Mike Minutes Mastermind 08/18/2022

And it started with a mic minutes mastermind, quick announcement. And that is, if you are a growth model, we are going to at command center set you up for a connecteam chat. In the past, we've only done for full service people, but we're going to do it for all growth model. Mostly due to the fact that we're seeing a lot of waste of people having to call in a lot of and talk to people at Command center when text would be way faster and more efficient. So we have the bandwidth now to be able to do that. So over the next couple days, you'll probably be getting an invite of some sort if you are not already set up on connecteam. So if you are a growth model franchise location, you're going to have a connecteam chat with Command Center. So this is really built for if you have fires, right? If you're not using them for full service with other things like payroll, et cetera, you already have a chat with them. You already. This is not new information to you at all. But if you do not use Command center for full service, you will still have a connect team chat if you are a growth model. Okay, so growth models, if you do not have currently a connect team chat, you're gonna have one set up for you. And you don't have to use it. You do not have to use it. But we are finding that when someone's in a pinch, they can't find a house, something's blowing up their calling command and it's just much less efficient than if you just send a quick text or voice note. So if you, if you already have a connect center Connect team chat, nothing's changing. But if you don't and you're a growth model, you will have that set up for you. And you do not have to use it. You do not have to use it, by no means, but it'll get set up for you. And we pay for all that on the command center side. Okay.

Questions. Let's jump right into questions. Share this. Boom.

There we go. Okay, I have not seen any of these, so let's just jump in. So North Bend, Tyler. I am caught up from loving the working GM model by how long hiring takes. I see maintaining with a few employees long term, creating Constant headaches when one or two guys leaves takes out 25 to 50% of your labor scheduled work. Yeah, that is the challenge of having two, three, four, even five employees. And that's why, you know, getting past 500,000, you're going to get to probably five six employees. So if someone does leave, yeah, you're going to lose 20, 15, 20% of your workforce. But that is what the challenge between 250 and 500 is like. If you have one, two or three employees and one of them goes down, it's immediate massive labor loss. Right. Here's the thing. If you have 15 guys, you're gonna have just as like from a ratio perspective, just as many call outs, just as many people quitting, turnovers gonna be higher. The rate of hiring though, gets way faster. And that's why you end up needing someone basically full time working on the business and working on just staying in touch with the guys throughout the day estimates, et cetera. So with the working GM model, yeah, if you have, you know, four, five, six employees, it's about as big as I want it to get because. But I also don't want to be one or two employees where if one person doesn't show up, like everything falls apart. So.

Let'S see here, one second here.

Okay, next one's. Kevin was the best way to price fall cleanups with P4P in our area, the leaves start falling at least two weeks before mowing stops. Last year we quoted cleanups of the season based on the total amount of hours worked expected and how many visits the customer requested. I'm not sure if that way would work with PvP. So yeah, like, you know, if there's, if you're still mowing, there's a whole bunch of leaves on the ground. I would recommend just being honest, the client be like, hey, you know, we don't pick up the leaves that are on the lawn, like we're gonna blow them off and then mow the lawn. If you want a leaf cleanup, we can get that scheduled for you. And I would just try to get them sold on like a weekly or bi weekly visit for leaf cleanup starting, you know, a week or two before the mowing season ends. That's what I would be doing. And yeah, it's just gonna be an a law of averages. Like if someone shows up and it's raining and there was a windstorm yesterday, probably going to be like a lot of leaves in all the corners. If there was, if it's super dry and there's a windstorm, probably not a single leaf on the property. So PVP is going to be very varied in this case. But you definitely want to have a budget hours assigned to still every single cleanup. And I think as long as you have a consistent recurring visit back to the property weekly or bi weekly, you can make that happen with relative accuracy.

Do you predict inflation ramping up more over the coming 12 to 18 months? How should we prepare? I do not expect inflation to keep ramping up just because the year over year comps next year to go 10% above what we're at now. We would be in a very, very bad spot. So I don't think we're going to. I think the Fed is going to step in and raise rates. I don't think they're going to raise rates enough. I think we need to crash the economy in order to get it to.

Balance out after everything that's happened the past couple of years. But no one want to do that politically. So they'll just try to keep slowly raising up the rates and I think we'll have a heightened inflation over the next year or two, but it will go back down to 2%. It just will things just even themselves out and supply chain stuff, all that. It will eventually come back down in the moment. No one ever thinks it'll go back to the mean. No one ever thinks it'll go back to 2%. It's like, oh, it's like we're in deflation or we're in inflation. It's like look after time, it always goes back. Let me, let me pull up real quick, Fred, interest rate chart. Let me show you this. This is if I can pull this up. There we go. This is actually really interesting. Let me stop sharing this one and share you this one. I guess it's kind of education, but let me just show you this real quick. So this is the federal funds rate, which is basically kind of quote unquote interest rates. And what you see is every time, see these gray areas, these are recessions.

Typically. So like 1990, 2000, 2008, during those is when they cut interest rates, right? Typically when the economy is booming, they are going to raise interest rates. So you can see the 2018, they started to raise interest rates right here. And then here in Covid, we cut down to zero. And right now we're on this little blip up. Notice this trajectory though, ever since the past 40 years, and that is interest rates still on a decline. And you can already see after the last Fed meeting, they're already saying at this rate that we are starting to see impacts in the economy. The economy with the current debt structure of the United states cannot sustain 5, 10, 15% interest rates like we saw back here in the 90s. You can't have that happen. We would go broke in a heartbeat. So they can't raise it. And that's why in 2008 it was up here.

Only got up like 2.3, 2.4. And then the housing market started seeing a downturn. Stocks started going down in 2018, so then they cut it right back to zero. So is the typical curve, you saw this in Europe years ago and then now they're actually in negative interest rate territory. But we can't go very high. Like I'd say, personally, I think if we get above three and a half, three and a half to four max, we would really, really start going into a recession. So yeah, I truly believe they're losing control on the interest rate side of things. So I don't expect, I don't personally expect.

Inflation to keep ramping up. I just don't see that in the cards and just super bad politically. Like it sounds so bad. But all of this is what looks good on the polls and hyperinflation does not look good in the polls. So they will do whatever they can to stop it. But they also can't spike unemployment by doing that because if you raise interest rates, you slow down the economy. Slowing down the economy leads to high unemployment. That's also bad politically. So that's why they're on this razor's edge. Do we raise interest rates, thereby slow the economy down and bring down inflation or. That'd be the perfect scenario. But if we do that and then we over correct now, we're going to lead to the economy slowing down, going into recession and unemployment going up. And the Fed, their, their dual mandate, it's called, is basically to keep inflation out of the system and then secondarily is to have unemployment being at a good level. So those are their dual, that's their dual mandate and they have to, that's the razor edge that they have to determine between that. In your experience, what month in fall has been the best customer acquisition cost in your region? September, October, November. For us it's always been September. Depending on the weather, typically like the second or third week we'll get like a, a downfall of rain. The grass just takes off because it's in dormant all summer or for the last, you know, two months it takes off there and for like two weeks we have a little bit of a spring rush for like a week or two in our local market. So that's just, you know, our local area.

I've heard you speak a few times about the gym membership early cancellation practices. The goal there being to discourage early cancellation because difficult or financial. Oh yeah. Is there a way we could do that with Augusta or could. Would we discourage that practice with lawn care? P.S. i have a few ideas that I have used in the past that worked pretty well, both to encourage someone to stay at the end of the season and to discourage those who would take advantage during the spring rush.

It'd be challenging, I think in our industry just in terms of like what's industry norm to charge a cancellation fee, especially because you don't have a signed contract. And again, the next question is, are you going to take someone to court over a signed contract? Like even at the gym, for example? Honestly, if somebody didn't sign the contract, I wouldn't take them to court over it. I would simply send them to collections, their credit score gets wrecked. And we have this happen all the time at the gym still. And that is people who don't have a good credit score still just let their credit card, their payment information go invalid and we still send them the collection. So they don't care. So it's not like it prevents people from still not paying or canceling or better yet you, because you think they're on a contract, you keep doing services and now it's six months go by or three months go by or whatever it is and they haven't paid because you're like, oh, I got a contract, I'll keep doing services. So I just haven't seen this, an actual cancellation fee being implemented in the lawn care industry with a lot of success. It would be something that would be again another more friction point on the onboarding side of things, getting new customers and growth. So it's one of those things though if you had grown to the point where you're like, hey, I don't want to grow, I just want to maximize profit, that might be something you want to do. Have 12 month contracts, have credit cards on file, have it where they have to prepay, have note cancellation. These are all things that just add friction to the onboarding process. But it's not necessarily a bad idea, definitely a good idea to be able to do that, but you're going to slow down growth. So it's just this constant balancing act depending on where you're at in the business and how much you want to grow versus how much you want to profit and systematize and simplify the business. So I would be all for that. It's just simply a matter of, of can I grow my business to the size where it actually is meaningful using that type of stuff and am I going to get massive backlash on social media? But More importantly, you got to sign a contract. So it's like it's another step in the process. I can't just sell them over the phone, get them set up, get a credit card and be rolling. It's going to be like you got to actually sign a contract. You got to keep receipt of that contract. And again, it's still not going to prevent someone with bad credit from still taking advantage of the system. And there's not getting payment. I see that. One of the featured speakers at Brian Fulton Lawnpreneur Academy on November 2012. Would you encourage a destination to attend? And if so, are you going to be there Friday night for the Go Kart Extravaganza? I will not be there Friday night for the Go Kart Extravaganza. I'm going to be flying in and flying right back out.

I wouldn't say not to attend if you're close by. I think it's always good to meet up with other lawn care professionals. The thing that I have seen being at these other events, whether Brian or Spencer Lawn Care, etc. The.

The type of business owner is very different compared to Landscape Summit, like, very different. Last year when I went to Spencer Lawn Care, I had this like, kind of speech outline in my head. Open up the conversation by asking how many people here have employees? And less than 10% of people raised their hand. I was like, okay, time to pivot. Totally different conversation. When you're talking to someone with the.90% of the employees are the. The audience does not have an employee. And I think that's the same thing. Brian's audience is slightly more evolved. They probably have a couple employees, but you're not going to be getting around, you know, large, large companies there. They do have some solid speakers. That's partly why I wanted to go there is honestly to network with the speakers. Just be perfectly honest because the audience level is just gonna be different. If you're watching his content and watching mowing a lot and tall grass and what type of weed whacker to buy, you're probably not gonna have a big business, right? So it's not, say, one's right or, or bad or good or better or anything like that. It's just a matter of that's the type of person you're getting. And the type of content that typically comes at those events is for solo operators, one or two employees. It's not someone thinking about a bigger business, multiple locations, investing in other things. So just no right or wrong, just different audience. So that was a huge eye Opener though, for me, down at.

At Spencer Lawn Care, when I did their thing, it was just like, okay, this is a totally different audience than mine and I had to switch, you know, on the stage. Okay, we're not talking about hiring or culture. We're not talking about compensation. We are talking about sales. Because that's everything that you need to know for the next few years of your business is getting, you know, selling and close ratio. So providing value and increasing prices, like that's the only thing that matters at that size of business. Right? So I wouldn't be opposed to it. It's awesome. I will be there, will not be there Friday night. I'm just not super interested in going go karting. I'll come in probably late Friday night, speak Saturday morning. I think I fly out Saturday night. So cool. That's all we got. Remember, if you are a growth model and you do not have a connect team chat that'll be set up in the next couple days, you do not have to use it, but it's available for you if there's fires and if there's major things that is going on that you need help with right away on. Take care everyone and we'll see you tomorrow. No, we will not see you tomorrow. I am flying tomorrow. Over the next week and a half, I will be creating as many masterminds as possible. Most of them will be recorded because I'm gonna be like 11 or 12 hours ahead or something crazy. So if you have questions, use the form, fill that out. I'll be connected the whole week and a half. Honestly, I think I'm gonna be able to get caught up on my email and things because I won't have to be like actively engaged in the content the entire day. So actually looking forward to getting caught up a little bit. But I will be flying tomorrow. I will not be available for a mastermind, but please fill out the form and I will get those questions recorded. Take care everyone and we'll see you virtually via recording at some point this weekend. Probably take care of.