Mike Minutes Mastermind 08/14/2023

Hey, everyone. Happy Monday. Let's go ahead and get started.

Let's see here.

Wait, five questions. Marathon Monday. All right, very good.

Let's see. I didn't have a ton of updates.

Cool. All right, let me just drop this into Facebook.

Sorry, I wish this was all automated. The first two minutes of this is always just like, I just have to copy in this from YouTube, make it part of the playlist, drop it back over to Facebook.

Okay, now we're good.

Cool. Like I was talking on the Facebook group, we are constantly improving right now. Max at the top of the calls.

And so on the weekend there was a couple locations. It seemed like ring central. There was some issues with them. But I think we got those all resolved, got that all figured out. So I think we're in the clear.

All right, let's just jump into questions.

Oh, there is the update to the website coming up here pretty soon.

Next couple weeks I will have that shown to everybody. It'll be a really nice look and it'll be what kind of is the theme then as we give options for the secondary options for the truck decals, what that would look like. I think everyone's gonna like a lot. It's pretty cool.

All right. And there's some hidden surprises coming up with it too that are really, really cool. But we're working on it still. All right, Ken from Fenton, Michigan.

Are we planning on doing summit conference every year just before quote Expo? I'm not really committing to that yet. Mostly I want to see how this one goes, see how everyone likes it. Probably something I talk about with franchise Advisory Council at the end of this year and see if it's something that we want to keep doing.

And so we'll see. I don't like the cost involved with being at the in downtown Kentucky during that week, but it's also saves people a lot two trips as well as having to fly all the way to Seattle. So some people like that. So there's always pros and cons to every place. Regardless of where we go, there's gonna be pros and cons. Ken from Michigan, two questions about copilot number one. I have 100 of contacts. My database of super but service less than 50 per week. Does that qualify me for the paid service or is that still a free version? It it has 50 contacts that you're allowed in there for the free version. But I would highly recommend.

Not getting the free version unless like you're just testing it out. Mostly because you're not going to have sequence automations which we are adding to a whole bunch next couple weeks which will allow for like the follow up emails for like multiple days as well as invoice collections, follow up, etc. And so you'll need the sequence automations for that. So you also want the two way texting which is huge. I highly recommend it. When I was in south park and I started using it for the first time, a lot of like a lot of response comes back from two way texting and then you can also use texting a lot in terms of automations back to yourself too. Number two, will there be a phone number integration similar during Central and or Twilio for call routing and mass texting? We do have mass texting which is really nice.

It's all through Twilio and we are working on doing the phone integration with RingCentral. Honestly the, the ring central integration with Zooper doesn't really work now. Like they, they just stopped servicing it. I don't know what's up. So we honestly haven't been able to use that feature for months now. But we are building something very similar inside of Copilot here in the next several weeks and so I'm hoping that by mid September that is completed for the Ring Central integration. That's basically that when someone calls in a command center if their phone number aligns with an account inside of Copilot, it'll pull their account up automatically and save that 15 seconds of have we done servers with you, what's your last name, etc. If they have already. If they're already in the system. But yeah, mass texting does work.

I don't know if we'll be able to figure it out. Mostly because the regulations around SMS texting is changing a lot right now. But the same way that we have email links inside of Surface, Autopilot and Super, we have email links inside of Copilot. However.

I'd like to figure out a way to do.

Texting links and do it all the same way. It's a very different though process because it's harder to track the click inside of a text. They don't like that. Again, it's a lot of rules. So we have some ideas but will we work on that? Probably mostly next year.

But can you imagine doing one click estimate emails but instead of one click estimate emails, one click estimate text messages they would crush because the open rate is usually 80, 90% versus 30, 40, 50% of emails. Kyle Tarvin how much should a regional manager salary start off at? What are the perks, incentives and Bonuses. A regional manager shouldn't really exist until you have at least four locations I would say because until then you're probably going to be that person.

At least four locations I would say.

And you want as much of their incentive to be based upon performance as well as long term staying. So I've, I've made my regional manager salary and you know, compensation package based upon really it's like it's okay the first year or two but like it's year five, six, seven that it gets very interesting.

So and, and like it would be significant but same thing with the general manager. It's like the first year or two is not incredibly awesome but I'm really trying to incentivize people sticking around for those locations or for those positions because it's a pain to switch them out. Kyle Tarvin I'm sure a lot of owners echo this feeling whether they say it or not, regarding employees taking home more pay than the owner of the business. Being young, I am defaulting to keeping as much business in the much cash in the business as possible. Oftentimes this leads to my employees bringing home two to three times more than I do. Grant I know we are working for separate things. They are working for a paycheck and I am working for equity and a long term cash flowing asset. 1. How do we balance between paying ourselves decent wage but also keeping cash in the business? 2. Does or will there ever be a point at which a GM or regional manager makes too much for their role at the company based on their fair market value? Oh wow, there's a lot of questions.

So.

Like you got, you got, you kind of talked yourself out of this one, right? Like this is a concept that is very common for new owners especially in years one, two and three when you're going to have employees, especially if they're high performing on PvP that make more than you do.

And even general managers, general managers might be more at a more fixed rate whether it be hourly or salary. And then they're looking at people who are crushing on P4P but when you look at the actual blended average of the whole year and not just, you know, given two or three or four months where they're crushing P4P you do make more. And more importantly.

The, the bottom line is the profit sharing is where the money's at for someone who sticks around longer, whereas for someone on, you know, it's doing well on P4P they have to earn that every two weeks. They have to show up every single day and work hard for that P4P whereas someone that is like a general manager position or regional manager, there's a lot more work on the upfront, but their incentive is to stick around because there's more residual benefit from their hard work. So if you put in the work the next two years, in five years, you'll still be getting paid. The benefits of working the first two with P4P, it doesn't work like that. If I work hard tomorrow, today, I have to still work hard tomorrow in order to be able to get my performance bonus. The whole, whole mindset of taking less home is that sacrificing now leads to a not just a long term benefit, but of a more residual benefit. And so.

You can take an hourly wage, which is the shortest form of equity. You know, you basically, you're giving and exchanging time for one hour's worth of time and then you can step that up to, you know, P4P, then you can set that up to profit sharing. Then you can set that up, set that up to equity, right? So there's just different tiers and layers of typically less on the short term, more on the residual of the work I put in today. So the work I put in today with equity might benefit me for the next 20, 30 years. That can't be said for an hourly or even profit sharing.

Because profit sharing can, will stop if they, if they, you know, leave, leave the position or leave the company. So it's less.

Residual than equity.

But in terms of the second part, I think this, ultimately you have to take ownership of this. Like if you set up a compensation package that incentivizes someone so much and then they go after it like it's on you because you set up the compensation package that way, right? So if you set up profit sharing a certain way like this, this will happen in your, in at some point, right? So it will, there will be more than market value. However, what you have to ask yourself is, are they simply cashing in on the residual benefit of the work they put in three, four, five years ago? Right. And so.

No for like the way I've set up my regional managers and like how we would do it in the future as we start locations? Like, yeah, they will make a lot of money in five to six, seven years if their locations are all profitable and they all get that 15 cut, like very, very, very profitable. Especially if they start doing more and more and more locations. And if locations churn out GMs, they get more so because all that pressure kind of falls back on them. So yeah, they'll come a point where it's like, man, I could switch them out and get two GM regionals for this. That, that, that, that would be the case. However, they have played the game of the long term and instead of going after an hourly wage or something more short term, they are going after the residual benefit of being that regional manager position or that general manager position. And they deserve every single part of that. The same way you, which yet you deserve the equity value that your business incurs over the course of years and the fact that in five, 10 years you can go, you know, on vacation for two weeks and still be making net profit. Like the reason you're working, putting all the work in now is for that residual benefit. The same way that I would expect my regional or my GM to think in the same terms. And that is like the next one, two years is not going to be like the best. I'm probably under market rate, but I know that in the four or five, six year term that I will be paid above average, um, and I'll be paid above what I should be making otherwise. And it would cost my, my boss less to replace me. But they are not going to do that because they know a good boss would definitely know this. It's worth keeping. Someone has a mindset of long term and is willing to wait for the residual because they're going to be probably the same order of magnitude in the next five or 10 years. They'll probably do the same thing with their income, right? And you're like, man, I'm going to be paying them double in five years. They'll probably double it again the five years after that. But I'd rather have someone like that on the team. So there's a vast, the vast majority of people either get underpaid or overpaid. There's very few people are paid the right amount. And usually it comes down to the horizon at which they look in terms of whether they're thinking about long term or they think about short term. Short term typically will be underpaid. They'll always think they're underpaid and they will be underpaid based upon market rent, market rate. People who think more long term will typically be underpaid for a given period of time or sorry, I messed that up. The person that is thinking more short term is usually the closest to being correctly paid because they'll switch a lot and so they'll usually, you know, marginal bonuses and little, you know, bumps in pay. The person that is willing to be underpaid for the longest period of time. But take skills and have a very long term horizon typically is the one that gets massively overpaid down the road. And that's why you look at most billionaires are their 60s and 70s is because they spent their whole career being underpaid until to get to the point where they are now overpaid.

So most people are not willing to be underpaid for a given period of time and take skill over compensation.

Joe Dilmore from Cherry Hill, New Jersey hey Mike, hope you had a great weekend and I find you well. It's hard to touch on a subject that's already been covered over and over again, but looked for your old videos on the subject and only one I could find on short notice was 3 years old and not really the information I needed.

I had a company call me over the weekend and offer me a client list. Said they are moving out of state due to a collaboration with a youtuber. Guests starting over better didn't ask details they were offering 40 clients for 15k. I tried not to laugh and told them we aren't even in the ballpark and didn't want to waste anyone's times. They said it includes some equipment and actually had 90 clients in total to sell but weren't sure if we wanted that many. They were they are about 45 weekly, 55 bi weekly. I set up an appointment Tuesday afternoon to meet with them, look over the overload paperwork and get all the details. She said very out front that they were anxious to sell and that even called me very early this morning and already cut their price in half. I have the list of everything I need to look at. My main questions are about what should we pay for customer list? If I remember correctly the value is Approximately double your CAC. My average cost this time of year is about 60 to $80 so we are figuring offering $150 each. Keep in mind my main concerns are one we only have two month away ish from the end of the season and I have to worry about keeping them next year. 2 no idea what their price structure is yet and we'll have to figure out if I have to raise their prices and 3am I sure I don't? Am I sure I don't have the cash to get another spring till another truck till next spring another Florida clients would be perfect at this stage and would basically look us up for the rest of the season which me would would book us up for the rest of the season which means I could shift my advertising money to this acquisition. Also if they are just a lawn cutting company, obviously we can make a killing upselling all of them, all of them on new services. Also, I don't really want to drain the account right now. I have finally got the funds back to a comfortable level. About 5 to 7 can average of the bank per month. And I have no idea if they would be willing to take the offer, but was thinking of offering them a deal. If they would be willing to do a finance. Would we settle on a base price and payments went pay as payments went, offer them more, even a higher price value than the out price outright price of the client. Stay for six months or a year. Sorry, so long. We're just heading the summer lump and this is perfect timing. It would really good for us, be really good for us if they could make it work out okay. So yeah, like I would just don't overthink this. You have the conversation with them and a lot of your questions are going to get answered. Once you actually meet with them and talk to them about all your kind of fears. Sounds like they're pretty skittish and they're not going to make this public. So you probably have more leverage than you think. You know, I would pay $150 for each customer. That's not bad at all. Just keep in mind you're going to lose some of them. So maybe that bumps up to 20 or $200. So then you're really paying a 3 premium, which is fine. Just making sure you know what you're getting into. And then again, like, are you going to have to raise the prices? I'm confident in two months you can solidify them as a customer. I wouldn't worry about that as like being an issue with you being towards the end of the year. In two months you can solidify with two invoicings and then, you know, selling them all in on fall and, and leaf cleanups, et cetera. Fall cleanups.

So I, I don't think that's too much of a concern. It's really a matter of like talking to these people, figuring out what you're going to pay per customer. I would ask for 10 customers at least randomly. Be like, hey, I want a list of all the customers. I'm going to put my finger on five of them and I want the pricing on them so I can make sure that we're in the right ballpark. Because otherwise if you know they're 45 and you need 65 or 70, then we're having an issue. Right. You're going to be losing a whole lot more than $200 per customer over the next few months. So I would have the conversation with them and then bring this up. I would not discuss terms at that, that meeting. I would just talk about why they want to sell. Kind of overlay your outlay, your customer acquisition cost side of things. Like, hey, look, I usually pay six to eighty dollars per customer. I want to pay a little bit more than that to get these customers, but it sounds like they're desperate. So I would not. Don't, no, don't get into a fire sales situation. Have the conversation with them. You're gonna have specific questions that are answered during then, and then have other questions you need answered after that. So after the, after that conversation with them, feel free to post some more questions. But it's a little bit premature to give advice when it sounds like a lot of the information will be answered in that meeting. And it also sounds like they're pretty skittish and you're gonna have a lot of the cards in your hand because they need to leave quickly. It sounds like. So cool. Lots of updates coming up. I put an update about the oil change place as the franchise deal preferred vendor. Take five, you get like 25 to 35 off on those. Check that out. That's cool. But we got the website we're wrapping up in terms of the new design. We've got some cool stuff in the website I'm looking forward to sharing with you. I think it was really, really cool.

And also for collections, we have some really good news coming up next. Next few days here too. So looking forward to sharing all that with you. But I gotta finalize all the details before I do that. So we'll talk soon. I appreciate all of you. Have a great Monday. Take care.