Mike Minutes Mastermind - 09/15/2023

Ladies and gentlemen, boys and girls, it's time.

Another Mike minutes Mastermind. Happy Friday. Let's go ahead and jump in.

Let me copy this link in for everyone on Facebook.

Boom. Max metrics were posted on the dashboard. Also feel free to look at the Facebook group. Lee posted some of the highlights. That was just a few minutes ago. Congratulations to those that are mentioned there.

Some really good nominations for not just French of the year but also internally for rookie of the year most improved. Just some really, really good stories this year. So is a fun time to be able to look through those and decide who is the best one. Which is never easy. You just. You never get it right usually. But anyways, let's jump right into questions. Let's see here.

Present Share screen. Bam. All right.

Mount Vernon. Why isn't it standard that customers receive a percentage fee or flat fee rate fee if invoice is not paid after a certain amount of time with increasing fees as time goes by, Seems this would make people pay instead of waiting months with no penalty. Seems the only way that one loses is if we don't get payment for a while and then it goes to collections where we lose more of what we could have made. Yeah. So in Copilot this is being fixed. The reason we have never done this is because there's no automatic way to do this inside of service, Autopilot or Zooper right now. But inside of here, if I go to a customer page, you can see.

You can do this at the customer level and you can do it at the global level. And that is adjust their.

Invoice settings. So late fees are right here. So this one's using company default rules. But you can create custom rules and you can make up to three. So after like 30 days you can add a flat percentage. That's the custom default rules or sorry, the company default rules. But then you can also add rules here of days after sent either an amount exact or percentage being added. So it's in Copilot. And the only reason we haven't done it so far is because right now there's an automated automatic way to remind us to change the invoice and add the feed. But there's no way to automatically add these fees in. So just more work, honestly.

So I guess the long and short of that is wait for Copilot.

There are some automatic ways to do it, but I've.

Seen that most of the time creates issues with clearance stuff, tax stuff as well as. Because you got to create, you got, you got to actually collect tax on that fee. So it changes the invoice by more than just that dollar amount. So that's usually. I know that's the technical issue and why it's hard, but a couple weeks ago we rebuilt it in Copilot and it's been working pretty good with the last thing invoicing that we really got to fix is the auto send. The auto sending of invoices.

Next question.

Kyle Tarvin Moore, Oklahoma. What is a healthy profit percentage we should be shooting for each month in growth mode versus profit mode? I'm looking for solid numerical values for each profit and growth. This is tough. This is very, very vague question that's really, really hard to pin down because it depends on so many different variables, like how fast are you growing? Growth mode could be 20 to one person. It could be 200 to someone else. It's also, what size and scale are you at? I would say, personally, if someone is in true profit mode, that they should be making between 15 and 30% profits as an annual percentage on a monthly basis. Like during. Right now, you're probably making 35 plus. Like the Bellingham shop was at 38. Mooresville, I think was at 32. Mount Vernon was at 35 this time of year. But as a blended average, I'm usually shooting between 15 and 30% for the year if I'm in profit mode. And again on the lower end, it's gonna be 15. If I am like myself, giving a lot back to the general managers in their profit sharing and much more, hands off. So I'm okay with a lower profit percentage. Whereas you're involved, you should be more in profit mode, more around that 25 to 30% profit, in my opinion. I gave you health. I gave you exact numbers. So please everyone else that is listening to this massive asterisk next to this, and that is there's so many other variables that need to be accounted for. But because you asked for solid numerical values, I gave that in terms of growth mode, the answer to that is simple, and that is as close to zero as you possibly can because the closer you can get to zero, it should be that you are investing every dollar back into growth. If you are true growth mode. And in my opinion, you're either in growth mode or you're not. And the not is you are raising prices. You are not actively buying more trucks and hiring more people, and you're tweaking and improving the systems instead of actively looking for more customers. If you're spending any money marketing, you're probably not in Prof. In profit mode.

Outside of maybe filling in the gaps of like the slower parts of the year, like July, August, if it slows down for mowing, maybe you do a little bit of marketing there to fill in the gaps. But the vast majority of your lead should be coming from referrals, people just calling you because they see your brand and one click estimate emails if you are in profit mode truly.

Imo.

What's this? No one. Okay, what is top line revenue and why is top line revenue in a war at conference? Oftentimes top line revenue. Okay, I'm gonna keep reading. But the reason is is it's the easiest to measure, right? So I could give a profit, I could try to give a profit and that would be the best one, right? Who made the actual most profit? The problem with that is.

It completely depends. Okay, are we doing it before or after amortization? Are we doing it before and after taxes? Well now different taxes, tax rates for different states. Are we doing it based on distributions? Are we doing it based upon before or after assets are purchased? So like there's a whole bunch of different stuff, right? So top line is just an easy number that's very trackable and it's hard to to inflate or deflate. It's like I can see exactly how many invoices were sent. Oftentimes top line revenue is regard as a key metric for assessing certain things within a business. But if you have a business that produces $2 million and runs on 2%, 2 to 3% margin, is that considered a business success? Yeah, I don't think. Keep in mind when we do the awards, I'm not saying these people are successful, I'm looking at one metric. The same thing is true if you look at a pitcher or a batter and you give one stat, people can get a gold glove defense and be a horrible batter. Does that mean they're going to get the best contract year next year? Probably not. They may make their contract value might go down next year because they couldn't pay fat, but they still get a gold glove and there's a ceremony and everyone is super stoked about it. So keep in mind these are individual data points. It's not a measure of success. I think we all understand that is a key indicator of the business. But it also depends on what stage stage of the business you are in. In your defense, if you are awarded most estimate sent or biggest profit margin, people that are growing or profit mode would likely have an issue with it. But I think some clarity as to why revenue is the one. Yeah, you're exactly right. Like regardless of what metric you use, there is no way to say who is the most successful because there's so many blended things. So like there is a metric that I'm going to be making in copilot next year called Business Health and it'll be out of a score out of 100. And it's going to take a whole bunch of factors, blend it into one and give you a number. Again, the problem is what percentage of each of those metrics am I calculating? Like, okay, close ratio is a piece of it. Well now someone who's in profit mode is actually going to be hurt a little bit on that number because they don't want to. 50, 60, 70%, close ratio. So metrics are just singular data points. It's like looking at a balance sheet. A balance sheet is a snapshot in time. It does not tell a story because I can take a really bad looking balance sheet, but then if I look at their profit and loss statement, it gets all the clarity in the detail as to why it looks bad and it tells a really good story. And so the balance, the bottom line is a balance sheet is much harder to.

To fudge. And the same thing is true with, because the data points of revenue, it's just harder to fudge invoiceable revenue. And I can see how many invoices were sent out to real people versus like profitability. Well, if you didn't buy any new equipment, like for example, a few years ago I took 300,000 distributions in Bellingham in part due to the fact that we didn't buy anything. Like, right. Like that number probably should have been like 250. But because we didn't buy anything, I just like completely hoarded cash that year. I would have been the quote unquote most profitable. Right. So profit is just such a fudgeable number. Like do you include owner's wages? Well, if not now, people that are working 80 hours a week are going to get improved. Is that a measure of success? Like so there's so many different things if I try to do profitability that it just makes it way too hard to calculate along the line lines of awards. Why are corporate locations not included in the awards? I think if they were and corporate won them all, wouldn't it push us. This is a good point. Wouldn't it push all of us franchisees to step it up? Couldn't this also further prove that staying within the system is an overall benefit to our individual businesses? Okay, so.

This is a good point. This is a Great point. The problem is.

The Bellingham shop has been every year the highest top line revenue.

And if, if the current management has anything to do with it, it'll continue to be that way. And I don't want that to just be always the case. Do I think someone will surpass them? And if it ever became where there's like eight or ten people right around that level, which I think it will in the next couple years, maybe I do make it where like top line revenue can be given out. That being said, you'd be amazed at how many of the general managers were nominated and voted to be Franchisee of the Year if that gets passed. I would probably.

I would definitely take into consideration because obviously if the frank. If the general managers, whether it be my locations corporately or your general managers as you start locations, if they're helping other owners so much to the point that they're nominated for Franchisee of the year, I will give them that, that, that opportunity. And it might mean down the road we do have a separate one like Franchisee of the Year and then like a more general manager role. But I don't want to do that yet because most of the gms are mine. And the big reason why I don't do the awards to a lot of my GMs is because I just don't want to look like it's just me up there giving all my GMs awards and doing that. I would rather give it out to other people. And as part of being a part of corporate, they buy into the vision of what Augusta is here for. And that is to support the franchisees and help other people growing their businesses and the other owners. However, however.

I have already had to consider this because there are a lot of the gms getting voted on to be Franchisee of the Year. And so we will take into consideration. I'm not saying that that is happening, but in terms of the top line revenue, that's why we've never given it to Bellingham. I just wanted to be more about the franchisees and Augusta was like Augusta. The first location should be, especially the first last few years should be ahead of everyone because like we figured out the systems, we implement everything, it was, you know, really, really good. So like, it's kind of unfair for it to just keep winning the first five years. Okay, how about this? After this year, next year I will allow Bellingham to be inside of the awards because I think there's several people coming right up underneath Bellingham. And I'd say within two, like not this year, next year there's going to be a lot of people right around Bellingham size. So after that point, I will remove that logic from. From the awards there. We just made an executive decision. So not, not this one, not next one, but after that Bellingham will be allowed to be considered for things like top line revenue growth, etc. But for example, like multi location operator, top line revenue highest. Like that's going to be me. Like I'm not going to give myself an award, so. And I do expect me to continue getting more and more locations and so I'm not going to give myself the award. However, I would give it to my general managers if people have voted on it, especially so. And same thing with most improved and rookie of the year. If I think my gm, one of my gms is the most improved or has it completely dominated after having a really, really rough start, I will give it to them. Especially after this comment, which is a very good point. So.

I just, I just don't want it to make it look like, honestly, I don't want to make it look like I'm just, you know, scratching my own back and stuff like that. I wanted to make it more about Augusta Nation and not just my candies. All right, Cool. All right, thank you everyone. Have a fantastic rest of your weekend. Happy Friday and we'll see you all on Monday. Some really cool stuff coming out next week. Look forward to sharing with you.