Mike Minutes Mastermind 12/12/2022

As long as we get it done by the 15th. Everyone, hope you're doing super well. Let's go ahead and jump in and make sure I.

Well we told eric on the 15th.

All right. There's a K question that came in. I'll jump right.

We went really good at the Spencer Pro event. It was really awesome to see Chad Williams and his wife there. That was very, very cool.

Yes. Let's jump right into questions. This week we have training for.

We've trained for. I think it is 20 people are going to be here so it's gonna be a lot of fun. Starts tomorrow now we're doing Tuesday through Friday so looking forward to seeing all of the new owners. We'll make sure we get pictures up.

Yeah, it looks like oh like a ton of almost everyone's coming to conference. It's gonna be great. I think 100, 110 people are currently scheduled from Augusta to be there. So that's awesome. Really looking forward to it.

We're starting to work a lot on the what I'm talking about and stuff so I'm looking forward to it more and more. Next our question here looks like a long one. All right. I'm facing a bit of a moral dilemma. I need some advice. Long post warning. You're currently renting a large storage space with a tax office for 1500 per month. We also have to pay for Internet and utilities which comes out to another 500amonth. Total $2,000 a month. We signed the lease on this before joining Augusta at training. I asked you about getting out of our four year lease day still remaining. I looked again. It is in fact a multi page lease with long contract garbage. We're facing difficulty with a lot of theft. Oh no. We have multiple trailers stolen along with parts off of our trucks being stolen, break ins etc. The other tents are also making parking our vehicle a pain since they are acquiring so much space. The landlord is also stating that the large parking lot area we were originally using and she said we can use as much space as needed is no longer fair game to use. All in all, I'm tired of having our stuff stored and constantly being harassed. Equipment, trucks, trailers that are all in their designated spots that the landlord originally said we can use. We were the first tenant in the complex when it was being when it was built this spring is a four unit complex and I rented one of the units. One of the tenants moved out early in the year unexpectedly and without notice because he couldn't get his vehicles into space well enough and he had two and he had, he too had trailers and vehicles stolen. He literally took off one weekend and haven't been back. There's another property without notice at the end of the December as well. I've already had multiple talks with the property manager about the problems and she said would get back with me on an answer about us moving out or reducing rent due to not being able to use the spaces she originally said we could. However, it has been more than a month and she won't address the problem head on. I've contacted multiple times which continues to kick the can down the road. I wanted to move out before this other tenant moves out and just not tell the property manager. But I am buying more of loan within myself, plus don't want sued. However, this space and I am paying for it, no longer suits our needs and the landlord isn't doing anything to fix any problems the tenants are having. What should I do to stop paying rent? That'll get their attention. Ultimately, if you have a lease in place that says you can do certain things and they here one second.

All right, so yeah, so ultimately at least protects you just as much as the landlord. So if there's certain things that are stated inside the lease that you can do and then they're not allowing you to do it, ultimately you can just stop paying rent. You'll get their attention very quickly. So you could theoretically just leave, just check your lease. The lease states all of this stuff like abandonment. It'll typically cover what happens in the case of people not holding up their contract, force majeure, like all that stuff. So definitely look through your lease, look for a loophole and basically stop paying rent. That gets their attention very quickly. And then you can get to negotiation table. But until you stop paying rent, they usually won't take you seriously. So but yeah, look at your lease though. For what are they not upholding? And what could you legally say, like, hey, you guys have not done this. If you. And if you just want out like a hundred percent, you could theoretically just say you have not executed on this lease. We are, we are breaking the lease based upon these things and we're out. If you do that, they probably wouldn't come do anything. Especially because it sounds like other tenants have already done that. Now if you want to actually negotiate with them though, you could just say just stop paying rent, see what they come back with and potentially get a lower rent if that's something you want to do. Like if they say okay, instead of 1500, it's a thousand, but I just don't know all the. With all these problems, if you even want to be there. So I'd be trying to get out of it. I would probably just stop paying rent. You could potentially leave as well and then just send them a letter that says these are things that were not completing the lease. And. But make sure in the lease you have the permission to leave. And typically, if it's a standard lease, there's reasons that you can leave. And that is if the landlord has not fulfilled certain obligations and duties and if it is even a gray area, they're not going to be able to win a suit, a lawsuit. So I wouldn't be too concerned about it.

Are your locations open on Saturdays? We typically don't unless it's in spring rush when it's just crazy busy. And we try to limit that as much as possible because obviously that means a lot of overtime just burning the guys out. We've been trying to sell every customer who speak with winter services. So even if it's a project job like leaf cleanup, we try to get them to subscribe. Obviously we can't say we charge the same amount as your M.O. and do the same amount of time. I normally charge $80 per hour, but figured to get the ext work for the winter, I lowered just the winter services to $60 for an hour spent on site to book up the schedule. But people have been balking at at that price. After sounding interested, what should we do? Just offer them a mobid and use that even if they don't want mowing. Or maybe sell $40 half hour but not tell them time on site. No one has come out and straight up asked, how much time is it? But I'm sure it'll happen and I need to. Yeah. So never tell them an hourly rate. People will freak out over that. If you said $25 now, some people would freak out, you said, but 40 even they'll freak out. But 60 or 80, they're just, they're not gonna say. They're gonna say no. So what you sell, how you sell winter services, if you're trying to sell them right now, is we do winter services based upon the time and price it costs for us to mow. And we do these other services throughout the winter. And here's your price for mowing. Here's what we do for winter services. Sell them on the mowing package with winter services as the caveat if that's what you're trying to do. But do not, do not sell them. Oh, it's gonna be $40 an hour, $60 an hour, whatever per hour for the winter. Don't do that. You will never get highest price because people start comparing dollars per hour instead of just what is the job being done and ultimately that's what we're shooting for. So highly recommend you don't do the dollar per hour thing. Give them the price for mowing and tell them hey, during winter services these other month, this is what we do. We do all these other services. We spend the same amount of time that we would otherwise spend on mowing and use the budget hours the exact same way.

I've been mulling over what you have frequently said about lawn care business owners wanting to sell over the next few years due to cheap customers, labor, etc. I think you're right and this is a good time to buy. Besides cold calling company to see if they wanted to sell, what other methods do you recommend using? I was thinking it might be a good idea to post lawn signs on street corners with I buy lawn mowing businesses. I think this winter would be a good time to see if I can get some good deals. I don't think the return on that on your time is going to be great doing this. Anytime that you ask for a deal, you're coming from a point of lower leverage. If you say hey I want to buy your house and the and that house is not on the market, you are going to pay 5 to 10% more than the market value because you came to the owner and are trying to displace them. You always want to come to the point if you want to. If you want to get great deals, it's people coming to you. So we're working on lawn care business for sale.com it's just taking us way longer because we're trying to make it really good. I'm hoping by the end of the year we have it done. Just constantly keeps backing us up. But that would be the place I'd be looking at.

But right now Craigslist and Facebook honest is where you're looking at Marketplace on Facebook and then same thing on Craigslist. That's where the people that are solo and small go to because they can sell fast and it's not complicated. They're not going to go on biz, buy, sell and get a broker and all the rest of it. So.

I do not think it's a good idea to approach other business owners about buying. You're going to be paying a premium the same way that like Twitter got purchased for you know, 40 something dollars a share when it's probably only worth like $20 a share. The reason is because Elon came and offered to buy it. It wasn't like they were at risk of closing and then like he came in and bailed them out. So a bailout is always a way better price. Like literally pennies on the dollar. So I would be waiting for that. I would. I don't think there's any return of value to go out and approach other owners if they want to be sold. You're going to be paying way more like double or triple, I think. I asked this before, but can't find the mastermind where I asked. Our laborers make roughly 24 to 30, 24 to 2500 per month. I am planning on paying our gems $3000 a month while they are training. When I have to be with them to train them, or if they have multiple questions problems during the week. Once they no longer need my constant direct involvement, I want to bump them up to 3, 500 per week. Our minimum wage here in Oklahoma is seven and a quarter. And cost of living is fairly cheap. I know your GM, you pay your GMS 4k. But I feel that 35 is a good market salary for market. What are your thoughts? Yep, that's totally fine. You just got to pay whatever in your market you think you can do and still get applicants. Right? So if 3,500 in your market is going to be able to attract a good, good talent, you know, it's only $42,000 a year, so that's pretty low for national. However, again, Oklahoma, you can get away with that. Go for it. It's all scale. Right? Like so, like when we chart, you know, if I have to pay 50 or 60 thousand dollars a year for someone is a really good chance that rent is twice as much in Oklahoma. That cost of living in terms of food and fuel and everything else is more expensive. Right? So it all scales. There's no right or wrong answer for so for salary. It really just comes down to can you get applicants at that price.

I'm currently planning out our growth strategy for the next five years. Is a quick plan and not set in stone. Just want something quick I can reference back to. After we get our first few locations up and running, I will be very aggressive with expansion in new territories. Number one, what is the city population cutoff that we should be targeting with new locations? Personally, I'm looking between 50 and 100,000 people. Two in rural locations that are quite a ways from our headquarters two, three hours away. How would that work with the Regional manager visiting the location each week. Maybe we could do base dining calls with the GM instead of site visits. I would not recommend doing two, three hours away. Until you have five plus locations, you want them as close as possible. So you can be within touch, you can be within touching distance of them and your regional manager can hop around and fill in for people if needs be. But yeah, we do weekly calls with our, the regional manager does weekly calls with the GMs. That's what we do. Currently they do a zoom call number three. Would it be worth it even to set up a new location, remote cities or better to move, just move a state over at that time? Honestly, I think as soon as you move past an hour, hour and a half away, you might as well be on the other side of the country because the amount of work and effort just to get there is almost equivalent. So like if you're an hour and a half, two, three hours away from another location, you might as well literally be on the other side of the country. So in my personal opinion, until you're five plus locations, you should just keep going right next to each other. You're going to be feeding off of each other's leads. You're marketing, you can, you can pay for like a billboard, for example, if you wanted to, on a main drag and split the location between like four or five locations. And we do small, like what I'm doing in Charlotte is doing like three mile radiuses right up against each other. Just going to stack them all. We think we can get about 12 to 15 locations just around Charlotte. You can control the marketing spend, you control the lead flow, you control the brand image, you can control so much more. And better yet, within a 20, 30 minute drive, a regional manager can hop in and help out if someone's sick. If there's a big calamity or big fire happening, that's gonna be way easier to manage. Managing out of state is not easy. You want to have someone local that can hop in if needs be. Do you have a rough idea of how many locations regional manager can manage? If they are close together? Yeah. If they're really close together, I think you could probably get to 10 or 12 if they're in, they're in profit mode. Growth mode are the ones that will take three times as long. They'll take way more effort from the regional manager. And so I personally feel like a, we haven't tested this. This is just my assumption. You could probably do 10 to 12 locations that are in growth mode or you could do six to eight locations that. I'm sorry, you could do 10 to 12 locations that are profit mode. And you could probably only do six to eight locations that are in growth mode because the ones that are in growth mode are going to take way more time and effort. You got usually a newer gm you have. You're hiring a lot of people. You're breaking things. Like there's just way more going on. You're having to do more marketing. In growth mode, you're not marketing. You got the same crew. You have the same trucks and equipment. You usually figured out your shop space. So personally, six to eight, I feel like is pretty manageable in terms of growth. 10 to 12 is probably what you could get away with for profit if they're all in profit mode, especially if they're close by to each other.

I can't remember what the Augusta employee handbook says, but do you know what our policy is on holiday pay in the handbook that we have as a template, there's six days of the year that they work on. Those days they get time and a half. Christmas is on a Sunday this year, so we pay for Monday. No, we only do the six days of just trying to figure it out. Since there's Christmas Eve, Christmas and Christmas, New Year's and New Year's all back to back. We do offer holiday pay. I was just curious on the observance days if we are supposed to pay for that. No. Yes. Just got. You got to look at your employee handbook. We do six days out of the year. I think Christmas Eve and Christmas Day are both on there. I don't remember, but I know there's like Thanksgiving, July 4th.

Couple at Labor Day.

Something else. But there's six of them. And those are the only days that we do that for.

Yeah. Days around that don't matter.

What in your. What if you're in a rural area and not possible to get three to five locations without going two to three hours away? This is a great point. Then I would probably look at seeing if. If you're planning like this is probably Kyle, I'd imagine. But I would personally do is okay, if you can. Three to five locations. If you're looking at two, three hours away, can you go three to five hours away and then cluster five or six. There's like. I would just try to avoid being like two hours here and another two hours away. It's two.

What is Ryan Payne. Oh, okay. And so if you're trying to. If you're in a really, really rural area, I just try to not make it like each one's two hours away. I'd look for, okay, two hours away, there's a market that I could put five locations around. I would personally be looking at that because I know I can hire a regional manager there that they can manage that. What you don't want is the locations. Even a rule, if it's so rule that you gotta travel an hour and a half to two hours between every location. I wouldn't be going to that market. I'd be going for a market that I can. I know I could put three to five locations at least around. And then that way I can. Once I build it, I can then throw a regional manager and they can be within proximity of them all. So that would be my recommendation, is just looking for a spot that says, hey, let's say there's 500, 000 people. I know I can put five to eight locations over the course of time in that area and then hire one regional manager and they take over. And that way if I need to travel two or three hours away, I go one spot and can help manage all of them. So if you. If you were thinking about multiple locations and it's like two hours and I got to drive another two hours and drive another two hours, it's me very hard. And that would be, in my. My opinion, a bad market to get into. Any update on Angie's list? We don't know. They did everything finalized. I signed everything a couple weeks ago. We're just waiting on to them. Literally. Just give me the check mark, say it work that they're set up legally on their back. They move very, very slowly, honestly. So I think Lee was going to check in with them and see any updates, but we signed, everything is all ready to go. I'm thinking this week they'll get it to us, but it has been slower than I expected. Here's another question that just came in one second.

Oh, yeah, got it. Cool.

All right. I think that's it. Yeah. But I'm hoping.

With by this week we should have something from them. They've just been slower than we had expected in terms of executing it. But we've signed everything and everything's ready to roll. So awesome. The next few days as we have training, I might be doing the mastermind, like 30 minutes earlier or even an hour earlier just so I can accommodate the training schedule. But we'll still be doing them. So make sure you submit your questions and hope you all have a fantastic week. Take care.