Mike Minutes Mastermind 12/30/2024

Hello everyone. Happy Monday. Let's get this party started. Welcome to the Mike minutes Mastermind.

Hope everyone had a fantastic weekend. I am beyond excited to get this week completed. So we have these holidays, midweek holidays. What are we doing folks? Midweek holidays. All right, let's go. Present.

Share screen.

Boom. All right.

First one up.

Is from Landon Smith, Tallahassee, Florida. One second. Let me get my laptop.

Much better. Okay. What is your thought on doing contracts for most throughout the year, including winter services? My thought is that we still do them based on amount of service requested each month instead of level billing. Other services such as pine straw and mulch can be quoted separately. I'm thinking to do this because of all the cancellations we received throughout the year, but most coming through this winter. Looking back on this year and last couple, our retention is around 67% or less each year.

I believe based on feedback. We have had many cancellations for reasons beyond our control and many canceling because they are not committed to receiving service for a long period of time.

Just keep in mind if they, if they intend to cancel soon and you have a 12 month agreement, you're actually going to reduce the amount of sign ups you have. So just keep that in mind while in growth. I understand how this can inhibit growth, but I, I think plugging the whole huge hole of cancellation is one of my biggest hindrances to growth and a sustainable business. Yes, I agree.

100%, especially once you're in profit mode that switching to some sort of level billing or more frequent billing, et cetera can certainly help. Well, frequent billing helps cash flow. It doesn't help with churn. But.

Having some sort of level billing or contract is helpful 100%.

It's just a matter of do you have enough leads coming in to be able to sustain that and to be able to what Churn still does happen. Do you have enough leads coming in to fill those leads that are leaving question? Do you think this could be a fix to the issue? It's definitely helpful. It just. It simply comes down to do you have enough leads coming in that are willing to accept that that new price proposal, a new structure that will replace the. The natural turn that will happen anyways. So it's very natural to have like you have a 33% average. That's a three year annual customer lifespan. That's not crazy bad.

You know, I've seen some of the best be at 20 to 25% simply because it's like people move and if you're in a market that's Growing quickly, people probably move every six to seven years on average in markets that are really established, the population is declining. There's not a lot of building happening. You're looking more around 10 to 11 years. Usually people are moving every 10 to 11 years. So you know, then you're more like a 10, 10% baked in attrition rate. So.

I definitely think that you, you can reduce this. I also think that when you're in growth mode, you'll burn. What kind of happens is you're, you're spending money on leads and you're getting all these leads coming in. You're burning off 15, 20% of them that are just customers. You don't want customers that do just come, they want a couple months of service and they're out, you're going to burn them off. And then over time what sticks, the other 50, 60% of people stick and they become your core audience, your core customer base. And that's why the first three years is like you're throwing as much against the wall. You're getting more leads, you're spending money on ads, you're trying to grow to 500,000 is because yes, you're going to have that turn off, but then once you stop marketing and then you keep customers that have stayed for a long time. So.

Do I think that putting someone on a contract is going to help? Initially, yes, because what's going to happen is people who are only going to use you for six months just won't use your service right. They'll be like, I'm only here for six months or like I only, I don't, I don't want 12 months service, etc. So assuming that you don't need those leads to stay busy, then yes, I would give a enthusiastic thumbs up. What are your thoughts on this in growth mode? It's going to inhibit your growth mode dramatically. It'll keep you from hitting capacity. And that's why I would only do this sort of decision at capacity. And once either like at capacity being that like you're probably going to do this alongside going into profit mode and raising prices because it's going to inhibit growth. So again, I'm a big fan of grow to capacity and ideally grow past 500,000, mostly due to the fact that once you turn off the leads, there are going to be a core demographic of people, a core segment of your audience, your customer base that does stick and does keep your services long term and doesn't churn out. And as long as you can get to that point, then have enough lead flow coming in naturally or organically. And usually you only need about 40 to 50 leads a month to do that depending on how big you get. But you usually need about that number of leads. Just replace your churn every single year.

When would be a good time to renew the contract with customers? If we go this route? March or April? Yeah, I would try to renew the contract right in the middle of spring rush after you've come for service. So I would probably even do a little bit later like May or April. April, May. Because what I want is I've already showed up to their property, I've already started service and now it's like oh by the way, let's go ahead and get that contract renewed. I don't want that to be like after an off season where they haven't seen me much. They're questioning whether or not they want one to services. They're questioning why they're paying you. Because remember that dollar amount per month that they're going to pay during the off season is going to be inflated compared to what it would be otherwise.

So yeah, just keep that in mind because like for example, if you do two winter services visits it might be 120 bucks but if you're doing level billing for the whole year it might be 160 or 180 for example because you got to bake in the fact that you're going to do four or five mo's during spring rush per month. So just keep that in mind. Does kind of make the blow a little bit more. But again I'm not opposed to this. It will absolutely help with churn because you're locking everyone into at least one year term.

So by doing that you essentially will cut your churn usually in half, but you're also going to usually cut your leads significantly down and increase the the amount of friction required to sign up. Right. So it's just like which one do you want? I would, I. That's why I typically see this action being much more correlative with being in profit mode, not in growth mode. Because in growth mode we're trying to get to capacity and the loss of profit in not being at capacity is far greater than the churn that is being caused by getting so many leads coming in.

Mr. Anonymous hi Mike, this is a copilot question. What are your thoughts integrating QuickBooks and Copilot? We are having issues with receiving payments as we use 99% E transfers here in Canada and there is no way to see bank transactions in copilot like in QuickBooks. Is there a way to sync bank accounts similar to cookbooks or will this feature be available in the future? Sync bank accounts how would you suggest doing the receiving in Copilot for E transfers? I find there's a lot of room for human error without matching transactions. Talk to atc. I know there's a lot of Canadian members and they probably know this way better than I do in terms of E transfers. So it's not like ach, it's different.

So feel free to talk with them. In terms of syncing with QuickBooks within a matter of next few weeks.

Maybe next week but like probably a few weeks more. Realistically the one way sync with copilot or with QuickBooks will be happening where basically everything from Copilot will go into QuickBooks. That might be a helpful time to actually integrate the two if you already are using QuickBooks and you're used of it. But I don't want to make any promises in terms of how that how your each the E transfers work because I have not tested that. So talk to ATC and then I would also say keep, keep stay in tune throughout January. Eventually we'll announce it like right now it's actually I think it's live for everyone that's integrating. I actually think it's already happening in beta for new integrations with QuickBooks but just a one way sync instead of the usual two way sync. But I don't know if that'll actually solve what you're asking here in terms of the E transfers for Canada, but talk to them at atc. I know there's a lot of other members and I just don't know that workflow. What's the most optimized way to do that using stripe?

Excuse me Mr. Anonymous, you've mentioned 15 to 20 churn is normal just for customers, moving, dying, etc. Your recent post about 170 locations got me thinking. Out of curiosity, what's the churn for Augusta franchisees killing a business or closing up shop? How's it compared to industry average? Yeah so our our average is a little bit higher. So if you look at like I compare a lot to anyhow fitness because I know all their back end metrics so we're a little bit higher than them. They got brutalized during COVID I think it was like almost 25% of our clubs at Inhabit Fitness closed down over 2020 21, 2022 and 2023 so they've had a big churn there. In terms of Augusta we had quite a bit of Churn this past year at the solo operator level. And so I expect that to go down dramatically next year and be significantly less than industry normal going forward. And so ultimately you can increase. So, so for example, the same way we just talked about like you can increase dramatically decrease your churn by having contracts and I. E. Creating more friction of onboarding a new customer by having a 12 month agreement. The same thing is true in terms of franchise. By simply increasing the amount of filters and the amount of investment expectations that we require people to have coming in immediately just completely changes the way our, you know, churn looks like. And so do I think we can get it down to 3 or 2, 3% annually? Yes, that's like a.23%.

Monthly which is super, super low. Like we're. My lowest churn I've ever seen in any of my businesses is 1% a month.

And that's at.

Lawn care web design and home service web design. The franchise is way better than that though because it's simply again you have far more stakes involved. You have trucks that are painted, you're part of the brand, you're using all of the uniforms, et cetera. So how much someone invests in upfront into any product or service many times is the actual distinguishing factor of what churn looks like. So for example, at Copilot, I can track this very easily because people who join the, the, the starter program, they churned way more than people who join at enterprise level. Because enterprise level you're usually a larger company, you're investing more, you have more employees, you get better integrated in the software, you actually start using automation, you start using deposit thresholds, you start using the more complicated features. And so.

Yeah, I would say like we, we hit a, a pretty big bump early this year with, with churning out a lot of the solo operator models. And it's the thing that like the Franchise Advisory Council had been putting pressure on me like two years ago to really start enforcing this because they wanted from an owner's perspective more about the territories being much more defined and having people enough skin in the game and, and that was super valid. I always wanted to kind of go for that underdog someone just getting started, want to be scrappy. And there certainly have been and we, and I don't want to diminish the fact that there are solo operators, a bunch of them converted this year also to becoming growth models. So, so shout out to all of them. And so, but two years ago when they made, when Francis Advisory Council voted on that, wanted that done, we made that decision and now are completely. Have now phased out the solo operator model. So I still think there'll be a little bit of churn as solo operators, you know, they just have a higher turn rate. They just do. They're struggling.

Due to the fact that they don't have the money to go spend on marketing. They have to go do boots on the ground. If they don't have that skill, it's a very difficult thing for us to help them with besides just trying to coach and help. But you, like, I can't go knock on the doors for them. I can't be the one that's, like, in front of the customer and doing phone calls and closing deals with them, et cetera. So that's been a little bit difficult. But I think we can get down to, like, where we have, like, a 0.3 to 0.4% monthly churn. I think that would be like, our kind of target that we try receiving for. I think it'll be this year was probably our worst. And like, next year will be slightly because, like, some more solo operators, just because of the metrics, because of the numbers will probably be a little bit higher. But there'll be something that we really start to zero in on also. Once the value of the territories continually go up, it's also sticky because you don't want to just quit. You'd rather sell the location, knowing that, okay, I bought this thing for 10 or 15,000. It's now worth 25 or 30,000, just the license itself. And so you're more inclined to go, like, let's go try to find a buyer. So, like, there are. There are people whose initial fee. Their initial fee, like their license is now worth five to six times what it was when they first joined. So it's just a matter of, you know, that that is certainly something that will keep them from ever quitting. They'd rather sell their location. So. Because, like, life happens. Like, it's. It's, you know, for the first couple years, I've got, like, no one has ever, you know, failed. No one has ever even sold. And then it's like, oh, like, life happens. Like people get kids or like, they. Their goals change. Like, I'd rather get a 9 to 5 or, you know, move, etc. So the goal, though, is that, like, when those things happen, if they have enough capital on hand that they've been able to get past 500,000, they should be able to throw that thing into profit mode and get a general manager. And that makes it very Very much less churn knowing that if you that location be run passively. And so when that's been like my focus and will continue to be for the next 12, 24 months is how to get people over 500,000 as fast as possible. Because I know that if they pass that marker and then life happens, they usually actually have this great default which is, okay, great, I'm going to stop growing. I throw this thing into profit mode, raise prices, get a general manager in place and pay them well, and the location will get through that rough patch of six to 12 months when they're going through a family emergency or a health issue, etc. So.

Mr. Anonymous, is it normal to jump up in number of mows and dwindle down during the season? This year we are at 150mos at our peak and have slowly dwindled down to around 80 mosquitoes that will renew this next season. Seems like we have a lot of work to do in the upfront to pick up customers only for them to cancel at the end of the season. Our quality is not the problem as typically people say they are moving or just like to cancel as they do it themselves. Yeah, so I think, yeah, this is normal because everyone needs the service at the beginning of the year and this is when everyone locks in their service provider for the remainder of the year. That being said, what I would say is trying to change your advertising strategy would be helpful because everyone that joins your mowing service from summer and beyond, like fall, they are switching providers. So instead of pitching like, you know, save time on the weekend, you're gonna be switching after spring rush to much more of a matter of like, here's what makes us different than everyone else. And so customers can only come from two places. One, they've never done their lawn before and they are deciding to use Augusta Lawn Care for the very first time, their first service provider. And then the second person is gonna be the one that is leaving another provider because they're unsatisfied and they're coming to Augusta. The vast majority of people that make a decision to.

Case number one, those people that are the very first time deciding to use a lawn care service, those come all in the spring because they almost all of them, because they don't just randomly wake up in the middle of summer like, I don't want to mow the grass anymore, they usually have had an off season or that their mower's not working, they don't want to take it in and spend $300 on getting a new one and et cetera, et cetera, et cetera. So a lot of your newbies come in the spring, but I would recommend after spring rush, you switch your whole marketing, even the first three to four weeks of spring. After that, you switch your marketing to much more matter of like them versus us. Because the vast majority of your customers will come from the person leaving another service. And so if you're marketing to them as like, save time on the weekends, they're already thinking, I already have that. Like, I'm not doing my lawn. And so this is when you speak to like, we answer our phone 24 7. If we, if we don't answer your phone call, we'll give you your first service for free. Like, these are the type of things you want to revolve around price. Check your landscaper, click here and get an instant quote. These are the type of things that are going to get their attention later in the year than compared to the beginning. So I would really zero in on how are you marketing. And then I would also think about doing more of that towards your database to people who are not in mowing service.

So I would keep that in mind. I would also really, really hone in on targeting people that have declined estimates for mowing in the past. Because if they've declined an estimate for mowing in the past, it means they've had a need for service in the past and they likely went with another provider because they're not going to go just to randomly decide to do it themselves after declining your estimate. Once they decline, though, they still need service. They went and used another provider that they're a prime target for going after and being like, hey.

Again, here's us versus them. And I'm not. I wouldn't do it in a targeted way as much as more of a mass way of like, hey, are you tired of your landscape? We're doing these things, here's how we're different, etc. Simply because that's. That's the demographic of people that's going to join after the spring. Word of encouragement. Okay, let's go. Thank you for everything you do. We all appreciate it. It's one of the main reasons why we signed up. Even those who have left and will leave in the future, all those are not part of August Nation. You are still helping to change the level of professionalism in the fan. Sincerely not a fan. Okay. Thank you. I appreciate it. Cool. Yeah, man, I can't wait till conference. I'm so bad at holding stuff back in terms of secrets. So I'M just gonna shut up. That's my current mode of operation. Because there's some cool stuff I'm looking forward to sharing with everyone. Okay. Oh, we had a question come in.

Congrats on engagement. I have one boring printing question. Is she shorter than you? I guess you'll have to see at conference. Let's go.

All right, everyone. Have a fantastic Monday, December 30th. Finish this week strong. Don't like what? Let one day in the middle week ruin an entire week. It's a great week to be able to, you know, look back on 2024 and look forward to 2025. And I encourage you, whatever worked in 2024, double down on it and whatever held you back, like, cut it out as quickly as possible. I'm not a huge fan of New Year's resolutions, but it's definitely a great time to be reflective. And, you know, there's been several owners, I think 1, 2, 3, 4, 5 in the past few days have messaged me of stuff they're doing around their health.

One is trying to lose weight. I think a lot of us are trying to lose weight. And someone's one of the ones trying to improve their diet. Another one was trying to give up vaping. Another one was trying to help. They had some marriage issues. And so now they're working through it and they're doing a great job. They're seeing, I think, a therapist. So congrats to them. And so, yeah, like, this is a great time to look back at 2024, see what worked, analyze your marketing, analyze what worked well with finding new employees, what worked well in terms of networking with other owners. And that's why I like to have a conference at the beginning of the year. It's just a great time to be reflective and be able to look forward to what's happening in 2025. And one quick thing, if I could have from everyone, I made a post on the Facebook group yesterday. And what I'm looking for is several case studies and testimonials about Christmas lights and winter services. Those are two of the five tracks we have at Augusta Lawn Care that we focused on more this year. I'm going to be doing more on those this coming year, but also looking at the other tracks. But those two specifically, I want to include quite a bit more of in training about winter services and about Christmas lights specifically. And so I know Brian Conner and Jason Murphy post in there what this past year was able to do. So, like, for Brian Conner, I think he was able to have higher keep 12 people busy instead of 6 people busy out in the field. Awesome. And Jason Murphy talked about how over the course of a few years they were able to go from spending a hundred thousand dollars in their off season and like burning cash to actually making good money on Christmas lights. So if you have anything like that, if you could just comment on that post, I will just screenshot it or I'll use as a quote in training. I might even use a couple of them at conference when I'm going over kind of year recap for Augustination. So if you could share that, that'd be excellent.

Mostly because the vast majority of people who do. Back to the question that happened earlier about people who don't make it inside of Augusta, even it's their first off season, that just obliterates them. It happened mostly with the solo operators because they run out of cash. And this is why Q4 collapse is so important. Because especially when you have low cash, if you have a quarter where you lose money, it just completely can wipe you out. And so what I want to make sure is that during training I do whatever I can do possible to convince people to choose a track and like really apply it. Because most time people join and they're like, oh like this is gonna be great. I'll just do simple services and I won't need to think about Q4 collapse. And I'm like, look, you have four months of snow and cold and no growth. We've got to figure out a winter track and like apply yourself to it now like in January, February, March, April, prior to the year coming up and really figure that out. So I really want to use some case studies and examp from owners. So if you, if you've used winter services this past year and really increased the amount of recurring work that you've had this year, even if it's gone from like five grand to ten grand of recurring winter services, like I want to hear that. Please, please, please. I need, I need these captions. I want to just drown people in evidence that this is.

Not going to be an instant fix. It's going to take you two or three off seasons to nail down Christmas lights to nail enough of those recurring winter services to actually get it sticky where 70, 80% of customers are staying on. It's going to take you a while, but I want to see just what can do. So if you can make that post that be super beneficial to Augusta Nation and to new owners because I just consistently seen that being the Achilles heel is people are super hyped they grow, like, massive during spring and summer, and then they run out of cash during Q4 and their first off season. And so if you all could help me with that, I'd really appreciate it. I'll put a little peer pressure on new owners coming in, and I hope you all have a fantastic rest of your Monday. We'll talk to you tomorrow. Take care.