Mike Minutes Mastermind 09/11/2024

Hello everyone. Hope you're doing good. Happy Wednesday. Let's get started a couple announcements. First off, Liz made a post on the Facebook group. The Google Local Services department and command center is no longer going to be needed. Over the past few months they've been phasing out manual reviews of leads and so it's all being done by AI. They've made a few screenshots of what their announcements been they've been working with the past few months as they've kind of operationalized the Google Local Services program over the past several years. So kind of expecting they would eventually not do manual reviews. So based on what I have seen they are charging for slightly more than usual.

And but I still think it's a good deal if you can get leads for 15 or 20 $25 and 10 20% of them they charge you for aren't correct I'd still be doing it. So.

That is the Google Local Services update. Oh also later today, if not tomorrow, I will have completed.

The winter services training.

I have several videos, I have videos that you can use with your customers. I have ones that you can use for non recurring customers that you're trying to sell winter services. I'm going to go through these four different ways to convert customers and exactly how to go through each and then using this this one as a template that you'll be able to customize using Canva to sell these. So really looking forward to sharing it with you. I'll begin those recorded today and then up in the dashboard and academy for everyone tomorrow if not today.

All right, let's jump into questions.

What do we got here? We got seven Bam Bam.

All right, blew me to Illinois of the winter services price comparison sheet. However, over the past few years I've had a hell of a time trying to get people to pay what we are worth for fall cleanups. Most times I've had to fill a schedule with 120 to $300 fall cleanups just to give the guys any work. Because of this I'm worried about the price comparison. Won't give it a very big delta if any. The only real sell is that we'd be coming more frequently and they basically just get a snow removal as a bonus. Is that enough? Would you artificially raise averages to look better? How would you go about this? Thanks in advance. Yeah, so I'm going to have a whole bunch of training on this today. I would say to answer your question more directly, if you use $300 for fall cleanups, $300 for your spring Clips and then include several.

Snow services. Even if the numbers are the same, Even if it was like 50 bucks, how I'd be pitching if it was $50 more to have winter services, I'd be pitching as, hey, for 50 extra dollars, we're gonna keep your property looking good all winter long instead of just in fall and once in spring. So you could literally sell it even if it was a little bit above.

So that would be. I'd still roll with it. I would also say that the reason you bring those prices way down is because you have a lack of work. I would sell these, these winter services when you still have plenty of work and you're selling the. You you put four or five hundred dollars as the fall cleanup. What you quote, think you're worth, like charge. What you would actually charge in the price comparison would be my recommendation.

Also, by the way, I think that when you're selling winter services, especially if you're doing in person, you are going to get some people who don't want winter services, but you'll actually get them on the cleanup. And a lot of times that cleanup, you're have a high price on there. So hey, we're going to be moving. Okay, great, let's go ahead and get you for a fall cleanup and you'll be able to sell it right then. Mr. Anonymous, it sounds like on our website clients are able to reach out and ask us questions about services. Is this something you would recommend having on? Is this an expensive feature, having Command center handle this? So this is the web chat in the bottom left hand corner. You can have it where whenever someone comes to your site, after a certain amount of seconds it pops up and starts talking to them. It's, it's probably about twice as expensive per minute compared to a phone call. Not because it takes way longer to communicate with them. As much as you're waiting for the dialogue to go back and forth. So we'll ask for an address. They gotta type it in.

On your breakdown at the end of every month on Command Center. You can see exactly what it's costing you though. So you can make that determination and see if it's worth it for you. I will say get a lot more leads than I ever anticipated through that web chat.

Mr. Anonymous. Hey Mike, I'm getting older and thinking of selling down the road and curious to get your thoughts. What determines the value of an already established Augusta location? In other words, how do you calculate its value? 1. How does annual profit factor in a company's valuation? Is there a simple metric to use like a multiple of its yearly gross profit or gross revenue, 1, 2, 3x, etc. Okay, so I'll address these as I go down here. I guess there's a lot of different ways to value a company. Once you're in profit mode, you are usually going to be determined based upon.

The profitability of the business after the owner is paid. Like your, your net free cash flow. And so in general, if a business can run without the owner, that's what takes it from a 1x to a 3x. And so that's why it's always like get the businesses to that stage. If that's 5, 600,000, if that's 800,000, whatever it needs to be, to where you can have a manager run the business without you, that also increases the valuation at the multiplier. So if an owner worked in the field to cover his costs and this produce more profit, is the business more valuable or is the company more valuable when the owner is not needing the field? So definitely the latter. So yes, you will increase your profit. However, your multiple will dramatically be low, like to a multiple of like double or triple. Like a business that makes $100,000 in profit with the owner working out in the field is worth less than a company that makes $50,000 in profit, but the owner literally has never been there.

So from a valuation perspective, also the amount of people who want to buy a passive income investment is far greater than someone who wants to go work out in the field. 3. Should franchisees consider our locations more valuable? Since we are part of the Augusta brand, like you have your license, which will become more valuable as we get more locations. So that's one part. The second part is as you fill up locations, the only way for people to be able to buy in is or to be able to join Augusta will eventually be to buy out locations. This is how Anytime Fitness works. All their locations, like territories, almost all of them are bought up. And so you basically have to buy in. And I've been with them for like those seven, eight years that it's happened and the valuations have doubled. So just because now, like if someone wants to join any definition, you're going to be buying a location or you're going to be in a really bad territory when you say bad. Just like you're not going to be in the best markets. So that will happen. And then secondly, I would say the only reason valuations of franchises in general or higher is because they get SBA preference on loans, so it's easier to be able to get capital. And secondly most people who are.

Most people if they're buying a lawn care business will need to have industry experience.

When you're buying any franchise typically.

Excuse me.

They should have the process in place to where you can send a general manager training and then run it for you. So there's less hands on hands on required from the owner which also makes it more valuable not because of the the franchise or the brand but because it doesn't require the owner to be there and it gives training to staff in the form of managers. So for lastly would you sell for a higher amount to someone within Augusta? It seems the business is worth more since customers wouldn't know they are being sold and therefore it's much safer for the buyer. It's definitely worth more to a potential buyer inside of Augusta Nation. So excuse me like if I ever saw a location around me from Augusta that was going for sale I would definitely be interested because like to your point the the.

The customer wouldn't even know there was a difference. You could completely transfer. You could even raise prices and feel feel very organic to them. So it's definitely worth more to the buyer.

Is the person it's not worth more? No, it's not worth more. I would say it's worth more to us because you know there's going to be no drop off, there's no change of brand, everything will just go smoothly.

So I wouldn't say it's worth more the vat, the business valuation, but it's worth more to us because we know the retention of customers will be next to 100%.

So.

Mr. Anonymous, if I were to take a frontline team member that is already that is ready for a GM role to another location should my GM that hired and semi developed give give him a bonus. One second, let me read this again. If I were to take a frontline team member that is ready for a GM role to another location should my GM that hired and semi developed him get a bonus? My thought is if I make an outside hire I might have more churn and that individual will have more to learn I. E. Co pilot, P4P budget hours, etc. So hiring within the team is a massive advantage for me because they will have general understanding of existing systems while it is helping the business as a whole that I own is hurting one location, the one that I'm taking individual from which will also affect the GM's compensation and ability to sell. By needing to rehire and taking his top performing employee in the field, all of that all of that said, I want to incentivize my GMs to continue to hire, develop and encourage frontline team members to better themselves and want to become GMs. As I think about going from two to 20 locations, that will be the businesses business, the biggest bottleneck, hiring, onboarding, rockstar GMs. I'm interested in your thoughts on this as well as what a reasonable bonus would be to the GM or location I am pulling talent from. So I look at this very differently. I would say you taking the gm, the top performer of this GM is actually the best gift you could give this gm because he can use that person as the person he points to in every single hiring discussion, every single team meeting, etc. And they would likely not be able to keep this rock star if there wasn't the promise of becoming a general manager in the cards. So this is the same thing with the 3F program. It's like, well, our best employees are going to leave. I'm like, look, that person would not have stuck around for even the two years that they did if there wasn't the promise of becoming in the 3F program. I've had it with my own team members that became 3F members. Like they would not have stuck around if there wasn't that benchmark. I would also say I then use those people once they've moved on and use the program to be able to point to them all the time and tell frontline team members that this is not a dead end job and here's the proof and I have them come in and talk, et cetera. So if I was your gm, I would be thrilled out of my mind because now I have a person and a face to point to every single time someone says they come in for an interview. They come in for their orientation, team meetings, off site meetings. I'd be able to point to someone like, hey, they start in the field, a couple years later they become a general manager. Look at their location now. Now they're hiring. Now they went to training and elevate them. Like elevating that person in the mind of your whole team is super beneficial from a hiring and retention perspective.

So I, I personally will not incentivize GMs over this. I would not give bonuses. I, I genuinely believe they have literally an ace in the hole when it comes to hiring and retaining and talking to people about their future. By having someone that came up from the org and then became a GM, you'll get 3, 4, 5 people to buy in and stay much longer Encourage the rest team and bring the whole morale and culture of the company up.

Can you walk us through how you would potentially vet the viability of getting a loan for opening a new location? Let's say you take a $50,000 loan to open up a new location, combined with cash on hand. What would you look for to make sense or not of the loans and terms? $50,000 loan amount, 60 month term, 14.6% interest.

13,000 in fees and interest over. Okay. Over the loan life, I was like, 13 fees. Okay. 1600 per month. Okay. In this example, I'd be paying 30% of loan amount in fees and interest. Okay. So, okay. So, okay, so over the course of five years, you're paying $13,000. Okay. Interested in how you go about breaking down if a loan term is a good deal or not? Okay. Well, in theory, if you're comparing cash versus debt, you're asking yourself is, what will I make more than $13,000 in five years? That's the simple version. Because ultimately this taking the loan is costing you 13,000. You're going to buy trucks and equipment remarketing, no matter what the actual cost of this capital is $13,000. So the question is, will you make more than $13,000 if you start this now versus in five years?

And so another way to look at this is this. This is specifically why we do it. Augusta. Your first three months are free. Your first year is half off. If you think about it from this perspective, you have 15 months to basically ensure that you can.

Make this location profitable. That makes sense to me. So that'd be another way to look at it. Another way to look at it is how long would you have to wait to just get the rest of this $50,000 in cash? You might only need to wait six to eight months, depending on who this is. Like, if you have a larger location that's pumping out decent profits, you might literally be wait this fall, get through next spring rush, and you'll have the money less and just have less.

Risk involved. I am a little bit hesitant here. One second. Why this is. This number isn't making sense to me. One second. Something's not adding up. Give me one second. So, because 14.6%.

Times 50,000. Yeah, something's not adding up because $7,300 is the interest per year. Times that by five years. I'm coming up with this amount that you're paying.

So.

If your interest is actually 14%, you're going to be paying more than 13,000 over the next five years. So I'd run your math again unless I'm not seeing something if this is a balloon payment or something you're talking about or something like that. But I do believe that you can look at it from a, you know, the 36,000 or 14, 13,000, whatever that number is. You can. Can I beat that? I think it's gonna be more at 36,000 by the way.

And then that's one way to look at it. Will you make more than $36,000 in the next five years from making the decision? Secondly, can you make up for $1,600 a month payment? Can you make more than $1,600 of profit from making this move? And that's what you can be looking at it as well. So it's a more aggressive approach is can you make more than $1,600 in profit? Almost anyone can get any get to yes on that answer. So at that point it's simple. However, making $36,000 over the next five years in profit because you made the decision to take the loan versus just wait six months, that's a little more difficult. Is it worth $36,000 in fees? If that's a number or I'm gonna use your numbers. Is it worth $13,000 in fees or would you rather just wait six, eight months and start the location with cash because you have the 50,000? 14.6 interest is a lot.

I'd be trying to go after A probably a SBA micro loan 7A also realize that probably in a year your interest rate is probably gonna be at least 1% less.

At least whatever loan. This is probably more like 2 or 3% honestly. Because we're gonna get interest cut, right? At least two interest cut interest rate cuts this year. Probably a couple more next year. Like you're looking at a little bit less interest there too.

Brian Connor I recently tried using the ramp rack discount code. It did not work. Do we have a new code?

I thought they just. Lee, if you could reach out to them, see if we can get this updated, that'd be appreciated.

We were just talking with them yesterday touring. Could we build their website? Ramp racks 2 what would your response be to the following scenario regarding the attendance policy to receive profit sharing Specifically, why is there not a way that a grade A plus talent employee that is never late and has not missed a day of work could not have an avenue to have a one time emergency situation affect their profit sharing amount? The proposal is to have a one time exception rule to the policy. Exception to the policy. What Are your thoughts and what would your response be to the specific success scenario? Team member had a family emergency, middle of the night, passed the cutoff time to have called in 6pm the day before work, had to take his child to school while the parent went to the hospital, got to work one hour after start time and still finish the list. Would you consider adding exception to your policy? Yeah. So ultimately you create the mark dates inside of P4P software. You can take it out as as much as you would like. If someone's never been late and this happens, I'm not holding it against them. Like if they had 2, 3, 4 solid quarters of never being late, never having a call out and then this happens and I completely trust that actually what they said happens, I'm not holding them. That's just me. I'd be careful about making this a policy where everyone just gets kind of like a one red card type situation. It's just going to cause more of them. I would probably just address this with the employee. Like, hey, just so you know, you've done this for six. I think this would really elevate the employee. Hey, you've done this for six months or you've never been late, you had this family emergency. I would also, if you're like, well, what if the team finds out? Okay, make it a team meeting. Like, hey, guys, usually this is the scenario. Bobby hasn't been late for six months. Does the team agree that he should still be part of the profit sharing program? Because again, it's their money. Like at this point you're giving the money no matter what.

So whether it's split between him or not, like, that's kind of on them. So I think if you did that, it would also elevate.

People like, oh, the reason he's getting this exception is because the 6, 912 months, he's never been late a single time before. And he's getting this treatment because of his track record. And so then in the future it's like, well, I want to like Bobby. It's like, well, yeah, but Bobby had 8, 9, 10 months of never being late, single time. That's why he got the exception. And if I brought this to the team and you've been late every single day this entire week, you're not going to get no exception. So I just be careful trying to make this really black and white or, you know, have where once a quarter everyone gets a red card and they can pull it.

Just know you're going to get people that will misuse it. So there's pros and cons of either way.

Brian Connor added proposal to the previous profit sharing scenario what would you say to the possibility of adding the one time exception if these guidelines were implemented? You must have a vacation day and you use that during the one exception unpaid you lose any other bonus benefit that month. Perfect attendance, 5 stars etc also if you have a late a sec. If you are late a second time during the quarter all profit sharing is taken out. Yeah, something like this would be fun. I'm fine with that. I like that he get the exception but you're gonna lose the other bonuses around perfect attendance etc and.

If you're late a second time the profit share taken. Yeah, I'm fine with that. Like to people thinking that this is not a big deal when you start getting this can be worth like 500 to a thousand dollars for people it means a big deal. It really does mean something. So you know either a I make it very very much like exactly what you have here, like there it's written down or I just make it where it's like if someone it's so obvious to you that this person has never been late and then they show up one time I'd just be making, I'd probably just make an exception and if anyone challenged me at the end of the quarter over it then I'd explain it. But honestly most of them at the end of the quarter they don't remember every single person on the team and who was late and who didn't show up and all the rest of it. And you could even in the check for the bonus for the person that was you could just write a note like hey, on this date you were late but we're going to override it because I know X, Y and Z happened with your family. I think you get really big points with that person if you did that. But I just don't see them all comparing notes of who was like how many times all the rest of it.

With each other. Like in the yellow slips tab of P4P on the app they can see their times that they've been late, their times they've called out, etc they can't see other people. So I don't think it'd be a problem if you just literally just do this on the down low at the end of the quarter if you wanted to write them a note you'd get extra brownie points.

And if not they probably wouldn't even remember.

Do you know how often Trimble Maps updates the GPS location of a truck or copilot user. A quick search was not helpful.

I believe it's 10 seconds.

I could be wrong but it is pretty often unless the user either A has their.

Tracking off or B, they're in A, they're in spotty service. So Those are the two things I've seen but I think it's like either 10, 15 or 30 seconds.

Yeah, it also depends on the phone. Sometimes phones they only allow their thing to be updated so often. Usually phones nowadays have it very almost instantaneous because of GPS maps but sometimes you can restrict that like hey, only allow like.

GPS coordinates to be given like every minute or five minutes or whatever. But I believe it's either 10, 15 or 30 seconds.

All right, cool. I will have a whole bunch of training out later day on winter services with four different ways to be able to sell it. I'll also kind of have like an optional fifth one which will be selling it to non customers and and how to use the price comparison. So I think it'll be helpful. All right. I will also make videos that you could potentially just use for your own one click estimate one click opt out emails and you can make your own or just literally use the ones I'm going to make. So the ones I'm going to make are going to be pretty casual. They're going to make in the office kind of thing but if you want you can use them for your customers. I was going to do in the studio and I figured, you know what if I do that then everyone knows it was recorded. I'm going to make it in a way where you could actually take the video and, and use it for your winter services. Opt out emails if you wanted to.

Mike from Augusta doesn't mean anything to your customers. You're like, oh, they're going to know it's not the owner. No, they're not. They're just going to think it's someone with the office. No one knows who I am. All right, love you all. We'll talk soon. We'll see you tomorrow. Take care.