Mike Minutes Mastermind 10/17/2022

Being well, Happy Monday. Quick announcement. Booth 8190 is where Augusta Lawn Care will be for equipped Expo. In case those of you who are there, make sure you come hang out in the booth if you'd like. Even if you just want to be there for a few hours and talk with other owners, it's kind of a cool place because they're coming to our turf so they're happy to talk to you and things like that. And yeah, just a really good environment there. So feel free to be there. I'm also talking at the Thursday energized event from 2 to 3pm so if you're there, come check us out at the booth. Feel free to hang out. Liz and Lee will be there along with Zach and the media team. So should be a lot of fun. All right, let's go ahead and jump into questions. I know at Command center doing a whole bunch of training today and tomorrow on winter services and that is going to be very good. Let me go ahead and present.

Most everyone there has done winter services already.

But they're going to be doing a whole bunch of reviewing and just making sure all the kind of finer details that questions that customers ask around refunds around weekly versus bi weekly, things like that are all ironed out.

Logan, we have a fake review on Google. Oh there is probably. I reported to Google already but is there any way to get rid of it? Take a look at it. Let me see if I can't share this to everybody.

Fake reviews. Gotta love them. The quick answer without even saying yes, you do not really want it taken down. Their worker, Mr. Hayes stole from our property and when confronted they used vulgarity. And I've seen gestures to tell us never to contact them again. I would never use this service. And there's no one else either. Law enforcement is concocted all the best. Mercy goodness. That one's pretty bad. Except the name of the person is the bad guy. Oh, that's the best. Yeah, so I'm not, I'm not a big believer in trying to get. It's not a big deal if they don't remove. Remove the review because guess what? That's the review everyone's going to look at. So if we go to Augusta Lawn Care.

Columbus.

Nebraska. All right, let's see here. Okay, so let's. Let's pretend like we are searching. Boom. Share Share. We are looking for lawn care service first and foremost. We only have 11 Google reviews. So Logan, Spanky Spank. Not good. We need more than 11 reviews but if we do Go into it. Let's just see here. So this is what people are going to do. They're going to go like this. Bam. Lois. They're going to read. Oh, yes. You only have the one. Okay, this is perfect. So this is the one review that people are going to read, guaranteed. So, yes, you can ask to get removed. And that would put your reviews up to 5.0, right? Or probably 4.9 or whatever. I would prefer honestly that you keep it because everyone's going to read it and make a really good response and then secondarily go and get another 20 reviews to bring your average score up to 4.8. 4.9. Anyways, just saying.

But for example I'd be doing is writing a review that's very professional and basically saying we have no.

Inside the. The dashboard, there is a download for responses to reviews that are negative. And one of them is for reviews that are just random like this. And it's basically a matter of professionally confronting these issues. For example, like Mr. Hayes, first of all, we don't have a Mr. Hayes that works for us. We have not been contacted by law enforcement. We don't have any record of you working for our company. This potentially could be a different business that you have confused us with. If you have any questions, feel free to give us a call. Give them the business number. That's what I would do again, because customers are going to read this. So if it doesn't get reviewed by Google, which of course I'm going to do my. My part here and report this.

Let's see here. I just call it bullying, harassment, because I know that's when Google is trying to go after right now. Okay. I don't know if you guys can see what I'm doing. I reported the review, so take it down is okay. But if it doesn't, I would not worry about it. I would make a really good response.

But definitely two things when I look at this as I'm sitting here is.

You can kind of try to get an address instead of area served. Oh, you do have an address. My bad. Take that back. But more importantly, number of Google reviews. Okay, let's see here. Columbus, Nebraska. Let's take out Augusta. And so we have lawn care. Columbus, Nebraska. Where are we at? Where are we at? Oh, we got ourselves a Google local services. We are on the top even with 11 reviews. Oh, my word. Whoa. Okay. All right, let's go. Oh, and we are the top two spots of Google. Okay. I don't have a whole lot to say. Oh, man, it's still a good idea to get more Google reviews, but that really did not prove my point very well. They have 11 and they're still crushing it. Your lawn care page and your homepage are the top and the top of Google My business. Okay, all right, that was a bad analogy. Bad analogy. You did not prove my point. Well, okay, let's hop back into this.

Yeah, fake reviews, you know, you can, you can report them, but if they don't get taken down, I think it's actually a really good thing because again, if you don't have any one stars, people are a little bit suspicious when they see one. They're going to read it. So you just make your response really good. When you raise prices, do you adjust your mowing matrix estimate calculator? Yeah. So if you want to raise prices on future customers, you're going to raise your mowing matrix. If you just want to raise prices on past customers, you would be raising prices that way, which is emailing them, telling them the price is going up on a certain date, et cetera. But yeah, if you want to raise your prices going forward, you would want to move up your matrix. And typically those things are done at the same time. Right. If you're raising your prices to old customers, you know, $5 to $10 cut or whatever, you're probably also going to raise your matrix so that future customers have a price increase baked into their new quote.

In regards to previous to a question in a previous mastermind, our business name on our Google page was corrected to say Google Local services instead of including our Google name. Google claim they only want relevant information in the business profile name. I'm a bit nervous about changing back to Augusta Longcover island after Google claimed it was not appropriate. I fear that it's not allowed. Their guidelines will hurt the ranking. Yeah, so this is being done by customers. Okay. So the same thing, they can change your hours of operation, the services that you offer. So when it is recommendations that come through and it says corrected, it usually means a customer came through and changed it. We actually had a someone competitor, someone was doing this to a whole bunch of our sites. Not, not the Google Local services name title. This is a new thing for me. But they are doing this to services because they know they can just go in there mess this up by adding a ton of services to our Google Pages. I think Google will have to figure this out. It's happening across the board, especially just competitors locally inside of markets are doing this to each other.

So yeah, no Google, Google does it's not that they're not claiming it's appropriate. There is user generated feedback and then it gets submitted and then it gets reviewed and then gets updated if you don't go against it. That's why I always recommend checking your Google listing page every month and just making sure like the hours are the correct ones. People can actually change your phone number and if you don't review it and change it back to what you want it to be, it can change. So they've got to really iron out some of the kinks. I get what they're trying to do and it's a good thing to crowdsource information. They get way more data that way. But it's, it's, there's some holes in it and I think they'll fix it up, fix it in the next year or so.

On the roundtable we had mentioned that the regional manager should be the one to to do all the online ads for different locations. If we have multiple locations, do we allow our GMs to do the online marketing or just do it ourselves? If we are the regional manager at that point I would recommend doing it yourself. The amount of time and energy you're going to train a working GM is just a lot. It just is. And if they're a working gm, they're great out in the field, they're great with the team, but they have not been watching videos, they haven't watched the tutorials. They likely did not come to training if they're a working gm. And so it's just one of those things that you, I would recommend you as a regional manager even if at this point the regional manager is the owner, be the one doing the ads online. It's just such a learning curve. By the time you did it for you trained one person, you could have done it for you know, five or six locations. Right? Place the ads.

I'm looking on doubling up on crew members and trucks before investing in more trucks next year. It costs about $30,000 or so for each truck setup, which includes a ramp rack, hand tools, zero turn, et cetera. So my thought is to have the variable expense labor over the fixed expense trucks and mowers. That way I can get out of the 500k mark as soon as possible without feeling as much financial stress. I know the concern is being able to hit PvP and I may have to adjust our rates to hit it consistently. However, are there other things I can can do to help with ensuring P4P route density via door hangers? Pushing a new client bonus review Bonus. Etc. Yeah, this is a great point. During this past spring rush is when we start implementing a whole bunch of bonus stuff because P4P is harder for our guys to hit during our spring rush. So things like really pushing the $50 for online reviews we've probably given out this year alone. Six or seven grand.

I would imagine in just $50 dollars. $50 bonuses for online reviews. And we do it cash at team meetings. And that's just the local shop, Bellingham. I would really be pushing that. Especially if they're struggling P4P the ability to get new customers. Like now. It's really cool to see them kind of bragging during team meetings. Like I will let you talk all day long about how you got a new customer and they'll talk about how they went and saw the customer and then like took a video and then they're training other team members on how to do like because they're with each other and they're like, okay, let's go get this job and I'll like drive down the street, get all the customers information. Like it's really, really awesome to see them do that. They're learning and then they're getting new customers and they're getting 50 bucks to do like 20 minutes worth of work. So it's been really good to see that. And I would say we've probably given about five or six thousand dollars this year in just reviews and probably another couple thousand dollars at least in getting new customers. And you gotta really keep pushing it to your guys and then making a big deal. If like the first couple come in where they get new customers or they get online reviews that say their name.

That'S. If you get that momentum going, you can. All of a sudden you're handing out thousands of dollars at team meetings, which is a great problem to have. So. But yeah, I agree with this. If you're lower on cash and that is to double up the guys, like you said, it's going to hit your P4P a little bit. And so ensuring you have the bonuses things in place, making sure that as you like as you grow, you're going to get automatically more and more route dense. Right? Because let's say you're servicing this area and you have 80 customers. When you go to 120 customers, you're still inside this area. There is no more drive time. You just reduced all of your drive time by 33%. As long as you stayed inside of this territory, going from 80 customers to 120, you reduced your drive time by 33% across the board on average. So keep in mind as you grow and scale the number of employees you have, as long as your customer base is also scaling, you're immediately improving your route density because you already have to drive inside of here, you know, doing your route. If you can just double the number of customers you have, you're gonna half the amount of drive time that you have.

So that's why like, that's why I always talk about like you know, scaling up and getting past 500,000. Because just the, the operation of scaling up the business and getting more recurring customers improves route density, which improves P4P, which improves your profitability, which improves team morale. That's why like being at that 3,400,000 level is a little murky a lot of times because you're trying to service like 60 to 100 customers, etc. When you get through like 100, you're trying like 150, 200 customers, you get that good route density. It helps the guys on P4P like it is a virtuous cycle of profitability, better team culture, better morale, better P4P, etc.

What's the worst that can happen? If you buy a house using FHA loan on your primary residence, but you don't live there full time, and somehow your finder, your lender finds out.

In a different hypothetical, let's say you're okay. So let's answer the first question then.

Worst case scenario is that they could call the loan. That is the worst case scenario.

I have never heard of someone calling the loan because of this. And that is you get a loan and you call it your primary residence and it switches. Now fha, I've never gotten FHA loan, to be perfectly honest. I talk about a lot because it's a great way to get started. My first loan though was a construction loan. So I got my first house, it was $95,000 in cash and I got a construction loan on it.

All of that to say, I have not personally had experience with this, but an FHA loan is built for first time homebuyers. You have to have, if you look at the fine print, you have to have the intent to make it your primary residence. You do not have to live there. All right, so what you want to do is if you live there for a while, I would recommend living there for a while. So you can say it with honest intent. You, you're going to live there. I would personally do that. You could theoretically just immediately get renters. But if you're going to go through the process, I would personally live there for a little bit and then find renters move out. As long as you have the intent to make it your primary residence, Typically a primary residence is going to hold up even if the lender does find out. Okay, in a different hypothetical, let's say you're purchasing, you put your, you're purchased using FHA and you live there, but then you move into another place and use FHA loan. Do the term on your original loan for the first house, stay the same, you refinance. Yeah, I, again, I have not gone through the FHA process. I would, I would suspect that getting two FHA loans is almost, is very, very difficult. It's made for first time home buyers and if you're moving out of one FHA loan into another FHA loan, they're gonna be like, so you're now this is a rental property. So I would imagine that would raise a lot of red flags. An FHA loan is typically made for someone first getting started their first home loan and they don't have a lot of savings in order to make that. Because like the government knows if you get into a house and you buy one and you stay there for five or 10 years, you're going to get in the process of buying homes in the future. They just know that once you start, once you stop renting homes, you very rarely go back to renting. And so this is a government program to get people into home ownership because they know they can build equity and then usually they'll sell that first house after five to 10 years and they'll have enough equity or put a down payment on a, like a 20% down payment on a regular loan. So also, as the market continues to slow, does it make sense to buy at a good price but with a higher interest rate? Or is there a price or is a higher price with a lower interest rate better?

This is a great question. There is no right answer, right? Because as, as prices are high and we had really, really low interest rates, the payment was lower than what it currently is, even though the price has come down by 15 or 20%, but interest rates have doubled. Okay, so my house that I bought down in Mount Vernon a couple months ago, if it would have been sold six months prior, would have gone for a hundred thousand dollars more at least. Okay, at least $150,000 more. But because the interest rate was double, my payment, even though I would have paid $100,000 more, probably would have been the realm of $2,500 a month. That, well, now it becomes $3,000 a month, even though my, the price was $150,000 less, but because my interest rates were almost double what they would have been six months prior, I was paying way more into their monthly payment. So here's what people are gambling on and is, do I buy now when there's a good price, and then I hope that within the next year or two, interest rates go down and I'm able to refinance at a lower interest rate. That is a gamble. If you look at what's happening in the government with the, everything right now, I can't with certainty say that in, in a year or two, the interest rates will come down. I do believe that in the next five to 10 years, I can, with a good level of certainty.

Expected interest rates will come down. But in the next 12 to 24 months, the way inflation is like, sticking around like a, like a sore thumb and a toothache, it could be a year or two at least. So there's gonna be some people that are gonna suggest you get variable interest rates right now. So that way you can get the house and then, you know, in two or three years get a refinance. But you have no certainty that we can't get rid of inflation the next 12 months. I would hope that they do. And I hope, and I do believe that in the next 12 to 24 months, inflation will come down, interest rates will go back down. I do believe that. But you, you just don't want to make it where you can't afford that monthly payment. If they don't, that would be the big thing. And people going to variable interest rates right now, it just. Oh, that's. That's a, that's a tough pill to swallow right now. You're risking. You're basically just betting on the fact on whether or not the, the interest rates will go back down, which I think they will. But you just got to make sure that's not going to put you in a bad spot. Can you send me a picture of Bellingham's couple mowing matrix calculator sheet? No, but you could ask command center to do that. Just email estimategustalongerservices.com and they could send you a picture of it. It's probably the one that's actually standard on the template they send you, though. So.

What's the best way for an employee to make contact with customer to receive review for bonus pay? Yeah, so they get really creative when you start giving out money and they start realizing that it can Take literally three to four minutes for them talking to a customer and making a good connection with them to get a $50 bonus. So literally, I actually should ask the guys because there's some of them that just crank estimates out left and right. But you could, they could literally, because now all of you on your homepage have a writer review button. So you could literally just, they could literally just tell the customer, hey, if you go to gustongservice.com Wacom, there's a button about halfway down that says write a review. Could you write a review, include my name? My name is Mike. If you include that, I get extra bonus on the job. Make sure the office knows I did a good job on the property. Like if you made a good connection with the customer and you tell them that and they know you're getting a good tip, or if they say, hey, can I, how can I give you a tip? And if they just use that as a way.

But yeah, the employees, in order to get the, in order to get the tip or the review, they have to have their name in it. Which the reason we did that is because in order to get someone's name, they had to have created some sort of connection with the customer. Right. And so that's what the benefit of the, of the, the company gets is the five star review, obviously. Obviously. But then also the fact that in order to get someone's name in a five star review, there had to have been a connection made with the, with the customer. And that's the hard part for the employee. So but some of them, you could, they could literally have it pulled up on their phone and just like, hey, click this button and just leave a review and you can log in on my phone. Like, they can literally do that and, and we would be totally fine with it. They look creative and we're okay with it.

What are the economics behind inflation still being around with higher highest interest rates within the last 20 years? Yeah, so this is a great question. So we kind of talked about this a little bit on MBA for Entrepreneurs. I made a video about this last week about the wage price spiral.

People don't like having their wages go down. So, like, people will leave. And so think about it.

If we've all raised our wages because of higher costs, when the higher costs come down, are we also going to lower wages? Probably not going to happen. People like wage increases are entrenched. They don't go away. All right, so what that does is we raised our prices and we raised our prices or, sorry, we raised our Wages. Now we, we raise our, our prices to customers. Are we taking away our price increases? Not a chance. We're not going to give everyone a better deal next year because inflation and the cost of fuel goes down. That's not happening. So what happens though, more importantly is because the government's giving, been putting all this money out there and it takes a while for inflation to come down. It's not so instant. Like literally the money printer was just turned off. Theoretically. Like in July. They, they had, they changed policy in January. They said, hey, we're going to interest rate, increase interest rates and we're going to cut the amount of Fed spending when it comes to buying out bonds from, from the, like from the market. When, when the government steps in and starts buying bonds, it's basically like, hey, we're going to come in and buy stuff up so that way the market doesn't keep falling. And they did this in 2020 to prevent the market from completely collapsing. So they stepped in like, hey, I guess we should change this. They said, hey, we're going to make sure that the market does not collapse. We're going to be spending $100 billion per month on just buying out these low value bonds. Well, when they start buying a bunch of bonds, guess what? Everyone does. Oh great. Well, we'll just throw money in too because we got free money from the government. We just got stimulus money. And it's not just the stimulus checks. Everyone's looking at the stimulus checks. That is like 5% of the stimulus that was given. There was so much other money pumped into public institutions, private institutions, loan programs. That was cheap money. There's so much money going around. And so when money goes around, people buy more stuff. When people buy more stuff, there's a increase in demand. When demand goes up, supply either has to go up. Well, guess what? Supply was limited because the supply chains were all messed up. So what happened? Reduction of supply and increase of demand. Prices are going to go through the roof, right? Think about it. If my iPhone, everyone wants my iPhone. Demand is high, but there's such a very low supply of them, they can't make them. Like if there's something wrong in China, they can't make the phones. Now instead of a thousand iPhones, there's only 100 iPhones. People need them more. They're willing to pay more because they have plenty of money. So demand is high. Supply gets cut though, because of the issues with the factories in China. Guess what happens to the price of this phone? It goes through the roof. And that's what happened over the past two years.

High demand, low supply. Because of factories getting shut down. Massive, massive inflation is going to happen there. And when you talk about inflation, that just means prices go up. And that's what happens normally when supply and demand. When supply and demand shift that way, it's very, very normal. The thing is, eventually those, those factories get back online, eventually the supply chain corrects, and eventually people run out of all the stimulus money. And so that's not going to take six months, though. It's going to take a year or two. Right. And so.

Yeah, that's the short and long of it.

My dad works for a global shipping company called Barry Global, and he said the railroad is on the verge of a national strike. If the government doesn't step in and fix their contracts because of higher living costs, they will strike by the end of the month. National Railroad is responsible for 30% of all shipping in the United States. Yep. Such it is with government jobs.

Yeah. Like, the, the problem that I've seen over the past two years is actually way different than economic policy. It is a mindset that when everything goes bad, that the government is there for us, to help us. And everyone's like, oh, that's a good thing. Right? That's what the government's for. No, the government is not for helping us when things go bad. They are there to make roads and protect the country with a military. And so again, this is just my opinion. You can call it political, but it's not really because, like, both sides of the aisle would disagree with certain parts of this. But the bottom line is when they start getting involved in healthcare and railroads and the supply chain, and now they're, like, involved in oil and they're involved in how we produce energy. When you start getting them involved in all of these things, guess what happens? 2020 rolls around, and when they tell us we have to stop our businesses, we do. Like, it's crazy. I always, even during 2020, I said, like, we're gonna eventually laugh at ourselves one day. The fact that we closed down our businesses because our governor told us we had to, and then a week later opened up because they said we could is simply a matter of we are plugged into what they. We are so reliant on them for everything. Like, I can't not close my gym because of COVID when they told me to, because if I did, they could come shut me down, they could lock up my bank accounts. There's so many different things that we rely on them for. And so when you give someone more and more reliance on someone like a government or any relationship. When you put more and more eggs in the basket, guess what you do? You try to prop up the basket as much as possible. So you'll listen to the government, you'll try to do everything. You don't want everything to fall apart. So there's a big reason why, you know, FHA programs, great. Use the government for whatever they're going to give you, whatever stupid programs they've created to prop up our economy. I'm a big fan of using it and then getting out of their power as soon as. As soon as possible. I do not want the government having debt over my head. I do not want the government having a program that they can stop or start interest on me. So, like the student loan programs that I cannot default out of, these are like things that I, I just don't want the government to have power me. I don't care if they're good or bad. You think they're a good government. I don't want anyone having the power to be able to close my business. Like 2020 was a big eye opener for me. The fact that the government can just within a tweet and a little press conference, shut down all of our businesses. Like, I am not tapping into that. And I immediately paid off my, what's it called, SBA loan on that, on that gym because I did not want them having the power over my gym that this ever happens again. Michael's not closing down his gym because the reason I did before was because I was afraid because they held the loan on that, on that business. So not happening again, bro. Anyways, a little rant for everyone on their Monday morning. Have a great day, everyone, and we'll see those, those of you who'll be out at Quit Expo. We get there late Tuesday night, we'll be there Wednesday setting up And I think 12 o' clock, they open the doors. Looking forward to seeing those of you that are there and more importantly, those of you in a couple of months for conference. Really looking forward to it. Take care, have a great week.