MikeMinute: Lets Talk LAWN CARE Business - Live Q&A

Live here in the studio. I have a call coming up here in about 15, 20 minutes. Figured I would try to answer some questions. So if you're here live, go ahead and answer any questions down below. Until then, I will give you some updates and stuff that's going on in my world, if I can set this up correctly. There you go.

I was in a false that.

I've been up to. So this morning, met with the architect that's going to be building our new headquarters. That was kind of fun. It's freezing cold. And then what else is happening is over this past week, we had a crazy amount of stuff happening at Command Center. Just training people. But then also we had our phone system. We're switching our phone system, and it's been very, very annoying, taking a lot of work because we randomly have been missing phone calls and we can't track down why exactly. And we feel like it's just we overusing the current system that we have. And we're using Grasshopper, which, by the way, if you're looking for a VoIP phone, grasshopper is great when you have one or two phone lines, but when you have 50, which we have now almost 50 phone lines, I think it's. Something's messed up so very. Like, the weekend was a bit stressful because I hate missing phone calls and I hate when the franchisees are missing phone calls. And it's our fault at Command Center. So.

We are changing that right now over to Ringcentral. So we looked at, like, five or six different options in terms of different softwares, and we're going with Ringcentral. Honestly, I haven't been super impressed with their customer service, but what's good about them is they're a publicly traded company and they're built for, like, massive phone centers and call centers. And so I'm hoping that our use case will be a lot better with them versus Grasshopper, which is really good for, like, if you have two or three phone lines, maybe, or even one, but definitely, definitely not for, you know, 50 or more. And we'll be having more and more that we're adding. So just. That's been a bit of a pain in the neck. I hate letting down the franchisees. It's very annoying. And last week a couple of them told me about it being down and. Or not down, but, like, we missed like, four, four, possibly even five phone calls, and that was horrible. So welcome everyone that's hopped on here. Go ahead and ask any questions you might have about lawn care, landscaping. I got 20 minutes until I got hop on my next phone call here. I'm trying to get better about hopping on here live to answer questions as much as possible in between meetings and things like that. So sorry for bad camera angles, bad audio, but hopefully it's helpful. Feel free to answer ask any questions in the chat.

That you might have about lawn care, landscaping or business related topics. But yeah, that's kind of what's been going on for me is we've been building the new headquarters here. Actually, you know, I'll show you, I'll show you some drawings of reset. I know for those of you have followed me for the last few weeks and at conference you heard me talk about make sure I don't show you all my bank info.

This is a sketch that I made on the weekend of the new facility we're trying to build about like mental health and everything like that. So I did that. I'm very proud of my drawing actually. I'm not super artistic but I can do technical drawings decently. So trying to make it to scale and that was not who I met the architect about today. Today I met the architect about headquarters for Augusta, which is five acres. It's industrial land. It is a little bit scary spending that much money honestly on a facility, a big piece of real estate and a building. But we need it and it's going to be really good for the franchisees when they're training. It'd be much better when they can see what's going on in the local shop as they're listening to like on the second story is where we're going to have the training for the franchisees. And instead of just talking about like scheduling, they'll be able to like look out the window and see it happening. Like see the guys pulling in, having systems looking at their phones to get their schedule and their route. So looking forward to that. It's obviously a big project because we're building it and I want to stay there for the next five years. Well, in five years we're going to have 500 franchisees and so trying to build it for that but then obviously keep it within budget and all the rest of it's been interesting. So today was working with, I was working with the architect just in terms of really a very initial parts of like we're in Washington state in Whatcom county where literally they're a bunch of tree huggers and bless their heart, it takes forever to get permits and a lot of money. So literally like $75,000 is the design, just the design phase. To get permits and make sure I can build $75,000. It's crazy. And literally that's like, no, nothing is built for that. It's literally just being like, okay, yes, this is a good piece of land and you have plans and you got permits and you can go. Like, it's crazy. So process. Good learning for me. But again, definitely something that I very much like looking at cash flows and want to build the business. This is a whole different ball game because you got banks, you got contractors, and it's a lot of money. Like, that whole project will be almost $2 million, which in some of your areas seems like, why wouldn't you just buy an existing location? And that makes a lot of sense. But in our area, the 500,000 we're paying for five acres of industrial land is a really good deal. And we can't find land where we can have both a commercial office, where we're gonna have command center and training facility, which is basically commercial area for the public. And you gotta have an area where I can have trucks and machines and like 20 dirty trucks coming in from lawn care every day from the local shop. So it's kind of a tough piece of land to find. I think we found the right one and I'm hoping that that project goes to completion. But right now it's just frustrating dealing with architects, the county, which is a bunch of tree huggers, like I said. All right, couple questions rolling in. Hi, Mike. When is the best time to start marketing for upcoming mowing season? I always say two to three weeks before the grass really starts growing and you start mowing. Obviously have more money. The sooner you can do that, the better. Just realize that you're going to be investing in branding and not in direct sales. Direct sales is when someone sees your ad, they pick up the phone, they call and they ask for an estimate. Branding is going to be just brand awareness. They see your name, you can do that. You're not going to get as good a result until two to three weeks before the mowing season. So, for example, we start mowing in the first part of March. And so we start really getting serious middle of February. If we're trying to grow. Oh, that's when we're doing ads. What revenue point do you hire an office assistant? This is kind of the whole premise behind working the field, then becoming an office manager, then becoming an estimator. So I would say that when you start needing to be mostly doing estimates throughout your day, that's when you start hiring people for the office in my opinion, you work in the field as much as you can. And when you become kind of the office manager, you do all that stuff, you move in that role, you're now no longer in the field. Usually that's when you're like four to six employees. And then eventually so much of your time is being taken up with the estimates and you need to be doing that. You maybe have 5, 10, 15 in a day. And you can't do all of that with the billing and answering the phone, emails and all the rest of it. That's when you would hire someone for your office and you can focus more on the sales part of things, the estimates. Let's see here. Next question. Working on profit first right now, what would you say should a growing company's profit percentage be also what percentage should go to owners pay? This is a question that is very difficult to answer. It's gonna depend mostly on your circumstance, how much you want to grow, if you want to grow really, really fast and you don't need a lot of money. Personally, I'd be pumping the money back into the business. And as long as you can find a good place to market and you're confident in your ROI and your customer acquisition cost, I just keep pumping money into marketing, honestly. But then, that being said, if you want to take money out, living expenses, et cetera, that's going to be there as well, right? So, you know what's weird is I can't see. See, I'm looking at my other screen, it looks different. But anyways, let's see here. Hi, Mike. What is Augusta's plan for when mowing becomes automated? If people start buying robots to cut their lawn instead of hiring a company, then where does that leave companies like Augusta? Alright, so I've talked about this before. I like talking about it, so I'll talk about it again. And that is I'm looking forward to the day when mowing becomes automated because it is our least profitable service. Even with you, when you look at mowing service, like when you say mowing service, the actual mowing part, that is using a mower to go back and forth on a lawn, is our least profitable part. Because yes, a robot can do it. A robot cannot edge, blow, trim bushes, pull weeds, like that level of sophistication is years down the road. So in my opinion, I'm really looking forward to the mowing part being robotized because that is going to give me the ability to plug the holes in the biggest issues in our business, which is finding great labor. So if I'm able to robotize the least profitable part of my business that takes labor because the reason I said it's most least profitable is because I'm thinking, you know, eight or $10,000 mower and mowing the lawn. But like even for someone who has a robot, you still got to edge, blow, you got to pull the weeds, you got trim the bushes, got installed the mulch. That's where you make your money on a customer. And if they're going to go direct to consumer with these robots, I'd be thrilled. Because every time I see a robot on someone's lawn, I know that that person doesn't want to mow their lawn. Which means if they don't want to mow their lawn, they also don't want to trim their bushes, install their mulch, pull their weeds, anything like that. And that's a great indicator that that person is a protective prospective client. And again, I'm able to do what a robot can't do and those services are the high profit margin services. So I'm actually a really big fan of robotized mowers and I'm very much looking forward to it because it's going to help us in finding great labor. Sorry, it's going to help us in the biggest issue in our industry which is finding good labor. Okay, let's see here. Questions, questions, questions. What type of truck is the best for long care, four wheel drive or two wheel drive for a daily work truck? Honestly, if you don't go off of road, go with a two wheel drive, it's cheaper, you can still pull heavy weight. If you're going to go off road or do construction projects, you might want a four wheel drive.

Hi Mike, how do you handle certain clients and older clients who aren't comfortable with technology and having credit cards on file? Honestly, the beautiful thing, or not beautiful, like there's Nothing good about 2020 or Covid. But the good thing was is that a lot of these older clients had to adapt and start using credit cards because they couldn't go to the store anymore. So fortunately, I think this is going to become less and less as a big catalyst for change in our industry in terms of our target market. That older clientele adopting these new technologies, in terms of someone that has is having an issue with it. We currently do not require credit cards on file. Some of our franchisees do. That's up to them. We have an automation for that. However, we don't require it mostly because we're in a good spot in terms of cash flow. And we don't necessarily need the money to be coming in the day of. And so they could pay with check if they wanted to. But as long as you have a system for the, you know, the sending out those invoices, that's the most important part. So you're not wasting time. Jack Decker. Hi Mike, Love all your content. Working on adding a second mowing crew this spring. Trying to break into new markets and create a route from here while growing the markets I am in now. Any advice? I would say make sure you double down. Don't just get two routes in one. Like go get three or four routes in one area, then expand. Route density is so important and cutting back on your windshield time is so, so important. I would say double down. Focus your marketing strategy. People start building their territory out way too quickly. Oh, I got three or four trucks. I need to go to another city or I need to go like 10 miles away to a different town. Like, are you kidding me? You want to be able to put all of your marketing efforts, you want all your trucks going on in a smaller location because people inside of the area are now going to think that you're bigger. They're going to see your trucks all over the place when really you just have a few trucks. But they're in a very centralized and targeted area. But definitely your brand penetration and your marketing much better in a smaller territory. All right.

Augusta Long Care for Southside. How do you think about battery operated equipment as far as not needing gas and paying for itself?

Honestly, gas inside of a two cycle engine or like a trimmer, for example, like you take, it takes a lot of gas to pay for even one battery. And this is when it comes, people start talking about batteries and the cost versus fuel. I agree with it. But think about this. If you lost one battery like the cot, the amount of fuel you could have for that piece of equipment is literally like probably a year's worth of fuel or more. If you lost a battery or dropped a battery and it broke, broke or something crazy, right? So I'm not really a big fan of using that as the argument. My big argument for battery operated is wear and tear on the body cut. So much lighter for trimming bushes, edging weed, whacking, things like that. So. Oh, by the way, while everyone's on here, if you are on Clubhouse and if you don't know what Clubhouse is, it's a new app where basically you can just talk via audio. And it's kind of like, it's kind of like zoom, but no Video, it's all audio, kind of like on your phone. If you have clubhouse, make sure you follow me because I'm going to try to really get on there more and it's going to be very much like one on one, be able to talk to me. And I'd really like to try that out. There's no one else in the lawn care community doing it in clubhouse right now. So if you have clubhouse or you know, anyone who has clubhouse and they're in the lawn care landscape community, I want to be able to where I can hop on there because like I can't do this when I'm driving simply because it needs an Internet connection that's a lot stronger. So I want to be able to become, you know, fill in my 5 and 10 minute gaps, being able to give some content out when people have questions for free. So if you have clubhouse or you, you know, another landscape that has clubhouse, please follow me. I want to like, I might even try it tonight, like hop on there, just like start a room and basically if you don't know what clubhouse is, you go in there and I can, I can talk to you, you can talk to me and just audio of people in the room. I want to try that out. So if you have clubhouse, make sure you follow me. I'm really looking forward to using that. All right, I got a couple more minutes here and I got to hop off on a call.

1099 are part time for second year landscaping. Again, you got to be careful in these 1099 things. I know there's a few people on YouTube saying you should 1099 everyone legally. You got to make sure you know what you're doing. Talk to your accountant, talk to an attorney. But for most of us, if we, if you have your own truck, if you make guys wear uniforms, if you make them clock in and out, you can't do 1099 in most states. So this whole 1099 thing is being a good business strategy. Like please double think I listened to some tax advice from a YouTuber the other day. My goodness, it was illegal. So please just, you know, do what's right. Mo Dayton, how are your thoughts on instant mowing prices available? Potential clients via website based on lot size. For example, for for instance light client provides name, address, content info and gets an instant price. Mo Dayton, I have tried this out on several different softwares including several. I'll say that I don't want to throw anyone in the bus and I believe this is the way of the future. Currently, right now we still send estimators to our job sites for mowing, even. Even if it's drive by estimate, because we still have not found anything that's better than that. The reason is several things. I get speed, but at the end of the day, if I can get 20 or 30 drive by estimates for mowing done in one day, it basically means the cost of having an estimator doing a drive by estimate is like five bucks. We charge estimate fees of $80, so I can recoup that very quickly. Also, when the estimator is there, they can look for need for bark mulch or for trimming of bushes or overflowing gutters or a lot of other service that we can upsell that are actually where our margins at. Third thing is, when you're on P4P, you're paying by performance to your employees. They are not going to appreciate if you put $30 on lawn mowing and they show up and it's a foot tall and it's going to take them five hours. You're either a going to have a very uncomfortable conversation with the owner or two, your employees are going to be very unhappy with you because it takes took so long and they can't make any extra money on performance dollars. Or three, you're gonna have to add friction to the sales process by having a bunch of verbiage or even a few lines of verbiage. It says basically this estimate is a random guess and it could literally change the moment we show up at your property. So that's really the only way, in my opinion to make it work is the last part. And if I'm gonna do either of those other things. Oh, Kevin. Kevin Ferber. I got your messenger at. When you get a minute, shoot me an invite to Clubhouse. Yeah, so if you are on Clubhouse, you are to get on there. You need someone else to invite you. So again, you might want to like pair up with someone who's got it or whatever someone in here has. Clubhouse. I have Clubhouse right now. Just search Mike Andy's. When you're in there, I'll make sure I invite you. Kevin is one of our franchisees. I will let you in once I get off of this next call. I'll make sure you get in there because you're in my contact so I'm able to allow you into the group. But yeah, definitely, if you're on Clubhouse, please follow me on there. I want to do that more often because. Because this is a little harder for me to do. Cause I gotta make sure I'm In a quiet place, I have good wifi. Whereas, like, if I'm driving, if I'm in between meetings, I can hop onto Clubhouse and we can have a really good talk. And I can actually bring you in. Like, it's kinda like Zoom. I can bring you in, but again, you don't have to be on Zoom and have like a video in your truck. You can literally just be on your phone. So it's great. Okay, a couple more here. Let's see here. Quick question. What percentage of revenue do you think a business should spend? Spend on advertising in order to grow. Again, it's going to depend on your size, your business. Like, If I said 10% and you're doing a million dollars in revenue, that's a ton of money. 100 grand to spend on ads. If I said 10% and you're 3,000, that's only $300. It's about size, your business and how big do you want the business to grow and how fast. So I would be looking more at your customer acquisition cost and then figuring out how much you can afford to spend. Like, if you have a good customer acquisition cost, you should be spending all the money you possibly can in your business, in my opinion. Absolutely.

We did this at conference. We went over the numbers of a small business and the ROI compared to the stock market or real estate. And if you have your customer acquisition cost down to a science, your small business is one of the best performing asset classes you can have. So figure that part out and then start thinking about how big you want to grow and what that ROI is. Oh, thanks, Kevin from Ridgefield. This. Yeah, we just got this look. We just got these done. The other embroidered. These are command center uniforms. Now. Vest, polo. Looks pretty sharp. They have dress shirts, too. A couple more. I got LLC or S Corp. A quick, quick answer that Michael is llc to get started. S Corp. Once you have a significant profit, what do you think is the threshold where net margins go from 35% to 10%, for example? 5. Okay, so I would say to answer Your question directly, 35% is like, if you're doing under 200,000 on annual revenue, you should probably be around 35%. I'm just making these numbers up. If you're at 10%, you should be like 2 million-plus in my opinion.

I think at a million dollars, you should be doing 20%. That's a great business. 15% is a good business in my opinion. Jobber Service Autopilot. If you're at 200,000, I would stick with Jobber if you're going to go a lot bigger, I'd switch to service autopilot. How do you get W2 set up and what is a typical cost? It doesn't cost a lot to get a W2 set up. You know, get Gusto. You use Gusto.com Bootcamp. Try that out. You can use QuickBooks. It's not super expensive. Just have the forms and everything ready for them. So when someone joins at Augusta, we have an i9, a W4 and then their compensation agreement that they have to sign, and then a direct deposit form and then a.

Employee handbook. So we have five things. That's their checklist. Employee handbook, compensation agreement. Those are the two things internally that we do in terms of payroll. I9A W4 and a direct deposit so we can put their money directly into their account. How do you feel about Gus Worker HTBV says, I feel like it's a vulnerability. In my opinion, especially what happened in 2020 20. You saw the HDB Pro just get sweat. Like, I don't want to rely on the government for my employees, something that's so important to my business. So I'm gonna leave it there. Everyone make sure you go on to clubhouse and follow me. Mike Andy's is my handle. I'm gonna try to be there more often because this is harder for me to get onto in little increments in comparison to just audio. So I gotta hop onto a call. Thanks so much everyone for being here. And also.