Mike Minutes Mastermind 10/10/2024

What's up everyone? Sorry, the text message went out probably a little early.

I got distracted with something else.

All right, Dylan, Getting dizzy on me. All right, we're good.

Cool. Sorry about that. Yeah, usually I send the message out a little more prompter then hop on. Okay, let me put it in Facebook and we will get Rowan.

3M 101024.

Send this bolt.

Okay.

I posted on the.

I posted on the Facebook group yesterday, but the media team's working on quite a bit of creative creative for the winter services. Ads, pictures and video.

That's not all the ones I showed there. There'll be more, some variations, different pricing, different services mentioned, etc.

So those will all be coming out shortly. There's several other designs we're still waiting on Pro Shop to finalize in terms of door hangers and every door direct mail for neighbors of your Christmas lights. So we have a bunch stacked up. I'm thinking they're gonna hit here pretty soon. If not today or tomorrow, maybe Monday. So I'm trying to get that out as soon as possible because I saw the other day Kevin Fairburn had like, I think like 25 or 30 estimates for winter or for Christmas lights. So we're trying to get on top of those. Get vistaprint to get those out as soon as possible.

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Right. All right, Sweet. Cool.

Oh yeah, real quick shout out to Connor Hutchinson and several others that kind of brought to our attention some of the stuff about the delayed automations that is something that was like not being tracked. So thank you for bringing that up to atc, Josh and etc. We made an alert to users today that some automations are delayed and so we're monitoring it. We have a fix. I think it'll be done tomorrow, if not Monday.

And then like a more long term one to prevent that ever from happening again. Basically like what happens is like one thing will happen. For example, Twilio goes down.

And creates a backlog because it goes down for say two hours and there's 20,000 messages that need to go out. Then it backlogs everything else. And so what we should have caught is the fact that like alerts that it was affecting everything else and then kind of create a backlog chain effect. So like last week it went, you know, it seems like it goes through on that one service, but it backlogs all the others because automations are very dependent on each other. You can't have it where one doesn't go out and the next one does. So they all just start stacking on top of each Other. So anyways, thank you for bringing that to attention and how like they were coming in batches etc. So I do believe tomorrow they're going to have that basically like the short term fix done and then within two weeks have like where make sure that there's monitoring and alerts and go throughout the system if that ever starts happening again. So thank you for you guys jumping in, helping Josh and the team, Parker, et cetera. Jump on that. All right, had to stage. Here we go. That'd be perfect. That be perfect? Yeah, it genuinely helped out. So where is. Oh, there it is. Okay, cool. All right. First one up is from Mr. Anonymous question about quarterly distributions. You mentioned a location needs to have the average of 3, 6 months of revenue in the bank before distribution can be taken. No, no, it's the app. So anything above the average monthly revenue for the past quarter is considered distributions. A distributable cash.

Currently have about double our monthly revenue in cash in the bank. However, I'm hesitant to do any distributions as winter is coming up and I don't want to have to put money back into the business bank account. How would you handle this that with a gm regarding distributions, would you rather err on the side of caution and have more than the rolling three months in cash or would you still go ahead and give distributions? So again, all you're looking for is the the average of the last three months.

Of revenue in the bank. So if you have two months worth of revenue, you're well in the clear in terms of distributable cash. Now if you want, you could say hey, in after Q3 or after Q4, we change it slightly because we want to make sure we have enough cash for the winter. This is again why fixing Q4 collapse. You wouldn't have to fix this or resolve like and change this, modify it. But I'm in favor of that. And that's why like in the distribution things in the composition docs we have on the drive, I say that the owner has the right to be able to change this temporarily on a one quarter. So that way if you're going into winter like or going to go into spring rush when you know you're going to get a bunch of trucks like hey, we're not going to distribute based upon one month of the last three months because the last three months are low months. So for example, a lot of times after Q1 you've had January, February, March, which are slow season and so your distributable cash threshold is pretty low. So sometimes like, hey, let's keep it above not, we're not going to do 45,000 even though the average last few months or any 60,000. Because where we know we're going to be spending some money to buy trucks, equipment, expand in spring and then next quarter, if that money's still left over in the bank account, then we'll distribute it then. So as long as there's like a shared, it should be in your, your compensation docs with the, the GM making it clear that there's certain quarters where if you want to delay or increase the threshold, you can. But I'd say try not to do that. Instead focus your attention on like fixing Q4 collapse so there's not such a massive dip in, you know, loss of cash flow. That would be my recommendation. But yeah, just, just again to be clear, is the average of the past three months of revenue, anything above that is considered distributed cash. The average. So if you did 40,000, 50,000 and 60,000 in revenue in the past three months, anything above 50,000 in revenue or $50,000 in cash in the bank, the average of those three months would be considered distributable cash. But you don't, you do not need three to six months of cash of revenue in the bank to make that.

What are your thoughts about some markets being easier to scale than others? How do you judge the potential performance of a location before setting up shop? Yeah, now, now we have a pretty sophisticated way of doing this. We used to do this very much. We would look manually at a lot. Now we have software to do a lot of this stuff for new locations. And so my thoughts in terms of making it easier to scale than others, I just, in every market where it's really, really quote unquote good, I see a lot of competition. And when there's markets where it's like you wouldn't expect them to do well, like they don't have a great upper middle class and you're like, I don't know if it'll work. And somehow because there's not as much competition, they get tons of business or maybe they have blue collar workers at say factories, but the combined household income is around 110, $120,000, remember, even 90,000. But because they're focused just on mowing and simple services, they just have tons of recurring revenue coming in and they focus on recurring, not projects. Because usually projects is going to someone with a little more discretionary income in terms of equity in a home, etc. So I've seen all of it work. There's, there's just every market, I've seen it work. It is a matter of the owner's ability to be able to adjust what they think is right to what the market needs. And so if you go into like every market like the same, like, oh, it's got to look exactly like, oh, we're only going to do mowing. Okay, cool.

Well, if you go into certain markets, you are mowing for six months at the year. What are you doing for the other six months? Right. And you're going to forego huge amounts of profits in terms of projects that you could then use to use funnel towards marketing for recurring. And you, you need snow. And so like every market is, does need to be special, like tailored. And where's the demographic? Like do you have 20% of your market that is just like extremely price insensitive? They want everything taken care of on their property, et cetera. Are you going to service them? Because I guarantee there's another 20% right below them that if you market to slightly differently, you could also tap into that market. So I believe like in each market there is usually three different kind of cat cust, ideal customer profiles that you can target completely differently. In some markets it looks really good, but I see tons of competition going after a certain layer of that, that pie or slice of the pie. Like I can make sense of going after a larger customer base in a market that has a cheaper client, like a less affluent customer. But because 60% of the target demographic falls into that category and everyone in the market is going after the top 15, 20% of the market, I'd rather just go after the bottom 60%. I'm gonna have a lower ticket, lower ticket. I'm gonna probably have less projects, but I'm gonna be able to make the math make sense if I can advertise and get that customer at a cheaper price than what everyone else is going after this other demographic. So I've just seen it work in like every single market. I've seen some. I've seen where the average household income is like $50,000 combined and people are slaying it mowing. And they're price insensitive because going from $35 to $40, they'll still stick with you. And that extra $5 is literally a 18% increase in price. And they're making all that straight margin. So you know.

It'S a matter of making like adopting, adapting to the market. And I genuinely believe like that there's more and more of a demographic that like if you look at the split of like people that want to have service on demand, do instant pricing, have someone show up and just take care of things is growing like more and more of that demographic. And that's the differentiator of the people that want that as well as people that are looking for a national brand for the sake of security, insurance, etc. That's a mic that's like our blue ocean. No one can go after it. And so even if you. If I'm going after a smaller segment of the population, you have a smaller segment if no one can go after it. I'd rather be fishing in a blue ocean versus a red ocean where everyone's there. Like everyone is trying to be their local, you know, lawn care guy. And the vast majority of people want that. But I'd rather go after the blue ocean where no one is fishing, no one else can say what I am and be to the customer. And it's like I just want to put a card on file. I want to check out online and never have to talk to you guys again. And I will accept every single estimate. I just want my property taken care of. I do not care about the price. I do not want to get another estimate. Like there's a demographic there that only we can serve. And I believe that person is price insensitive, high margin. They're okay with automation. They don't want to talk to humans, they want to check out online. And I genuinely believe that that 15, 20% of the market is a blue ocean. And they'll also be the ones that down the road want robotics on their property.

Russell, Canton, GA in essay we were able to track one click estimates as a group. Yeah, this is really good. Yeah, we have a. We have this in our roadmap. Do you plan on adding a feature like this in Copilot? Yes. As we go into Q4. Have you reflected on the growth of Copilot this year and are you satisfied with the progress? What are some of your goals for copilot in 2025? Let's go through this one time. Do you plan on editing this a feature? Yes, we're going to make it more like. It's called likely campaigns. This is late on the roadmap and that is like where you actually run a campaign and you see a blended average of open rate, click through rate and then tying the actual value of the one click estimate. Email, for example, right now you say, well, okay, I got 50 clicks, I got 10 estimates. Great. I want to be able to say sending that one click estimate, you made $58,000, 336 cents, whatever. Right. And so that's down the road. Same with text blasts. We will distract. Okay, did the customer actually click on the link? Did it actually lead to an estimate? Did they accept, did they pay? What was the actual value of these campaigns? So that's down the road. Very much down the road. But yes, I know what you're talking about. You're able to see like any sort of bulk stuff, like how many people opened, clicked it, how many went to spam, stuff like that. I want to take it to the next level and track those to see how much those campaigns actually make you in revenue, et cetera. In terms of reflecting the growth of Copilot, Copilot hasn't grown much in 2024. We just grew so much in December, I guess January, like it just grew like crazy. But it led to a lot of problems. And like the, this entire year has been nothing about like sales or me trying to push the product, et cetera. This is 100%. Just fix the product, fix the architecture, fix the infrastructure of the software. And so in terms of like goals for copilot in 2025, going to see a lot of this from Josh at Blue Collar Summit. And you know, looking into 2025, what we're going to do, you're also going to see a couple things late released by then that are going to be pretty exciting and I want those to be rolled out in a really good way to where it's very, very positive. There's not like, oh yeah, that's cool but like you also have a gazillion bugs still. So like in November and then in December you're gonna see a couple releases that are pretty cool stuff that Gus has been asking for, stuff that we've, we've promised in the past and we want to deliver on that before Blue Collar Summit. So but in terms of like it really hasn't grown a whole lot in terms of like member use or members, but like churns way down because we don't have as many incident stuff happening, et cetera. Those are all positive signs towards where we're trying to get to by December. So a lot of the big, the big we call elephants, like the big infrastructure projects are wrapping up in November and December which will lead to a lot of stuff. So.

Mr. Anonymous, the other day I asked about a vehicle that is titled on my personal name being used for business use and you mentioned that that was a bad idea since my commercial insurance may not cover me. How would it work if a vehicle was financed? Regarding coverage.

I think you meant regardless of coverage. Any vehicle and I've ever been able to get was put in my personal name and not the business. Looking to get a loan on a vehicle but want to make sure I can actually ins of the vehicle too. Okay. It's a little funny to me honestly that the bank if that you have the loan with doesn't want to see the insurance and then they would not have a problem with the fact that you're insuring it underneath the business name but then personally you are signing. It's interesting that the bank isn't even like asking for the insurance or like if they. They're okay with that. Again I could be just wrong. Like maybe my, my state is different but like I just have never seen it where you can insure a vehicle underneath a business and then own the vis the thing personally. Again please just talk to your insurance agent. They're going to know more than I made this a local law. I don't know looking a little bit one yeah like I would probably say you're going to get a bit. You're going to get a loan even if it's underneath the business's name. Hey, I'm going to get a personal loan. The truck is going to be owned by my business but I'm going to be the guarantee guarantor because they'd rather guarantee like you be the guarantor than the business. So that's probably. You could probably pull this off not pro without a problem but I think you need to like declare to the. The bank that you don't own this. This truck like it's titled underneath your business for example. Oh no, sorry it's titling your personal name being used for business use and you mentioned commercial. Your commercial insurance. Yeah this just seems man I would just talk to your. Your. Your. Your insurance agent. Sorry sorry not to be coy on this one. I just. I'm just wondering if there's maybe a per. Like a state law I'm not aware of but that's usually frowned on is like owning it in your personal name but using it for business. Like it's a lot of gray areas there.

Mr. Anonymous, as mowing is slowing down for the year I am looking to pick up more project based work from our current customers. We are already doing email and text blast to our customers but I know our guys see our current customers property needing work, mulch trimming etc. What do you think of giving them 2.5 dollars per estimate video a customer's property, regardless if the job closes. I was thinking about $5 per job, but that could get expensive if everyone is sending 10 to 15 videos per day.

I would probably do this instead of doing two and a half dollars. It's just not a lot. I would probably make it more like, you know, 40 or $50 if the job gets accepted and then fix the back end of the funnel. So for example, that video, if you just literally got your got an iPhone and imessaged that video to the customer, I guarantee you'll get a response. Hey, Mr. Jones, crews at your property took this video day. They mentioned to me that you might need some mulch on the property. If you'd like, I can get an estimate to send over to your email. I can text you an estimate right now for it. Like that will get opened, that will get viewed and you will get a response. And I just genuinely believe that video that your crew takes. Again, tell your crew like, hey, I'm gonna send this to the customer. So make sure it's like, okay, they can WhatsApp it to you, imessage to you, whatever. You then send that to the customer on imessage with the video and then telling them I can get an estimate to you right now. I can text it to you. Do you want that? Like you're gonna do really well. So I think if I was you, I would probably still incentivize the close deal. So they don't just get a bunch of volume of bad videos. But then you fix the back end which is like when the employee sends me the video, I'm going to send it via imessage to the customer. I'm going to tell them, hey, I can get an estimate to you made up for you. Right now it looks like the crew is at your property. It shows also, even if they say no, it shows that you care. And the crew's looking at their property throughout the whole time they're servicing their house. That's also a value add. So I don't think this comes across salesy at all. Comes across as you caring and I think you win points regardless of whether or not they accept the estimate.

Mr. Anonymous, how would you be able to. Would you be able to discuss a few of the most recent closures and why they close? In your opinion, what could have been done by the franchisee to alleviate this closure? Yeah, so the most recent one, they wanted to come back. We've talked about this at the franchise advisory council and we kind of went over what happened, et cetera, they wanted to come back. And due to the historical past with this, the owner having some trouble with mental health and being indecisive in terms of whether or not they wanted to be in Augusta, they wanted to come in, they want to come out. They want to come in. Even though they left, they wanted to come back in. There was another owner that had already purchased that location. And so we made sure that prior, there was lots of conversations like, hey, you know, you're not gonna have a website. The leads will drop off. Do you want to sell your location? So I don't know how to describe that one. That one would have been.

Like, they grew really fast. And. And then they sometimes underestimate the fact that, like, that takes a while to get that lead flow, like the website up and running and things. And so when they left, I think it was just, like, kind of a shocker. And then they wanted back in. And, you know, I think it was best for Augusta Nation that that new owner come in and. Yeah, so that location's already been sold to another. Another franchisee.

And then in terms of why. Yeah, in my opinion, the ones, like, I actually say at. Com at training, it's like, look, if you don't want to build your business past 150, 200,000 in annual revenue, like, you probably don't need Augusta.

Because you don't need, like, the coaching. The community is nice, but, like, if you have you and you're working, like, a lot by yourself, like, you probably don't need Augusta now. If you have the aspirations down the road to be able to grow the business, get, do more marketing and even, like, the thing that we're going to do next year with the lead program, like, that's not going to appeal to anyone that just wants to fill their schedule personally and stay solo. And so most of the locations, that's where they're at. They're at that, you know, between 5 and 15,000amonth revenue marker. And it's a tough spot. But I look to people like Audie and Karen, I don't think they mind me saying their name. They really were there for the first. I would say, year and a half, almost two years. And I'll be honest, like, I was concerned that they wouldn't be able to make it. I know he had left a really good paint job. He's a great diesel mechanic. He's super awesome Audi. And Karen was pouring herself into the business, but, like, it clicked in year three, and they were able to find a couple Good employees and, like, scale the business up. And so I think sometimes it is one of two things. One, people get into the industry, they haven't had the experience in the industry, and so they experience this growth. They're very excited, and then they hit up against, like, switching from labor to manager, and that's very tough for some people.

One of our fastest growing locations left recently because of the exact same thing. When I say fast growing, he went from 0 to 70 or 80,000amonth in revenue as a solo operator in his first year, or, sorry, his second spring rush and got a ton of employees. And he just wasn't ready for manager. And nothing against him. He just realized he's like, I just rather be solo. And so there's just like. I don't think there's ever been a time there's been, like, bad blood when we let someone. When someone left Augusta Nation on our end, and we make sure as much as we possibly can on their end. And, you know, I wish each of them the best in terms of, like, why it's a lot of times they're kind of stuck at the solo model. A lot of times, I wouldn't say fail. There's a huge learning curve going from laborer to manager, and people like Adi, I am thrilled when I see them make that change. Like, is one of the most rewarding things about seeing everyone's journey is being able to get through going from laborer to manager. And then I'll see other people really struggle to get out of manager, kind of around that 600 to 800,000 level and get passed into an architect. I can name 10 people right now that I know are at that stage, and I just can't wait to see them break through. And sometimes it takes a year and you kind of stall up against it. You're less profitable for a bit, and then you'll break through it. So sometimes just it is timing. We really try to make sure they understand that. It's like, hey, look, let's not. Like, are you just. Are you just in a rush? Because this, this could, you know, you'll gain the skills. You've grown quickly. You'll get your feet underneath you. But then sometimes it's like, no, I actually am comfortable here. Like, I just want to stay here and I'll just take my current customer base. And I'm not interested in growth. I'm not interested in getting a general manager. I'm not interested in, you know, trying to get more employees or marketing. I'm getting too many leads as it is. I'll just keep my current base and I'm fine with that. And we support that 100%. And I think, you know, there's multiple of people that have been invested in the past, they're coming to like conference.

And they get longer web design, etc. And so they're trying to support is what they can and.

They just, you don't want to grow. That's usually what it kind of comes down to. They're happy with their AT and that's fine. And they use Augusta for what, what it was needed and they really scale up and they found out, hey, I don't want to be a manager. I'm just gonna stay solo. And that's usually, it's usually what happens.

Okay, cool. I think that's it. No, there's a question here, Thomas. What's the best way to handle bi weekly customers that request to skip a week? Since it messes up scheduling so much.

It's tough because like for example, we only give weekly and bi weekly prices. So if they're bi weekly and I'm pushing them off another week, I don't have like another price for that. I would probably just send a message to them or potentially raise prices them first.

Like the message is basically, hey, this is really tough from a scheduling perspective. Is there any way we can stay on a bi weekly schedule and take it like a nice approach?

I wouldn't come heavy handed on it. I would just come more like, hey, this is really, really tough for us to accommodate. Is there any way we can stand on a bi weekly schedule or would it be too much of an inconvenience to ask that you would stay on a bi weekly schedule so the crew is able to stay on their route? Like I think most people would be cool with that. The next thing I would say is like if they're still not doing it or if like it's consistently bad behavior, I'd probably raise their prices because it's going to get really weird, like, oh, okay, we're going to be weekly price, bi weekly price, every three weeks price and then a monthly price. It's going to start getting confusing. So that's probably what I would do. I would probably just ask. Honestly, most time customers are, they get it, they get the moving things on you is going to cause trouble. And if you put it kind of tie it to the crew and not you.

It makes it more beneficial too, or well received. Okay, this kind of messes up the crew schedule and our route. Would it be too much of an inconvenience if I asked if you tried to stay on biweekly. We really appreciate doing business with you, and we'd love to continue being of service, so I think that would be taken. Well.

All right, everyone, have a fantastic Thursday. We'll see you guys tomorrow. Take care.