REAL Financial Statements From My Million Dollar Lawn Care Business!

Hey, everyone, it's Mike Andes, and you're listening to the Business Boot Camp podcast. Today I'm going to be sharing the profit and loss statements from two lawn care companies that I actually own. Corporately owned Augusta lawn care locations. One that has, like, 15 trucks, one that has two trucks. And so very different sides of the spectrum. One's been in business for six or seven years. One's been in business for six or seven months. And so I just a really good comparison, I think, for some of you, if you've watched these before, you'll enjoy this one monthly kind of episode of me sharing my numbers. We're gonna go directly in the profit and loss statements. You can see where we spent money, where we made money, and I look forward to it. Before we get into the show today, though, a big thank you to today's sponsor, which is Gusto. If you haven't Already, go to gusto.combootcamp Try out their software completely free for 90 days if you use that link and you can pay your employees directly into their bank account without having to write a check, without having to do numbers or on a calcul or making an error when you're writing out the check. None of that anymore. Direct deposit directly into their account. Get a W2 for them automatically the end of the year. No more back and forth with your accountant. It's very, very, you know, cost effective, even after the free trial. So tryouts today. Go to gusto.combootcamp all right, so we are going to start off with the Bellingham location. The Bellingham location is the one that we started first. Now, I got to make this very clear. We started this first location in a little town called Blaine. Blaine has like six or south, six or 7,000 residents. And we grew the business past a million in revenue before moving to Bellingham. A lot of people think that you need to have a big territory, like hundreds of thousands of people or a million people. Like, I need all of Seattle to grow a big business. You don't. You don't. I actually like the smaller market and having a smaller area where I'm marketing, because I can be a big fish in a small pond. And by having a smaller area that I drive, less drive time. And when I do my marketing, everyone knows who I am. Like, when we were in Blaine, if I wanted to do a Facebook ad, literally everyone saw it, wanted to do a every door direct mail campaign. I could send it to every single person in the city and it wouldn't be too expensive. So everyone knew you so brand penetration is almost better inside a smaller area and a smaller number of people. I'm a big, big believer in this. And so Bellingham location, it's November. We do lay off some of our crew. Not all of them, not even half now. Most of them we actually kept on this year because of winter services, which we'll be talking about at Landscape Summit, how we keep our crew busy. We don't have a lot of snow plowing in our area. We can't do project really big ones because it's so wet. Anything with the mud, just being absolutely miserable. You can't grade or dig or anything like that consistently during the winter. So our income at, you know, so let's go ahead and throw up the profit and loss statement. I don't know where Josh is going to put it, but it might even just cover me completely. The profit and loss statement from November 2020, you are going to see, first of all, the service income, $141,000, that product sale of product income negative above that is from a refund. Actually, it's not even a refund. It's a balance check. All right, so that was a bounce check that happened at the very last of November, like the 29th, I think, or 30th. And so therefore it shows up as a negative amount. And then it'll be reconciled in December. So, all right, expenses. You'll notice the advertising is really high. There's a few reasons for that. Number one, we're doing a bunch of testing for the franchisees on winter services and spending money in certain areas. We're doing some testing, but also you'll notice that our revenues compared to even October actually up. And it's because we're spending quite a bit on marketing as a function of revenue. We're really only spending like 4% of our revenue on marketing on this month. But, like, we didn't spend that much money in marketing for like eight months out of the year. Like six months out of the year, I should say from like, all the way from, like March to September. We probably didn't even spend $6,000. And here we are spending 5,700 in advertising marketing in November. So quite a bit we spent on marketing. Again, like, we wanted to keep the crew busy. It's very important to us. And you can see the profit margins are high enough on the work that we do do, so that that 4% in advertising is fine. And for $6,000 in marketing, we can do a lot. We do, you know, a whole bunch of different avenues. Google Nextdoor Facebook, we don't do any. We haven't done any print this month. But anyways, bank charge and fees. I don't know why there's a negative charge. Probably something small anyways, like a chargeback or something like that. Credit card processing fees, $2,000. Employee other. This is like uniform stuff like that. 137 bucks. Employee other. Wait. Fuel expense. Fuel expense, almost 2 grand. Insurance and licensing, 4 grand. That's a little bit higher, I think, than usual because we just had to change our insurance plan. We had to change companies and we had to because we've been growing so much. The one company said, hey, like, you're kind of not the fit for us anymore. So we had to move on to a different company. And we've added a lot more employees in the past year. And so it increased our insurance. Now our insurance will not be $4,000 per month. That was the initial. Like you got to pay some money up front to start the plan. And what's different? Like in the past, I would have paid the whole year right away because there's not a financing charge. However, because we have profit sharing, I don't like to do that anymore because it might be better short term or better long term. But the problem is, like when you start doing profit sharing. If I would have spent say $15,000, I forget exactly what it was, but let's say it was $15,000 on paying for all the insurance for the year. It would have really hurt them this this quarter or it would have impacted their profit sharing. And I don't like to do that. I try to keep the month as consistent as possible. So if I know there's a big expense, I try to match it up on a month where I know we're going to be getting a, like a really busy month with lots of revenues. So I try to even out as much as possible because now the team is impacted by my decisions in terms of their profit sharing. So I try to even out the profitability a little bit more now, whereas in the past I would have just paid for that because I know that there's some. There is some finance charges of taking an insurance bill over the course of a year and doing monthly payments. I know that. And it's better to pay it all off at once. But profit sharing, I want it to be a consistent profit sharing for them each quarter or as consistent I can possibly make it. So I did go ahead and do where I only think I paid like 2,500 to get the program started and Then every month there's a premium that we pay. Office and software. You got payroll expenses, 57,000. Rent and utilities, 2,200. That includes like Internet, the toilet.

Trash, stuff like that. We do. We're on solar and backup power, which is not great at all. We're looking to buy property and build so that way we can get around this issue. But it's a pain in the neck. I would be happy to pay a few hundred dollars a month in power bills and utilities if we didn't have to run off generators and solar. But anyways, especially this time of year, pain in the neck in the summer, not so bad. You got sunshine right now. You don't subcontractors, we don't do irrigation. So we do have some of our bigger commercial properties. We do have irrigation inside of our contract, but then we have subcontractors that come in and actually do the irrigation, fix the heads, you know, blow out the system, stuff like that. Taxes, you got to pay taxes. 14,000 tool supplies and materials. That's like mulch, gravel, etc. Mostly stuff like that. Truck and equipment expense. If you watch my other video the other day you heard me say that we had about four to $5,000. To be honest, it was $4,800 that we had left on a skid steer payment that we went ahead and paid off because we sold it. So what you don't see is the fact that we sold this piece of equipment for $17,000 today, which is December 2nd, so that isn't going to be recognized until December. But in terms of equipment, we did have to pay that 4 or $5,000 off. And I should have this number right now when I'm talking about it. But I'm pretty sure that was the last bit of loan besides like 1,000 or $2,000 on a MO several years ago. Both of those loans were 0% and I was going to pay them off a couple of years ago. I was like, look at 0%. Let's just run with it and just pay them off. And it's not like I'm going to save any money. So you know, time value of money. I was like, okay, we'll stick with the payment. Well, we want to sell the skid steer and it only had like 400 hours on it. And so we went ahead and paid off the rest of the debt. So that way the lien holder was off of the account and then sold the piece of equipment for $17,000. And it wasn't a bad deal all in all because we bought, I think, for 23,000. We used it for past couple years. We used it quite a bit. Not in terms of hours, but we used it pretty consistently. But now that we're really simplifying our systems, we don't need three loaders, and that's what we have. We don't need three. Two is all we need. Totally fine. We have a track loader, and a skid steer totally works fine. Maybe once or twice a year, we'll have to rent another one, and we'd rather do that. But in terms of scheduling jobs, you can just make sure they all line up correctly so you don't ever need three at the same time. But we don't do big, big stuff anymore. We really try to simplify things the past couple of years. And so therefore, we sold the other skid steer. So all in all, net profit of $34,277. That's a net profit of a little over 20%, which is what we shoot for over the course of the year. All right, that is the Bellingham location. And some people will ask this, I'm sure. I think we have now 10 to 12 people in the field working at Augusta, whereas during the summer months, we have, like, 15, 20. And so there's a couple of them that basically you'll find other jobs during the winter. None of them went on unemployment. It's more or less they have other stuff that they do already, and they're like, hey, we'll just go work for three months. So that way, everyone that's here can work full time, because we could put everyone on, like, you know, 30 hours a week. But we'd say, hey, we'd rather give people full time or as many hours as you possibly can for the daylight. And then the other folks, they usually find other things to do, or they are already planning to leave after November. So November is kind of like our last. You know, our mowing season ends in November, things like that. So you'll see a decline in revenue, like in December, because right now, December is a lot of just winter services. There's not much projects. There's no mowing, and a lot of equipment maintenance and things that we got to wrap up at the end of the year. So look forward to November's P and L as well. Now let's switch over to the smaller location, which is the Mount Vernon location. If you have not followed or heard a lot about Mount Vernon, we started this in. In March of 2020, right in the middle. As the pandemic was striking. Literally that week when we went to lockdown, that's when we launched this business. There's a second corporately owned location. I am not there on a daily basis. I am not there on a weekly basis. I'm not there on a monthly basis. I connect with Tim, who is the manager, and I connect with him about once a month. And literally for 20, 30 minutes he has Command center to do all of his full service, we call it. And that's what you'll see here is this legal and professional fees. That 2,200 right there, that's. That's command center. And he's charged like a franchisee. So he gets charged the $600 per month because he's in his first year of business. So the franchisee at Augusta, the first year, 600 per month, and then after that, 1200 per month doesn't change standard flat fee. So that $600 is wrapped up in this number. And so you can tell 600 off of 2,200, about 15, $1600. He paid Duke Command center for their services, which is answering the phone, sending out estimates, doing his scheduling, sending out his invoices, you know, just about everything that is in the office. All he is doing right now, because he's by himself, is working during the day. And then when he has an estimate, he has to put those notes in and then they format it, connect a video, send it to the customer and take care of setting up the job, taking deposit, all the rest of it. So some people like freak out over the fact that I guess probably 20% almost of his revenue, about 18% of his revenue is going towards command center. And it seems like a lot of. However, if I had to hire a full time office person that was good, I'd be looking at $3,000 a month in payroll. I'd be looking at buying an office, I would be looking at all the utilities and all of that stuff. When literally you can see here this rent and lease, it says 600 because they paid for two months and one, but it's $300 per month to rent the facility. Whereas if I had an office and computers and a staff, and I had more parking for those office staff, and I had to have bathroom and Internet, like you're looking at least 5,500 to $6,000 to have that one office person operating per month. And literally for the 2,200, including his franchise fee, that's what he's getting covered. All right. So that's why literally one person working throughout this slow season, he's able to at least break even and make a profit. Okay, so this is the beauty of Command center is when in spring he'll probably spend three or four thousand dollars at Command center. When he's getting ten estimates a day or right now. And you'll definitely see it probably in December, it'll go down significantly because he's not getting all the leads. He's more or less doing winter services and farming his current client database. So we got advertising. You see credit card expense, fuel expense, insurance, and that's pretty much every single month the same. That's two trucks and liability for very simple services, professional liability, I think a million per instance, 2 million total. Office supplies and software. You can see that there. That includes like service autopilot for him. And I actually I'm on there too because we use that account for training the franchisees in terms of service autopilot. So that software is in there Again, rent and lease is usually $300 per month, but that 600 they paid for two months in the same taxes and licenses, got to pay taxes, tools and supplies includes like little stuff if you're doing projects and like that. And then wages and employee related. And that's basically all going to the manager right now. And this was not a profit sharing month. On a quarterly basis he gets profit sharing. So there's all the expenses. Total net income was $1,000, which is low. Right. Like that's 8% net profit, 8% profitability. But if you go back into the summer and you know, busy times using like 40, 50% profitability because he had one other employee which doubled the production and they were hitting 24, 25,000 in monthly revenue. Right. So I know that having just that one as a manager there, he can at least break even, make a little bit of profit every month throughout the winter, which is awesome. Build up the cash reserves, be ready for spring when we'll probably get another truck and a couple employees. Right. So we do not intend this Mount Vernon location to pour money on it. You can see we're not spending a ton of marketing or anything. But like I don't intend like we could technically spend like $20,000 in marketing and probably build this thing up to five and six trucks next spring. Ten employees very quickly. Right. But I'm not going to pour money onto it. I'm going to let it grow natively and organically and really allow the manager to determine how big that gets. It's really gonna be up to him. Cause I'm not the day to day operator. I'M not going to create more stress for him if he wants to keep it at 3, 4 employees at several trucks, 40% profit margin over the course of the year. Awesome. They're Gonna do about 150,000 in revenue down in Mount Vernon in terms of gross for the year. The Bellingham location will probably be like 1.6, 1.7 million in revenue for 2020. But obviously we'll know that at the end of next month. So I hope this was helpful for you. The reason I share this and I share both of them like this is cause I want you to be inspired by the fact that hey, I might be at the smaller location size, but hey, I want to grow bigger. Maybe the Bellingham location is where you want to be at. Or maybe you are thinking about starting a business, starting a long care business and you're like, oh, I can't do it because it's only going to be like, I don't want to grow big, so I'm never going to make money. Well, you can, you can make a very profitable operation if you have systems in place. And so do I think that Tim by himself could run the Mount Vernon location location without command center? No. And I think he'd say the same thing, like to manage all the clients emails. They did all the invoicing the other day for him, answer all the calls, send out all the estimates, do his in like everything, billing, take the calls, credit cards, people changing, sending out automations. They manage his inbox and email for him. Like I don't think he could say he could produce that much revenue without them. And that is the effectiveness of having systems and having those, those things for your operations to be lean. And I think, you know, I know that a lot of times, even when franchisees join Augusta, you know, paying Command center seems like a lot of money. It's doubt like you paid $2,000, you know, like I said, 18% of revenue going to command center. But I can promise you it just would not be possible without them otherwise. And if you were to hire, go out and hire an office person, you'd be looking at least 40% more. But that right now is what we shoot. We are kind of averaging out about 40% savings in comparison to a regular office member. And that's why we moved a lot of our opera. When you go to the Bellingham location, the phone does not ring there, right? They do not get phone calls. They all go through command center. We treat it just like a franchisee in terms of the calls going there. And automations Everything going to command center. Actually, you know what? Let me actually pull up the Bellingham location and see what they paid for command center last month. I think it was like, probably four or five grand. Oh, yeah, right here. No, let's see here. Doing this on the fly. Not that one. See here. Tool supplies, subcontractors. Where did they put it in? Somewhere in here. I think it was $4,000. Though, if I remember correctly, they might have put it into here. I have to take a look at. They might have actually not even been charged because I'm recording this on December 2nd. But I know it was $4,000 and like 5, 400. Like $4,400 or so in terms of how much they paid command center. And that can seem like a lot, right? So I think that's daunting for some people. But I know that by us spending the 4,000, we're probably saving another 5,000 or 6,000. On top of that, they would otherwise have to pay employees to sit there and do nothing when it gets slow. And where at command center, you only pay by the minute. You only pay by the estimate that goes out. So you can we really see scale as you need us more. So I didn't necessarily mean that to be a pitch for command center, but that's really why some people wonder why Mount Vernon can be as efficient as it is in the spring and still be profitable. And then in the winter still get by, produce lots of revenue with only one person working is because they have command center behind them. And so, yeah, anyways, hopefully that was helpful. Inspiring to you. If you have any questions about the profit and loss statements, post down below. I'm a big fan of keeping them simple. So a lot of times some people are like, oh, you didn't break down this one item a bunch. There is definitely ways we can break this down more. When I go do my taxes, like, I'm meeting with my tax accountant next week to go over the annuals, see where we're at. We do break it down more, but in terms of monthly profit and loss statements, I want it simple. I want to be able to look at these numbers, remember them, have them in my mind. Like, I can remember certain ones all the time. How much we spend on fuel, insurance, things like that. I can remember that because it's simple, right? I only got like 10 or 12 expense items here. And so it's pretty simple for me to keep track of what's what and what's out of place or what is too high or too low. And not normal. So I hope that was helpful. Comment below if what helped you and what you might want to see on December's profit and loss statements or what I can expound on more. I don't want these to be boring. I just want to share these every single month as much as possible. Be open and honest and so you can learn and compare to your business and don't compare it like if you're doing landscaping and hardscaping, don't compare it to these. We do not do a lot of cogs cost of goods sold because our cost of materials is relatively low. You know, less than 4 or 5% usually. So keep that in mind. Don't compare it necessarily. But definitely I'd rather share these have these numbers out here so you know you know how you can improve your business. I hope you learned something today. Thank you so much for watching and you've been listening to the Business Bootcamp podcast. I'm Mike Andes. We'll see you next time.