My Lawn Care Business Failed...

Today I'm going to show you behind the scenes of one of my lawn care locations and how it went from negative profit to over $50,000 in profit in just one month. Over the past year, I've traveled around the country, turning around small businesses that are struggling.

Can you build a business that runs on the augusta systems?

Today we're at my location, and it is in desperate need of a turnaround.

It means this whole thing could be a sham.

My name is Mike andes. I'm the founder of augusta lawn care.

As Mike's employee, I can disagree with him when I want. And I'm going to.

Everything we talk about in this video, I want to show the numbers behind, like, what actually happened to the profit and lossing. In order to understand exactly what the bellingham shop has been through, I want to take you on a bit of a tour because this is where it actually all started in blaine, washington, a little city, 6,000 people. I'm going to show you exactly how I got started with a storage facility and our very first shop before we moved to bellingham and really started to grow. Let's go. So for the first four years of augusta lawn care, when I first got started, we grew from about zero to a million dollars in annual revenue. But honestly, I was working 70, 80 hours a week out in the as well as doing estimates and made absolutely no profit. That was the first four years. This is actually the first year where I kept my 6 by 12 enclosed trailer parked. I paid $40 per month, parked my enclosed trailer here with all my equipment inside, and would come inside here every single day to pick up my trailer. But those first four years, we grew from zero all the way up to about a million. I never saw any of the money, though, because, honestly, there was lots of breakages. I didn't know what I was doing. I was spending money on marketing that I shouldn't have in different areas. I just had to learn the hard way. And what changed in the fifth year is that we instituted something called pay for performance, where we paid a percentage of all of our revenue to our employees instead of just paying them an hourly wage. So if you want to check out more about what that is, just go to mikeandys.com P4P. I do a bunch of free training about how exactly that system works. Let me go show you the next shop space where we upgraded in around our third or fourth year and grew up to past a million. Okay. So I want to show you the blaine shop that we actually started with. I think, like, my third Year of business, they kicked us out because we were growing too fast. But the landlord's a little bit paranoid, so we're gonna try to stop on the road, jump out, and quickly shoot this so you can see it in the background. Let's go. All right, so this is it. This is where we'd have the bins of material. We used to do way too many services. We do like putting greens. We'd haul all these mulch, gravel, soil to people's yards and those big dump trucks that almost killed me.

Old stomping grounds. I don't miss it at all. All right, let's get out of here. Now we're headed to the Bellingham shop where we're going to see how that location does seven figures in annual revenue without me ever being there. It cannot be understated just how important a general manager or leader is when it comes to a home service business, and especially if you're going to have multiple locations. If you're the owner, operator and you're in daily operations, you are the leader, you are the general manager. But when I stepped away from this location, it is very evident that a great general manager, even if they have an average team or a bad market, will make a great performing, very profitable location. A poor general manager does not have the skills, is not trying to improve their skills, doesn't have the leadership ability or sales ability. They can be put into a really, really profitable location like this one with a great market and a great team, and somehow they ruin it. And sure enough, that's what happened. Because when I first stepped away, I handed things off to Liz. She was the general manager, and then she handed it off to Lee.

My name is Lee park and I have been with Augusta for seven years now. And I've seen it all. I started with Mike Andes when It was just one location, and now we've grown to 150 locations across the U.S. canada, and now in Australia.

And it was very profitable underneath them.

As general manager, you do not realize how much an owner does, a manager does in a small business until you sit in that driver's seat and. And figuring out how to balance all of those things was definitely a challenge, a challenge worth taking on. And I learned a lot from it.

And then it handed off to someone new. And all of a sudden, within one year, we lost more than 70% of our recurring customers from mowing. A huge percentage of our revenue was coming from project based work. Now, I'm not against that, but we usually like to have at least 60 to 70% of our revenue coming from recurring work. Because recurring work, I can keep the guys busy consistently throughout most of the year. And it's especially important for us to, because at Augusta, we do what we call winter services. In our market, we do have snow, but only like once or twice a year. So what we do is we go do what we call winter services. That's where all of our mowing customers that finish mowing in say, October, November, simply merge into what we call winter services. Bush trimming. We edge the lawn, we blow off the walkways, we pick up any down branches, we cut any bushes off of the house, we check their gutters, we do all these winter related services. During those winter services, they get charged the same amount as if they were mowing service. And we spend the same amount of time on the property as if we were doing mowing service. And so it's really important during the spring when everyone needs mowing to get as many recurring jobs as possible so we can keep them all summer long and then throughout the winter have that recurring revenue.

In most home services, there is a proverbial busy season. In lawn care landscaping, there is a spring rush. You will acquire the bulk of your new customers in most markets from March through June, every single year. It's almost a guarantee. Well, if you have an underperforming manager and that four month period, that is not only going to impact those four months, but the trailing six to 12.

Months, it was horrible. We lost tens of thousands of dollars for the first time in any of our winters because we didn't have enough recurring revenue. Because we lost like 70% of our customers on mowing, we had very little recurring revenue. We were down to like 25 to 30% of our revenue coming from recurring work. And everything else was projects. So we all of a sudden have to spend a bunch of money on marketing and like getting a bunch of projects on the schedule very quickly because we didn't have that recurring base of revenue. Well, we figured, okay, this general manager, they're learning, they're still new. Let's get a full time office person in the office for them all, all the time. And hopefully that will help. Well, having that full time office person increases our overhead here by $5,000 per month. And that $5,000 is the cost of having that office person in the office to manage things for the general manager. And so now all of a sudden our overhead jumped. And again, when you have a location that's struggling, it's easy to start grasping at things to get outside of the systems. This is when people start adding services or expanding their service area or changing their pay structure. Ultimately all of those band aids were simply because the location was failing and it was not in the hands of someone that actually took real accountability for the success of the location in their own hands.

Ultimately we tried. We really gave this manager every opportunity to succeed with weekly check ins, monthly check ins. And I believe that the manager that stepped into this location thought that hey, I could just be a manager. I can still be friends with all these, these folks on the crew and I don't really have to do anything extra and have a good time. But not buy into being a professional, not buy into P4P, not buy into holding people accountable. It'll all be good, man. I'm going to be a great manager. And that's where I think there was a of failures on their part.

And that was one thing we had to undo very quickly. It's like, all right, back to the systems, get rid of the office person. Because as soon as you start doing that, people start, they start doing their own thing. The follow up calls weren't being done the right way. Estimates weren't being handled correctly, they weren't going out as quickly. Emails weren't being handled exactly the way they should be. And ultimately just following the system and for us at Augusta is have command center handle all the admin tasks where everything's regimented and checklists and standard operating procedures. That's the way we should have stayed. And deviating this other model did not.

Work well with a manager if they're underperforming. Their underperformance can impact the business not only while they're currently in that business or in charge of that business, but for a long time afterwards this manager.

Failed to make the transition from employee to being a manager. And that can be really tough. I've always hired from within the team inside of the organization. I like to do that because it allows everyone to see that there is actually a path up and a way to make more money and go to the next stage of their career inside the company. It's also a way for the manager to actually have empathy for the crew because they know what it's like to be out in the field when it's raining, crazy hot, et cetera. I don't want to bring in some suit and tie person to be the general manager that has never actually been out in the field with the crew. So it's always worked really well in terms of bringing general managers to that worked in the field previously.

So When I started with Mike, I was mowing for two years. I didn't see the inside of an office. I didn't see a desk or a computer for two solid years. So I put in the extra work. I put in the optional work. I tried to pick up slack and not create slack. It was a really hard transition. It is hard to become a manager. Your peers now become your subordinates. And I don't use that term or that word in a negative context, but ultimately I was now in charge of. Of taking care of those team members. That's a very hard transition for a lot of managers to realize that these aren't just my friends anymore. You can still be friends with your employees or the people that you work with, but ultimately you have to hold them responsible to the standards inside of your business.

And the problem is, he never really made the transition from being a buddy, buddy team member to actually managing and having to bring down the law. Sometimes because of that, efficiency dropped, people started calling out, standards started to slide and be slack. And ultimately there was just no urgency from the management to, like, improve and get better. If someone's making mistakes or they're new to something, I give a lot of leeway for them to be able to drop a few balls or make a few mistakes. But if those mistakes don't, then spur the desire to go learn and improve and get more skills, I got a problem with that.

Like I said, pick up slack, not create slack. If you can do that and improve yourself incrementally. I'm not expecting folks or my managers or my team members to spend hours every night or on the weekends putting in all this extra work. But I am expecting a little bit of extra effort. Hey, come to the optional meetings where we're going to talk about the profit and loss statement. It shows that you care about the business and that you want to learn something. Hey, log into the Audible account every once in a while. Listen to some of these great books that will not only help you in this company, but literally in life. I can say that some of the things I've learned working under Mike and at Augusta have helped me more in life than they actually have at the company. Because I want you to live a better life. I want you to make more money, whether it's with Augusta or not. You. If you take these skills, if you take the time to learn these things, you're going to make more money, and you're probably going to have a better life.

And so whether it be not listening to books or podcasts or audio programs or asking the right questions, or getting critical feedback from other general managers or owners that had been in their same situation. I just didn't see that passion to become better.

If you never want to get ahead in life, don't self improve. Simple as that. If you have a bad manager, for lack of a better description, if you have an underperforming manager and they're in your bulk, busy season, I guarantee you it's going to affect you for at least six months, if not a whole year after.

This is the debris pile at the Bellingham shop. And over the course of years it has slowly built up. That's very different than how it works when it comes to a turnaround. You can have just a matter of a few weeks or months and do massive amounts of damage to the business, but yet it'll take an entire year to turn around the business. And that's what's happened here. The Bellingham shop. In a matter of few months, massive amounts of damage was made, recurring jobs lost, culture was deteriorated, no accountability, all these problems. The general manager needs to be good at two things. One, leading the team, having great team meetings, looking at people in the eyes, keeping the room engaged during a team meeting, very important. So leadership, hiring and firing, everything. That is being a great leader. The second thing is they have to be really good at sales. And the general managers did not have the skill of really having the urgency that hey, we need jobs on the schedule. We're only booked out a few days, we need to get jobs on the schedule this week and I need to do follow up calls and I need to knock on doors and do door hangers and really sell jobs. There was just never that sense of urgency.

Now this person, honestly a great person, I have nothing negative to say about them. You know, we talk about how do we choose managers. And before they became a manager, they showed a lot of marks of being a good manager. Great communicator, great with customers, well respected among the team. Right. Those are good marks of someone becoming a manager.

And so even back then I would come to the office once a week and I just never felt there was an urgency and like there was no accountability for like the fact that they were responsible to keep the crew busy. Therefore they've got to sell, they've got to go out and get hungry and get more leads. And if there's not enough leads coming in, you've got to figure out the marketing and turning on the ads. And I just didn't see that sense of urgency.

They were an obvious choice to Move up into a management position. However, maybe we should have looked at the intangibles a little bit more, right? And that's buying into the culture, the philosophy, the systems that we teach here at Augusta, where they bought into that. Did we see any characteristics of them wanting. Wanting to hold everyone around them to a standard, or were they willing to just get by on whatever standards they felt were good enough for them?

Our assets weren't getting used. Our trucks and equipment. I would come in here, there'd be 15 trucks, and only six or seven of them were out in the field because we didn't have enough work. We weren't anywhere close to capacity. And when it comes to the revenue you're making now versus the revenue you could do, if all your trucks are being used, the difference between that is where all of your profit is at. You want your trucks being used and your equipment being used as much as possible. That's what we call asset utilization. Utilization. It's simply a matter of, like, what percentage of the day of the week of the month is your equipment being used. The more it can be used, the more profitable you will be. Because otherwise, that fixed expense of the payment on the truck, the insurance on the truck, it's just sitting there. It's gonna cost you something. No matter what, you want to get as many jobs on the schedule as possible to fill the schedule to capacity so that all the equipment is being used as frequently as possible. Throughout the spring rush, whenever I would check in up on the shop each week, I saw a degrading of the equipment and the maintenance of the fac. So weed started growing. All of a sudden, things weren't upkept and organized, and the trucks weren't washed, the trucks weren't cleaned out. All these little indicators of just lowering the standard.

One thing that I like to say to leaders and to managers, to team members, is being a peer to peer leader is a lot harder than being a hierarchical leader. A hierarchical leader means, all right, Mike has promoted me to manager, and now I have authority over everyone, right? It's much harder to be a peer to peer leader. And that means you and I are on the same level here. But I'm going to hold you accountable to a higher standard, and I expect you to hold me accountable to a higher standard. And that's something we didn't look for in a general manager. And that ultimately was something that set that person up to fail is because they weren't already practicing that mentality before they moved into a management position.

And ultimately, it comes to things like cleaning a truck, does that really affect what the customer is going to get on their property? Not a lot. Like, the actual work itself still got done. The lines were still straight in the lawns, like, the grass still got cut. However, when you let standard slide, like cleaning out of the trucks, my philosophy is this. How do I expect my crew member to get out at a customer's property and have things neat and tidy and exact and professional, and then get into a dirty truck where there's trash and dirt and grime, and it's like, no one's cleaned this thing in months? How is that even fair to the employee? I take this fully at the manager's discretion, and they're accountable for making sure that the standards of cleanliness, tidiness, organization is upheld. And when you don't have tidiness, organization, equipment starts to break down, Stuff starts to fall apart. All of a sudden we have lists of things that are broken on the. On the board in the office of just equipment that was not taken care of, that was damaged, that was negligent, someone drove over stuff, and all of a sudden that cost you a lot of money. Also, what is done in a matter of weeks or months in a business with a bad general manager or a bad leader or a sour apple, that starts to poison the culture. If that happens, it can take months, if not years, to fully turn around the business. When it comes to doing a business turnaround, it's kind of like stairs going up and the elevator coming down.

And that was one of the things that I discussed with this previous manager in detail, was that our customers don't trust us. We are not holding a high standard. We are not raising the level of professionalism, the way in which we were treating our employees and the way we were treating our customers.

You can trash a good business very quickly with bad leadership or with standards that are not upheld. And when quality goes to pot, the customer is going to lose confidence, and it can take a long time to restore that confidence back in your service.

So we needed to earn the trust of our customers back, and we also needed to get new customers to fill in the slots for the customers. That left us, unfortunately. So we needed to redefine the systems, redefine the standards at the company, and retrain all the employees as to what those standards were.

And for the very first time in almost five years, I had to put money back into the business Instead of taking regular quarterly distributions.

I knew that this location was struggling, and I was ultimately the report from this manager to Mike And Mike sent me a text, and he said, hey, Lee, just an FYI, I'm putting some money back in the Bellingham account. Well, I'd been around for a while. I knew that he had not put money into the Bellingham account for at least three, if not five years. And when Mike texted me, hey, I'm gonna have to put money into the Bellingham account, that hit me really hard. I got pretty emotional. I was pretty upset because I know that the Bellingham shop not only is Mike's business that should be producing money for him to go and develop things like copilot, like P4P to hire more people for the various companies that he runs. So I knew that was affecting that growth, but I also knew it was hurting the image of Augusta.

Now, let me be really clear that there's no hate towards this new general manager that came along. And so I want to be very clear that there's no ill intent against him, and I wish him all the best. Ultimately, this entire Sega. The story of this Bellingham shop going from extremely profitable to losing money comes down to one thing. A great general manager will make a location successful. A lousy general manager without the skills required will make a great location unprofitable. Very quickly.

I would almost 110% agree with Mike that the success of a location is dependent on the manager. With the caveat, there is an asterisk. So as Mike's employee, I can disagree with him when I want, and I'm going to. Did the owner set up that manager for success, and did they define the rules of the game? Right. And so what you need to do as the owner is define the rules of the game and then hand it off to a general manager if you've set them up for success. And by that training procedures, systems, and you define the rules of the game, how they succeed. As a general manager, I completely agree with Mike that the success of a location is determined by the manager, the person in the driver's seat.

I'll take ownership of the fact that we did not give him enough training before he took the position fully on the transition period was probably too short. We didn't bring him to training as early as we should have because we have a spot where we bring all the owners from Augusta Nation and we bring the general managers and do training that should have been done earlier.

When someone becomes a manager or when you promote someone within your team, you have to make sure that they are fully bought in to the systems that you've created. Right. We talked about how you know, you have to set those people up for success. That is training them, that is defining the systems, the standard operating procedures of your business. That is setting them up for the success. And I feel that Mike and Liz did that really well for my transition into the manager. Where I feel like maybe we failed is we could have done that better. For this general manager that stepped into this location and didn't find a lot of success, we probably could have taken more time to really define the SOPs, define the systems, and make sure that they were properly trained for their position.

So when it came to actually swapping out the general manager, I was out of town when this all happened. In May, June of 2023, he was in North Carolina.

He was doing his 30 day challenge. That was horrible. So I know he's like going through that and he's texting me about moving money. I was like, ah, I hate myself.

I was doing a 30 day challenge in North Carolina, trying to start up a location from 0 to $300,000 in annual revenue. And so I was out of town, not really knowing what was happening. So Lee stepped in and had kind of made the transition happen.

So once we decided to move on from that general manager, some somebody had to step in and that was me. I stepped back in as kind of interim general manager until we found someone to replace that general manager.

Everything we talk about in this video, I want to show the numbers behind that, like what actually happened. So these are the actual panels from QuickBooks. And so this is May 2023. First off, we made $110,000 in revenue and we lost $3,000. So we had a negative 2% profit margin. Not good. I knew that we needed to raise prices. However, as I've always taught you, raise prices when you're at capacity. In other words, all your trucks are being used, all your employees are fully working full time. And we were nowhere near capacity because the previous general manager had lost so many jobs and we literally had less than half the amount of mowing jobs as we had before. Now the thing I want you to really focus on though, is the fact that our wages in this month were $71,000. If you take that as a function of our total revenue, about 65% of our revenue gross revenue was spent on wages. If that number is over 50% most of the time, your business isn't going to do very much profit. It's not going to be super great. And so what we need to do is focus for the first year on just increasing the amount of jobs that we had back up to capacity. And so the first year, we didn't raise prices. Obviously, if you raise prices, you're going to sell less jobs. Your close ratio, the number of estimates that you actually close and when it's going to go down. And so instead of raising prices last year right away, instead we waited for one year and we triple, literally tripled the amount of recurring jobs that we've had. We started focusing on the recurring work, really trying to get that back up and running, even though it was later in the year. And it's very difficult to do that. This past spring, this location went from just 70 mowing customers to over 300 after losing so many of them the year prior because of the previous general manager. But it's taken an entire year to get to the point where we were able to raise prices because we actually built up enough goodwill with our customers. And about a month ago, we raised prices at this location. Now what we did is we raised prices two ways. One, to our existing customers. These are customers that are already on the recurring schedule. And we raised their mowing prices by $12 for weekly service and $18 for biweekly service. We created a price increase email that notified our customers that we were raising prices due to the cost of fuel, insurance, and the extra costs associated with the inflation of labor.

The importance of waiting to do that price increase was to reprove or to show our customers that we cared.

We were paying so much more for labor and cost of insurance and all these other things in the business, but we hadn't raised prices in a few years. And so we notified all of our customers in one email in a matter of a couple of days. We also raised prices to all of our new or upcoming customers and changed our rates from $80 per hour to $100 per man hour. When we were on the job site.

We needed to redefine the systems, redefine the standards at the company, and retrain all the employees as to what those standards were. Before we could raise prices and expect to be paid more for the work we were doing, we need to increase the value of the work before we could do that.

And you might be asking like, well, did you lose a bunch of customers over the price increase? Well, out of about 330 customers, we lost about 30. So we lost about 10% of our customers over the course of the past few weeks. However, in that same timeframe, we gain an additional 15 to 20 customers just from natural demand and leads coming in through our website. And so realistically, within a matter Of a month or two, we had the same number of customers, but everyone was paying 25 to 30% more. And ultimately, in home services, if you do a great job, you have a great brand and you've positioned yourself as a premium product and a premium service, and you have premium customers, when you raise prices, they don't want to go look for other providers. And if you've marketed that service to really good customers that have the money, they're not going to want to switch. And that's what we experienced. But the other thing that really needed to change was resetting the culture. And honestly, because the way that general manager had been managing in terms of very buddy, buddy and friends with everybody, as a manager, you're going to have to have hard conversations, you're going to have to fire people, you're going to hold people accountable. You have to tell people when they're doing things wrong. There's a certain style of leadership that being friends with the team members can be helpful. But if that takes away from the responsibility of you as a manager to holding people accountable, to getting performance and getting stuff done, we've got a problem. The new general manager came in town, it was a new sheriff. And when that happens, especially if someone's having to crack down and bring law and order back to a situation or people aren't going to be happy, more than half the team either left or got fired within a matter of a couple months. And that's not fun, that's not exciting. I have no joy in firing people or making people lose their job.

Now, I didn't fire these people without warning. They were given a shot, but that shot was very cut and dry. It was very black and white. Hey, you've one more shot. And of course, the three lowest performers all broke their chance within the first week of me managing. So it was easy for me to move on from that.

But the bottom line is the business was losing money and it was on a trajectory to go out of business. And ultimately, you got to wake up sometimes and realize that drastic measures are required to turn around a business and in this case, bring a new general manager is what was required. And within one month, the changes were seen. Because of the culture shift, there were.

Six underperforming but decent cultural fit employees. They didn't even realize they were underperforming because the management standards were so low. They didn't know what level of performance was expected of them. Those six employees I paired with the top six employees of the company and they worked side by side every day. For two to three weeks. So the idea was to bring those low performers or underperformers up to the level of what a high performer should be in the location, talking to employees.

Holding them accountable, getting paid for performance, back on track.

I reinstituted what the standard was on P4P. No one had made P4P the three months previous with this underperforming general manager. So what I did is I retrained what P4P was, and I reinstituted the standard of being productive on our team. That meant that you had to have less than 30% waste in your day. So what we had to do is work a lot harder. But when people started to work harder, the profits went up in the business and everybody made more on their paychecks.

By increasing our hourly rate and increasing our prices, we were also effectively giving our crew a raise because of pay for performance, where they make a percentage of all the labor revenue. And this was perfect timing because we were going right into the hot season where it's super hot outside and no one wants to work. And so we immediately able to get everyone making an extra 3, 4, 5 dollars more per hour on pay for performance. All of these things were resetting the culture back to that of accountability. And if you make a mistake, you're responsible for it. And if you're responsible for the equipment and something's not fixed on the equipment, you're in trouble. And actually having some sort of standard and upholding that standard as a general manager was very, very important. But this is what really is eye opening is when you compare it to the very next month. Again, the only thing that changed between these two months is a new general manager came in place. The wages spent $72,000 compared back to May. Look at this. Literally $1,000 more. So our wages went up like 1 or 2%. Meanwhile, our revenue went up from $110,000 all the way up to $168,000. Which means it is a tell tall sign of the fact that there's inefficient labor. The same number of employees, the same amount of wages being spent, literally garnered 50% more revenue. This is the difference between a great general manager and a lousy general manager is taking what labor was already given to them, but making it way more efficient and completing 50% more revenue after the price increases. Our crew is making substantially more money on pay for performance. Pay for performance. They just make a percentage of the labor revenue in their day. So by increasing the hourly rate that we're charging the customer from 80 to 100. We were effectively giving them a 25% raise.

Part of the reason we push so hard for pay for performance is because we want our people to make more money. Having been paid by performance under Mike Andy's, it is a great feeling to know I worked hard, I was more efficient, I eliminated waste throughout my day and now I get more money in my pocket.

As the employee on the first paycheck after raising prices, the lowest performer made $25 an hour and the top performer is making over $40 an hour. What we did to adjust this was instead of paying our employees 33% of the labor revenue, we adjusted it down to 25% of labor revenue in order to be able to accommodate the fact that our insurance has gone up, our rent had quadrupled in the past five years at this location, and we need to have more overhead expenses in the business. They weren't complaining though because honestly they were still making 25 to $35 an hour and everyone was super happy. Ultimately raising prices has a massive trickle down effect in the business. And you can afford to pay people more, you can afford to have benefits. And when we switched to paper performance, that was the first year that I was able to offer medical benefits, gym reimbursement programs, paid time off and other incentives for the team. So everyone wins when you simply have a better business model that makes more profit by having this much incentive for them on pay for performance, we saw their efficiency scores go up dramatically and.

That'S why we push so hard for efficiency scores. The last month of this previous general manager, the team efficiency score was 51%. That means 49% of the team's time was waste. Your business will never be profitable in lawn care and landscaping if 49% of your employees day is waste. The month I came in we increased that efficiency score 13% over one month, so went up to 64%. Not great, but an improvement. The following month we were just around 70% efficiency, which means the employees are making more money on their paycheck and the company is now profitable.

Now they're over 90% consistently. Well, what is efficiency score? It's budgeted hours divided by clocked hours. In other words, how many hours on the job were actually completed divided by their total clocked hours for the day. If you have a low efficiency score, it means there's a lot of drive time, wasted stops and a lot of lally gagging around the shop talking to people instead of doing the work.

You can assume there's going to be waste, especially in home Services, Your crew has to load up in the morning, they have to drive between properties, they have to unload. At the end of the day, there will be waste. There can't be 49% waste. So the idea behind pushing efficiency is not I must get the most out of my employees, so that way I make the most money as the owner. That's not it. I want them to make more money. And I also want the company to make more money so we can reinvest in trucks. Better equipment, more paid time off benefits, more bonuses and incentives for employees. That is why I want my efficiency to be increased for everyone's benefit.

With efficiency scores over 90%, you'll be printing money in your home service business. If you compare these two profit and loss statements, there's really not much difference. Like, oh, maybe you spend a lot more in advertising. Nope, we actually spent less money in marketing. We went from $3,000 in marketing down to $2,600 in marketing. So less money you spent on marketing. Everything else very, very similar. The only thing that changed was our revenue. Why? Because the labor got way more efficient when you brought law and order back into how the crew should be ran and making sure everyone was efficient and pay for performance is actually being used. That's what turned this culture around. And ultimately that's what changed the numbers on the profit and loss statement from going negative $3,000. And look at this. $55,000 in profit the very next month after one change was made. And what was that? A new general manager. And check this out. If I take $72,000, it is now under the 50% threshold compared to my revenue. In fact, it's like 40% or less. That is a very efficient and profitable business. And this business will make money as part of the turnaround process. We wanted to simplify and standardize as much as possible. When it comes to creating systems in your business, or if you see that you don't have systems in the business, the easiest thing to do is simplify and standardize, which makes it easier to systematize, because easier to systematize something that's simple and is done the same way every single time. And so when we tried to create systems to have a better culture, more accountability, more efficient labor, we needed to standardize and simplify our equipment setup. So we did is we started to move to just one mower. In the past, we had a bunch of enclosed trailers with 48 inch mowers, 52 inch mowers. We also had 21 inch push mowers and then we had 25 inch push mowers, then we had 30 inch push mowers. We standardized across the board to one type of mower, and this is a 25 inch push mower on every single setup. And everyone had the exact same equipment. We also did the same thing for our trucks. In the past, you might have heard me talk about getting used vehicles that are cheap. When you're first getting started, the chances of you succeeding over the next five years, statistically speaking, is low. I just don't want you to blow all of your cash on a brand new truck does not get you a business. If you've been in business for five or 10 years and you know you're going to be in business for another 10 years. Honestly, from a per mile perspective, getting a low mileage, newer truck actually makes a lot of sense if you're going to be in business for another 10 years. And so that's why a lot of times you'll hear me talk about getting used and cheap trucks at the beginning and focusing your marketing dollars and your budget on getting new customers. However, at this stage of business, when we know we're going to be in business for a long time, we've started switching to getting newer trucks. A lot of the trucks that I had prior to the Turnaround were literally 4, 5, 6, $7,000. For example, this truck, we've had it for like six or seven years. We bought it for $7,000. It's been used and abused. I think it has like 200,000 miles on it. Now. The most I spent was $11,000 for a truck prior to Covid. That's what we got, is a bunch of cheap trucks. But the problem was it led to breakdowns and it led to the general manager having to be a much better scheduler, dispatcher, juggling equipment, a lot more. That makes it harder on their position. And so as part of the transition, part of the turnaround, we standardize our equipment and we standardized the trucks that we're using. And so over the next few months, we're cycling out all the old trucks, selling them off, buying trucks that are a year, two years old, have less than 20,000 miles, and we know we'll be able to be used for the next 10 years without any problem. But then this is the upgraded version. It is a 2023 Chevy Silverado, and it looks very nice, and we'll use it for 10 more years. It has like 12 or 15,000 miles on it. So instead of having 15 or 16 trucks like we did in the Past we'll probably pair that down to 10, maybe 11 trucks. But they're all be the exact same setup, the exact same type of truck and all newer trucks that we don't have to have backups to in case they go down. Oh, by the way, these are shipping containers. They're 8ft by 40ft long and they work really well for us because we don't have any sort of actual shop space at this location. However, I digress. Let's fast forward all the way to present day. Now. At this location, I actually don't show up at all. This is the first time I've been this box this entire year. The bottom line is I used to show up once a week on Thursdays for meetings. But now Nick the regional manager and Corey the general manager completely take care of this location and honestly doing a pretty good job. This is where broken equipment comes. We get red tags on it, stuff gets fixed, things are organized, things are back to where they should be at in terms of following the systems of Augusta Lawn Care. One of those systems was getting the office manager that was dedicated this location back to moving everything admin related to command center. That way the general manager can just focus on selling and working with the team and all office and admin related activities are back at command center being done efficiently. I expect that as we move forward into next year, 2025, they'll be able to grow revenue by at least 30 to 40% while maintaining a 20% profit margin. My goal is always to have at least 20% profit margin with a 10% of all revenue being distributed to me as the owner. Again, profits. I'm going to give a lot of it to my general manager, my regional manager and my crew. But the other half of it, that other 10%, I want to be taking that home as owner's distributions. Now, to be clear, all the credit will go to my general manager and regional manager that have been running this location. I don't come here at all. I never show up. And it's because of their accountability and holding themselves to a very high standard that all of these changes have been made. Their ability to have urgency around sales, hiring, getting a great culture of people having standards and organization is what's led to this turnaround and will propel them to more revenue and greater success in profitability in the future. Watch this video here if you're interested in starting multiple locations and actually give you a budget for starting a new location and scale it to 6 over the next 10 years.