Mike Minutes Mastermind 07.08.2022 (Reviewing 4 P&L's)

Hello, Augusta Nation. Starting a little bit later today, but I wanted to go over some P. Ls, so I was just getting these from Command center today. I'm going to go over the four locations that I own and show you the different financials. I thought it was good because all four of them are very different stages of growth everywhere. From just getting started this spring to one of them just turned around and we've only owned it for six weeks. And one of them is, you know, the first location that's been around for eight, nine years. So I'm gonna show all those today. I don't put this on the public channel anymore simply because theoretically, people could try to say this is promise of earnings, and then I'm trying to sell the franchise or whatever. So I'm not trying to sell you on anything. I'm just trying to just show you the different stages of growth and where we're at. So hopefully it's helpful. And I have not looked at these a lot. This is up to the general managers of each of these locations to ensure that they are as efficient as possible. They make all the buying decisions, hiring decisions, et cetera. So I don't know every single part of these P. Ls, besides just touching base with them monthly or quarterly. My general managers. Before we do that, the last call, and that is on the Franchise Advisory Council. If you would like to be on the ballot, make sure that you fill out the form that was sent a couple days ago.

Just put yes on there. And then tomorrow, likely tomorrow, the next day, I'm going to be sending out the actual ballot with everyone that was wanting to be a part of the nomination process. So make sure you get it in. And as soon as you get that ballot on the weekend, make sure to fill that as well. Because on Tuesday night next week is when we have a roundtable and we will announce who's on the Franchise Advisory Council. All right, time for some edumacation. I'm going to take this off just so that we can see as much as possible. Let me share my screen.

Let's see here. Can I pull up? Okay, let's go from the smallest to the largest. Here we go. All right, so first one I'm going to pull up is in Connecticut. And we just got this location started. Why is it not pulling up? I did this the other day. It doesn't show PDFs. No. Here, give me a second. I can fix this. I can fix this. Take this out, throw it into a web page. That's what I'm going to do boom.

Move this. Change the file type. Let's change it to an HTML file. Boom. Let's go. Okay, now this should be shareable HTML file. Shareable. Boom. Boom. Boom.

There it is. Let's go. All right. You should be able to see this. Yes, this is Milford. This is Milford, Connecticut. This is June. This is basically kind of what I would say is like a solo operator because the general manager just got started this spring and is really just by himself. We're trying to ramp this one up, but it's been a slow grind this this spring from 7,8000amonth, 15,000 months. We're really shooting for like 2025 and just kind of growing this one slowly. We're not spending a lot. We did, we spent nothing more than average on marketing. So we didn't do a grand opening budget in terms of marketing on this location. And so I have my quarterly call I think with the general manager next week. But we really have to work on Google reviews. That's our big thing. We've got to work on this location. But you can see here it just basically broke even after paying the general manager. The general manager is out in the field working. It's kind of like a solo operator model. So theoretically if you were like a solo operator, this would be kind of like a your take home pay because this is what the general manager is making. But I personally am making just basically just above break even again. This location just got started this spring and we did not do an opening budget for marketing. I only started allowing them to spend any money on marketing the past couple months. So it's really proving the solo model and then continue to grow from there. So this is the Milford location and they are on full service. So that's why. And they pay $1,200 a month. That's why this is the franchise related. Around 3000. So minus 1200. They pay about $1800 a month to manage all their emails, phone calls, payroll automations, P4P etcetera at Command Center. So this is much of a slower grind. This was not like what I usually do with the general general manager owned location which is like just blitz the market. And we wanted to grow really, really fast. We actually just started. We actually sold one of the trucks and just focus is focusing on one or two employees max this year. So we're slowly growing this one. Really trying to work on just grassroots marketing and door knocking. And we really need to work on our SEO in terms of Google reviews. So I'm going to be Talking with the general manager about that. Next week, next one. This is the turnaround. So this is Mount Vernon. Let me show you guys can see this. Boom, boom, boom, boom. There it is. All right, this is Mount Vernon. Gots a long care of Skyjack. So 54,000 in revenue here. And these, these are just the profit loss statements that command center sends to me monthly. Again, if in order for them to send them to you, they will have asked for your bank statement so they can reconcile things. You'll have to send that to them or give them access, which some of you do as well, to your bank accounts. All right, so you can see here, this location was already in progress, is already rolling the month before. Actually did more in revenue, like 60, 70,000 revenue. And I don't expect it to be at 50 plus next month. I. I expect to be more on 40 because we're actually scaling massively back. We cut out a bunch of the service area that was. They were driving too far. We gave away a lot of the customers to one of the other locations down on the south side of us. And we let a whole bunch of other customers go. We raised prices, we cut out customers big contracts that they had. So it was actually really tearing things apart. And then the big expense on this one was over. Almost $23,000 we spent on repairs and maintenance for the trucks. Literally new brakes and suspension engines. Just a whole bunch of stuff had to be torn apart on a lot of the trucks. So much more expense than usual in terms of repairs. And then you're going to see. Let's see here. Where is it.

Looking for?

Oh, they. That's what they. To this location. Because this was. We took this location over. They're throwing command center fees under advertising and marketing because again, we took this location over. We did not set this one up from the get from command. So that's why it's categorized. Weird that 4000 was definitely not marketing and advertising. That is good command center. And again, we took over this location. So that's why their books are not as clean as I would like. So we'll have to create a new chart of accounts. And I'm sure they did, but in June this existed. So this is the first month we basically took this location over. And the reason this is so high is because it was a lot of work just raising people's prices, cutting customers out. Lots of back and forth with customers and just giving things away. We had to redo an entire lawn for someone. They installed a lawn. It was incorrectly done. It was lumpy we just tore the entire thing out and then redid soil and sod in the entire deal. So that probably cost us six or seven grand in just wages or not wages. That would have usually been a six or seven thousand dollars job that we did for free. So that's why we lost, you know, 10 grand, is it? Yeah, 10 grand on this bad boy. You got vehicle expenses here as well, other expenses on top of the 22,000. So really we spent like almost 27, $28,000 just getting all the trucks up to spec and brakes and everything. Engines like everything was, had just been left honestly to disarray. So by the time you add up vehicle repairs and all this stuff, really looking over 25 grand of just that in the month. So. So when you take 25 grand out of the net income, just those extra costs for the equipment alone, you know, they actually were probably decent. But a negative 10,000 first month in operation. I expect going forward this location to be profitable every month because we're not trying to do anything fancy. The general manager is actually out in the field working with the crew and so it'll be really efficient. I expect to do around 40 to 50,000amonth in revenue with three to four employees and the general manager and just be consistently profitable. We're not adding big projects, we aren't adding scheduled estimates. The general manager is out in the field working 80, 90% of the time right now. So if we ever wanted to expand, we could allow more jobs to come in, more estimates to be on the schedule. Like this week for example, they allowed two days for drive bys to be put on the schedule and they had 20 estimates on the schedule. So this location could grow significantly. But it's really, we, we took this month and just really had to restructure everything to taking out large projects, big contracts, getting all the office workers to command center. Everything got moved over to command center. So yeah, it was a big feat, but I think we did it. And going forward, I expect this location to be consistently profitable. All right, next one. Boom, boom, boom is Mooresville. This is Mooresville, North Carolina. Another location. This one's been in operation for a couple years, a year and a half now. I think Chuck's been there. Let's see here. Boom boom. All right.

Cool. So this is Mooresville. Let's see here. Wait. This is the whole quarter. I didn't want the quarter. Wrong one. Give me one second and go back into command center and get this right.

QB gustaloncraservices.com Boom. I apologize for pulling out the wrong one. They gave me quarterlies and they gave me the monthlies and I pulled out the wrong one. There's Mooresville's quarterly, there's more. Phil's June. Boom. All right, Bam bam. Mooresville June. Here we go.

No, what I did wrong. Oh, here we go. There it is. June. Let me share that with you now.

All right, so this is a more solidified location. It's been around for a year and a half now that, that I have had a general manager there. Revenues 43,000, profits was 13,000. So a good solid profit right around 30%.

Most of that being wages. Obviously that's the biggest expense. They also are everyone's on full service, all the locations that I operate, so obviously a higher amount of command center fees than most. However, the general managers are out in the field able to actually produce revenue and then do drive bys, etc. They, I know they, they stripped out planting and they stripped out some other services in Mooresville as well. And I think they're going to grow quite a bit in revenue next couple months because they've gotten more employees. They had a real struggle finding employees. Yeah, nothing super out of the ordinary. Again, this is like, this is the kind of boring P and L you want to see after a year and a half, two years of being in business. Pretty boring stuff this location will do. Just prior on 500,000 revenue, a few employees, just boring, consistent profits. This is kind of where you want to be after a couple of years. Obviously during the winter you're not going to see 30% profit margins, but the goal is just break even. And then again from June to December you should be very profitable. And so this is again is the mortgage location. It's been a year and a half, two years in operation. All right. And this one we're not trying to grow either because honestly we're trying to actually find this location. We want this to be a working general manager location where the general manager is not doing estimates all day long, but they're out in the field working and then maybe a day or two a week they're doing drive by estimates and that's usually going to be enough to keep three to four employees busy, have a business that has 40 to 50,000amonth in revenue, have a couple crews. And because the, the general manager or owner, however you want to set that up, is out in the field working, it's extremely efficient. And so this location we are not going to scale up anymore. We're going to actually keep it to where there's three to four employees and a general manager that's out in the field working and then does drive bys a couple days a week. That's what we're going to be doing for this location. Okay, so Chuck currently is that person. But we are trying to systematize it, simplify it because we're actually going to pass it along to another general manager more than likely end of this year. So again, simplification is what they're really going for in the next few months at Mooresville. June is a good month to show because it's like we're not like in spring rush, but then we're not in July, August, September when like your profits are like you can really crush profits during those months. I like June's kind of a middle of the year month in terms of just a nice average.

Now let's see here. Let's bring in Bellingham's P and L.

Boom, boom. So this one is a little different because we are running. If you listen to my video publicly, you heard me talk about the. How we are running the loan for the headquarters through this location because it makes it has the most consistent profits been around for the longest. So because of that, if you go here, you can see this. $37,000 is for the Head HQ building project. So I have to put on the P and L because the cash expense right now, but it will eventually be amortized into a loan. So that $37,000, even though it left the bank account, isn't really has nothing to do with their operations. And I do not take it into account when I look at their P and L when I do profit sharing things at the end of the year, my accounts will take this expense out. All right, so you're actually going to see a negative at the bottom here of 5,000 or $6,000. But that's because we're taking into account like a $38,000 building expense that will not be there. It's not. It is a cat is expense now, but once we get a building loan, it'll get amortized out and it will not be a part of their P and L. So just keep in mind that is not going to be there. So really they had like a 31, $32,000 a month in this month in profit. They also had some massive truck repairs, some so $12,000 in truck and equipment expense. I think there was, man. What was it? There was like one that was a $3,000 expense. Another one they did some big expenses and they bought some Equipment too, a ramp rack and a couple other things. So a little bit of investment in this month and a little bit more than usual. But you can see like they pay quite a bit for Command center. And this number at the local shop dramatically goes up and down because of just how cyclical our local market is down in the winter they might be paying 3,4000amonth for franchise fees. And well, Command center and it can go up to as high as 15 or 20,000 during the peak months because they're so busy. The bottom line is if we didn't have Command center, we would have to have the office manager and at least three assistants. That's what we had three or four years ago with Liz, her and three assistants. So now it need at least that. So I'm actually okay with paying that. It's higher. And definitely during the summer months I think we could be. We could beat Command center in terms of our costs for office work, but we couldn't keep those office admin people on throughout the winter. For the cost that we have Command center On, you know, three, $4,000 a month we can keep them on. And better yet, I don't have to worry about training people at this local shop in terms of training them in service autopilot, training them how to answer the phone. Command center can handle all of that. So this expense is high 100%. And it was higher last month. Like for the actual month of June, which will come out in July, it was higher than that significantly. Like 15, 16, 17, maybe even. But again, it just a mass. I want that. I'd rather have that expense be tied to a variable, variable cost where when we get really busy that it goes up. And then during the summer, during the winter it goes way down and I don't have to worry about training people. And now that office at the Bellingham shop that all of you have seen and empty throughout the day because Marcus is usually out of the office. So next year we are going to have a full time estimate at the Bellingham shop. It's just too much to ask of any general manager to be doing as many estimates as they get plus the management of the office. So that's why we're really focusing on the recurring side of the work. We're really making a big shift at Bellingham. We went from 40% recurring revenue last year to 75 plus percent recurring work this year, which is a poor use of assets. Once you've purchased a bunch of big trucks and bigger trailers, like we have a big seven by 14 trailers we, we have four of those and probably most of the time we only use one or two now. So poor use of assets when you start having to do that shift. So that's kind of why we're seeing it. We'll see a definitely a down year in profits. I won't be making, you know, pulling out 300 plus thousand from this location this year. But we are shifting. We moved everything over to the trailer setups. We are obviously wages are going through the roof, but also, you know, fuel and all the rest of it is more expensive than usual, but overall pretty good. This fuel expense usually at this location is less than half. So again we're just seeing margin compression across the board. This is one of our worst months, honestly in terms of June at the local shop we've ever had, or I shouldn't say ever, the past three to four years. This is our worst June ever in terms of profit of, you know, 30%. So 30. It's around a 20% margin. So horrible. But it's still one of our lowest ones. Mostly because we had some big truck expenses. Obviously fuel's going up, wages are going up and we have so many new people going into like usually in June our crew is solid, we're good to go, we're locked and loaded. But this year we have such. So had so much churn. Not like bad hires or fires either. It's just like people switching jobs and stuff and, or moving and. And it's just been really difficult to have a really efficient crew. Like usually by June, our crews, this would be a 60, $70,000 month in terms of profit. So it's really like half of that. So it's like what I've been talking about. Margin compression is really across the board in all small businesses when it comes to wages, fuel, et cetera. So not disappointed by Bellingham. I think we'll still do a good amount of distributions in the second half at least, you know, six figures in addition to what RD has gotten, but not going to be as good as last year. We had to raise prices in June so we won't see that until July because we obviously collect on July 1st for those, those customers. So that all that margin compression led to us raising prices significantly in June. Again, that will be reflected in July and beyond in terms of price increases. We moved everything up to $90 an hour, increased e fees, etc. Etc. So I made a post on that last Sunday. I have a few questions that came in. Let me go through these really quickly. I gotta bounce to another meeting. Give me one second. Let me share my screen.

Boom. Boom. All right, let's see here. Let's try to go through these quickly because I gotta run.

My. My landlord has been thinking about selling the house I'm in. He's mentioned it a few times, but not moving fast with the process. We've talked and I've told him if we wait until I fix my credit, I would go to the bank and get a loan. My thing is, I'm not trying to rush into a situation, so I may need another year or so until I can come up with the money on Zillow. The property is listed for 285. Zillow doesn't mean a single thing, by the way. Two years ago, it probably would have sold for 150 to 180. I was thinking to maybe pay him rent to own one year, then to the bank, the rest. Rent owners definitely off the table. Because I've asked in the past, how would you approach this? The mayor. The house is small, three bedroom, one bath. But it's good for me. I don't mind living here another five to seven years. Just want to try to lock the deal in before he changes his mind and sell to someone else. But I'm. But I'm for sure he won't because he don't need the money like that. If so, he would have raised the rent two times what it is now. Honestly, I would just stay there for now. Don't. Don't rush with real estate. Don't ever think that I've got to get a deal now. Whenever you have that mentality, you're going to lead into a bad situation. You could potentially get owner financing like you're saying you want, and then the price go down six. In the next six to 12 months, the price goes down by 50 grand. Right? And now you're locked into a contract. So, like, honestly, it comes to real estate, stocks, investing, slow everything down. Don't ever think that you need a deal when. As soon as you get into I need a deal, you'll overpay. You'll make, you know, rash decisions. I would just slow everything down, Ivy. I would just take the rent. If you think it's like half of what should be, just keep paying rent. Tell him, hey, I want to buy this property. I'm actively trying to grow my income in the next couple years. I want to, but I wouldn't go beyond that. When you start pushing a deal, it always get. Gets ugly and, you know, and I could be only wrong in a year. It's worth way more. Well, if it does, there's a good chance he's going to probably want to get out of the deal that you've done with owner financing or something like that. When you go to a bank and are looking for a line of credit, what would you recommend asking for out of the gate? Revenue is on pace for high fours, low fives and we have a good chunk in the bank if, if that's changing changes anything, typically under 50,000 is easier and then typically over 100 is harder. So they kind of have chunks. Usually it's like above 20. Under 20 is easier than 20 to 50 and above 50 is harder than above 100. Like it kind of goes up like that. So I just go to them, show your panels and say what you want. I'd start off with 50 if I was you. Go for 50. Accept 25 as a kind of a, you know, if you have to settle. When switching a client from weekly to bi Weekly, should we 1. Change the service details to reflect new budget hours and rate for biweekly. Two, pause weekly service and create a new service for biweekly mowing. Number one is what I would do. That way you can get all the notes will carry over. I've seen people do number two before where they create. Create a separate visit and they forget a certain note and now you got a complaint in your hands. So I would take that existing service, switch the schedule and then switch. Switch the budget hours and the rate so that. That would be my recommendation. 100. It can get very confusing if you have to start copying notes, etc. Into.

Another job. So. All right, I gotta run. Thank you all. Hope that was helpful. And it's Friday, so have a great weekend. I get them all mixed up. This week has been weird because July 4th. Take care everyone.