Profits Drop by 50% for this $1M Business! (Mike Andes Coaching)

I mean maybe give me a little bit of background on you. And then I saw your form and things. But then we'll jump right in.

You know, we do probably 60, 40 split I would say with the maintenance things and then call it construction. You lump in there plants and things like that, you know. But we do stuff, you know, we'll do $1,000 patio all the way up to $130,000 hardscapes. And then we do, you know, sprinkling up the fall cleanup, everything in between.

And we sell those as like maintenance patches, either 8 or 12 month. But we still also offer, you know, a pay per visit style. We call it. Oh yeah, a little bit of casual coming winter.

As far as snow, I hate snow. I really try everything I can do to avoid it. It's just not Lou devil millions of dollars on giant equipment which I have interested.

So trying to find a way to increase stuff through the winter wouldn't be bad. But that's kind of where we're at as far as winter. Do work full time as a firefighter as well. So eight hour a week, two 24 hour shifts. So two a week every week. I'm not present.

And that's, you know, the last, the last three years we've been, you know, a million to 1.26 to seven guys. One my, you know, my wife was doing the office stuff but with the two business now it's. I have a outside company. I use Belay for an office manager and she's great. But I would definitely rather have someone in house.

Like you where you are. Massachusetts is ridiculously expensive for any sort of space. So if anything, you know, like right now we have a shop which we pay like three grand a month for, but there's no office with it. It's just a dub space and plenty of outside space as well. So trying to find a space that's close or that has both has not been fruitful.

But I am looking at kind of trying to. I don't want to, I don't want to call it franchising because I zero interest in franchising. But maybe having a few locations, you know, near my house, some downstairs to Boston where the yards are, you know, small and then right in between where we're at now.

And just kind of lifestyle through running the GM method. I like that. I've been, I don't want to say absentee. I still do most of the sales.

But my everyday is pretty much run by our office manager or my column gm Andy. He pretty much runs everything. So That's, I think pretty much covers the gist.

Oh no, that's awesome. Are you trying to stay full time firefighter for now? Like that's not like you're trying to get out of that.

I mean, I'm not opposed to it. I really don't like the job. I've been doing that for fears. It's, you know, 48 hours a week to, you know, be up all night doing ridiculous medical calls and fire calls and accidents and stuff. It's fun. The adrenaline is great. But for 65 grand a year just so I can get a pension when I'm 57, you know, is it really worth it? We really just use it for the benefits right now.

I.

And working at a union is not for me. Not a fan. Trying to disband the union in there. They don't like me so much, but whatever.

So, you know, if I could get this, you know, a little bit bigger, bring in some health benefits, that kind of stuff, that'd be the ideal goal and then to step out of there because I have noticed since I started that job, my job for this has been diminished because you come off a 24 hour shift like all you want is go to bed, you've been up all night. That would be the end goal by with.

Okay, cool. Awesome. Well, how can I help?

One quick question. I had Joey. How long has the business been in? Started? Like did you start it?

And when I started it, 2015.

Got it.

And that was kind of just, you know, my first year we. I did, I made three grand. In the second year I made 50 grand. And you know, I was renting the land while I was rich guy.

Did you really rent a Lambo?

No, no. I was like, I was like, you know what if I make 50 grand this year I'm renting a Lambo. I'd made like $54,000 and I'm like, I have no money.

I love it. Cool. What can I help with?

So I guess the, the first and foremost question I have is the PFI stuff. I've been trying to get after that for like three years and I just can't. So I'm on and I just can't see how to make the two work cohesive. And I'm in and out of copilot twice now and I just, I don't get co pilot. I don't know why, because it's clearly a far more simplistic CRM than lmn, but I've been on that for five years. So for me, I like the back of my hand. But at the same time to now implement it with the P4P, it doesn't, you are. It just doesn't work that way. It's much more difficult, much more confusing because I'm, you know, if, if you look at the analysis, my aeration jobs, the guys are making $187 an hour, but the, the mowing jobs there at $76 an hour. And so, you know, do you have some way to make that work? And if not, I want to get into more questions how I can get off into copilot as seamlessly as possible.

Yeah. So first off, in terms of like aeration for example, for what we do because you're 100% right, the treatments and applications and are going to be way higher rate. So what we do is we just assume that 50% of the revenue is not labor revenue. It's either product cost or just simply like the cost of renting a piece of equipment because you use it so infrequently. And so we assume all treatments and applications are 50% labor revenue, 50% product cost. So if you take 180, 180 and divide it by two now you're back down that 90 and you're in a better range. And I don't mind it being a little bit higher revenue producing because it's a higher risk to the guys when they get yellow slips for things like core aeration of like knocking some someone's irrigation head.

Yeah. Okay.

So that stuff's all fine. I'm just trying to think is the way that you can now translate that to the, the P4P software that it would work.

Yep. So basically. Yeah, so basically there's a couple ways to do it. 1 so first off, there's two pieces of this. I kind of look at two parts. One is like P4P and then two is if you, if you actually use copilot it integrates and bring all the information over automatically. Right. But like let's just assume for now you're not going to switch to go put because I think switching staying in element is probably actually a good move for you right now doing seeing the effect you $100,000 projects and you know it so well. I'd probably stay in that for now. And then the, there's a little extra manual stuff you'd have to do numbers into P4P but I think it's still going to be beneficial. So.

In terms of what you would be putting inside of of of do you do budget hours on like all Your jobs, Joey.

Like everything. I think that's correct.

Perfect. So then you just. You just simply have to make sure that when you do budget hours on certain services, like corporation, the budget hours, you can look at it two ways. 1/2 of the revenue is considered, but is labor revenue like we do? Or you can just consider it that the hourly rate is just so much higher.

Right.

Like your target hourly rate to get the budgeted hours.

Yeah. Because you're not aerating. You know, I'm not sending the stinger out there for failures. It's just not going to happen.

Yep. And the bottom line is, like, you want your budget hours to be accurate regardless of the customer's paying. I want the budget hours to be accurate so that the crew gets in the habit of, like, looking at the beginning of the day, seeing, okay, six, seven, eight budget hours on my schedule, and I get them finished, and then they. They're trying to go after it.

Yeah. Okay. All right. That makes a lot of sense. So since we're kind of on the P4P copilot LMN thing, in copilot, one of the problems had. And, you know, when I was talking to Christian, he's like, oh, when you sign up, you can have a meeting with Mike. And I'm like, that's great. But I kind of want a meeting with Mike now. So that's why I scheduled this.

The. Obviously, there's no sort of price. I don't want to say matrix, but like a pricing list. Like, I have every one of my suppliers, and this isn't like, one integration. This is, you know, the northeast landscape supply yard. That's right next to my shop. And everything we buy from them, everything put in there. There's. I don't think there's something that. In copilot, at least not yet. Something that I was, I guess call it lazy. I was like, I like having it there. And trying to streamline these things would make it more difficult for me to do that. Right now. When you do jobs and you have materials for mulch or whatever, are you just still pricing whatever, say, 90 bucks an hour, and that mulch isn't included in that price? Or are you doing 90 an hour and then slapping on, you know, 50 bucks a yard for mulch plus a month on the mulch, or are you just charging for the price, the cost of the product? I couldn't figure out how that worked. Having everything separate.

Yeah. So we simply are calculating the price before putting it into copilot. What you're talking about is what we call estimate components that down the road we got to add. That's a big reason why, like, bigger projects, I usually say, hey, just stay in element. Um, because they nailed this part. And that's the estimate components you built. You know, click all those stuff you want, and it builds up the job, Right? Yeah. So what we do is we basically are doing that inside of an Excel document. So we have like, all of our pricing, we have all of our cost of goods, et cetera. And then we just put in like, okay, four yards of this one, three yards of this one, eight yards this 48 hours, boom price. Then we put into copilot. So that's the extra step that we have to do for big projects right now. But we are absolutely keeping hours and material separate because ultimately they are only getting a percentage of labor revenue. So material markup is completely taken off the table. And that's important because, like, when you want to raise prices, for example, you actually have to ask yourself, do I want the crew to make more money, that is, increase the labor rate per hour, or do I want to increase material markup? Estimate fees, dump fees, because that's going to go in your pocket.

Yeah, because that's the. The problem. You know, every business owner who pays guys hourly, like you've run into in the past, is, you know, it's every. I mean, Jesus Christ, it feels like every week they're like, I need more money. I need more money. And like, you don't need. What have you done to earn more money? You know, And I. I've tried doing things like, hey, get the door hangers out.

We'll.

I'll pay you compensation for that. We'll pay a compensation for upsells. We'll pay a compensation for bringing new clients and bringing employees. And they don't do it. They never do it. You stay on them for three weeks, and then you let off the gas for one second, and then they just, they drop the whole thing out there. So trying to get on that is because around here, it's like, if you're not paying 25 to 27 bucks an hour for some person to go weed whack, you're just not going to get anybody. It's just not going to happen.

The positive thing is, Joey, you've done actually the hardest part for most project companies, and that is you figure out budget hours across the system.

Yeah.

Like, that's the majority of why bigger project companies can't move into P4P is because they're like, well, we kind of do it Based on a linear feed or like cubic yards as long as you have budget hours. Like it's, it's not a hard lift into P4P. And what, what you could do is just run the numbers, even the back end inside the software without telling them. It'll take you like usually a minute or 2 per employee per day to do it manually because there's not the sync. But you just create the time card based on what they've punched it out wherever else they're doing it, put it in. What's cool about P4P with your projects now that you have budget hours and not everything, they can crush budget hours. Like the ability to make a lot of money on P4P actually comes from projects because you have a 300 budget hour job that can get done in 200 and they like crush it.

So yeah, for the projects, I haven't really seen much of an issue bringing it over. It's more of the maintenance stuff I've had an issue with because like I said, there's, you know, we can have the same, you know, our, our elite package which covers everything from starting up the irrigation, doing the spring cleanup, all the way to the fall cleanup, shutting down the irrigation, the mulch aeration, overseeding all that stuff. Monthly bed mates is how get. Is there a way to create almost like a card for every client or would I have to create like a new card every week for the service provided that week?

Okay. I'm assuming you're talking about the fact that like they're on 12 and eight month contracts. So you don't know, re pitch that to me because you're cutting out.

Yeah. So every, every job we go to, they are clocking in and clocking out. Visit every job. So every single job has its, you know, say it's going to take, you know, we do 27 weekly mowing visits here. We only do weekly. We don't do bi weekly. We don't touch. They're going to clock in it out 27 times and say it's going to take them a total for the season to MOW 14.38 hours of budgeted budget hours to mow. And then some people, some people don't, you know, is there a way to make a specific time card for the season and just run off of that or we need to make that time card every week that.

The half hour of time. I don't know if that makes sense.

You're good. You're good. Basically, I think what you're saying is like the fact that you're kind of spreading out all the revenue over the course of say eight or 12 months. But you do have budget hours per visit, right?

Correct.

And then you can look at a day and see, okay, this crew completed X amount of budget hours. Like you can just add up the budget hours.

Yeah.

So realistically it doesn't really matter how 8 month or 12 months because like they're not making any percentage of that. They're making a percentage of labor revenue. And labor revenue is simply calculated by budget hours multiplied by your target hourly rate.

Okay.

And so as like you're doing the hardest part that like literally very few people that do 12 and eight month contracts will actually granularly look at a budget hours per visit and be able to say at the end of the day they complete X amount of budget hours. As long as you have that like.

Your goal, then yeah, we again we have elements great with that. You know, it's one of those things, if you use the software, how the software was supposed to be used, you have no issues. That's people trying to get in and make it work for them. You know, like anyone says. But.

I don't, I don't hate that. I think that could definitely be done. I guess we can move more towards the business side of things. Not the financial side is.

Yeah. And the maintenance, you know the thing with the maintenance with P is the reason it has such an impact is because like there's way more waste every time they have to start and stop as well as multiple line items on a contract. So I've seen this a lot of times the contracts, once you do get them into PPP is better because right now they're kind of like, okay, or what are we doing today? They're going through the contract. They have multiple visits or multiple services on one stop. So you know, I think you've done all the legwork to actually institute P4P. And then what, what I would just be aware of is if you're running the math in the background on P4P software, usually once you actually start paying them based upon P4P, you see about a 25 to 30% increase in efficiency. So the reason I say that is because some people like man, I did the math and they're like making a dollar more on P4P, it's not going to work. But then they institute it and all of a sudden they'6 $7 more per hour. So just keep that in mind. We usually see that on average that 25 to 35% bump.

Yeah. Because that's that's an issue I. I've had is, you know, I have some guys who are great, awesome, and, you know, they deserve more money. But then I, you know, of those guys who drag. So.

I guess we'll stick to the employee part before I go into other stuff is, do you have.

I cannot find a guy that speaks English. It's not happening. I'm sure you get this all the time. And, you know, right now, luckily I have who from Colombia. He speaks perfect English, perfect Spanish. But the influx we're getting here is a lot of like, Brazilians. So even Andy's like, I can't even really talk to them. And they're good workers, they're nice guys. But it's, you know, how are you going to build a company, build a culture if everyone can't communicate? And that's, that's an issue I've been having. I mean, we have a, I think a really good culture. All the guys get to get along, they laugh, they goof off, they have fun, and they work pretty.

Do you have any advice as far as a better way to deal with that, or should I just stop hiring people that don't speak English?

It comes down to being able to afford it. Like, you're gonna have to pay 4 to $5 more per hour to tap into an audience that would otherwise go get like a low level trade job, like, you know, entry level H vac or something like that. So it really comes down to, I think, institute P4P then be able to, with the numbers, go confidently in the marketplace, knowing what you can actually afford to pay. And if you can say, hey, now we offer 30 bucks an hour as our base and, you know, guys are making 35, 36 an hour mowing grass. Now you have something. Yeah, it is like the lame out, but it is. The only way is like just raise prices and make enough money to where you can go at a different level of employee.

Yeah, okay. That's kind of what I figured. Figured I'd ask anyway. So at the company, like I said, the last three years, we've been just sitting around, call it a million bucks, because I can't figure out myself which direction do we want to go? Do we want to go the Mike Andes route and do we want to make these very profitable smaller organizations? Or do I want to go the Tommy Mello route in this 25 million dollar landscape company that has one location and we do all the projects and second one's great. Sounds super fun to me. It sounds terrible. I love the simple stuff. You know, as much as I want to see excavators and my bobcats and you know, run around, I just don't see it happening. Especially where, funny.

I'm competing. You know, we got teamsters everywhere. I'm competing with the laborers union and they're paying 60 bucks an hour. So I'm not getting any better realistic wage that will allow me to price myself into the market. And you can't beat somebody who's got pairs to run those machines. So I definitely think I want to transition more to your style model. If you recommend at this point me looking at getting that second location off the ground, being at a, you know, that million dollar mark. And like I said, the last couple years have been somewhat absentee as far as, you know, the headaches we have is, you know, rock goes through a window, okay. So we call the carpenter, he goes over and fixes it. Or you know, they do a burnout mark in the grass. Oh well, kind of things.

Where do you recommend for that? Where you think I should start as far as that goes? Because I would love to have a location. So I am, I'm about 20 minutes away from my shop now, about two towns over, you know, so I'd love to have something more close to my house.

Maybe as a second one so I can, you know, keep my hands on it a little. Get that my feet wet in an area that I'm close to.

So I guess I'll let you go.

Yeah. Like what I would say is kind of the safest route in my opinion would be start second quote, unquote location as simply expand service area. And all we're going to do in that area is focus on the simple services. It's going to grow slower but you don't really care because you got your other thing doing it's. It's deal. What's going to happen is if that actually starts growing, let's just say it, charging 4 or 500,000 in maintenance and it's, it's really simple services and you're hardly there now. Then what's going to happen is like okay, do I start a third one? Or like what does it start looking like? And so then what usually happens is you'll have to simplify the first one. And so like Andy right now can kind of manage everything. But if you said only Andy, you'd probably have to remove two or three services that you get pulled into all the time, whether that be the bob cast up excavator, whatever it might be. And you would find Those holes over the next 12 to 24 months, as you're starting the second location, like, what are the two or three things that Andy can't handle? And then I got to nix those things. And then I'm probably going to pair that first location down to, like, 8, 900,000. But be a little more simple services, less equipment. But Andy can handle literally 99% of it. And I think to do. To do that move, you're gonna. It's gonna hinge on a solid admin person. Yeah. So right now, if you had a solid admin person thinking. You know, thinking about admin, he's your ops guy. You still operate as sales. You move into the new market. It's kind of like the sales spear. You could just start sending leads to the admin person. They're doing, like, normal. It's not gonna be a much of a lift for them. And then you. You don't break it off, though, until you have, like, two solid locations and you're ready for the first one to go. Basically absentee by simplifying. So I wouldn't do that fast. Some people go, hey, I'm gonna tear the band aid off. Gonna go from 1.2 to 600,000. I would do that. Yeah, you're there enough. It's not like you're trying to do anything super fast. I would just know that when you want to move along, if you're gonna do multiple locations, you're gonna probably have to turn the revenue back a bit, but then simplify the services that, like, I would just literally document anything that you have to get pulled into. You probably know the two or three things already.

Yeah. Like I said, Andy really does most of it. I mean, he's kind of like. He runs the construction jobs. I'm. I'm really more pulled in if it's, you know, something changes with the client. You know, the client says, hey, I want to add this area to the project as well. And Andy's like, all right, well, I have to talk to him first before I start doing this, because I need to make sure you're okay. Whatever the price is going to be. And any of that stuff, as far as services go. Yeah, definitely. Any locations can. Are going to be like, build job is going to be. I think, you know, it's not going to be, you know, the crazy stuff we do now is the first called the original location. You know, I'm fine bringing that stuff back. I would still probably keep a small construction crew, but we might not do, you know, through the pool Installs and the big stuff that just take, as you know, takes a lot of manpower, takes a lot of admin, a lot of communication with suppliers and vendors.

And what you could do too, Joey, if you go, if you stay regional, and I see some of you in our locations doing this with chemicals is they're like, hey, we don't want to get chemicals. But what we'll do is we'll start three, four, five locations with maintenance only, and then we'll get one truck or like one crew that does all of it now because there's enough now of just like organic demand. We can immediately send an email, fill up a crew and so you could also just do it with your project. So say for example, if Andy, like, I don't want to do maintenance my whole life and you know, he's an awesome operations person. Great.

Yeah.

You're going to operate from location number one is going to be home base. It's going to be where the office is at. It's going to be where we do big projects. We keep all the shop, storage, etc. The other satellite locations are going to be GM RAN. They're going to be simple services and they're just going to be profit cash cows. But the project crews can go into those markets and grab all the leads.

Yeah, and that's kind of exactly what we talked about because we do want to, you know, start. I used to do the treatment stuff and then when I kind of came out of the field, I got rid of it. It was just too much to just hand it off to the else who just didn't know anything about it. But we went to bring that back and that was kind of my plan. Like that is, you know, we have a, we got a Wilmington location, a Westfield thing or whatever, all three of those locations. Then we have one pesticide application where that just goes around it and does all of those. And that's kind of my thing. So you think, you know, just running as an expanded service area now and then once, you know, say the half a million dollar mark would break and get a location, a hard location in that area.

Yeah, like what you could do is you could say, okay, you're going to kind of be the. Did you watch on Home Service Millionaire channel recently about the GM thing? Last week there's a video, it's an hour and a half long and it walks through like finding a gm, how to start one from scratch, the compensation model for them, all of that I would recommend.

I don't think I saw that one.

Yeah, basically I think would work because you've already focused on sales. Like you start the location, get to 500,000. You then in that process are hiring people, etc. You're going to try to take one person that's been with you for 12 months or so, make them the GM. But now they don't need to have tons of experience like Andy because they're literally just doing mowing and maintenance. You know, Andy's bopping into their territory to the big project stuff. They don't have to worry about it. But then as soon as you hit that 500,000 level, you're looking at maybe two or three trucks. Trucks, four or five crew members. They can manage them. It's low lift for that general manager in terms of operations. And they're going to raise prices. And so you're going to make that location do 7,800,000 but very profitable, simple services and ran by a general manager. That's the copy paste model. Right. And then if you want to keep Andy and like the first home base being the, hey, we are willing to travel further because we are projects. We can travel an hour if we need to. Yeah, no problem. Great. That's high margin. You increase prices when you hit capacity and you'll get more and more leads from all these other locations and either a. Make it a, you could make that a big, big one, like maybe that goes to 5 million projects or you just make it absolute cash cow. Like you just keep raising prices only.

Okay, because. Because I am going to be like Andy's got, he's kind of project. I, I plan to make him a general manager. He's, he's far too wanted to be left doing the work.

So bringing him out is definitely the number one plan I have. So whether that leave him there run. Would I prefer to leave him to run the, the main location just because there is projects there and he can keep on those. And then like you said, if he's gonna come here and do whatever or you know, hey, you're in charge of this, I'm hands off as far as the Billerica location I go. But you know, Westford, you know those two guys who come up here with the mowing the bushes or whatever, because that's going to be my issue to deal with for, you know, because I like to get to the point where it can make him a regional manager and you know, get him paid some real money. Because right now he, he's a salaried employee. So he's making just under 70,000 each.

Yeah. And like, you just break it off. You break it off when two things are true. One, there's enough revenue to warrant a gm. And two, you find a good gm, right? So the, the challenging part is finding someone who's actually going to get the location up to 500,000. That person is so hard to find. I recommend the owner. You should do that and then pass it off. And then you just make it a system where you know what the pricing is. You get everything up and running, you hand it off, and then the handoff is easy because you're not requiring this person to grow the business. It's like, hey, leads are going to come in. We're going to just try to replace Churn. We're not going to be marketing. We're going to raise prices. You hit capacity and just move on.

Yeah, you. What are you recommending? So, you know, if I take a hundred grand, you think that's a good start for starting up a location?

Yep. If you're doing simple services and you're starting with 100 grand and you're not getting debt, I'm gonna like to be, to be conservative, it's gonna take three years by the time you get. Because like the first year you get to say like 15 or 20,000amonth or 25, 30,000. If you're doing simple services only. That's a lot of customers. You're probably talking 150 plus. Then year two, you're going to be really probably solid, like 350, 450. It's that third year, you can get above 500 and then, okay, great, now it's time to find my general manager. And then I'm not going to grow this anymore. Because as soon as you get above 6, 7 trucks or 8, 8, 9, 10 employees, it becomes you need Andy's caliber of person to run the location versus just having five, six guys, they can even four honestly and make it really profitable.

Yeah, because a lot of times when I've, you know, watched coaching calls you had with other people, they're, you know, they're doing 3, 4, $500,000 and they're like, oh, I got 8, 9, 10, 11 guys. And I just can't wrap my head around that, you know, because we're running a million bucks and we're doing six guys. So I'm just, you know, granted, they may only be doing services, but I just still don't know where the, that money's coming. Because on that note, like, like this last year, probably in my opinion, our worst year yet, where we, you know, just broke a million. But we only did like 10 profit. But we had a tough year with just all new guys. This is the first time I've ever had a whole team of guys that couldn't communicate with, you know, things were getting broken, things were getting lost. Guys are dragging ass, taking too long to do stuff. So, you know, being the right people in and that's really kind of what put the fire under me to switch to the P is the guys that had the last three years prior were great. You know, I could kind of set it for it where they were fine. I didn't have to watch them, I'd have to tell them to work fast. They, you know, we were doing 15 to 18 profit, net profit every year. And all of a sudden this last year we dropped down to like 10.24, which to me is not good. You know, that's whatever, 50 grand.

Yeah. I almost say it's like you could potentially start to market in the second area. Just like you pick up some mowing customers. But like you have to have location one in P4P because as soon as you move out any more than you currently are, just expect that to get worse, things break, more guys show up, it just gets worse and worse.

Exactly. And I knew that you got to bring that up too because I'm sure you've dealt with it.

Like, like if.

You can get them to be all super money motivated. Because then what happens, Joey, is like once you leave, you institute Prof. Sharing. Because now like, hey, anything over this dollar amount because like you're, you're thrilled at a 10% distribution if you're never there. But then anything above that like needs to go to them. There needs to be incentives. And so, you know, that would be like step one is P4P. Step two is we've got to have a incentive program in place for location one. And then, then I'd be like, yes, now you're good to go. Leave. Because they're now thinking constantly about efficiency and profitability.

Your employees break stuff. Do they for it or do you pay for it? How do, how do you guys work that?

Yeah, so you basically have your base pay 20 bucks an hour. And then every day they're getting a percentage of the labor revenue, right? Yeah, all the whole paper. Do you do weekly or bi weekly pay periods?

Weekly.

So then every week, basically at the end of the week you say, hey, look guys, I'm going to pay the higher of either 20 bucks an hour or whatever you made on P4P. The higher of the two. Now, if, let's say P4P is 950 for the week, their base pay is 700. That means there's $250 of what we call performance dollars on the table for yellow slips. Yellow slips are going to be damaged cases. It's going to be callbacks. It's going to be anything like, that's money on the table. But I'm never going to go lower than base pay that way. From a legal perspective, you're not actually taking money away from them. You're taking away their bonus.

Okay, I like that because like I said, we had. She was last year.

And honestly, even if it's a thousand dollars repair and like, man, there's only $200. That $200, them knowing it's on their paycheck, like, it's enough for them to slow down, look one more time, not run over stuff. Like, just having a little bit of pain is helpful. Like, I don't want to penalize.

Okay.

I don't want to. It's just a matter of, like, I need a little bit of pain. So they look twice. No, they take an extra second, you know?

No. Because 90% of the time, they're great. And there's no issues. You do have those times where they, you know, you don't want it to get out of hand. How do you recommend I explain this? Because we all. We all have worked with, you know, Hispanics, for lack of a better word. All they quote is, how many dollars per hour will you give me?

Yep. So right now, any of them above 20 bucks an hour?

They're all above 20.

Okay. Like 25, 27. That we're mostly 25.

Yeah. Okay.

I think you're making a lot more than 89 per hour.

Yeah. Like, I think. I think it's probably more like 110 to 120.

And so last year was. Last year was 107.

Yeah. So I. I think between.

Between maintenance and projects.

Yeah. I would probably do like 100 for maintenance and 120 for. For projects.

Okay.

As what the target hourly rate is. Because if you go where you're talking now, like, the budget hours are gonna get all inflated. Just simple math of knowing, like, there's only six guys working. He made it one way in. Like, it's almost impossible. So. So I would use 100 and 120 to, like, run the math. And the reason I say that, too, is because I need to get the 25% rule, which is the base pay. I do not want it to be more than 25% of the hourly rate to the customer. And then. And then you could theoretically $25 an hour base pay. And I think in your market, you're going to need to do that in order just to attract a decent worker.

Yes.

So then what you can say is, hey, guys, like the $27 hour people, that those might be a little harder of a conversation. And I, inside the P4P university, the training it walks through, how to convince those people. Basically what you're going to do is you're going to run P4P and what they're currently doing at the same time, and you're going to give them, hey, guys, we're going to try this new thing. I'm giving you a percentage of all the labor you make for the day. And at the end of the pay period, I'm going to show you both of them and you choose which one you want. And so you just make sure you've done the math on the back end to know, hey, everything's lined up for this project. We're going to be good. We're going to make a lot more money on P4P because they can crush this job. So, okay, to make it really simple, all you want to do is them to choose two to three times in a row of P4P versus base pay.

Okay.

And how you explain this is like, do not get in the weeds of yellow slips. You say, hey, guys, I'm giving you a percentage of all the labor revenue on this job. I'm also giving you $25 an hour. And we keep track of them the whole week. At the end of the week, you can have the higher of the two.

Okay? Yeah.

And if you had to, Joey, if you wanted, like, hey, I want to roll this out. I just want, I want no friction. I would just say if there's some people at 27, just lock them in. Just be like, hey, guys, I just want everyone here to make more money. I'm gonna be tracking how much you earn for the business, and it's gonna be a third, let's just say 33% of all the revenue you make for the business. And if you want me to show you the numbers each day of how much you're going to make, I can show you that too. And at the end of the week, I was going to be higher of what you're currently making versus that.

Okay.

Your hope is that your killers go for it, and then you're able to literally let go of your, your lowest performers and let These guys make 35 bucks an hour.

That's kind of where we're at. And I've already started doing that this year. I already lopped off two cancerous cells, so.

Okay.

And the yellow. The yellow slips thing, how do you, you know, should I wait to introduce that kind of system, too? Because I've, you know, I've definitely brought that out because I. We need to have a better system for these repairs.

Yeah, totally. So how you pitch this is, like, in their best interest all the time, right? So you say, hey, guys, it's not fair that some people make tons of money here because they go super fast and make all sorts of mistakes. So what we're going to do to keep this fair is if someone's going super fast and making mistakes, any mistake that you. If you make a mistake like a skid mark, you got to go back to the customer's property. You're not generating any more revenue. So it's actually a pretty easy system to keep track of in terms of, like, just callbacks. It's the damages that you have to explain the damages where it's in a negative dollar amount. And it's only if you're negligent. If you are, you know, shoveling and the shovel breaks, who cares? But if you back over the shovel, you're paying for it.

Yes, exactly.

And you pitch this in a way, because everyone, when you're in a meeting thinks they're the highest performers. They. They're like, yeah, like, it's not fair that other people work really fast and make more money. That. That's not fair. And they make all these mistakes, and then you just institute it from there.

Right. I love it.

When you guys do estimates. You probably. I don't know if, you know, like, I have in the mn because of the Moore's overhead style, which. The mult. Overhead which way above how it works. But, you know, you guys include the price of, you know, the truck mowers and the weed whackers. That's included in labor revenue and the hundred per hour.

We keep it simple mostly because I want. Yeah, I understand. Multiple overhead recovery. And like, yes, I want to keep it simple for my crew so I can literally show them how much money they're making today. And they can just do the math in their head of I divide that number by three or like, so we move. As we've moved our prices up, we've been able to move our P4P down to 25%, right. So they can say, okay, I'm making $1,000 a day, 25%, $250. I'm making the day. And then in their mind, even if you're not synced up with Copilot, because in Copilot they can actually see live, like, how much they're making. They have a track of like, as they complete jobs. It's kind of cool. But like, if you keep it simple enough and you can just share all the information with them and this is what leads into down the road, open book management and profit sharing. Because when you're doing profit sharing, you've got to be able to share the numbers, otherwise they don't trust you. And so if you can, if you can do P for P, where it's like, hey guys, I'm actually going to show you how much money we're ranking. Like, here's all the money you're making today. Divide that number by three or divide that number before and that's how much you're making for the day.

So it's just labor, materials. That's all you for your.

Correct. Yes.

Okay, perfect.

Otherwise you're trying to explain to them about like, good luck. Yeah.

Which I, I couldn't explain it to them. I'm just. This is how it works.

Well, especially like if they can't speak English, we're not going to yield.

That's awesome. Yeah, I know. I wish you guys would. I, I hate Element. I hate how great their estimating functions are. I get a lot of complaints, my buddies who use it. But I love the scheduling aspect of it. I think it works for me. Other than that it's like one of the most overpriced software in my opinion. And I can't stand it. Your software. I love everything about it except for the estimate component.

There's. There's a few parts, even like one part I really like about projects. I, I don't know if they have it in, but it's like where you have gaunt graphs. So like on big, big projects that are six months long, you kind of have a graph. It's like more of a project management tool. Like, that's the type of thing that we need to do for bigger projects. But that's why I always say, like, if someone's doing over $50,000 projects consistently, Element's still kind of the way to go.

Yeah. Yeah, that's. Thanks. I guess.

But what I would say, Joey, is if, if you, if you do P4P, like, what will happen is by the time you have that integrated and you're ready to kind of like split it off and like it's really dialed the P4P side then you'll probably be ready to be able to move into copilot with the estimate component side of things and then, then those will sync and then that way. Yeah, the sync sport is so nice because then what happens is you don't have to do any sort of manual entry. It does it all for you because it's pulling over the amount of budget hours. It's pulling over every customer as they come through. As the guys complete jobs, they see how much money they're making per hour. So they always want to finish late in the day because they don't want to go back to the job site the next day. Like it's, it's good.

Never mind all the automations that it has that I love. You know, it's the same than I think John, like jobbers about. A yard book is an LMM when it comes to a lot of this stuff and yard book is so. Yeah, definitely, definitely. Okay. How long do we have here?

A few minutes. You're good.

Go for it. No, I think that's, that's pretty much it. I mean, I guess other than that, you know, if my guy spoke English, I don't think be having any of these issues. It's just like you said, finding the right guys. And you know, I found some, you know, might be from Massachusetts, but I'm not politically correct. I've had white people come in and they want a man. I want, I want, I want. And I'm like, you know, get out. Because that's not how the real world works. You know, go get a government. Yeah, it's just, you know, so it's been just very difficult to bring in those, those people who, you know, are great people. I love that we have, we have Hughes pool parties, all kinds of stuff with the guys. They love it, mistakes and all that fun. But it's just so difficult. And thing that gets the most is if a clank when I ask. Well, you know, there's nothing they can do. A client obviously, you know, gets up. So you guys don't speak English, blah, blah, blah. That's the hurdle that I'm trying to get past is, you know, I'd love to keep these guys but. And I've even tried doing, you know, I told them, hey, I'll pay for you to go take English. And you know, once you finish those lessons, I'll give you another two bucks an hour, whatever it is. So they just don't really want to do it.

Yeah, yeah, like, honestly, money talks. And like, the big convince is get them on P4P, because once they learn P4P, the leverage you now have is the more efficient they are.

They don't really.

They actually make more money tomorrow. Like, yeah, this week you will make more money if you're more efficient. Now they actually, like, then we, we started having optional meetings that they could. They didn't have to come, but they could show up and we'd actually go over. Here's a more efficient way of doing this. Like, pack your lunch. Here's like the five things that a top performer does. And then inside the software, they see the top. The leaderboard of who's making the most money. And then when you're recruiting now, you literally pull that up. It's like, yes, our job ads at $25 an hour, but here's a leaderboard someone last week made 25, 20, 26. Yes, they were just starting, but here's the guy made $40 an hour last week mowing grass. That's when you start being a pull in the best talent. And it just changes the dynamic of things.

Okay, all right, I'm gonna do. I'll do that. You do that week, or. Pardon me, the optional meeting is at an every week thing.

And you won't be able to do that until they're all above base pay and they're all like, super motivated by P4P. But like, there was a guy last week, he worked. We don't even. He wasn't even full time, but he did $70,000 out in the field as a. We had a screenshot of his W2, sent it to the team and stuff. So that's an average of 35 bucks an hour if he was working full time. And so once you start having evidence of that, you start framing stuff like that, then people walk in, you're like, hey, this is what so and so made last. Here's the. We have the leaderboard of PPP software on the board because they can see the top and like, yeah, so right now. And you just literally can list it live and, like, see how much money people are making.

So, okay.

And then that way too, whenever anyone comes, like, I want more money. Like, well, let's step back for a moment. You're getting paid same as everyone else. And over there, he's making $15 more an hour. Then maybe hang out with him. Like, what? Oh, he gets here, he's out of here within five seconds. He. He looks at his job notes the day before. You know, he asked Questions the night out of. Like, then you have so much evidence. Like, I've never had anyone from the field ask me for a race since I answered P4P.

Yeah. Oh, let me ask you this question for probably the millionth time. Maintenance stuff, shop maintenance. What are we doing on that?

So it's called manual adjustment. So basically, you. If you think about, like, P4Pmoving up as stuff gets completed. Well, when I have them doing shop maintenance, what's happening is P4P is not moving. But. But their hourly rate is. So all I need to do is manually adjust P4P. So, for example, they're at the shop, they do two hours worth of work. I'm going to do a manual adjustment to P4P to equate two hours worth of P4P time.

Oh, okay. Okay.

And then they. Down the road, they do it all in the app. For now, if you wanted to, Joe, you could just do it in element tracks there. Yep. Perfect. And sometimes for shopmates, sometimes they'll do, like, even just like a clipboard. You know, they put their name and how many hours and you sign off on it or something like that.

Okay, all right, cool. Yeah, because like I said, every time they're not clocked in, they're clocked in the time. If they're at the shop doing maintenance, they're clocked into maintenance time. If. And then, you know, three towns will pick up some stone, they clock into, you know, material pickup and things like that. So we kind of have them broken down into a lot of. Even the unbelievable stuff we crack a lot of.

So.

Yeah, I just. I don't know how you can charge if you don't track. So. Yeah. Awesome. Awesome. I think that's all I really got for you.

You got it, man. We'll stay in touch. You have a great day, Joey.

Thank you, brother.

Take care. Bye. Bye.