Mike Minutes Mastermind 09/28/2022

Hello everyone. Hope you're doing a fantastic day. Let's go and get started. A couple things. First, announcements. I was gonna do a whole bunch. They were all recorded last night on a video that I sent to you via email. So if you have not watched the update about the website portal so you can make changes to your website, the Christmas templates, Christmas lights, decorations, I just got an email from vistaprint saying they're alive.

And the updates to the dashboard in terms of being able to make changes to your command center services. If you do not hear any of those things, those things seem foreign to you, check your email. Last night I sent everyone a video 10 minutes long with all those updates instead of doing the announcements today. Okay. So please watch that very, very important education.

Keep in mind I found it takes at least three years to for most owners to really figure out the seasonality of their local area and figure out how to balance their schedule better with our being the fact that our industry is so tied to the weather, your, your demand and your market can change overnight a matter of just a few days. You can go from very, very busy, tons of leads coming in, to basically nothing coming in and vice versa. Can go from nothing's coming in to you're being bombarded and you feel like you need to turn your leads off because there's so many. The reason I say it takes three years because you start to know when that time is going to happen and plan accordingly. So for example, during the spring rush, everyone's like, oh my word, I'm so busy, I'm going to hire more people and get more trucks and all the rest. It's like, no, no, no. Book yourself out for six weeks. So that way when you hit July and August when it gets really, really slow and there's no mowing, that you work through that backlog and you don't have to lay people off and then vice versa when you're heading into September. For a lot of people it's like this weird period between leaf season, end of mowing season, and that no one really wants to do projects because they did their project in the spring so they can enjoy it throughout the summer in their outdoor areas. So it's a weird period of time where there's. It's hard to get leads. Your customer acquisition cost is very high, usually for a four to six week window of time. Between all of those things, you got leaf cleanup coming up, but you're not there yet. You got mowing still slow or dying off and you don't have any leads Coming in for projects because people have done what they want in their, in their yard. So you start to learn these things in your market and you start to prepare for it better. You start getting better. Okay, well, I'm gonna make sure I book out further during my periods when I am really busy so that I can get through the slower times and then not have to lay people off and not be so surprised like, oh my goodness, I don't have any work on the schedule. Like, that's why it's so important to book yourself out in the future. When you're four or six weeks booked out, that's, that's a comfortable zone above that starts to get where you're getting declined estimates, et cetera, above six weeks. But if you're a week booked out, two weeks booked out in the middle of spring rush, I would not be buying more trucks and equipment. I would be focusing on book yourself out and then go get the equipment and the trucks, et cetera, because you need to get that four, six weeks so we can get through July, August, when there's going to be less demand for your services and you, you know, going out right now and spending money on advertising. I was talking with one of the owners the other day is like the worst use of your money because demand is so low. Right. We haven't got lease season for most of us yet, so there's not really a top opportunity to market for that. No one's really buying mowing services because they've been on service for the whole year or it's not growing. And then again, projects like, no one's really looking for projects. So, you know, knowing that seasonality and really starting to schedule around that as you grow, your business is, is important and you're, you'll be less inclined to have the high highs and low lows of I'm super busy and then like, I'm not busy enough like that Ups and downs gets better as you get better at scheduling for it as time goes on. It took us a long time to figure that out that, you know, during spring rush we're not going to schedule projects. Those are going to be booked out a month or two months down the road. And we're going to focus only on mowing, initial mows, overgrown mows, etc. Because those are more time sensitive and have to be done. And then the projects can come later on down the year when we are not as busy. All right, I saw there was like 12 questions that came in, so let me jump into those.

All right, see here.

Oh, wow. Why is it so weirdly shaped here? One second.

That's a little better. Okay. Dustin, when is the best time to start advertising for your new location? Opening day is April 1st. So yeah, I talked about this the other day. So I would recommend trying to get your website up as soon as possible. So as soon as you have signed your franchise agreement and that's loaded, that's great. Get your website up, get reviews rolling in. Let's command center know that April 1st is your opening date. I would probably recommend opening prior to April 1st and try to try to get some of the early adopters, the people that try to set up service in March or in February. I would recommend that because you're going to lose out a little bit there and you don't want to be marketing.

And not taking on new customers. Right. That's just a waste of money. So if you are starting the location. This is what I was talking about yesterday, Dustin. I don't think there's a whole lot of value in marketing right now and say like next spring, Augusta Lawn care is coming to your area. You're not driving any results to the business because they're not, they can't go. It's not direct marketing that they're not going to go. Ask for an estimate right now because you're not open and secondarily no one's like, oh great, in six months I know who to call. Like, that's not happening. Our service ultimately is very much direct marketing based since you have not built a brand yet in your area where people are thinking about your service when they think about lawn care. So. So I would recommend starting more in like February or March and starting your marketing then when demand is starting to tick up and you're actually getting real leads. But until that time, I'd have your website up and ranking so your SEO improves and I'd be getting reviews as much as possible. And make sure you let command center know that you're not starting to a specific date. Our Google Ads have been clicked on 750 times in September and we sent out 43 estimates that mean less than 5% of Google leads are requested. An estimate. Keep in mind we sent out one click estimates that would for the actual figure, lower. Is this unusually? No, it's not. No. A 1 to 2%.

Conversion rate from click to estimate or click to lead is pretty common and so I wouldn't be super concerned about this. You're saying it's 5%. Let's assume that half of those are one click estimate. Emails, you're still at like two and a half percent. So it's not unnormally low. Again, very, very common in September, especially in your market. Max Nick, who I was talking to yesterday, same thing that people do not there's not a huge demand for our services this four to six week window because the grass is dormant. No one needs projects done because they've been finished already this year and leaves haven't started to fall enough yet to do a lot of leaf cleanups. So it's a weird period of time. Your conversion ratio is lower, your close ratio is lower, your customer acquisition cost is higher during those periods simply because demand is low. Right. So when demand is low, your conversion rate is lower because there is no pain. That makes the person who clicked like I need to get an estimate. It's less, there's less pain for them. The grass isn't growing to the point where if they don't get the estimate and get on the schedule, that it's going to be overgrown in a couple of days.

Customer request quote online. We need more info on what exactly they need, but I cannot seem to get a hold of them. I've called multiple times over the last two days, left messages and still haven't received a call back. Would you just automatically go and look at the yard or wait till you hear back? It is about 20 minutes away from the shop. Okay, so everything was a yes until this part. 20 minutes away from the shop is tough assuming that you don't have anyone else over there. Like if you have other customers, then I just try to route it in. But I wouldn't be going 20 minutes away from your shop for one customer anyways. Like if you can't route these into an existing route or other customers aren't over there, you probably don't want this customer anyways. But I would definitely, if you haven't heard from them, still just drop by their property and get an estimate. You've already done the work of getting the lead, so you might as well good chance you're not going to close this person if they're not calling you back. If you've left messages and they're not calling you back, potentially you might hear back from them. That being said, some people like myself don't answer our voicemail, don't answer our phone, and if I get an estimate I just click accept. So don't rule that out. But again, the 20 minutes away from your shop, unless there's other customers around it, I probably wouldn't be touching this thing anyways. So.

Yeah, but in general, if someone's not contacting you back, I would just go do the drive by accident, send them a quote.

During training you had mentioned we needed to raise our hourly price to the customer to $75 per man hour. During conference I told you we were charging 60 per hour, but in reality we were actually making 40 per hour on our mowing due to running two man crews. The efficiency loss was killing us running two main routes. Am I working out? As I am working out the kinks with a solo route, I am finding we are actually spot on or a little bit above 60 per hour rate as a solo route. Maybe that's just me being super fast and efficient. Would you still recommend raising our customer on customers that are billed at $60 per hour rate? We closed 50 to 60 our spring and are now down to 40 to 45 close ratio.

This is still low for a solo operator or solo route. And you as the owner doing that is still low 60, honestly, to be perfectly honest. Right. And again, I'm assuming that permanent hour raise on the job site, right? So a dollar per minute you're on the job again. When you add like second crew in there, you immediately are going to drop down to a lower amount which almost makes it impossible to hit P4P and you guys are going to struggle to make any performance pay. So that'd be my concern. Knowing this, I would say you probably don't have a whole lot of room to move your pricing up right now. So I would be probably targeting next spring rush when this is going to go up to 50, 60, 70% and you're going to be getting a ton of leads. And Kyle, knowing your specific location, you're not trying to grow a whole lot more. You're trying to like maintain that 500, 600,000 revenue, annual revenue. I would probably raise your prices next spring rush on on all existing customers. Because a solo operate solo route, especially if you as the owner are doing it, you should be making more than $60 per minute per per hour per man hour on mowing if you're solo route. Because what that means is if you put two people on a route, they essentially cannot hit above base pay. So that would be my concern.

Great question. One of my guys asked me, why do we default to having estimates be valid to 30 days? We had a discussion over it and I can see pros and cons for a seven day acceptance window and pros and cons for a 30 day acceptance window as well. What made you decide 30 was the best option and are there instances where it would not be the best option? You know, 100% 7 days is much better for mowing. Except the thing is with the initial mow price, when you give a dollar like a dollar fifty per minute per man or two dollars per minute per man for the first mow, it's less important that they accept within a day or two because now if it gets really overgrown, the price is just going to go up, right? So this is also another reason why I like that dollar per minute per man or $50 per minute per man that first visit is because now I'm not tied to making sure that they accept the estimate within a couple of days because even a seven day window acceptance you still might be two weeks away from actually getting the service done from the time that you look at the property. So for example, someone mowed their lawn last week, you come look at it six days later, you send them the estimate the next day, five days later they accept, five days later you come and do the lawn. You're now two and a half to three weeks, it could be completely overgrown and that's still within a seven day acceptance window. So that's why having that first visit being at a permanent rate is so good. Because if they take longer to accept, price is going to go up, right? In my mind mowing is really the only thing that needs the seven day acceptance window. The 30 day is really just a matter of I don't want the client to go in there on the eighth day because they missed the email or they got a follow up call and now they're looking at it finally and it says that it's invalid, right? Then they got a call and they go like is it valid still? And then we got to contact the estimator like does these need change etc. So I haven't seen a whole lot of instances where the seven day is hugely important. Mostly due to the fact that your follow up emails should convey the scarcity of like you need on the schedule and you know your, the follow up calls is basically like your estimates going to go invalid etc. So it's really mostly the fact that especially when you have a lot of these softwares that have the, the estimates becoming invalid, the customer sees that and then like oh like I can't accept and now I've just lost the customer over, right?

Seems like this year is drier than usual and demand is down. I finally have good workers but, but finding enough work to fill the day is a bit of a challenge. Any Suggestions yet. This is the entire West Coast. Every single owner is dealing with this right now. Like I said, it's dry. Grass is not growing typically by this time of year of September. It is. It's not Leaf season really hasn't started and again, projects no one's super interested in because they've already got them done previously in the year so they can enjoy it during the summer. So this is very normal. Again, this should just be a matter of gauging where you're at this year. This is your first year and then next spring, knowing how much, how far you need to book in advance to be able to fill these gaps in. This is why booking out seven, eight, nine weeks in spring is great because then as the mowing season trails off at the end of June, you know you literally have July and August completely filled. And during those two months your goal is to try to fill the next September up right just as the leads do come in. So you're either adding to your wait list in your backlog or you're subtracting away from it. And ideally you're subtracting away from it when you are not as busy and the leads aren't coming in and you are adding to it when you're really overwhelmed with work.

What's your opinion on using a company do all the digital marketing for you? They will take care of all the Google local services, Google Ads, Facebook, et cetera. They also do SEO, but it wouldn't make sense since I'm already paying for it. I've been thinking about doing it for a while, but I'm not trying to go out the Augusta system. What are your thoughts? P.S. i'm not sure if this helps, but the company is in South Florida and has been Vince for a while with great reviews. I was thinking it might be better to let another person take care of the marketing for me to take some load off my plate for now. I truly believe most people hire these marketing firms because they think that there's going to be some sort of pixie dust. They fly over their marketing. It just becomes better when ultimately they are simply running Facebook ads. They're simply running Google Ads exact same way that we do. I would much rather that marketing spend in that retainer that you pay them go towards actually running ads and getting in front of people. And the marginal amount that they improve by retargeting or doing other things is very, very hard to compete with the fact that how much you're spending and paying them is not going towards actual ad spend. So if you're spending $1,000 a month, but you're also spending $1,000 to go to them. If you're paying 1,000 on ads and a thousand to them, you literally have to make sure that they can double your performance do twice as much as you in order to make it for the dollars to make sense. And I have very rarely seen that where people continue that for a very long time.

Again, I would just rather you spend that money on actual ads that are driving leads. So everyone just thinks that like and these companies are great at marketing. Obviously they're marketing firms so they're really good at showing their reviews, they're good at showing customers that said, oh yeah, we went from 10,000 to a million, like all that sort of thing. But ultimately they are running the Facebook ads and Google Ads very similar to what we do and they are going to probably save you some time checking in on those. But I truly believe just spending the ad spend and using the tutorials that we have and the done for you ads is 95% a better spend of your money. Just to be honest with you and I, if I ever thought that us managing it for you and doing it for you would be a better use of your money, we do something at the corporate level to be able to manage your actual ads. But you spending 50 cents of every dollar on managing the ad versus just spending more on ads very, very rarely do does a marketing firm actually pay off especially at small amounts like a thousand, two thousand, three thousand dollars a month. If you're talking about tens of thousands of dollars a month that you're spending in marketing, that's when potentially having an makes sense because now if they can save you 20% it makes a lot of sense. But small businesses, a lot of times the only reason people do this is because they have no idea how to use the platforms. This week, by this weekend I will have a new Google Max performance ad tutorial up because I know they've changed a whole bunch of buttons and options in the ad process. So I'll have a new one up for everyone this weekend. And I just truly believe that, you know, if, if your cost per Click is say $3 using our ads, I don't see anyone else shaving 50% off of that and being warranting their their extra retainer. I just don't because keyword driven, it's not rocket science. And they're always going to try to convince you that it's very complicated and it's like this dark, you know, the more complicated they can make it sound, the more money they can charge and just not. So I've, I, we've done, I've done a bunch of campaigns and testing other. Like even last fall we did a whole bunch of Facebook ads with different agencies, spent tens of thousands of dollars on it. And they were, they were the best ones, were beating me by about 10 to 15% on cost per click, but I was paying 50% of my ad spend towards them. So. And those are the best ones. There are plenty that didn't. Wouldn't even get close to us. So do you look at every investment vehicle or opportunity as what's my return on my initial capital and how can I maximize return? Is it strictly just numbers or is there other thought that goes in the investment? Yeah, you have to balance what your return is based upon the risk, right? So your return is going to be higher the greater the risk is. And so what I'm balancing out is, okay, do I want a quote unquote non risk, like no risk quote unquote, no risk by putting my money into the S&P 500 or into a real estate deal and getting 8, 10% a year, or do I increase my risk by starting another business, choosing an individual stock.

Etc. Higher risk, but usually a greater return. Right. So yeah, you're definitely looking at what's the return, your initial capital. You're also looking at what's the sustainability and risk of that investment. Because otherwise no one would invest in stocks, they would just invest in businesses. But because 90% of businesses don't last 10 years, there's higher risk. Right. So you gotta balance out ROI with just what's the.

What'S the success rate of getting that roi? Right. So.

This is from Kyle. I've heard you talk a little bit about your Ketosis Cups business a while back, and I'm very interested in it. When did you start that business and how did you fund it? How much initial capital was invested? You mentioned it failed a while back. Why do you think it is? Okay, let's start with the first one. So started that business in 2019 in the winter.

In terms of funding it, I funded it with purchase orders from three different companies that we filled. You know, got a whole bunch. I was able to get 50% of the deposit down and I use that to basically order all the material or the ingredients and do all the setup, etc. Initial how much capital? Probably like 50 grand. But that was all just funded by the positive purchase orders. You mentioned it failed a while back. Why do you think it is mostly capped it immediately when Covid hit, because all food distributors and buyers immediately locked. They didn't buy anything extra. They stopped all trade shows. All new products and brands were cut out. So that was the ultimate reason. In number three, is there takeaway or something you learn from the experience? Yeah, don't get into something that I don't have a unique advantage over everyone else on. The only unique advantage is that I enjoyed. I eat keto. That's not enough of differentiation. There's a million other people that could have done it. Like, if you look at the number of people in the US that eat keto and are into business, that was like my demo. That's horrible. There's probably another million, 2 million people that could have done it. Whereas if I look at lawn care, I'm like, okay, how many people in the US have the experience I have in lawn care business acumen? Like, we're talking about dozens maybe. So I feel like a really good shot. Same thing with real estate. If I look at everyone in my. In my city, because now I can cut down to my city versus the country. It's like, okay, who is the capital? Okay, let's cut out most people who has the experience. Okay, let's cut out more people. I'm probably down to like 100, 150 people that could compete with me on that level, so I have a better shot of things. So when I look at something like ketosis cups, I didn't have enough differentiation to the average person. Like, so why in the world would I start that business? So stupid. So as soon as I realized that and the fact that Covid came along was capped immediately. As we approach the winter season, our work starts slowing down a bit. We will be doing Christmas lights, but I still need other sources of income during the winter for my guys. I'm currently just thinking other ventures in adventure season. Yeah, this is a venture. A piece of honestly Kitos cups. We used a lot of the team to. To make them still stupid use of our time. Honestly, it was dumb. We could have done something better. There's some. Something that could have been aligned better with.

With winter services, outdoor services. We could have just made so much more money and spent the time better. But yeah, definitely Christmas lights. That'd be a. I'd definitely look at that as a better alternative to doing something completely out of your wheelhouse. Most people will lose money on doing secondary ventures, so I would love to see a stat on.

The failure rate of businesses when people get into an industry that they have not been in before. I would imagine it's very high because typically you'll throw money at the situation and this is dumb money. And ultimately that's why I capped it so quickly. I was like, this is stupid. I have no unique advantage. I have no product knowledge or industry experience that's going to separate me from everyone else that could do this. Like if you literally think about it from a very.

Ruthless standpoint, like how many other people in the world could do exactly what I'm doing And that number is above like a thousand, you probably shouldn't do it. Right. Like anyone else could start X. Well then you probably shouldn't do it.

And now if you, if you're more geographically bound, for example, with lawn care or real estate, something that's more localized, then you cut out a big segment of the population. But still, like, okay, if a thousand people could start a window cleaning business tomorrow And I have no experience in the window cleaning business. I've never cleaned a window in my life. I'm afraid of heights. Probably not a good idea to get into the window cleaning business now. If you've cleaned windows for your whole life, you have special technology that can clean them from the ground and 40ft up and you're able to get in for like no money. And you have a really good contract now you're probably one or two out of your whole city that has that kind of connections and that sort of leverage. So.

Evansville, since I know we both have Capital One cards, how long, how does it work going to multiple locations? Can you set up separate accounts or will you only have the main one account? We're just curious to see what your. What that, how that works. Or do you have only. Or do you only give your locations GM's cards? Yeah. So.

We use capital one right now for just one location. I'm going to switch everyone probably this winter from Chase over to Capital One because the experience has been so much better. But I'm not sure 110% about having what you mentioned there separate accounts. We will have separate accounts for each location. 100% because they're different LLCs. So have to do separate accounts. I don't want to do one main account. It'll be a trial, absolute mess. Trying to do expense categorization in QuickBooks. If you have different, all different locations coming from one account.

How much profit do you want each month from your parental properties? I owned a home a few years ago and I'm looking at the comps on rentals in the areas I've since sold the property, but I'm curious how much I could have rented it for. I purchased it for $145,000 with 2 1/2% down on FHA. Loan monthly payments was 90 950. It now rents for 14 to $1500 per month. With a rental company managing it, I would net 300 to $400 passive income per month. Would this be an ideal be ideal a deal you would buy. So first I would challenge the premise that you would make $300 to $400 income per month.

So here's the deal. 950 is your monthly payment. I'm going to go ahead and assume that you're throwing in taxes and.

Insurance. So let's just assume that. But let's say it's fourteen hundred dollars a month. So you're just looking at 550. You're going to spend a couple hundred dollars a month on management. You're going to spend a couple hundred dollars a month on repairs and maintenance. If you don't spend the money on repairs and maintenance, that money should be going in a different account because you're going to have a $5,000 repair with the water heater. Water heater breaks down or there's a leaf roof leak. And that will happen every couple years. You'll need to have that money set aside. So I would challenge the fact that you'd be making three to 400 passive. You, you'd probably be making like 200 max. So whether or not it's a deal, I would be buying. Now personally, I would not because it sounds horrible, but $200 a month is just not worth me even getting worried about. But three to four hundred dollars, that starts to become something interesting. Again if it's completely passive. But again, if you have to spend even an hour a month thinking about that, you're making $3,000 a month. For another thing on your plate. This is why I'm selling the duplexes is because like look like it's just not worth making a few hundred dollars a door.

It's just too much headache. It's another thing on my plate. It's another thing I have to always do. Banks always have to know the numbers and all the rest of it. So that being said, real estate usually starts this like this is only a couple years in. You're making a couple hundred bucks a month. This will probably be 2,000 in five years. And that starts to become really interesting, right? So holding real estate is always where you make the good money, right? When you start holding it for long periods of time. There's people that are paying 6, $700 on mortgages that now they're renting out for $2,500 a month, right? That's when it gets really interesting. So holding real estate is always a good thing. And if I held my current duplexes, they'd do great. They would do fantastic. It's simply a matter of do I want $20,000 a month in cash flow from those properties or do I want to sell them all and pull out what, 2.3 to $2.4 million in equity? That's the big question, right? It's literally years worth of, of.

Of cash flow that I'm pulling out. And if you look at just the appreciation, the difference, it's probably like, see 600, 500, 400, 5, 6, probably 800,000, probably $800,000 worth of appreciation in those properties. And I'm selling. So if you divide that by 20,000, that's 540, that's 40 months. So I'm basically trying to pull forward about five years worth of cash flow and selling now. So.

It just, it's just a matter of speed, right? If you were going for long term investments though, you'd keep these properties. They would cash flow better. And even that property you're talking about there, Kyle, it'll do well. It will do well in the long term, right? So it just, there's no right or wrong. It's a matter of is this going to be worth it for you in five years when you have four Augusta lawn care locations and that you're making an extra few hundred bucks a month? Like that's just, you know, something that you want to think about. Just, just another thing on your plate, right? It's just another thing. I'm not sure if it's just me, but I cannot get the price analysis pivot tables to work on Google Sheets or Excel. I'm using the update file, but the values aren't transferring. If this is happening with others, could Jane show us how she made the pivot table so I can replicate it on my slide? The pivot tables seem to be working on Google Sheets Max. If you want to send a email to estimate GustAlongerServices.com with a screenshot, they could potentially diagnose what the issue is. But Excel, it was not working. But we found it was working Google Sheets, the updated link should be working.

So yeah, feel free to screenshot what you're. If you're having an issue or block there and the send to estimate singular GustavongerServices.com.

Cool. All right, guys, hope you have a great Wednesday. We'll see you guys tomorrow.