Mistakes that Kept Me Poor

My name is Mike Andes, and I built Augusta Lawn care to over $50 million in annual revenue. But along the way, throughout my 20s, I made a ton of mistakes, some really stupid ones at that. Today, I'm going to share exactly what those mistakes were and how you can avoid them when you're growing your business.

Early on in my entrepreneurial career, I really fell in love with the starting line. When it comes to business, it's like a marathon, because the very beginning of the start of the race, there's a lot of fanfare, there's a lot of novelty, there's a lot of ch. They have loudspeakers and music, and everyone's cheering for you on the sidelines. But there's a very lonely and long run and race that has to be run in between, one on one, you and the ground and your shoes, just jogging, doing the same thing over and over and over again. And in business is the same way. When you first get started in your business, you, like, post about social media and everyone's like, let's go. Super excited for you. They're giving you referrals, and it's all very new and novel and it's exciting. What we can do is fall in love with the start line and just that's why we always are starting new businesses. And I'm going to start this thing, I'm going to start. This is because we. We enjoy the fanfare and the excitement and the thrill of the start. And then we look at people that are down the road that are succeeding in business and they're at the finish line and like, well, we want to get there. But between that is a lot of loneliness and a lot of hardship and figuring things out and doing things that are uncomfortable and pushing through all sorts of barriers and walls and, like, runners high. And then all of a sudden, you can't walk another step. And it's that lonely period between when you start and. And when you actually are successful that most people give up on. And that's why nine out of 10 small businesses that start in home services won't get to a million dollars in annual revenue. They start, they get to 1001-502003-00000, but they never actually stick with it long enough, 5, 10, 15 years to actually build a business of their dreams. I fell into this trap a lot when I first got started in entrepreneurship, and that was like starting more businesses all the time. I fell in love with the starting line because it was reinforcing to me to be able to hear other people say good things about me. It was reinforcing to me to hear people say that you're going to do a great job with this. This is awesome. But between that point in time and the finish line could be 5, 10, 15 years of pain. And so because we as humans are always looking for reinforcement, we start a year or two or three years into something, and then we go back to the starting line because that's where it was fun. That's where it was exciting. And we fall in love with restarting businesses over and over and over again. And I fell into this trap over the course of my career. I've started like, bio Shakespeare. We were gonna do like, protein shakes from a vending machine, and that failed. Then we had ketosis cups, which is like these little chocolate food things. I was gonna sell a food product like, what in the world are we doing? Then I had reset mind and body. I actually signed a lease. And I was gonna get this. Basically a 24,7 gym for your brain. And it was like ice baths, hot saunas, red light therapy, yoga saunas, and float tanks. It's cool. In theory. I'm sure someone's made it work. But, like, this is the thing. Any one of those ideas was just another starting line. And anyone that committed to them for 5, 10, 15, 20 years probably could have made them successful. Over the past couple years, I've realized, like, look, if it doesn't have to do with franchising at Augusta Lawn care or copilot with software, I just don't want to be participating in it. I'm not going back to the starting line. I'm going to keep running the race despite the fact that novelty has worn off. Like, we've been doing franchising for five years, but, like, now is when you actually become profitable. Now is where the real success starts to begin. But most people quit before even getting to that stage. Everyone that you look up to has probably been in the same industry for 5, 10, 15, 20 years. That's why they're at the finish line. That's why they actually are starting to get the applause of other people and people wanting to learn from them. And they're doing keynote speeches, and everyone respects them. They're at the finish line. Everyone starts at the starting line. Very few finish. And the difference is who made it the entire race.

As the business have grown, I've realized that outmaneuvering the competition, using speed is overrated. Now, when you're first getting started, you're rewarded by taking action very quickly and making decisions Very rapidly and pivoting and making changes. And if I'm trying to get around all of these pylons, it's very agile. I'm nimble. But as the business grows, as you begin to get more employees, get more customers, and the organization is growing and I'm moving faster on something like a bike, it's a lot more difficult to get through these in a more agile way. And if I crash, it could cause a lot of hurt. And that's what I've seen as I've grown the businesses, especially with franchisees that go to lawn care that depend on me to make good decisions. If I make a decision too fast, I'm going to hurt other people. Three years ago, I did a decision way too quickly. And we had command center. We were in the middle of spring rush. It was just absolutely insane. We were missing calls. There was way more leads coming than we thought we had planned and anticipated for. And so I decided we were going to cut a whole bunch of services at command center. And I did it overnight. That was a dumb decision. Was it right? Maybe. But I did it way too fast for the fact that we had 50 plus locations already at Augusta Lawn Care. Now, two years ago, we instituted AI to answer our phone calls. Again, very good in terms of the fact that it answers phone calls 24 7. But all the kinks weren't exactly ironed out. And we didn't roll it out in a nice systematic way or test things as much as we should have. Instead, it just dropped on it on one day and everything changed again. Hurt people's businesses. It's my fault for making the change too quickly. More recently at Augusta Lawn Care, I made another mistake this past year, and that is when we switched over to Copilot CRM. I did it all in one month for all 150 locations. And that exact same month is when hundreds of other public users joined and it broke the entire system. All of these decisions were made because in the name of speed and being aggressive, I thought I'd just move fast, move quickly. But if you're moving really fast on this bike or you're moving in a car and you make one little small deviation that's incorrect, you're going to cause a big crash. You can't just dodge through it like you would if you were a solo operator. And when I looked at the entrepreneurs that I looked up to, Elon Musk, et cetera, I always thought, man, they kind of move slow. Like the cybertruck is four years late. And then you look At Apple, like, they don't create new products very much a really groundbreaking innovation. They just make and execute things very, very well. And they don't rush things. They just. We're not going to rush. We're going to take our time and make a great product, make a great service, regardless of whether or not we're late, regardless of whether or not we're the first to market. And as a leader, you're always gonna be judged as being too slow or too fast to react to things in the business. However, I've found that making a decision too fast is twice as damaging as making a decision too slow. As the business grows, what you get rewarded for shifts from quick decision making to great execution. Dude, there's no way I'm gonna be able to think clearly and talk and drive this bike. Yeah, it's not happening.

Dude. If they don't have a car mock yet, I'm gonna be so confused. Another thing that I've thought a lot about over the past 10 years while growing the businesses is just one little phrase, and that is be hard to kill, ultimately in business, unless you die. In other words, you never get off the. You don't lose. And so if you're hard to kill, you will probably be successful.

Hi there. Hi. Can I get a caramel macchiato, please? Yeah.

Let'S go. When it comes to actually habits that people form, many times we can have dependencies or addictions that can really hamper us from being successful. And I don't mean like hardcore things as much as people literally have this notion that unless I have my cup of coffee in the morning, I won't be able to operate. Dude, the whole language, our own coffee is hilarious to me. Macchiato, all the different types of milks, dude, just, you know, I want to drink, I want it hot. Unless I don't get my cold plunge or my sauna or if I'm not able to have this relationship or if I don't have this drug. Like, this is the type of dependencies or addictions that are created. And then because of those things we link, we must have that in order to be successful. Hook me up. I think the drip right here. And here's the thing. There are people that have been successful that didn't have that coffee. They didn't have that lifestyle, they didn't have that relationship, and they somehow figured it out. And this is why a lot of times I see immigrants be very successful financially and in entrepreneurship is because they didn't have all of those dependencies. They didn't have the coffee. They weren't able to have all these niceties that we now have created dependencies on and makes us easy to kill.

Hi. Hello. Just the caramel macchiato, right? Yes, please. There you go. If you could literally just not have your cold plunge, and that's somehow going to wreck the rest of your day, we've got a big problem in our hands.

Thank you so much. Appreciate it. If you ever hear someone say these words, you know that they're easy to kill, that is, I just can't get going in the morning unless I.

Sniff the cocaine. Very good. Very good. If you are one caramel macchiato away from having an unproductive day, you're gonna be an easy competitor to beat.

One of the biggest mistakes I made early on when I started my business was majoring on the miners. And there's a ton of little things inside your business that you can get distracted on and spend way too much time thinking about. For example, like, I spent way too much time thinking about, like, the type of mower I was gonna get, the type of trailer I was going to get, and I would spend weeks, months, researching and looking into it, the type of blades I was using on my mower, what name of the business was going to be. And we focus on all this time and attention. We get so maniacal about the little details in our business, and we major. We spend all of our time on these minor things instead of focusing on the big rocks, the things that actually matter in our business, like your close ratio, the fact that pricing, if you just fix that one thing, it makes a massive impact to the company and your bottom line, those little rocks. I spent all that time and energy trying to focus on getting it perfect, and it hardly actually adjusted or affected the business. The type of mower that I had did not affect whether or not my business would be successful. The type of truck I had did not matter. Focus on things that really do matter inside your business. Now, these are heavier things, these big rocks. They're harder sometimes to do. But honestly, sometimes we focus on these little things because we're afraid of attacking the big things. Over the course of the past year, I've traveled over 30 businesses to do turnarounds on companies that are struggling. And almost all of them, if they just adjusted one thing, one thing, that's their pricing, it would have a massive impact on their bottom line and the business overall. No one ever said that the mower or truck that they purchased made their business successful. It's the bigger things in business and there's only a few of them. Your close ratio, your pricing, the team members that you hire, these are the big things that actually matter.

I learned that debt is like entrepreneurial cocaine. Basically what you're doing is you're borrowing from tomorrow in order to be able to fix a short term problem of a cash crunch. And I think about it like sugar. If I am going to, you know, feel if I'm down, if my blood sugar is low, if I'm not feeling good, having a Kit Kat, having a Reese's, having a Snickers bar is going to make me feel really good Very quickly. For the next like few minutes, I'm going to be like the sugar high. It's amazing to me that people somehow think that constantly just eating more and more candy is going to somehow make them feel good. In the long term, you actually need to go to the gym, you need to eat healthy, you need to sleep right, you need to drink water, et cetera. But people try to do this short term solution and eventually it'll catch up with them. The same thing is true with business. I just constantly keep getting more and more and more debt and feeling good. All I'm doing though, is I'm solving the short term pain of a cash crunch at the expense of the long term future of my business. Because I am essentially going to eventually have to pay down that debt the same way that having some quick sugar will hide systemic issues that are happening in my body, like low sleep, not enough muscle mass, and other massive problems. It'll, it'll mask it for a while. The same thing is true when it comes to the debt. A short term cash crunch immediately can get fixed by going out and getting a loan, or swiping a credit card or racking up more debt. But in the long term, the business needs to become profitable. And if you're just going to hide and put lipstick on a pig of a business model, it's just not going to actually solve the root of the problem, which is you need to make more money and be profitable. Over the past year, when I've been doing all these turnarounds around the country, one of the major common denominators of all the businesses that either go out of business or fail is they have a bunch of debt. In part not because of the debt, because a lot of times there is a solvable solution and a path to getting out of it. However, having a lot of debt will usually cloud your judgment when it comes to making good decisions. And that's the part that really cripples people because they need to adjust their pricing. But because of the debt, they're afraid or they feel like if they lose customers, they won't be able to afford the debt service and the loan payments. And so all of a sudden they're making bad pricing decisions because of the debt. And a lot of times that sort of debt burden is what clouds entrepreneurs and that prevents them from making good business decisions. Now let's look at how debt affects your financial statements. Because a lot of people wonder, how is it that I can have a profitable business and still run out of money? Here's how. On your profit and loss statement, you're actually only going to see the interest expense, which means technically, if you have 0% interest, you will actually never see any trace of debt on the P and L. Because when you're paying down the principal, your principal pay down, or the original sum of the debt, you never even see it on the P and L. That is a balance sheet item. So on the balance sheet, I'm going to see the debt as a liability. But here's the problem. Now on a balance sheet, assets have to equal liabilities. And when you get a loan, you get more assets, cash. And the same time you get a loan which is a liability. And so it's like, well, it evens out. I got more cash, I got debt on the books, but who cares? But if you're paying, if you're using up this cash and that loan balance is still staying consistent, that's when we have a problem. And that's why I think that most of us should be looking at our statement of cash flows. This is showing money going in and money going out of the business. Because on my P and L, that loan can hide. Even on my balance sheet I can see the debt, but it's like I can kind of discount it because I got the extra cash. But your statement of cash flows will not lie. Cause it's going to show the actual principal pay down as well as the interest expense that's going in and out of the business. And cash flow is king. Why? Because if you don't have cash flow, even a P and L that looks like you're making money, you can still go out of business. And if you're like, what's a statement of cash flow? Think about it. It's like money in, money out. And what's the difference between how much you spent and how much you made? And you can just get this on Quickbooks, just download it. Statement of cash flow.

Did I Have too slow. And I think most of us, if we talk to entrepreneurs or business people that have been in business for a long time, they would say the same thing. And it's like fire fast. However, some of us are emotional, and that includes myself. Even though logically I know they should be fired. I'm not great at firing people. And that's why for each of my businesses, I have an operator that is over operations that will fire people because I'm not great at it. I know when to fire people, but actually doing it, not great. And the difference in productivity and efficiency of your organization comes into play when you know you should fire someone. And the amount of space that goes by before you actually pull the trigger. And for most of us, it's way too long. The amount of damage that is done in that period of time, the amount of wasted time for that team member, the payroll that you pay them, your time and energy and mental space that's put towards it, and then the rest of your team that gets slowed down from having this cancer inside the organization is insane. And if you think about your job as a founder, a CEO, an owner, whatever, making sure that the entire organism is healthy, the entire organization is healthy, there's going to be times when a certain part of the organism gets cancerous and you have to cut it out. And that is not fun. That is not exciting. It's not fun to go underneath a scalpel and get cut off your finger, cut off your hand, cut off your arm. Why do we amputate people's arms like that? Seems crazy. The reason we do it is because we want to save the rest of the organization. We want to save the rest of the organism. And there's going to be people inside of your organization that you will have to cut out. And it'll be very painful. And you might even miss them somewhat because there's an appendage. It's a leg, it's a finger, it's a toe. Something you have to cut off in order to save the entire organism. And your job as the founder is to ensure the health and success of the entire organism, the entire organization. Not making sure that one person that is cancerous to the company is having bad performance is losing money for the company. That person needs to be cut out of the organization. And your responsibility to make sure that happens. There's not one single time that I have ever fired someone or any of my operators have fired someone that I regretted it down the road. Now, at the first, it's painful and it hurts and I Hate firing. And this is why I don't do it most of the time. But not one single time has any of us ever regretted firing somebody. In fact, usually when you fire someone over the next week or two, you find out all the stories of all the things that they were doing beforehand that their team was covering up for them because they were trying to be a good team member, they were trying to abide by good cultural standards and protecting each other. And all of a sudden when that person gets cut out, all the stories come out, all the skeletons come out of the closet of all the things that they were doing behind your back, all the things they were saying, the damage they were doing to the culture, their lack of performance, et cetera. And most of the times, most of the times, within a matter of a few months, the person that gets cut out of the organization, their replacement, is a far better, more superior fit for that role. They do a better job, they're more productive, they make more money. The people that they work with are more efficient. And realize that one bad apple inside of an organization, one bad cog inside the machine, slows everything down. And so sometimes you won't fire someone cause you're like, what about the productivity of the team? What about the efficiency of the team? Or we won't be able to make as much money. And then you cut that person out and realize the entire organization that the grease of their gears, everything going well because you took out one defective part from the machine, everything works more efficiently, more effectively, and you make more money. Every single time I've had to replace someone, their replacement became an upgrade to the team within a matter of just a few months. How'd it look? It looks okay. Okay, just look at this. One of the things I've learned more recently in my career is that just hiring based upon culture is not going to get you past $10 million in annual revenue. Let me explain. When you grow a business from zero to a million dollars, if I had to generalize, what skill you're going to really want to focus on, it's going to be work ethic. If you have great work ethic and you sell and you really focus on hiring and you focus on just getting your name out in the marketplace, getting enough customers and working crazy amounts of hours, you can probably have a million dollar business. Now to get past 10 million, you're going to have to really focus on another skill. Because no longer is just how hard you work going to do as much good for you. You actually have to have really good management skills. Now, I assume that you have, you know, you're owning the business exclusively and you don't have a partner that could kind of do this for you and be more operationally driven. But typically getting to a million in your work ethic, in order to grow a $10 million business, you need to hire really good people and then manage them effectively. Now, if you're trying to grow the business past $10 million and you're trying to grow it to $100 million, and this is where I'm currently at and I've been stalling out around this stage because I was not focused on recruiting great talent. And more recently, a great example of this is at Copilot CRM where we had massive problems and issues happening because I was trying to hire good cultural fits and then train them up on the skills that I had instead of going out and recruiting talent that had already done this for 5, 10, 15 years. More recently, our VP of Product, Josh, he's already done this before. And so I want to take his 5, 10, 15 years of experience and then draw that experience into the organization and immediately be able to get massive advantages of time. At this stage, I'm trying to hire people that already know what good looks like. I don't have to train them on how to do their job. Now be very clear, that's at this stage of business, at a million dollars, you probably just need to work harder. And that's just the brass tax of it. Do more sales, do more follow up phone calls, do more hiring, do more training, just do more of everything and work like crazy hard. Growing past that though, to from a million and beyond, you're going to have to have great management skills. Focus on those things before you go out and recruit talent. Otherwise you probably don't have the money to be able to actually go find the person that has enough talent to take you to 100 million.

You don't have to be right to win. Most people want to be right more than they want to win. And it's reflective in the fact that they care what everyone thinks about them so much to the point where they'll not take action. For example, if I am trying to win a World Series, if I am trying to get a championship, if I'm trying to get a bunch of home runs, realize that is the long term goal of winning. No one cares about the individual games that you play for 160 times. They care about who wins the championship. There will be L's all along the way. There's been never a team that has been perfect in the mlb, there will be losses. And if you get so caught up in the fact that you're going to have losses, you will just never swing. The people who get the most home runs and the most hits many times also make a lot of strikeouts. They also pop up the ball and they get out, they get off balance in a swing, and they look like an absolute fool in front of hundreds of thousands of people. And if you're not willing to be wrong, if you're not willing to make the wrong decision, you will just not make decisions. And when it comes to customers and employees, there's gonna be times that you will want to appear right when you know you're correct and they're saying something in factual. However, you take the L because you want to win in the long term. For example, a customer might come online and say horrible things about your service. They make all sorts of falsehoods and claims about your company and what you did for them. The natural inclination is to appear right, which is post invoices, email screenshots, text messages, send or sign contracts, and like, make a big deal about appearing right when sometimes stepping back in the long term, taking the L on that customer and then just fixing the problems. The communication style, how you addressed the initial deposit, how you sent pictures beforehand to actually prevent this from happening in the future. One of the things that you can do in your business, technically speaking, is survey your customers and ask for their complaints and actually ask them what makes you mad and then what can I do more to serve you? They're going to tell you exactly what you need to do in the business to be able to make it more valuable and therefore be able to charge more for it. In the future, make sure that people don't leave and customers are more happy. At Augusta Longcare to bring that to my business, what I've learned over the past little bit is we've really focused on surveying and fixing complaints. And trust me, when you take surveys from all your customers, they're going to give you really honest feedback that hurts. And it's like drinking from a fire hose. If you have a larger, larger organization, you get dozens, if not hundreds of responses and feedback and complaints. And people like, if you allow them to give them give honest feedback, they're going to skewer you on some things. Here's the thing, take the L. Like, be okay with the fact that someone's mad and then go fix it instead of trying to appear right and like, oh no, like I'm right. Like, I have the Data. I know I have the invoices. I have the written. I know this. I'm right. Who cares? Take the L and then go fix what caused the complaint to happen at Augusta Lawn Care. I've made all sorts of big mistakes that really have impacted all of the owners inside of Augusta nation. However, our NPs score net promoter score currently is around 57 to 58, which is pretty good. And it's trending upwards because of the work we've done in terms of surveying and fixing complaints, like, what are we not doing good? What are the things that make you mad? And then secondly, how else could I make this amazing for you? What else could I give you in terms of resources or templates or products or what can I do more for you? And if you're willing to do this with your customers and actually take their complaints and you know what? Feedback is a yellow slip. It is a callback. It is someone complaining and saying, your crew didn't do this at my property. If you look at that as feedback, and instead of being like, oh, no, I got to be right, take the L, take the L. Maybe you have to refund them a little bit. Maybe you have to concede the fact that you didn't do a great job. Maybe you have to concede the fact that you need to change the process, but then go change the process and fix that so then the future customers don't complain about that thing. And the reason that our net promoter score MPs score at Augusta has continued to go up is because I've stayed focused on winning. I know I'm going to make mistakes. If I continue to swing, I will strike out. I will swing off balance, I will make errors. But in the long term, I just want to focus on winning. And if that's the goal, I don't care if whether or not I. Every single swing I hit make connection. Every single swing has got to be perfect. And if you constantly are thinking about what other people are going to say about you, what customers are going to think, what employees are going to think, what your family's going to think, if you're constantly thinking that way, then you're just never gonna swing because you're looking for perfection instead of progress. If I could go back and tell myself just one line on this topic, it would have solved me so much headache and pain and a lot of tears and sleepless nights. And it would be this. Don't be afraid to forfeit the battle and sacrifice your ego in order to win the war. The war at Augusta Lawn Care is. We wanna change the level of professionalism in the landscape industry. And I'm gonna have Ls, I'm going to have strikeouts along the way, but I'm staying focused on winning.