Mike Minutes Mastermind 10/03/2023

Hello, guest nation. Hope you're doing well. Get started.

Conference. Currently there's over 160 of a destination going to be there. That's awesome.

I guess it'll end up being around 170.

Check 1, 2, check, check, check. Okay, cool. All right. Yeah, so probably 160, 170 looking like coming from Augusta Nation. Super cool. We're expecting over 400 total for the conference, so it should be a lot of fun. Let's go ahead and jump right into questions. I think there's only three. Three. Yeah, let's go and get started.

Did you buy a boat? What's the boat club all about? Oh, this must be from forest. I did not buy a boat. Mostly because if you talk to people that buy buy boats, they say the best day of owning a boat is the day you buy it and the day you sell it because they take a lot of work etc in terms of cost of insurance, cost of storage, transportation, repairs, etc. So I did not buy a boat. That'd be a bad use of money in my opinion.

Currently at least. And so the boat club is pretty cool. It's actually a franchise. They have 400 locations around North America. It's called Freedom Boat Club. You can look it up if you like. You can pay, you pay between $350 a month and $600 a month depending on the size of boats you want to be able to use and how many reservations you want to make. You can use it unlimited, but then you can have like up to four reservations in the future if you have the highest plan. And so yeah, that's what I use. Basically it's super cool. You show up as a dock, you jump in a boat based on your reservation, they check you out and you get back. They charge your card automatically on file. It's super smooth and you can use any location, all 400 around North America. Also very cool. If you travel things like that, you can use it. So if you, for example, in my area, a boat slip costs around 250 to $300 per month and it's about a two year waiting period just to get a slip. So not a bad.

Exchange for the fact that just the storage would cost that much or you're going to be stuck getting a trailer and hauling it back and forth from the boat launch all the time. In which case I would probably not use it very often because it'd be a pain in the neck to do. Whereas right now I can just check and like, oh great, there's an available boat at the end of the day after work, I'll go there and finish my work there or be able to work on the book or work on my keynotes, for example, for a couple hours. And then just my house is five minutes less than two miles away from the marina. So super, super helpful for me. It's a nice place to get away from everybody else and just focus on work. So especially creative stuff is helpful for me. Just kind of a change of pace. Like when I go on vacation, it's the same thing. I like working because it's just a change of scenery. Sometimes it makes you think a little different. Modesto Will Copilot University update as you incorporate and roll out new features? Yes, it will. It has been as of last week they added, I think, about 10 or 15 new videos. And as well as I know Brian is working on the videos on the dashboard for Copilot that are specific to Augusta Lawn Care. So co pilot is obviously more generalized training and for the public. But then if you go in the dashboard, there's very specific training for Augusta Lawn Care, so feel free to look at both of those areas.

Garrett from Glendale how do you go about thinking about capacity based growth when optimizing for profit? In other words, is it more profitable to be below capacity and not spending on ads or to spend on ads and remain at capacity?

I'll answer this because, and I'm sure there'll be a bunch more questions here, it looks like. So.

How you want to think about this is the cost of the ads is greater than your profit on that extra revenue. For example, if you're 40% profitable on any revenue in additional revenue because you have excess capacity, let's just call it 40 or 50 profitable on any new revenue between where you're currently at and where your capacity is for labor and trucks and equipment. If you're 40% profitable in there now, it's a matter of like, well, technically you can spend 40% of whatever you're making on ads. So this is where I, I really do believe during the winter, although your customer equity cost is not as good. Although the math doesn't make as much sense, sometimes spending money in there is still beneficial because what you gain in growing, growing revenue is far greater.

Than what you spend on marketing. And it's not as good of a return on investment, but it's still quote, unquote maximizing profit. So even if I have to spend say 10% of revenue during the winter months on marketing in comparison to like 1% or 2% during the rest of the year if I spend 10% but I'm profitable on that revenue.

At say 20 or 30%, you can still make sense of it. So it also just comes down to like, do you want to still be working at full throttle during the winter? Because if you do, you could potentially spend, you know, 15 or 20% of your revenue just to fill a schedule, but keep all your capacities at max. And if you're trying to grow really fast, getting all those leads throughout the winter, getting brand recognition, getting SEO, getting clicks at the time of year when most people are not getting clicks in your market. So now it probably is going to add more color, I imagine without ad spend, we are hovering between 36,000 and 43,000 the last three months. With two trucks, that's pretty, pretty good, good work. We have about 30,000 recurring work that will begin to decline mid to late October when we transition to winter services. Currently we, we are spending 100 to $200 a month on Google local services for snow removal only. We are committed to spending around $5,000 across two Christmas light ad agencies this winter. Most of the ad spend will ramp up in November when the bulk of the leads come. Okay, so let's assume that you do $50,000 in.

In.

Lights. So let's just call it 10% you're spending on getting that. I'm just going to kind of round a little bit. When thinking about Q4 and operating profit. Do you think it would be more profitable to spend on marketing leaf lamps, Christmas lights and snow removal more heavily than we currently are in order to fill capacity or would you, would it be more profitable maintain what we are currently doing marketing wise and potentially be low below capacity. Either way, we will be doing one clicks and door hangers.

Again, it just depends on your marketing spend in terms of your return. Right? So like if you can, if you can spend.

10% of revenue, so that's you're doing 40,000 month. If you didn't spend $4,000 a month. I know, which sounds crazy, but if the difference of spending $4,000 is the difference between you having a $10,000 a month and a thousand dollars a month in the winter, that's a lot of money to spend on marketing. I would not dump all that on Google. Like if you spend more than fifteen twenty dollars on Google in your market, typically you're wasting money.

And you're just, just your cost per click just goes through the roof because you're getting the fringe benefit. So it's going to be like okay, are you doing door hangers Are you spending that money on like hiring someone to go do door hangers basically full time? That'd be like three, four thousand dollars a month. So you need to make sure you do it efficiently and you make sure you track, okay, let's do a hangers for a week and see what the return is. But if you can spend, let's just call it $800 on door hanger campaigns, tire someone full time to go do it for you, and you're able to get $5,000 worth of work from that $800 of quote unquote marketing spend, I. E. Labor to go distribute them. That might make sense during the winter for you. Right now, do you want to be doing low margin because now you're getting a big chunk of your revenue's gone out the door to marketing. Do you want to be doing low margin or would you rather just have the time off that really comes down to your personal preference? When I was in my growth stage from zero.

Starting to five years, I went full throttle during the winter. I just tried to stay busy with everything possible. Did one click estimate emails, did just everything possible to get more work, spent more money on ads, et cetera. It is not the most efficient, it is not the most profitable way to scale by spending money in the winter. However, when you're talking about, you're making the gap of where your capacities are and where your revenue is bigger and bigger and bigger, that opportunity gap gets vast. And so marketing into that is potentially a good idea. And that's why typically, even though the best return on your investment is to spend marketing dollars during spring rush because your customer acquisition cost is the lowest. The problem is typically that we're all bumping up against our capacities and you really don't want to spend money. That's the challenge, right in the perfect world, you plan for that. You increase your capacity going into spring rush, and then you can market into spring rush and fill your capacity. But now you've raised your capacity, which means, guess what? During the winter, you're going to come back down. So there's a, there's a give and take. It really comes down to your personal preference. Some people would rather have a very mild winter work by themselves, or maybe one employee have very low overhead and only have to do 10, 15,000amonth to break even. And they'd rather do that for two or three months than try to grind door hangers marketing lots of leads. By getting more leads, you have higher command center costs. By having more leads, you have complaints. By having more leads, you will have to get more, keep your employees busy. So there's managing them. So the question is, if I just didn't do all of that, would I make the same amount of money? Potentially, yes.

But the bigger that gap between capacity when you're making revenue is, the more and more it makes sense to go spend money on marketing, Even if it's 10, 15, 20% of your revenue and get work on the schedule, especially if you're in growth mode.

Currently we are going into October overstaffed by one or two people. In the back of my mind, I think I'll be able to keep people longer if we advertise. But in the day I know we have to focus on profit going into winter, even if it means laying off a team member too. We simply don't have the reserves at this point in the business to give people hours for the sake of keeping them busy. The business account has been hovering on 15k. Yeah. So I would highly recommend for the one or two overstaffed people, just first off, make it optional to the team, like, hey, does anyone here not want to work during the winter? It's the weather's not great, etc. If you would like, I will guarantee you a spot to come back February 15th or March 1st or whatever. You'll be amazed at how some people are almost relieved because they're like, man, I don't like this workout in the weather. It's raining, it's cold, etc. I would rather just come back in the spring and have a guaranteed spot and maybe they can work indoors over the, over the, the winter season. There's a lot of seasonal work around the indoors for retail. So it's, some people will be thrilled. So I would, I, I came to this realization like in years 4, 5, 6 of my business and it helped me a lot because otherwise I was saving up literally seventy plus thousand dollars in cash that I just knew I'd burn through trying to keep my guys busy with random work. So that was a huge unlock for me and I was just like realizing that some people don't want to work in the winter and by giving them the option slash, you will might, you might have to tell some people like, hey, I can guarantee you a spot coming back this date, et cetera. And like if we do that to someone, we still pay their medical benefits, for example, if they're willing to come back. And it's amazing most people come back, especially if you're doing P4P and they're making good money, like they're not going to be able to go get a part time job during the winter for what you're offering if they're doing. If they're High performer on P4P. Second questions 1 clicks paired with text messages have been our best form of generating estimate requests as long as the offer corresponds the time of year. We currently have 1800 active contacts in our database. After reading $100 million leads by Alex Hermosi, I've been intrigued by cold outbound. Have you ever tested buying lists from data brokers and sending one click estimate emails? The problem is if you send one click estimate emails from any CRM.

And you send it to like a big list, you will get blacklisted almost for certain and very quickly. Like they're getting very, very good at doing this and weeding it out. If you had multiple emails to burn through, this might be a better option. In terms of bulk emailing people.

The challenging thing is if your email gets blocked now, your invoices don't go through, your estimates don't go through, a lot of bad stuff can happen. So that's one part. I'm not saying it's not going to work, but we have tried this with also bulk texting.

And cold lists. So a couple years ago we used a thing called.

Text cowboy. Something cowboy, I forget. We basically send it like to a list of text messages to people like just bulk.

It didn't work great, to be perfectly honest. However, what is cool? In copilot we do allow you to do bulk texting.

And sending out to your whole list of data in your database. Our goal down the road is try to figure out how to do one click estimate emails in text form, which is very, very difficult. I can't promise we're going to be able to figure it out, but my hope is that we can because I think the response rate would just be through the roof. But.

In terms of your active contacts, I would say instead of thinking about cold outbound, think about just calling every single one of those 1800. That will take you a long time. If you sat down, all you did was phone calls. It would take you a couple weeks to get to that 1800. And I think your return on that would be dramatically better than a cold outbound list of just random people in your market. Especially when you're doing cold outbound during a time when they do not need your services, there is no pain whatsoever. Whereas the act of context, they know who you are, they're, they're, you're not intruding on them because they've they've given you their contact information, and you're gonna have the best chance of closing them, especially if you've kept them warm via email through the entire year. It's a great idea. Like, if you have time. I the video coming out today, I think I kind of mentioned it in one part when we were the business doing a turnaround. And I say, like, he was spending like $30,000 a year on marketing. I said, and he was spending like 150 to $100 per day on Google Ads, which almost always is leading to waste when you spend that much on one campaign and one keyword. And so I said, you'd be better off spending that $100 a day on someone calling who was about 1700, 1800 contacts in his database, too. I said, you'd be better off spending that money having your office person call all those people one by one and ask them for a fall cleanup. Like, hey, Joe, Mr. Jones, absolutely just wanted to touch base to you. I know we're going into Thanksgiving season. We really appreciate you being part of Augusta Lawn Care, and we know that the leaves are starting to fall, and we wanted to see if you wanted to get on the schedule because we do book out pretty far when it comes to lease cleanup. So if we can get you on the schedule now, I think it'd be great. I can get an estimate to you by tomorrow. How's that sound? That could work. And I think you doing that against your 1800 contacts a few times a year is better than going and buying a cold list of 5 or 10,000 people in your market that, A, you don't have as much information, B, you have to pay for them and see they don't have any idea who you are, and it could lead to bad will, too. So I think before you go cold, you need to go after your active warm. Right? So, for example, like Copilot, we do the same thing over there. It's Christian. He does sales. We have over 2,000 people that have signed up for a free version of Copilot. Why in the world would I go run ads? Why in the world would I.

Do call cold outreach when it will keep him busy just following up with the 10, 15, 20 people a day that is signing up for a free trial. And so the same thing is true for you. Like if someone said raise their hand, literally said, I want an estimate for service. There you have their contact, you know that they need service done on their property and that they're the type of person that wants that type of service. So I think most of us go after the new shiny customer. And because cold outbound is a limitless faucet that you can technically, the beautiful thing about it is you can just keep, you know, turn it on when you need it, Whereas you could technically run out of the 1800. I just don't see many people actually mining the 1800 to the full extent of.

What they could be. And so before you go to cold outreach, you better be touching a warm inbound or sorry, warm outbound. So.

You know you have cold and warm outbound and inbound, right? I would definitely be looking at every, every single warm outbound, I. E. People in your database and mining that to the utmost before I do anything with cold calling random people in your market or randomly emailing them. So that'd just be my 2 cents. And so I agree with him. But keep in mind he has a whole room and had rooms of people doing cold calling. They would run out of their inbound leads very quickly. And I can guarantee you if they had inbound leads, they were hitting them with emails, phone calls, tech messages of their offers and what they can do for them and touching base with them. I think that is the number one step. And before you do any sort of paid marketing, before you do any sort of cold outbound at all, those things need to be checked. And that is I am sending out one click estimate emails. I am potentially calling them because they'll be a whole lot better than a cold call to so someone you've never done business with. And I'm resending any pending estimates. I'm making sure there are no pending estimates. I'm doing follow up calls. Those are all things that don't cost any money and are going towards the warmest market, which is people that have asked for my service and have my information and I have their information. So I, I just see very few people actually mining that resource that 1800 people enough to where I'm like yes, you should do cola outbound because you have called, emailed, text each of these people, including a personal phone call to every single one of those 1800. I can guarantee you out of 1800 people you would get 10 to 15 leaf cleanup jobs if you just call them all. Can I say the same thing about 1800 public people? No. And so that's just my two cents. I think you cool down is good because it's a faucet you can turn off. I just think it's a way better use of your time to first fully mine the warm outbound and that is people in your database that you've done business with in the past or have asked for an estimate in the past.

All right, everyone, have a fantastic rest of your week, and I'll see you tomorrow. Take care.