Mike Minutes Mastermind 12/20/2022

Hello, destination. Hope you're all doing well. Let me go ahead and paste this into the comments and do it on Facebook. Quick announcement. I put it on the Facebook group, but also.

Sorry, I'm just putting this in the Facebook group.

Yeah, so on the Facebook group posted already is Angie, what used to be Angie's List, Home Advisor, etc, they all kind of are combining. So Angie basically saves you from having to sign an annual contract with them, which is the biggest downside, honestly. You have to sign a whole year contract and it's 300 bucks per year. Plus you got to make like confirm you're going to be getting leads the entire year. So all that's waived. So if you go to augustafranchise.com the dashboard, this is our direct contact. If you ever have questions, they have a separate email, augusta lawn care leadsie.com and then also if you want more information, you can check out this flyer, which I'll show you in a second. And then there's going to be a webinar on 11 January, register for that. Click on that. It'll be a zoom call and they can walk you through, you can ask questions, they can show you kind of the whole program, etc. Let me go ahead and show you real quick. Quick. This flyer that they also gave us. It's time. It's already attachment. You can download here on the dashboard, but let me go ahead and just share that with you here. So yeah, this kind of just goes over what they can do in terms of the different accepting of leads, your profile, et cetera, et cetera. So again, this is all available on Daily Dashboard for download from the deals page. So I think that's all I had for announcements. I did send last night the form, the Google form, if you need to come to. If you're wanting to come to conference, you do not need to fill out it again. Fill out the form again if you have already filled it out. Sorry, I didn't make that clear. If you're getting that email, it doesn't necessarily mean you need to fill that form out. If you already filled it out, don't worry about it. But if you are planning to come to conference, I need that form and fill out asap because the rest of the seats are going to get filled up with public people for the weekend. And I want to make sure that we have enough spots for Augusta Lawn Care first and foremost. All right, let's jump into questions.

There are several, I think that came in. Yeah, there you go. Okay, number one, sure you guys can see this good.

Logan, we are planning to get out of fertilizing next year. We only have about 1500 dollars per app on a six app program that we bill out. That's like what $9000 a year. I am willing to give them away to someone as long as they don't offer mowing or property cleanups. And we can work out a referral program which they refer all mowing and cleanup clients to us and we will refer fertilizing to them. I mean with someone tomorrow that fits that criteria well. But I'd like your input on how to give him the information if I decide to go this route. I feel weird about giving customer data without a written agreement, let alone for free. Should we automatically relocate customers into his program or should I just give him the list, write out a customer letter and leave it at that? The second way, honestly is easier. Just like your time. Right. Like if you spend time too much time and energy on this. We're talking about $9,000 and your business is going to do over half a million. Right. So obviously I want to keep good relation with the customers. We're not fertilizing anymore as we mow for most of them. I don't want to spend too much time dealing with this over the spring and winter. Yeah. So I would just try to cut it ties as quickly as possible. We're talking about $9,000. We're talking about probably $3,000 worth of profit. So it's just not worth $3,000 to spend massive amounts of time, energy or feel like you got to do a bunch of work in the spring to like talk to customers about it and explain to them etc. So I just do a letter to the customer saying we're getting out of of spring out of fertilizations. Your fertilizations will now be handled by so and so. We'll continue to do your mowing price or mowing at the same prices etc but all your fertilization will be handled this person. We think this is better best for you as a customer because someone who just focuses on fertilization and we focus on all the other aspects of your property. I would probably have something in writing with one page document a couple sentences that they could sign. The person that is buying that says they will not market to those customers and any sort of work outside of fertilization for those customers will come to you. It'd be very hard to enforce that across their whole business. Like they can't do any lawn care, they can't do Any fertilizer or any lawn fertilization stuff. But for those customers, you could definitely do it, especially for giving it to them. I think anyone in their right mind would take that. Anonymous business bank account question. What happens if I don't. What happens if I don't take draws each year, but I'm taking a small salary? Delayed draws while leaving profits in the business. Pros, cons, draws at later date year, treating the accounts like a savings for now. Yeah. So if you're taking delayed draws as a quote unquote small salary, there's. There's no difference. Right. So if you take a salary, when I say salary, I'm gonna go W2 income. Okay. You are an employee, you're getting, you're getting a W2 when you say draws. Doesn't matter if you're doing it on a schedule or if you do at the end of the year, that's a, that's an owner's distribution. You're gonna be taxed on that like normal. Um, you can't write that off as an expense. So there's no pros or cons doing it later in the year. There's not. I think for some people it is a good habit to just do the draws on a weekly or bi weekly or monthly basis just to get discipline around. Like that money goes to them and they need to live off that sort of thing. Just keep in mind you're gonna have to pay taxes if it's, if you're doing a straight draw, like it's a straight transfer to yourself, you're going to pay taxes on those, take taxes on that at the end of the year. Just keep that in mind. If you're doing W2 income, obviously your payroll tax and income tax etter comes right off the top.

You mentioned multiple times that if you were to start a location or scratch right at the GM at the end of the first year would be at 500k in revenue. Can you break down the method to get 500k so quickly? I'm interested in your monthly marketing spend where your time will be focused. The mindset behind doing what you're doing. Yeah. So first and foremost, I'm not really too concerned. So let's assume I'm not running it as the GM. Okay. So like I'm having a GM do it more. Realistically, you're at $300,000 the first year because your first couple months would be like 5, 10, 18. Those months kill you. Right. You've got to now get to 30, 35, 40, 45. Just to get to 300. So that's like 300k. Your first year is pretty good. With RGMs, what we're doing now. And you'll see in the dot the folder on the academy that Chuck's making. Um, our first year compensation for GMs, we've changed now just the first year to really make it. Where is growth strictly growth dependent? It's like we don't care about profits. Like please just grow this thing. And your salary for year two is dependent on year one's growth.

Because we just want to grow faster. Right? So it's okay. Look, your salary is going to be at X. If you're above 2000-003000-00400,000, 500,000, there's someone just guns for it and got to 500K. That means that they're going to be doing $70,000 a month in revenue by the end of that fall. Right? Because you got to make up for those first few months. So it's very rare that 500k is achievable in the first year if you're just doing recurring services. What is possible though is to get to the clip of 500k. So like getting to 50,000amonth in revenue, that's, that's more possible. But, but with the whole year, if you look at the 12 months, even someone doing 50,000amonth in revenue is probably only going to do about 350 or 400 in revenue. So simply because the first few months of the year just you're growing, you're slowly kind of ramping up. Right? So my marketing spend, like at our locations, I don't want to spend more than 10, 15 grand. It really just depends on how quickly they ramp up with their close ratio. If their close ratio is good, I'm just going to keep feeding it, right? Because I want to grow quickly. But getting 500k in revenue in a calendar year, in the first year, you're looking at, you need to get to 70, 80,000amonth in revenue. I don't think that is what I really want to do. It's too fast of growth for most GMs, so I'm looking at more. Okay, can we, if we can get to 50, that'd be incredible. Like that's the clip that next year would easily be at 500k. Which means I can turn the profit knob right away, right? So as soon as someone's doing 50, 60,000amonth in revenue, I can turn on the profit knob. Because we're starting to hit based upon that clip. That speed of 500 to 600k a year. So.

I'm probably taking a dead horse at this point, but just want to make sure we get things set up right. Our bank is telling us we have to wait a minimum of one year to get credit cards to our new Norman location. That's garbage. You guys are going to Relay bank for all your locations. Are you aren't using any credit, any credit cards, only debit cards. Do you not really care about the bank, the cash back and safety features of the credit card? I'm looking for an online bank that does check checking and credit cards we can get right away. We are currently using credit cards for the more location and get rewards, but the whole system is paying to use without our current bank. I'm just looking at going debit card and gas cards only. Yeah. So that's what we're doing. I, I understand I'm losing 1 1/2 percent, 2% on cash back and rewards and stuff like that. But the fact of the matter is, if you just need a checking account, Relay has been great. If you need credit cards, Capital One is great and you do not need that experience factor for Capital One. We've started many new businesses and locations and just start it directly with. They might have you like a $10,000 limit to get started, but they'll let you get started right away. So like the other day I started a Capital One account and ordered credit cards. Probably took me an hour. Like get it all set up, order a bunch of credit cards for the employees, et cetera. So you don't need that. If you need a credit card, I would do Capital One. One and a half percent cash back, no annual fee. And then if you want to go very simple where everything is through one checking account and just debit cards come off the bottom, I would recommend Relay. We're gonna talk more about a conference and show how it's set up. But it is literally in 30 minutes. You can set up multiple checking accounts, multiple debit cards, and it's just a breeze. It's very, very simple. There's not the bells and whistles. You don't get cash back, you can't do checks. But like, I don't do checks anyways. I mean, like, you can't, you can't write out checks. You can deposit, like do mobile deposits and cash checks. That way.

We'Ve had a decent profit year, but not great. Not great, but not super great either. Where would you be putting that money? Or would it be better to just keep, keep it in the bank account for taxes. We could siphon off more money from the more location and put it into the normal location. But need your thoughts. Or I could just take it as an owner's draw and keep it for the third location we start. We don't necessarily need to buy anything else this year. We are basically set. Yeah, I'd probably just pay taxes on it then. If you don't need anything and you already have everything you need for your second location, I would just like just turn on the cash cat. Like there's no one, no one's going to be complaining about having cash this coming year. 2023, cash will be king. So keep the cash. I don't think you need to spend it. If you had like a truck, truck that you needed in the spring, maybe you buy it now so you can write it off as Section 179. But it doesn't sound like you have a ton of profit. So like just, just keep, don't buy too much because next year if you turn the profit knob on, you're going to need expenses. Right. You're starting your second location though, so that should help. Like you'll have plenty of expenses on that side of things.

But I would just don't, don't feel any pressure to buy things right now because everything you're going to buy truck wise and equipment wise is going to go down in value over the next six months, like massively. Not just because it's regular depreciation but just like inflation is going down very quickly. You look at like the cost of used vehicles right now. Everything is going down in the month of November. Used vehicle prices went down 11%. So just like the same way we went up really fast and like doubled and it's now coming down very quickly. So over the next six to 12 months, you'll just see here, I'll show this to you, see if I can get the most recent one. Used car prices I need.

See this isn't, this is probably not going to be recent. Yeah, this isn't the most recent one. I'm trying to get an image for you.

Here we go. So this is. I'll show you this, this is not the most recent but it's close enough. Let's see if I can pull this up for you. Here we go.

Boom. Stop screen. Present share screen window. Chrome tab.

Is it? There you go. So yeah, you got these card prices to just jumped massively for this past little bit. I think this is 2021, honestly. It went up again. Yeah, one second. This is not right. That's just 20. 21. Yeah, it's 2020. Oh, mercy goodness. Way higher than that. I was gonna say.

Used car prices chart.

Okay. All of that to say. All of us to say. It is coming down quickly. Um, so I would. I would just hold off. Cash is going to be king. You'll be able to buy trucks for, in my opinion, 20, 30% less in 12 months. So I'd be holding off of that. Just pay your taxes on whatever it is. If we sign up with Angie's, will, the. Will we get the lead or Command center, you could set it up either way, however you would want. If they're managing your email inbox, you could just have it go to your email and they could. They would manage it for you, obviously, go through your email. Email twice a day. Or you could have it go directly to you. I think they have an app where you could, you know, assign them. You could probably, literally, honestly, if you're doing. If you. You could probably take a screenshot of it and then just send it on your Connect Team to Command center if you're wanting to do it through the app. Or you could just have it go directly your email, and then if they're handling your email at Command center, they would see it then, obviously. So I would. If I. If it was me, I would probably do it where it just goes to my email and I'll let Command center handle it. And then if.

If you wanted to see them, especially at the beginning of the program, have it go through the app, screenshot it, send it on Connect Team and say, hey, there's a new lead. Can you follow up on it and just send it through Connecting?

All right, everyone, hope you have a very fantastic rest of your week and we'll see you tomorrow. Take care.