Mike Minutes Mastermind 07/13/2023

Nation. Hope you're doing super well. Let's go and get things kicked off. Obvious. Drop this link into Facebook.

I'm just gonna go through the questions. We're halfway through training, so I'm just trying to get this out of the way before we continue.

Boom. All right. See, there's several questions, I think that came.

Snap. All right.

Cool. All right, first one's up.

Dustin from Champagne. What would you say the threshold for getting a lien on a house as opposed to collections? Honestly, it's. It's what you're valuing is the time it takes to do the lean versus the cost of collection. So collections will be 30% of if they collect on it versus the lean is going to take you some time to fill out paperwork and go to the courthouse, typically. So in the perfect world, though, you'd rather get the money by doing the lean on the house compared to collections, honestly, so. But if it's like a hundred bucks, I'm probably just gonna send it collections. If it's 200 bucks, probably collections, you know, if it's like a thousand, I'm giving out 300. By sending the collections, I might go drop by and get the lien submitted. Every county is a little bit different in terms of how much of a pain it is to submit a lien to a house. So if it's easy, I'd probably be doing that a lot more before I do any sort of collections. If it's a pain, bit of a. More of a pain, a bit of a process, then I'd probably be leaning more in the direction of collections, so. Kyle Tarvin Moore, Oklahoma. Do you have any tips for reducing the up and down swings of emotion while running a business? I'm feeling the lowest in years today. Tired of working on the field, Low cash reserves cycling through employees due to the high temperatures. It's all very emotionally draining.

Yeah. Like, in terms of dealing with it honestly, there's, you know, a few things. One you have to ask yourself, like, if you're asking for some sort of exceptional outcome, you're gonna have to put in ex exceptional levels of effort, time, energy, and there'll be exceptional levels of pain. And so.

I try my best not to get emotion emotional about. About the emotions, which is this is expected, this is planned. This was prescribed to get where you want to go. And if it wasn't, everyone would have everything that you want.

Everyone would have multiple locations and profits coming in while you're out on vacation and general managers in place that are motivated and you're able to pay them really good and you have benefits for all the guys and plenty of cash reserves. Like if, if, if it was easy, then we'd actually have a serious issue because everyone would be able to do it. That would drive our price prices way down, our margins would evaporate. And then this is what keeps a, in a, in a free market. This is what creates stability, right? Because if everyone was able to do it, then it would drive prices down, margins get compressed and become harder to actually make that happen. So eventually it just goes to the select few that are the most competitive, right? The most efficient, the most profitable, the ones that can work the hardest and the longest. And so everyone always tries to get towards equality, but perfect equality will never happen because as long as there are incentives, there will be people who want the incentives more and are willing to sacrifice more for them. And therefore they will get more of whatever incentive there is. And in a capitalist society, it just so happens that money is mostly the incentive. And so there can never really be true equality when it comes to money, simply due to the fact that as long as you make it money and incentive, there will be people willing to sacrifice more for it. And so your pain tolerance of what you are willing to endure to get where you want to go is the determining factor of the size of success you'll probably achieve. And so.

The same thing is true in, in sports. For example, one thing I was, I was, look, someone was saying the other day, I thought it was really good, I think it might have been on a podcast I was listening to and they said.

Yeah, it was a really no name podcast, but Alex Ramosi was on it and he said in, in one day's worth of training, a high school like athlete, like a track and fielder can probably shave off a few seconds off of their, you know, 400 meter dash just with a few training and like, you know, techniques, etc. However, the most, the most elite of athletes in the Olympics will spend four years trying to shave off one second or even a quarter of a second. And that's the difference between being 10th place and first place, which is infinite in terms of the rewards that they will get. No one cares about who got third, fourth, fifth place in the Olympics at everyone knows Usain Bolt, everyone knows Michael Phelps because they got first. But the amount of time and energy it took to go from third to first is infinitely more. And yet the output, the result of all the effort is so small compared to a beginner that starts. And so a lot of times happens when you first get your business started is from 0 to like 20,000amonth in revenue, 30,000amonth in revenue is extremely exhilarating because you can ramp it very quickly and get there very fast. It's extremely exhilarating. However, fine tuning a business that's eighty, a hundred thousand in monthly revenue and making it profitable, cutting out the waste, getting good management in place, starting a second location, doing all these other things that make the business actually exceptional is not as fun, it's not as exciting and it takes as much if not more pain. And that athlete that start did it in one day literally might have fun having a picnic, but yet you know, with their friends and chilling out at the park literally cuts off several seconds off of their 400 meter dash. While at the same token four years of blood, sweat and tears, multiple workouts, eating correctly, coaching, spending millions of dollars on their body for an app for an Olympic athlete will shave off a few seconds. However, the difference is is that the person that is doing it at an Olympic and.

Elite level is the one that gets all the rewards. And so.

It'S easy to fall in the trap of constantly jumping from thing to thing because it is rewarding to get that immediate improvement. And that's why people like to jump from industry to industry or service to service is because they get an immediate increase, very quick ramp of proficiency and increase of revenue and growing of the business. But that's not really where the rewards are at. The rewards do not go to the person that just shaved off 3 seconds or 4 seconds after 400 meter it goes the person that shaved off point 1 second off of their their 400 meter dash and became went from third to first place in the Olympics. And that's where all of the rewards are given. So if you want to have an elite level of to to compete at an elite level, expect extremely high levels of pain for less and less marginal return. However, that marginal return is the.

Is the tail end of where success is found. And that's in the the 0.2, 0.3% of the population. So.

Vlad from Winter Garden. We are at labor and asset capacity for our four guys and two trucks. We are about four to five weeks booked up on projects. We just got a 40 hour property cleanup approved today. We just got a 40 part. We do not have any money in the bank for another truck and equipment. I would hate to shut off the fossil on growth. I would hate to shut off the faucet on growth. But we went into profit mode in July, raised prices on new and existing customers and we're still getting work accepted on our schedule. So this by the way, I'm assuming is probably about a year and a half into your business. You're hitting momentum. This is awesome. Good problem to have. This is an awesome problem to have. Do I just completely shut off new leads for recurring and project based work or rent a truck and hire another team member until we have enough to buy a new truck and set up? There's a few things you could do. One, if you've already raised prices and you know you are profitable in the work, it's just a matter of that you raise price in July, you will probably not collect on that in August. It'll be a September and October when you really realize the benefit of the increased price.

So what I would recommend is one of two things. One, you go get the truck and you just get a loan on it. Realize that you're going to spend probably $1,000 or more on interest over the next several months. That's going to be cheaper than renting the truck for the next few months and you'll be able to own it, paint it, et cetera. So get a loan, get the truck, et cetera. Or two, if you really are like, hey, I don't really want to grow, I'd just rather stick with the four guys. Raise your prices on all existing customers. It sounds like you did this already though. So you know this is, this is the best problem to have. You raise your prices. You still have max that capacity. You know that in a few months that profit's gonna come back to you. I would definitely raise your prices on all projects. So if you say are $80 an hour, you might want to move your project rate to like $100 an hour. While like in when you start hitting above 4 weeks booked out. In my opinion, EV should be going up, dump fees should be going up. Your hourly rate for projects should be going up because you literally do not need this work. And furthermore, in four or five weeks, if you're doing property cleanups, for example, like this 40 hour property clip, there's probably going to be an additional five to six hours worth of work that over the next four or five weeks is created simply because the bushes keep and the weeds keep growing. So this is a good, this is a good problem to have. Very good. It sounds like you raised prices significantly on oh yeah, new and existing customers. So good for you. This is exactly where you want to be at. And if you want to continue growing, I would. In this scenario you can absolutely afford to get a Debt, get another loan on a truck because just your price increases on existing customers will cover the cost of that debt easily. And then the whole, the goal is that in the next three, four months you can pay off that loan. So you're not paying 6, 7, 8% interest or whatever you're going to get. So that, that, that is a scenario when you have so much work coming in, you already raised prices, there's still work coming in and you're at capacity limits. Getting another truck on some debt would be completely permissible especially due to the fact that just getting that other truck, I guarantee you will unlock three to five hundred dollars a month at least which will cover your mortgage and it create increased efficiencies. Even if you kept your current employees. Like I think if, let' example you're doing 35, 40,000amonth revenue, I bet you go to 48, 50,000 just by getting the other truck because now you can split up your crews and like have one truck doing projects and the other two doing mowing. Just, just that alone will increase your capacity. If you now add another employee, you're probably going to increase your capacity by about 30%.

Connor from Evansville looking for clearing in a situation. Oh, I think I, I addressed this with the, with you Connor. And then she emailed you back.

No longer doing employees. I do payroll. Got it. Yeah. So I think they cleared this up with you and that was about can we do onboarding if you DO payroll and QuickBooks categorization. So I think I saw the respond back. I didn't read her entire email back to you. But it's gonna be difficult for them to onboard into QuickBooks if you're doing all the payroll and all of the.

All of the other stuff inside of QuickBooks, especially if you're setting up everything differently in payroll because of the state. But I know she responded back to you potentially was able to help you or something. I forget I did not read the entire thing. Sorry. Back to you yet, Connor.

Kyle Tarvin from Moore, Oklahoma. I've been thinking about this question lately and maybe it's because I'm currently in the trenches. Curious if you have ever seen anyone be a better manager or visionary versus operator type. As I have been thinking about myself and my business every time I'm not satisfied with my work is when I'm in the trenches doing the thing, customer complaints, performing the work, doing the dirty work, etc. Is there a time when a business owner should just accept that fact that they might be an operator in the field and Just hire someone for the position instead of run the business. Would it work to put someone in the position and then you get out, go get a day job to cover your living expenses. Maybe I'm looking at wrong, but just a thought that has been rolling around in my head. Most of the time we just, we disqualify ourselves from an operator's perspective because we enjoy the visionary side more. But I can promise you, being an operator in your own business is a whole lot more.

Giving you a whole lot more autonomy than you go in and get a job.

The fact of the matter is, unless you're making like twice as much as the GM that you're going to be hiring, it's probably not worth doing that. If you can make say 130, 140 grand and then go hire an operator for 60 grand, that might make sense.

But it just comes down to what you want from the business in the long term. Because in the long term, this would be a step back in terms of going towards your goal. If you want, like, what do you want? Like, what is the end goal is you want one location pumping off a little bit of profit on the side. You could absolutely do this. Basically running it as a GM ran location, get to 500,000 in annual revenue, increase prices, make it pretty profitable, try to get, you know, a good profit sharing with that GM and then you're doing your day job, if that's what you want.

But I would, I would recommend for someone who knows that they're more of a visionary compared to an operator is you need to grow out of the operator stage, but don't do it prematurely. So a lot of people will like, oh, I need to go hire an operator. It's like, no, you need to keep growing to the business can afford an operator and you need to just stay patient till you can afford to have someone come and run operations. And this could take you five or 10 years.

But if the end goal is like, hey, I want to be the visionary, I want to have, you know, be doing investments, I want to be doing multiple locations, I want to be more of a regional manager, training my managers, et cetera, like, that's all fine and good, but you're going to need to have the business be having enough capital to be able to do that. And you're going to, it's going to require you being the operator for a good period of time. So.

A lot of times too, I just find people like business owners, they use the visionary card as a way to get out of operations when in Reality operations is where you make money. Visionary is an overhead expense. So you've got to scale the business significantly before you can be quote unquote visionary, like a lot. Because you'll still be doing sales even as the business continues to grow past a million dollars in revenue. The only way you step out of like daily operations and you're more of an investor is going to be if you stop growth. Right? But if you want to be a quote unquote visionary and like really try to scale the company next, you've got to create quite a, the nut of revenue to be able to afford the expense of you becoming visionary and stepping out of actually creating revenue. Right. So you have like different stages. You have you being in the field, creating 100% revenue for the business. Then you have operational, which is going to be like you as a manager doing estimates, et cetera, then sales only. So you probably are going to get someone like do operations out in the field, manage the crew, manage the dispatch board, and you're probably going to sales only. And then the stuff above that is what you're talking about more of a visionary rule, which is like you have an estimator, you have general managers in place, you're more of a kind of regional, you're training the managers. And then you're also thinking about like expansion. You're acquiring other local, other competitors, you're investing money. Like the amount of size and scope of that organization has to be very significant to afford a visionary. Right. Like I'm still not technically a visionary. I still am very much in the weeds of like looking at tickets and software and things are breaking last night, I'm still jumping in.

So I would be very careful to say that being a visionary is where a small business owner's head should be at until they are, in my opinion.

Probably 50 plus million in annual revenue. And people will go to what like Jeff Bezos said about like he makes two or three good decisions a day and that's it. And his, his philosophy is like, he doesn't need to work many hours, he needs to make two or three really good decisions. I agree with that. However, look at his track record and he did not think that way until they were already doing nine figures in revenue. He was on the floor packing boxes until that point in time. And so everyone always looks at the end and listens to these people and says, oh, they're successful because of this. No, they're doing that because they are now successful. Right. Getting to that point was not that way. And so just be Careful when you, even when you listen to people that are quote, unquote successful or you look up to is what works for them. Well, today is potentially not what got them there. And I have a big problem with people giving advice about what works for them now when what got them there is a completely different recipe. And so that's why I feel like a lot of small business owners get discontent and want to become quote, unquote visionaries. Because they see their visionaries that they look up to, like, oh, I want that. When in reality, what got them there is not that it was being a great operator and just putting their head to the grindstone and working very, very hard for 15 years. And then they became a visionary once they're the size of the business quantified and could calibrate for the overhead that a visionary brings. Because a visionary costs a lot. Not only just in terms of like your, your salary of not being in operations, but more importantly, a visionary is going to break stuff. They're going to be trying things that they're typically bringing R and D to try new things. They're going to do try new services and venue in like different businesses and branches. And that messes stuff up and costs a lot of money. So don't fall in love with being a visionary. That would be like what I would say to most small business owners. Recognize that you are that way and if your goal is to get to that level, you're going to probably need to put in the time to build the business to the size where that is actually quantifiably justified.

I think most people jump to that conclusion way too soon because they're listening to a bunch of visionaries that have gone through the years of operation. And. And I would challenge most people on the fact that you can build a business and year one or two, be a visionary most of the time. Those are startups that don't make any money. All right, guys, have a great day. We'll see you tomorrow. Take care.

It's Kyle. I like to be more of a region manager in the field anymore. Yeah. So it's just like, no, I didn't have a regional manager for eight years. Right. So put in your eight years with that as the goal. That's what I would be thinking. Right. And so is it painful? Yes. Like, I wanted to quit almost every single day for five years. I didn't make any money, worked my brains out, felt like horrible all the time. Eight years before I had a regional manager. Right. So if that is the goal, realize that you going and getting a job and hiring an operator as a GM is probably not going to get you close to that goal. What is going to get you close to that goal is you scaling one location making extremely profitable starting another location making that very profitable profitable and getting to the regional manager position. Once there's like three or four locations you then can hand it off to a regional manager because now all three or four of those locations you've made sure are profitable on every single one have a good general manager in every single one have a good compensation plan for each of those GMs to be able to succeed and stay with you in the long term and you spent time with each of those GMs to make sure they're profitable they understand what's going on they've been sent to training and then then you have the license to go get a GM that's going to cost you 70 to 100k just to manage those locations. All right guys we'll see you tomorrow. Take care.