Mike Minutes Mastermind 08/01/2023

Hey, everyone. Hope you're doing super well. Let's go and get started.

YouTube.

Okay, I'll move this over. I wanted to go over. Franchise Advisory Council had asked that I share.

The job posting that I used to in Madison.

Had decent results. I had 21 applicants.

And I'll show that to you in just a second as soon as I drop this into Facebook. So I'll show you that and we'll jump into questions. I am in.

No, not that one.

Copy that one.

Cool. All right.

Let'S see here. I did not get any hirees, mostly because there was a few good ones that I would have typically like to hire, but unfortunately there was no time to train people. And I would have liked to been there for a few extra days. I would have hired probably three of them and then just like train them up really, really solid for like all my time and attention on them, and then they would have been decent. But really a new hire that has no longer experience needs two weeks to become, you know, solo. So there unfortunately just wasn't time at that location. So we ended up just raising prices, cutting down costs in terms of extra shop space and trucks, etc. But anyways, let me share that. Something revolutionary, but some people had asked if they could see it. So here we go. Pretty straightforward, this one specifically. I did say in two to three years there could be options for general managers. You can usually use that because for the vast majority of two to three years, you want to be moving on from daily operations. If you have no intention of ever having multiple locations, if you have no intention of ever working outside of the daily operation of the business, don't include this. But I knew specifically this location that was something that was in his. In his. In the cards. Crew leader, Mowing and landscaping.

Yeah, I use lawn care leader at lawn crew leader as the title. You can change it up these multiple variations, change it every couple days. If you have an ongoing lead, an ongoing ad, you know, you can do long hair technician, you can do lawn care leader, you can do crew leader, you can do all these other things. I would not recommend putting things like pay bonuses and pay increase, you know, pay for performance in the title. I would do that in the main part. There is significant amount of data now that indeed. And their ads platforms don't want that. They want the actual job name and title and the position title in the title of this. They do not want dollar signs, P4P, long names, etc. So.

But you can play with it, right? So then we kind of focus on the mission of side of things. And then here I told them to go check out our videos. The part that I changed that I did not get on this one that I ended up changing before is this should link to Augusta logger. Oh, here it is. There you go. Sorry. Your careers page to hear hear from other team members that have worked on our team. That's the big one because when you go there.

On all of our locations now you have employee testimonials and we have something like 25 or 30 at least now of.

Employees at Augusta that has been submitted in so definitely you want to send them here. Has some day in the life stuff here office the application and I'll come directly to you. So that's that I go through some of the requirements. This one specifically required experience.

I I declined a lot of people because they didn't have experience. There's a couple ones that were good though that I did interview that did not have experience. They just really needed two weeks to get trained up. My base pay stuff in there I would not recommend. I saw someone telling an employee of the day that they would make like $6,000 in a month. And I did the math on that. That would mean they have to make $37 per hour. Like it's just not realistic even if it was. Like if it's you working out there all day, maybe. Yes. But again, like if they were you, they'd go start their own business. They're not. So be realistic because otherwise you're setting up your guys to be to hate you. Oops, sorry. To hate you within a matter of a couple pay periods. Sorry, this is the part I was just highlighting. There is paper performance allows for higher earnings with average of 21 to 28. Don't say 50 or some crazy number because you might get them on board but you will not keep them. So. And then I know specifically this location they actually were giving 40% during the heat of the of the summer. But I just did again conservative keep it 33%. So I'm not going to make them mad when in two months it goes down to 33% at this location. So there it is. Just don't oversell P4P because you're gonna. You're setting your guys up for a lot of disappointment and then that'll be. They'll. They won't trust you.

All right. Present share. Where are we going? We're going here.

All right. Caleb from Merritt island in Copilot. When we send an invoice, will the invoice be displayed directly on the email or we'll have the client click a PDF to view the invoice. We get a lot of calls from clients trying to clarify aspects of the invoice because they did not click the PDF link. So the link will take them directly to their client portal. They will not have to log in. It'll just show them the invoice right away. Whether that is a paid invoice or is they actually like pay to the credit card. And then it's also there's the option to have the PDF attached to the email and it's. It's a lot more straightforward.

Jeff from Sandwich, Massachusetts Mike, I'm thinking of using Angie. This is not Home Advisor leads powered by Angie. The piece that is a little concerning is a 12 month commitment or 35% early termination. I choose the monthly spend but it's then locked in for 12 months. Here's the offer. Please let me know what your thoughts are. Thank you. Pricing options recommendations 12 month agreement 12 month pro campaign broke into 12 monthly payments for consistency in work and budget. That's a great marketing spend. Marketing monthly quarterly annual payment options available. You are in a great market with limited competition. The average cost per conduct breaks down to just 25 per direct job request. Here's a package we requested $1300 monthly.

Times 12. That's 30 plus thousand dollars in the year. Keep in mind that we can make adjustments once you find your monthly budget. Stay the same 12 months you are. Here's a quick highlight of how Angie's leads works. Nvidia Timely, correctly, directly, no random dispersed leads one on one customer contacts you can complete with multiple pros receiving the same lead.

IM conversions set monthly price dedicated account manager, Limited competition, predictable demographics. Yes, yes, yes.

Okay.

First I'm interested to see how this is different than what we currently have in terms of on the deals page. We have a deal with them and I believe we are able to get around this 12 month agreement. Now you're saying this is somehow different than what's on there. So I'm pretty certain this is who we have. So I personally Jeff, I would contact our project, our.

Our service manager that we have the contact inside of the deals page of Augusta and connect them about this and say hey, how does this relate to what I have going on with Augusta and I think you can get out of this 12 month thing or at least something different.

I'm not saying these don't work. I'm just saying be careful of the fact that you're spending $30,000 because let's say for example, it works really well. You're gonna, you should be increasing revenue by at least 300,000. So now if you increase revenues by 300,000, you gotta say okay, well do I have the cash to go buy a couple more trucks, hire more people, increase shop space? Do I have the capability and the wherewithal to actually do that? Where am I going to turn this off? And for five months of the year keep paying thirteen hundred dollars a month and now your customer acquisition cost isn't, you know, 50 or 60, it becomes 100 plus anyways because of that. I'm not against these at all. Just keep in mind that this is a 12 month agreement. You're paying $30,000. So you got to know what that return is and know it's better than what you're currently getting.

So that would be my only, only thing to mention. Why did you stop by Cameron Simpson's location? It was struggling. He lost all his employees last or two weeks ago and was just really, really low and had reached out and basically wanted to quit. And I know that the location has a lot of potential. It's grown very fast and fast growth requires a lot of cash. It also requires a lot of stress and change of the owner. And they've been profitable like the business is actually doing good. It's just a matter of the team. And so as we've always stated, going from 0 to 500,000 in annual revenue is going to require a really good salesperson and Cameron did great at that and that's why it grew so quickly. But when you hit 500,000, when you hit that 40, 50, 60,000 month in revenue marker, the person that can grow beyond that, whether that be that singular location or multiple locations, will come down to their ability to lead other people 100%. And so there's a lot of learning that comes into play with that. And you'll see in the main video that we post kind of like the changes I believe are required to make that turn and be able to attract and retain a better team. So. Kevin, Bloomington.

NJ I currently have a loan from QuickBooks that I'm paying 2800amonth for. I have a, I have a, about a year left on that. $30,000, however, as you can imagine, is really eating my profits and cash flow. I'm thinking about trying to get an SBA loan, 50k to pay the QBO loan off and the remaining 20k to pay for my growth model fee since I don't have much cash end of the year to Pay for it. My hope is to get a lower interest rate from 11% to whatever they can give me and lower my monthly payment by extending loan terms to two years or more. Freeing up some more cat, some cash month to month. How should I be thinking about debt and pushing the can down the road? What are some pointers you can give me about the SBA loan possible, about giving the best SBA loan possible? Are there any other options available I'm not thinking about to help pay for the growth model fee. My plan for 2024 is a stop at 250 to 7 to 275. We'll hit that this year. Raise prices, increase profit and to pay off as much debt as we can and stock up cash for 2025 to jump to. Yeah, this is, this is exactly what everyone should be thinking. That is in this, like, in my opinion, to reduce stress. I'm seeing too many people jumping to this 500 level when they, they still have a little bits of debt, they still have quite a few payments. It's not like you can't do that. But you just remember you're going to have a lot of stress. So I think it's a great move.

You can get lower than 11%. But even with SBA loan, you're probably looking at 8 to 9%. So.

But at 50,000, it's considered a micro loan in SBA terms. And so it should be a little bit simpler of a process.

In terms of thinking about, you know, pushing the can down the road. The thing is, I would focus most of your time on building a business that you can pay off 30,000. Right. Because the thing is, I want to get pre wrapped up in interest, honestly, mostly due to the fact that your goal is to pay this off within a year, year and a half. And so going from 11% to say 8 or 9%. Yes, you will save a few hundred dollars per month.

But don't spend 10 hours a week for the next five months giving paperwork to them. Right. So if I was you, I'd probably apply for the loan to give yourself some breathing room and reduce. Oh, I see, your payment would come down. Got it. Yeah. So you would save in terms of like net interest a couple hundred bucks a month. But I see you would be bringing down your payment. So I'm not opposed to that because honestly, if you can, if you can extend the term of a loan longer without even increasing interest rate, or you have a highly, slightly higher interest rate, but you are able to extend the term of the loan if you Know you're ramping up, business up and it's going to become more profitable, going to pay it off in a short amount of time. Just know that you're actually not seeing the benefit like the interest, interest rate becomes less important because you're not actually going to have the whole loan mature. Right. So I would just keep that in mind in terms of getting the best SBA loan possible, I would just go to a couple local banks and basically talk to their SBA specific lender. If they do not have a specific loan officer that does SBA loans, don't talk to them.

They are the number thing. One thing I'd be asked is like, how many SBA loans do you do on average every year? And if they can't say confidently that number, and I go, well, we know, we help, we assist, just get started, do not deal with them. An experienced SBA loan officer will save you so much time and hassle during the process versus someone who's just kind of like bumbling their way along in terms of other options, paying for the growth model fee. You, you have the right mentality that like I would personally be looking at this, okay, if I got a two year term on this and I'm paying an extra thousand dollars or whatever it is per month to pay this thing down with interest, ultimately you've got to grow the business to the point and make it more profitable. So a thousand dollars extra per month, can you raise your prices by probably, if you're doing, you're going to be doing 25, 30,000amonth. You're doing 30,000amonth this year already. So literally, if you could raise your prices by 5, 6%, you would cover that, right? So when people, people underestimate the power of adjusting to the profit, to profitability and the increase of prices, how much that affects your profit. And if you're running $30,000 a month and you need to get an extra thousand dollars to be able to cover extra debt, or even 2,000 or $3,000 even. Okay, let's call it $3,000 per month. To cover this entire thing, you would have to raise your prices by 10%, raise it on your labor, raise it on your material cost, raise it on your estimate fees and dump fees. 10% across the board would pay this off. Right? And this is why I'm such a fan of recurring work is because you don't have that lever when it comes to projects. Right? I'm not against projects. Everyone always thinks I need to say that like there's no other business in most industries where you can be like, well I just did, we just did the Madison last week where we raised prices but by 25 plus percent on the vast majority of the customers. And I think we've lost six or seven total across 300. So.

And that just like immediately brings profit, like probably double profitability because it add an extra five or six thousand dollars to the bottom line. Right. So when you can do that, it makes debt a little bit more easily to, you know, achieve or to stomach. And then furthermore, the next question is by doing that, you're now unlocking full service at command center. That's going to increase your, you know, if you use their services it might, you might end up paying extra 500 or $1,000 to command center. The cool thing is this, now all of a sudden that thousand dollars you're paying on the debt, the extra that's called $1,000 for command center do all your full services, that $2,000 a month unlocks you doubling the business in 2025. Right. And you've now covered that $2,000 per month, the extra cost of the loan and covering that payment as well as the extra cost of command center doing full service for you like payroll, running P3P et cetera. That is what's going to unlock the ability if you go spend time on your team and do more marketing to be able to double the size of the business. So you like that is why the difference even between the two locations I just did the turnarounds for is one had 300 recurring customers, the other had 75. I have less of a lever with the 75 in terms of price. In terms of what we talked about on the weekend where like okay, well if I'm having trouble with my team, I can raise prices on my recurring customers and raise wages. Right? That's really hard if 70, 80 of your revenue is coming from projects, right? Because you're not as you can't just like immediately do it tomorrow and raise prices and immediately see, oh, I just brought X amount to the bottom line. Your close ratio is going to come lower when you raise prices. That's just how it is. And so on a tangent, Ben Collins, Arnold numero uno Mike, in your location, when your GM does production work, are they paid performance or do they have just get their normal salary? They just get their normal salary. All of their, what we call P4P would be around their profit sharing and then certain revenue goals for the new locations. Number two, my brother Andy is functioning primarily as an estimated trainer manager, no Production. He is wanting to do some production to make some extra money. He is currently paid $26 an hour. If he does a hybrid role of non production. And Esther, would we do manual adjustments for all non production so it doesn't drop his performance pain.

Honestly, like, it gets. You're gonna spend more time in the admin of like, okay, they've spent an hour and a half doing a job and they did a couple estimates, like back and forth. I would just be like, hey, you're getting paid 26 an hour. And then when he's helping someone on a job, you know, moving, you know, just running P4P as if he's an employee, so you know, how. How profitable and effective is he? But then not trying to do both, like, you're gonna. It's just gonna be an admin nightmare if he's actually switching back and forth throughout the day and like doing some estimates and helping that job site and then going on job on, jumping on a crew. If he's actually doing that, it's just more of a pain to track it, honestly. So I would just track it in P4P so that the employees that he's helping, it's accurate, they're P4P and you kind of know how efficient and effective he is. But then I just keep the same 26 an hour. If he's running as a general manager, trainer, estimator type, he should be more incentivized by profit sharing.

Lastly, would you ever give Andy a GM profit share or only reserve it if he takes over all GM roles? I would give him a small percentage now and then have that be like, as you take over more responsibilities, this number goes up. Right. And so ultimately, if someone's not getting P4P and they're actually out in the field, the only thing that's really incentivizing them is either revenue or profit goals. Right? So you got to have something there. If you're not going to have them on P4P during those times where you're doing production work.

Ben Collins. Arnold. Hi, Mike. Number one, when doing instant quotes, are you doing door knocking or just hanging them? I think it's more of a numbers game, especially if you're doing it in the middle of the day when half the people aren't going to answer the door anyways because they're not home. So we just hang them. Typically, if you are very keen on a specific neighborhood, knocking will absolutely do better in terms of the number per hundred that you get as customers. And I know that.

We've done door knocking before and like Connor Hutchinson for example, if he's listening to this, you can make a video if you'd like about what he's doing. I know he, I saw him in a chat with the general managers of what he's been doing. Actually talking to the customer and actually selling them like in person on what he thinks their property needs. That's going to take some serious balls to do it. And as long as you have the stomach for it go for just simply is going to come down to it's going to be hard to find someone typically that besides the general manager or an owner. Right. So if you're doing it maybe door knock and you sell them in person and he talks about like you know exactly what he kind of says do that he sells multiple jobs a lot doing that. Just know it's going to be harder to replicate that compared to just like hey, it's more of a numbers game. I got fixed per hour I expect you to put out. I expect to get one lead an hour like that sort of math. Number two, a few weeks back we put almost 400 instant quote during your assembly. We didn't get a single phone call from it. We felt like our prices are already low. How do you lower prices and still protect the employees on P4P? Does the company just take a hit on its margins? So first off, I'm always reminded of the story Alex Ramosi talks about where he put out four or five hundred door hangers or four or five hundred flyers and he went to his friend and he's like well it didn't work. He's like how many did you put it out? Said 500. He said well usually we do test runs of about 5,000 to see if something works or not before we even consider putting it into production. So it might just be like it is the size and scale, right? So do 400 for a week, 400 a day for a week and then, then see what happens. Right? Because I've had it before like even in North Carolina was there in June it was like I would put 400 out and like nothing next day, nothing next day. And then we would probably two or 300 and like got four or five phone calls, right. So you know, switch the neighborhood up etc. Etc. And keep committing to it and then actually draw conclusions. When you have 3,4000 houses that you put a door hangers on. In terms of lowering prices and protecting the customer, I would like on projects I'm okay with lowering prices like E fees, dump fees etc. Because it's taking a direct hit on my margins. I'd rather not affect the budget hours to the guys. So that's the first place I'm looking like can I affect my margins only. And that is through lowering EV dump fees and material markup instead of changing budgeted hours.

Garrett from Glendale, Colorado. We are maxed out on asset capacity. We have two trucks and five people. Including myself, I am only able to work on the field on weekends. We have profit about 8 to 10,000amonth each of the last. Before I pay myself, I'm one to finance a third truck. It would also be a nice as estimates are only happening Monday through Friday. Right now. Monday and Friday now. I feel it's hurting our close ratio. We are two, three weeks worked out but I know work will pick up this fall. Revenue is 22:30 to. Good work, man. 80% recurring. Nice job. I have about 40k in debt and 18k in cash with debt service about 1k per month. That's healthy. Do you feel we can find to justify a third truck? Our growth model is due in April 2024. By the way, just a great breakdown of your numbers in a clear, concise way for me to understand this Great job.

These are all the data points that you need. If you're talking to a coach, for example, this is the fact that you've doubled your revenue in the past two months is an important data point. The fact that you are you've maxed out your trucks and you've given the proof as to why important data points, the fact that you're close, you're booked out this far and what your close ratio. These are all exactly the data points I or any coach is going to need to know exactly what to tell you. The fact that you have 18k in cash and your revenue is 40k tells me it's a little bit risky. Especially because you have debt of $1,000 a month, right? So you're running a little bit of a risk at when you only have basically two weeks worth of cash in the bank. So that's normal though when you're doubling your business in 60 days, right? So going from 22 to 39k like you're doubling the business. There's going to be financial pressure. So either a raise your prices on existing recurring customers, 80% recurring. I bet you probably have 150 plus recurring customers. Easily raise your prices on them. That's going to literally take you from 39 to 45 without having to buy any more trucks and stuff. Then it's like, well now you got $5,000 extra in your pocket. Do you A, do that the rest of the year and pay, pay off your debt service and then you know, get the growth model and accelerate next spring or B, what you could do, and I'm not opposed to this, is what's your risk tolerance? Do you go get the truck with the extra 5 or 6k you make from raising prices on existing customers and go out get another truck and now your debt service is $1,500 per month, but you have the capacity to go up to 58, 60,000amonth in revenue during the winter, during the fall season. That looks very interesting as well. What's going to delineate your, your choice there is what's your risk tolerance? Right? Because you are running high risk by having only 18k cash and 39k in revenue. Like it's only literally two weeks worth of revenue is in the bank account. So that is you are running your seat, but you're single, you don't have a lot of obligations. Like you can do that. But if you want to grow, I would give you the green light to go ahead and raise prices on existing recurring customers and then make sense of it. Buying the other truck. The extra 3, 4, 500amonth in payments that I know you don't want to get make sense of it by just simply raising your prices and running the math on how much more profit you're going to get, right? If you raise all your prices by four or five dollars a cut, even you would pay for the truck. Plus like you'd have more, right?

So you could say, okay, I'm going to raise my prices on existing customers. I am going to get an extra 5 to $6,000 a month. Let's just call it 5,000. Let's be 4,000. $4,000, that'd be like a 10% price increase. I'm going to go take that $4,000, 500. That is going to go towards my, my truck payment, allowing me to continue growing. I'm not going to spend a whole bunch of money on ads. Your work is coming in, et cetera. I'm two, three booked out. I'm okay. I can slowly grow up to 55,000amonth in revenue over the fall. And then that extra 3 or 4k that I have a profit, I'm going to just chip away at this till this is gone or stack the money in terms of cav. Sorry, this debt, you can start chipping away at this or just put money in Cash to just build up the reserves. Because if you have 40k in debt and you're only paying $1,000 a month, you must have a decent term or a decent interest rate. So it might not be the best thing. Like, oh, let's go pay off the 40k in debt. You might actually just want to stack up your cash with that extra profit. Right. And still be able to afford the truck. Like have an extra $5,000 in profit just like tacked on here by raising your prices gives you a lot of flexibility to cover your debt service. Get another truck, continue growing and be able to chip away at the debt or put more money in your cash reserves. Like raising prices is a huge lever in your business. And so.

All right, that was it for that. We got questions that came in here.

Jeff Bromway. The Angie email doesn't work. I brought that up when I called the Direct Line on the pamphlet. They were able to give a better offer where we can pause leads. I just signed up and so did Thomas Hickey. Where do you submit testimony employee videos? On the Facebook page at the very top. I've pinned a post and it has the link for estimate for employee videos. If you have an employee that wants to submit a video, they can use that link. It's right at the top. Same thing with customers, which is even more important. Customers putting on there. Because now on all of our homepages we have customer videos being shown. So highly recommend everyone use those. Someone really loves you. Send them that link to submit an actual video.

Angie email doesn't work. I brought that up when I called Direct line the pamphlet. They were able to give them where we can pause leads. Who? Sure. Who this is. Oh, no, don't. Let's see who this is. One second.

Hey, Devin was the one asking for employee videos. If you have the actual video there, Devin.

Just. Yeah, you can. I got it here. I will put it into the thing. I just need to just. If you can just open up thing. You can submit the video using that same link though still, Garrett was the one talking about Angie's and Jeff Bromley and telling him about that. When you can call them. Yeah, like all these lead companies, their margins are so high, you can negotiate with them so much. It's ridiculous because once they have you as a customer, like it's high margin. So yeah, if you can get a tool, you can pause leads. Great. Just keep in mind if you're locked in for 12 months, that's gonna be a tough sell during three or four months of the year when you probably don't even want the leads, and they're still coming in to increase the cost per lead still. All right, everyone, have a fantastic rest of your day and we'll see you June. It was like I would put 400 out and like nothing next day. Nothing next day. And then we'd probably like two or three hundred and like we got four or five phone calls, right? So, you know, switch the neighborhood up, et cetera, et cetera, and keep committing to it and then actually draw conclusions when you have 3,4000 houses that you put a door hangers on. In terms of lowering prices and protecting the customer, I would like on projects, I'm okay with lowering prices like EP, dump fees, etc. Because it's taking a direct hit on my margins. I'd rather not affect the budget hours to the guys. So that's the first place I'm looking like, can I affect my margins only? And that is through lowering EV dump fees and material markup instead of changing budgeted hours.

Garrett from Glendale, Colorado. We are maxed out on asset capacity. We have two trucks and five people, including myself. I am only able to work out the field on weekends. We have profit about 8 to 10,000amonth each of the last before I pay myself.