Mike Minutes Mastermind 10/08/2024

Hello Augusta Nation. Welcome to another Mike Minutes Mastermind. There's only one question yesterday so I did not initiate a mastermind yesterday. Don't want to blow up everyone's phone over a few minute video. So let's go get started though it looks we got four questions today.

Alrighty.

And then we can just look at it in the perspective of writing tests.

What is going on? There you go. All right, first question from coach Connor. We are about 99% card on file for clients. One of the newer issues I am coming into is the it does not allow when charging cards. Oh this is like for FSA and HSA cars sometimes. Okay. It's it's like some clients do not allow services subscriptions and I'm wondering how we are supposed to be mayor aware around these issues. We've been pushing into cards over the last few years and that has its own set of issues. For non payment we get more and more NSF or weird errors like above. Yeah, so.

This is where like creating a very strict automations.

Is is important. It's like as soon as a car gets declined you have a thing that goes out and it's like you're staying right on top of them and then you have an automation that sends to you over the course of time if it hasn't gone.

Hasn'T gone through. The reason for that is because like for example a lot of times what people can use is FHA, sorry FSA Flexible Savings Accounts or they can use HSAs which do like they're like debit cards but they don't allow transactions like this. And so you can sometimes get an error like this which is done does not allow. You can also look this up on stripe site and see like what. What is the code that's being thrown like what's happening.

So I would recommend looking at that. You know these are one off little things that happen. But. But people do use those debit cards sometimes incorrectly and they get. They do it as a way to get around having a card on file sometimes but usually it's just a matter of like they don't even know they're not supposed to spend it. Again this is going to be a typically a lower end client in terms of their income or just someone who's new to something like HSA and they don't know that you can't spend that money even though it looks like a debit card on random stuff on from stripe. So yeah I would just like I would just really nail down even if it's daily every single day once a card gets declined and I have like a, like a ruthless follow up process to it even of course like say five or six, seven days and that it's like a phone call to them, that's a text message to them. A text message will do really, really good. By the way, an automated text message going to someone like email immediately. I would probably do like a immediate email and text going upon, upon a declined payment saying hey, your payment was declined. Click here and they can go right in there and just pay like add new card information like go to the invoice, put a new card on file. You can just be like hey, your payment was declined. Go to your client pro profile here to put a new card on file. Boom, send that out and then try again the cards the next day. For example.

Mr. Anonymous, will we get the waiting list before 2024 spring rush? I'm guessing in 2025 not having ads 20 to 30 minutes to my day every day has lead led to clients canceling, has led to bad reviews and other mad clients. I don't mean to be dramatic but it's been a pretty big deal for my location. Thanks. Yeah. So the waiting list will not likely be ready by 2025 I'm guessing is what you're asking by spring rush.

You know, I don't want to make that promise.

And so basically it is if you, if you have something on the calendar, Augusta's command center is going to assume it's on the schedule. And so if you've been used to just like throwing stuff on the schedule and then it's moving stuff around. Yes, this is why we have, you know, a waiting list is needed. I would personally, I don't know why it's taking 20 to 30 minutes a day. I, I would love to see what your workflow is here because I would personally say hey, get the job accepted and then just have an Excel spreadsheet of hey, this job, this number, budge hours, this service. And then whenever you want to pull from something you just go to the list, pull them over, go to that client's profile and put them in. I don't think that would take 20, 30 minutes a day unless you have like maybe if you're doing property claims and you like 100 of them. But even then it's like I would just do an Excel spreadsheet and then you just click the like rank them by budget hours for example and then you be immediately see like which ones you want to pull over. But if it's on the schedule, Command center is going to tell the customer like there's it just that's what's going to happen. Because if we don't, if we start making them not trust that what's on the schedule, it'll slow down the other 99% of people that when they do call in and they say when am I on the schedule? That they're on the schedule for a certain day. And so what you don't want is where command center just leaving a note like hey, this customer wants to know when they're on schedule. And then you just get a to do. So what I would recommend, what I would recommend is put an Excel spreadsheet. It'd be the customer's name, it'd be the service and the budgeted hours. And then I would, in their customer notes, I would say customer accepted dub. We'll put on the schedule when we can get to it. If you want, if that's the kind of verbiage you're looking for, I'd put that in your customer notes. So if they call in, that's what command center is going to say. They're going to immediately go to the customers like oh, looks like your job was accepted. We have it on the waiting list and we'll contact you and we can get on the schedule or something, however you want that phrased. Have what exactly want them to say in the customer notes? Because when they go to the client's profile and they see oh, this job is on the schedule, they're trained to basically tell that to the customer. So if you don't want that, like, hey, I move stuff around all the time. I'd keep it outside of copilot's calendar. So yeah, that's why a waiting list is valuable. And like even at my location, we stack all the.

Aerations, dethatching all like the treatments on like one week, for example. So it can still happen that way. Like, but we usually wait, hey, we're going to reserve that week and like, oh, we might have to move it one week. Okay. Then we put them all on once we know the schedule is locked in. So if a customer does call or if there's automations that are set up around putting that on the schedule, it fires out correctly. I know it's frustrating and that's the use for a waiting list. If that's kind of your workflow is moving things around based upon like weather, you know, availability as you get kind of a spot where sometimes it snows and it doesn't the leaves fall, they don't. I Understand that.

Andrew from Bentonville. A couple of questions main both of these mainly arise from wanting to market for Christmas lights. Is there any way we could have CC set up a service area for Christmas lights? I would be willing to have a much larger service area as I don't have to travel to the property, do an estimate like I would for most projects. Also the tickets have a higher profit margin than most other services we offer. So there are two service areas for command center. There is the what you're doing for recurring services and your mowing and then all of the projects. If you want to adjust it for Christmas lights. Adjust your projects and so you're either going to have you know, occasional like for most of us that are doing Christmas lights there's not a ton of projects coming into that time of year. So you could adjust it there. I would be careful with trying to go like way far away anyways, like if you're not willing to go out for a $5,000 project, I don't know if you should be going out an hour away for a, you know, 5, 6, 7, 800 install for residential lights. So it is going to be the projects. There's just two. Otherwise we will go into this slippery slope of oh we want to have a slurp service area for this service and a service area for this service and a service area for this service and it gets very convoluted. There's already three for every single territory and that is your actual locked in territory which is guaranteed. Then you have your recurring services and you have one time projects. We've got to keep it that simple. And so if you during this time like October, November want to adjust your project one out further, feel free to. But yeah, in regards to command center work process, when a customer that's out of our service area calls in, would it be better for their email and phone number to be kept in our profile? Yes. Okay, well keep reading. Currently CC puts their email and phone number into the customer notes. This makes it difficult to market to or add these people to our service area. I want to market Christmas lights to them this way we could simply choose to filter, exclude or include these people whenever we wish. So we've, we've done this in the past where we put them in and then we had a lot of people asking for us to take it out because then they would get caught in one click estimate emails.

It's also struggle because like if there ever was a guaranteed territory over there and then they're in your mark in your thing and you're marketing to them, it becomes another problem. Think about from the inverse, for example. You get a location, you're rocking and rolling, all of a sudden a lead comes in. One of your leads go to someone else and you're like, hey, that's not allowed. And it's like, well, you know, three years ago they contacted them and now they're a lead inside their system. So it gets a little bit convoluted. And so in terms of Christmas, I see, like, you're like, hey, I'm willing to go out further for Christmas light. So I want them in the database most of the time. Think about this perspective. When a customer calls in, it's a weird experience for them to be like, giving like, hey, we can't service you, but let me get all your contact information. It just feels weird. As a customer, it's like, yeah, we can't service you for your lawn, but. But let's go ahead and get your email, your phone number, and your address. Customers are just like, wait, wait, you're not even gonna give me an estimate for mowing? Like, why would I do that? So as soon as, like, we're not in their service area, it feels awkward for a customer many times to give us their information. Or if we get their information and then we tell em, oh yeah, we're in your service area, they get a little bit ticked off. And reasonably so. Cause we just spent a minute of their time getting all their information, putting it in the profile, and like, oh, sorry, just kidding. You know, we can't do anything for you. So that's why we've avoided it. I've listened to a lot of phone calls when customers have we when we used to go that way. And there's a lot of confusion and a lot of frustration because it's like, so wait, you just took my address, my email, my phone number, and talked to all about our services and now you don't service me. And that's the only way to get them in the database. And then it caused a lot of problems when people were in the database. And then they could get one click estimate emails or bulk emails or text messages. And then you're just basically wasting money because they call command center, get confused again, like, hey, I thought you didn't service me. Now you're sending these messages. Or we set up estimates for one click estimate emails because we assume that everyone inside the database and that you sent them to is a valid lead inside of your area. So that's why they do it. I've listened to a lot of phone calls around this and it's confusing for customers if we do this. And I like, yeah, we're gonna take all your information, but we don't service you. So that's why we do it that way. I would just say, like in general, if you're trying to service a wider area for Christmas lights, put your project area wider for this period of time. If you wanted to put inside of your wiki something more specific, that's fine. Just realize you might get a project or two that's a little bit out where you typically not go. I would reason to believe if it's in your off season, you'd also likely be willing to drive a little few more minutes for a project anyways, if there's a $3,000 cleanup or project, you're probably more likely during this season if you're doing Christmas lights to also travel a little further out for projects. So I would just change your project service area. I think that probably fix most of this.

Papa Payne, when filling out your scorecard for labor percentage expense, would you do field staff only? Oh, this is a good question. Would you do field staff only or field plus overhead plus officer? Would you include payroll taxes for each? Would you include payroll processing fees? Would you include command fees? So it's even for location with office staff versus say without the same owner, not necessarily different franchisees. Would you say baseline for the field only is 33% field plus overhead including taxes, 45% field plus overhead plus officer, 55 to 50%. What should be aiming for total payroll plus command fees versus gross revenue? Great question. Okay, so generally, in my opinion, anything under 40% as gross labor, sorry, as direct labor is pretty decent. Now if you're in projects or in your chemicals, you're going to have products and that number is going to go lower. Right? So if you're doing big projects, you can get down to 20, 25%. Same thing with chemicals. You're usually going to index more on marketing for chemicals because it's usually a little more intense there. And then you index more on material costs in terms of projects. But as a very blended, if someone's over 40%, then usually I see their margins collapsing for direct labor. And then for command center perspective, I'm shooting at my location between 8 and 12%. Usually they're lower than that. Like I don't want to go about 12% unless I'm in growth mode. If I'm growing, doubling year over year, I'm fine with my, my command center or in this case Admin expense being say 15 or 20% because I know I'm getting tons of leads and I'm artificially propping that up with a ton of marketing. So I would agree with the sentiment. Like, if you had 33% in the field, that'd be excellent. By the way, that usually won't happen because some people hit base pay. So if you're paying, say 33% on P4P, don't expect 33% of wages to be. In terms of your. Compared to your revenue, it's going to probably be more like 38 or 40%. If you're at 33% now, like, for example, we moved our Vallingham shop to 25%. Now I expect the direct labor, the direct labor to be around more around that 33 to 35% of my total revenue because there's gonna be people hit base pay, there's gonna be overtime. I'm sorry, overtime. There's gonna be.

Paid time off, there's gonna be trainer bonuses, there's going to be payroll taxes, etc. I consider all, everything to do with payroll part of that number in terms of what I'm. I'm calculating as a function of, of my revenue. So all my payroll taxes. What are the other things payroll processing needs, anything to do with payroll, I look at is that number. It is part of payroll. Now, I. How you bring this down is very good. It's like field overhead officer. Right. So your officer, by the way, if you're out in the field, you are part of the field. You're direct labor. I've seen people be like, oh, yeah, I'm under 40%. They have one employee and they're doing most of the work. It's like, whoa, whoa, whoa. If you actually took your salary out of the field, you get 60 or 70% and you will not make money doing that. If more than 50% of your revenue is going to direct wages, direct labor out in the field, you just will not make money. I just see this consistently all the time. Maybe break even if you hit 50 and close to it, like, you'll be bumping around, but you really want that. Under 40%, I highly recommend. And then I'm excited. Yeah. So I would say if you can be under 40 for direct. And then from a command center perspective, I'm looking between. I wanted the lower end, even if a little bit lower. I know some people go lower because they just, they're in profit Mode. They're at 4 or 5%, but like, I shoot between 8 and 12 if it goes above 12, I serve like, okay, are we contacting command center too much? What are we doing that's inefficient? Why is there so much communication back and forth, etc. Unless I'm in profit mode, my first three to six months in a location, I let it usually go up to 20 plus because I'm pumping money into marketing and I'm growing like 10,000, 20,000, 30, 40,000. And that, that amount of lead just creates a lot more cost at command center. An admin, even if you're looking at admin in general, an admin is in general. If I'm looking at like an office person, et cetera, I do get worried if it starts going above 15, 20%. I looked at someone's P and L the other day, a very big company and 24% of their revenue was going out to admin costs, office rent, et cetera. I'm just like, oh, we can't do this. And so I generally believe they could cut that in half. Almost half. They had four people in the office. I said one can go part time, one we should just remove and that. It's like structurally they need to simplify the business. They need to be takeout services. Like there's structural things that have to happen. They were doing a lot of floating scheduling stuff which was causing a lot of back and forth customers like look, you've got to lock things in so there's not, you're not touching every single job five times. So.

Yeah, in terms of aiming for total payroll, I would say yeah, if you commit 50 to 55%, you're going to do really well. If all of, all of your payroll, every like all labor, including your overhead labor, your direct labor out in the field and any wages that you as an owner take, if you're at under 55%, you will crush. I would be, I would be more lenient to go to 60% and that's going to include everything that includes your wages. Assuming you have either admin in the office or if you have command center and that and then also your direct labor, I would, I would flex it to 60%. And again I'm including everything, all your taxes, everything. Just these are the, when I come with these numbers, these are just simply when I look at P. L's like who is profitable, who is not? And I'm like, okay, what's like the commonalities? And I usually see 40, 50 and 60%. 40% under that being direct. 50% is the goal for all your wages and Then if you're including owner salary on a location where the owner has like multiple locations, etc. 60% are below, including officer wages is usually where I'm like, I see those as like, like easy benchmarks for a high probability of someone being pretty profitable.

All right, looks like we got some other questions in here. One second.

Is there any system in place? The CC follows to look at the wiki. I've had a con consistent connect team chats or to dos created that could simply be avoided by looking at these pages.

Depends on what, what exactly you're talking about. Like they go there first because it's the only way for them to get information.

But Dustin, if you wanted to feel free, on the dashboard there's a form to submit information to Liz. Feel free to say, hey, this is what happened. Like this is what's in my wiki. Is there a way we can address this? Or like what, what, what, what can be either changed or like what needs to be looked at? Because like think about their perspective. They only can get information for your wiki. They have 150 locations. They're just not going to memorize everything. They have to go to your wiki. So it could either a B we need, we need to track down people that are not doing it correctly or B it's like, hey, they're getting confused because you say two different to it, say it differently in two different areas and they're looking at one or the other. So feel free to submit that to Liz. She'll review your wiki if needs be and kind of help you with that. I think I'm probably gonna use part of the mark cuts if I'm planning on having multiple locations in the future. Should I start ace, should I start new tax identity and have all my other locations fall into that? Would the tax identity be an S corp or an llc? Yes. In general I recommend an S corp and then that S corp you file a tax return for and then underneath that you have your LLCs. That S Corp you're gonna have articles of incorporation, you're gonna with your board and you want a board because you can put your wife and spouse or family on there and take them for vacation and call that a board meeting.

There's other reasons you can put people on boards, but the minutes are important for like really ensuring that there is a corporate veil, people can't come after you, etc, but you don't want to be filing a different tax return for every location. I fell into way back so I now it's Like Augusta Longer Corporation. And then as many of my locations I have, I just funnel into there. They all have separate eins, separate bank accounts, etc. Again, I'm doing that mostly from an asset protection perspective. Most of the time when you do that, it's actually mostly asset protection. You don't want one thing being on sync the whole. The whole ship. So. And should it be a current location name. Currently I have a DB under my comp OG company, which is an llc. That's fine. I'd probably make the LLC into an S Corp. You can just do a form 1120s then file a tax return underneath that one and throw your LLC into that corporation. Talk to, talk to an accountant. But more importantly, this is more of an attorney question or a lawyer. But that's my general recommendation that legal advice, not financial advice is have an S Corp LLC funnel into the S Corp. And then you take, you take 1W2. This is, this was nice. Like you have 1W2 coming from the S Corp. And what's cool is you have one location that's losing money because it's just brand new. You're pumping money into, it's growing. You have another one that's making a bunch of money and they can offset each other on the same tax return. Instead of making sure like all your taxes are kind of like balanced on all the different entities, you just funnel it all into one. So that like, this is why I started multiple locations is like, okay, we have X amount of money I need to kind of use up in December. Great. I'm gonna go buy X amount of trucks. X amount of locations. Boom. And then I can take that underneath the S Corp as existing. That's already existing. That's profitable.

Have fantastic Tuesday. I'm going to do my first TV interview. So that should be interesting. I think it's on NBC. I forget. Anyways, love you all. Take care.

Of.