Mike Minutes Mastermind 10/25/22

Hey everyone, hope you're doing super well. I'm gonna get started.

I am in the main command center today because on the other side of the wall where I'm usually at, they have a meeting going on and it's too loud. So I'm over here. All right, I have a couple things I want to go over and then we'll jump into some questions. Number one, announcements. Then I'm going to jump over to education. Then we're going to go to questions. All right, so let's start with announcements. There's been a couple questions about this one. Make it crystal clear as much as possible, it's in everyone's franchise agreement and I mentioned a little bit the other day and then it sparked some more questions and that is about territories, rights to leads, stuff like that. So a solo operator has no guaranteed leads in terms of territory rights, right? We do not. We, our goal is never to have solo operators long term. The goal is that it gets started as a solo operator and then that allows you to get started for a lower cost. You're able to get involved, you'll ramp up the business to 15 to 20,000 in annual revenue or monthly revenue and then you convert into a growth model and actually start to grow the business. If you're going, going above 20,000amonth in revenue, it's really not built for that. It's not because you have no security of your leads whatsoever. And.

There'S not a lot of, there's just a lot of advantages to being a growth model and growing the business to a much larger size.

When a lead comes in, whether it be command center or to anybody, even if they're taking their own estimate request forms or phone calls, if someone takes a lead inside of someone else's territory, it's in direct opposition of the franchise agreement. And that is the reason why we have territories and why every franchise has territories is to protect areas that you can grow and develop your business in, knowing that no one else can build inside of it. When you buy a franchise territory, this is all state in the franchise agreement, but I know sometimes it's common language is easier for you to understand and that is when you buy a franchise territory, if there's already people who have customers inside the area, they get to keep those customers, but they cannot get new leads inside of that area. To service a client or take on a lead inside of someone else's territory is a direct opposition franchise agreement and will lead to a 30 day suspension and where you're going to be warned and you have to give Those customers back, etc. As a solo operator, what potentially can happen is you have your service area. Again, service area is different than territory. Territory is a legal binding. You get every single lead inside that area. A service area is, I can serve this area. And this is the thing with a growth model, you might have a 3 to 5 mile radius of territory and, but then you serve maybe the north side, that's a good market. And you're like, hey, I want to go outside of my, my territory and have a service area outside of that. And we allow that command center that, on the mapping software that we use that you can have a territory, your legal territory, and then you can have a service area even if it's outside of that. Or even for some people, they actually don't even fill their whole legal territory with their service area. They stay very, very concentrated, which is typically the most profitable locations. But for the ones that go outside, that's fine. But now you are outside of the area. That is guaranteed. All leads come to you, which means a solo operator can be in that area. And what's going to happen is absolutely going to happen. It's happened at four or five different locations now. And that is where a service area of a solar operator is here. And the service area of a growth model overlaps that. Now the territory for the franchise, the territory, legal territory, might be here, but they're serving a larger area. They could potentially overlap. So what happens if a lead comes in where there's two service areas overlapping? It's going to, it's a brand new lead, it's going to go to whoever the phone call is coming to or the lead is coming to. Right? Because again, you say, well, the service area of a solo operator is here. I should get the leads that come here. Not necessarily because the growth model can, their service area can overlap. All right, so the, the only way that a lead is determined is who marketed for that lead in a service area. Okay? Now the growth model cannot say that they have a guaranteed lead outside of their territory. Not happening. Because someone else can get that lead, someone else can service that lead, someone else can get other services for that lead. And this is what can lead to someone having a mowing customer and then someone else having that correlation as a core aeration customer. This is where communication with your franchisees around you is extremely important because you can simply say, hey, I have their mowing, you have their aeration. Do you want to swap customers there? And then I'll take so and so from you over Here, I don't really want that area as much. I like, I like to focus more on these services. You focus on these services. Communication is like literally solving 95% of these problems. But I want to make it really clear so that as we grow and you're talking with other franchisees, everyone's on the same page. No lead is guaranteed if you do not have a territory. And yes, if someone has a solo operator model, someone can come up, buy a growth model over them, which will basically lock up all new leads for that location. That is possible. That's not going to happen without your knowledge. And that's letting you know prior, hey, a growth model is coming into town. You're at say 18, 20,000amonth in revenue or 15,000amonth in revenue. Do you want to go ahead and lock this in and become a growth model so that they can't come in? All right, again, the reason we're doing, we do that is to give the growth model the value of having a franchise license with a territory rights on your balance sheet. Okay? And this is what every other franchisor does. And there are lots of franchises that don't have any franchise license. That's why you have our territory rights and that's why you have subways literally can be across the street from each other. They have no territory rights whatsoever. Right. So the way that we allow people to get started with the franchise they don't have the money is using the solo operator model. It is not what I would recommend if you are A, above 20,000amonth in revenue, or B, if you're trying to grow the business and you're like doing it for two, three, four years, I wouldn't recommend it. There's no real point in joining Augusta. And for the vast majority of our solar operators, they've scaled to past 15 to 20,000amonth in revenue within six months and tutors them, they've tapped into the brand. The goal is to become a growth model and lock in your territory so that way you have actual enterprise value. You actually grow. Because if you don't have that on your balance sheet, you can't really sell your, your, your franchise and have additional value in comparison to every other independent that is also just in competition with everyone else for leads. When you actually lock in an area and have a, have a franchise license that has a territory, right. That is an asset on your balance sheet that goes up in time as we raise the price to that initial fee. So for those, there's our first franchise, either five, $10,000, they're on their balance sheet. They now have a franchise license that is worth $25,000. All right? So it's something that when you sell, you will have equity in and you can sell it for more. Okay? That is the goal for everyone. We, I have no ambition of having a whole bunch of solar operators in Augusta Nation. It's not the goal. It is a means to an end in a six month to two year kind of ramp. If you need it to get to be able to have your territory, lock it in and scale up. All right? So there is no lead that is guaranteed. And if anyone ever gets a lead and tries to serve a customer inside of someone else's territory, it is a violation of the franchise agreement and we will act on that. But again, communicating with each other is like solves 99.9% of these issues because most of the time when you're getting outside of your territory or into someone else's service area, there's parts that you want and they don't want, their services that they want that you don't. You can just communicate hand leads back and forth and it's all fine and dandy. But when we do have to have an agreement that we, if someone's not getting along, we can step in and hey, this is the rules and these are the regulations and the ones I just stated are they. So.

Most branches have zip codes. That's something for thought in the future. We have not done this because so many zip codes are irregular shaped and very, very strange in terms of how they operate. So there's certain states that do their zip codes a little bit differently, more of a grid. That'd be great. But we don't have any plans of doing zip codes because there are literally parts of zip codes that are like say a quarter mile long and it goes big and it goes small again. And trying to fit them together is absolutely impossible. And there's also zip codes that have millions of people inside of them. And we could easily have two or three franchise locations inside of that to be able to have good brand penetration instead of giving a massive zip code away to someone that is either very population dense or just massive in geographical size.

Would you recommend sharing a shop space or just land with another location or to help each other out? Especially if you're so close. We can spectate, sport, but land is. I would 100% think this is awesome. This is, this is a fantastic idea. And this is the advantage of getting close to your franchisees that are around you. And as we get more and more. I truly believe down the road we'll end up having hubs. And that is like, hey, you can you start up? And we all have this. We have five acres. We all split the cost of it and we all operated out of it. And there is. It's kind of in between three or four different locations. And we all drive our different ways every morning. We support each other a lot and we are able to split the cost of that and we're able to, you know, share trucks and equipment because they're all in the same spot. I genuinely believe that will be the massive advantage as we cross probably about 250 to 300 franchisees. And that is having shared, shared space that you then operate out of. Again, that's going to completely come down to communication between the owners to be able to make sure, okay, like, there's definitely lines that we have to cross in terms of making sure our base pays are the same so we don't have competition internally with the team members. What happens if one team member doesn't want to work with this franchise or franchisee wants to work with another franchisee? How are we going to handle that? There would definitely be things you have to communicate about, but communication internally inside of Augusta Nation is going to be what leads to the brand of penetration in your area going up consistently. We have seen the locations that have two to three locations close to each other. Their ramp up time in the first six months is far better in terms of scale than the ones that are out by themselves, you know, two or 300 miles from anyone else.

Thomas and I share yard space. Yep. And as you get three, four locations, you get some really cool, good space. Could have put a massive billboard up and, you know, be in it for a lot cheaper than if you were trying to get your own.

I would highly recommend. Love the hub idea was the best marketing campaign I can run for my location, Edgewood. Talk to your consultant on your coaching calls and they'll put together the initial one that you can test and move forward. Okay, let me move on to education real quick because I didn't want to cover a couple things. All right, let me pull out my phone because I made notes this morning.

I wanted to talk really briefly about the mindset during a downturn and two things about it. One is it is a paradox because in one sense, you gotta really lean out and look at every single overhead expense and really start to cut it out and every single thing inside. Like, I'm literally going through QuickBooks on every single one of My businesses, I'm looking at every single subscription, every single dollar, every single penny. And you have to do that if you're going to lean out and be able to get through the recession. On the contrary, the flip side of that is like, step two is default aggressive. Because when everyone else is, is cutting back on things that are not overhead. Because this is the thing, you want to cut overhead, but don't cut beyond that. Because if you cut beyond that and you start, okay, I'm going to sell all my trucks or I'm going to stop marketing the things that lead to growth, like, especially on the sales, the sales side, like production side, you don't want to come back on. Because if you cut back on those things, you're doing it at a time when everyone else is doing that. Like, that's what your competition will do, is they will cut back into marketing. They will stop hiring people next spring rush, like, when, when we would typically do it. They won't, because, like, oh, we're going to a recession. We're not going to hire people. I really believe next spring is going to be an. A nice window of time to hire people because it's not going to be as competitive as it was this past year. There's gonna be a softening in the market. There's been people exiting the industry, and there's so many people getting laid off right now at the big companies. Just wait till that trickles down. And.

Next spring, a lot of owners, I think, are gonna be scared to scale up. So again, that's the opportunity that we need during a downturn is marketing will be cheaper. We'll actually be able to find people that want to work. And during a recession, people need to work. They need to make money. Like the cost of fuel and food and all the rest of it is through the roof. People are going to make sure that they have a job. And so for the people that, you know, owners that are complaining like, oh, people don't come to work, blah, blah, blah, it's like, well, that, that will go away eventually. And especially during a recession when everyone's struggling to pay rent and, you know, food is through the roof and fuel, et cetera. So there's. There's definitely a paradox. One side is lean out, cut expenses, but do not cut beyond. In my opinion, your overhead, cut overhead, cut the extraneous expenses, the random subscriptions that you have. You do not need a subscription to YouTube, premium YouTube or Spotify.

Pandora and like four other sites, and Netflix and Hulu. You don't. If you need an escape for video, you need one. Get Amazon prime, get Netflix, get whatever. But you don't need five of them. Okay?

So yeah, I would recommend that number one cut out, be lean secondarily, but default aggressive. And don't cut beyond, don't cut beyond your overhead. And that's typically going to come in the form of expanded, expansive type endeavors. Right? So anything that's gonna affect sales, don't touch it. Right? I'm seeing some people, they're like, oh, like man, I'm so busy and I'm gonna. And I take calls back from command center and it's like, look, you can do that to save money, but that's not default aggressive. All right? I would recommend take that time that you would otherwise spend on the phone reacting to phone calls. Go, keep selling. You're doing an amazing job of growth. And so don't allow all the fear tactics of the news because the news just basically they get more clicks the more scary the headline. So everyone's going to make a bunch of fear porn in the news over the next six months. As we head into the recession, it becomes more mainstream. We've been talking about this for 11 months now, 12 months. But as it becomes more mainstream and they see year over year declines in the real estate market and they see year over year declines in our unemployment starts going back up. Once that all starts happening, you see all these crazy headlines, you're going to want to retract and you're going to think about defense. If you built the business correctly over the past 12 months that we've been talking about it and preparing for it, then when it actually happens and is mainstream and fear is at its all time high, you can actually take advantage of it.

So do not, do not allow all that noise that's coming to distract you from the fact that we've been preparing for this for the past 12 months and now it's our time to actually default aggressive. Focus on selling, focus on growth, focus on hiring next spring, because it's gonna be like this window of opportunity. Remember we talked about this after Omnicron last January, February. We said, hey, there's a four to six week window of hire people and then it closed immediately. The same thing is going to happen this spring. It's going to be not a window of time, but it's going to be easier than last spring because so many people will just have been giving up and they will not scale up this one this coming spring. And they won't be spending money on marketing because they're afraid of a recession, which is going to be all in the news come next spring. Just wait. Just wait till February, March and February, March and April of 2023, when all over the news, like, we're in a recession and, like, unemployment's up and real estate is going through the toilet and all the rest of it. That's when you'll want to retract, and that's when you should be like, all gas, no brakes.

All right, let's go to questions real quick. And I know there's some others that were popping in on the Facebook or in the chat here.

All right, can you guys see this? Yes. Okay.

All right. Going into winter, is it bad to try and close work at a lower price to keep the crew busy? Yeah, I would do that again. The main objective in doing that is that you have fixed expenses and maybe you have revenue here, and this is your profit, and you're willing to take a lower profit by lowering price, but keep revenue high enough to cover your fixed expenses. That's the main thing. So usually you have about 15 to 20%. If you need to shave off of your revenue, you can. But you do that in order to just keep the guys busy and keep your fixed expenses covered.

How do you balance between making the customer happy and sticking to your guns? I sometimes struggle with telling customers no because I don't want to get a bad review. Is there a way that you can delineate the 20 times, or should you bend and when should you stand your ground? My big thing is I'm always anticipating a review. And my question is, what's my response going to be if I have a really good response that's gonna make me look professional to the customer, to other potential customers I don't really care about? You know, I'm definitely gonna stick to my guns because in that regard, I know that if I went back to the customer's house three times and tried to make them happy, I gave them a refund and already half the bill. And I tried everything I could to make them happy. I know that as a response to a negative review, that's gonna look really good. And most people would be like, oh, like this. They tried their best. They came back multiple times. They already gave some of a discount that's going to look really good to potential customers. I do not care about that customer at that point. What they're mad at me. I only care about future customers that see that review. So it really just depends on what your response to that review is going to be. If you really messed up. Make sure you really try to fix it before you stick to your guns. Because if they say something really negative, I'll say like, hey, we really tried. We apologize, I'm sorry we gave you discount. We came back three times, we fixed it, ended up looking good. Whatever might be, but I'm always thinking about the response to that negative review.

Boarding postcards for every direct mail. Can I use the batch option to have the printer break them down into proper quantities? When I open the tab for creating batch order, there's an Excel spreadsheet. Is this for entering the quantity to sort into pictures? Attached. Thank you. Okay, let's look at these pictures because I do not know what you're talking about. Screenshots of Excel document. Screenshot of Create a batch order. That's a great point. I've actually never used that feature.

I. To be perfectly honest, I do not know. Let me show you what everyone is. Screenshot is here. I actually do not know what this is, to be perfectly honest. Let me share this. Chrome this. Create a batch order. This is what he's looking at on the.

Dashboard or the Pro shop. Create a batch order. I have never done this before. What you're saying, I think, is, like, you'd make multiple orders of a hundred, so they're bundled up already. I don't know if that. I've never ordered a batch order from List of Print, but I would assume it's not coming bundled the same way that the post office wants it. Like, you're still gonna have to unpackage every single one and just take you just as long to unbox each one and unwrap it and, like, do it correctly as compared to just, like, printing them all off and then taking some time to do them in batches of a hundred. Now, one thing that you can do is instead of counting out by the hundred, if you're doing like thousands, is either weigh them if you have like a kitchen scale, or B, take a measuring stick and just do like 110 and measure that out, and then you can just stack them up, measure it, and take that batch and just know you're gonna have a little bit of an overflow. Like, you know, 5 to 10 on every batch of a hundred. So you're only wasting, like, a couple bucks, honestly, just to make sure you have over a hundred on every bundle. So, yeah, I've never done the batch orders. I can't really say on that one. Sorry, Jeff. I apologize. But I do believe that just unpackaging each bundle would be More time than if you just print them all off and then bundled them yourself.

The way that they package them is not going to be the way that the post office wants it. When rescheduling a job in Zooper, do I one, just move the job over or two, update the status to reschedule and assign a new job to the new date. I'm trying to make sure I'm doing this right just in case a client calls in. Yeah, just move the job over. That's fine. You might want to make a note if there's a reason why. That way, if the customer calls in, command centers will tell them for you. But you do not need to do this reschedule part. The reschedule.

Feature or a job status is for a few things. One, it's like you don't get to a whole bunch of jobs today. You mark them all as reschedule and then the next day you deal with it. Right. But the status of reschedule should only be there if you don't know where you're going to put them. And there's down the road there's workflows that we can build around. When you're rescheduling, for example, just moving the job over, there's actually already an automation we have that if you do that, it'll let the customer know we have not enacted that one or enabled it. I don't think because you could just be moving jobs around every week. If you're moving a day or something, it's now letting the customer all the time. But down the road you would tie those sort of automations to this status of job, which is reschedule. So it's like, hey, we would. If you change it to reschedule, then it would fire an email off to the customer. If you're rescheduling a project, for example, instead of having to manually, oh, like sorry, we're not coming tomorrow, we have to move it off to the next day. That could be automated. But for now just do number one, move the job over. I would recommend if you feel like the customer's gonna call about that for some reason, I would definitely make sure there's office notes for the command center to see.

How often do you change up your ads for Google Max performance Max. I don't touch them, but maybe once every quarter. Because again, it's intent based marketing people are searching a certain keyword so it's irrelevant in terms of how often I change.