Mike Minutes Mastermind 09/30/2024

Hello, Augusta Nation. Hope you're doing good. Let's go ahead and get this thing kicked off. Happy Monday. We got one last day here in Q3 before we head into Q4.

So.

There you go. Cool. Yeah, like I've. I've just consistently seen how Q4 is handled. Determines the entire profitability of the current year, but also sets up the next year in terms of revenue. And so obviously I call it Q4 collapse for a reason. I just consistently see this is when people's revenues drop off their leads drop off their consistencies drop off their dedication drops off, their discipline drops off. So like I just highly recommend if you need to take a, you know, a quick break, a vacation, get back on track to finish the rest of the year out strong and have a great Q4, it really is the determining factor of, of whether or not you are profitable in, in 2024 and what your revenue starts to look like in 2025. So let's go ahead and get things kicked off. I think there was just. Oh yeah, there's two questions that came in today. Let me go ahead and set this up. Okay. Yeah, I'm more than happy to.

If I open up copilot here, maybe we can. Maybe we can kind of go step. I'll send the text message. It'll come out here a little later. Sorry. Alright, first one up is from Mr. Anonymous. Let's say it cost you $100 to acquire customer door hangers for mowing. Is there a formula you can run to see how long that customer would need to stay with you for the $100 customer acquisition cost to make no longer make sense? Yeah. So technically, technically if you take your direct costs out, you can figure this out. So for example, let's say 40% of the revenue that you earn that job is going to go to direct labor. Let's say that another 10% goes towards things like fuel or dumping costs. When you're associated with that job, maybe some direct, you know, you could even break out some cost of like equipment for example, that are direct costs like your loans on the equipment. So if you break it down to say 40% is gross profit. Again, this does not include your overhead, but your overhead is you're paying for anyways. Like you're going to pay for your shop and your insurance, et cetera, no matter what. So that's, that's like you can't really deal with that. But in terms of direct cost, let's just say it's like 50% your gross profit margin, which is pretty common. In this industry, if your direct cost to a job is 50%, then technically on a hundred dollar customer acquisition cost, you need to make $200 in revenue to break even on that customer. And so, you know, if you, let's say you have a $50 lawn and you're doing it weekly, well, I need to do four weeks worth of mowing or $200 worth of revenue in order to break even on the customer. And that's why typically I use, you know, if basically if I get a customer for $100 or less, I'm going to back up the truck and just keep buying customers because usually I can recoup the cost of them within a month or two. It's when you start paying 2, 3. I've seen some people pay $400 for either purchasing customers or their actual customer acquisition costs from marketing. That's when I start to get a little afraid.

Because it's just going to take like four, five, six months to recoup the cost of acquiring them. And it starts to become more and more difficult to actually make sense of spending that money because it takes so long for the money. Like the velocity of the money is so slow. In other words, when I say velocity, I mean like the money coming in. You're investing the money versus getting it out of the system. A business that has that velocity is low or your return investment comes slower, I.e. you're less liquid, is also worth less. So a system where you have to put in $500 to get a customer and it takes a year to recoup the cost of that customer is worth significantly less.

All right, Mr. Anonymous, do you have a rough game plan of what to expect regarding Gus to help with our marketing? If we choose, do you plan to dabble with stuff for Christmas lights or just prepare for going full speed ahead by next spring rush, are you going to have some beta locations? Very exc. Yeah. So we're already working on this in a very small form. I'm testing this is in relation to the post. If you don't know what this is about. On Saturday I kind of went in depth that we are taking action towards doing marketing for Augusta Nation owners. And, and I kind of put in there what the general thesis of that is actually just wow. I just pull that up instead of trying to go off the hip here.

See here present.

So what I put in here is kind of what I want to share for now.

Because anything beyond this could change.

So this is what this question is in relation to. So basically a lot of people have been asking for this for especially the past six months as marketing has become more difficult and leads aren't just pouring in for everyone like they were in 2020, 2021, 2022. So also I've been looking at what agencies are charging owners inside of a Gusta nation and the average cost per lead is getting close to $150 from agencies.

And that's expensive because you got, you, you have the cost of the agency etc in there. And so I do believe we can do this more efficiently simply because we have economies of scale, we use the same marketing strategies etc vs like an agency that is like trying to service all these different customers. They have to create different systems for each person and it can become, you know, we give the economy the scale. So that's why I think we can actually do this affordably as well as make sure it's sustainable. And in order for it to be sustainable it needs to make a profit. This I've told an owner recently about this like has been really helpful in helping other owners. I'm like, you got to make money here. Otherwise like this eventually becomes a sustain is unsustainable. And so I'm making sure that is true. So we're going to test it, we're going to roll out very slowly. Will it be ready for next spring rush? I do not know that. I know that we will be still working on it but I'm not going to rule this out until I am fully confident in like every single aspect of it. So I'm taking calls at least one or two a week with people. This is not just like oh, we're going to run your, we're going to run your Google Ads for you. This is not what this is going to be because I do not want one change the algorithm to basically make it where we no longer can produce leads in a cost effective manner. So we're going to a full out like approach which we are doing click funnels, we are doing lead pages, we're doing you know, paid traffic like Google and Facebook but then also like really doing data scraping. Like how do we really get this stuff nailed down? And I want to do this in a way where it is we're both on the same page. In terms of incentive. I don't like the agency model where they get 50% of ad spend and they get a flat rate.

Market management fee as much as it seems fair. The reason I don't like it is because they don't really have an incentive to bring down your customer acquisition cost. Basically, as long as they just keep the customer acquitting low enough to.

Keep you around, then it's fine. I want it to be where like the. I would rather be where an agency is. They're incentivized to like go out and drive down customer recording costs because they'll do way more iterations of ads for me. So that's why I alluded to here, like I don't want management fees and I don't want to do a percentage of ad spend. I just want to be a flat, simple pay per lead, cost per lead. And basically it's like, look, if we can't run run ads and get the cost per lead under this dollar amount, we just won't be able to get you leads. And then it's like up to us to figure out how to drive that number down. And like as like we would, like all the work and effort would just be how do we get that as far as low as possible. And we're incentivized to do that. So again, this would be completely optional. Just like max AI and CC command center services, you could opt in and out of this.

So that's. If you're going to do this really well, you've got to have a significant amount of money that you're spending just on testing. And so that's why we've got to make sure it's sustainable. Otherwise if we were just like dependent on something we know works, like Google Ads or Facebook ads, if we just do that one thing. Well, if one thing changes all of a sudden, like we can't be selling leads for 100 bucks and it costing us 120, $130 to get them. We would just like immediately have to close the program. So we have to have a very.

Broad approach to this that we know is sustainable to where one platform making a change does not cut you off from your leads. This is why I've always avoided, always avoided selling leads to a Gusta Nation. Because I've seen what's happened to other brands that do this.

And I'm not a fan in many of what they do. And so there's another large lawn care franchise and literally everyone like the franchisee's goal is basically to not get leads from corporate because the way that they handle them. And so I don't want that to be the case. I want it to be opt in and opt out and where you're excited to get the leads and they're good quality and they're not based on literally the whim of Facebook or Google and algorithmic change. So that's my main focus. So what was the questions here? I want to make sure I answer this question directly.

Do you have a rough game plan? Yes, I do. Do you plan to dabble with stuff for Christmas? Yes, we will. This will be like. So our goal is to basically make this where we can keep this year round for you on. I have to. We have to make a profit. Like, I cannot sell a lead for a flat fee and then it cost us more. So I need to. I need like all the incentives will be around us driving our. Our costs down. Because I want for you, for you. Just know if I spend X amount, I will get X amount of leads. Right? And so that's my goal. Are we gonna have some beta locations? Yes, I'm already starting to work on this. I will likely do my locations and then I'll probably have a select group of beta users that I will have in the program. Will I have it ready for spring rush? I cannot guarantee that. I need to nail this. Like, you all have seen me slow down dramatically the way I roll things out.

Especially after what happened last year with Max AI and then Copilot. Like, I'm slowing down everything and when I roll stuff out, it'll just be well thought out. And that's my goal. It's like more or less nail these launches of stuff like this instead of it being like, yeah, this is a good thought, but it's kind of like half baked. I don't want that anymore. And there's too many people's livelihoods at risk and depending on us to do well. So. All right, everyone, I love you. Hope you have a fantastic Monday. See you tomorrow. Take care.