Mike Minutes Mastermind 10/11/2022

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Just one thing real quick. Liz mentioned me yesterday, and that is on your wiki, if you know already when you start and end your mowing season, it's very helpful if you put that in there. Even if you put something along the lines of mowing ends end of October, weather dependent, that information sort of thing. Got fly. Let's go.

Nope. Anyways. All right, forget that.

If you can put it in your wiki next to the mowing, that'd be very helpful. Especially this time of year, a lot of customers call in. They say, hey, when do you end? Do you end on your own? All that good stuff. If we know a date, we say, hey, look, we usually typically stop mowing end of October. Then they'll typically just let us keep mowing. They won't stop and start on their own accord, which is very good. And so, for example, in Bellingham, we mow to the end of November no matter what, and we start the first week of March no matter what. The only thing that will change that is if there's snow on the ground. That's it. So if you can put that in your wiki, very helpful. Put it right next to the mowing service, it'd be great. There was someone yesterday that called in and was wanting to actually get, like, a few more cuts, actually get on service and get a few more cuts in before the end of the year and probably could have been sold winter services. But they specifically wanted to know, like, when that date cutoff was. And the rep wasn't able to answer that simply because, you know, they did not know based on the weekend. And I know, I understand it's a lot of weather dependent. I understand 100%. But it's definitely helpful for people on the phone to at least give the customer a rough idea and then be able to say it could depend on the weather. Right.

All right, let's see here. We got some questions.

There it is. There it is. Let's go.

Is it possible to have our service area larger for leaf cleanups? I would do this inside of your project service area. So again, the map that command center uses, we have one that you can have for your projects. So you can only change this once a month, though. It's changed at the first week of every month. So you would need to contact estimategustalongerservices.com and you would want to go over the map with them for your projects. All right, so they can do that. You can't flux this all the time. And it can't just be for leaf cleanups. The reason we did this is because originally we were like, okay, we'll have a snow service area. Cause some people are like, oh, I didn't own a different service area for snow. Well, how many different service areas are we going to create where there's like literally 10 different maps for? Well, I'll do mulch cleanups, I'll do leaf cleanups, I'll do snow services. And it's like all these different service areas, it's too confusing. It needs to be recurring, it needs to be projects. So if you want to change the projects this time of year for leaf cleanups, let Estimate and Augusta Longer services know and they'll change that the first of the month. So same thing with services for Command Center. That's changed every Tuesday based upon the forms. When you submit them every Tuesday, those will go into effect.

We can't do what we were doing before. It was just too many changes. Like with service areas and services at Command center, there's too much moving parts and then things are getting dropped. So it has to be more systematic. On the first of every month, we change this. Everyone at Command center downloads a new map inside of Google Earth. And those maps have all the service areas for every location. And so that's why if you communicate with estimategustalongartsurfers.com they'll confirm that map with you. But then it'll be the 1st of November in this regard, and in this case that would take effect.

If Command center gets requests about services that I don't offer, is there a way they can refer them to a local landscape with I know yes, 100% inside your wiki there is a spot to be able to put references. So what you're going to do is inside of your list of services in your wiki, you would put refer them to and put their name with their number. That's usually the easiest way to do it.

If you don't do those specific services like stump grinding or artificial turf or hardscaping. If you don't do those things on that service item of the list, just put in the referral that you want them to give. Man, this fly.

Goodness gracious, it's huge. Okay, next one.

This question is in reference to our new location in Norman for next year. Since we would be in stage one at this location and we want to close jobs at any cost, can we have Command center just give 10 to 40% discounts to try and close the Work over the phone or that's something I have to get involved with. No, we can't do that. Like that's a 30% delta. That's the difference between being profitable and losing money, which is totally fine. If you're trying to scale quickly. All you'll need to do is change your estimate grid with them and move that if you, once you get filled up. Right. So again, when you set up the new location, they're going to send you the estimate calculator that has the grid based on the square footages. If you're wanting to lower your price, just move your whole grid down in terms of price. And then when that changes you can immediately say let's move everything back up and that'd be fine. But it's, we can't have arbitrary, like give them 10 to 40% off. It's like, okay, so $50 doesn't work up here. How about 45? No. Okay, what about 32? What about 28? Like, it just becomes really awkward for the customer experience. It needs to be where it's more systematized in terms of if you want lower prices and discounting to be in there. We do not train command center to give discounts over the phone. We just don't because it's too arbitrary. And ultimately you're the one that on a follow up call can only be the one that decides whether or not a discount is made.

How do you do it? When we are starting a new location? Yes, when you start a new location, you'll get on board the same way. You'll get a new estimate calculator, new grid that they're going to follow. And that grid of square footage versus price, just move everything down. If you, if your goal is to get a whole bunch of people sold, same thing with your hourly rate for projects, just move that down. If you're trying to increase your close ratio, fill the capacity and then move those things back up. Raise your prices on the customers you got from three to six months ago, that'd be totally fine.

Here's an idea, here's a thought, let's bounce out of this for a second. As I was saying that the model that is appealing, I feel, and not as scammy as the illustration I'm going to give is cell phone and Internet carriers. They do this all the time, entry level pricing. TV carriers, they do it, it's very, very popular in cable and things like that. And that is you get like $30 a month. And the thing is they'll like double or triple the Price after your first year contract. Right. We're not doubling and tripling our price, but get them in the door. Now, the difference between a cell phone provider and us is the fact that we can create a sticky and unique service, not like T Mobile, that you can just switch over to Verizon and have a very comparable experience. The goal when having this entry, like, if a lot of people think it's like scammy to do it, it is not scammy. You're getting people in the door, they're realizing how good your service is and they're really realizing the value. And you're the reason you have that lower price in the upfront is to get them over the initial hurdle of just making a buying decision. Because if price is low enough, they make the purchase decision. Great, they're in. Now your goal is to how do we make it where there's a sticky enough service to where they don't switch another provider when we raise the price? So like your thought process on this is fine. When you're starting a new location, it's like go lower in price, fill to capacity and then raise everyone's prices. And the difference again between it being the reason it's looked down on in cable and cell phone, it's because they all have a very comparable product. The difference between T Mobile and Verizon? No difference. My cell phone is the exact same. IPhone 11. It's literally the same thing. The only differentiator is price. The beautiful thing about service businesses is that we can differentiate ourselves from everyone else by answering the phone, having a great website, having great communication, being able to have employees that talk to the customer and communicate and are trained well and are efficient. Those are all differentiators that they are not going to switch providers when you raise price. And so we got to get over this notion that this is somehow a bad business tactic of lower price. And then you raise it down the road. That is like the number one way to get people in the door. Prove yourself and then raise the prices to what you need to be able to stay in business and be profitable. All right, and raise, fill the capacity, raise prices, fill the capacity, raise prices. This is something that everyone should be doing. And it's the best way to grow very quickly. And that is you say, okay, I got two trucks, great. My capacity is like $30,000 a month. I'm going to grow to that very quickly by having these lower pricing and having a 70, 80, 85% close ratio. And then I'm going to raise prices on all my existing customers and immediately be very profitable. And then prices to all my existing customers and lower my close ratio down to 40 to 50%. That is extremely profitable. You can do that in one year. You're going to see Thursday when we talk about the roundtable, what we're working on with Chuck, like that's the way we're going to be structuring our GMs going forward. Like first year. We're actually not going to give them profit sharing. It's going to be based on growth because I just want them to scale up and grow to capacity and then it'll switch to profitability because I want them to raise prices, reduce close ratio, et cetera. But if you're not, if your trucks are sitting at your shop, if employees are not being fully you being used 35, 40 hours a week, you're not at capacity. And you need to scale that point. And if your close ratio is not 70 or 80%, it's the only thing that matters. All right, I will give a lot of slack to a GM if they were. If they're not profitable, but they have a 78% close ratio and they're scaling to filling up their trucks and using all of their crew members. You've got to scale the capacity. And then you can. You have the option of flipping that switch to profitability. The last thing you want to be doing is, is you're not at capacity, but you've tapped out financially. You got to raise your prices then because you're not fully taking advantage of the fact that you could have had $30,000. And if you raise price by 20% now, all of a sudden you're making 36,000. And that $6,000 is like straight profit. You don't want to be running out of money at 15,000 or 12,000amonth in revenue and then raise your prices then because you're not at capacity, you're not using all of your assets to their full capacity. And now when you raise price by 20%, it's only like 2 or $3,000 a month extra. So that's why it's like speed to capacity. And then make your decision, do I keep growing and buy more assets or do I flip the switch to profitability? And if you do that, that's when it becomes very interesting. Whether or not that takes you six months or six years is simply a matter of how aggressive are you when it comes to close ratio.

Back to the regularly scheduled programming.

I want to know how Andy Burleson is able to get clearance to Put his money in his accounts. This is like so but mind boggling to me. I'm on the next day deposit for sometimes larger bags. Yeah, I don't know. I have no idea. Some of my accounts, same thing. Next day, it's in there. And somehow Annie Burleson has been in the good graces of service, autopilot and clearance. But it's very random. It sometimes will be next day. I think for the majority of it's next day. But then randomly some of the products take four or five days. I saw this one Facebook group, some people, it was taking them a week and a half and they were freaking out. I'm like, I can't blame them. It's like, get your credit card so you get money the next day. But a check could have beat them in the mail. So like that's a tough proposition. I don't have a whole lot to say about that. And because stripe, I just have a lot more confidence in stripe. Who processes like 20 to. No, probably like 50 times as much as clearance in terms of daily processing.

One of your thoughts on using Strike Capital. Make an order of Christmas Light materials. I just watched the train from July and realized that I am behind the eight ball. Oh yeah, if you're in October.

That'S gonna be close. I'm at 8, 000 cash now and I believe the recommended first order is around 7, 500 for the stripe business loan. The annual interest I believe is just shy of 20, but you pay the full interest even if you pay it off early. Doing numbers backwards, I should be able to do 8, $40,000 in Christmas light revenue, which is at 20%. So I wouldn't like, keep in mind it's 20% profit or 20% interest if you pay us in a year. If you pay off in six months, you're paying 40% interest. So I would not recommend that. That's too much of a high of an interest rate. And that's assuming if you use the whole year.

And having that type of debt is going to be tough to ever get another loan. Because the type of debt you have is important. When the bank looks at your.

Your financial statements, I would recommend, and this is me talking out of my nose because I have never done Christmas lights, personally, I would be trying to sell these jobs, collect the money. Like if you think you go $40,000 into Christmas light revenue, can you go collect 20,000 of it now to get them on the schedule, book them for the end of November, collect 10 grand now on pre orders and then go make the order. That would be nicer. I would much rather you do that. And obviously someone like Ryan Payne's gonna have way more experience, so maybe ask him in the Facebook group. But if you think you can do 40k in light revenue, we're in October. I don't think there's any reason why by the end of October you can't make an or make this order by simply go out and pre selling these packages and getting 50 down. That would just be my 2 cents though, because 20% interest rate is a lot. I would pay 20% interest rate on dollar. That's a lot of money. Oh, man. All right, let's see here. Questions the hiring cab on each of our websites.

Is there a way for an employee that wants to work in another location to be able to apply? This would mean differently than the traditional employee application. Obviously before they are well versed with working Augusta and will make it more valuable for us. Is there a way for an employee that wants to work at another location will be able to apply? I'm not exactly sure what you're talking about.

On your individual location there's a hiring, you know, a hiring tab or careers tab. If they apply there, it goes directly to you. There is a way. If you go to augustalongerservice.com careers@the corporate level, there's a drop down of every location. So if they want to do. Oh, I see what you're saying. Are you saying like applying at multiple locations? That would be interesting. That would be interesting. Some of our best employees are the ones. I've seen the content. They know they want to work for Augusta and they're willing to move.

We've had a few people like that.

In terms of Christmas lights and using Stripe capital, I would use a line of credit or prepayments with a discount. Yeah, prepayments with a discount. That'd be my recommendation. Line of credit would be a secondary option as well. You're gonna have a bit of a waiting period. Usually get a line of credit set up with a bank, but it's going to be lower than 20% interest and it's going to be a revolving line of credit to where you paid off and it's still there, which I like. I keep all my lines of credit open and I pay them off in time when times are good and when times are bad. It's like a little insurance policy just in case. So my lines of credit, I make sure that on all the business I have a line of credit and I want to make sure that Three months worth of payroll is in that line of credit and I don't use it and I got to pay my fees. I think you pay depending on which bank. Try to get a. If you're ever going to get a line of credit, try to get a credit union that doesn't require you to pay annual fees to keep the line of credit open. A lot of them will charge like 1% to open it. But there's some banks will charge 1% every year and I hate those. Those are garbage. Not garbage. They're not as valuable as finding a place that's going to keep your line of credit open without or origination fees every single month, every single year. So it's very common that 11 1/2 percent. Origination fees. Origination fees. I don't want to be paying it every year if at all possible. So if you're setting up a line of credit with a bank, especially if it's a credit union, you can usually get that without having to pay every year. But it is common, especially if you don't have great credit to have to pay the fees every year. But my goal is always for every business have different lines of credit. And like when 2020 March came, I told all my managers, hey, you're gonna see a bunch of money in all accounts because I'm pulling every single line of credit. We're getting all the cash out before they freeze these and you know, a month later we put all the money back. But it was just one of those things that's like break glass in case of emergency. I know where I'm going if needs be. Yeah. 1% fee every year. The bank is very small. I didn't even check my credit for the line of credit. They just gave it to me. Yep. That's cool. So usually the more due diligence they do on you, the less kind of origination fees they do. But always negotiate on these fees. These fees are straight profit for these banks. Always negotiate origination fees. Any sort of fee at a bank you should negotiate. There's no such thing as a bank fee that is set in stone.

Probably if you like in certain like very entry level. Like your first account with a bank maybe. But if you've been around this bank for a long time or your line of credit has been for years revolving. I negotiate every one of these fees.

How do you price leaf clip before you know how much leaves there will be. I'm getting people wanting estimates now. But do want me to continue last week in November? Yeah. So I would Recommend the leave has already started falling. Give them a price for an initial cleanup and then a recurring weekly or bi weekly visit to come until the end of the season.

Oh, they don't want to come to end last week in November. Got it. So that's, that's what I would say. Okay, great. I'm going to go ahead and give you the price for the recurring visit. But come end of November, that first visit is going to be an initial price. I like the initial price because I know I can get it accurate for budget hours, get it up to standard and go going that way because there's just so many variables of like if it's dry, if it's windy, all the rest of it. A leaf clinic can take an hour. The same one could take 10 hours if it's just wet. And the day before a lot of the leaves fell versus yesterday if it was dry and it was windy. All of a sudden there's hardly any leaves. So I like that initial price for the, for the cleanup and then a rec visit price which is going to be more variable. But I know averaging out over the course of five, ten visits, it's me. Fine. I really like doing. For us, it works well in our market where we do a property cleanup, give everything up to snuff, and then we do winter services and it kind of keeps everything maintained. So it really depends on your market when the leaves start falling and for some people that have already started to fall. So if someone's asking for it, I'd be like, hey, here's your initial and then here's your recurring. And what? By having the recurring, it makes it look really cheap for occurring when you have an initial. It's like five, six hundred dollars or even more.

But yeah, I know, I know. For those of you who do live leave, it's like you get, you get flooded with calls like that last week in November and getting ready for Thanksgiving, etc. And then it's just, you're really just doing one time cleanups. But if someone's this early in the game, the ideal is like get them on the leaf cleanup. Yes. And then they're recurring throughout the whole season, weekly or bi weekly, depending on what they're looking for.

Cool. Eo. All right guys, have a fantastic Tuesday and we'll see you tomorrow.