Mike Minutes Mastermind 11/07/2024

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Hello, Guess and Nation. Hope you are doing amazing. I forgot to put this in the Facebook group. Give me 34 seconds.

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Okay, let's go ahead and jump right in. I know a couple people text me, say they had had put questions in, so there should be at least if. There we go. We got three for today. Rock and roll. First one up is from Bryson. Can we pay to have Lee run that software report on our area? Saw that our sales webinar. Last one and looks super cool.

Thanks.

Yeah, email him directly. We're not going to charge for it.

We'll eat the cost of it if you really need it.

But yeah, if you're definitely.

If you're thinking about a secondary location.

I would recommend getting the report.

But if you just want it for.

Hearsay, just know Lee will get to it eventually.

But it does take some time, so.

But feel free to email him directly.

Papa Pain. I've been looking. I've been working with Lee on acquiring our next two locations here shortly. I've attached the new reports provided you were talking about yesterday. On yesterday's Mastermind. How would you rank these locations S to F tier. And what order would you open them? My thoughts are open. Kyle and Buddha. With an extended service area covering San Marcos. This will allow us to get to 35 budget hours faster to get the GM busy and allow us to start building up the budget hours in San Marcos.

To break it off as the second.

Location, Kyle has more households, higher hustle income, higher white population, older demographic. San Marcos has a college, so the demographic key demographic data is skewed. Younger, but also has a good area to get employees and seasonal Christmas light team members. This entire Highway 35 between San Antonio and Austin is growing. Rap is a rapidly growing area. This will allow us to expand via expansion or acquisition into either major city in the future and start our movement North Lake Canyon would be less efficient because you have to drive around the entire lake while building out my route density.

Okay, so we got four.

Let's go ahead and open these up. I'm going to open up in different tabs. Oh, great. They're gonna be backwards on my tab thing.

All right, one second.

I'm gonna flip these all around so they're actually in order. All right, so the first one up is Buddha. And based upon what we have said so far is.

Extended area, open up Kyle and Buddha.

With an extended service coming, San Marcos. Okay, that's the plan.

So let's look At Buddha first.

There you go. All right, so this is Buddha.

Five mile radius. 79, 000 people. That's like my perfect size. I like that. I like, I like between 40 and 60.

That like 40 to 80 maybe.

That's like. I like that. It's Good. Number of households? 28, 000. Average age. Okay. A little bit lower. Median household.

Wow.

It's pretty good in income. Private for profit.

Private for profit. Wage and salary. Workers. Good. Don't want a whole bunch of government workers. Potentially that can be a risk.

Okay. We got 14 longer companies. So low.

Low amounts of.

Competition we have. Okay. Quite a bit of male population.

Okay. Average income per person is 36,000.

Okay. Okay. It must be a high.

Married.

Married population.

Okay, got it.

I was like, how can a household be so high? Okay, there's your distribution. So yeah, you're looking a lot in those 30 zones.

Okay.

Okay.

Unemployed is like 1 2%. Full time occupation is management, business, science, art. That's pretty good.

Like that.

Private for profit. Wage and seller work is good.

That. This is probably one of your most important pages by the way.

Where there are.

Where they're.

Okay, this is an interesting one. Educational service, healthcare and social assistance.

Okay.

Interesting to probably College.

Okay.

They're 2.9% unemployed.

Okay. There's your breakdown. So 20%, that's not so bad.

That's not like if this is like 80%, you be. I would want to be concerned in a smaller market if.

If you have massive amounts of concentration.

In one like one employer.

Okay. So family holds there. That's why it's so high. Okay. Okay. Household income. Yeah, so it's right around to people.

Getting married plus 35.

So yeah. 7,580. Okay. All right. Okay. These ones aren't so important. Number of dwellings.

That's fine.

Medium house value, 272. A little on the low side, but let's check, compare them to others.

So far your assessment is holding true. So 14 lawn care services in your area. You can actually see them on the map here. Cool. List of the four closest.

Okay.

So you look through those Texas most wanted landscapes. That would only work in Texas. Let's go. Okay, that's Buddha. New brothels. So the main one I'm going to go to really quick just so this doesn't get super long. So I like that in terms of number of inhabitants, less married people here, only 18 people. Only 18 competitors.

Not bad.

Slightly higher female demographic here. So again, something to keep note of.

Okay.

Wow. We have very high white population in this area. Okay.

Close class of worker. That's fine. Industry a little more spread out. I like that. 72% private. Oh, sorry, I'm not sharing this one. Ah, sorry guys, give me one second.

Sorry, sorry, sorry, sorry. There's just a gazillion tabs when I'm.

Sharing this many things.

Sorry. Okay, we're back in business. Okay, so your household income's a little higher mostly because you have a very wide end tail here. This is what's going to pull that average up.

Wow.

It gets a big houses.

Wow.

Okay, still 280,000 average prices.

Okay.

All right, all right.

Interesting.

Okay. All right, I'm looking through these as.

Quick as I can.

Everyone share this tab. San Marcos.

Yeah, I agree. Having these two and then just doing the one in between is gonna be the move. Whoa.

Low household income though. You're right. Really low.

Oh, and low age.

Yeah, you're right. So this is going to be like.

Where you could potentially get employees though.

So if you have the two locations, you might. Yeah, and then a high male population.

In the middle age, in the 20s. Yeah.

Okay. Yeah, I like your assessment. You know, basically getting two locations using the one basically is to get labor because it's very young, very low wage.

Average size is 2.28.

Okay.

Yeah, very low wages in the one this market. And so if that's even okay, just to say it's 30 minute drive, you might be able to get people to drive across and like tap into this market. I'm also looking for one more thing.

Give me one second. I'm wanting to see.

Clc.

I'm wanting to see one thing. Give me one second.

Yeah, so you have a ton of tenant population. Look at this.

It's like what, 65, 70% of the market is tenants. So that's very interesting.

Again, I think this is a more of a working class. This would be a great supply of labor. Might be a little more difficult to sell some of the high end services just because such a low percentage of.

People make over 100k.

Where is.

This?

Okay, your unemployment. So unemployment's a little high.

Yeah. You're looking at like six and a.

Half, seven percent unemployment rate.

So.

Yeah, that makes sense though. It'd be easy to hire people here.

My goodness, if you're at 6 and.

7% in this market, like gonna be easy to hire people. So I like your assessment. I think it's 100% agreed. And that is like use the one as a way to get the talent.

The one thing I don't know is.

How far away these are. I'll look up that in a second. This is gonna be very rural. So you get 36,000 people. Much higher. Okay, this is interesting. So probably larger, larger properties. You only got three competitors in your area.

Okay. More of a distributed K. Wow. Also super high white population. Okay.

Yeah, very low. Yeah. So this is like the wealthier. You only have a few competitors. The nice thing about this, see everyone.

Always like go after the.

You have to have a bigger market look, you got three competitors. This is, this is actually really good. I like this one too. Canyon Lake. So yeah, so I would say the only, my only red flag on any of these would be San Marcos being your only location because it's gonna be easy to find people, harder to.

Get that high end client. But in terms of finding employees, it'll definitely not be your.

Ideal place. Canyon Lake, though, like to your point, though less efficient. You have to drive around that entire lake.

But there's a lot of money there and there's very low competition. If you have three competitors, like it's not hard to win. You have to beat three people. In most markets, you're looking at a minimum of 25 to 30 competitors. When I run these reports. So even 12, 13, 14, not bad. But if you have three, everyone looks at the total number of people, but it's like divided out by the competitors. So like for example, if you have 30,000 people, but you only have three competitors, that's 10,000 people per lawn care service. If you have 80,000 people, but you have 14 competitors, now all of a sudden you have 66,000 or 7,000 people per lawn care service. I also think you could get a higher rate in that area because there's such a lack of supply. So if you have the supply of labor coming from a cheaper area that you can pull in and then target the higher income areas with basically no competition. Like if you have three competitors, there's such a demand crunch in spring rush because there's so like even 30,000 people is enough to make three, three lawn care services be completely tapped out in terms of employees. Like let's just assume all of their big companies, like 10 employees each. That means 30 lawn care like employees are servicing a town of 35, 40,000 people. To me, that's a huge opportunity because I would rather go after that than a market that has say 80 or 100,000 people in it. But then they have 25 competitors and 10 of them have a large company, million plus. Now all of a sudden we have, if you Actually, look at the number of employees, like workers out in the field. You could potentially have 150 or 200 employees servicing that area when you look at all the competition. So I really like going into markets that are very small and very low competitive. Like, again, I started in Blaine, Washington. There's 6 to 7,000 people that live there.

High affluent. There's maybe, I think there's maybe about four, five competitors. There's some smaller guys, but like four or five meaningful competitors. And so like, you could just dominate because during the spring rush, no one could handle the demand. So if you're able to tap into a labor source, bring them in. Like, for example, if you were able to say, hey, yes, you're going to have to drive an hour or hey, for six months or four months during spring rush, I will rent you a house. It'll be 6, 500 bucks, 600 bucks. I'll rent you this place, you'll come work for me. But if you're able to tap into a labor force, bring them in, absorb the extra little cost, but pay them, you know, lower wages because they're used to a cheaper wage. Could potentially make sense, especially for seasonal workers because they're, they're younger. You might be able to pull a lot of people in from the cheaper area, travel over a little bit, do a three to six month stint during spring rush or during Christmas, light season, etc. So I like that strategy. In general, I'm just a fan of going after places with lower competition, less people in them, because it means I can dominate the marketing. And when demand spikes, I can absorb all the leads because they're just not enough people in terms of contractors to service the area. And if it's in a high affluent area, like when supply goes, when demand goes really high, if you have an affluent market, they're willing to pay absorbent amounts. So in these type of markets, that's when I really encourage people. Like, hey, when you booked out four weeks, you bumped the price. When you go to six weeks, you bump the price when you hit. Like it's so much easier to be able to raise prices at capacity in a market where they can't go find another competitor to do the job for them. Like if you raise prices by 25, 30% and there's only two other three or four other competitors, like, they're not gonna be able to find anyone to do their job in the middle of spring rush. So you have a lot of price flexibility.

All right, let's see here. Where's my share Share. Share. Share. Present.

Okay, I saw. All right, I saw the word Trump in here.

So I was just. I just waiting for someone to dig into politics.

Lawrenceville. With Trump winning the presidential election, what are some of the things that us as owners need to be thinking about going the next four years? I like to be prepared or at least thinking about certain possible outcomes in the future to help mitigate any risks that I might want to take on. Okay, so this is, this is all hearsay and guessing. Well, guessing. So I'm going to give my guessing. It's going to be pretty broad. I think that next year is still going to be pretty tough. We're dealing with a lot of high interest rates still.

I think personally that the last three years of the. The administration will be very, very boom down. I think politically it's a good move, especially when you're on your way out to have the economy running hot. So it's going to feel more like 2021 than 2022. That's what I would say it's going to feel more like. Unemployment will be very, very low. Interest rates will come down. We will call all be growing. We'll get tons of leads next year. I think we have this unique opportunity in the spring rush that where it's going to be easy to find laborers. Unemployment's trickling back up. You got a lot of seasonal workers after the election as well as then the retail season. I think we're going to have to be able to tap into. I don't think finding laborers is going to be difficult. I don't think there's going to be price pressure on wages this one year. Now I do believe that it will be harder to find leads if you're in a depressed market or in a recessionary type environment. And if housing prices continue to kind of stay stagnant while interest rates are really high and no one's moving houses now.

If interest rates come down, the real estate market begins to tick back up in terms of sales velocity as well as. Because whenever a house sales, they're they're hiring landscapers. They just are. They're hiring a new lawn care service. Like there's, there's more people to sell to, there's property cleanups, et cetera. So it really helps our industry. So, you know, if we can get back to regular rates of selling, it would be good. Now if you flood the market with sales, that's what happened 2007, 2008. With houses on the market, we would have a very depressed real estate market in terms of valuations. If that goes down, we'd be in a really, really bad spot. I think it's going to happen very, very tiny bit still next year. But if he's going to come in and cut corporate tax rates, we're going to see so much investment happening if he comes in also and the interest rates continue to go down. And I think he's going to push, put a lot of pressure on Jerome Powell to make that happen because he's going to want to see boomtown. The only way that we can outgrow our debt is either to A fiscal become fiscally responsible and slash government programs, which will never happen, or B, to grow extremely fast. Like, I mean, run hot with GDP at like 3 to 5%, which would cause some more inflation. So I think we're going to see more of that. I think we're going to continue after 2025 to still have a lot of price flexibility, assuming we have a maintained a workforce. I think that 2025 is easy to find employees. We're all going to kind of get like lax again on like, okay, it's easy to find people just like it was in 2024. Most people weren't struggling to find employees. But I think what we saw in 202021 will become the norm if we go back into a hot market where leads are going to start pouring it and we're going to struggle to find employees. So I encourage you during the next year, year and a half to make sure your prices are high enough so that when it is hard to find employees, you have a high enough premium and price to be able to pay an additional 3, 5, 6 dollars or on top of what everyone else is paying on base pay alone. And then on top of that, have P4P instituted if you are making, if you, if your employees can make an extra $10 per hour more than the competition or $15 more per hour, you will be able to find people. Even in two years when I believe it's gonna be very hard to find employees, just like it was in 2021, where everyone, like literally the vast majority of Augusta Lawn Care turned off their leads because we couldn't find people. And so I believe we're going to go back to that.

I do believe the way has been said on the campaign trails that he's going to run this thing super hot. We're going to have a booming economy. Everyone thinks that's good. I agree. Everyone is going to go into very prosperity mode. They're going to start spending money. Projects will pick up again. Christmas lights will take off again. This is something I've had in the back of my mind with the Christmas light thing and watching that because Christmas lights in boomtown people's very price insensitive. It's a very much of a luxury item and for fluent people. So.

I don't know if I answered your question directly. I would just say I think that 2025 spring is going to be a great opportunity to find employees. We're still gonna, it's gonna take six to 12 months to get these high interest rates through the system, assuming we don't start defaulting and we don't have up mortgage crisis, which I don't see it happening right now because prices have maintained themselves. I think it's going to be pretty easy to find employees in 2024. I think actually 2025, 2026, 27, 28 if we, we stay in the current projection which is grow at all costs, raise tariffs, which is inflationary. If, if you start to do all these things, we're going to continue to see what we haven't seen the past few years, which is harder to find employees, but very price insensitive customers. So the goal is get ahead of it. So you charging a premium and you can pay a premium to hire and retain employees. So that would be my two cents. Hi Mike, I'm thinking I'm getting a loan for Vermont, a location in Vermont. Pros and cons. Thank you. Watch my video Abraham, like three, four weeks ago on my main channel. Just like how, how I think it's like how the rich, how the rich use debt. Something like that. Watch that video. It goes in depth about like the different return on investment using cash versus a loan. And so I know you're bringing some capital over from your first one. So like if you go slower, is that fine? You also determine like what do I need to make just to pay the bills and then what can I invest after that. So you know, feel free to hop on a coach, have another set of eyes on this go. Nick would be happy to hop on a call with you. Just have another set of eyes on the loan and like okay, what do I need to make in terms of revenue, what with the loan versus without the loan to just break even. Like your break even whenever you add loan just goes up. So keep that in mind. So like the biggest thing I think with home services the biggest risk of having a loan is that you have a bad off season. Because you have a bad off season, your break even point is higher when you have debt. So it's potentially an extra 3, 4, $5,000 of revenue you make in the off season to cover the cost of the loan. And so if you can't, if you have a bad off season, like, that's why like, the more stable your your revenues throughout the year in terms of throughout the months in a year.

The higher inclination I am to tell someone to go get debt because I know you can service that debt. And you don't have months where you have negative cash flow. Negative cash flow will kill your business. It will keep you poor. You will not be able to grow. You will not have the confidence to invest in the business. It is like so central to fixing the business. And this is why, like we've been talking a lot about it. This will be continue to be next like 18 months of me just focusing on this problem with our guestination. It'll be a big topic at a conference. And then when I talk about conference, you'll see me just doing this all throughout 2025 and 2026 to solve it for Augusta.

All right, everyone, hope you have a.

Fantastic rest of your Thursday. Love you all and we will see you tomorrow.