Raising Prices & Staying Busy in Fall With Landscape Jobs. (Landscape Q&A)

Hey everyone, it's Mike Andes and you're listening to the Landscape Business course podcast. Today we are going to be answering questions from you, the listeners. And if you are interested in submitting your questions, make sure you join the texting platform. You can do that by simply texting the word landscaping to 855-575-1267. Text the word landscaping to that number and then you can join the group. And when I ask for questions, you can submit them. So that's where we're going to be taking questions from today. About 30, 40 minutes ago I submitted this and I already have about 60 or 70 questions. So we're not going to get to all in today's video, but I'll post these in segments and I will try to get to all of the questions because they'll probably be about 100. I'll try to get through as many as I possibly can over the course next two or three videos. So let's go ahead and jump right into it. But before we do, make sure that you've signed up for Landscape Summit. Alright, so Landscape Summit is a three day conference where landscapers come together and we're going to be talking about everything to do with profit sharing, implementing P4P, creating a money motivated team culture and just it's going to be an incredible event. Opening up your books, how to do that, we're going to actually role play how to share that with your team. Going to show some of the behind the scenes of how I did it. So going to be very, very useful. Implementing your profit sharing program is going to be very, very helpful for retaining and attracting great talent. Make sure you come to this, this year's event and make sure you sign up soon because right now we have had to get a massive venue. The capacity of this venue is over 1300 people. In order for us to have the 200 people that were allowed in the building because of COVID and that could go down to 150. So please, please, please, I can't overemphasize this enough. Please register now and I'd love to see you there. What I love about it is it's people who are serious about business. It's not people who are just interested in fancy equipment and driving things around like Gies. So much fun. But a lot of times not a whole lot of business talk. So let's go and jump into these questions and I have not read through any of these. I've just seen them pile up and I'll just start cracking through them a couple of them actually came in a couple weeks ago as laggards to our last Q and A ask on the texting platform. So make sure you text that number, text the word landscaping to that number and you can join this group as well and submit your questions. Next episode. Alright, first question. How many chances do you give your employees before you fire them? This is really a case by case basis. We're gonna be talking about actually a couple of these at the conference. Cause sometimes it's based upon what they do. It's a one time you're done, no questions asked, you're fired. And then other times we work with them, we try to help them, we give them a lot of slack, we give them a lot of second chances. So every single case is very much different and also depends on what their track record is. If they're late one time, they're not gonna get fired. If they've been on time for the past three years, you know something's wrong. And usually that's like, okay, like let's have a discussion with this person. Because something's obviously wrong for them to be late. Whereas if they are habitually late. Yeah, like they. Or they've been habitually underperforming and then they're late one time, they might get fired right away. Even though that's their first offense for being late. It just. Every single situation's a little bit different. Next question. Okay, this is a long one. Hi Mike, I have a quick question for you. At what point in your progression would you feel offering employee benefits such as health plans and other employee benefits such as a 401k would be recommended? Also, have you considered this in terms of tax efficiency when paying business taxes? In other words, instead of paying taxes on your retained earnings, you covered that tax amount and benefits. So that is deductible. It would be interesting to get your take on this. We are considering this in terms of employee hiring and retention, along with tax efficiency. Thank you. Thanks for all you do in helping us on this journey. Okay, so the biggest thing is this. If you're trying to attract family guys who have families, this is gonna be something like health plans, 401ks, retirement. That's gonna be something they actually care about. But for the majority of people in the landscaping industry at entry level positions, they're looking at one thing and it's the dollars per hour. And that's all they really care about. They might not understand the fact that your benefits cost four or five dollars per hour. If you have paid time off, if you have sick Leave if you have 401k, match if you have medical plans like that gets expensive. And a lot of times the entry level employee is not going to be interested in those things. They just want the money because a lot of times they're covered with Medicaid and other things that are going to take care of them because they're lower income. So keep that in mind. But also know that for retention, I feel like it's a good tool if you're wanting to keep people for five, 10 years, like they have families and they get married and all the rest of it. Whereas in our case we are trying to get them to the next level in their career, whether it be owning their own business or manager and kind of like moving them up pretty quickly. So we don't want to keep people for like 10, 15, 20 years. So we don't really concern ourselves too much with the benefits. We do do paid time off, we have to do sick leave in our state. So we do two weeks paid time off and. But we don't do like a 401k or medical or anything like that since half of the company, half of the employees in the company are covered through either their parents or they have Medicaid and whatever. So just kind of what I've seen. And it's gonna really depend on the age and where your average employee is in their life. That's the biggest thing in terms of if they value health benefits or not. All right, a couple questions here. How can I do, how can I stay busy to keep money coming in during the winter? I live in Georgia and after all the lease fall, there's not much to do and customers don't want to continue service. Okay, so we're gonna talk about this extensively at the conference about what to do if you don't have plowing to stay busy and how to make sure that you convert your mowing customers into winter services. How to do that really effectively and get like 70 to 80% of them to do that. We're talking a lot about that conference. I don't wanna get too much into it now, so let's go to the next question. Next question. Hey Mike, can you talk about the MBA course? Do you go over profit and loss statements? Also common business practices, take care of all that legal stuff and also taxes or keeping track of growth. Okay, so he's referenc links below. I have an MBA course that's in pre sale right now. Gotta make sure I emphasize it's in pre sale. It's not done yet. This Week, the first three modules are gonna go up. There's gonna be probably about 15 modules in all. The first three are going up this week. But it will take next four months at least for me to complete that course. There's gonna be over 300 courses in or 300 lectures inside that course. And right now, like I'm building it. Basically all the stuff in my MBA course that I learned, I'm trying to extrapolate everything that was useful for small business and put that in the course. And so right now it's in pre sale. The first three modules are coming out this week, within the next probably four or five days of me recording this. And we'll continue to be building that for the next four months and then into the future as well. So that's what he's talking about there. And in terms of what we cover is, yeah, profit and loss statements, we cover accounting, we talk about very deep concepts that do not do well on YouTube. No one wants to listen to on a podcast. They're very deep topics. Some of it's theoretical and some of it's not even going to apply to your industry. Like when we talk about supply chains and when we talk about what was I talking about the other day, Product market fit and how to do market research, Things like that might not be applicable to you, but it's really good business knowledge and it's really good for just overall, like what I learned in my business school, I'm able to put into this course. So that's what I'm working on. That's what he's referencing in this question. All right, next one. Hey, I was wondering what your procedure is for raising prices on non contracted customers. Also, what verbiage do you use and how do you deliver it to the customer? Love the channel. All right, so we make sure we raise prices in the middle of the fall or spring rush so that customers are not. They don't have a bunch of people ready to serve them because everyone else is busy. If everyone's busy, all the landscaping companies in your local market are just absolutely saturated with work. That's the time to raise your prices because they're not gonna be quick on getting estimates back. They're not going to be. Especially if the grass is growing really fast and you give someone a price increase notice they don't like. They can't not do their lawn for a month. Whereas if you wait in the, if you raise their prices in the winter, they have all winter to find someone new. And everyone needs work. And so people are Willing to get estimates done faster and cheaper. So I'm a big advocate of doing it during the rush of the season to try to increase prices. And the verbs that we use is really highlighting the positive things for the customer and we assume the sale. In other words, we do not say, contact us if you'd like us to continue. We say, contact us if you would like us to not continue at these new prices.

All right, let's see here. Next question. Hey, Dean. Hey, Mike. This is Dean from full circle landscape solutions in Doylesville, Pennsylvania. Do you include yourself in your workers compensation? Do you. Did you when you were small? All right, good question. I do not include myself in our workers compensation. In our state, it's a little bit different. You need to check your state regulations. But the bottom line, for me, I am literally at the Bellingham location, like our first. Our bigger location, maybe an hour a week. And I'm literally walking into the office and out of the office. So, like, I'm not going to get workers compensation for myself. If I was out in the field, maybe I would. I did not when I was smaller because I got. I had really good insurance and I did not do it. Yeah, I didn't do workers compensation for myself as the owner because it's an option in my state. Hi, Mike. I live in Linden. Owner of trulawn lawn care. How do you transition your mowing services into fall services? Kind of talked about that a little bit already, but really focusing on leaf cleanup, things like that. Great to hear from a local. Make sure. Didn't put his name here, but I know Trulawn lawn care. Make sure you come to the conference. Love to see you there. You're more than welcome. Even though you're local. Like, I don't feel bad about that at all. Okay, next question. Hey, Mike, question about your used trucks you buy. Are you looking for a certain mileage or year? The only trucks I find at the price you say you got yours at seems to be 150,000 plus miles. And I'm nervous about buying one with so many just to have it replaced within two to three years. What's your experience? Things. So usually if you have a tight route, you're not gonna put a lot of miles on these trucks. That's something that people don't think about a lot. If you're driving 50 minutes to go to your mowing routes. Yes. But if you're keeping all of your mowing route within five, six miles of a certain point, you might put 50 miles on each. You know, 50 to 80 miles a week. And that's not a lot. Especially when you have a winter and you have days you don't use the truck and you have the weekends, you don't use the truck. So we don't put a ton of miles on our trucks. And so for us we do get trucks that are between 1 and 130,000 miles usually. And we are also looking all the time, we are looking in Canada which is the borders closed right now. So the three or four truck vehicles we got this year, we weren't able to go into Canada, which stinks. But we still bought them locally, we bought them used. And you just gotta keep looking, looking for people that are bringing them in from down like south. For us, those are cheaper. We are also looking for trucks that we can paint. And so we're looking for ugly trucks, ones with scratches, bad paint color, stuff like that. Because we can paint them, make them look brand and get a discount from a retail perspective. Next question. Hi Mike, what's the web to go so you can help me with my website? Oh, the website. Yeah.Law.Law CareWeb Design.comLaw CareWeb Design.com that's where we can help you with your lawn care web design. I know two or three new sites went up this week. So thank you all for everyone supporting that. I really appreciate that. Lawncarewebdesign.com it's basically where you can get your website built by us. There's no contract, it's just a monthly fee. It usually takes six to eight weeks to get up though. Keep that in mind. What else can you do for money in a colder climate that is not snow removal? We're going to talk a lot about this at conference. It's called winter services. You try to convert your mowing customers into winter services. We'll talk a lot about this in detail at conference. What is the best System for running P4P with multiple employees on a job? Go inside the course. We have how to deal with this. You basically need to take the budget hours, divide it by how many people are on the job and you're going to come up with the amount of budget hours per man on that job. It gets a little more complicated when you have a job that's multi day that is going to extend for multiple days. You need to keep track of how many hours people worked on the job site so you know what ratios to use at the end of the job. So say for example they did 39 hours actual hours and there was 50 hours budgeted. So you know that 39 divided by 50, that's the ratio you're going to be using. And then you're going to split up the monies based upon how many hours people are on the job site. That's all in the course. Go to the P4P section, watch the videos, there's the Excel spreadsheet, the software, it's all in there. And I was just answering someone's question today that was using that Excel spreadsheet and doing P4P. So good for them.

Question. Next question. Scaling too quickly, burning through cash. At what point do you pull back for a profitable year to then go at it again? I don't believe you need to burn cash to grow and necessarily once you've hit a certain point. So our first few years, yes, I was putting all the money back into the business. But then like this year for example, we've grown 36% at our local shop and it is our by far most profitable year. Like we'll do, you know, like very, very good profit margins right around 20% for the whole year. That we will do. And we've grown significantly. But again that's because we've simplified things. And so what I would do if I was you is not so, you know, pulling back for a year. I would just take a year where you simplify services, cut services out. And if you look at the growth trajectory of our first location, it was grow, grow, grow one year where we started simplifying and it was kind of a down year, not down, it was just flat. And then this year it's just taken off because once you take simplification of services, removing services is short term pain because you don't get that revenue. But then once that, once you've implemented that system, like you can scale it so much faster. And so I would definitely say, I recommend most people if they have more than two or three employees, to take a year. If you've been burning through cash and growing really fast, I would definitely take a year, not focus on scaling back. Don't be like, oh, I gotta get smaller. I would raise prices, I would reduce the amount of services I offer, simplify all the systems and use that as a way to kind of have a level or a year where you kind of go flat, become profitable and then next year you can keep growing and be profitable. It is possible, 100%. All right, next question. How does one calculate their overhead cost? What is it divided by? Alright, so I'm going to actually point in the direction of lmn. Really good tool for determining this in terms of your budget and determine your overhead, cost and all the rest of it. You can put all your numbers there, use the free version of their software and you can put all your numbers in there. It gives you some really cool numbers in terms of ranges for the industry and averages, things like that. Next question. How much a month do you spend a month on marketing to make over 100,000 K? And how many routes does your main location run? So our main location has about 4 to 500 mowing customers. I think a little bit over that now actually. But anyways, in terms of month to month that we spend on marketing, watch the videos that I make a monthly made the past couple months on our marketing expenses. You can see our P and L and see how much we're spending on marketing. However, if someone was. This is the thing we use with our franchisees. If I spend $100, I expend 10 to 20x multiple on the next 12 months in revenue. So if I spend $100 in marketing, I expect 1,000 to 2,000 in revenue this coming year. Now if I'm getting mostly mowing services, I know that's gonna compound the year after and the year after. Keep those customers hopefully. But that's the general rule of thumb that we use. If you're doing good marketing, if you're not doing dumb marketing methods, you should easily get 10 times of what you put in. You should get that back in revenue. And then the year after the basis of which is so important is having that recurring revenue you keep the customer the following year. So when you put more marketing dollars in, you're building. That's the importance there. And so you get over 100,000amonth in revenue. Like you're going, if you're doing that in year one, you're probably gonna need to spend like five to $10,000 a month to get there in year one. But if you are willing to wait a few years, you could spend $1,000 a month or $1,500 a month and get there in the course of a couple years. So it's just all about the speed at which you grow. That's gonna determine how much money you spend on marketing. Knowing that the more you spend on marketing, there is more waste inherent in that your cost per click will go up. If you're putting a lot more money into programs, you'll spend money a little bit more. Unwise when you have a lot of money at your disposal based upon what I've seen. But it's going to strictly come down Your growth, especially at the beginning, is going to come strictly down to how much money you have for marketing. Last question here for this video today. Hey, I was wondering what your procedure is for raising prices residential and contracted customers. Also, what verbiage do you use and do you deliver it to the customer? Love the channel. Alright, so I answered this already. We do not deliver this by hand or mail. We do this by email and so that way we can do we just raised prices I think on about 200 of our mowing customers and so that way that come next spring. Again we're just taking our profitability. We're really focusing on profitability and simplification of services. So we did that. There is a letter inside of the course that actually shows you what we say to our customers. In the templates and download sections you'll see our exact letter of verbiage we give to the customer. But yeah, I hope that helps somebody. I'm going to be making another video or two or three to answer all these questions. Make sure you stay posted for that but make sure you join and you come for Landscape Summit 2021 go to landscape businesscourse.com conference. I can't wait to see there. It's going to be great. Can't wait to see you then. Thanks so much everyone. You listen to Mike Andes on the Landscape business. Wait, this is the Landscape Landscape Business course. Thanks so much everyone. We'll see you next time.