Mike Minutes Mastermind 06/06/2022

Hello Augusta Nation. Hope you're doing super well. Hopefully you can hear me. Okay. I had to wear this thing. Forgot my AirPods. Let's go ahead and jump in the There is that business card that is on the.

Pro shop and they're editing today the ability to be able to change the dollars per hour so you can leave it blank if you want and just so you can add a range or a Sharpie and just add it in for each person that you hand it out to or you can actually change it on the pro shop to whatever your base pay is. I don't know a huge fan of even filling that number in because it doesn't convey that it's base pay or that it's a range. I'd rather almost put like 18 to $30 per hour if I'm trying to hand those out. But again, just an option because a lot of times I know if you're trying to poach talent from Home Depot or whatever, you can't give them like a flyer or talk to them or give them a a postcard. But potentially having a business card is something you could be able to do. So hopefully that's helpful. And that QR code goes directly to the application for new hires and so those have to do a dropdown of your which location they're applying for, but that will go directly to that using that QR code. So I think that was it for announcements. Let's jump into questions. Boom. Share Share screen.

Alright, I have not read any of these, so let's just jump in.

Max, any update on this current state of the economy and what you foresee playing out for the rest of 2022? Last week the government came again with the jobs report and this trend is very, very bad in my opinion. That is the small businesses again lost 90,000 jobs and and large companies with over 500 employees added a ton of jobs. So bad I feel like for small businesses and a lot of times small businesses are the first to be impacted when you're going into recession because they have the least amount of capital and they have the least amount of leverage to an access to capital. So they're usually the first indicator small businesses are of a recession like I've been talking about for the past six months, like recession is going to happen. And so as we head into that small business are gonna get whacked the fastest. That being said, I feel like we're gonna have a massive opportunity here next month or two, a window of time to hire as these large companies are starting to lay off massive amounts of people. Tesla just mentioned on the weekend they're laying off 10,000 people. Just massive company after massive companies cutting in workers. Target did, Walmart did. So as they start to do that, the thing is right now we have such a lack of labor right now, it's gonna take a little to actually burn through all of that excess supply, excess demand. And then we're going to have, start have like you're going to see the unemployment rate start ticking up. And you just did for the first time last month it went from like 3, don't quote me on this one, I think it was 3.8 to 3.9. But that's the first time it's ticked up like that since 2020. So I feel like we're going to see a trend that way. I don't think it's going to go crazy. We're not going to have like 8% in unemployment or anything like that. But if we could just get to 5%, it would help the whole issue with employees not showing up in interviews and all the rest of it. So yeah, so that's kind of where I see the job market going in terms of the overall economy. I've tried to stay pretty consistent on this. I know in the next year, year and a half, we'll go into a recession. It really comes down to whether or not the government continues to prop it up. And I think that's going to honestly come down to a lot of political stuff. So people always say don't time the market. I don't like to time what the government's going to do because they're just governed by politics. So as we go into midterms and stuff, that'll be interesting to see what they're doing. But like for example, the build back better plan, which is like all the rage a year ago, all of a sudden no one hears about the build back better plan. I guess we decided not to just do, just not do it. The reason for that is because of inflation they realized, oh like pumping another trillion dollars in the economy for freebies is going to probably create bigger issues politically for us because everything continues to get more expensive. So what you're seeing right now in my opinion is politically they've figure out, oh like it's not a good thing if people cannot pay their rent and gas prices are going through the roof and food is expensive and you know, in our state, for example, no license plates, we don't have any license plates and there's a shortage of aluminum and they just tripled all of the registration fees for vehicles, like, people don't like that. And that does not get votes at the polls. So that's why the government stepped in right now. And you've seen even what happened last week. Some of the comments that Biden made is it's just all political, what they're doing with the economy right now. And they, unfortunately, because they overstimulated so hard in 2020 and 2021, now they're trying to recourse and go backwards. And that's why interest rates have to go up. That's why the stock market has, quote, unquote, crashed so much in the past few months. Six months, is because that's what's happened. They're recoiling from all the free money that was given away as a way to basically get elected in. And that's every state and government and federal level, in my opinion. So it's very easy to give away money, very hard to raise taxes. And that's exactly what needs to happen right now, unfortunately. So.

All right, Evan. Whoa. Okay, here we go. Evansville. Connor, I always call you Evan. I apologize. Just because it says Evansville. And Evan is a name in my head now. So, Connor, I have an employee who casually mentioned this morning that workplaces might have to start offering fuel incentives or increase pay even more in order to fight the higher prices of gas. $5.90 here. Of course, the only way to fight high prices is to have higher prices yourself. Long story short, I know you mentioned it, training that the labor market being the worst has been that employees will no longer look at the hourly rate. They'll begin to look at what else we can do for them. Flexibility, more PTO, take home cars, etc. Should we be looking into more options like this, giving work trucks to take home in order to fight potential turnover or just stay ahead of the curve? Yeah, so it's funny.

Every single incentive sort of has a psychological aspect to it. Pto, for example, is extremely expensive, a benefit because you're actually increasing the wages of every employee by about 4%. And so that's an actual, like, tangible cost. What I would try to do, if you're trying to grow, is first look at the things that don't cost you money that you can do as incentives. Right. So things like over hiring and not having where they have to work long, long hours, not having to make them work Saturdays and Sundays.

Being able to take a day off if it's raining, whatever it might be, those are all intangibles that you can sometimes get away with without having to spend a lot of money. And then what's funny is there's these creative people that come up with these ideas that allure frontline staff. And for example, giving people money because the cost of fuel is high is simply a short term measure to get people in the door. And it's very smart. I don't feel it will be sticky though because people will start to do the math, right? If you're going to give someone extra $100 a month for fuel and give them like hey, 20 gallons, that's you know, $100, $5 a gallon, that's $100 a month, they start to do the math really quickly and realize that that's literally if they work full time, that's like a 20 cent per hour raise. So should they be pushing for the fuel surcharge, little bonus or should they be pushing for a position that actually allows them to get the next stage in their career and there's upward mobility and they can actually make a $2, $3 more per hour which will be way more than a fuel surcharge. So some of these are that are good for frontline staff and unfortunately most frontline staff aren't educated enough on finances to actually make these calculations. And so sometimes it's not a bad idea to do these for your team and like hey, this is the cost of the PTO paid time off is the cost of having a health insurance. Like adding health insurance this year is going to cost me well over $100,000. And that that is unfortunately usually overlooked by the employees. Like they forget about that once you start paying for health benefits for a lot of them will just for about it because like well I just see my paycheck every two weeks and I forget that like every month there's this other hundreds of dollars going out the door. So just be careful with your incentives. Some of them cost money. Like health insurance is extremely expensive. PTO is even more expensive. If you actually run the Math, for example, PTO will cost you 4%. So probably about depending on how you do it, 3 to $4,000 per year per employee, upwards of that. If you have a better plan for us, it costs us three grand per year per employee. For PTO if you're doing a 4% increase, that might be 2,000 or $1,500 per year per employee, that's full time. And then you start looking, okay, well what's the things I can do that are non don't cost me anything. Can I give them less hours? Can I give them more flexible hours. Can I let them drive a truck home? Well, the driving the truck home thing might actually cost you $500 a year or $1,000 a year because of wear and tear and tires and gas and oil changes and all the rest of it and all those extra miles being put on your trucks. And then it's a matter of like, well, does that all, like, does that $500 a year that I spend on extra fuel and letting them take the truck home, Is that better to them, for them, than health benefits? Every single employee now has a different gauge or meter of what they feel is important to them. For example, we had at the location we were doing the turnaround at, we wanted to bring one of the employees from the other location, which is like 30 minutes away, and bring them down. But we knew they didn't have a vehicle and they've been their, their partner has been drive, dropping them off at, at work every day. So we knew that, like, hey, we're not going to offer them any more money, but we're going to offer them a truck to basically be able to, for the first few weeks to help us get things turned around. You can drive the truck to and from work and then you can use it however you want. That was immediately a benefit far more important to them than like, oh, I'll give you, instead of $18 an hour base, we'll give you 22, $22 an hour base. So I don't like changing base ever. So when it comes to incentives, you got to, like, realize certain people are going to have certain values based upon what incentives or based upon what bonuses or based upon what benefits you're giving. For some people, medical benefits means absolutely nothing because they're getting free on Apple Health or from, you know, Medicaid or whatever it might be, and it's free. So, like, there is no benefit to them having medical benefits. And that's going to be a majority of your frontline staff, especially if they're all entry level and you're just getting started, a lot of that will be the case for a lot. And they won't take you up on medical benefits, but to them, if you gave them, you know, $100 gift card to Chevron, that might be a big deal, right? And so this might be a really good thing for you to do is like, look, I'm going to give everyone $100 as a gift card to Chevron or whatever per month. As long as the gas prices are above $4 per gallon, you could do that. You just got to realize that's going to cost you. But that might be cheaper than committing to, you know, indefinitely in the long term paying for health benefits. Right. Because now you're locked into 3,000, $4,000 a year versus $100 per month as long as gas prices are inflated. And that all of a sudden is another thing you could add to an application or to hiring. And honestly, as I'm reading this and I'm talking about it, I kind of like the idea especially for front the guys who drive to like the local shop and stuff like that, hey, $100 per month is a gift card as long as the gas price over $4 a gallon. And that makes sense to me. And it's again something you put on an application or put on hiring ads that might make you stand out.

Good idea. Gonna write it down actually. Fuel gift cards.

Cool. I got this new thing actually and Liz had got one and I was very jealous so I had to buy one. It's a, it's a remarkable. And actually Derek Doran was the first one that actually showed this to me in person. And so now I'm following in his footsteps. Okay, let's move on. Let's see here. That was a long answer that question, but. Oh wait, this is another one. Sorry. It would be very helpful if we had some access to back in analytics for our websites with numbers and graphs to help us determine trends in our area, especially in our area. Oops, sorry. In our area, especially in areas in the south where the spring fall cycle business doesn't match up with a lot of the country. Is this something. Yes, it can be done and we are working on this. We are creating a dashboard that you actually will log into and see your analytics as well as be able to submit changes for, like adding banners, taking away service pages of removing the ability for in person estimates. We're trying to systematize all that. It's just a big lift from a technological standpoint for you have your own back end login. Every single location will have a login password to go in there and change what they want on their site. It won't be like immediate, like that would take us a long time to build, but it'll likely be able to submit things and check off what you want and don't want in terms of service pages that will then submit to us and we can change it here within a day or two usually. So that should streamline things a lot more. But part of that is going to be some really intuitive analytics and it's all it's going to do is tap into Google Analytics. But Google Analytics is very, very dense. Like, you can go really deep in Google Analytics. We're going to give on the dashboard just very broad. You know where the traffic's coming from, click count, some basic conversion stuff. So that way the stuff you need to know. And if you really want to get nerdy on it, Google Analytics is where you want to go. And there's quite a few people that have already given us the Google Analytics code. So if you set up a Google Analytics account and then just send me the copy and paste that code that they tell you to put in your head, in your page header, your tag, just send that to me and we can already do that for you. But Google Analytics is pretty dense for most of us. And I don't expect someone that's doing lawn care landscaping to understand the full depth of Google Analytics. So we want to kind of take the most important information and give it in a much more easy and simplified way to see it. But we are working on that. It is going to come out this summer. I don't want to give an exact date just because we keep adding to it, honestly, like, oh, we can make it where they can add banners for Christmas lights. So that way in November and December they can put that on, then take it off. Like, we're trying to add as much as we can, but I also want to roll it out as soon as I can. So that is coming this summer, though, and it will be a little more simplified and easy to read than compared to Google Analytics.

I have one employee who, like, who wants like 50 to 60 hours per week and wants all extra work put on him. He is always productive. P4P average around $27 per hour for him. Let's go. So I don't think overtime would bring his P4P down. And I have no issues with it because of how productive he is. My fear is that with him. Let's pause here for a second. I have to vent a little bit. The local shop had someone leave on the weekend because of P4P. And I went back his last paycheck, he made $32 to $33 per hour. Like, I just, just blew my mind. And it ultimately came back. Like, we have to explain it better because obviously there was frustration and he didn't understand something because my goodness, I don't know if you're, you're not going to find anyone else to come for mowing laundry make 32, 32 hours an hour obviously was A high performer too. So at the meeting this morning, that's kind of what they were going over. It's like, look, if you have frustrations about P4P or you don't understand something, let us know because we don't want you to leave when you're like making so good on P4P because you're frustrated to understand something. And it's like there's nothing that we're trying to hide here. We don't even calculate P4P at the local office. Like Marcus, the GM, it's like he doesn't even calculate P4P. It's command center who doesn't even know you. They're just looking at the numbers. So it's not like anyone's trying to manipulate stuff or like make someone else make more money. Like. So anyways, back to the question. Okay. The guy's making 25, 27 bucks an hour. He wants to work as many hours as possible. My fear is that with him handling this much work and already being so productive that I would be putting too many eggs in one basket. Meaning that when it comes to winter, mentally he would still be expecting similar pay. I also feel that it takes. It would take two people to replace him should he leave. Three of my four employees are 19, 20 and 21. They have no outside commitments except for rent. The employee I'm referring to has. Is 33 years old with four kids and a stay at home wife and has many outside of work commitments. Thoughts? Okay, so first and foremost, I was talking with Thomas Hickey the other day as well. I fell into this trap of way over thinking keeping guys busy in the winter. I just made that massive mistake for the first three to five years in business. And that is okay. I've got to like make sure I keep these guys on and keep them busy. And we would do the stupidest stuff like give cookies to property managers and we have the guys deliver them. We would do like free pressure washing. We do like the most random stuff to keep them busy. And all of a sudden I realized after doing it for one winter, it's like, oh, they're willing to go get another job for three or four months because they actually don't like working out in the winter anyways. And they'll come back in the spring because can make $27 per hour. Like you said here, Connor, he's not gonna be able to make that in any other lawn care company. So he'll come back even if you have to let him go during the winter. Right. So I would not overthink this. This has helped me massively when it comes to profitability in the past several years. And I was like, look, we're gonna keep our core group. This person's probably gonna be that part of that core group. So if you have four employees, you're probably gonna let two of them go and keep the other two full time busy. And if they don't make 27, it's like, look, if you wanna go get another job or do a second job during the winter, that's fine. You have full time right back to your 50, 60 hours a week if that's what you want come spring, right. And so I would just have that honest conversation with them like, hey, you're crushing it right now. I just don't want to. And just be really honest, like I want to make sure you have enough money, I want to make sure you can provide for your family. I appreciate how hard you work. I just don't want to set you up for the winter and thinking that you're going to be able to get 50, 60 hours or you let other people go, like the two other employees go, and you keep that, you know, that guy busy throughout the winter. But again, he might not make you make that much on P4P. So it's just having an honest conversation with them. And when we had that honest conversation with the employees, like again, it was just really helpful. Like, hey, we're not playing favorites here. We're just going to simply take the people who have been here the longest, they're going to stay all winter and they're going to basically full time hours. Everyone else, you're able to leave this date, come back on this date and you have a job guaranteed. And as long as they're making good on P4P and they're high performer, they're not going to be able to get another position elsewhere and they're going to the other job that they get during the winter is going to make less than what they're making mowing lawns so they'll come back. Right. And honestly, most of them don't like to work in the winter. They'd rather just work and make really good money for eight, nine months out of the year and then go get something else indoors for the few months of the year. And that's what I had to learn and it helped us so much when it came to profitability. So Connor, your spot. I was looking at 50 to $100 extra month from added cost to me or so for the take home vehicles. Yeah, so then it's a matter of like, okay, what's better for the employee? Is it giving them $100 gift card per month where you don't have any liability? You have to worry about, you know, people driving the truck after hours or taking on a five hour road trip or, you know, taking up mudding.

Would it be easier to give $100 for the gas? Or is the benefit to them the value of that hundred dollars is literally $100? Or is giving them a truck to drive home going to give them $200 worth of value, but only cost you a hundred? So that's how you want to look at benefits. Like, what's the cost to me? What's the actual value to the employee? Whenever there's a differential there, that's usually when I'll take it. Right. If I'm giving you a hundred dollars in money for Chevron, but they live next door and they just walk to work, like, again, the value of that gift card is very much lower. So looking at ways to be able to create discrepancy between cost to you and benefit and value to the employee, that's the benefits that I want to try to incentivize.

Awesome. All right, guys, have a great week. Happy Monday. We'll see you tomorrow.