Mike Minutes Mastermind 12/08/2022

Hey everyone, hope you're doing super well. Let me just go ahead and put this in the chat. Copy that.

Cool. There are several questions that came in and I also wanted to go over a couple things. There's a couple questions that came into Command center about conference tickets.

If the owner's not coming, that's fine. You still have the two tickets that are included. So you just need to GM or an employee that are coming, just fill out the form that sent via email and then anything above 2. That's the only time you need to buy any tickets for the main event. Landscape summit side of things. Let me paste this in here.

Sorry. Now Facebook doesn't come across. Okay, here we go.

And then also we had a good discussion.

This morning at the Bellingham shop about profit sharing and we're going to nail it down better in a couple of weeks here. But what we've always done is profit sharing. And as, as all of us have been trained, we talk about doing profit sharing where at the end of the quarter you take the total number of employees, divide that out by a profit sharing amount, whatever that be, 5%, 10%, whatever you're giving for your frontline staff, and then you give whoever is eligible their amount.

What we are considering doing and Dylan brought up this morning is a good point. I think is removing the division of the number of employees. The amount that each eligible employee would give people significantly higher. However, we're going to make our, our call out policy way more stringent. So I'll give you guys an update on that in a couple weeks once I iron things out. Dylan, I think it's a good idea though because right currently we allow someone to not have authority as long as they give a two hour notice. The problem with that in the spring rush is people like will get back from the route and they're not coming in tomorrow and then they're still getting at The Bellingham shop 1000 plus dollars in profit sharing a quarter. And we don't really think that's fair. So what we've done is we've made it to where it kind of caps it a little bit by dividing up the number of employees and kind of taking churn into effect. That's really what you're doing. But we are considering changing that. If we actually do change it. I'll let you know how it goes.

But the big thing is your reason that you do that is because during spring rush the thing that is most annoying is when you just turn through 80% of your workforce and you're giving A massive profit sharing and literally one or two people did all the work or the general manager did all the work. That's what ended up happening. The General Manager works 70, 80 hours a week to get things done and then because there's only a couple people eligible, they get tons of profit sharing. So. So it's not, it's not a perfect system. We've always done allowed the two hour notice in order to accommodate people calling out sick. However, there needs to be a better way of doing that. And that is like look, you might have a cough but if you're coming in that's what gets you the massive amount of profit sharing and then make the profit sharing number even bigger. So if we change that I would expect in 2023 for there'll be quarters where guys can make $2,000 plus profit sharing but it would require like you basically never call out. So something that I'll be talking with Dylan GM at the Bellingham shop and hopefully for conference have some that nailed down. But then we'll let you know how it goes in 2023. The reason I mentioned that is because we've all been trained which is you take the number of total number of employees, divide that out and then give the eligible employees their amount.

But I'll give you updates on that if there are any. See if there's anything else I had to go over.

I don't think so. Okay, let's just jump into questions. I haven't looked at these at all.

A couple people have been asking me about multi unit locations, how to set those things up, banks, accounts, insurance, etc. I'm going to talk a little bit about conference actually show you how we're setting up the bank accounts and cookbooks and things like that.

But we're still going through that whole process now and we'll have it all ironed out. But definite conference I'm showing you kind of like the easiest way to have the bank account set up. We just found a great, a great bank online that it seems like it's a super simple have multiple accounts and you can set up in two seconds. It's fantastic. So more info on that coming up at conference and.

We just keep adding to that as we get those rolling. What should the regional manager salary or compensation look like? How many locations are needed before you should hire a regional manager? In terms of the second question.

It really comes down to what your goals are. If you're constantly trying to grow.

And you're probably going to be the regional manager, that would be your Role as the owner would be that you are kind of a regional manager and that is supporting the GMs. I don't think you'd really want to hire out the regional manager position until you're at three or plus locations at least.

Just because you're probably going to be that role. The only reason that you would hire someone out the only had, say three locations is and hire a regional manager is if you want to step out of daily operations. But if you're still growing the business, I would keep, I would be that regional manager. So you have three, four, even five locations and then hire a regional if you want to keep growing. But the role of the owner really looks like that of a regional manager until you have four or five locations, because you are the one supporting the GMs and that's the role of the regional manager. In terms of the salary, I would probably say you're looking at like a 30 to 40, maybe 50% bump in salary. And then their profit sharing is a piece of the pie, like it would be for all the GMs. Right? So that's kind of how I roll it. And that's just my personal thing. You could obviously change that however you like. That's what we're doing is higher salary and then they get a piece, a piece of the profits from all the locations. So.

My goal is to have at least five locations. If I open one every year, is there a certain threshold of revenue I would have to make before opening a new location? So I don't think it's a good idea to say like, oh, I want to open one a year. I would not recommend using that. Hey, great goal. That's fantastic. The reason I say that last part is what usually happens. It'll literally take you five years just to get to your second one. And then what'll happen is, like, you can hockey stick it. Like, you'll get like three or four in one year. The reason for that is because you figure out the systems, financially you can afford it. And then you have now a supply of good team members you can elevate to being GMs. But that takes a long time. Like, people are like, they jump in, they get their one location ramped up and they're like, oh, it's their second and a third and a fourth. Like, please don't feel the pressure to start more locations. Iron out one that makes good profit and really turn the profit mode. Like if you're not, if you're not actively thinking about turning your location into profit Mode, your first one, do not think about second or third location unless you have gobs of money like 100,000 plus sitting ready to be used.

So great goal. I just don't put this pressure on you if I open up one a year because that's typically not how business will work. It'll be a matter of it'll take you five years to figure out the system. Nail the nail, get profitable. Turn the profit now on. Hire gm. Like the step stages of wealth is something we're going to go over at conference again and I'm going to go in very much detail because people jump to like, oh, I need multiple locations or I hire GM way too quickly and then that's what leads to like unprofitability. And then what happens is they retract back to basically being solo operators. So yeah, just, just don't put this pressure on yourself like, oh, I got to open one a year. It's unlikely that's going to be the case, especially for second and third location. Just to be like, hey, I'm going to make this one location profitable. Follow the stages of wealth. And the first one is go to 500,000. And you're not getting a GM until stage five.

So just keep that in mind. And in terms of how much revenue I would be making sure you've gone through the stages of wealth going past 500,000, you've got a GM turned on the profit mode, then you can focus on second locations.

So just don't, just don't feel pressured to do that. The reason I talk about a lot right now is because there's quite a few of us that are getting a second and third locations. And so I'm talking about a lot and there's a lot of questions and I'm obviously doing it, but don't feel pressure. You need to follow the stages of wealth and like you should not be thinking about stage five, six and seven when you're still going after number one or two. Right. We'll talk a lot of that. Conference.

Can annual users on SAB reassigned, for example, can I have one license for an annual user and transfer between employees? I'd like to get the $5 a month per rate if possible, but we do not. We do have a decent amount of turnover. Yeah, you can. However, what you're going to need to remember is the least amount of employees you have across the entire year is that only the number of annual licenses you'll want to have. What I mean by that is you can switch the number of users that you buy in service offline is independent of people leaving and coming. It's not locked to one person. However, if you buy, you know, 10 annual licenses, but you only have 10 employees in the spring, well, when you go down to four or five in the winter, you're still gonna have to pay. You're still paid for 10 annual users, right? So personally, once I get a good contact for everyone, which I believe is gonna be Mr. Penn at service autpilot, we'll be able to email them and say how many annual licenses you want. Since it's obviously not on their front end like their website, you can't do it. I would recommend only getting the number of your least amount of employees that work year round. So for you, max, it might only be 2 or 3 and then just use the $10 ones for the spring rush. Or when you might go four or five, six employees, whatever that number is. So.

Make sure I answer that correctly. Yeah, it can be reassigned though. Yes, they can be reassigned between employees. Totally fine. You're not locked in. I thought your post yesterday about the profit breakdown per location was very insightful and got me thinking. What main metrics are you tracking with Chuck to keep pulse on the success of allocations? Is it just profit or is there more to it? They run the max metrics cards like everyone on a monthly basis. And that's Chuck's responsibility to make sure those are all in alignment and he knows what the numbers need to be. And when he stepped in, there were several things that we had to change at locations based upon those numbers that I didn't have time to. That's why I needed a regional manager. And so.

In terms of main metrics, we're looking at the scorecard. Monthly scorecard is for coaching. That is the number that. Where all the numbers come from. It's the only numbers we get. And then in terms of what I'm focused on as the owner outside of the regional manager is the profit. Like if those numbers are red, I need an explanation. And I will have a very short fuse for red months. Especially if the location has been around for more than six or 12 months. Like, that's when I would say, okay, what's up? That's when I get involved. But the regional manager, I. E. Potentially you as an owner for the first several locations, you are looking at the max metrics. Like the max metrics tell the whole story. Your close ratio, what percentage of your revenue is going towards labor, like all of that. So like when. When Chuck or Lee come to me about any location Whether it be mine or they, they usually give me a number. It's like, here's what's wrong. They have this percentage of revenue is going up to labor or this is their close ratio. And those numbers are all we need to know. Okay? This is what needs to happen. And that is a problem. So the regional manager is looking for red flags on the scorecard and our GMs are forced to be doing those scorecards. There is no option. So even if you're doing well and doing good and your location is just kind of humming along, it's still healthy to get the checkup that is the scorecard with a coach. Have a third party that you're accountable to. A reason. There's a reason why sport greats still have coaches. They still have athletic trainers. They still have people that will tell them how many push ups to do, how much weight to bench and someone will pull them into the gym in the morning. There's a reason why it's not a matter of the coach being better than the player. Right. There's a reason why the player is getting paid millions and the coach is getting paid a fraction of that. The athletic trainer, the, their, your athletic coach, they get paid way less. They're not any better at basketball or baseball or football. They're way less better. They're probably, they have never gone professional in that sport. However, it's still important and the value of that is evident to the people at the most elite level for accountability and for someone that pushes them and holds them accountable to the standards and goals that they have. So.

Eric.

Given that for winter services we spend as much time on site as we would for a regular mowing service. Do you just use budget hours to assess the required time spent? Yes. How do you handle accounts that have had an inflated budget hours for being highly priced versus our regular time spent? My current rate is $65 per hour, but I have some accounts that we regularly make 90 to $100 per man hour make great time. In those more extreme cases, I was thinking about adding average MOW time to the job title for benchmarking since budget hours is way more time than we actually spent for mowing. Okay, great. What I would recommend doing is adjusting your hourly rate that you're charging for mowing up. By doing that, your budget hours will come down. Okay. Because if the majority of your jobs you're making 90 to $100 per hour. Yes. You can look at your budget hours are way less. Just flip it. Right. So. So instead of charging 65, raise that to 80. And now instead of getting an hour on the job, you're going to get 40 minutes to hit that dollar amount. And then what that's going to require you to do is you're not going to have enough budget hours on the ones that are taking you about the same amount of time and you have to raise prices on those. The bottom line is your budget hours need to be accurate. Sorry, that's the.

Bottom line is that your budget hours have to be accurate. So whatever you got to do, you need to adjust your pricing and your and your hourly rate to, to ensure that those are accurate numbers. That's the bottom line. Don't adjust things manually. You're going to mess up your guys P4P once you start hiring.

And you're going to confuse the clients too. If you start doing that, you're like, well you spent 30 minutes doing the lawn, now you're spending 45 minutes doing our yard or doing the winter services or vice versa. It goes from 45 in the winter, it only takes you 30 during this, you know, mowing like it should be less now. So highly recommend budget hours should always be consistent, should always be accurate. Adjust your hourly rate, price changes to the actual customer, whatever it is, make sure your budget hours are correct. Also curious if you make any adjustments to the timing for a one man versus two man crew. Crying for one man crew, not taking double the time. A two man crew would appreciate your thoughts and approach on this. Budget hours are always just cut in half. If you have two man crew. Gotta keep it simple. It's the easiest way for them to understand. And if you start baking in numbers, they're all objective or subjective. And I was like, oh, it's a 10% more. I'm gonna give the customer 10% more. Nick, don't do that. The 10%, the extra time wasted with having two man crew is absorbed by the company, not the customer. The reason for that is because the reason a two man crew is less efficient is because of drive time, load time, et cetera. It has nothing to do with being less efficient on this job site with the customer. Very, very marginal. Like we're literally talking about like just walking back and forth from the truck and that's it. With having more efficient, less efficient because there are two people on site, they're paying for man hours on site. So yeah, don't make any adjustments. Budget hours divided by two. If there's two guys in the crew, there's three guys in the crew divided by three. Because again, those inefficiencies are being absorbed by you on drive time and load time, etc. Not by the customer. That there's no loss to the customer when there's more people on the job site.

I heard you use chromebooks for the GMs instead of buying something like that. I have an iPad Pro that I honestly shouldn't have bought, but I did when they came out a few years ago. Is the reason for using a Chromebook the cost? Yes. And it's just you drop it and most of the time they'll survive because they're plastic instead of glass and metal. Or is it because you essentially can only do simple tasks on a Chromebook? Meaning like no games, horses around, et cetera. I was under the impression that they only work when on WI Fi. Our school district bought them because all our systems are easy to plug, play games on. Other systems are easy to play games on. I was just curious if the Chromebook leads to less temptation. I'm really not too concerned about the temptation side. Ultimately the gm, if they want to be horsing around, it's going to impact the business, it's going to affect their profit sharing and eventually they'll get fleshed out. That's not why in terms of WI Fi, everyone's phone is a mobile hotspot. So if there is data, you can make a hot spot on your phone and make turn off and turn WI Fi. If someone didn't have like unlimited data, I would give them the extra 10 or $20 or whatever it is to make sure they did have it so they could be on their Chromebook. But the reason we have the Chromebooks because they're cheap if they drop their plastic, so they typically survive. You can like get the really, really hardy ones that are super thick, but they're like super rigid on the, on the hinges. There's no glass. You don't have to worry about all that stuff. Like a chromebook or a MacBook is metal and glass, so you just be way more careful with it. Totally fine to use. I'm just not going to spend a thousand or fifteen hundred dollars on a device that only needs to connect to service. Autopilot or super. It was just basically just a web browser. Right. So you know, if people are. If you're worried about people getting distracted, there's plenty of distractions just on online. Like you don't need to download apps to be distracted. So I have no good concern about people distracted. If someone really wanted to use the Chromebook or something, they are more than welcome to do It. I'm sorry. If they wanted to use like an iPad Pro or MacBook, they're totally more than welcome to do it. If they like that interface, totally fine. I'm just not going to provide it for all the GMs, because when they drop it, that's $1,500. That's $1,000.

And so. And the likelihood of them getting broken when they're going in and out of estimate cars, they're going in and out of the office all the time. Like, it's. It's high. You will drop them once a year, which doesn't seem bad until you're paying $1,500 for profit sharing. Do your quarters months run 1 to 3, 4 to 6, 7, 9, 10 to 2, or 2 to 4, et cetera? Are the quarters the same for GMs and fuel staff? Great questions. Um, yeah, so we went over this at training. Um, next week we have training and it'll all be recorded. So hopefully the week after we get that up for you all. So I could actually reference some of these things. I know it's in the current one. I just don't know where it's at the one that's currently on the Academy. But yeah, so for us, we do regular Q1, 2, 3 and 4. For the general managers, that's 1 through 3, 4 through 6, like you said. For the fuel crew, Q1 is considered March. So third month throws 3, 4, and 5. And then like their fourth quarter would technically be December, January and February. We do that to maximize the amount of people eligible and ideally get people that stay from March to November and they're eligible for three full quarters of profit sharing. Because otherwise you get people starting in March and they're like halfway through a February or March and they're halfway through a quarter. So adjust that for your climate. Like, if you don't start mowing till April 1st, you might want to make April 1st the beginning of Q2. Right. And then do the model that you just had right here. Right.

Cool. Those are all the questions you had for the day.

Fantastic. Tomorrow I will not be doing a mastermind in the morning. I have. We are flying out to Ohio for the Spencer Lawn Pro event thing. I did not look at where we're going. I think I fly in a Cleveland. But if anyone's close by and wants to say hi. If anytime I'm flying and you guys are close by, feel free to come say hi. Feel free. We'll take you out for dinner or something like that. I just don't know exactly where we're going, to be honest with you. So anyways, have a great rest of your day. If I don't see you all tomorrow, have a great weekend and look forward to again seeing you guys at conference. I really, really am looking forward to it. All right, take care.