Office Staff 101 - What Should They Do? How Much Should They Get Paid?

Hey, everyone, it's Mike over@landscapebusinesscourse.com today I'm going to be talking about office staff. And so there's a question that came up on the landscape business course Facebook group. And so I wanted to address that as well as Cass from Mastercuts, which is in our Pro plus group. He also wrote in a question concerning hiring an office staff person, but more importantly, even the second office staff person. So I wanted to kind of go through a couple notes that I had written down about some of the questions I've seen in the group, whether it be ProPlus or on Facebook group for landscape business course. So I just wanted to go through those things and a couple quick announcements I want to get out of the way. Number one is some of you. Most of you have probably watched Zero Turn the video series. So last year I went to a couple different companies around the country and basically for a day, spent time with them trying to help grow their business. And so season two of Zero Turn is gonna be coming out this year, and we're looking for companies that want to join or apply to be on the show. And so if you haven't watched Zero Turn already, feel free to watch on YouTube or on Facebook. We went to Mastercuts, that was in Oxford, Mississippi. Then we went down to Imco, which was in Texas. And so regardless of where you're at, originally we were just gonna do Vancouver, sorry, British Columbia, Washington and Oregon companies. But I decided to open it up to everyone to apply. So if you ch. Landscapebusinesscourse.com tour landscapebusinesscourse.com tour2019 all right, so it's landscapebusinesscourse.com tour2019. Go to that URL, fill out the form, and I'm going to choose a couple more companies that I'm going to come to. You don't have to pay for anything. Like, I'll bring my camera guy and we will basically spend a day with you, try to grow your business, can get you to the next level. So feel free to go on there regardless of what size of your business is. And we're gonna see how many we can hit this summer. So again, landscapebusinesscourse.com tour2019 fill out the form and you will have the chance to have me come for a day and help you as much as I possibly can. So make sure you check out that. I think that's all the announcements. So let's go ahead and just jump in how to pay. Like, the first thing that comes up A lot of time is how much should you pay your office staff person? And it kind of depends on several things. Number one is are you going to pay them by the hour or are you going to pay them salary? So depending on your state regulations, office person can be paid on salary easier than someone out in the field. Again, depending on your state regulations. And so traditionally in most states and in Washington state, in order for someone to be on salary, they either need to be in a management position of at least two people or they need to be in a scenario where it's not laborious type work. Someone's mowing lawns, it's hard to get them on salary unless they're over a certain.

Threshold. And for us it's like $49,000. Then you can start putting them on salary. And so it gets a little bit hairy when you start trying to put lower employees that are out in the field on salary. But for people in the office, you can definitely do salary. And so just check your state regulations, what the regulations are for salary versus overtime or versus hourly wage earners. And in regards mostly to overtime. So that's the big kicker. So number one, are you paying them hourly or are you paying salary? Is important question to ask when the question of how many hours are they usually gonna have to work? So if they're gonna end up working always 50, 60 hours a week, you might wanna pay them salary because those overtime hours are gonna really hurt you. And they're become. I just find with office staff.

When you need them the most is usually in overtime. And that's like late at night trying to figure out routing, pushing things off cause of weather, figuring out customer complaints, whatever it is, when you need them the most, they're usually on overtime. And so I'd much rather them just be on salary if all possible. So that way there's not always that them wanting to leave you wanting them to be there. That being said, I don't have all my office staff on salary. You want to make sure if you're going to have an office staff on office member on salary, that they're really bought into the vision of the company, that they are really supportive of the business. You might even want to give them a piece of the revenue or a piece of the company if you're really small, just to keep them engaged. Because if they're not engaged and they're on salary, like I said, the last thing you want is you feeling like they're not being there enough and then them feeling like you're asking for too Much in terms of hours when spring rush comes and everyone's behind schedule and you need them to stay late. So again, I just look at how many hours are you expecting them to work versus should they be hourly or salaried employees? A second thing that kind of determines how much they're getting paid is the responsibilities that you give them. So I'm going to talk about in a little bit all the different things that an office person can do, what types of roles and responsibilities you can delegate to them, and just kind of hopefully give you some ideas in terms of maybe hiring your first office assistant or something like that. You can figure out what things you can delegate, what things you can pass off to them. The third thing is in terms of how much should you pay someone in the office, it comes back to responsibilities. But are they an office person or they really like an operations? Because I find that there's usually two different type of operations people within a landscaping business. So usually I find as the company grows, you have an owner and then underneath that you have some sort of an operational person. And that person can operationally be in the field or they can operationally be in the office. And so for me, my operations manager is in the office. And so she has responsibilities other than just like answering the phones and emails and just like clerical or secretarial work. She does a lot more than that. And so because of that, if you're having your operations manager, like the person that's really kind of running things and really indirect reports to you a lot, if that person's in the office, you're gonna be paying them a lot more. I've seen both work. There's no pro and con. I've seen the operations manager be someone out in the field that is just in close proximity to that secretary office person, but they're kind of second in command and they report directly to the owner and they're more of in the field. And so again, this really has to do with what you or the owner want to be doing as well. If you want to be out managing crews, then you are probably going to want an office type person to be an operationally kind of second in command that's in the office. Now if you're more in the office side of things are sales and doing estimates or hiring, and you're really focused on that. Your second in command might be the person that's out in the field and really watching over the crews and taking care of the guys out in the field. So how much to pay an office person? I mentioned this on the Facebook group, I've paid everywhere from $14 an hour, all the way up to 6,000 plus per month in salary and with other benefits and things like that. And so they, it really is a wide range. And for myself, my office manager really is sort of my second in command over the whole company and thereby she's not really getting paid as much as an office person, as much as an operations manager. And that's really the role that she plays. But she started more as an office assistant, just answering the phones, emails, et cetera, and has worked her way up. And she has three office assistants that report directly to her and then obviously all the guys out in the field. And so how much to pay an office person? I think if they're just answering the phones, they're answering emails, they're just doing clerical work, they come in, they punch in at 8 and they punch out at, you know, punch in at 8, leave at 4, like they work in 8, 8 to 5 kind of shift. That type of person, you shouldn't be paying them a super large amount of money. You should be paying them hourly. It's the individual that's going to be there 50, 60 hours a week that's going to stay really long. When you do get behind, that's willing to come in early, that sort of person, you're gonna wanna really compensate them because they will do the work of two office assistants by being flexible with their schedule and really caring about the business. And so also, if you have that type of individual, they're usually gonna get involved in the sales aspect of the business, which if they're good at that, they end up bringing in money and thereby paying for their extra compensation. And so next question I get a lot of is like, do you need office staff? And so this really comes down to the size of your business, if you can afford it. Because office staff are an absolute overhead cost. Like, yes, there is a certain level of them. They can bring in sales. By having a professional office staff member, they can attract more business, all those sort of things. However, strictly from a P and L standpoint, someone in the office does not create billable hours and thereby they are an overhead expense. One thing I find is, I find a lot of people actually hire an office person too soon. They'll have one or two employees out in the field and then they'll hire a full time office person. And I just don't feel that's really necessary because literally if you have two employees and then you add a full time office staff member, you basically have yourself and two employees with three people out in the field working. And when you add an office staff, assuming that everyone gets paid the same hourly rate, you have essentially, basically added a fourth person. So if you were making $100 an hour with three people, and you add this fourth person as overhead expense, you are not generating more than $100 an hour still, you're actually now making $25 per hour per person instead of 33 like it was when there was just three people out in the field. So you have to realize that an office person is gonna be expensive in terms of overhead cost, and especially if you start looking at the, the ratios. So if you have three to one ratio of people out in the field versus office staff, or maybe four to one, like four people out mowing lawns to every one staff member in the office, you have to remember that overhead has to be made up for in those field workers that are actually making the money and producing the work. And so I really feel that your hourly rate needs to be substantially higher than $40 an hour if you're going to actually hire office staff members that are strictly overhead and that are strictly not doing field labor. And so trying to run that hourly rate lower than that is very, very thin margins. And if you're running even five to one, like five people on the field to one person in the office, it still is a tough thing to swallow if your hourly rate for those people out in the field generating that labor is not high enough.

So do you need to hire an office staff member? I see most people, once they hit about $500,000 in revenue, that's when they start getting in house office staff. And I feel like that's kind of a natural place when the owner starts beginning to realize like either A, they have to hand off operationally managing the crews, or B, they have to start handing off the office side of things. And usually they tend to let the office, you know, hire out the office duties before they hire out the managing the crews and training the crews duties. And so usually around $500,000 in revenue. Again, that's just a complete random number. I'm pulling on my just like experience and just like what I've talked about with other landscapers, that seems to be the area kind of the trend. That being said, if you are a husband wife combo, starting the business, having your wife or husband being the office person, and then the wife or husband being the person out in the field as operational type leader is very, very powerful. And so you don't necessarily think you need to have to wait till you're at 500,000 in revenue. But it's definitely the place I find most often when someone realizes they need a full time office staff to be in house. Now what can you do before that? Like, what if you're at like 2 or 300,000, $400,000 in revenue? I find a lot of people, what they can do instead of getting that full time office staff person is hire a bookkeeper. Then you're just gonna hire another business. Basically. Basically they're gonna be a contractor. That way you don't have to have a W2, you don't have to pay certain types of taxes on them, less liability, et cetera. They also usually have their own office space and they have their own computer and you don't have to worry about tracking their time as much and things like that. And so that might be an option. Hire them for 10, 15 hours a week that they do all your bookkeeping, billing, et cetera. That's one option. Second option, the reason I like that is because you can see them face to face, you get to know them, you can go walk in their office if they're local, things like that. The other option is having a VA or virtual assistant, someone that answers all your phone calls. And that can do a lot of the kind of mundane, answering emails back and forth, setting up appointments, but especially answering the phone and setting up appointments. That can be done through a virtual assistant or through a calling center, a calling service that basically gets all your calls. You basically just route your phone number to them, they take all your calls, set up appointments, make notes for you. They can set up your estimates, they can set up complaints, they can.

Sell work over the phone. Depending on what service you use, there's lots of those services out there. So I'm not gonna talk a whole lot about that, but that is an option. So again, do you need to hire an office staff member? If you're over, you know, if you're generating so much money that you can afford their 30, 40, $50,000 a year salary, or 30, $40,000 a year in pay, at least, then maybe that's something you invest in. And then by them taking those things off your plate, if you're at that kind of crucial middle zone, by them taking those things off your plate, you're able to go produce an extra, say 200, you know, $300,000 in revenue. That's interesting, right? And so I would not do it just because you don't like the work or anything like that. But if you know, if by having an office person take certain responsibilities off your plate, certain things off of your day to day tasks and roles, and thereby give you the opportunity to either go hire more people or go make more sales, and right now you don't have the time to do those things. They're actually gonna move the needle and move the business forward. That's when an office staff member is really worth the pay. Again, start off part time, that's fine. And work your way into that full time office staff member. Another thing is once you have office staff, I'd really look at making them a profit center. You're never gonna actually get them usually to go out in the field and work. However, you can turn your office staff into salespeople. And what I mean by that is make sure they're trained, make sure they know how to sell. And I don't mean like high pressure sales or anything like that, but make sure they know how to overcome objections, make sure they know what phrases to use in order to close a big estimate. If people have certain concerns, they know what to say, they know how to infer and put pressure on a client by basically using the schedule as a way to make sure that they reserve the spot for the client and get that 50% down. Like so many different ways that that office staff can be trained to become a salesperson and not just answer the phones and not literally just be a calling service that says, okay, the owner needs to call so and so and then the project manager needs to call so and so, but they can actually take care of things themselves. That's when they start becoming valuable. That's when they can actually start moving the needle for the business instead of just literally being the person that takes messages, incoming from the universe and pushes them off to the appropriate people. That's a very low.

Value type of work. I'd much rather them be trained to where they can take a call. They can turn an angry customer into someone that is willing to see the other side of the coin, is able to be understandable, is able to actually become a raving fan, and they're able to go through those customer service interactions and they're trained to do so. They're able to turn someone that's kind of not so sure about accepting our bid. They're able to get them on the phone and convince them that we're worth the extra 10, 15% more than our competitor or the other bids they got. And so turn your office people into salespeople. That is a massive thing. I would say if you're actually hiring an office person because they are strictly overhead. They do not make your company any money if there's not billable hours attached to them. They are not making your business money. But what you need to do is make sure that you train them to make them valuable, to actually earn their money. And how do they earn their money? They make those sales that would normally not go through. They save the customer. They retain the customer that usually would have got lost.

They go the extra mile on the phone to make sure that Instead of a $10,000 project, it becomes a $30,000 project. They are keenly aware and listening for other opportunities to upsell people. And in terms of fertilization or weed control or trimming or all these different things that an office person can do, because there are the front lines of communication to your customer, they have the opportunity, if trained correctly, and if they're a really good employee, they do have the opportunity to move the needle for the business and generate more work. But they are not actually going to produce labor. And therefore, they don't have any billable hours. And therefore they are a pure expense on the P and L. So the reason I say that and stress that so much is that I just want you to make sure you know that if you're wanting to get an office person, you need to look at your financials and actually ask yourself first, are you charging enough in the field to pay for the office person in the office? And again, if your hourly rate does not compensate enough and there's not enough profit there in that category, after you pay people out in the field, it's gonna be very difficult to pay an office staff member anything of any. This is very difficult to make it work financially. So next question I get a lot of is like, what does your office staff do? And I wrote down several things here. I'm sure I'm not actually talking about all of them. There's probably 100,000 other things they do. Like, little things I'm not thinking about, like getting the mail and printing things off, and just a lot of other stuff, like putting in budgeted hours into jobs. Like, a lot of things I'm not including here, but I have a list of things I wrote down that an office staff can do for you. And so maybe you're in that position where you're wanting to start handing these things off, or maybe you're in the position where you have an office person. They're full time, but you really don't need them full time. But now, here are some of the things that they can do to stay busy, but more importantly, actually be productive. And the last thing, the thing I hate, the thing that kills me is when office staff members who are overhead expenses are not doing anything and they have nothing to do in the office, like that kills me. I want them busy. I don't care if they're sending out flyers, if they're doing cold calls, if they are following up on dead leads, always, they should be staying busy. If they're an overhead expense, they need to be generating revenue for the business by getting in new work.

But here's some of the things that they can do and they do at my company for me, obviously answering the phone, they need to get trained on how to do that. Answering the phone, making sure that they, whether it be an existing customer or a new customer or a lead, be able to convert them correctly. Answering the phone, be able to communicate with people is important. Next thing they can do is customer accounts. So if an existing customer calls in, wants to change their schedule or change their billing information, they can do customer service things. If there's like complaints, people want things changed on their job notes. If they're on a recurring schedule, all those sort of things to do with the accounting, the counts side of things like figuring out the recurring customers and all of their communication, they can do all of that. They can set up estimates so leaves that are coming in and need an estimate for landscaping projects, they can set up that appointment with an estimator. They can schedule it, put it on the calendar, put it in the system and set up the customer as the lead, as a customer in terms of all the contact information and their address and all of those things, they can put together the estimates. So at my company, the estimator doesn't actually format the estimate and send it to the customer. They get all the information, they put the raw notes in there. And then the office assistant, who is traditionally cheaper per hour than an estimator, they are then going to actually format it real quick. They're going to send a video with that estimate estimate. They are going to actually like they're the ones that actually click send and emails that estimate to the customer. And that's all done by the office. Because I want the estimator to be able to pump out estimates as fast as possible simply because that estimator usually has a lot of experience and costs more per hour than someone that can just click, drag, drop and be an office assistant. That's a lot cheaper to make those and format them correctly. They can follow up with estimates, they can sell projects and they can sell contracts for maintenance. And so again, trying to have this being done all by the office is super important. I don't really want the estimator to have to go back. I want the customer to call the office and be sold on the phone without having a bunch of back and forth with the estimator, project manager, et cetera, routing. So if you have a bunch of routes for maintenance, the office staff can optimize your routes, make sure they're all ready to go. They can do the scheduling, making sure which crew, which crew members are on which routes, and scheduling for every day when there's rain or weather that's inclement that you need to change the routes around, they can do all of that. I haven't done routing really for a long, long time. And that was a big thing that was taken off my plate to get me out of day to day. And so again, if you're going to have your office staff do routing and scheduling, they need to be there every day, they need to be there consistently. You can't have a part time person come and do your routing and scheduling because they mess it up and they're not there the next morning when your crew shows up, you're going to have a mess on your hands. And so until you, this is my opinion, until you have a full time office person in house, I'd recommend that you do the routing and scheduling so that you know where everyone's at. But again, this is a process of evolution. I haven't done it for a few years now. Routing and scheduling is kind of like a big part that you hand off to your office staff once you have a good office manager. Billing and invoicing. So billing is the process of collecting payment. Invoicing is the process of sending out invoices. And so whether you do it monthly or daily or weekly, sending out invoices and then collecting that payment via check, doing bank reconciliations, putting into QuickBooks, all of those things that can all be done by the office staff. My office desk does reports for me as well. So on a daily basis I get a report. That way I can stay connected even if I'm not there very much. I can stay connected. On every single crew, we know exactly what they're making, who's most productive, who's least productive and be able to.

I can keep a pulse on the business by having those daily reports and then on a weekly basis they make a scoreboard using those reports that are sent to me daily. They Make a weekly scoreboard, which is then sent to the entire staff. And we talk about it on Monday mornings at our scoreboard huddle. And we go over those numbers. And so all those reports and the scoreboard and the daily reports they send to me, that's all done by the office assistants. Because again, those are just. That's number crunching. It's like moving numbers around. And that should be done by an office assistant. It doesn't need to be done by you as the owner. It doesn't need to be done even by an office manager that's gonna pay more. It doesn't need to be done by your operations manager. Depending, again, of, like, how large your business is, those are things that you shouldn't have to be doing. If you can go like, this is how it should be thought of. Like, if you're doing estimating, right, what would you have to pay an estimator to do that job? Maybe it's 40 bucks an hour, $30 an hour. If they had the experience that you had and they could go out and bid jobs and all of that, like me, it's $30 an hour. Let's just say it's $30 an hour. If you were to hire out what you're currently doing now, let's say that you could also be answering the phones. You could also be pushing a lawnmower. You could also, like you as the owner, if you're a smaller business, you could be doing all those things. What I would recommend you do is figure out the thing that's the highest value per hour and focus on those things and try to delegate the lowest per hour. So if answering the phones is a type of job that you can get someone to do for $12 an hour, you should get someone to do it for $12 an hour. So you can focus on the thing that costs $30 per hour in terms of value and be the estimator and make sales. Right? And if you're paying a crew member $15 an hour to mow lawns, you should pay someone $15 an hour to mow the lawn. So you can focus on the $30 per hour value work of estimating and doing sales. So I'd really recommend all those things that I talked about.

What of those things? How much would it cost per hour? Just to break it down, make it easy, what it costs for you to hand those things off, like for answering the phones and for emails and things. That's a 12, 13, $14 an hour type of job. But if I'm gonna expect Them to do routing and scheduling. It's gonna cost more. If I'm expecting them to screen applicants on the phone. For new hires, that might cost a little bit more. But if they're just answering phones, entering in billing information, sending stuff on software that's lower level stuff that can be done for a cheaper price, that should be an assistant level thing that after a week of training, they're pretty. Prof. In. And again, if you're handing off routing and scheduling and reporting and they're starting to get involved in the sales aspect, then they're gonna be more valuable. And so for the Pro plus members in, I think it's July, July, I believe July or August we are doing. Our session is gonna be actually with my office manager, Liz and one of her office assistants, Lonnie, and they're gonna do the whole probably hour and a half, two hour course or two hour webinar. We do it right here. They're gonna do the whole thing together and they're gonna talk about their roles, how they break up responsibilities and all about what they do on a day to day basis and how they support me and just kind of really talking about a more detailed level like the office assistant role versus the office manager role and how they divvied things up there. So if you're in Pro plus, you can look forward to that. It's July or August and that'll be our webinar for the month. Last thing I wanted to address though was the question of when to hire your second office team member. And so this came from Cas, who is in Pro plus and he had emailed me with this question. And this is a tricky one because obviously your business is now growing like Cas and them is doing. They're gonna be going for over a million dollars in revenue this year, which is fantastic. But again, you have to ask yourself the question, like you have to remember that office staff are purely an overhead expense. And I find when you get two office people, they don't do double the amount of work. They usually do like one and a half times the amount of work. And the reason for that is because there's more, there's overlap. They start, you know, they both know how to do the same thing. So there's a lot of overlapping in responsibilities. There is a lot of wasted time because now they start talking to each other. If you have two office people in a room, they're gonna talk, there's gonna be waste. You also have to invest more in equipment like computers, and you need more Space for two people. And so usually you're gonna like an office space or like an extra room. And Internet, you need more, better Internet, you need a restroom. Like, all these things start piling up. And so there's more and more overhead, more and more expense. And I would just encourage you, if you have one office staff member and it's gotten to say three quarters of a million.

You'Re not going to be able to get two office members and be able to get to like 1.5. If you don't change anything else in the business, like, they become less.

The ratio becomes less as you grow, usually because there is more waste, there is more overlap. And the big reason is because of overlap, because they can all do the same thing. So to counteract that, to combat that, what you gotta do, if you start getting multiple office people have very clear roles and responsibilities, who does what, who does not do what, and really make clear dividing lines. Like, this is something we really had to work on last year when we hit three people in the office. And now with there being four, there has to be very clear lines of like, okay, when an incoming call comes in, who's supposed to take it first? Okay, if they're on the phone already, who takes it next? If they're on the phone, who takes it next? Right? And same thing with like customer complaints. Like, when does that get pushed up the chain of command and addressed by like the office manager? When does it need to go to, like, the owner or to an estimator? Like, they need to know those things. They need to know who, who takes what calls, who can answer which calls, and who can make the call on issues and problems. Like, who can give a refund, who can set up.

A return back to like a complaint, who can set up that return to job site visit. And so very clear roles and responsibilities. Like, who does the scheduling and routing. That should not be like everyone in all your office people, because all of a sudden they're all chipping in on the scheduling and routing and it'll start becoming a big mess. Now if you have a dedicated person or a couple people like that stuff they do, and then a couple other people, like, they're focusing on billing and invoicing or like following up or answering the phone. Very clear roles and responsibilities. Even when emails come in, for example, you'll come in the morning in the spring and there's dozens of emails, like, who answers what? We have a marking system that they use. So the person that goes in first in the morning will mark emails with a Certain color based upon who needs to address what. So that way, when the other office people come in, they address all their colors, and then they know that they are taking care of certain things. So if a job is big, landscaping job has been accepted, that email comes in, that office assistant knows to mark that for Liz, who's gonna put that on the schedule? The office assistant does not need to address that. But yet, if an email comes in the morning of and it's a new contact form from the website, there's no reason why Liz needs to deal with that. The office assistant can do a satellite view for making a lawn care estimate. They can.

Set up that appointment. For an estimator to go to the property, there's got to be clear roles and responsibilities in who does what and who does not do what. And so as you get more office staff, that's something to really think about. And so I hope, hopefully I answered some questions today about office staff members. If you have a question further about your office staff, how much to pay them, what they're doing, what more you could add on their plate? There's just so many things that they can do. And I feel like, like I said, the worst thing I like to. The thing I hate to see is an office staff member not actually staying productive because they are costing the business money and they aren't generating revenue in terms of billable hours. So it's something I'd really keep an eye on. And I'd make sure that you kind of micromanage to extent, especially at the beginning of your office when you have 1, 2, 3 office people, because you really want to make sure that it's just not an absolute waste. And if you have three, four people on staff, all of a sudden, that's costing the business like $100 an hour in overhead by the time you have taxes and all that stuff, plus all the expense of like, their paper and their computers and the Internet and all the utilities for the office they're in, like, all of a sudden, you're looking at like 150, $200 an hour of overhead expense. You better make sure that they're productive during that time. Otherwise all the money in the world that you're making out in the the field labor will not be able to compensate for that. And so, number one, make sure that your profit margins are high enough for your field laborers to compensate for that office staff overhead. And from there, it's just all about the numbers. The numbers don't lie. So thanks so much, everyone. Hopefully that helps if you have a question, let me know below on Facebook or YouTube. Thanks so much.