Mike Minutes Mastermind 08/09/2024

And we're live. Welcome, everybody. Happy Friday.

Let me turn this up a little bit for you. There we go.

Okay, let's get rocking and rolling. We got three questions this morning.

Jump right in.

First question is from Dustin from Champaign, Illinois.

Hey, Mike. To pee. Back off of Mr. Anonymous question yesterday, for context, is my seventh year in the landscaping industry. This is my third year with Augusta. I found myself being less and less patient with both customers and employees as time goes on. This is generally in its peak time, in its peak this time of year when the business begins making money and things seem to be headed in the right direction. And to be clear, These issues are 99% of the time from low performers and the worst customers. Is this something that you see across the board as a trend with people in their businesses? I generally want to go, want to be happy, go, lucky guy. But when minor inconveniences come up, it's extremely frustrating. Day after day, I always try to reflect and see if it's an issue on my end. And I would say it's about 50, 50. Whether it's not putting enough estimate notes in to make something clear to a customer or not explaining something well enough to the team, I will take the blame, fire those. But laziness from team members, customers demanding certain things that won't fit on our schedule, etc, are extremely annoying.

Any words of wisdom or suggestions you have to deal with, this would be great. I know there's a quote, something along the lines of, as you grow, your issues don't go away. You just have to just know how to handle them. And you get frustrated with bigger ones, but you know how to deal with those small ones. However, when the small ones compound, it's extremely frustrating.

Yeah, so, yeah, like I always joke about it, but like, I live my life in a constant state of frustration, and so I usually say ingest, but it's actually quite true. And it is in part because even the little things.

The reason it's frustrating is you know how to fix it. You know how it could have been prevented and it happened nonetheless. And it stinks. And it's. It seems so far below you to even have to deal with it. So this doesn't change. This doesn't get any better. But to your point.

In part, like you said, the frustrations continue, but it's bigger problems and the smaller ones don't seem a big issue. That's true. I would also say as the business becomes more profitable and you're in profit mode and then you actually scale up, usually past more around the lines of 2 to 3 million in revenue is when you can start hiring multiple layers of management to prevent you from even hearing about these problems. And so.

The reason is you want to do that is not because anything other than you being frustrated usually leads to bad decision making. So.

Like when I'm frustrated, I know I make bad decisions. So I have sacrificed profitability in order to be able to get good managers in place that can make the decisions without me being there and block from these minor inconveniences that happen throughout the day. Because they're going to happen all of the time. As long as you have humans evolved, there's going to be little things that fall through the cracks all of the time. And as you grow in scope and size, there's simply more things that are happening today. So the percentage might literally stay the same. Let's say 1% of your interactions and customers, employee interactions, et cetera, go wrong. If you 10x the business and you go from 100,000 to a million dollar business, it's going to feel like 10 times the amount of problems happening when you, when in reality it's the same 1% of problems that are occurring.

And so I would really say the only way to actually truly not get frustrated these things is to delegate them. Yes, you can try to fix the process, fix the system, fix the service, et cetera. But as long as you're dealing with humans, like employees will get sick, employees will have bad days, employees will get frustrated, employees will get mad, customers will be unhappy, reasonable customers will say stupid things, customers will leave bad reviews. These things will be tried and true forever. And so if you're going to grow the size and scope of customers you're dealing with and the size and scope of employees that you're dealing with, you're simply going to increase the likelihood and the percentage or the likelihood and the volume of those issues. It's just going to happen. And so instead of being frustrated, I would just come to peace with that. That is a fact. And the only way, the only way to actually alleviate yourself from this is to delegate the frustration. And that only happens when you get to a certain S and generally is past a million. And then especially you get a second layer of management when you're like 2 to 3 million. And then you start going beyond that. That's when you get a second layer of management. And it is a lot of times you won't even know about these mild issues and problems.

So for example, I'll use myself an example.

It's only literally the past few months where I no longer go to any meetings in terms of my local shops. I haven't been to the Mount Vernon shop. I haven't been to the Augusta, the Bellingham shop. So I know they're going through problems. I know they're having issues. I know they're trying to find employees, et cetera, et cetera, et cetera. I'm just not aware of them. I don't know what the problems are. And that is important because I need to stay focused and not be frustrated on those things. And I need to be focused on other tasks, not to say those things that the frustrations that they're having are inconsequential or smaller. It is simply a matter of, like, that should not what I should be focused on. The same way that they shouldn't be focused on things that they delegate to their employees, like mowing every single lawn. They delegate that as a general manager to an employee. They delegate fueling up to their employees. And then it's like as you have those multiple rungs in the ladder, you just get removed from the frustration, and your business can't really afford that until you're past a million plus. And then. So then that's like my local shop, then like the gym, for example. Same thing. It's like I go over there for 15 minutes a week, tops. And it should be running smoothly. You pay the people correctly in order to be able to keep all the mild frustrations and people that complain about whatever. I don't even hear about it. And if I do hear about something has gone wrong. And then like with Augusta Nation, there are layers inside of Command Center. There are layers in the leadership team theme that prevent me from hearing about every little thing. Because if you have tens of thousands of contacts that are happening at Command center, and you have thousands of interactions with owners every day, there's going to be problems. If I was aware and briefed on every single problem, I would have absolutely zero time to actually move the needle on things like aggressive Christmas lights, the dashboard being redone, the thing we're trying to build with the. So you can see your live command center fees improving. Max AI, like, all of those things is what I should be focused on. The frustration part will keep me away from that. And usually when I'm frustrated, I'll make bad decisions in those areas. And so it's just your current stress is, you know, you're in that. Excuse me, you're in that manager slash psychological pain part in the growth of your business. And so very common. For the size you're at and it doesn't necessarily get better.

Yeah, it's just. Man, it's frustrating. I just live a hot state of frustration every single day. Like. Yeah, on every single level. Every single business I get frustrated with. So.

Joe Falashi from Racine, does the instant quote pricing on the website capture the lead information if they don't click accept or decline? I thought I heard it did, but it doesn't appear to be getting emailed to me. Maybe I heard just the functionality wrong. Yeah, so they have to click something. If they don't click anything, there's no way to capture information. It's. It's malicious on the website. To actually do that you have to record their keystrokes and so you can't. They have to actually click something, either accept or decline. So they do. If they click decline though, we do get the information and then we would do it in OTP like the regular and measure their property. But they do have to click one or the other. So yes.

Excuse me, I have an ad sending 10 to 30 clicks to the webpage daily but no leads coming through. If I test, test, submit, mine does come through. I was getting leads and converting to customers from the same ad to the traditional quote form but since changing a week ago in instant it's been crickets. Maybe I'll request instant quote form to be moved and go back. Feel free to test it if you would like.

And so I was getting leading for customers in the same ad. I would want to know what that number was to actually accurately judge this. Keep in mind that with the instant quote form, typically people that don't want the price aren't going to submit. You also reduce instant price forms cause 0 admin time to get accepted. So there's a trade off and usually when someone's accepting it's an it's not just a cost per lead. Now you're talking about cost per customer acquisition like you are getting a customer. So keep that in mind. Even if I'll be happy with a half half the conversion rate because I'm cutting out any sort of close ratio. There is no close ratio with a instant quote form. And so if I can just skip that step and let's assume I have a 50% close ratio, I'm halfway happy with half the conversion ratio. So switch back if you would like. Joe. I haven't seen this in any anyone's territories yet that I've seen but interested to see how the data plays out.

If you want to switch it back and Then compare. But I would definitely make sure you have a volume enough to test this and then realize that even if your conversion rate is half, I'd rather have that because it cost me zero admin and it cuts out my close ratio completely. But you're right, you're going to get less leads if you're requiring people to accept an estimate. But again, you are getting over.

Five different steps of the sales process, which is submitting information, getting, getting the price to them them, clicking accept them them.

Or if you have to go to the property. So that would be the fifth one if you have to go to the property. So you're trying to cut all those steps out just by having the instant price form. And then all those steps do cost admin time. You driving to the property, you measuring the property and giving them a call submitting, creating the quote. So just keep that part in mind. Asterisks. If you saw a massive drop and we're Talking like from 10 leads to 0, I would switch back. I haven't seen this at any territory yet that I've done the measuring on, but definitely test it. And if the numbers are telling you that I have no shoe in the game here. So just do what's right for your location.

Braden Morris. Sorry, I need Kleenex. All right, Brandon Morse, following up on Nick's question a couple days ago about borrowing money at a lower interest rate from friends and family, how would you reconcile that pay from the business? Okay, so first off, it's very likely you're going to get a lower interest rate from friends and family. If you are, you're kind of taking advantage of them because you not going through a bank and going through underwriting is.

Is what? Like, if you're not gonna go through underwriting and submit all your taxes and everything to your, to your friends and family, they should be getting a higher interest rate because they're taking on more risk. So assuming like they just are doing it out of love in their heart, cool. But I wouldn't be, you know, I'd just be careful with the fact that like.

If you value the relationship with them and they ever sour on you about the loan, keep in mind they are a, they are taking a much higher risk by not doing underwriting. So how would you reconcile that pay from the business? Writing a check every month and being able to use it as the appreciation still with say it's a vehicle loan or equipment also in the agreement, would you recommend putting it. Okay, one second. So if you write a check for the loan Each month you'd want to determine how much of that is interesting and how much is that of that is paying down the principal. So if you do a balloon payment where you just pay interest only say for two years, and then you pay it all off at the end, that's easy because then the entire check is interest expense. That does show up on the p&l.

So profit and loss statement. That's going to show interest expense as an expense, but it does not show principal pay down. So, yeah. Also in the agreement, would you recommend putting. So if you want to pay off earlier, would you give them a flat rate if you pay off before a certain time? So it's worth it to let you borrow money. Everyone's gonna be different. Like what the person's wanting and then what you want. Right. Like, I think the most beneficial thing for most business owners is interest only for a certain period of time and then all the principal paid off at the end, that's usually gonna be the best for you.

And the simplest to keep track of because every single check that you send it to them every month is straight interest expense. And at the end it's all principal pay down. And it's just on your B sheet. You'd be taking cash, converting it, you know, for cash as an asset, and then reducing that and paying down a liability of the loan. It'd be really basic. Some people, they would like. They don't really like that because they don't see any of their money until like two years from now. And so then they're like, no, I want like $2,000 a month in principal pay down. And I want that interest every single month however they want to do it.

So, excuse me. It really just depends on what they're wanting and then what you want. I would say if it's best for the owner, you is probably in the best case scenario, a balloon paint where all the interest accumulates and then you pay at the end. So you can just maximize growth of the business and then get the loan, basically pay for it down the road. Usually what is simple is like, hey, look, I'm going to pay. I'm going to pay 10% interest on an annual basis. So if I'm getting $50,000 from you, he's going to pay you $5,000 per year in interest. Take $5,000, divide it by 12.

What is that, 500 bucks.

Something like that? No, 500, it's going to be 480 or 400 and whatever, 450. That's going to be interest payments. Every single month. At the end of two years, I'm going to pay the 50 grand in total. That's going to be like your most straight line, easy way to do it. So they're making 10% interest annually and a balloon payment at the end. 24 months. That's probably the simplest, like most straightforward way to do it.

Alrighty.

Sweet. I am doing a webinar about P4P tomorrow if you'd like to join. You're more than welcome. You'll see a notice go out later today. The link wasn't working yesterday, unfortunately, but I'll get signed up tomorrow morning. Just do gonna do an early one so I can fit it in and yeah, that is the plan. Okay, I need to say, say this right now, but please keep this inside of Augusta Nation. All right. I'm only saying it because it came up in Memphis and then we've been doing a bunch of stuff on our end to make sure we can make this happen. We are planning by the end of 2025 to put P4P in the copilot. So it's one app, everything would be there and P4P would just simply be a tab on the left hand side. Please keep this internal.

Please, like it's very important. But I'm just letting you know because you all brought that forward. And then we've had a lot of discussions on the engineering team of how we make that happen. And then basically the P4P app as it currently stands would actually become the Copilot app, where it's native, it works offline, etc. So that it's built on React, which is a much more powerful system for mobile than what we currently have for the mobile version of Copilot. And so the goal is to basically move P4P app into Copilot app and then move the P4P web app into Copilot. So it'd all be in one place, it'd be really, really streamlined. There would be no sync because the data would be in the exact same place. So that is the way we're moving. The reason I ask that you please keep that internal is because we do have a plan to make sure that public people that are paying for P4P are able to be transitioned. And it's like a really smooth thing. But I need the next year to fully execute on this. And then this time next year I would be sharing with the public how they can roll this, make it simple and easy. But eventually they'll have to use Copilot in order to use P4P. I just don't want to freak people out because they'll think, oh my word, I can't use P4P because of that. It's like not the case. I'm going to make an easy transition for everybody, but I wanted to let you all know since you brought it up and we've been having meetings about it for the past month or two. So anyways, appreciate you all. Hope you have a fantastic weekend and we will see you on Monday. Take care.