Mike Minutes Mastermind (07/11/22)

Hello, Augusta Nation. Welcome. Let's go ahead and jump in a couple announcements first thing and that is tomorrow evening, which is Tuesday, July 12, we are having our quarterly roundtable for Augusta Nation. So obviously with these daily updates there's we cover a lot more ground. So there's not gonna be so much updates and me talking at the beginning. It'll be opened up for Q A. We are going to be announcing the Franchise Advisory Council and who will be on that facility in the roundtable. So those ballots need to be submitted by tomorrow at 11:00am Pacific Standard Time. So please get those done today and check your email from the weekend on Saturday. I sent those out basically for everyone that had was willing to be nominated. They were on the ballot and it's just a matter of popular vote. So feel free to submit those anytime of the day would be fantastic. And then I'll close that out tomorrow and those ballots will be counted for tomorrow evenings.

Sorry, tomorrow evening's roundtable. So again that roundtable is at 5pm Pacific Standard Time, which is 8pm Eastern Standard Time. And the following day I will have the recording up. But it is really great just to be able to hop on their live, see everyone's faces and at least quarterly be able to connect with everybody. This coming weekend is the meetup in Memphis, Tennessee. If you don't know what I'm talking about, check out the Facebook group. Kevin's made a separate group and event for that. It's going to be this Saturday. I'm going to be there, Liz will be there and we'll be dropping in really, really quick. Just Saturday morning and Saturday night we leave. But we wanted to be there and support. I'm not, I don't think I'm going to make like doing a keynote or anything, but I just want to be there, support everyone that is trying to learn and grow. I know Ryan Payne's going to be talking about Lights. I know there's a few other of the owners are going to be talking and I appreciate Kevin Fairburn for putting it all together. Really, really do. So those are a few announcements. Number one, tomorrow roundtable, 5:00pm Pacific Standard Time. At the, at that roundtable we're going to be announcing the fac, the Franchise Advisory Council. So make sure you get your vote submitted. That email went out on Saturday. And then finally this coming Saturday is the meetup in Memphis. So obviously in the Pacific Northwest we have the annual conference. It's nice to have some face to face time though. If you are not able to make it to Down The Southeast. So I really appreciate Kevin Fairburn for taking the time to put this all together. And I will try to record some of it. I don't know if Kevin's already made plans with this. I haven't touched base with him. But I'll try to bring a video camera and maybe a mic or something so we can try to at least record the four hours of the owners and everyone chatting together. So that'll be good for us all. Let's see here. I wanted to actually bounce to education real quick, and then we'll go back to questions.

Oh, I messed that up. Let's go. So over the weekend in the Mount Vernon location, we really needed employees. And so it's something that I. We did. I did it on the weekend and I just kind of helped them out because they've been so bogged down just trying to turn this whole location around and everything. So I jumped in and was like, hey, I'll try to get some new employees. So over the past 24 hours, we were able to hire three new people. And so I just want to kind of go over what I did to kind of make that happen. First and foremost, uploaded job ads. Indeed, Facebook and Craigslist. Most, if not all of the applicants came through. Indeed. That were good, but did all three platforms. I did two ads on every single platform. And then as they came in, literally as they were coming in on, because we post them on Friday, as they came in on Saturday, because I posted like $50 a day on Facebook, posted two Craigslist ads. They're at $20 a pop. And then indeed, you know, just boosted that as much as we possibly could. And over Saturday got like 10, probably 10 to 12 applicants. And what I did is as soon as they came in, I text them and offered a time to meet with them the next day, Sunday. And then I also called them and then if I did didn't get a hold of them, then I'd email them. And essentially what I did is I broke down from 2 till 4:30 on Sunday. I broke down every 20 minutes. I had a different slot and I just took a. I use my remarkable. But you could use a Word document or a piece of paper. I just wrote down all my time slots. And as I offered a time to somebody, because if they're coming pouring in, the problem is you start to forget, you know, who you offered certain times to. So what I did is I just had the time slots and if I offered them a time, I'd put their name and then if they contacted me back, I'd put confirm next to it and all I needed is their name. So that way prior to the interview I just pull up their resume that they had sent in. So and then what I would do is if, if no one had confirmed like I would put two on every time slot because I hate is when you slot a whole bunch of interviews and then you don't people don't show up once or twice. And now I have like an hour you're sitting around twiddling your thumbs. So literally what I did is every 20 minutes I put two people, I would schedule them and twos unless they confirmed immediately, which there were some of them that would on text message people are much more likely to respond fast. So and the ones that hired were the ones that immediately text me back. So it's text message is gonna be the fast way to get ahold of them. And I really recommend trying to get, if they apply, try to interview them within 24 hours and then have a job ready like a position ready for them within 24 hours too. Not to necessarily start because every single one of the good people that I got on the weekend, all three of them needed time. They needed to give their two weeks notice. So couple commonalities. Every single one responded with to my text message within one hour and all three of them wanted to give a two weeks notice. And good, good employees, good workers are already having a job. They're not just like sitting around twin their thumbs wanting to work tomorrow. So what we do with those two ads is one of them is geared towards like you can start tomorrow. That way if someone is in a bad spot, if they do need a job right away, you're going to get them. Typically not going to be your best of your best in terms of the hire. However you might need them. The secondary ad is more like long term growth mindset leadership opportunities available, management training available in two years. That's the kind of two different ads that we were running. And so every single one that was hired were instant texts. And then they were, they showed up. Now this is the thing, when you're doing that time slot I was able to every single 20 minutes have an interview. And for some of them I had two people schedule or two people on the interview slot. But I just considered it filled when there was a time slot that was confirmed. So what you end up having is only half of people who even get back to you when you offer time. So that's works out perfectly because you just have one person each time slot. So I actually had no doubles up and I had no one waiting on each other. It was like perfect. So every 20 minutes I didn't have any twiddling my thumb, twiddling my thumb, twiddling my thumb, twiddling my thumb, twiddling my thumb, twiddling my thumb, twiddling my thumb, twiddling my thumb, twiddling my thumb, twiddling my thumb, twiddling my thumb, twiddling my thumb, twiddling my.

Sorry. I don't know what happened there. Give me a second audio.

Sorry guys, give me a second here. Switch my microphone over.

Cool. Sorry. Audio on this thing is flips out all the time. So.

What they say? Oh yeah. So big thing is respond to them quickly once they apply, get them interviewed quickly and text messages is going to be the killer. It's awesome. Like every single person responded back to me via text. No one called me back. I think only one person emailed me back. So I'd really, really recommend that as soon as they come in try to jump on them in terms of and then offer them a time slot and then just try to go back to back to back to back every 20 minutes and double them up and then only consider that time slot filled once someone confirms once they respond back to you saying a time is good for them. So worked really, really good for for me. Yesterday we were able to schedule three people. One starts next Monday, another one starts the Monday after that and the next Monday, August 1st, someone else starts. So spread them out that way. Worked really well for them in terms of them needing to have time before getting hired anyways. So cool. Let's jump into some questions.

All right, let me share my screen. Sorry about that. Audio issues. So weird. This thing is weird. All right, let's jump into some questions. I haven't read these yet, but there's two of them. Oh yeah, this one's from Dustin. This is about the management thing. My phone died when I write died when I write when I clicked submit. So hopefully this doesn't get posted twice. Little recap as you have answered part of this question already. This what is the reasoning behind keeping Moore's vault 500k? Are you trying to trying a different model or is it the market etc. Would you say that 20 to 25% profitability can still be expected or or will this be lower due to having a GM running day to day or higher due to less overhead? What does the compensation look like for the GM at this location? P4P profit sharing hybrid since the GM is still expected to be in the field or just a bigger percentage bonus on profit sharing and salary? Yeah. So in terms of the compensation for a GM, it ranges for me for my general manager from 10% up to 25% depending on my involvement in the business. Alright, so if I'm involved, if I'm going there, if I'm having meetings, if I'm doing hiring for them, they're going to be getting 10%. If they're doing everything without me and making all buying decisions, etc. That's when they go up to 25% of profit there. That's their bonus. So in terms of that, in terms of this one, I'd say 20% is definitely possible. It's getting compressed, as we all know, with inflation and things, but it's definitely possible. How I see it is I've always said between 300 to 500,000 is like a weird range of revenue. Right. But I also believe once you pass 500, you're gonna need someone full time working on the business, doing estimates, admin, shop work, clerical, doing estimates, just enough to keep the guys busy. So if I can keep right on that $500,000 marker, I can still have four employees. A general manager that stays out in the field, working most of their day, they do estimates maybe two days a week, easily can do that. And just them working three days out in the field will cover their, their wage, their salary and allow the location be very profitable. Once you get above that 600, 700, 800,000 in revenue, you're going to need someone just full time scheduling, managing the dispatch board, sending out invoices, talking to unhappy customers, working with yellow slips, communicating with command center, going on, doing estimates, managing the crew, someone doesn't show up. Like lots of employee issues, when you're at that four to five employee level, you can make that work as long as the general manager is out in the field working. What I see a lot of times people will do is they'll get a general manager, four to five employees and the general manager doesn't work all day long. And literally 20% of their labor immediately is overhead. That's the general manager. So if I can make it where the location has command center running everything, the general manager is able to work three to four days out in the field and do estimates and drive bys and clerical work maybe one or two days a week, that model will work at 500,000 in revenue. So that's why I keep it there. If it keeps growing, and if I had a general manager that wanted to keep growing I would totally let them do it. It's just going to suppress my profitability in the short term because you got to scale up more, buying more trucks, equipment, et cetera, to go from like say 500,000 to a million. But again, you're going to need someone full time in order to make full time overhead, non revenue producing in order to get, you know, 6, 7, 8, 91 million, you're going to need someone full time overhead. So I actually really like that 500,000 level because it's easier to find a general manager that is working out in the field and does part time clerical stuff and estimates versus someone who's good at managing a crew of 10, 12 people. So if one of my GMs was like, Hey, I want to grow this big and I don't mind being unprofitable and not making a bonus for the next few years, I want to grow this thing big, I would let them do it. But this specific location we worked, we want to find a general manager manager replace Chuck and so he can help us more on the franchise side of things at corporate. And so we want to make it. It's easier to find a working manager. I have to come up with a better name. I'm calling it a working manager. Someone that's out in the field part time and then just doing the field. The estimates and office work part time, day or two a week. It's easier to find someone like that than it is to find someone who can manage 10 to 12 employees or 15, et cetera, and really scale the business. So again, simplification, it's not a matter of just simplification services, pricing, all the rest. It's also like okay, well, general managers, if there's churn at the general manager position, how can I simplify that as much as possible? You got to reduce the amount of experience you need from a management perspective. It's much more difficult if like the local shop has, you know, 17, 18, 19, 20 people out in the field. It's harder to find that general manager than if someone who's, you know, three, four, five employees and out in the field working half the day. Because that, that first position is going to be very, very management based. All right.

Next question.

Vlad from Winter Garden. I have some high interest debt personally and within the business. Should I continue to grow the business as fast as possible and make minimum payments or slow growth to pay off debt first? Thank you, Mike. I think there's. You could do it two different ways. If you want to go really attack it, you'd probably slow down the business growth, raise your prices and attack it that way. I think you could probably raise your prices, take that amount that you're going to get the delta of and start throwing that at the debt. You definitely anything in my opinion above like 7 to 8% right now, you want to be paying off. As you go into an environment where especially if that's a variable rate that's going to keep trickling up, you want to be paying down. Anything that's above 7, 8%. A few months ago I would have say 5% and anything below that I just keep long term. But now with interest rates going up and you know, everything's in terms of interest rates are going up, I would say anything above 8%.

You definitely want to be paying off as soon as you can. So that just be my two cents again. Back in the day it used to be 5%. And I usually take prime, which is like you take the 10 year treasury, which right now is like 2.7, 2.8, I might multiply by two and anything above that I usually want to pay off. So for example, a few weeks ago prime, like the 10 year Treasury I should say went to 3.5%. So that'd be like multiply by two, that'd be 7%. Anything above that, I'm like starting to get a little bit high, too high of interest, I want to pay that off. Whereas if I get a loan on a house that's fixed at 2.5 or 3%, like keep that debt, do not pay that off. You do not like the fact that people encourage other people to pay off their debt, their home, home loan, when they're at a fixed rate of 2 and a half or 3% and interest and inflation is at 8% right now. Like it's stupid. Do not pay off your house debt. If you're at 2 and a half, 3% interest and inflation is right now at 8% like that would be crazy. Don't do it. You want to pay off the things that are above that, are above that. Inflation as well as I use personally 10 year treasury multiplied by two. Anything above that I'm typically trying to cut out. So I would personally if I was you, Vlad, because I know you're growing quite a bit. Like I would say raise your prices to slow down growth and then whatever the marginal difference is between you raising your prices, throw that towards the debt principle. All right, so let's say you have 70 mowing customers. If you raise the price per cut by $5, just say that, that's $350 per week times 12. Let's just say it's $1,200 per month. I'd be taking that $1,200 in Delta that difference and just throwing that towards the debt.

Yeah. And then in the meantime, once you pay that off, pay that debt off, then go try to open up something like a business line of credit. Because once you pay it off, your credit score will go up, your debt to income ratio will go down and so you'll be able to go and get a business line of credit that if you need it, you can tap into. Because you'll probably be cash depleted. If you're stacking money at this loan every single month. Right. You're going to be cash depleted. So open up the business line of. Once those things have been paid off, your debt to income ratio will be better, your credit score will be better, then you open up a business line of credit. That's what I would do. When you've paid those things off, you'll get a better term and better line of credit, basically. Cool. Awesome. Thanks everyone. Hope you have a great day. Have a great week. And tomorrow make sure you tune in. We will not have. No, we'll still do a mastermind in the morning. I'll answer any questions and things like that, but announcements and things like that will be done Tuesday evening. Again, Franchise Advisor Council, make sure you fill out the form and vote on who you would like to be representing you. And.

We'Ll jump right into that tomorrow evening for the roundtable. So I'll send that zoom link out again, but it was on the Saturday's email and look forward to it. Take care everyone.