Mike Minutes Mastermind 12/02/2022

All right, everyone, let's rock and roll. I was going to start on time this morning at 9:30 Pacific Standard, but at 10:00 clock I had a meeting and I noticed when I logged on today that there's 11 questions. So I want to make sure there's plenty of time. Let me go ahead and post this into.

Facebook Group Real.

There it is. All right, we'll jump right into questions and there's plenty of them. Share screen window.

All right.

Oh, that shows the whole deal here. One second. Let me go. Just show my window.

Sent. Present Chrome tab. There it is. Okay, now we're in business.

First one up. Logan, can you talk about the right size of business to keep a working GM profitable? Should we be shooting for 500k to keep a working GM in the field? Thank you.

For me Personally, I think 5 to 600,000 is kind of like that perfect window above 700 starts to get where it's unmanageable. It depends really on the stock and the speed of growth. If you're at 400 and you're growing to 600, that's gonna be a tough one, tough year to pull for a GM that's 50% growth even though you're inside that window. But if you're at 650 and you're literally not going to grow at all, you're just going to raise your prices and you're going to actually cut down on services that might actually be doable. So it needs to be, it needs to be the size of the company, the revenue, but also the other piece of data that it needs to be how fast are you growing? Because the faster you're growing, the more chaos you're adding to the business. So a business that is doing 650,000 but you're cutting services out, you're not trying to grow and your profit margins are higher because your, your close ratio is lower because you raise prices. That's going to be an easier business to run than it was that 400,000 last year. You're shooting for 600,000 this year. It's still going to be harder to run that second location because the growth, it's going to require another truck, a couple more employees. And so that extra layer of chaos is going to be harder for a working gym to handle. But in terms of where I want them to stop growing, 5 to 600,000 is kind of where I ideally like it. Anything starting to get above 600,000, I'd probably just re raise my prices. Cutting out services and focusing on higher profits.

Forest when starting a new location, you spend 15k on marketing at this. At the four new. At the four new ones you're opening. When will you start marketing? January 1st. Please specify 140 day. How much do you deploy per site? Okay, so.

We will not start January 1st. We will start marketing probably the second or third week of February because we start mowing in March. It might even be the third week of February, depending on the weather. So only a couple of weeks before the season is actually growing. And then in terms of right now, how I deployed that capital. Is Google working? I'm sorry? Google Local services. I would max my budget out on that. Assuming I spend a few hundred dollars per month on that as I max it out to like as high as I possibly can, I'd be putting about 20, $30 per day on Facebook and then I would be running as much as I possibly can on Google Ads. So Google Performance max would be the bulk of that 140, probably like 50 to $60. And then anything left over could be spent on these other things next door. Elp but even like door hangers, yard signs, that sort of thing. I'd be doing that first. I'm really interested to see how this new partnership goes with Angie's. We're gonna be rolling out here for the next couple weeks where they don't make us pay the annual fee. So that potentially might be something I would start looking at now because now I don't have to pay that few hundred dollars annual contract and they lock you with a certain amount of leads and things. So that might be something I explore. But I'm going to spend the majority of it on Google Performance Max. I'm going to be spending some of it on Facebook, as much as I possibly can on Google Local services and anything extra outside. I'm probably going to be doing more guerrilla marketing like yard signs, door hangers five around. Things like that.

Is part of the training at CC to automatically void invoices and give refunds for people who didn't read their email about winter services. I guess I wasn't expecting refunds without being in the conversation. Just got a note on dispatch about it. Just trying to understand the next time it's not a surprise. Yes, the standard is that if someone calls in and says, I never got that email that we do go ahead, just refund. The reason for that is because if you don't, you're going to lose the mowing customer and you'd rather give away, let's just say 5 or 10 of your customers will get a refund after the first month of winter services. You'd rather do that and send an opt out email a month prior, then send an opt in email and only get 10, 15% of your customers to opt in. Right. So we talked about this before. We are okay with having 3, 4, 5, even 10% of our customers get refunded for that first month of winter services, then have a opt in email and only get a very small portion of our customers to be in winter services. So there's something we've talked about and yes, that is the way we train because we don't want to lose that mowing customer because if they call and they cancel, that's fine. But basically they're telling us is come back next spring. And so we know that we can get them started again next spring for mowing. So.

Have you had any experience with banks or companies that offer loans when we sell jobs? I'm referring to when, when salesmen come to the house, sell you a job and offer financing? If so, are there advantages to it such as getting more people to buy on bigger jobs, otherwise they would not be able to afford? What are the upsides? Downsize. And does anyone know where to look for banks and companies to offer it? Yeah. So if you, you're not Joe, you're not on super. But if you're on Zooper, there's already an integration with a Buy now pay later company called wisetac. And they're pretty good. And you can use this as a function that when someone's checking out, they're able to use the Buy now pay later. And you know, everything is through that third party. You just get paid on the front end. I have not seen this lead to a massive conversion. Honestly, if someone's using Buy now pay later for a thousand, two thousand, $3,000 cleanup, probably not an ideal customer anyways. And I just haven't seen like those who are using on zoobr, I haven't seen it lead to like a higher conversion ratio, but it's something you can usually use as a way to get someone to say yes for an estimate. And then they don't even use it because you have to fill out the form. They have a credit check potentially depending on the size of the loan, et cetera. So honestly, it's one of those things that's kind of like some benefits, like when you're hiring an employee, it's all about attracting talent, but they don't actually use a lot of the benefits or the things that you talk about. So that's what I've seen buy now, pay later be. I have not seen it really meaningfully increase people's close ratio unless you're talking about jobs that are 40, $50,000 plus at which people are usually taking out home equity lines of credit. And the alternative is a buy now, pay later option where they just basically make payments over the course of 12 or 24 months. But I have not seen it meaningfully adjust or change. And in a rising rate interest, in a rising interest rate environment, it becomes less and less appealing because the rate interest rate has to be 10, 15%. It just gets a lot. So what I tell people when they ask about like, well, can I have a few weeks to pay for? It's like, look, we take credit cards. You pay your credit card off as you want. It's a revolving line of credit. Every line, every credit card is. They actually usually end up spending less in interest and fees on their credit card if they paid off the course of three to six months compared to a buy now pay later where they're taking a percentage at the top and other fees are throughout. So if someone ever asked about like, can I pay it over a quarter time? We accept credit cards and they're paying 18% on that credit card. But they might only, they only need it for a month or two to pay it off. Right.

You mentioned yesterday's mastermind that when starting a new location, deploy $15,000 over three months to kick off the locations. Can you give a percentage breakdown that you allocate towards different marketing methods? At what point do you feel the market knowledge will have diminishing returns when retirement start talking about a target population of 30,000 people. So I already talked about the percentage breakdown. I would say I would not reduce my budget unless we were under 20,000 in population. And I don't even know if I would at that point. Because the reason that we do the three month thing is because I want it to be where my general manager is able to really focus on growth for three months and then the second quarter they make profit sharing. That is like the perfect scenario. Again, like I said yesterday, sometimes GMs will not be able to grow that quickly and it'll take them in the second quarter to grow to the size that we want and fill up the at least two crews. However.

I would only reduce my marketing spend, honestly, if I was like five, six thousand people. The reason I say that is because we were in Blaine. There's 6,000, 7,000 people live in Blaine. And if I was to start one in Blaine right now, I would still probably spend 10 to 15 grand. I would just expect everyone to know who I am. And because I'd be able to hit every single house multiple times with print, I'd be able to hit everyone with Facebook and Google and I would expect a high. I'd need to have a higher percentage of people convert because there's such a low population. So diminishing returns though. Yeah, you're 100% right. You're going to hit that. The thresholds faster when you have a lower amount of people. But I'm not really focused on that. I'm focused on it. I need to get to a certain revenue point. So if I have to do a little bit of loss because it's not as effective, that's fine. But again, there's sometimes I've seen locations that only spend 5,000 and they fill up the capacity and they stop spending money on marketing. So I would do the same thing if we're hitting our growth targets. So yeah, it's not like I have to spend 15,000. It just. That's the benchmark and the budget that we put towards it.

Your thought on starting next year's new team members out at 30 PvP million only while leaving original team members at 33. This year they were crushing among routes averaging upper 20s to low to mid 30s per base. Yeah, this is totally a good option. I, I have considered this for even the Bellingham shop and that is basically saying after a year you go to 33 and the first year is 30. I like this. And now inside of P4P software, very, very easy to do because you just go to their user settings and change the percentage. So if you last year had like you were paying gobs of money on PvP to people, you could make it. Whereas, okay, you stay at that number if you've been here for a year plus, but if you're under a year, it's at this percentage. I think that's a great move, especially if you're so far above the average wage in your area that you don't have any problems finding people. So great point. I literally have considered this for the local shop because during June, July, August, September, like the average was 26, $27 per hour. And so it's like, okay, well why don't we let the guys have that have been here a year. But the people that are just brand new, they go. Go to 30%, for example. It's something I've considered. We have not done it yet, but yeah, that's definitely something you could do.

What will you be starting hourly at your four new locations to ensure fast growth? We'll start all of them at the same. I would imagine it's $80 per hour. I have to talk with Chuck but they'll all be the same. The advantage of having everyone close by. Everyone's rates will be exactly the same.

I believe. I believe I heard.

Brian mentioned him and Lee had a discussion about the pros and cons of having an existing location and dividing into smaller locations. This seems great in terms of helping with the working genome approach versus finding a single top tier GM to run a big organization. I could also see the benefit of maximizing your location's potential without depending on one GM and their capacity. You also touched on smaller locations yesterday. So I am curious to hear how an existing location could implement this similar strategy as we come to that bridge.

Not exactly sure what you're asking although you text me Thomas and said that there's a second question to this so I might keep reading. It sounds like you're asking me is would I break up a current location And I would say the only way I would do that is if you couldn't find a top tier GM and you needed to be out of the daily operations and then I would break it up but otherwise it's. It usually is more of a pain in the neck to break up an existing location. I would rather just grow it to a certain size that 5 to 800,000 and then move on as I grow. But if you're talking about I have $1.5 million location, should I break up? I would say only yes if like I lost my top people and I could not. I did not want to be in daily operations or run it myself. That's the only time that okay great. We're gonna make two or three separate working GMs and separate it out. That's the only time I'd ever do that. If you lost your people and things like that. But you said there was a second location. I should not be lulled to sleep. As you said in your text, Karen spoke with Brad about taxes. It looks like we're all about $4,000. What do you suggest we do to bring this down to zero or positive? This year we invested in solar for our house.

And want to stabilize on full credit. But with owing the 4000 millise out in order to pay down the loan for solar energy.

So you got a tax credit. Sounds like. So you'd solar do that. Okay, great.

In terms of the 4000 obviously talk with Brad. Like you would spend the money in buying like a truck for example. And you're like, well, if you don't have the cash, you could theoretically get a $15,000 truck.

On a payment, do a section 179, take that $15,000 as a loss, probably wipe out your $4,000 taxes. But you knowing your situation, you don't need another truck right now. So.

You could be looking into things like.

Health savings account. If you have a high deductible health insurance, you could look into an IRA where between you and your wife you could put, I think it's $6,500 aside. So that would be tax, you'd save a couple thousand dollars in taxes there. So definitely talk to Brad. He can give you lots of different ideas of ways to make sure that you're not going to be paying if that's a big deal to you. Now keep in mind you're just kind of pushing the can down the field. If you do a section 179, like next year you're going to have another truck, you're going to have more revenue, you're more profit. So like keep in mind sometimes paying a little bit tax is not such a bad thing. The only reason you really want to get around it is if you have a cash Crunch. If the $4,000 is like we don't have that, then it's a matter of let's try to optimize for this year, not like paying taxes. And that's what Brad can help you with. I'd be thinking about like an HSA, an IRA, potentially a 401k depending on what your options are, previous employers, if you do a sep, things like that. So yeah.

SEP is a self employed version of the ira. Basically.

I want to have Brandon watch the training videos on the dashboard for new owners. Are the videos you're posting of the new training going to be much different than I'm guessing? I'm asking, should I have him watch the videos now or wait until we post new ones? We're ready to watch them if they're similar. Yeah, no, it's totally, it's gonna be totally different. The ones that are recorded there now are from past spring. The new ones are gonna be way better. And the ones on there, we've missed one file for some reason. The Saturday at the last hour or two that's currently up. So what we're doing now is we're making one training that's gonna cover service, autopilot and zooper. Instead of having the two separate ones like we do right now in the academy. So just wait. Give us like a week after training. So probably by Christmas we'll have them up. But I would definitely wait for those. It's gonna be much better. Over the past six months, as we've not been selling, we've been refining the training process the entire time and so it's much better.

Okay.

Hey, Mike. My number one flaw this year was sales. I've been doubling down on sales videos from YouTube and have been getting.

Been getting after follow up calls which have always felt uncomfortable. Would it be possible for you to put together a training video or sale videos for selling? I found a video form. Alex and Rosie closing his clothes, sharing his CLOSER acronym. Would you be able to share ideas of 30 second anecdotes, etc. I honestly also started practicing with pretend customers while driving. More info and exposure the merrier. Thanks. Yeah.

I believe so. For example, I know exactly the CLOSER acronym thing that you're talking about. High ticket sales is what Alex focuses on. And that's when having a framework like closer works very well. Big decisions, large tickets, etc. We're talking about thousands of dollars. When you're talking about someone's mowing lawn for $40, having them, quote, unquote, sit in their pain and like the sales process can't be long, it's more about speed, efficiency and getting someone through that process and answering the questions, alleviate them of any sort of rebuttals or problems they might have. And so the vast majority of our sales is simply following up and giving information and following up repeatedly until you get them on the phone, they make a decision. Getting them to make a decision.

And so do I think pretending with yourself in the while you're driving is helpful? Maybe. But I would ideally just tell you to keep calling people until you get an answer from them. That's reps in and of itself. Like just keep doing it.

Repetition. Like you could do a lot of things wrong in the gym, but if you just keep doing them and you keep lifting weights, you're gonna get stronger. Now, could you hurt yourself potentially? Yeah. Could you potentially sell a job and lose some money because you oversell a job? Yes, that might happen to you, but getting the reps in on sales is the number one way to get better at sales. Like Alex talks about his closure afternoon thing, but right before that he always talks about the fact that he did gym consultations and selling gym memberships thousands and thousands and thousands of times. That's the part that allowed him to come up with a framework. But the framework's not what made him successful. It's the repetition of doing over and over and over and over again which builds the muscle for sales. So I would highly recommend, especially given what we're selling, which is a commodity product and it's not like we are changing their life, we are simply trying to add give them back time. I would not be trying to have an elaborate sales process. It's going to come across really salesy. I would rather just get the reps in of follow up, answering their questions and then conviction in your product. Having that along with repetition, you'll, you'll win the sales game in this industry like a hundred percent. You just got to believe that you're the best, the best option for the customer and truly believe that if you don't have at the end of this call, you do not get them to accept you, that you've let the customer down because you are and you know you're the best option for them and you do the best job for them. And that conviction parlayed with the ability to continually follow up with someone and answer questions and get to the root of yes or no and not leaving 20, 30, 40% of your estimates as just sent that will, that, that is the person who will win the sales game.

To piggy off, back off Logan's questions on speed of growth, does your answer change on the harshness of 50% of growth in or year if your restriction is labor, not assets? To piggyback off of Logan's question on speed of growth, okay, does your answer change on the harshness of 50% of growth in or in one year if your restriction is labor, not assets?

Not really. Because even if you, if, if your restriction is labor and not necessarily capital to buy more equipment, growing by 50% for a working GM is still a lot of change. They're adding new customers. There's more complaints. There's gonna be yellow slips. Like most of your yellow slips, your complaints happen in the first few weeks of a new customer. So if you're adding new customers, it creates havoc in the business. Regardless of how much capital you have, regardless of the assets not being the capacity, the personal capacity of the working gm.

If it's growing that quickly is gonna really push those limits. Not saying they can't do it. I'm just saying that although assets and capital is a piece of a restriction, it is not necessarily to say that you have the capital of a working GM can grow up 50% a year like from 400 to 600, for example. They can. It's just a matter of that is going to be harder than the guy that does 650 but is not trying to get new customers. Doesn't have to deal with people that are new as much because they've raised the price close ratio is lower. They have less estimates coming in. They've restricted the amount of bigger jobs they're doing and the type of services. So that way there's less large yellow slips and big damage cases. So a growing business always creates chaos, not only on a cash side, but if you eliminate that, there's still other problems that are created. You have to hire more people. You have to train them up. All your employees are finding out new customers every single week because you're growing and growing and growing. You're adding new services, things like that.

Pretty much. We have all the equipment, just need bodies still. We will still. Will we still experience that much pain. And I am currently at 320. Yeah. So no.

You, you show. Yes. You've eliminated the calf problem. You say you just need the bodies. You will still have pain. It will be less than if you had to also come up with. You didn't have the calf required. So you, you've eliminate. You've reduced the amount of pain you're going to have in this growth trajectory. Just realize that cash is just a piece of the stress. Right. You have physical stress, financial stress, and psychological stress. You've eliminated the financial stress. Great. You will have an easier time growing up to pass 500,000. And I would recommend you do that in one spring rush, especially because you don't have capital restraints. So then it'll come down to okay, if you don't have capital restraints and you have equipment. The only thing we should be focused on is how do we hire more people. And then so really good look at P4P. It's a really good look at your hiring ads. It's a good look at the benefits you're offering. Like, we just started rolled out the Bellingham shop. Because at the Bellingham shop, like I said, no one take it back. All of my locations, I'm rolling this out. So. And that is all our frontline guys don't use health benefits. Like, like literally 95% of them don't. And a lot of it's because they have through the government, through the va, the va, their parents, whatever it might be. So we rolled out the $80 per month gym membership reimbursement program. It's more helpful for them. A lot of them will use it that's the type of thing that will look potentially when you say I just need bodies and I have the equipment. That's the thing you should be focused on. That's the only thing you should be focused on because that's your capacity. Right. So if your capacity is labor and not assets, then you got to do whatever you can do. Assuming that your personal capacity is also in excess, you need to do whatever you can do to increase the amount of labor hours that are on the schedule. And so that's going to be in the form of better hiring, better hiring ads, better compensation, explaining P4P better potentially raising prices that people P is better. All of the above, because for the vast majority of us, leads are not the issue during spring rush. It's either assets or it is labor. The vast majority of us turned off leads last spring, including the Bellingham shop. We restricted leads down to one day a week. We would take in person estimates.

So I think we did only over the phone, no drive bys, nothing. So the vast majority of us turn leads off or restricted them in some way last spring. Do I think it's gonna be that level this coming spring? No. However, I still believe that the capacity for the majority of us next spring is going to be labor or assets. Okay. And if you're saying that it's not assets because you have the capital, then like the only thing to be focused on is what are you hiring at? Looking at, like what's the compensation pack? What benefits are you offering? Really looking thoroughly at the compensation of competitors to see where really where you're at in your market.

Are we set up with Angie's List that they've reached out to me multiple times and I like to sign up, but I want. I don't. Don't pay the initial fee. Do not pay that. Just wait. I was on a call with them two days ago and we finalized everything. I signed the contract. Hopefully within the week we will be able to email you all. Actually it might even be today because they had said within hopefully end of the week. So do not sign that initial fee thing. It's like $300 or whatever. Just don't pay that. Well, we're getting all of that waived.

Facebook just got in trouble with Google. Are they still valid for advertising? Who is this saying this?

Connor, I'm not 100% sure what you're talking about. Facebook just got in trouble with Google. Are they still valid for advertising? I don't know exactly what you're talking about. I don't know if you're talking about the iOS thing.

But as far as I know Facebook is still valid to add. Yes, they're actually the cost per click is going down because so many big advertisers are jumping out. I was actually testing Twitter ads the other day because so many people, their top 50, 50 out of the top 100 advertisers bailed out after Elon took over and so. But at the same time their users are higher than ever and so potentially the cost goes down. I haven't seen it be great though. Like I'm not. I'm not recommending it but I definitely am testing it. But I've noticed that Facebook's cost per hook is coming down because people are moving away from the platform because the targeting is just not as good.

However, all of us have a very easy way to target and as demographic. That's our. That's our main filter. Whereas a lot of the larger companies are going after psychographic stuff that is no longer available on Facebook. What is the size do you expect your GMs to run the first year at your new locations? I want them to get above 30,000 per month in revenue. Anything below that I would be.

I'd say it's underperforming.

Are you starting your new locations on Zooper or Service Autopilot?

I think it's service off. I have to talk to Chuck. Sorry. I think we decided on Service Autopilot just so we're all in the same one.

I could be wrong on that.

Also if anyone is planning to get above three to four employees, I'd probably say service all platform right now.

Anyways. And we plan to do that relatively quickly. So we will probably just do Service Autopilot until I have control over more of a software that we can jump into and know what's going on. Google guaranteed services don't match what I offer. How do I change the services on my Google. On Google my business ads, Google guarantee service don't match what I offer. Okay, so there's only a couple different services on Google Guarantee. Like there's like lawn care provider, there's landscaper. I'm going to be done. If you meant you want to do it in here.

I got two, three minutes. Yeah.

Yeah. Google Guaranteed only offers like landscaper, lawn care provider, et cetera. Changing your services on Google my business, I think you might mean your Google listing. If you mean talking about your Google listing, sign in on Google here. I'll show you right now.

Go to google.com also use my personal account. But all of you would be using your Augusta account. Let me show you this. There's this new FAQ thing too, I wanted to look into today.

All right, so we're at Google. Boom. Take this off. There you go. Google you go. Here you go to my business profile. I'm going to select here. Cool. So here now is where you're going to be editing things. It's no longer Google my business, your Google listing. So from here, you would edit services right here. So that's where you could edit again. As you can see, people can add these things. And you'll need to go through here and take stuff out because we do not do hardscape design and construction. So, for example, like if Dylan and April are watching this right now at the Bellingham shop, they'll need to go through here and edit these services out that people are trying to add. They're trying to add all the stuff that we don't do. So that's where you'll want to do it. And then you can run ads based on keywords, and those keywords are going to be the services that you would typically want to offer. Got in trouble with Google just like they did with iOS. Let's take a look at it. It shouldn't really be a big deal though, because Facebook doesn't run off of Google. Of Google. They run off of. Oh, I see. Like Android. Okay, I have to take a look at it.

But honestly, these companies are all in bed together and like, they do better when they're all crushing on advertising dollars. So that being said, Google and Facebook are arch nemesis when it comes to advertising. But Google does not have a platform like they try with Google and it resales. So they need Facebook.

But I will believe it when I see it if Android does something about Facebook. But the only way they can really handicap them is to limit targeting. That's popular right now in the government and for users to block tracking and things. So they could do that to handicap them potentially. I just haven't seen anything yet that is noticeable. All right, guys, have a great day. Have a great weekend. We'll see you on Monday. Bye.