so we're doing some design work. So it's quite a few enhancements before you'll probably see the waiting list.

Will the price increases be applied to solo operating model when they move to growth model or just for completely new people? It'll be just for the new people that when they sign up. So it'll be based on when they sign up. I'm guessing you're talking about the increase to prices for the.

Growth model, so. Oh, I see what you're saying. You're saying if you're a solo model. Now, here, let me reread this one second. Will the price increase be applied to solo model people when they move the growth model or just for completely new people? If you're switching to growth model after the price increase, then yes. Um, so it's not gonna like extend way out into the future. But if you've signed up already, like, if you've signed up, then you're fine. So. But someone can't join as a solo operator and then two years from now be like, oh, now I want to switch to growth and be at 1200. That won't be the case. Kyle Tarvin Someone posted something the other day about a buy now, later, buy now, pay later option for Christmas lights, but we had to order before the end of June. I looked on the Christmas lights dashboard and the lighting supplies. It doesn't see anything about that. Where would I go to find out that? So that is the.

The program that they called Advanced Placement. So that's for certified lights. You can buy everything now and then. You don't have to start paying till October so you can actually get the lights sooner than that. End of June might be. You're talking with different supplier. I'm still working with one. They're taking a little bit longer as a secondary vendor. But Certified Lights is ready to roll and their Advanced placement program, basically you pay starting October. So the six weeks leading into the end of the year. So feel free to reach out to lightsgustalongerservices.com that can help you out too. That's directly to Certified Lights just for us.

After spring rush is over and the leads start drying up, is it time to cut marketing spend and go into profit mode for the rest of the year? It seems almost counterproductive to try and spend even more money on less leads when you could save that money until next spring rush. Yep, this makes sense. The thing that you want to be careful of if you're way below capacity, if you're at capacity with a recurring work, then yeah, like you're just basically going to go in, maybe lose a couple customers here and there just because of the summer. But the goal is like, be as profitable as possible and not spend money on acquisition when it's going to double or triple over the next few months.

The flip side is you can change your service offering to on marketing to be able to address the needs of the customer. So maybe they're not going to buy mowing Maybe they'll buy a project in the middle of June, July, August, when when your leads might slow down.

But your goal really is a get to close as close to capacity as possible and the as much of your revenue as possible being recurring revenue during spring rush when all those leads are sitting there. And so that when you go into the drier season, when you go into off season, you have that recurring revenue still coming in and then you switch your offer and you switch what you're trying to pitch on your customer acquisition cost to our customer or your marketing to address the needs of the customer at that time. So during the summer you might actually talk about zero scaping like tearing out their lawn, removing their grass, which that customer acquisition cost would stay steady during that time and actually be better than the spring because you're addressing the specific timing of the year to the offer that you're given.

Kyle Tarvin the other day you mentioned you'd be raising the initial fee and recurring monthly fee to new owners in 2025 for any current owners wanting to open up a third, second, third, fourth location. The future would they be grandfathered in that lower rate for their new location or they still have the increased initial fee and recurring franchise fee. Only their existing locations will be grandfathered in at the lower rate. Correct. Only the existing locations will be grandfathered at the lower rate.

It just incentivizes everyone that started earlier so the earlier you start the discounted price applies. Kyle Tarvin Just throwing out random thoughts and observations from other industries. Curious to hear what you think. It seems as though the everyday consumer nowadays many people are tightening their belt and looking for more cost friendly options for their purchases at the pump, purchasing food, etc. From my observation these budget friendly companies are doing well with inflation.

Would there be become a budget friendly home service business or does the budget friendly not work with the service based work since it's not a product? I know it's a harder to maintain a loyal customer base just due to price increase as there is always someone else willing to work for cheaper. Would you just need to sell huge amounts of volume to make up for the lack of margin? I think budget conscious consumers are not our ideal customer and it would be more headache than it would be worth to try and cater to these customers. However, just curious your thoughts on a home service trying to be budget friendly and if it would work or not in your opinion. So in general it doesn't work in home services because there's no one with any moat or differential different expense layout so that's why like command center is so important. That's why the tech side of things is so important. Because if we can drive our costs down so far, then we can offer at a lower price but still make really good margins. And so that's like the long term goal of all of this. So.

The reason that Walmart can offer such, you know, everyday low prices and that's their brand, is because they can still make really good margins because they have the infrastructure of massive networks of semi trucks, they have their own satellite system to be able to have instant tracking of product, their own barcoding system. Everything is like internal infrastructure they have built over the course of decades. And for that reason you cannot compete with them on a retail perspect. Same thing with Costco.

So that's why like most of these grocers, if they're going to compete, they do it through acquisition because they have to scale up so quickly and go into massive amounts of debt if they're going to try to compete with someone like Walmart or Costco. That has built up so much infrastructure. And so in our industry there's not a lot because it's so fragmented. No one has real moats. It is still a matter of get the customer, perform the work, try to get labors as cheap as possible. That's essentially it. And so whether it be things like P4P, whether it be incentivizing, attracting better talent through things like the 3F program, whether it be the ability to be able to drive down the cost of admin with technology versus having to hire more people.

That will be always the focus. It'll take a long time to build that infrastructure though.

Coach Connor.

When doing price increases, do you know how to determine by how much? Ryan says he's doing $20 across the board because he wants to find that number that will make people cancel. But enough people stay where profit is key. I was thinking about doing a 15% price increase but now I'm thinking almost 20% because I hear some people like Dustin saying they should have raised prices by more than what they did. Do you, how do you figure out this number? We haven't had an across the board price increase since we joined three years ago. We've done individual accounts but nothing flat out since joining Mercy. Yeah, if you haven't raised price in three years, definitely recommend raising prices. I personally don't think anything less than 15 is worth raising prices on 20% and above. Like if you're gonna raise someone prices by 20%, they're gonna leave. If you raise it by 5%. A lot of those same customers are going to leave, are going to like, if they're going to leave it at 20%, a lot of those same customers would have raised it would have left if you raised it to 5%. So I'd rather just tear the band aid off instead of doing it. So, like, frequently, like every year we're raising prices versus being like, hey, every two years we're going to raise it, but it's going to be 15, 20, 30%. I would recommend going that direction. And how do you figure out this number? This is something I recommended to Ryan specifically. It was like, if you're concerned about it, just raise it on a hundred of your customers. Don't do it on everyone. Right. So if you have 500 or you have 300, let's save 300. Do it on 50 of your customers and actually figure out, okay, out of 300, I did 50. And on those 50, 10 people left. Okay, that's 20% of my customers. Am I now willing to do it on the other 250 customers and using that same logic, lose 25 new 25 of my customers? Right Then. Then you have a better understanding of the math. So I would recommend if they could be really concerned about it, do as. As a fraction of your customers to get what number is potentially going to leave and then make that full decision. Number two, we are raising hourly to $90 from $80, and after June, bringing P4P down to 30%. This will still give the crew a 6.18% increase, even after dropping down to 30%, which makes me think the remaining 8.8% will go to my pocket. And not enough. And not enough, in my opinion. I'm not. I'm thinking the company needs 20% increase to make that net, retaining close to 15 like I want. Is that. Is this how this works? Okay, so let's break this down. So you're going from 80 to $90 per hour. So that's $10. So the crew is going to make an extra $3.33 per hour. You're going to remove though 10% of that. So essentially, because they're going to get an extra $2 and 60 cents or something like that per hour. Budgeted hour.

So the thing that you want to be careful of is if you're all crushing budget hours and crushing P4P right now, that's when you would do what you're talking about, like raise, lowering it. You could lower it down more if you really wanted to. So for Example, if you raised, lowered it to 28%, it will essentially break even all of their pay. You could do that. I would recommend. I just know that the bigger their P4P bonuses are, the more incentivized they are to work faster. And you might actually increase your capacity simply by giving them more bonuses. And so if you're raising your prices from 80 to $90 per hour and you're actually going to change all your pricing that way, that's gonna be about a 15 increase right there. Okay. If you're, if your needs 20% closer to 15. Yeah. So if you're wanting, if you're wanting actually 15 to go to your bottom line. And then I would say, yeah, like put them down to 30, raise them, raise it by 20. Which now 20% on $80 per hour is like.

You'Re gonna have to go up like $16 or something like that per. So you're like 16%.

So. Or sorry, 20% increase on $80 per hour is going to be somewhere around 96, $97 an hour in terms of. If you're just changing the hourly rate. So but yeah, you have the right concept and that is like you're giving a piece of the, of the action when you raise prices to your crew, assuming you don't drop their percentage of labor revenue, it goes to them. Right. So if you need to make more money, drop the percentage more while increasing the rates. And so if you wanted to just do a, like, if everyone's making 3, 4, 500 a paycheck on P4P bonuses, then I'd probably put your percentage down to 28 and then drive prices up. That way I would make sure they're still winning somewhat. So you can explain the math to them. And it's not. Nothing is done badly. Number three, if you increase prices by 15 like I wanted, and we had a $40,000 in profit last year on $400,000 after paying myself, how do you forecast your new total gross profit? Dollar amount? Okay, well, if you had 40% profit last year on $400,000 after paying yourself, so you had 10% profit margins last year, you're raising your prices by 15%. You're going to give a third of that away to your crew. So let's just call it 10%. You're effectively doubling your profit. Right? You're going to go from 40,000 to $80,000 in profit after paying yourself.

So because if you raise it by 15% on 4, 40, 400,000, that'd be an extra $60,000 of revenue or additional profit, I should say. But you're giving a chunk of that way to your crew on P4P, right? So that's how I came to that. You're basically doubling your profit. This is why it's like this morning, an owner Talked to me, 85 customers. They raised prices on one person left. They raised everyone by 15. I would imagine they're probably wishing they would have raised everyone by 20 or 25% because they probably would have lost two or three people. Okay, so until you start raising prices, you don't actually know what your value is. The customer, because you always right now are thinking, oh, if I'm charging them $45, it must mean that their value of my service is $46, when in likelihood it is like $60. There's a video on Home service Millionaire channel. I broke this down the other day. It's like we always think in terms of the people who are like right on the edge of our value. But you're not thinking about the people who have a value of $80 for your service and you're charging 40 and all the margin in between is complet did profit on your end. And so, yeah, like 85 people, you raise price on by 15%. That probably increases your bottom line, like two or three grand extra profit per month. Like, what if I lose some customers? You could spend it on marketing for a month and get all those new customers back at a higher price. So, yeah, big fan of price increases. And if your crew's making crushing it, like, I mean, absolutely obliterating paper performance, the entire team, then you could reduce your. Your percentage if needs be. I would just openly communicate with the team how that's actually affecting their check and then make sure they're. You're. Make sure you're doing profit sharing.

On the Augusta. Oh, we just changed this. Yeah. Let's go on the Augusta franchise page. Initial investment suggests $82,000 to start. Location. If someone was looking to open a location with a GM working GM in place from the start, would this be a good amount of cash saved up for GM salary, equipment and marketing? Second question. While saving up for a location, where's the best place to store the funds till it's ready to deploy? So let me actually answer this backwards. Second question. If you're saving up money for a location, I just store the money either in S&P 500, very basic. Not going to go anywhere. Ideally, though, I just keep it in cash because you're probably only going to save in the cash for a year or two. So if putting 100 grand aside.

The difference between risking it and putting in the stock market versus just putting in a savings account or even a high interest CD for a year is like marginal, right? So if you get a high interest rate, a CD for like say 4 or 5% interest, right now, you know, the average in The S P 500 is 8 or 9 or 10%. The problem is there's a risk that it could go down to 10 over the next 12 months is also. And if that happens, is that going to put in jeopardy the fact that you start a second location? That's what I'm most concerned about. So I just, I would keep this as liquid cash because the goal would be creating a location that produces hundreds of thousands of dollars, not trying to make an extra few thousand dollars between a high interest savings account versus even if you put a high interest savings account, forget a CD right now, you can make 3, 4 or 5% on high interest savings accounts. In terms of the first one, you're going to see this actually change. With everything recently we've seen with the people that are quitting being the ones that did not have enough capital, as much as we want to make sure that they have a chance, we are upgrading what the expectations of capital is. Even though we might require and have proof of funds, we're going to make this clear on the website. Lee put it all together. We broke down every single cost in terms of trimmer, like every little thing. So what we're basically saying is the, the cost to join is going to be like 40,000 to 140,000. 40,000. Being solo operator, you already have a truck, you can jump in and get started. And then if you have a truck, like it's going to be more. If you need to go buy one, then what we're doing is 140 is like I'm going to have from day one be out of the field, have a general manager, two, two to three trucks and employees from day one, the expectation more around 140. I've done my location usually around 100,000 in terms of answering your question with two trucks, two tra, one trailer, ramp, rack, and a general manager. But if you really want to scale, that's not going to leave you much in the way of initial marketing spend. So we're kind of redoing the page to kind of set the expectation because some people will see the 82,000 and be like, oh, it means I can from day one I can be scaling. That doesn't leave A lot of of money to spend on initial marketing. So we're gonna, we're resetting that here in the next little bit to make a better expectation because we have seen almost all the locations that have failed. It's under capitalization and from the get go they just did not have enough money to spend on marketing. And because of that they didn't get enough inertia at the beginning. And so they spend their first year doing a hundred thousand instead of someone who has the Capital can spend 20 or 30,000 dollars on marketing in their first year and go to 3, 400,000. So the difference is simply the amount they can spend at the beginning. So we're resetting the expectation a little bit just because we've seen the direct correlation of success rate.

Mr. A non bus.

I don't think I have heard this talked about much, but I am curious curious questions. So we'll call this person Curious George instead of Mr. Anonymous. What are your five years goals for Augusta in terms of growth and what what you want out of the franchise? What steps are you taking to get there? What is the end goal with Augusta in 10 to 20 years? How can we as franchisees and managers assist you in your goals? Okay, in terms of growth, I do not have any metrics in terms of numbers. And this frustrates someone like Lee that is very numbers driven in terms of he wants to know how many locations we need to sell. I don't really have that. I just know that if we can make the product better and we can, when I say product I mean like the customer acquisition cost of everyone is dramatically lower compared to everyone I see in the industry. Driving more leads, having brand awareness, being a big piece of bringing in new applicants, improving command center, improving all the technology in the back end that can drive down admin costs or at least keep them stable. Compared to the cost of labor going up 15% a year.

If we can get everyone's admin cost more around 8 to 10% instead of 10 to 15%, little things like that over the course of five years, if we keep making those improvements will be game changer. And so like even couple weeks ago we talked about all the changes we made at command center over the past eight, nine months to make sure that we fix two metrics. One being missed calls, second being time to getting the estimate out and dramatically improving those every year. If we just take two or three of more metrics and just put all our time and attention on it, we'll just make so many elements bulletproof and it'll take, you know, those that time. So five years for me is like we want to create a world class calling service that regardless of the size of the location, you don't need an office staff. Really the original premise that I thought we were going to be able to carry out at Augusta.

And as I talked about a couple weeks ago, realizing now that like in order for that to work at a million plus location, like there's so much simplification that we have to do at Bellingham Shop to make it work. I would really like to be able to remove that for everyone. We just got to invest a lot in technology in order to make that actually reality and a lot of stuff like that. So like that's a big five year goal. We're going to keep investing a lot into the tech side of things so that in five years the admin cost can be either like a nominal cost or it's going down but not going up. Like the average admin is going about 15% a year. When I look at like wages, cost of rent, et cetera, the past four years it's, it's gone up tremendously more than that per year. And so if we can bring that down, that'll help a lot. In terms of the end goal with Augusta in 10 to 20 years, I probably would eventually want to take it public. I'd really like to have the first 10 owners at Augusta be like with me when we ring the bell and like make it go public. I'd want to take it public mostly to be able to create liquidity around the technology side which will probably be around robotics that will need another huge injection of capital. Right now I'm just cash flowing myself with the software side which is okay because software doesn't cost as much as robotics. But even still the millions that I've spent on software, that'll become 10 to 20 million that will need on robotics and I'll probably need liquidity for that. So that's probably when the 10 to 20 years I'll probably hey, that's bunch of stuff all up together and take a public. Is that what's going to happen? I have no idea. It's 10 to 20 years ago. That's where my head is at in terms of how everyone can assist me in their goals. I appreciate the sentiment.

It's really just like being a good brand representative. Augusta, like our goal is to change the level professional in the, in the, in the industry. If it wasn't to do that, we would have licensed this and we would have really Eliminate a lot of the pain. We would not have started Command center because it's just so operationally hard to scale versus just running ads and collecting licensing fees. And so I know that a lot of the stuff we've been doing over the past five years of the groundwork required for us to build something like have the infrastructure to build something that actually has a moat versus just creating an arbitrage that is short lived and short term. So in terms of supporting that, it is like reach out to competitors, talk to other people in your market, be the place that when people think about Augusta like they are good people and yes they will make mistakes and you're one of your employees will cut someone's lawn wrong and there'll be a bad review online, but ultimately people will know that you will do your very best to make it right. You'll, you do, you're, you're doing what's best for the customer, you're doing best for what's for your team. And yes, you're going to make mistakes, but you'll go back and fix it. And then you're talking in terms of like competitors and other people in the industry is that like we are a resource for them to improve and by doing that we improve the industry.

That would be how we can assist in that happening. So whether it be online, like I don't have time now to respond to comments. I don't as many as much anymore. Like I really just only have the Augusta Facebook group now.

And occasionally I'll trip on a comment in landscape or the lawn care millionaires one. But when you're out in the community, whether it be online or in person, just like upholding that standard like we are here to help and serve the industry.

And other home service business owners that like really struggle. And so in doing the turnarounds like I just see time and time again how much struggle people are going through and to create a place where people feel safe to be able to share when they are struggling and know that no one's going to judge them, they're just going to try to help them. That's what I would want members of Augusta Nation to be known for, regardless of whether or not they're inside of a of the franchise. Dustin from Champaign, Illinois. Oh, we got a big one, boys. Let's see what we got. All right. First, thank you for your help last week. I'm already starting to see some change in Bloomington in the right directions. Today's question is in regards to champagne. We currently have one truck with two Guys in it One just started Monday, but based on their efficiency attitudes debriefed with both employees yesterday. They are both good fits and are good team members. We are mowing around 45 to 50 budget hours weekly, which for some reason I was thinking was higher, but we are. We are also doing initial mows each week and are filling the gap to 60 budget hours weekly. For that crew, we are working 4 tens, which allows me Friday to fill with projects and while they are working in the field during the week, I'm hitting door hangers and estimates. We are averaging 70 to 75 budget hours weekly getting completed and that is pretty much our max. And we are overbooked. When we get rain, all projects get pushed. This location is growth mode at all. Cost of spring break even or losses I'm okay with because once we get Bloomington on track, it'll cover me. My thought is to invoice for May mid-20s and go buy or put a down payment on another truck. We have $9,600 in the bank. Bloomington owes Champaign $3,500. After invoicing, we should sit around $30,000. I don't take any money out. We just have regular expenses, payroll being the biggest around 3, 500 for payroll. One guy's hourly because that's what he negotiated and I really needed him at the time he started to realize he's getting screwed. But he. We don't have a conversation about switching to P4P yet. Because of my involvement with Bloomington the last couple weeks. Based on me. Based on knowing me and what I have going on. Would you keep pushing the envelope now to grow champagne to mid 30s, low 40s in month revenue this year focusing more on projects as we have about 2.5 weeks left in Spring rush Boeing sales or raise prices. Be content with two guys in one truck. Hammer down, buy that second and get ready for Spring Rush 2025 to fill the capacity again with Moe's like we did this year. I should be on live, so if you need more info, let me know. Be blunt to whatever you say, he acted immediately. Thanks again for your help last week. You got a great job executing last week, by the way. Okay, great. All right, Dustin, I'll throw you a curveball. This is why it's important to sometimes to share your name. I think you need to start upgrading your trucks.

The current way that you're. You've been running the two locations is going to come very, very difficult for your general managers to take things off your plate if every week or two things are breaking down and you've scaled down to, you know, between the two locations, 50, 60,000 easily per month in revenue and growing very quickly. Great. Now, when you start consuming these trucks, I would consider other options. Whether you finance it, whether you lease it, whether you buy newer.

For example. I think if the difference this is, this is where it comes down to you knowing if you know that you getting a second truck allows you to get to $40,000 a month in revenue if there's a clear path to that, because that's where your capacity would jump to. But you're like, hey, know, we, we'd have two to three weeks. We could fill the mowing schedule like crazy. And then we're going to go ham on projects and get revenue from 20 mid-20s to 40,000 in there. You know, if it's been in operation for a year, let's go. That is worth significant. And I'm willing to pay some interest if needs be on some debt to get that to happen without putting you in a massive jeopardy position of.

Cash crunch. If you spend all of your cash on this truck, guess what? It's going to be a, it's going to be a $10,000 truck. All right, we're gonna have to wrap it still. We're still gonna have to paint it. It's gonna cause problems next year when you're gonna grow really fast again during spring rush. And between we start having multiple locations. It is a wiser move, in my opinion, to make it easier on the general manager to have decently new trucks. Not new. Doesn't have to be brand new, like within the past eight years is nice. All right, so that was just my recommendation off the rip. I would say I'd be willing, I'd be more inclined for you to pay a $500 a month payment on a newer truck that you know is going to work just fine. You can throw in almost double. You would double your capacity having going from one truck to two trucks, be able to get all the extra revenue. Just be careful, you know that during the four months of the off season, you're going to have that $500 a month payment, right? And yes, you're going to pay some interest over the course of three to five years on that loan. I happen to think then three to five, three to four years, you might actually just pay it off because the interest is going to be a little bit higher. Six, 7%, whatever you're going to have to pay. But I believe I don't want to see all of your cash go out the door to a truck because you put yourself in a really vulnerable position because you have a distributed workforce with the two locations and you have trucks that are, you have more trucks that are susceptible to breaking down. And so as soon as you go to multiple locations, I start thinking, especially if they're further away, I start thinking about getting newest trucks. And I mean within the past eight years. I'm not talking about brand new, but if you get a truck that's four years old, 20, 25,000 miles and pay $25,000, I would rather that even if you have to take out some debt and pay a couple hundred dollars a month in interest, it still make up for it. If you can double your output. If you can literally double your output, right. And this is like the reason this is case in point. I remember talking a very similar situation when I was sitting down with my lawyers when we used to franchise and I said I need to be able to tell them to go buy the truck and increase capacity without them thinking I'm going to make more money on them. And so this is why we have the flat fee model. You've grown this location, it's a secondary location to mid-20s in a year, basically. Awesome. Fantastic. I if you can go from 20 to 40 and you're confident that you can do that using projects, get the second truck. I don't care if you're going to spend a couple hundred dollars in interest every month, you're going to be able to reduce the amount of.

Cash requirements. You're going to have the 30 grand in your pocket. Maybe you have to put out five grand to go get the truck down payment, whatever this would be. In a case where I would say getting some debt is not a bad idea. I just don't want to see you go get a really cheap truck with cash, deplete all your cash resources and then not have the capital to actually drive that capacity up to 40, 40,000. And I happen to believe if you can, if you can take some of that capital over the next couple weeks and deploy it in the marketing, you'll get an extra 10, 15 budget hours per week in mowing, which will really help going into the off season.

Terillac, Boone's Creek, Tennessee Hey Mike, on our instant quote prices that are accepted on the website, we have started to just send that exact same pricing as an estimate through Copilot right back to the client to have them accept it and get the card on file. I know it's an extra step, but we do it. We have a client that Accepted a medium sized property, instant quote for 79, 120 or 119. We then sent it back as an estimate and he accepted it right away. We did the initial M.O. here last week. Fairly tall grass, but a nice yard. Met him and his wife, nice people. He then calls CC a few days later and wants to talk about his bill. He said that he's been getting several quotes and they come out to less than what he's showing on the website. As far as square footage. What?

And they come out to less than what is showing on the website. Square footage. Don't know if he meant competition quotes or us. CC rep measures it and come up with $59 and sent it right over to him and says this is why not having the. Of course he's pumped. What should I do? We are in profit mode. Okay. So this is why I don't really recommend having the square footage on the website because they're going to measure their property if they ever have a question about their bid. So right now only about 15 people.

That was a 15, I think 15 people have the square footage ranges. The problem you're going to face with that, the problem is going to be someone could go price check you and they're going to measure the property and what the cheaper price. So I'm only saying this for the people that have the square footage on their website.

And, and that's just the downside of it. The upside. The upside tarot, the flip could happen, right? So let me just bring a balance here. The flip could happen and that is someone accepts a medium, you say, hey look, based upon the square footage, I need to charge you large. So you'll be able to use that by having the square footage on the instant quote. And this is an optional thing. If anyone's listening, you can, you can add square footage. There's going to be upside and downside. The upside is that if someone, if you measure someone's property, you do the thing and they're like, well, it looks like that but well actually I did the square footage and because of X, Y and Z, you fall into this other range. Easy way to be able to get them to at the higher price without a whole lot of issues. The downside is this can happen and that is they look at the picture, they accept it. They even accept the quote that you sent to them via copilot. And then they go back and like why is this so much more expensive? And then they measure the property. I happen to believe they wouldn't have seen that measurement. They would have just kept going with you because they enjoyed the process, they thought you did a great job. All the rest of it. The only reason they price checked you like this is because you have the square footage on the on the picture. So I'm only saying this as a warning to people that have it. There is downside. There is upside though in the fact that you are going to have the ability to to get someone up to a higher price if needs be. I've seen very few people actually use that, but that is the upside, the double edged sword of having the square footage ranges on your website. Because if someone does call in the command center, the prices are based upon your square footage. I would make sure that those ranges match up with your pricing.

Price matrix matrix. So if those are off, like the pricing is going to come weird and wonky. So I would make sure that you're going to put the price the square footage ranges on the instant quote. Make sure those generally are around the ranges that you're going to have on your instant price or your actual quoting. So great question. That stinks. Just know that Terrell that you, you by having the square footage ranges on there, there is upside that this happens the other direction and it'll actually save your bacon one day. So it is a bit of a double edged sword. That's why again, most, most owners don't have that. But it's totally optional. You can add that on there if you want. Just go to the dashboard, go to the edit your web page and you can add in the ranges to your instant quote.

Jason Storch from Knoxville Mike, does Lee or anyone help new franchise owners know if the location they're wanting to open is a good option? The reason I'm asking is it seems like there are some locations and areas that be extremely difficult to build a business of any size that is profitable here in Knoxville. The majority of our territory and accounts are in West Knoxville where I would estimate the median household income to be at least $75,000 and up. We have quite a few accounts in the north and east areas of Knoxville that are in much lower income brackets and are way more price sensitive. All this can be found on the USPS website and seems it could be very instrumental on steering a new franchise owner in the right direction and set them up for success. Just wondering if this is happening as it didn't with us. And I'm very thankful that I'm not trying to grow business in an area where the median household is $50,000 or less. Great question. All right. So we do use the UPS USPS data on this exact same thing when we are looking at the location. Obviously, Knoxville was not a conversation of like, you must restrict or move your territory. We knew it enough and we already looked at your service area to know that you serve mostly in the areas that are higher up, up, upper end. Here's the thing is what we're really careful with. There are locations that are in areas that are, quote, unquote, lower median household average that are crushing it. And the reason is, is because in those areas you can usually find labor for cheaper. So if their median household average is lower, you can find labor for cheaper. So it balances itself out. There's some places in Texas where like the median average is like 40,000 and people can still crush it, but their average labor, their base pay is 14 or 15 bucks an hour versus 18 or 20 in a higher market. So what we've really found is having smaller territories is better because by going after the smaller territory, now that owner moves their shop to the actual area. Because the part that's really hard is if you live in a more elevated median household average, you're having higher rent, higher utilities, higher fuel, higher labor, and then you serve lower end clients and areas. The ideal scenario is we try to break out a territory to make sure, okay, you're just serving the smaller community and then you're going to have your shop inside of it. Most owners, when they think about joining Gusta, they have no actual care about our analysis. They are thinking more about their house, like, where do they start in their shop? And so the thing that we got to be careful of is like most people want to start their business where they're geographically centered and that's going to be the most efficient for their crew, especially starting out. So sometimes though, it's a matter of like, look your market, if you're going to be survey here, you're going to have to be premium. If you go 10 miles south, you're gonna, you're gonna have to change the way you do it. Like you're gonna have to move your shop there and you're gonna have to have labor from that area in order to be able to compete at a 15, 20% lower price because people are just more price sensitive. But it does balance itself out. The part that doesn't balance so is when you serve a large service area because you are gonna have areas that are more price sensitive and the areas that are higher, more affluent. But if you go to the more price sensitive areas, you can find cheaper labor there. So this really comes down to service area size and then shop location. Location, location. Location is like a mantra when it comes to building a larger location. In terms of shop space. You can build a location to probably $500,000 in almost any market. When you start going above a million, your shop space usually needs to be in the market you're ideally serving. So that way you can tap into the cheapest form of labor. If you're going after a lower market. If you're going after a higher end market, and that's where most of your customers are, guess where your shop's going to be in a higher market where your rent's going to be double or triple your. It's going to be higher wages. Like we, we just by going from Bellingham, say to Blaine, our rent is about 50% less, if not more. Just by moving. Was it 15, 20 minute drive on the highway, we move our rent by more than half for command center wages, probably I would say 10% decrease. Why? Because the people that live up here, their rent is also 30, 40% less than in Bellingham. So we've moved out here because I don't need to be in centralized. Whereas like the Bellingham shop space, they have to be more centralized because that's where all of their customers are. Right. So there's a bit of a balance there. It really comes down to service area and making sure that is actually going after the target demographic, whether it be high or low. When you start getting a bigger service area, this is a big factor. And that is a matter of you're going to have distribution. And the bottom line is if you were just targeting the cheaper areas and that was your only market and your shop was in those areas, you would, you could get lower margin, lower labor rates, and lower rent. So your, your costs come down, therefore you're able to compete more effectively in those markets. So we've seen both. It's very interesting, actually. There's some people charging.

Struggling to do 60, $70 per hour in their market in terms of rate, but they still make good money because their rate labor rates will so low, rent is so low, et cetera. And then we have people charging 120 plus dollars an hour and they're struggling because they have to pay $3,000 a month to get any sort of storage space, and they can't get anyone to work for them for less than 25 bucks an hour base. So it all balances out as long as you're serving one market. So hope that makes sense. All right. Everyone have a fantastic rest of your day. We'll see you tomorrow.