Mike Andes answers questions on scaling: whether to open multiple locations or grow one site, how to hit 70-80% close ratios in slow months, and QuickBooks setup basics like keeping chart of accounts to 12-13 line items. He also shares that his Africa trips run 30-40 hours of flying.
Questions this video answers
About 70–80% (he says he prefers at least 70–80% and cites example of closing ~78% with follow-up).
Around $40 per month (base plan).
Consolidated down to less than 20; he keeps about 12–13 line items.
Approximately 22–24 hours.
Approximately 30–40 hours travel time.
Chapters
Hello destination. Let's go get started. I'm gonna drop in. Okay, this link, Facebook. Thank you so much. Alrighty, have a great day. We'll jump right into questions. There was four that came in.
Right?
This is one that was on the Facebook group. That was good. Okay, so Nick says why open multiple locations versus growing one location? Very big. Yes, this is a great point. I think there's, there's pros and cons of both. So you're right in what your tenant said the other day about why would you, why would you have two locations at doing 500, 000 versus one location that's there's a million. There's obviously kinds of scale and having one larger location, etc, I agree with that. Especially if the owner is on site. I think the part that is harder to scale is having leaders and managers that are capable of running multiple million dollar revenue locations. It's gonna be harder and harder to find that type of individual. Whereas if the business is built more on systems, a, a good person that is trustworthy, that works really hard and works well with the team should be able to run the location as a working gm. And so it's a matter of would I rather have one location that does 10 million, let's just say for example, but requires 8 to 10 very high level executives that are very expensive, hard to find and just difficult, or would I rather try to find.
You know, 20 different hard working people and use them as working GMs? That's, that's the determining factor. So it's a matter of like if someone's goal is say do a million dollars in revenue, I would probably stick with one location that's gonna be the most efficient. There's really no point in trying to have multiple locations. But if you're trying to be like multiple millions in revenue, it is harder to replace yourself on a daily operational level. When you have millions and millions in revenue and 20, 30 employees, like it's going to get harder to replace yourself and you will, you'll just pay more and it'll be harder to find that person and you'll be at more of a disadvantage if they were to ever leave. Right. Like if a working GM leaves, it's not going to be super hard to find someone else to replace them. If something an executive and like your CEO level of a $2 or $3 million landscape company leaves, there's a lot of knowledge that they've had and they have a lot of leadership skills and abilities and you're like, you're paying a lot different amount of salary. You would likely actually pay the same amount of salary for someone that's running a three or four million dollars operation than you would probably two or three salaries of a working gm. And so that's kind of how I look at it. It just, it's like the whole McDonald's model of like how do we get cheaper labor in with less experience and train them up to become something. And then you really focus on the systems versus trying to find all star incredible people. They have to pay top dollar for and are hard to find in this labor market to run something that's much, much larger. So there's no right or wrong. It really comes down to the people. Because if you have a large company and you have created systems and simplified it, the only way for someone to really move up inside the organization is to like become a working GM of maybe an estimator if you have like a million plus location. But there's not a lot of room to move up unless you're doing like big projects. And so like a lot of times what people will do is in order to create hierarchy for their team to move up inside, they'll just add more services, they'll get an excavator, they'll start doing pavers, they'll start doing ponds, and that's how they'll grow their business. And all of a sudden they have a $3 million company, but they're doing all these different services as a way to basically retain talent. And the multiple locations with a working GM model is more or less a way to have.
That same hierarchy. Like a way for someone to move up inside the organization without leaving, but not be based upon something like adding more services.
What close ratio do you shoot for during the slow winter months? Honestly, it's a matter of filling the capacity like I, I'm shooting for as high as humanly possible if there's not work on the schedule. So if I have less than a week worth of work on the schedule, I am cutting prices, I am doing follow up calls and calling and I want that to be my jobs that are leads that are coming in to be closed. If I am in the middle of spring rush and I'm getting leads out of my ears, I'm you know, reducing the amount of time that I can do estimates. I'm Falling behind like 30, 40% is pretty normal. But your lead flow is going to be five times as much in the spring rush. Right. So in terms of the close ratio, it's going to depend on how far I'm booked out. If I'm booked out less than a week, literally every single estimate comes in that the customer's like I need service. I am like I'm doing their job and I will do whatever I need to do in terms of price, availability, follow up, calling them, clarifying things to get that job on the schedule. And I would prefer at least 70, 80% close ratio. Again, you got to remember, anyone who asks for an estimate needs the service done. Whether or not you do the work to to get them on the schedule is up to you. And so don't think they're like oh like you know, I can only get 40 or 50% because like other people don't respond. It's like no, those other people are not responding for a reason. It's your job to figure out why and then address those issues.
Because you can close 78% of people if you follow up, if you cut the prices to what the effort is needed. If you just need to get work on the schedule. Now if you're two, three, four weeks booked out in the winter, I'm not going to be doing that and I'm going to be making sure I charge appropriate budgeted hours, etc but this is not the time to be to you putting your lowest level estimators out in the front lines during the winter because like oh like we're gonna do training, it's like no, it's time to get your best estimators and follow up, call people making sure you're using correct tactics in person. And again that's why coaching calls exist. Can you go over these sort of things like why, why am I not closing my in person estimates? Like go over that with an estimator. Maybe it's your presentation, like there's a whole bunch of different things that you could go over to improve that. But ultimately anyone that calls and asks for service needs the service done. It's up to you to figure out how to make sure that they choose you. Do you set up your new QuickBooks accounts for each location or is that something you have the accountant do? Command center does that for my locations and for anyone. I'm getting our current QuickBooks account free from our accountant. So I have no idea how much it costs per location. How much it costs?
Okay, yeah, so like Typically your QuickBooks Online account is going to cost like I think it's like $40 a month now at the minimum. And then you can add on like payroll, etc, other add ons that they have. But if you're getting for free that's pretty cool. If you. Yeah, command center does. Sets up my new accounts and does all of that sort of thing.
So in terms of if you. There is a list of chart of accounts inside of the dashboard for download. If you are wondering like how you should set up your charter accounts. The thing I don't like about online is when you first get your chart of accounts it comes with like literally 80 to 100 different chart of accounts in different categories and it makes your P L super messy. So I always consolidate that down to less than 20 things on all my businesses. So I have a list of like 13, I think 12 or 13 that are in the.
On the dashboard plantation. How long was the Australia flight and did you fly first class? I'm thinking of going to Africa, Egypt, Ghana, Canada over the winter and was wondering if I should fly first class or economy. Just wondering. I did not fly first class. I never have.
Australia flight was like 22 to 24 hours. I've gone to Africa where you're looking at 30 to 40 hours travel time because I went to Kenya and as well as.
Some other place that starts with now I forget the long way. There you go.
So I've never flown first class. I'm small though. It's super easy to fly. It's not a big castle. I just don't like all the stuff in between flying, traveling, being around people, security, all that sort of thing. That part I don't like.
Cool. I think that's all I got everyone today. Hopefully you guys have a fantastic Wednesday and we'll see you tomorrow. Take care.
