Mike Minutes Mastermind 06/04/2024

Oh, didn't mean to go live, but we are live now, so sorry. You're gonna get this text a little bit later probably.

Couple quick announcements, one of which was I was talking to one of our.

Multi unit operators, I guess we could say Ryan Payne was talking to me a couple weeks ago. He was daring himself that he should raise prices on his locations. And he's never really been in profit mode. He's always been grow, grow, grow. And he was like, I think if I remember correctly, 300 or 350 recurring customers across his three different locations. And so he went ahead, he wants to start more locations. And so he's like, I need more money. So what did he do? He raised prices. Probably the most drastic price increase I've ever seen. $20 per cut across the board for every single customer. Just across the board. Out of those 300. 350, I forget exactly. Minor 340 customers, only 10 people left. If you do the math on that, that looks very beautiful. Right. So I think most of their clients are bi weekly. So you take $20. Let's just say there's 2.2 cuts per month on average. 44. Let's just say that 300 of them stayed with him. There's more than that, but whatever, that's an extra $13,000 straight to the bottom line.

That will pay $13,000. Let's say you get a loan, $13,000 would literally get you.

Easily 4 to $500,000 payment on a loan to be able to start more locations. Or just take that money, stack it aside. You do that for a year and all of a sudden you have money to start a location remotely with several trucks and a gm, et cetera. So again, I have yet to see someone who has raised prices and they regret it, especially six months later. Sometimes you'll get it right after, especially if you lose like 10, 15, 20% of your customers.

But six months later you've refilled them all and then you know the 10 that they lost. I think he was saying like within two weeks or so they expect to get 10 more customers. So you're going to replace them anyways with higher paying customers.

So again I just recommend everyone do that. When you are in a spot where you're like sip, I'm stacked enough cash or I have quite a bit of payments and things like that. And because they've been gross so mode so much, they have lots of payments, they have lots of equipment, trucks, etc that they're still paying off and they're two years away from doing that, it's like switching to profit mode. And all of a sudden $13,000 will pay off a lot of debts. Like it'll pay all the payments, pay for growth and expansion. And even I told him when he was thinking about a couple weeks ago, I said look, if you, if you spent 1/3 of that $13,000 on marketing for one month, you'd fill them all up anyways. And they've, they're probably gonna do it like two weeks because it's only 10 customers that left. But even it would have been like 30 or 40. It's like, look, spend just a third of the extra profit you make on marketing.

And guess what? Your team is gonna love you because they're all making more money on P4P. Not even much more motivated workforce. Which now means you can actually get more jobs done in the same amount of time because your crew is now motivated to work faster on P4P because they're making more money. Win, win, win. There are win, win wins in life. Let's go. So super excited about that.

And then yeah, Nick Reed, he races last week. I think he lost like, I guess it'd be like 5 or 6% of his, his customer base. He was hoping to lose more. I think he did a 15 increase in price doubles your profit margins. Especially if you're a smaller business. The impact of price increases are just as much in terms of percentage. So.

Price increases. Let's go. When you have a solid brand, when you have people with a credit card on file, when you have people in automations, when you're showing up at their property consistently, especially after three plus months, they have the habit of you just doing the work raise prices. So I might do it at Bellingham but we're probably gonna wait till next spring because we still want to be growing to.

We want like another 70 mowing customers before we raise prices or so cool. Let's go. But I cannot wait, cannot wait to turn that bad boy back into profit mode. So shout out to Corey first spring rush as a general manager. Crushing it. Let's go. Had a wonderful lady come into the office. This is why you don't want an office. Folks had come in the office for two hours yesterday and reeve them out about, about the fact that because she was refunded and the fact that stripe takes, you know, several days to get the money back in her account. But she wanted one of that change like that's, that's change it. Like she genuinely thought that her being the squeaky wheel could somehow get the refund faster than three to five days. Eventually, I think split her a check, but she somehow, like dug up the fact that I was the owner and got my personal email somehow, I don't know how that happened. And then sent me a crazy email. It was great. Good times. Good times. So shout out to Corey for joining up with that for two hours yesterday, someone screaming at him over the fact that processing these are processing time and stripe is too long lest it hurt. I was going to say one more thing. Oh, yeah, let's go. All right. I made a post on this yesterday on Facebook and it was kind of a dry post. It probably didn't get seen much.

On your Facebook ads. If you're not seeing results or if you are seeing results and you want to make them better, here's one way to do it without spending a single dollar. Add more creative options. So, for example, if you wanted to see examples, I put a video in the done for you ads as part three for Facebook to show you just how to do iterations and variations. Now, I'm not managing my locations, ads accounts, so I just showed you actually the franchise and what we. Because I do a bunch of testing there and then usually I do it on COPA and then I do it in the local.

Shops. And the reason I do that is because then I want to actually see if the. The mechanism that we're doing is actually a trend or if it's just like a seasonal thing. And it's actually the easiest for me to do it when I do it across different platforms altogether. So it's not just a matter of like, oh, like it was good weather this week in Bellingham, therefore it hit better. I tested across different completely software like Business Opportunity and then grass and across the board. If you want to cut your lead acquisition cost by literally 30 to 50%, just make more ads. I know I say it in part in the part of the video at the very top of the dump for you ads page. I'm telling you, just make like there are so much creative now inside the dashboard of different ads that we've made. Just make an ad for every single one. And I made a video on how to duplicate your ad set or your ad really quickly and then just change the picture out and then have different variations of text and headlines that you can just put in there and it'll duplicate across.

And so make like, don't make one ad on Facebook.

Like I can. I could literally double your output of that ad by simply taking five to ten images that are in the Dashboard duplicating that ad ten times and then just changing the picture out. It'll get you so much more traction. It's blowing my mind right now. And I know I've talked about in the past, but. And usually I'm doing like three to five ads and I'm running and testing those. I'm like a couple weeks ago was our peak. We were doing over 80 different ad types. And you'll see 20 of them that I in the video I made. So highly recommend. It's really easy. You go over on the side, you click edit, you click duplicate. It makes a new ad, you go in there, you change the picture. If you spend five to 10 minutes doing that, you will double. I think, I think 30% to 50%. 50% would be doubling how many leads you get for the same budget. Highly recommend. Literally the fastest way to introduce your cost per lead. Okay, so again, there is a video. I put it on the done for you ads. Part three of the Facebook part is now how to create variations quickly. And it's pretty, pretty basic.

Okay, folks, what are we doing today? We're doing questions. We got five questions. Let's go.

Sweet. Okay, where are we at? Boom.

We'Re rolling. First one is from Pass Ql CC on the month of May. May Copilot created two invoices for the same month. The second voice went through and paid, but the first one didn't. Now it says overdue and send an email to the customer. And they, they have an overdue invoice, but they have a card on file and added a date, a late fee. How can we fix this? As I have several customers just like that. Is there something that command center can do or I have to go through all of them. If CC can do it, will it. Will I get charged for that last thing. Can we have one invoice per month for recurring work?

Okay, I see. Casey, you're going to change your settings. This happened the other day too, because the 1st of June was on Saturday. And so a lot of people have their settings where they send the invoice, but then they have like we have auto send but not auto charge. What happened is auto send happened on Saturday and then auto charge was disabled. And so what happened is people got other invoices like, hey, I thought I have a card on file. Well, the fact of the matter is if you don't have auto charge on, then they're going to get an invoice with an email without it being charged. So this is a settings thing. You'll want to make sure you go over this. We're going to try to simplify this because quite a few people get confused in this. Most CRMs don't have the. The auto send an auto charge separately. But we find it, a lot of people find it very helpful. The problem too is the ability. Like you said, the. Well it doesn't have the ability right now to do easily split invoices. And the ability. What's nice about that is if you're say billing monthly for your recurring services, it'd be nice if you could split out an invoice for like a one time job that you do for a customer and send it midway through the month. So that is on the roadmap. But for now you could. You'd have to do that manually. But I would recommend Pasco set up a quick call with ATC Air Traffic Control. So make sure your settings are dialed in. I saw this a bunch last weekend though because of the fact that it was a weekend that people, a lot of people had auto send on but not auto charge causing customers like hey, I thought I had a card on file. Why don't you just charge it? Because they got the auto send email or invoice without having the auto charge being enabled. So I do recommend having that call. You can book a quick zoom call with atc. It won't cost you anything because they're not command center. It's part of Copilot. So recommend that or Even just using WhatsApp. Everyone in the group has access to WhatsApp group for copilot ADC. So you could send pictures or quick video to that too, whatever you prefer. But they'll make sure your settings are dialed in. I will also say back in April and May they had the double charge thing with stripe going on. So that might be the actual root of that issue. You're speaking of their pass field, but most people I see when it comes to the auto send auto charge, they just, just have another set of eyes to go through that with you. I do want to simplify in the future but I know a lot of people really like the ability to do those separately. So we will proceed with caution there. All right, this is from the bearded one. What is the best and easiest way to evaluation of your business? Best form to use, Find the industry multiplier, et cetera. Great question. So.

Industry multiplier, like as a rule of thumb, small businesses that earn home services, you're going to be doing two to three times the earnings of the business plus any sort of Equipment or assets. That's a very wide margin, like a change in difference. It also there's a reason there's so many, there's other variables like key man risk, like if the owner has to be there every day, the business is basically worth nothing. It's usually just worth the context. If it's not been systematized to where someone else can run it, it's not worth anything because it's harder to sell it. It's hard to sell it to a passive buyer. And a passive buyer is the one who has all the money. No one wants to buy a job and if they wanted to, they'd probably just go start their own if they were just going to be in the business. So the fastest way to change the industry multiplier or to change the multiplier is to simply make it run without you because then that's the real earnings of the business. And if you do that for most people at a smaller size business, once they take out the actual cost of a general manager, their profits are so small the business isn't worth much. That's why in my opinion, growing a location or a chain of locations past seven figures is the way to actually make it where it's sellable. Because below that, even if you're running a $500,000 business and you're 30% profitable, once you take IGM's pay and make it a passive investment, that's really where valuation comes into play. Because you're, you're, you're.

You'Re benchmarking against putting your money in like the stock market or real estate or a passive form of investing. And that's why like in training I say hey, look, in 10 years the goal is try to make this business that is producing X amount of profit and usually I go low like 10 to 12%. Do I think in 10 years you can optimize and be in profit mode and make more like 15 to 20% on a million dollar business? Yes, absolutely, 110%. But I go low there because I'm assuming complete passivity, which means a general manager, regional manager, you aren't in the daily operations. Now you can inflate your profit margins by being more operationally in the business. And any business where the business owner is present in the office, etc. Is going to have higher margins because the owner is driving improvements all the time. They're seeing that it's a whole lot harder to general management and then another layer of management typically to actually see those changes being done. And that's when the valuation increases. So I've seen, you know.

Businesses in this industry go for more like 3 to 4 times earnings and even as high as 5 and 6 would have a high recurring amount of revenue. But those businesses are larger. And the reason that larger is better is because it's more anti fragile in that it's if it's recurring and it has higher amounts of revenue, which means more diversified amount of customer base like your revenue spread out more. It just becomes more and more valuable.

Ken Lin I have an opportunity to take 40 plus customers for free. A guy I know is moving and said he'll give me his list. However, they're all in a town 20 miles away. His helper wants to take it over but doesn't have the equipment. My question isn't necessarily should I do it? I can ask my couch for that. It's more based on the question from yesterday's master territory versus service here. Are we allowed to go that far? And if I have all those customers 20 miles away and someone wants to buy a territory but I don't have the 25k to buy a second location, should I just let the new franchise have them or whatever or you ever profit to buy my location or what? So this is what I would do in this case. 20 miles away is quite a ways, I'll be honest now that might only be 12 miles outside of your service. Your current territory though, so it might make sense. Here's the thing, if you're getting for free, like you said, you can ask couch. You probably get to take them, especially if there's 40. If you raised all their prices by 30, 20, 30% and now you only have 25 or 30 of them, that's still a full route. So I would say anytime I know I can go to a full route of customers, I'm willing to drive a little further. Um, the problem is going from 1 to 30 usually takes people a couple years and they burn so much profit there it takes a year to actually recoup that. That's why I'm against going so far out service area. Also, when things break, etc. You can crush PPP very quickly because you're far away from the shop. What I would do in this situation is take the customers, raise the prices, et cetera, because you're getting them for free. And then if there's someone, if, if someone came along and bought that territory, you could sell them those, those jobs or keep them because you can keep them. You just can't get new leads in that territory. If Someone bought that territory over the top of them. Now the likelihood of that happening low. You could also let Lee know, hey, I want to know if someone's about to. And then you contact that person and you potentially, if you optimize the profitability on say 2530 customers that are in that market, you might be able to get five grand literally for the fact that they've been producing cash flow for day one because you have paid for free and then they're far enough away where someone else gets that turkey. Okay, you know what I'm going to sell them to, I'll give you a pretty good deal on them and you get five grand. So I think it's a win win in this case. And then at that time when that would come and be like, okay, do you actually want to start a second location? Maybe in five years, but if it's next year, you probably just take the five grand, right? So I think it's a win win because you're getting for free. If you were having to pay say 10 grand for these customers, I probably wouldn't take them because the likelihood of you doing the location next year unless you're about to get them. Like you, you knew you were about to start, start a second location. If you're your case, Ken, I know you're still trying to build your first one. So it's like you don't want to take time and energy away from that. Right. It's very, very dangerous to do that. So hope that makes sense. Mr. Anonymous, has anyone been testing with yard signs? Do signs that lay just say lawn, lawn with a phone number get better results than full color branded signs? I see signs all the time that say we buy cash houses, cash with a phone number or we buy diabetics test strips with a phone number. Okay, so every single market mostly has to do with whether or not yard signs will stay in the ground. Most markets were in, especially in higher end neighborhoods, etc. Will be removed if we just put them in the ground. So that's actually the biggest factor. The second factor in terms of like color branded signs, the reason that cash, we buy cash houses for cash, simple text, et cetera. Guess who they're they are marketing to. Desperate people. That's how they make money. People who need to move quickly, people that don't have a lot of cash. Typically houses that are distressed, houses that are cannot be financeable. They have to be bought with cash because no bank would ever finance them. Those are the type of houses they're going after. We aren't going after that customer. So I'm not saying those don't work by the way. There are plenty of evidence that people have made those work. I would argue that if you're in a higher end area, higher end market, it's not going to attract the type of customer you want. Again, you might be okay with that if you're in growth mode and then just know that you're going to get a lower level type customer that doesn't do upsells, etc. Again, not saying this is a broad stroke, I'm just saying as.

A rule from the reason of the we buy houses with cash is I just need to get your attention and, and it's going to attract the lowest like type of customer because if you have a house and you want to sell it right now, you can sell the house no problem. You can't. If there's financing issues, there's title issues. If there's a leak in the roof, you have no money to fix it. You don't want to go through 90 days because you need to move next week and get out of the state because you have something crazy going on. Those are the type of people that do the whole we buy houses with cash and it works for the customer. Most of our customers are, you don't want them in that scenario. You want them to be able to actually really care about who's on the property. You want them to do upsells and you want them to be able to not leave and scatter when you have to do a price increase. And so that's why going after the right customer in the long term pays off in the short term. It's usually a little bit slower of a grind in terms of getting the customer. But once you have them, they're priced more price insensitive compared to the person that is literally looking for every single yard sign to get a lower price or a free cut or, or like 20% off. Like that's a discount shopper. And the only way that you can make that work is if you have the scale of Walmart to do everyday low prices and operate on 1 and 2% profit margins like they do. And so that is typically not a great recipe for small businesses because we need, we need profit.

Okay, this is Mr. Nomis. I noticed that Surf Highlights was recommending people use holiday home concepts to quote light installs from what it looks like that software takes all the guesswork out of estimates and knowing what and how much of each product to use. From what I heard and seen doing a little digging on them. I'm pretty sure they own that software. Would we be able to get in on that at a reduced rate? If not 3. From what I've gathered, from what we've been told and the digging I've done, Augusta could potentially double their business on the product fulfillment side. What does this mean? Okay, I get the first part. Give me a second. What would we be able to to get in on the Edwards if not free? From what I've gathered, from what we've been told and the DM done, Augusta could potentially double their business on the product fulfillment side.

I don't know what the product fulfillment side means.

I'm not sure what the last part is. Sorry, I'm failing on product fulfillment. I don't know if you mean like installing Christmas lights or if you're talking about like warehousing and distribution of Christmas lights. So I'm gonna answer the first part. Holidayhomeconcepts.com so I'm guessing they made a tool. Let me just go ahead and pull it up so everyone is on the same page. Holidayhomeconcepts.com.

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Okay, so let's see here. So.

Okay, well I can look into this if this has been super helpful.

If, if whoever is listening this has used actually used this. I'd love a comment in the YouTube video or in Facebook either one.

This is does look like their type of design by the way. I would say that probably use some very basic measuring stuff, but if it makes it that much easier and someone has actually used this, let me know because they never told me about this. So.

If someone has actually used it, feel free to put in the comments and then I will address it with them. But I would actually want some firsthand experience with someone utilizing that tool and knowing that it's actually worth our time. I know there's a lot of people who just plug into the Google API and it's basically measuring and it could literally just be a matter of like Excel spreadsheet or a calculator that you could literally do really quickly. Or also knowing that I know we're going to drive a lot of traffic online and there'll be price ranges similar to instant quote, but it won't be instant quote, it won't be the same thing, but it'll be ranges when they fill out the form that you can do like small, medium, large houses are one stories, a two story, et cetera. You can give ranges of prices so that way you don't have tire pickers. One of the biggest things, when I'm talking to people that have installed Christmas lights, you need some sort of range. Otherwise people, they think it's like 100 bucks or $200. Like no, like our basic package starts up like 400, but come on. So the ranges are going to be likely what we move to in the estimate quotes, the forms. It's not going to be instant pricing where it is going to give them exact price because there's just so much variation. But it'll give them ranges based on some pre qualifiers. So. But yeah, someone who's actually used holidayhomeconcepts.com put in the comments if it's actually been useful and then I can address it with them if it is indeed they own it and see what we can do in terms of getting some sort of discount from you guys, which is always fun and I'll make sure I can do that if it is helpful, if it's worth fighting for. Because if I'm going to like go to bat for that, we have to give up something somewhere else. And I've already really gone to bat with them on pricing around their C4, C9 bulbs. So let's see. Oh, we got another question that's popped in. We got a last minute one, folks. Number six just came in. Mr. Nas, how is adding your, how is adding to your number of Augusta franchise locations going? Things gone how you expected? What is the biggest problem you're currently facing? How is spending money trying to add locations gone? How. How do you keep from getting discouraged? Oh, these are all very different questions. Okay, so in terms of adding locations, we don't really have like a target or goal for these. It's a matter of like learning and seeing what works and what doesn't. So in terms of like adding locations, one thing that you really notice is everyone wants to start a business in theory, but you're just not going to be the chances of success when you have less than like $10,000. Extremely low. Especially when you think about doing a franchise. Like it's just not going to work typically. So we're now making it where we really encourage people at least 40,000. We used to say 20,000, now it's like 40,000. And then we are resetting the how much money we expect people to have coming in based upon their expectations. Because some people literally have 20 or 30 grand. Like, oh, like from day one I have a general manager and we have a bunch of employees. It's like, no, no, no. If you're trying to go for a General manager and being passive from day one. You're gonna need like 20, 30 grand in marketing spend to ramp up very quickly. You're gonna need to get a couple employees. You're probably looking at $140,000 in the cost to actually get started. So we're kind of resetting the expectation, making that more accurate and then making sure that people come in. Most of most of them are existing businesses and existing lawn care businesses. And so being like, you see some of the ads now, we'll say like minimum of one employee or two employees, one or two trucks. They gotta put requirements on it because these are our best candidates. They're the ones that when they join, they go from like 2, 300 to immediately 5 or 600,000 and get the best return. And like, the time that we spend in terms of helping and coaching is like 10 times more for someone who's just getting started because, like, they have no industry experience, they have no idea what's going on. I'd rather be able to take someone from like grade 4 to grade 12. It's easier to do that than grade like kindergarten to grade three because you have to teach them very basic elements. And I'm not to say we aren't going to serve those people. That's why we still do have the sole option. We do allow people that have less money, but, like, it is a lot more work on our end and the results they see are less. And because we have a flat fee model, it just makes more and more sense the bigger you get, right? Like, if someone already has $300,000 in revenue, they're not spending much on franchise fees. Just like, they can tap into systems and go from 300, 600 or 700,000 to get great return on their investment. And so then it's just a matter of vetting them. And that's like, please, big job right now. He has calls all day long. Like, the vast majority of them, we just don't allow in for a lot of different reasons. But anyways.

I don't like, have a benchmark, like a timeline on this. It's just a matter of, like, in order to achieve the ultimate goal, I think we need about a thousand locations. When I look at kind of like how many territories we can get by doing. But once you cross like 5, 600 locations, there'll be a lot of pressure on people being able to join just because of territories. And then it will drive everyone's valuations up. And I'm looking forward to that. So, like, if I can get there in like five years. That'd be nice because then the way that people would join is they have to buy an existing location, which means all of our locations become infinitely more valuable. Because if someone's like, well, I'm in Charlotte and I want to join, well, someone like Connor has four or five locations around Charlotte. If you're in Charlotte and you want to join Augusta, you'll basically have to buy a location which will drive the price of the valuation of all of our licenses way up. And I've seen this at any time fitness, like I was mentioning the other day. So I'm. It's kind of like my intermediary benchmark, like a success, because I know it'll really, really drive everyone's valuations, like 5, 600 locations. But a thousand is going to be what's required to really saturate the market, in my opinion. So. And then what will happen is people that are like, hey, like, you know, I'm popping out 2, 300,000. It's not my personal capacity. I know now if they want to sell the valuation dramatically higher because there's people basically on a list being like, hey, if there's anyone in this market everyone wants to sell, please let me know. And that, that will. It'll take a while to get there, but I think It'll be like 5, 600 locations. So.

The bottom line here, I'll show you one thing. This is one thing I actually focus more on instead of locations. And that is just like, how do we just keep making it better?

Obviously we have to pay the bills. And that's why, like, next year we'll have to raise to new owners. Just in case you've never heard me say it, new owners only no one has signed is going to have to do this. But, like, we'll have to raise the price just because, like, our costs are going up like crazy, especially the Christmas light legal stuff. But, like, this is like all the improvements we made over the past year, right? And so if we can just keep doing this for the next five years, I happen to believe we'll get to 5, 600 locations just making it better and improving it. And every single aspect of just like constantly making these changes and adding value to owners and making the dependability of ramping and scaling much greater. And we've heard loud and clear, like, from owners, like command center is the thing that's going to allow them to be able to scale, like multiple locations. And so this, this spring rush, it was a matter of like, not missing calls and getting back to estimates very, very quickly versus in the past always dropping that ball during the spring rush. So we nailed that and now like Liz's focus is like making a world class call center like so that the inbound calls are just nailed like so emphatically. Because that was not like the main focus this spring rush. And so she's doing actually on the Facebook group. If you saw her post the other day, you might like it. I'd recommend anyone that's starting their own office too. If you're starting to get a bigger location, you have like one or two office people highly recommend doing what she does and that is taking a call and then breaking it down. So we call it game day footage. It's like in professional athletes when you break down the film, you break things down. What went well, what didn't go well. So she'll take good calls, take really bad calls and every day she's doing that now with the team. And so that's the way you get better. Like just break it like you want to get better at follow up phone calls. Record yourself, break it down, send it to one of another owner. I'd really recommend. Okay, we have homework for the day. If in one of your WhatsApp groups, record yourself doing a follow up phone call and voicemail and ask people to take it apart again, just strip out the pride thing. Like we're all family here. We just want to get better. So if you, if you can do this this week, be super cool. This is how you get better on follow up phone calls is how you get better at what they're doing at command center. If you want to get better at something, record it and let other people pick up it apart. Really highly recommend. So but yeah, feel free to watch that. Liz posted one the other day. They, her and Brian kind of like tag team on it. Break the thing down where everyone can do better, especially in the edge cases. So there's always weird edge cases in every territory that will pop up once in a while. And the only way for us to even like come up with it, how to train it is like actually pick it out in terms of the calls. So.

Yeah, if we keep doing those sort of things, like having the customer satisfaction text going out to customers knowing exactly based on like every single agent where their CSAT score is, etc. Those are the type of things that we just constantly make that better. If we can do that for the next years and years, the locations will take care of themselves. And the byproduct of all of it is that we change the level of professionalism in the industry. So at least that's what I tell myself all the time. Trying to get a stupid book done late at nights, just grabbing bonkers. Trying to break down something straight structure, goodness gracious. I speak in passive voice way too much. I use complicated postgraduate level sentence structure at least once every chapter. It's horrible. So I'm learning. All right, love you all have hope you have a fantastic day. I'll see you tomorrow.