Mike Minutes Mastermind 06/03/2024

And we're live. Hello, Guess nation. Happy Monday. Hope you're doing fantastic. Had a great weekend. Let's kick things off.

I had an interesting weekend. Got robbed at my house. So now I'm gonna have to get security cameras. Let's go. Okay. Whoops. Wrong one. There we go.

Present Share screen.

And we're live.

Boom. All right, first question is from Kyle Tarvin. Our service area is larger than our protected territory. If someone was wanting to come in and purchase a location inside our service area but outside of our service, our protected tory will be notified or given first rights. Yeah, anytime someone's even close to you, Lee's gonna reach out. Usually put you in contact with the owner. Make sure you don't want the territory yourself. We always give. We don't have first rider refusal in anyone's FDD unless it's specifically noted. But first rider refuel just means like you get the first option to buy it if someone else wants it. But we almost always contact owners and just like hey, just making sure you don't want this like immediately. Otherwise someone else is going to get it. Our service area is on file with cc. So just curious. We are planning on sending a truck in the north side of our service area next year to start building up a mo out then locking that territory by buying a license. Would hate to lose all that hard work by not being notified someone else is going to buy location out from under us. What about areas surrounding our location but not actually inside our service area Protected territory would lead check with us before awarding this location. Yeah, he's gonna check with you if you're close by. In now some areas he, he would have to contact several owners. So if you like specifically have your eye on something, I'd probably put it in his ear. Like hey, just so you know, within the next, you know, 12, 15 months we're probably going to be trying to get this location. We're already sending people up there. It's in our service area. Please let us know if someone's going to buy it. I'd let them. If you are planning on it, I would let them know. But we do contact anyone that's adjacent to interested parties. Kyle Tarvin. Food for thought. If our goal is to eventually get to a place where robots are doing the majority of our mowing forest, what is going to stop a homeowner from buying an off the shelf robot to mow their lawn for them? Why would they need us? Would we be selling the ease of use to the customer like we do now? To where the customer wouldn't have to worry about managing the robot mower, setting it up, cleaning it, ensuring the weeding is done around the fence lines and planting beds, etc. I know we are years away from being able to implement this. Just curious to hear what you think this mower will. This robot mower will go and what our value proposition would be. Once the robot technology is good enough, a customer can buy a robot off the shelf.

So. So again, I think this is 15, 20 years away. Still said that for a long time. I believe that the commercial application will not be around installing like a wire or even using GPS to have one little mower that goes around all day long. It'll be more or less taking existing mower, putting the technology on it, and it still looks like it was done by a larger mower. That's not going to be affordable to a homeowner in terms of the size of that mower, the power of that mower, et cetera. You know, the little ones that go right now kind of all over the place or even go back and forth, these don't look the same. But again, for 15 to 20 years from technology actually being there, in my opinion.

Right now, for a customer that has a small lawn, it would literally. It literally takes like three years to pay off the installation and initial purchase of a mower, let alone the weed whacking, the blowing, all the other things that need to get done on the property. So it'll take quite a while for it to make economic sense for most homeowners to actually buy one. Especially because in three to four years, there's a good chance it's getting stolen, it's breaking, they're having to replace it. And the technology in three to four years will be obsolete. So it'll be a long time before homeowners are buying them, like left and right. And if they do, it's fantastic because most of us, our margin, the actual mowing portion is zero. We make our money on the fact that we buy a three or $400 trimmer and, and spend just as much time doing that versus a $10,000 mower that's doing equivalent amount of work on the property. Like, I would be thrilled to do $30 cuts, and all I'm doing is blowing, edging, pulling weeds, whatever, like other tasks. Because the robot, we are a long, long ways from that being economically viable, something that can pull weeds. There are machines that do it, but on agricultural levels, not at individual residential properties.

Coach Connor, as we go into profit mode, what are some things that we could do to reduce costs more. So some of the hidden items that some of us may not think of, insurance dropping down to liability only subscriptions, bank fees, things like that I think I could look for on our P and L and bank statements. Yeah. So insurance liability, I'm guessing only on your cars, that's fine. Again, you're opening yourself up to the liability that you do get. An accident, it's not your fault. Your, your vehicles aren't going to get covered. So like what if you have cash in the bank? This is something I would want to be opposed to. If you have plenty of credit worthiness also, I'd be okay with it. But if you can't go buy a truck tomorrow, assuming one of them gets totaled, this might not be a good thing to do. You might want to just part with the hundred dollars a month for the peace of mind, knowing that if your truck gets tolled tomorrow, you have an insurance claim that's going to cover it. Things like subscriptions. Yeah, I'd be looking like all over for things like this. Especially during the winter. You can, some, some states allow you to.

If you're paying month to month, you can get away with like less premium for your auto insurance. So again, some companies do this and some companies don't allow you to this. But what you can say is like, hey, for these three months, I literally disconnect the terminals on my battery. We do not use these trucks and you can bring down your cost significantly. So if you use the track of like what I call lockdown mode, which is like basically shut everything down and cut down expenses. If you're using that method.

During the winter, that's when I would give that as a recommendation. If you're not using your trucks and then in terms of subscription and things like if you're just, just scan your P and L and if you can't like look at your P and L and know where everything is going, you can just want to drill into it. A lot of times it's random little stuff. This is like clear. It was always the thing that always got me annoyed. I'd randomly see these random charges from them. Whereas a stripe, like I just know it's a percentage and there's no PCI compliance, no statement fees. Like little stuff like that just kind of annoys me. And honestly, this is the thing, don't spend a lot of time doing this because most of the time this is like 01, like 0.13% of your revenue. When it's like if you spent all the time that you're going to go like call the banks and do all this other stuff and if you're like, oh, I'm going to do all the bookkeeping myself, if you're going to do that, spend that time on growing the business and like improving efficiencies or go get more customers, you'll probably have way more return on your time. So, Kyle Tarvin, a few questions regarding the GM starter role. I have a GM in one of my locations that has continue expressed interest in getting into the starter role and starting new locations. He's okay to stay at his current location for now. We would like to start and hand off these locations asap. One, my current GM wants to be a location starter, but I prefer him to continue growing his location. Then he can hand it off to another person in a year after it's stable. Would he still get profits from the already established location or only if he fully started the location from scratch and handed it off. So it's only if you start from scratch and you hand it off do you get the residual as a starter. You can watch the two videos I have on this on the Academy.

And I would, I would recommend if this is this, you still want him to say the location. Just give him a benchmark of revenue that he needs to hit before he can start another one. Okay, you got to get to 50,000, you got the 60,000amonth in revenue for three months straight and then you can go on, you can become a starter. Like that's what I would do. And then he only gets the residual if he starts it from the, if he is a starter, like if he starts it from zero, gets it past 20,000amonth in revenue, then if you look at the way I have the general manager compared to split up is we give away 35% but if you get above 20,000amonth in revenue now the person that's coming in is like the operational GM, the working GM, they're going to go get 25%. The other 10% would go to the starter. But again it's only if the starter starts the location. So yeah, like technically a starter, if they are really patient and can wait 5, 10 years and start maybe 5 or 6 locations can become a very, very profitable role. But most of the time a starter is also very entrepreneurial and usually wants to kind of sink their teeth in and own their own location. Very normal.

But if they're risk adverse and they're just like hey, I'd rather just start your own locations for you and Get a piece of each one and get kind of residuals from that. Kudos to them.

What percentage of profits would the starter get per location? Yeah, so check out the two videos on the academy. Basically, they start off as a regular gm, but then it's when they hand it off, they, if they have got past 20,000, 40,000 or 60,000, they can get chunks of residual revenue from that location, which means that they're going to set it up for success and then make sure it's profitable when they hand it off. Otherwise they don't really get any sort of residuals. 3. Would these profits follow the person around regardless of how many locations they start? And is there a cutoff period of only profits for the next three years, for example? I've never done cutoffs, mostly because it means that I want them to keep skin in the game. Because if the GM that they replace themselves with is doing badly, guess what? They're gonna feel like they want to jump in and help and they're gonna give them support in order to be able to make sure that those residuals still are coming through. So I want them to keep that skin in the game, and I'm not gonna take it away from them, assuming they stay with me. Like, I'm not gonna complain if they have, you know, residuals from 10 different locations over the next 10 years. Hey, I'd be thrilled out of my mind if they stay with me that long. Most times starters will want to go start their own because they're more entrepreneurial, which is totally fine too. 3.5. What if the starter person becomes a regional manager? Would they still get those locations profits along with the profits the regional manager would get? Yes, you're correct. So this is also another viable option. If you have a starter that takes residuals and then they become your regional, they could technically keep the starter and the regional perpetuity. Again, that's a very hard role to take on. That is like you're going to start locations, you're going to hire general managers, get them trained up and put in your position, and then be a regional manager over multiple, like five to six locations? Yeah, you'll make six figures 100%. That'll be very. That's a very difficult role. And so if someone. Someone who does that, they definitely deserve six figures. And so my regional managers, once they get to that level, are usually hitting above six. They are hitting above six figures because they're getting those residuals, just like you said. How does the starter roll profits affect the compensation of the current gm? And regional manager. It's the same as always and that is they're getting a percentage of distributions. So at the end of each quarter I'm looking at how much money above the threshold we have and then it's split. So I'm usually giving 50% away, essentially 35% to a GM, 15% to a regional. That 35 goes down based upon if there's a starter role or someone else involved or if I had the location myself and then I handed off to someone else and it was already doing above certain amounts of revenue that 35% down can go all the way down to 10%.

Again, that's only if you're following the model I pitch in the academy. If you're being like more gracious and you want to give more profit turn incentivize more people, you might give them based upon P and L profit instead of distributions because you're going to going to make more money doing that typically at the at least on the up front.

Kyle Tarvin, will you be doing some sort of audiobook for the turnaround book you are working on? Would be cool to put able to put in some headphones and listen to instead of reading? Yes, I will do an audiobook. I'm trying to finish up the editing next weekend.

And then I'll do the audiobook.

Mr. Anonymous, my question about raising the price for the Blue Collar Conference to franchisees and losing one ticket. Can we have the FAC put in to vote on whether or not this would be changed for all future franchisees? Whereas those that joined earlier would have 2 vacuums for this $506 what you are charged now? No. So right now you get two tickets. The $500 has always been the same and if we change it I'll let everyone know so you still get two tickets to come to Blue Collar Conference. Hunter from Marietta, Georgia has anyone looked into hiring an insurance broker to handle multiple locations instead of one state to offer a better health insurance group rate versus each individual location having their own? Not sure if this is even possible.

Yeah, you'd want to do this with if you have a bunch of owners in your state. You know I know most of most everyone has state kind of groups for WhatsApp, etc. Like you could definitely probably try to pull this together again. There's a lot of dependency multiple eins involved. Every state is so different. So you talk to an insurance broker, they're usually pretty excited because they have the opportunity to have multiple businesses and then usually they start digging into it and realizing, oh, this is pretty tough. It's pretty tough to have multiple ein numbers and employers with different groups.

Let's see here. Mr. Anonymous, based on what you shared at the end of the Thursday Mastermind, knowing that 90% of small businesses won't make it, what are your thoughts you can recommend for Augusta franchisees to do outside their roadmap to success? And what are your thoughts knowing that with the number of recent locations, closings or considering to close or sell, what are your thoughts knowing with that? Okay, one second. Based on what you shared at the end of Mastermind Thursday, okay, 90% of small businesses won't make it. What you are. What are other things you can recommend for Augusta franchises do outside of the roadmap to success.

And what are your thoughts? Okay, yeah, so when we look at.

In general, most like how I look at hello, franchising is the odds of success are dramatically higher. So for example, what's the likelihood of business is going to make it 10 years? It's less than 10% for independent. That would essentially mean about a. That means that basically 10% every single year of businesses close.

If we can be more around like 3 to 6% for a franchise, that means we're basically doubling the chances of success. That's pretty good. And so, you know, as we get more locations, there will be more locations that either sell or have to close simply because of the law of large numbers. So for example, Anytime Fitness, over 500. 500 locations either went out of business or sold last year. It's actually more than 500 now.

They have an entire department just around closures, like a whole legal department just around closures. They have 4000 locations, 2500 in the U.S. that's just the volume and scale. The bottom line is that's about a 10% failure rate each year, which means the average business would stay in business for 10 years inside their system. So if you have 10% churn, essentially the average would take 10 years before the business is done. It's why I believe that franchise agreements are helpful because it keeps the business owner always thinking in terms of 10 year swings instead of like, let's see if I can make it this season. With Augusta, we do allow people to leave and I think that's the kind of franchise I would want to join. On the flip side, I do think it's detrimental sometimes because it allows people to think more short term instead of like, I have to do this for next 10 years, there's no way out of it. I'm going to make it work. Most people, if they actually just thought that way and then did it and they just stuck to, as you call it, the roadmap to success. If they just stuck to it because I have to do it, they actually become successful. Is why I actually believe franchise agreements are so powerful.

As much as unfortunately they're misused sometimes and they're really just used for private equity and valuations. It also forces, it's a forcing function for the entrepreneur to commit to something for that long. And I do believe that most entrepreneurs, if they can get through the first three years, they have a very high likelihood of getting to the first five. And if you get to the first five, they're very high likelihood of getting to the first 10 if they get through the first 10. Most people wake up after 10 years and they have figured out their industry, they figured out their supply and demand curve, they figured out the labor curve and they're running a profitable business.

You know, even like on Friday with Max, it's like his third year is really starting to see the profits now. The first two years you have no evidence of success and it's extremely demoralizing. And so the vast majority of people who quit or sell it happens during that period of time or they have, you know, between years three and five sometimes like either physical or personal things that happen. And then at that point I'm glad that we allow people to get out because the last thing I would ever want to do is hold someone over a legal barrel and be like you, you signed this 10 year thing. So I know that most franchises have an inflated number of their success rate because there are locations that literally are just waiting for their franchise agreement to be canceled. I know that's happened at any time. Fitness right now because of after Covid, so many locations did not actually rebound, especially in rural markets. And because people started working out from home. It didn't affect urban as much because people are already traveling. But the, the, the rule ones were affected a lot. The reason they're having so many drop off, cancel or sell or and you can like find them for literally 10 or 20 grand you can buy an entire gym is because their fixed expenses are so high. Like the thing about thing that's really.

Low risk about home service businesses, if you want to close down your business tomorrow, you can. And for whatever reason health reasons. We've had a couple owners have really big health scares. One passed away because of COVID.

People get crazy, great job offers from a previous employer. They're like, hey look, it's going to take me three to four years just to get this back. The business, to make this much money, I need to go do this for my family. And they move on.

The thing about home services, you can actually do it with a gym. You're usually paying on the low end, 7, $8,000 a month for rent, on the high end, 25 to $30,000 a month for renting a facility. And so when you realize that you have to close down for sake of personal reasons, there's actually no option to. There isn't. And so the reason though that a lot of those businesses have a higher success rate and they have More like a 2 to 3% annual turn is because.

Huge capital expenditures. If you're going to put $3 million into building a Taco Bell or having signing yourself on a 10 year lease, you aren't going to close down because no one is going to let you out of that lease. You're going to pay that entire lease or you're going to pay a massive penalty, usually about 50% of the ending out the ongoing lease to get out of it. And so that is like, I would say why home services have a notoriously very high like churn rate of like more than 20% of home service businesses close every year, which why every five to ten years you have like a whole new cycle of, of competitors typically. And you always have two or three that are like the biggest ones in your market and those are usually the people that have simply been around for 10 years. And so again, staying in the game is success. And you know, Alex always says like you know, a good marriage, the only, the only benchmark is staying married. And with business like the benchmark for success, we have these like numerical dollar amounts. But ultimately staying a business will have a, like the number one way to be successful in business is stay in business especially because you just learn every single year better and better about your supply and demand curve, about your labor market, about what works and what doesn't work for marketing. And so the vast majority of people, if they could say if they could get 10 years of experience and then start their entrepreneurial career, they'd probably be like 90% successful. But most will just cannot do it for 10 years. So.

Yeah, I know that by allowing people to, to leave in terms of the franchise, we are massively inflating the amount of people who will give up in years one through four, one through five. I know that and so do I think that down the road we will change that. I don't have anything in terms of plans to do so because I think it's usually misused by the franchisor. But I definitely see why they do it in some way to just make it a forcing function for people to think long term.

All right, next question.

Mr. Anonymous, can we please have a corporate person create, monitor and track certain marketing channels for us? There are a significant amount of who would be willing to pay for this. I feel like this would be a good selling point for others wanting to join Augusta as well. I have tried to follow the Evergo marketing tutorial and I got get lost. Plus a lot has changed, so it looks different. I have hired marketing agencies who are not very competent, which lead to wasting tens of thousands of dollars. I try to follow done for you ads and I'm not confident I'm doing it right. Okay, so let me just stop on this part. If you're not com. Book a call with Nick, owner, success manager. He sets up. He sets up for like multiple locations. He set up ads and he's tracking them. He could show you his highly recommend that or someone who has followed the dump for you ads because they're recent, like last few weeks. I want to pay money for someone to do it instead of me having to figure out myself. Okay. I know I'm not the smartest person in the world, but I can't be alone with most of us doing the same services, using the same marketing pieces and having the same brand. This makes a lot of sense to me. Okay, so you're wanting someone to basically do the marketing for you. Okay.

I've thought about this a lot. When I believe that there is enough value for us to be able to charge, I will do so right now. If I was you, like, I just want someone else to do it. I would hire someone, another owner that's willing to run ads for you and has like, if they show their ads on the Facebook group and say, hey, I follow the done for you ads and here's what I got. Offer them some money.

But in my opinion, you want to have control of this. And the done for you ads are done in a way where you can just follow along and it gives you full control of your lead Mark. Like, the reason it's so frustrating when you pay a marketing agency to get you leads is because you're basically relegating control of your lead flow, which is the life source of your business. And so I don't really want to be in that position of taking that from you. It gives me too much power over your business, to be perfectly honest. If if and the only way I would do it is that we can make money. And it's still a massive arbitrage for you. The only reason that usually works though is like you usually you got to pay these, an agency at least 500 to $1,000 a month for it to make any sense for them whatsoever. Like if they're not making a thousand dollars a month, they just can't, like they can't make any money. And so they need to win. So $1,000 there, then it's like, okay, well if you spend another $2,000 on marketing, that means that you have, they have to beat out Your ads by 50% in terms of cost per click and cost, customer acquisition cost. So I typically see when people follow done for you ads, they can get within 80 to 90% of what a great agency will do. And when I say great agency, I mean someone that is like dialed in and you're not spending a thousand dollars a month. I mean someone that you're paying like a full time person, a media buyer to dial things in for you. That's what I'm seeing. And so until I think we could get you like way more returns than that, I just don't want to charge you because I just, I just know the done for you ads will get you 80 to 90% of what us managing it will do. And it's just the honest truth.

And so yeah, I think like the done for you ads, I can give it to you for free. As soon as I have to charge for it, then like there's more expectations. That's just the honest truth. As soon as like charge something for, for all of August Nation, like I love everyone, I want them all to succeed. And so like the value proposition needs to be huge. And furthermore like I am not going to charge somebody if I don't think that like they can do the Same thing, get 90% of the results with zero cost. And but if you're like, hey, I just do not want to touch it and I don't know who this is. So I don't know like what your level of size of business experience, et cetera is. Talk to another owner. First off, I do a book a call with Nick OSM owner success manager. He will walk you through it and make sure you're dialed in on your ads for done few ads, Facebook and Google. Secondly, if you like still don't want to do it, okay, go talk to an owner that posts their results on the Facebook group and said hey, I did this on the done for you ads I'm getting like 40, $50 cost, customer acquisition cost. Great, go to them. Like I will give you money. Just please run these for me. Or can you check on them once a month and I'll give you a couple hundred bucks. That'd be the next where I'd go. I just don't want to do this yet. I don't think I would provide enough value. I think the done for you ads provide 80 to 90% of the value of an agency. And I truly believe that. So unless you're spending 5,000 plus a month, um, like paying an extra thousand or $2,000 for an agency, like that's only when time it really makes sense in my opinion. Like if I truly believe that I could get your by me managing your your ads from corporate side of things, we could get your customer recording cost from 40 down to 15. I'd be like, okay, great, I'll take it. And then you're gonna have to pay a management fee and then that'll kick it up like $35 by the time you pay the management fee. I don't see that difference yet. Like I don't think I by me managing it's going to half it. I think if you follow the dump for you ads, you will literally get 80 to 90% of the way there. And if you just follow what I talk about in the done for you ads in terms of like changing your creative on Facebook ads, monitoring what your stuff is on Google. Watch the keynote from Jake at Evergrow from conference about tracking. Make sure you're not spending too much against your Google keywords, things like that. You'll get like 89% of the way there. I understand there's plenty of money to be made here if we can get enough arbitrage. And I do think that down the road, if we have enough locations that are interested in this, we might try to figure something out. But I'm not really interested in trying to make money on this. I just think we can get 80, 90% of the results just by doing done for you ads. I really do believe that. If it ever changes, I'll let you know. Nick Davidson of Hudsonville.

Vehicle wraps. The designer at the company that just wrapped our truck said the hex colors are not consistent in the designs. From one place on the design, the hex colors, yes. It took a different gradient, so it definitely changes. It's not like three different distinct ones. They also said that a.

Angles of the word Augusta are about a degree off from the phone numbers. So lining up them was a challenge. They also say that other colors throughout the designs had different hex codes, specifically the greens and some of the browns. They wrote a list of different stuff that did cause issues in our. This did cause. Rest of our apps. We have inconsistent yellow because some panels had the correct yellow and others didn't. Would you possibly have the meeting. Look at this. They had about five pages of notes where they had to try to figure out what to do in the proper way. Feel free to send over to mediagustalongerservices.com but they are gradients. I don't know why that would be a problem. Like, if you're. If you're printing off things, gradient shouldn't be a problem. And we're not necessarily trying to line up the. The phone number and the logo, because every single truck, like there is gonna have two to three, even four degrees of separation in terms of the bed and the cab. So that's always going to change. So that's why it is a vector image. So they can. They should be moving things around like, it's not an image that you can just copy and paste. Because every truck is so different. Bed sizes, trucks. The suspension will change whether your bed is up a degree or two and then whether or not you want it to be in line with the bed or if you want to be in line with like, a water line, so, like, level with the ground. Because the most time your bed, depending on your suspension, again, is either up or slightly down. So it's. It's a vector image. You should be able to move those things around to make it work for your truck. It's not like it's going to be copied and pasted. That's why it's a vector image. However, whatever they got, send it to the media team. They'll take a look at it. But our gradients. There are multiple hex colors. It's not just one color.

And, yeah, like, I, I'd say almost every single software that these companies use will kick back, like, five things they want differently. But that's why it's vector image. You can adjust. It kind of, however, works for their software to be able to print off their vinyl. But, yeah, feel free to send it over, Nick. And then they'll take a look at it and see if it's something that is universal or if it's just a matter of, like, their software or your trucks or whatever. They're happy to help, though. Media team Brian Connor, North Augusta, South Carolina. Oh, we got a big one. Okay, these Questions are focused on our North Augusta, South Carolina location. One gm, two team members, two trucks. Got it. Location is bumping up against labor capacity, 80 budget hours and recurring weekly. Last week they hit 114 budget hours. Let's go McKe out here. Let's go. Little shout out to McKe. Yeah, let's go. Into team. Just shy of 36,000 with three team members for May. Our project schedule is not booked out. Our goal is to get the asset capacity with four team members including Makit. So we can. So we were. So we were already looking to hire one team member. Okay, great. Great job Makit. Let's go, dude. Number one. We have one employee that is late multiple times each week. Makit GM has made the casual mention more than once and has had a sit down meeting last Tuesday about how being on time is required in order for him to have a good have a spot on our team. He was late on Friday. Other than showing up late. He had a great guy, awesome attitude, good work ethic, skills to be productive, etc. Is it wrong to make the decision to let him go and and wait until we find a replacement to do so? My stance is that while it would be best to have done it on Friday after a shift if we did, we have two team members with eight with 80 budget hours worth of recurring work. Also, the team member gets another week of pay much higher than he can find anywhere else. Our current plan is to hold interviews this week and to hire two team members which one of which will be his replacement and we can let him go on this Friday. Okay.

Is it wrong to make the decision to let him go and wait until we find our placement to do that? So here's the thing. When you have three employees out in the field in this case and you let one of them go, you are literally increasing the amount of work that your current two team members have to do by 50%. So you are crip. You are putting a crippling amount of work on them and so is it right.

To do that to them? It's not about what's right and wrong for the team. You want to let go like they're underperforming. You've given them warnings, you're going to cut them no matter what. But I don't want to hurt the existing team and the people are showing up and they are working hard. And so sometimes I will put up with this sort of thing for a little bit longer during spring rush simply due to the fact that I am not, I'm not looking out for the fact that this person is losing their job. I'm looking out for the fact that the people who are working hard and the team members who are putting in their time, I don't want to cripple them with way more workload because I'm letting people go. And again, it's going to literally increase their workload by 50% if you let a third person go. So the right move 100% is what you did. Get another person. And I wouldn't even, I wouldn't even try to push this for like a week. I would try to say like maybe two weeks even get the other person fully trained up, have a week or two where it's not crazy busy for everyone. They get off a little bit earlier what to do. Then you let this person go. And also when you start working less hours all of a sudden they might correct their behavior and showing up on time because there's not tons of hours being handed out. It's funny thing, all of a sudden attendance and on time will increase. When there's less hours being doled out because you don't have as much work, you still have the same hundred and ten budget hours, but now there's four people. And so there's not, you know, people are only working 30, 35 hours a week. He might all of a sudden start showing up on time. Right. So I always like to be in the control seat of hours and not having to be begging people to work overtime. I'd rather than working 30 to 35 hours clocked each week by having a little bit too much labor. That way if something bad happens, if someone does do these sort of things, you can let them go and at least make sure that people aren't going to be overworked. I'm mostly concerned about my existing team when I have to make firings like this. And the smaller the team, the more it's felt when you let someone go like this. Our goal at the beginning year was to get to asset capacity of 120 budget hours and then raise prices. The goal was to have this done by June 1st. As of now we are a month behind. We have strong demand and the grass will continue to grow vigorously through August. Money in the bank is 13,000. This is our second year at this location. First year we hit 220,000 gold. This year was 345,000. 100 budget hours are occurring setting us up to hit 500k next year year. Currently we're at 111,000 year to date. So you're probably still on track for like that 3 because you June so you're probably, you'll probably do like 350 again. 340, you probably hit that goal. Would you recommend pushing to get 120 budget hours or stop where we are now.

Ag budget hour, raise prices and move into profit mode for the rest of the year.

So keep in mind 120 budget hours is going to be full capacity. And this is something that I make more clear in the book and that is like full capacity is great. That's where you're going to optimize profits. It's also where you're running everything at full steam. And so really within 80% of your capacity limits is where you want to usually be at. If you want to be more passive and not have to worry about a truck going down or one employee not showing up like yes, it'll maximize profit being at 120. I'd recommend being more around 110, 105 on a, on, on an ongoing basis because it's less likely that one truck going down is going to crush you or one employee dropping off is going to crush you. So give yourself a little bit of buffer room there. I would say if you know the grass is going to keep growing and you're already at 80 budget hours of recurring services, I think you're going to probably get to 100 recurring hours over the next couple months anyways, which leads very little amount of time for any sort of projects. And I'm pretty confident even if you stay to 80 recurring right now if you it's only 20 like 30 budget hours a week that you need to sell off projects. So probably like three or four cleanups, three or four projects. Also if you raise prices. Now keep in mind, if you raise prices by say 15%, you're going to go from 80 budget ever occurring. And if you raise prices without changing your rate, it increases your budget hours. So you might literally go to 95 or 100, let's call it 90 or 95 budget hours recurring just by raising prices. And so it really would come down to for me what the general manager is looking at, right? So if I'm talking to you, Brian, I'd be talking to Makit and the general manager like hey, what do you want to do? Do we want to keep optimizing for growth and trying to get closer to 100, 110 budget hours of recurring or do we raise prices? Probably get to 90 to 95 budget hours just by raising prices. Make the guys more money on P4P doesn't sound like that's an issue. By the way. It really comes down to what my GM is wanting. I'm gonna usually build the business around them because the success of that location, I want them to feel like they're in control. And so if you are indifferent and you're like, hey, I don't mind growing, but I also would like to make some profit here. And if I make more profit, my GM will actually get more profit sharing. For example, the last 2/4 of the year could be really, really good profit sharing if you do go into profit mode.

So also, again, remember, if you raise prices, I'd do it by at least 15%. And if you do that, even if you take some of that money and put towards ads, you'll get then more jobs still at the higher prices and you'll probably get to the 100, 110 budget hours of recurring anyways within a matter of a month. Like here's my proposal is if you raise prices on the 80 budget hours of mowing, you're going to lose some customers, let's say 5%. But then because you raise prices by at least 15%, you're going to immediately go to about 90 to 95 budget hours of mowing. I believe that by the end of June, you'll be at 105, 110 budget hours of mowing just because of new customers coming in all of a sudden by the end of June, you're at capacity essentially and you don't even have time for projects, right? So as you start coming close to capacity, what you want to keep in mind is that you still have this momentum behind you of new leads coming in and for your market where you're going to keep leads coming pouring in all the way through August. Like you have a lot of run room to run and so you can raise prices knowing that you're still going to get new leads the rest of the, you know, growing season.

Good job, Makit. Proud of you, dude.

All right, folks, that's all she wrote. Happy Monday. See you guys tomorrow. Take care.