Mike Minutes Mastermind 08/11/2022

Hey everyone, let's go ahead and get started. Let me just quickly put in the YouTube link. Sorry, I forgot.

YouTube. Cool. Let's go ahead and jump in. I didn't really have a whole lot of announcements, so let's just jump into the questions.

There you go.

Cool. Six or seven came in, so let's go ahead and get started on those.

Another one just came in. Okay. Chad, is mowing Spring 2020 the only one click estimate template available right now. I'm not seeing any others in the dropdown. If you are in Zooper, it's probably the only one. If you are in service all five, there's probably three or four of them, honestly from years past. So.

It would be the only one. If you're in Zooper. Yes. In terms of the template that's available in the marketplace.

Dustin, when you start a new location from scratch, what are your goals for that location? Year one, does it depend on where the location is or do you have a revenue goal regardless of the market? Honestly, I like to invest the money and within I want the first quarter, the first quarter be really, we buy all the trucks, buy the equipment, all the rest of it, the next three months, the next next quarter to be stabilization, usually finding enough team members, et cetera. But by month six, I want profitable consistently. I want consistent profitability after the first two quarters. And so how, how much I grow in those first six months is mostly going to depend on the aptitude of the manager. If they have never managed people before, I'm probably not going to let them go above three or four employees. If they, especially if they're like having some serious discomfort at that level, if they want to keep growing, great, hey, I'll let them go as big as they want. But I typically when it comes to a secondary location, I am thinking about six months to profitability and I need profitable every single month after that outside of just the winter months. In terms of a location that's starting, like if I was the owner, operating, getting started myself again, it's going to come strictly down to my capital as well as.

How, how long can I hold my breath and not have rev. Not have profit? Because if I can push off profit for a year and a half or two years, I'll grow significantly larger compared to if I want to actually start taking distributions after a couple months or if I need to take a salary out of it. Right? So personally though, like I want my first, my first year. I want my location to like, if I start like more locations, I want the first year to be 300,000. I want the next year to be about 500,000. And so that way it is. At year two, they're making that decision. Do we stay at 500,000 and do a working GM model or do I want to keep growing and scaling it up? Right. If they want to stay at that second level, 500,000, that's when we're going to increase prices, increase margins, etc. So I don't really have a. I don't believe market is as big a deal as most people make it out to be. I'm strictly looking at the manager's aptitude and then capital.

Investment.

Do you have a baseline marketing budget for year one or does it completely depend on the amount of work on the schedule and adjust according to that? Yeah, it's got to be fluid because otherwise when someone's like, oh, I got a marketing budget of $20,000, like, great, what if we spend 5,000? You're overwhelmed with work. Are we going to keep spending advertising dollars and just wasting it away? No, we're not. So I kind of budget usually for 10 to 20 grand over the course of those first six months to kind of upstart a location and jump start one. But.

It'S very flexible. Right. I've had some locations I've seen where they spend $3,000 and they're doing 20 grand a month in revenue within a few months. I've seen other places where it's, it's. They put in 15 grand and they're struggling to do $20,000 a month in revenue. And honestly, it's not the market. It is not the market. It is the aptitude of the manager and the leader, whether that be an owner, operator, or the, the gm. I consistently see that over and over and over again. A good general manager, a good leader, they will figure things out. And they will. And if they, if marketing is not doing well, guess what they're gonna do? They're gonna pivot. Okay, great. I'm gonna be doing door knocking. Oh, that didn't work great. I'm gonna go and focus on upselling my existing customers. Like, they will figure it out. So the key is finding a great gm. And if you are the quote unquote gm, you are the person out in the field, you are the owner, operator. That's what needs to be brought into question and worked on is like, why are people leaving? Why are people not staying with the company? Do I need to do a better job of doing team meetings? Do I need to do a better job of staying with the crew. At the end of the day, I need to do a better job communicating. Do I need to open up my books? I can see the numbers. And then that, you know, from a marketing standpoint, that would be hr. From a marketing standpoint, it's like, am I just spending money blindly because, like, oh, I should just have some Google Ads running, or am I actually tracking it? Do I know how much I'm spending? Do I know where my leads are coming from? Am I doing nine arounds? Am I knocking on people's doors? Am I trying to upsell every single one of my existing customers? These are the type of things that you can dramatically take $5,000 in marketing spend and make it worth 40 or 50 simply by spending it correctly. And that is okay. I could spend four or five thousand dollars on just Facebook ad and Google Ads and probably blow it in two months. You could, but if I'm just gonna do it blindly and not track it and not know what's doing well and, you know, just kind of like, I'm just spending money. I'm just doing my marketing spend. That's what I don't like having a budget for is people just like, spend the money. I'd much rather be like, okay, let's try this out for two weeks, see how many leads come in. Oh, that didn't work. Let's pivot. Oh, okay. I just found out that door knocking. I get one lead per two hours. Great. I'm gonna go get four leads a day by just knocking on doors. And then I convert three of those. I have a 75% close ratio. All of a sudden, that makes a lot more sense than running ads on Facebook. Right? So.

Kyle, what percentage of your yearly revenue is made in the spring versus the remainder of the year? Should we scale up in the spring and scale back into less crews in the summer? Even though you might scale back in terms of number of employees, usually your revenue stays consistent or even goes up because you're so much more efficient after the spring rush. Spring rush is a. A multitude of inexperienced labor. Grass is growing like crazy. Bad weather. Combined, all those things together means that you're usually less profitable. That's why, like, from here on out, this is where all your profits made. Everyone starts making money in July, August, September, October, November in this industry. And so you'll. You'll wonder. Everyone wonders why you'll see a whole bunch of promo promos in October, November for mowers. It's because that's when all landscapers have money. So.

Did I Answer that question fully.

Yeah. So basically all that to say, like it's very normal to bring down the number of employees that you have during the summer as you kind of slow down, but your revenue theoretically usually goes actually up or stays consistent just because you're so much more efficient with your labor. Since we are coming to Washington September for training, I don't think I'll be able to come back in Washington for conference. Are there any ways to attend virtually? We are not going to live stream it. It's just way too much from a technical standpoint. Depending on the Wi Fi, etc. We will record it though and for everyone in the guest nation you'll have a recording of all both the Augusta part and the regular conference.

Is there a good or safe percentage number of overhead vs monthly over monthly income? Right now we have about 15k in recurring monthly overhead. That includes our shop, my pay, insurance, etc. We bill out recurring maintenance 25 plus another 20 to 20 to 60k in project based work per month.

I'm really not a huge fan of getting a percentage out because there are ranges that work. But just because someone says there's a range doesn't mean that I should be constantly fighting that range. And so I'm much more of a tone of looking at every single part of overhead and just seeing like can I cut it out? Can I reduce it? Is it wise to be spending $2,000 a month on renting a shop if I can put $2,500 towards a mortgage on and own the property? These are the type of things that individually need to be looked at. Throwing a percentage out there is very vague because it depends so much on what type of trucks do you buy? Do you buy them used in cash or do you buy them with debt so you can manipulate your overhead massively just by the way you structure your capital expenditures, the way that you account for labor, like you're accounting yourself as overhead? Well, what happens if you're working in the field for two days a week? Well, theoretically now 40% of your wages should be coming from direct labor versus indirect labor. So there's so many different moving parts on it. I don't like to give ranges because I've seen some very successful businesses be at 40% of overhead. I've seen some really being successful at 30. I've seen some really successful at 60. The 60 guys are typically going to be really, really high and design build because they are. Their percentage of labor is only like 15 or 20% and then most of their expenses Is an equipment and big trucks and, you know, things like. And even just, you know, material cost, honestly. But.

Overhead. I just be looking at every single line item, like, can we bring this down and can we move this to a variable expense instead of fixed? Right.

Next question. Is it okay if we ask you about your blog? Some of the questions I have haven't been answered in the following video. Huh? Is it okay if we ask you about the vlogs? Yeah, ask me about vlogs. Go for it. Some of the questions I have have haven't been answered in the following video. What's the following video?

I don't see any link or anything.

Yeah, ask me at the vlogs. Totally fine.

Let me bring this down.

Oh, we're already on the questions. Sorry. Unfortunately didn't initial mo crew tan. Oh, ran over a down spot, downspout it, shout out and hit the neighbor's siding and busted a section of siding. No, I'm going to check it out soon. However. How do you deal with that? My worry is that I will drive around trying to find a matching piece of siding versus just hiring a company and letting the customer find someone really comes down to the customer. Right. So some customers would prefer that they do it themselves. And you would want to push for that. Be like, hey, Mr. Jones, why don't you go find a handyman, give me the invoice, I'll pay it. And even if they don't go find the best deal, they, you know, someone marks it up more. It's better because you don't have to spend your time like half a day or an entire day trying to figure out who's going to do it. And for bids and then color match and all the rest of it, you just go tell them to find someone else. Even if you have to pay 50% more. I would do that. If someone's like, oh, it's going to cost $300 if I just went out there and figured it out myself. But it's going to cost you an entire day's worth of time. I'd rather the customer then go find someone to pay them $500 or $600 and they go fix it and it's done. Right. And I'm not liable for it anymore. Right. I would prefer that the customer take over it and I just write a check because the time spent on this is going to be much more than the cost of materials. Right. So if you don't confidently can't do it yourself, I would recommend, if possible, getting the customer to take it and then you write a check. Some customers, though, are annoyed because they realize that their time is very valuable and they don't want to deal with it. And they're like, no, you go get bids, you go figure it out. And then that, in that case, you've just got to go, you know, find yourself a handyman, et cetera. Honestly, if you're looking for cheap, you might want to go on Craigslist and find a handyman, Right? So there's odd jobs on the side. For something this small, you could literally be there the entire time where they're fixing it. Could probably only take them an hour. But if you're looking for cheap, Craigslist, handyman is the way to go. But if you're looking for, you know, obviously you're doing like a big project and it's like you're liable for stuff. You don't want that. But little hack.

Can I get access to the franchisee dashboard to see training and other documents or do I have to wait until training? You just gotta wait till training after training, then we get set up right before actually. You'll get it. Probably.

Cool. Awesome. Hope you all have a fantastic Thursday. I think that's all I had. Oh, we can do the house, the repair in house, but not sure on the color match portion.

I would first ask the client if they have a color match because a lot of people will actually have an extra half gallon of their paint of all their paint colors. If it's a newer house, if it's an old house, that's not going to happen. And you'd probably need to go get a color match. That being said, you could literally probably go to a paint store, ask for one of those big, you know, things that have, like all the colors on it, and then literally just go hold it up to the house and ask the client, like, which one do you think is the closest? Make sure they choose it and then go buy a, you know, a pint of this stuff and then go apply it on. How do you balance keeping customers for their revenue versus being tired of dealing with their complaints? I never keep them for their revenue. If I am, I would say I never keep them for revenue. What I was going to say is, like, I would only keep them for that if I was trying to grow and scale. Definitely not if you're trying to be more profitable. Right. Because they're sucking your time. But you got to realize, even if you're growing, a lot of people will hold onto a customer because their revenue. But what they don't realize is they just let that person go. And they spend all the time and energy and mental anguish that they spend on this bad customer. If they spend that towards finding new customers, they'd find way more revenue if they just did that. So I would recommend that pretty much across the board. All right, everyone, have a great day. We'll see you tomorrow.