Mike Minutes Mastermind 09/12/22

Good morning guest nation. Hope you're all doing super well. Let's go ahead and jump into things. I just opened up the form and there's like eight questions that came in this morning. Last night there was none. So awesome. We'll go ahead and get right into those. I didn't have a whole lot of announcements last week was training went really well overall. We changed the structure to four days and I think it was well worth it adding in two exams, one for software, one for skills test that they had to pass. And so I think it was a really, really good addition as well as just adding that extra day in to be able to add several more components in in terms of three stages of profitable growth, size, the five stages of growth and the seven stages of wealth. Really combining those two, talking a lot about growing to capacity and then raising prices, things like that. So it's really good. And we will record the one in November. We were going to record last weekend but I didn't want the first DOE at the four day training to be record for everyone. So in November though that will be available. I think most of you have more time than anyways to watch that and you'll be able to watch the Zooper training that we do prior to conference. So as we head in like November, December, expect more training on super and a lot more resources that when you come to conference and you switch to Zooper you already have a pretty good grasp of it. So don't think you're just going to show up blank to conference and have to switch from service off hut we we will have everything ready to roll and lots of training for you. I'm just holding off as long as possible cause there's two or three big features I'm still waiting on Zooper to get done. For us that is gonna be important for you to learn and it's gonna make the transition easier. Mostly around their dispatch board, a couple things around their budgeted hours and obviously there's a lot of other features but there's a couple specifically them holding off on doing a lot of training for everyone that's in service autopilot because there's a few of the things that we're trying to kind of copy from service autopilot into super and I need them to finish those hopefully in October. So that way November, December we can give a little more training. We are going to be bringing over some growth models into super prior to just to make sure that you know when you have 100 jobs a day it doesn't. Things don't break down. So anyways, let's go and jump to these questions. I have not read any of these. I saw there was eight of them this morning, which is great. Using this form is fantastic. Let me jump into this.

Cool. Here we go. Good morning, Mike and Augusta Nation. I know the best athletes and successful people have coaches and mentors. We have you, Lee, Chuck, the advisory council, as well as the rest of August Nation. I was curious, who are your coaches or mentors? I can't speak on behalf of everybody that you mentioned here, but in terms of myself, like, I think mentor is like a word that's like, massively overused in the entrepreneurial space. Honestly. And honestly, I think it's because the biggest names start to monetize mentorship. And so therefore it becomes this buzzword that everyone thinks they need a mentor. I have never had a mentor. I don't have anybody that I bounce things off of that's above me, that I know personally or I paid for consulting. I don't have anyone like that. I never have. None of my parents were entrepreneurs. No one I knew or currently know in my friend group is super, super successful. And things that I bounce things off of ask questions to. So I don't think having a mentor is super important. What I do think is.

A culture of learning and educating yourself. And then I also believe that not going after 500 different people's opinions, gurus, people that are ahead, especially social media and YouTube, et cetera, it's so easy to tap into like 500 different opinions of things and you can get confused. And all of them might actually be right. They're just different routes of getting to the same place or getting to a successful place, I should say. And if you listen to all of them and try to implement them all at the same time, you can literally get confused. And so one thing Grant Carterson said years ago that I have held on to, because I don't really follow Grant Carter anymore. I don't know what he does, but I remember way back, probably five, six, seven years ago, when I was listening to him, he said something that was interesting. He said he recommended picking one to three people that you looked up to in business and then just going deep on their content, like listening to everything they say, really following what they do and going off of their ethos. And that's really helped me. So I typically, every six to 12 months, kind of latch onto a different creator or someone that is an influencer in the business world, someone that has built real businesses. That's who I kind of like to. I gravitate towards. And.

I'm not a huge fan of like, just like, for example, Graham Stephan, great YouTuber, but he has not built businesses that I look up to. And like, I want to build a business like that. So what's really cool about the digital economy and digital world is the fact that you can get books, podcasts, courses from people that have built real businesses. And I think the biggest fear I have when it comes to mentorship is the fact that it has been sold to everyone that you need one, and it becomes somewhat of crutch. And there's just too many stories of most successful entrepreneurs. They didn't grow up with someone that they had a mentor or someone that coached them along. It was a matter of grinding and hustling to the point where you could afford to go pay up to be with people that you looked up to. And so personally, I just. I'm always listening to books. Like this morning, I'm listening to books on audio, audiobooks I'm listening to. I love YouTube videos now that are long form, like 40, 50 minutes long. They go really deep into economics. And, you know, I love the channels that have like 600, 6, 700 views, but go in like the most niche content in terms of psychology, business, selling, things like that. So that's what I'm like kind of going on right now. You mentioned that today that your corporate locations had two to three extra trucks that were not being used, and it showed on the P and L, I believe we were talking about growing to capacity. Can you break down exactly what you mean by this and how they show in the P and L? Yeah, let me see here. I might have their P and L. Give me one second. Ah, I deleted it. 6. So the one I was talking about, Kyle, the other day was the one you went and saw on Saturday, which is the Mount Vernon location. They have, I believe, five or six trucks when they probably only need three. And that's because we cut back all, like, projects and everything when we took over that location. So last month they did 36,500 revenue and they profited just under 6,000. So they're right around 20% profitability. Just under 20% profitability. And they're. They're just finishing their turnaround rate. So they just got their team established and everything's starting to roll now. But it's not as profitable it could be because otherwise this time of year we'd be raising prices if it wasn't for the fact that we had to cut all Those services mend relationships. And the fact that we have two to three extra trucks sitting on the balance sheet isn't helpful because you're paying insurance and there's cost of just having extra trucks so that that location should be able to do 50 to 60,000 per month in revenue without buying any more trucks and hardly any more equipment as maybe some push mowers. So I really believe that right now it needs to do about 26,000amonth just to break even. 27, 28,000amonth in revenue to break even. And at 36,000 it was, you know, had $6,000 in profit. And I think when it gets to 15, 60,000, it'll have $15,000 of profit just because it has that extra capacity. It's already paid for the trucks. The trucks are paid off. It is paying, they're paying insurance on them. They're sitting there for two, three days out of the week. And that's not efficient.

Does growing to capacity by lowering price apply in the winter season as well? We will most likely have one or two trucks dormant for the winter. Unless we just need to close work to keep the trucks busy. Yes, it does. And that is a great point. In terms of when demand is lower and you don't have enough jobs on the schedule during the winter, for example, that is a point to lower price. That's when we erase our E fees. That when we take a down feast about a month and a half, two months is when we take away those fees just to keep jobs on the schedule, keep the trucks moving.

And hopefully get as many customers on the books as possible so that we can resell them in spring. And again, focusing on winter service is going to allow you to do that the best.

Besides Wednesday and Thursday, are there going to be any other gustination events or get togethers available during conference? Yeah, so there'll be more info on this coming up. But yeah, Wednesday evening will probably be dinner all of Thursday. Obviously we'll be together Augusta franchisees. And then I'm thinking Saturday evening I'm trying to rent the.

The restaurant again. And Wednesday night and Saturday night would just be on us in terms of the cost of the dinner. But there is really cool outdoor space like fire pits and what you can walk around. And so my goal would be that we can rent that whole space out. The thing I'm balancing is number one, being able to rent it out. If we do that, we basically take up most of the restaurant and then secondarily is if it is freezing cold, it's going to Be chilly outside. They have some really good heaters. There's fire pits. They have all these like heaters from above. So I'm thinking Wednesday and Saturday night will be kind of a mingling event for all of Augusta Nation. I might talk a little bit on Saturday night after everything is done and Wednesday night, but that would be a good time for us to kind of get together. Then Friday and Saturday during the afternoon, we're gonna have a separate room where you can go and have one on one help from Command center reps when it comes to transferring over to Zooper. So still ironing all the details out with the hotel, but we should be able to have that set up. We have, I have a video the other day, actually I need to send it to Command Center. We have a conference room there that I'm going to try to get conference room video for Zooper. And so it'll have about where 15, 20 of you could go in there, have help from Command center around a big conference room table. It's pretty cool. And that would be separate from the conference center. So if you need help with Zooper stuff on the transfer over. My wife and I are going to start a YouTube and Instagram account for a different business idea. What would be your recommendations for monetizing each platform? Would you also recommend advertising through YouTube ads and Instagram ads to promote the respective channels? Any info from your experience is helpful. I would not recommend advertising on YouTube or Instagram to promote the channels. It's extremely expensive when you look at the cost per subscriber or cost per follower. And they're typically very low value kite subscribers that will leave you after a while. And we've seen this. Even if you look at my channel from last month to this month, we like 5 million views in July. I think it was, it was all shorts that was based upon like unhappy customers and drama. And we've gone down like half a million views per month now because all of you who subscribe during that, I'm not consistently producing that type of content. So whenever you create out, out of the box content that creates a lot of followers or you do advertising, the subscribers and the followers you get typically will leave after a few months. You'll get a spike and they'll go away.

And I talked to a lot of people about spending money to get YouTube subscribers or people following on Instagram. It's never worth the money and you get very low. There's a lot of bots, There's a lot of very low.

Low value subscribers and followers. They're not the type of people that actually follow you for a long time. They're not the type of people that buy from you. They're not the type of people follow the content religiously. So yeah, that'd be my two cents.

And then just be very, very, very patient actually monetizing media. Unless you're, unless you are A incredible talent, B have huge production value, or C are just the most incredibly creative genius in the world. It takes years to really create a following that is monetizable because you got to try so many different things to see what works and then you know, really before you can actually start making money on it. Like I didn't make money from my videos for at least three or four years and before it became meaningful it was like five years.

You talk about keeping prices for new customers low to incentivize them to try your service. Can you give specifics on how fast you should raise or can raise their recurring price without taking it, risking a huge number of cancellation after they join with you. My thoughts are to raise prices 2, 3 months after 2, 3 months so they have a good gauge and how reliable and professional your services. Yeah, I like to keep customers at least two to three months at least before raising prices. Ideally more like six months. But in like this year, this is very different, like the past two years. Remember we don't see inflation like this and we have it for 40 years in the United States or anywhere in the world honestly. So you know, the fact that we talk so much about raising prices at every two or three months is uncommon and we will likely never see this again. Like if we just step back and look at the world economics, we will likely never see where we all need to be raising our prices every two to three months. So in the regular inflation environment of 2, 3%, I think waiting every six months is good because you've really created that sticky kind of service. After two or three months they've only paid two bills. They've literally just gotten the groove of weekly or bi weekly service and where they expect you, were they happy with you? You've probably maybe add one or two yellow slips at the very beginning or adjustments to their service at the beginning to kind of dial it in. So they haven't really got to the point where they just like it's automatic and trustworthy and super sticky to them. So I like six months if at all possible. But in this environment, if you hit capacity after two or three months, I'd be raising prices, I'd be raising prices like I just, I cannot overemphasize if you are at capacity, stressed out financially or in the schedule. How, how you, how important is for you to raise your price. Like, I have yet to see anyone raise their price back. Man, I wish I would not have raised my price. No one has ever said those words in the past three years that we've been doing Augusta Lawn Care as franchise. No one has ever said, like, man, I wish if I would have just not raised my price, it would have been better. There's been one or two times when someone has raised their prices and lost 20 to 25% of their customers. But we're talking about a year, year and a half, two years ago. No one this year has done that because the customer is so used to price increases and it's very hard to find other service providers. I'm telling you, the next. It's already happened in some of our markets, especially Florida and a little bit in Texas, but California and some places in the Midwest. There are so many people going out of business. Especially they had two, three, four employees. They're going out of business. They failed to raise prices. They've dug this into a massive hole and inflation is scaring them. They can't find employees and they can't find employees because they can't charge enough to be able to afford the employees. And it's a bloodbath. It's already happened in several markets where people are getting a lot of calls around the fact that oh, my provider didn't show up. So when you raise prices, if people are not showing up to their schedule appointments, if they're not showing up to mow people's property, guess who gets the jobs? The people who just show up. And when you raise your prices, they don't want to switch to someone who potentially might not show up. So a very sticky service just showing up at this point. And I think it's going to continue this winter going into next spring. If you thought this year was bad when it came to labor, next year is going to be way, way worse for customers finding the.

Contractors because this year was so bad with employees. Everyone that had employees this year is going back to solo this winter. Not everyone. A lot of people are going back to solo or just quitting on the business altogether and going getting another job.

It's just going to happen. It's going to happen throughout the winter. I really believe that. Derek, could we get an in depth look at the corporate location, North Carolina, month by month, like the piano updates you used to do for that Location would love to see initial investment to get things going with the manager on salary and if and when additional investment was in your lap. Let me make a note here.

What's this called? Mastermind. Throw this under that one. Let's do Mooresville.

Let's do startup and capital analysis. Yeah. So basically my theory, and I can only say this because we've done a few of them, I want to do 10 of them before I can like logistically say this has happened 80% of the time. I want to be able to say that for all of you. So like next spring, hopefully I'm going to start two more from scratch.

But my goal is that I spend between 70 and 90,000 to get a location start up. And I spend that money over the course of three months. And after those three months, by month four, I want to be profitable and never have to inject capital into the business again, including the winter. So ideally I get started in the spring, maybe late spring, I have three months in the hole. But by the time I have hit winter, I've had four or five months of profitability that allows me to get through the winter time without having to inject any more capital. And because I'm starting from scratch, I should be able to convert 60, 70% of my customers into winter services and keep a good cash flow. So I can definitely show the numbers though. But in general, the philosophy that we are working with and Chuck is going to be helping with really is trying to nail down this model of like, how do we get 10 locations started tomorrow? And as we do, my corporate locations is going to be trying to systematize exactly where to spend that money, what that budget looks like, what the parameters and the KPIs are for those first three months. But I know, for example, with Chuck, he was really good, the third month was profitable. Right? But I would expect the first three months are unprofitable if you're trying to scale really quickly and trying to get above 30,000, like immediately. But we really got, I can't say that was positive because I only have four locations when I have 10. And I can very be very confident, say, hey, 80% of the time we hit three months, 10% of the time we hit two months. And 10% of the time took us six months. Like I want to be able to give those numbers to you all in terms of what that looks like. And Chuck is so good with systems and numbers, he'll be able to really create a good system around it so that when you look to create your second Location, your third location. It's like, hey, here's what a good location looks like, here's an underperforming location looks like and here's one that you should close. That's what we got to create. Right. So we have a pretty good idea what that looks like, honestly. But I need to do it 10 times before I can confidently tell you this is what a location that you should shut down because it's not going to perform well enough or you change the GM that, that that's coming up the down the down the road. But I can definitely look at going back and seeing what those invest what we I spent the 80, $90,000 on to get it up in those three months. But that's kind of how I look at it. And I haven't put any money back in that business now it's giving me dividends basically every month. Just owner distributions. Are you ever going to enforce weekly cuts only? How do you schedule for bi weekly cuts? We would run into issues where a crew would be overloaded one week and super light the next. Yeah, so we do enforce weekly cuts at our local location during the spring rush. So I think that's March, April, May and June. And most people just stick with weekly honestly because it's only July and August that like the grass is dormant. So some of them will pause, some of them will go to biweekly. But again, I don't mind them switching to biweekly because it's Double the, it's 50% higher price and we get the job done way down faster. So our profitability is the same if not more when they switch to biweekly. In terms of the scheduling though, what we're playing with, again, you got to look at the budget hours every single week. And for those alternating weeks, if you have a whole bunch of your jobs falling on bi weekly, you got to always be looking at that weekly budgeted hours hours to fit in your projects. So on those slower weeks, you're gonna see a lower budget hour amount for that week and that's when you're gonna be able to schedule in more projects. So the bottom line is in zoopro working on that with them right now they have the budget hours daily kind of like service. I'll probably at the bottom of the dispatch board we want it to be when you look at the weekly view, you get recurring budget hours and project budget hours for that week. So you can very quickly look at it and know how to schedule. Because if you're doing bi weekly cuts and they happens to fall on a bunch of them being on every other week. You'll just have to know that the project budget hours need to be higher on those weeks in between. So that's something we're working on with Zebra right now. I think they're close. We just don't like. I don't own the company so I can't, I can't see like where their engineers are at and everything and where they're hitting bugs. So it's very hard for me to give you guys timelines with Zebra. I apologize. It's something I wish I could do. Like I can do a P4P. I know where we're at. I can see the board, I know everyone, what everyone's working on, Zoom price, don't. So I know it's something we are working on. That's one of the things I really am trying to push them to get done before everyone starts switching over their larger locations. Because when you're small, as long as you're doing under, you know, 70, 80 budget hours a week, it's pretty easy. Just use the daily budgeted hours. But when you start getting hundreds of budget hours a week, you really got to have, in my opinion, that weekly number. And we're trying to get them to split it between recurring jobs and projects. So every single week on the left hand side you're going to see that. And it's very easy to schedule that way. It's basically a replace team up for those of you that are using that with service autopilot.

70,000. Nope. So typically it's like 60 to 70 is what we're spending outside the franchise fee. With the franchise fee. That's why I'm saying like usually between 70 and 90 is what I'm spending.

What if you're just afraid to raise price because you feel like you can't lose customers due to the financial constraints? This is a great point because I think that most people, due to financial. Yeah, I think most people don't realize just the impact financially of raising prices. And so I'm working on a spreadsheet that's going to hopefully convince people to do this. And that is looking at, okay, If I lose 10, 10% of my customers, but I raise my price as 20%, I'm still going to double my profit. It's not linear. It's not like if I raise my prices by 20% and I lose 20% of my customers that I net out even it's not like that. So I'm going to run a spreadsheet so it's very easy for you to put in what your average prices are, how many cuts per month, and then you can play with the percentage of customers lost. I think you'd be amazed that if you lose less than 30% of your customers, usually you're going to still make more money. If almost all the time, you're still going to make more money if you raise your prices, especially if you do it by 5, $10. Like a $10 price increase in a $40 cut is a 25% increase, which means if you were 25% profitable before and you raised their price by $10, you just doubled your profit. You doubled your profit. So if you lose 30% of your customers, you're still better off financially. And usually you're going to lose the worst 30% of your customers. So I'm hoping that the spreadsheet will convince people, because the narrative that I keep trying to enforce, people are holding on to their prices too long. They're waiting, they're struggling, and they're not raising their prices, and they're struggling financially. And I'm telling them, and it's like, three months later, they tear the bandaid off because they're forced to financially, and then no customers leave. It's like if you just would have listened three months ago and you would have an extra 10, 15, $20,000. So I'm trying to make it where you don't have to just listen to the narrative, because I know we get wrapped up with emotions with customers, and what if I lose them? And what happens if I don't have enough work and all those sort of things. When it's like, no, the financial picture here is very different than what you're thinking. And if you strip away the emotion, I think that the numbers will prove and convince a lot of people to do their price increases sooner. Because right now, what I'm saying is price increases only happen when someone's desperate, and that's not the place you want to get to. Like, you're going to be psychologically just running yourself into the ground all the time. But that's typically when we raise prices. Business owners, is when, like, there's a lot of chaos and issues are happening. And what I've become more comfortable with, the Bellingham shop that does well financially, is like, I'm not going to wait until we're, like, scraping by and losing employees because they're not making money on P4P to raise prices. We're going to keep raising prices, prices. And the math is just so on your side when you start raising prices, regardless of what size you're at, regardless of where you're at financially and the type of customers you're going to get.

And so on and so on. So I'm going to create that document. I actually have it, but Jaden is out of town getting married, so I'm going to have her. She actually worked on with me a little bit last week and I need her to get back and make it look pretty so it looks better than my rudimentary Excel spreadsheet skills.

Oh, that's funny. Scores are great. Let's go. The tests are fun. All right, everyone, hope you have a fantastic Monday. I am encouraging people that are coming to training now to listen to every single one of these Masterminds. I think that the value of these is important. If you can't listen, that's fine. You can watch them later again, just go to the dashboard, go to Franchise updates. And now the playlist will update every day or two with the newest YouTube video of these, the recordings. So you should be able to go there, see the day's video every day or two refreshes. I really, really recommend that if you, if you really struggle with watching it, because sometimes they're 25, 30 minutes long, I know it's a long time, don't watch it. Literally get YouTube Premium. It's $15. Trust me, it's worth every single dollar. If you can watch these Masterminds as versus not listening to them because you can power off your phone while listening to a YouTube video and just listen to audio while you're working, while you're doing jobs. Highly, highly recommend. Put the questions in anytime. Anytime you think of a question like, oh, I should ask Mike this, please put on the form. You're not bugging me. This is why I'm here. This is why we're doing the Masterminds. This is a great idea brought up by other franchisees this past spring. And so please use that form. You have a question, just put in the form. There's probably other people thinking about it and if you're really worried about it being a dumb question, take your name out of it or be. We just realized that other people aren't putting the question either because they think it's a dumb question. So please, please, please utilize that. Please watch the Mastermind. I think it's very important that we stay connected the answer questions and typically the ones, the fires that we see, the massive issues of people like coming to me and being like, I have no money, I haven't heard from them in six months. They haven't had coaching calls and they haven't been watching the Mastermind. It's very consistent. Please stay connected. And when you start having issues, like if I see questions about pricing and Lee watches, all of these, Lonnie watches, all these Liz watches, they're gonna reach out to like, hey, solid question. Is there anything we can help with that pricing we can do? We need to convince you that the pricing is can we do that for you? Like, we can do that in a matter of half a day and you're gonna wake up tomorrow and your price is all increased and we'll deal with all the collateral damage like that can happen. So please stay connected. It's very, very important. And.

Brandon, it was very good on your test. I'm very happy. Awesome. All right, guys, have a great day. Take care.