SHARK LOANS Destroy This $1M Business ($1,000 per day)

And I pulled in like $300K, and I think I walked with $200K of it in my pocket after 2 and a half, 3 months. If I get a good winter, I'm gonna be rich.

If, if.

That kind of fucked us the last 2 winters. We were bleeding so much fucking money, and then it got fucked. It got absolutely fucked.

Today we're in Canada visiting Faizin from Cobra Landscape Construction.

What is it? Oh my God. You're done.

He built a million-dollar business.

But I grew too big and too fast.

But has less than $10,000 in the bank. There's nothing left to collect.

There's no new jobs. I'm like, what the fuck is going on? Then I panicked. I was not gonna be able to pay anything. I almost fucked it all up. I was sitting on a fucking line right here, and it was just like one move away from fucking failing.

He also has Shark loans that suck $1,000 per day in payments.

I took some of those crappy 30% interest loans.

Probably more if you're doing $1,000 a day. These deposits, oh, we got $47,000 coming in. How much cash do you have in the bank now?

10 grand. There's a lot of deposits about to come.

We're just robbing Peter to pay Paul. These are jobs you have not done yet. You have not paid for the material. You're not paid for the labor. You've not been profitable on them. You have not completed them. It's not owed to you. These are just deposits. Like, jobs have been sold.

Hey, um, can I get into your garage for a minute? There's nothing in there, bro. Everything's at the yard, Manny. I should have grabbed it.

From everything I have seen, there's a lot of chaos. Like, if someone came in here and said that to me and like they swore at me, I'm sorry, you're out.

When I went through the yard, there's just so much fucking shit that's not in the yard. All our tools are fucking depleted, dude. Like, there's nothing fucking I don't know what's happening if we're leaving them places and shit, but we're losing all our fucking tools.

They forgot the tools. It's 3 and a half hours and they have not performed any labor for this business.

There's no hammers, there's no fucking mallets, bro. There's nothing. Half the power tools, half the fucking DeWalt, Milwaukee shit like that we've bought, it's all fucking missing.

They do not care about this business or you at all. This is the Business Turnaround Show. My name is Mike Andes. I'm the founder of Augusta Lawn Care and HomeWorks Software. I travel the country fixing struggling businesses. Kudos to you for being a great dad. And prioritizing that. I know that's tough with everything that happened. You can adjust the business to fit your lifestyle, so you want to love the business. Our goal is to give Faizon a strategy to turn around the company in the next 6 weeks.

I just realized I recorded a whole long message and it wasn't even recording. So my name is Faizon Badat from Surrey, British Columbia, Canada. I run a landscape construction business. Employees usually run around 8 guys, busier times up to 15. In the winter, we could have around 40, 50 guys out for snow removal because that's how many sites we have.

Did he say He had like ChatGPT make this balance sheet.

Exactly, I was trying to find which one.

I was gonna say, because like you can tell this was not made by an accountant or cookbooks.

It just is a— just a bad time for me, man. My father passed away a month ago, split up with my wife. It's me and my daughter. I've been working hard. I built this shit with— sorry for my language— with raising her. And, uh, I got everything set, man. I just need a little bit of help here.

As some would say, when it rains, it pours. Sounds like he's lost his dad recently. He had as many as 40 to 50 guys doing snow. There was There was no snow in Vancouver last year, like during the winter. I know that because we don't live far away. So it must have really been hurtful in terms of his revenues for the offseason.

I have a $1 million Walmart job that has been waiting for permits for so long, but I'm thinking about changing the whole direction because I'm struggling. It's that now it's getting hard to survive.

Well, he doesn't know his numbers. And so if anyone throws numbers into AI, it will come up with very confident numbers. But like, I can look at these and very much know this is— he's not using QuickBooks correctly. He doesn't have an accountant. So I imagine there's probably 20 other things that are Under the table, taxes not being done, all the rest of it. Because if I'm not getting clear numbers, that means like payroll's not being done correctly, taxes aren't being submitted correctly, sales tax up there, GST, PST, income tax. I, I bet it's all a mess.

Financial struggles. You've made a video about this. I've been taking some of those crappy loans, the one high interest, 30%, pay back in 4 months, daily payments. And it's because I was waiting on money so many times, and now it's getting to a point where I've paid $100,000 in interest since last July, which is absolutely crazy.

This could very well— like, he's disorganized his financials, he has a significant amount of debt. Personally, I don't think he has the personal capacity to be able to, like, have the wherewithal to pull himself up from the bootstraps after having a split, his father passing away. Like, that's so much that he's dealing with. Is he actually capable of getting out of this is my first question, and does he really want to, or is he actually considering selling everything and getting a job because he needs to work through these personal issues. Like, if you have no capacity in your personal life to be able to be a great leader for your team, the business will suffer. And so I could go in here and be like, okay, there's like a huge amount of change that you need to have. Like, know your numbers and cut this million-dollar project from Walmart that's been sitting on the books for 2 or 3 years and all these sort of things. But he will not do that if he does not have the capacity because personally he's just so depleted after the breakup and his father passing.

I think this could be the perfect case for you, man. You're, you're the guy. Um, would love your help. Uh, thanks, Joe.

Hey, hey, what's up, brother?

Hey, man, how's it going?

Good to see you. This is a cool spot you got here.

Thank you. Hopefully sitting with Mike will, uh, really help turn it around, you know. I've— I follow all his podcasts, listen to them in my truck and shit sometimes, so I'm pretty excited to meet him. What do you think he's gonna say? He's gonna tell me I'm stupid. I have no idea, but I mean, there's a lot of messiness in how I operate, and I'm sure that he might see some of that and just hopefully tell me to clean it up in a better way. But thanks for coming, man.

Absolutely.

It's a pleasure to meet you, man. I'm totally into all your stuff.

Well, fill me in a little bit in terms of what's happened, because I know at that time You'd recently gone through the passing of your dad, your wife separation, and then we were in a bad spot. We'd fired everyone. What's happened since then?

So, okay, so right around that time, actually, like right before my dad and the wife stuff, we were getting really busy and I was like getting excited, like, okay, like things are flowing. We got multiple jobs going. Obviously we've shrunken everything down. It's just us now. And it got really fucking slow for a long time. But the last couple of weeks I've been working hard. Obviously, you guys haven't all been working so much. Chris and Ash mostly, right? Jay, you've been kind of working a little bit part-time. We let all those other guys go. Everything's going well. You know, a lot like I'm closing on like 80% of everything that I was putting out there and I was like, shit, it's going good. But then all that stuff happened and I was a little bit disconnected from the business. We had a bunch of shit happen this year and some personal stuff that happened with me, and then all of a sudden it got really slow. And shit got really tight. And that's kind of when I reached out to and made the video for Mike. I was just sitting at my house one day, I took a shower, I was in my pajamas actually, and I was like, fuck, I'm just gonna record this video and try it out, see what happens. Yeah, so I uninsured all the trucks and I was like, fuck it, I'm gonna go back to work. I need to squeeze as much profit as I can right now. So I wasn't answering the phone properly, like I wasn't following up, I wasn't putting the quotes out fast enough. I had like 15, 16 guys out there every single day. And I wasn't tracking shit properly, and we started bleeding money. When we had so many guys going, like 2 months ago, 15 guys, we were just bleeding fucking money. We were bleeding so much fucking money, and it came to the point where I almost fucked it all up. I was sitting on a fucking line right here, and it was just like one move away from fucking failing. That was it, right? And that's where I was like, oh, fuck. I got laid on a payroll or 2, and then after that, it got to the point recently, I've collected almost all my invoices, and there's no new work The phone's not ringing, and I'm about to default on some bills. So it's like I'm always waiting for something, but I'm like, okay, sure, it's late, but there's money that's coming in. But I came to a point where I had collected all the invoices, and it's like, there's nothing left to collect. There's no new jobs. You just have maintenance going on. I'm like, what the fuck is going on? Then I panicked, you know what I mean? I took some of those crappy, like, 30% interest loans, and I stacked a few of them. It was fine, 'cause I knew I was taking them, and I was— as things were busy, it was okay. Like, I knew that I'd recover at some point. But when things all of a sudden got slow from like us getting 10 calls a day and there's constant, you know, you know, I hope that, you know, you're gonna land some more jobs, went to nothing. And all of a sudden I was not gonna be able to pay anything. That's why I uninsured all the trucks for a few days. Me and Ash went back to work for like a week and a half. It was just me and Ash. It was too fucking much. And it— and like, yeah, we're working till— we worked till 10, 11, 12 hours, 16, 18 hours we did that. The payroll got It was fucking crazy, you know what I mean? And then we weren't finishing the jobs. I wasn't getting the fucking money. I was fucking stressed. 3 days in a row we did 16 hours at that daycare. There was like, what, 8 of us? We didn't even need 8 of us, and it was only a 2-man job. That was a waste of money and a waste of time. We're still not done that daycare job site. Yeah.

It's been like, what, 4 months?

I was like, shit. Like, I sold my trailer. I had a dump trailer, and I bought that trailer for $9,500, and I just put in $4,000 to get it the commercial vehicle inspection, everything. Ended up selling for $5,500 just to pay off the a little bit of my bills, but that wasn't enough. And I thought I was gonna close on some jobs, collect some deposits, and I'd be fine. Didn't end up happening. And I had to actually borrow $20 grand from my brother. I almost fucked it all up. Everything ended up working out, and now we're getting good again, you know what I mean? And we're gonna be good. We're gonna be good. We're gonna be fucking real good. But in the last 2 weeks, I've fucking flipped everything right around.

Really?

Yeah, I was on the brink of tanking, actually. I was like a few days away from like defaulting on everything. I was able to secure a little bit of money and I turned it right around. Right now everything was like, this was bad.

Oh, but it's fine.

This was bad. It's fine.

Maybe just dig a little deeper.

Yeah. Yeah. Well, what does that mean?

Yeah. Like, can you show me the numbers?

No, you can't.

You made your balance sheet on ChatGPT, bro. Just so I have a clear picture, because the thing that you'd given me, I know, was kind of just set up from ChatGPT for your balance sheet.

Yeah.

So you had the $20K owed like internally to your brother.

Yeah.

Do you still owe some on the other?

Yes.

How much on that?

So on those quick The merchant advances is about $30 grand.

Okay.

And that goes $1,000 a day. On my personal truck, I owe $10 grand. On one of the work trucks, I owe about $15 grand. I went into consumer proposal a few years ago. My first— one of my first businesses didn't do well, so I owe $10 grand on that from $40. That's about it.

It's about $40, $50 grand of other stuff.

Yeah.

I'm assuming that the biggest pain point right now is the $1,000 per day. That's steep.

Yeah.

I think by nature entrepreneurs have to be optimistic people, and sometimes it causes like blind optimism, which is he sees all the problems in front of him, he knows it's bad, but like, we're on the up and up because 2 weeks ago I got $20,000 from my brother.

Since then, the last 2 weeks have been really good actually. I've turned— like, it's starting to turn around.

But like, he has to realize that he's just kicking the can down the field, and these deposits— oh, we got $47,000 coming in. How much cash do we have in the bank now?

10 grand, but there's a lot of deposits about to come hit my—

Deposits or final payments?

Deposits.

Or is robbing Peter to pay Paul? These are jobs you have not done yet. You have not paid for the materials, you've not paid for the labor, you've not been profitable on them, you have not completed them. It's not owed to you. These are just deposits, like jobs have been sold. And so the blind optimism sometimes keeps us doing the same thing over and over again because we think it's gonna constantly get better. But realistically, if his brother wouldn't have given him 20 grand, I don't know where he'd be at right now. And that was just 2 weeks ago. So he feels good. He's like, his cash-based feelings of an entrepreneur is like, if I have at least $10,000 or $15,000 in the bank, I probably feel good. And realistically, a business of his size needs $50,000 plus and not as much debt and not having $1,000 per day. Like, these Shark loans kill businesses. If someone's taking out a Shark loan, the chance of them surviving 12 months is very small. 'Cause you have to, you have to do reasonably $100,000 in revenue a month just to pay that off.

And I think since last July, by the time it's over, it's gonna be like $100 grand in interest I've paid. Some of it's like 30, 40% I'm paying on it.

Oh yeah, probably more if you're doing $1,000 a day. $1,000 per day is crazy talk. That's $30,000. Like, you can Google like rent a mansion. Like, he's right now, the equivalent of his $1,000 per day is like renting a 10,000 square foot mansion over here and having a Lamborghini in the garage. That's what he's paying for right now. Is it $1,000 a day and then the principal stays by itself, $30 grand?

So $1,000 a day is paying off the total.

Okay. And so when is that supposed to be paid off?

By the end of September, I should be done.

Because $1,000 per day, that means I need to create $1,000 of profit. So it's like $30,000 of profit per month, a really profitable landscape business. Even if it's 40-50% profitable, he's gonna be making $70,000-$80,000 a month in revenue just to pay that, let alone take Well, yeah, I want to zero out because like it's easy to say like whenever someone's— and I do the same thing too, and that is like I'm in a bad spot and I'm immediately looking to my deposits and what I'm about to be paid.

Yeah.

Whenever you do that, that becomes a slippery slope, right? If I start planning tomorrow based upon the money I might make or hoping I make or someone owes me versus like, what do I have and why did I get in this situation and what can I do to change so this doesn't happen again? 'Cause you will make this money, and by the time you make this money, you will have the $1,000 a day catching you up. You'll have been tapping into it more, and this vicious cycle just continues, right? And so I want you to get out of it for good. And not just be like, 2 weeks, it's been a little bit better, but like, we gotta get out of it.

Yeah.

So let's go through the 4L Framework. I kind of have a better snapshot now of your liquidity. The 4L Framework shares the 4 reasons why every home service business stops growing. It's either a lack of liquidity, cash in the bank, A lack of leads, a lack of labor, or lack of leadership. I'm going to identify the opportunities in each of those areas to be able to game plan and create the next 6 weeks to turn the business around. We have $40,000 in equipment loans, taxes, a little bit of taxes, etc., and about $10,000 in cash. So that's going to cause a— that makes it very hard to maneuver because that's not even like 1 week of payroll.

Yeah.

Like, or like 1 payroll right now. Are all their current crew members sort of Friends, they're not really running as full-time employees?

I got 2 guys running full-time.

Okay.

The rest are—

Kind of like as you need them?

As I need them.

Okay, and is that mostly for the projects and then the 2 guys are, the 2 full-timers are the ones for maintenance?

Maintenance, yeah.

Okay, okay. If you had to guess on the $20 grand, like the $20 grand per month, that revenue, are you profitable on that maintenance?

It's iffy. I've had issues with that one.

Is it commercial?

It's all commercial. My guy— so this is one of the things. So my guy Ash, he's a good friend of mine also. It's a fine line there, but I've been trying to be more of a boss than a friend. But he's really good. He gets paid a high— pretty high dollar amount. But he's late all the time, and he runs his hours up like crazy. Where's Ash? We're gonna do a quick team meeting, and then I gotta send you guys out, man. It's hard. It's really hard. And I'm like, bro, you're my friend, but what am I supposed to do? You're coming 3 hours late, you know? Ash is one of the He's a very big part of this company, but he's always late, so. So when I went back to work with him for 2 weeks, like, he was running like— there was 150-hour, like, 2-week pay periods, and I was like, what the fuck are you doing? You know what I mean? Ash, uh, in the blue truck there, he's one of my friends from high school, but we reconnected 3 years ago when I rebranded to Cobra, and he's been with me since, and he's fucking— he's good cheese, lol. He runs all our maintenance. He's someone that I can, like, count on Talking to clients and just like getting everything done, pulling trailer, whatever. Like, he can just do everything. So he's like someone that I want to bring into possibly operations down the road. I just haven't figured out how to do that for him. So like, he's a real big part of the company. And I went to the sites and I'm like, listen, like, we're finishing in 7 to 8 hours when he's taking 12 hours. Like, dude, I'm like, you're taking too much time. Like, like, you— the contracts don't pay for us to spend this many hours per site. And I've been trying, thinking about swapping it to like a system that they're not getting paid by the hour for maintenance because it's killing us. But that money is also constant, so we need that money. But I don't know if it's profitable, and I haven't fully been tracking that. I think I need to get on to tracking that a little bit better.

Okay, so do you feel like for the projects, that's where you make the money then because you're more involved?

Yes, yes. And if the maintenance labor stays low, we make money. We still always profit on maintenance, I'm pretty sure, but like sometimes, some months it's pretty tight.

If they're working 75 hours a week, mercy.

No, that's crazy. Like, I had to put my foot down.

Ultimately though, like, we've created that scenario because we've made it where the longer they work on the jobs, the more money they make.

Yeah.

And if they're unmanaged well, then they will take longer on the jobs. And suddenly a 40-hour work week will become— if you need to take it, go ahead, go ahead, you're fine. Hey, do you have like a chisel, crowbar, or pry bar?

It's all at the yard, bro. You guys should have grabbed it. I might have a hose at the house, maybe. I'm not sure. But I remember The last hose we had was at that one guy's site. Well, there's 8 more that are unaccounted for, so. Oh, and the other fucking thing I want to talk about. When I went through the yard and when we cleaned everything out, dude, like, there's just so much fucking shit that's not in the yard. Last year we bought 10 fucking hoses, dude. Nice ones, like $100 hoses. There's one fucking hose left. We've bought so many extension cords, dude, because every time we go somewhere, we forget the extension cord, so we just go and buy a new one. There's not even one extension cord in the Sea Can. This is how tools get left out. We, we, there's mallets, tools, all types of shit. There's nothing in our secret. All our tools are fucking depleted, dude. Like there's nothing fucking left. I don't know what's happening if we're leaving them places and shit, but we're losing all our fucking tools.

So is he on one of the projects right now?

No, that's Ash. He's actually, he is on a project today because some of those biweekly sites. But yeah, he's on a project today.

Okay. I had this random thought. What if you subbed out your maintenance? So you knew you had margin on it, subbed it out to someone who did commercial all the time, had it all dialed in with maintenance, and then you just took your 2 guys that are full-time and worked on projects together?

That's possible, yeah. But I'd have to find the right person for the maintenance.

Right, you have to find a company though, like a legit company where they're gonna come in, they're gonna be like, hey, it's gonna cost you X, Y, and Z, and you're like, hey, I'm making this, I need you to come in at this if you're willing to take it. It's all yours.

Yeah, it's possible. It's definitely not—

Because I, I have a feeling you're losing quite a bit on maintenance, and it's also taking like— they're 2 good people. Everyone else like on the projects, yeah, is like hired hands coming, come and go.

Yeah.

Also, by pushing it past 2 employees, you're stepping out of the field.

Yeah.

Versus like if you were on the projects, they would be profitable.

Yeah. Yeah. So me being in the field is just like of late, like for the last couple years, like it's only been like really, really needed, but I haven't been in the field. But I just felt like right now I didn't have a choice because of how tight things got. And I feel like until the winter, I want to stay in the field. It also like boosts the quality when I'm out there. That's just Jaden right there. Hey, can I get into your garage real quick? There's nothing in there, bro. Everything's at the yard, money. I should have grabbed it. Just gotta think, man. Okay, go.

From everything I have seen, there's a lot of chaos. In operations and admin and sales and all aspects. Like whether it be the financials sent to me, the shop space and how it's organized, the fact that like he's coming over, he can't find a crowbar. It's like there's 5 of them in the office, like they're going back. So like it's 9:30 and they haven't started.

Yep.

They won't start till 10:30. What time they clock in?

7 in the morning.

So there'll be 3 and a half hours before they will make $1 for the business. Right? That's chaos.

What happened to that big new silver rake we had too?

Don't pull too hard.

Just did you unlock it first? Did you unlock it? We're gonna have to come up with some type of system where we fucking mark the equipment and this is your equipment. You lose it, you fucking pay for it yourself. I'm not paying for it anymore.

Right now there's so much chaos happening. You're not gonna you're not gonna cut deep enough on maintenance. Switching to P4P model is the only way to save your maintenance. I don't happen to believe there's enough cultural buy-in from them to actually make that work.

It's coming. Bending the thing over here. There's no hammers. There's no fucking mallets, bro. There's nothing. Half the power tools, half the fucking D-Wall Milwaukee shit like that we've bought—it's all fucking missing. Yeah, see? Told ya. Look at that. Look how it's in there. How does does, bro?

These guys tied. Did they tie it in there?

Oh no. That's the disruptor. Okay, it's fixed.

Like if someone came in here and said that to me, and like they swore at me about my tools because they forgot tools at the office. I'm sorry, you're out.

Every time we go somewhere, we forget the extension cord, so we just go and buy a new one. There's not even one extension cord in the Sea Can. No, no, but if you have the generator beside you, why do you— you don't even like— you don't even need an extension cord because just keep the generator close, right? We need some wheels for that thing, but there are the wheels.

Where are the wheels going?

Oh yeah, we just never installed them. We just never installed them.

We were like, we'll do it after.

There. I don't know where they are. There you go. We'll fix it on Another day properly, but it'll fucking stay.

Who took the wheels to the generator?

Don't ask me. I don't— I can't answer that question.

They forgot the tools. It's 3 and a half hours and they have not performed any labor for this business. They do not care about this business or you at all.

The other day in Wally, we're trying to turn left at a red light. He drives up on the sidewalk, passes everybody on the red light, cuts in front of everyone, turns left. Everyone's honking at him. Is it jammed on this? You guys were pulling on the wrong part. Yeah, yeah, that's fine.

Anyways, whatever, at least we didn't break it.

There's one up in the top over there. Yeah, that's where you got to get it. How many monkeys does it take? One toolbox.

The only way to do that, like, to quickly change that, is you getting in the field. The long term is like, yeah, systems, operations, you have procedures and all the rest of it, and systems for pay for performance. The way to stop the bleeding is you are out there and you're like, you get the crowbar, you get that, you get that. And so I would strongly recommend trying to get your 2 full-time guys with you doing projects.

Mm-hmm.

Everyone else is cut. And then you try to sub out the maintenance because I need you to focus. Like right now, the maintenance is so low profit, you will not be able to pay your way out of this debt hole. You'll just keep in the spiral because even if you're making 10% margin on $20,000 a month, that's $2,000 a month in profit. You can't get out of $30,000 a month. And so that's why like this short-term thing of like getting the money for your brother, like it's just gonna become this spiral. And I need one part profitable, and I know it can be projects if you're on the jobs. Borrowing money from a family member stinks, mostly because the psychological pressure. Assuming you're not a psychopath, you feel really bad about putting someone else's money at risk. For most of us, when we take money out from our friends or family, it's like the last resort. It's because we can't get credit from a bank, we can't get one new credit card, we can't get loans from anywhere, so we have to go to our family. And usually they're doing it because they love us, not because they think you're an idiot. This is a great investment, or I'm gonna get my money back. So I hope it works out. I know what it's like to be in that situation, and it stinks. This part hits real for me because I took $10 grand from my brother to make payroll. It takes a lot of humility to ask for the money, and takes even more like the emotional pressure of knowing that your business failing now is gonna bring down your family is killer. Cutting deep would be you try to find someone to sub out the work. You say, hey, if you can do it for $15 grand a month, because I know for a fact you're not making $5 grand profit on maintenance. So if you can just go find someone that can do it for $15 grand and you get $20 and all you're doing is the billing stuff on your computer, let's go. I'd rather take $5 grand of guaranteed profit a month, cut that out, and then take 2 full-timers that you can at least rely on and they're managed by you now. And like tomorrow you're profitable as soon as you find that sub.

I like it. I like the maintenance thing a lot and it makes sense. Like I was already going into the field and I think it's right that I stay out in the field for now to fix things. And it'll just make things better. But we have a lot of auxiliary people, and I have a lot of people like for bigger projects as well. I have a lot of guys that I've trained, but I've let go because we weren't busy enough, and they're ready to come work for me anytime. It's just—

are you just writing a check for them usually? Like not running them through?

Everyone's just a subcontractor. They have their own business, and I just— even with Ash and stuff? Ash has his own business. Some of these guys, I just write them T4As, and they're responsible.

Why don't you just— why don't we make Ash the subcontractor for all the maintenance.

I could do that. I could do that.

He might be willing to do it for $12,000 a month.

Yeah, probably. Um, I could do that.

Because he's highly paid, you don't want to cut his pay.

Yeah.

But like, you're not making money if your maintenance guy on a commercial job is making $37 an hour.

Yeah.

And so—

That's actually a really good idea. How do I approach— I know I can talk to Ash, but is there a good way that I approach him about this?

Yeah.

I'm gonna have to probably rent him out my truck, the one that That he's using right now.

Yeah.

I'll just rent it to him, and the equipment, I'm just gonna just let him use it for now, just to start, and then figure out— I can figure out the details.

I would just make sure everything you have is in writing.

Yeah.

Right, so like if you're just gonna rent it or loan it, you know, make sure you're like, hey, this is mine, I'm giving this to you while you have this contract, right? And so it's an official subcontractor relationship, and he can't go behind your back and get the contract.

Yeah.

Right, like I'd make sure it's all in writing. You have the leverage of owning the truck, or whatever if you're doing that. So I'll leave that to you. You're smart. You'll figure that part out. Having that conversation with him, I think make it all about him. Okay, okay, Ash. You've been a great team member of mine. We're friends. I want you to win. I also want you to be able to make more money and not just constantly have to work more hours. So I'm gonna make you a subcontractor like you already are. But now you are fully in control of this contract, and you're getting X amount of dollars per month.

And is it just a one-time monthly payment would be the way?

He's probably not gonna like that. He's used to more consistent. So you say it's a weekly X. So for example, if you know it's $20 grand a month, you say these are the contracts you have to take care of and I'm gonna be giving you $3 grand a week, for example. And if you want to go to a helper or whatever, that's on you. But now you're looking at $12 grand out to him, $8 grand in your pocket. You are not making anywhere close to $8,000 of profit a month on those jobs. Nowhere close. Because he's all of a sudden Because I get twice as efficient.

Yeah, that's true.

Right?

And he won't have to work till 9 o'clock at nighttime.

Yeah. And what you just say in your subcontractor relationship is say, hey, any projects on these jobs, they need to come to us, but you'll get a 20% cut or something like that. So he's also going to be incentivized to look for like upsells, because I'm assuming that happens.

Yeah.

On the maintenance jobs.

All the time.

Yeah. So you say, hey, I'm gonna give you a cut of the projects, but the projects have to come to me, but you get You know, this is the dollar amount you get per week to do these things. He already knows the jobs. He's like, let's go. He knows in his mind he can get the job done in half the time.

And I think he'll feel like more kind of empowered and like, now I'm my boss again.

And that's the positioning you give him. You're like, hey, I want you to feel in control, build your own business. If you want to go to some other jobs, that's fine. Like, I want to have a subcontractor relationship with you. You have this amount per week if you do these jobs for me. Opt out at any time, give them back to me, that's fine. But like $3,000 a week, $3,000 a week for him is like $120,000.

Yeah.

Like a year.

Yeah.

So like, that's great money. He can go get a helper and still make way more money he's making now and have the complete freedom to do whatever he wants. And then you can focus on being a friend to him instead of a boss. Yeah. As Faison grows Cobra into a million-dollar business and beyond, he's going to need better culture, better technicians, and better managers. He's going to need better compensation plans, pay for performance bonuses for his team. And this is the type of material that we talk about inside of Home Service Boardroom. So if you have a 7-figure business and you feel like you're hitting your head up against the wall, you can't retain great managers or keep good technicians, I encourage you to join. The link is in the description and I'll see you inside the boardroom. So, Ash, we're going to sell out the work to him. We're going to try to get him at $3,000 per week, implying about $8,000 of profit to you. And he will be happier.

Yeah.

Assuming you make this conversation about him and like, hey, I want you to do good. I want you to be able to grow your business. I want you to— he can get other contracts. He's a subcontractor. He's not working for you anymore. He can do whatever he wants. That's why, like, if you're going to rent him something, just realize it could go on someone else's project, and that's fine. That's his business now. You're not managing him. Like, that's off your plate. By doing that, we're gonna focus out on projects.

Yeah, like, with hours running up like crazy with Ash now, I think he'll be more incentivized to work harder, and he can work long hours if he wants to, and I don't have to worry about paying for those hours, you know what I mean? And he gets flexibility, I get flexibility, I get a little less headache, and works out.

In the long run, having systems, checklists, and clear roles and responsibilities for the team is the fix for the operational chaos that's happening. The disorganization, things being lost, things being stolen, things being broken, all that gets fixed with systems in the long run. But in the short term, for him to make more money in the next 6 weeks and not go bankrupt, he just needs to get out with the crew And be the management system, which is his eyes on everything. Now that allows you to focus on the projects. And I know that feels lumpy, like that revenue, but by you focusing on it, not only will the jobs be more profitable because you'll be on them and things like this morning won't happen, but also you will be better at selling when that's all you're focused on. And that includes being the first at the shop to get there in the morning and the last one to leave to make sure that everything gets on the truck and we're not spending 3 hours before the job actually starts Just making sure we have our tools and materials for the job to get done, completed correctly. And then when they get back, everything goes smoothly. Just those 2 things: first to the shop, last to leave. That will create some continuity for the team to be more efficient in the field. And so Chris, your second full-timer, him with you on a project and maybe one or other guy, you guys could easily do $50,000 to $70,000 a month in projects very profitably.

Oh yeah.

Right. And with projects, like if you're dealing with, let's call it 2 or 3 jobs a week, you don't need a huge amount of back and forth calls, admin. Like you can set up a couple agents, your email, and you're fine.

I'm good at sales, but like I'm a killer hardscaper too. Like I just have a lot of experience in the field. Like when I'm out on a project, we get it done right. Like I've just done so much and so many different things. Yeah. I don't have a laser else we could check, but I mean, it's, I think it's a little bit above grade. Yeah.

I think we can probably just use the bottom box.

Yeah, yeah, absolutely. You know what we'll do? What we could do? The turf soil for here, we're going to take it back there first. Then we can still get the crush dropped here, then get the crush put into here, and then the last bit of turf soil, we put it over here. Do you know what I mean? Because I have limited space to get my bucket with angle, I want you to get these edges and push it into the fucking middle because this is where I can scoop out of, right?

Yes.

Then I'll scoop it, right? Get this down a little bit in here, a little bit, push that all into the area where I can reach. Okay, you're doing great. I need you to build a plywood trail here so he can come straight in. Okay, but when I distance myself and I'm not in the field is when the Cobra quality, that the 5-star quality that we give starts going down, and that makes my heart hurt. You know what I mean? But we need that. These figures got to move. We need that plywood.

This is a dump truck.

Okay, like back there, right? Okay, okay, okay. Okay, okay, okay, okay, okay. Right, you're right, you're right, you're right, you're right. Because I pride myself on being able to get it done to the highest level, you know, and like. Delivering when we install a patio, like I don't want it sinking after five years. I want that to lasting for twenty-five years, you know? Okay. Yeah, I got.

I gotta give him cash.

Yeah, yeah, yeah, I got it. I got it.

Based upon everything I've seen, you make quite a bit of money on snow and ice.

Yeah.

That's why you keep saying, I can hold my breath until snow. What happened to like last year when there was no snow?

So we landed so many contracts, we bought all this salt, we had a second yard, brine-making facility.

I heard like 40 team members, was that right?

We— so we have the capacity to bring in so many guys. Like if it's snowing, we probably need like 60, 70 guys out there and like 30 to 40 trucks. And it's gonna be more this year.

So all subbed?

They're all subbed. I have tons of subs. Like I got subs—

And what happens if it doesn't snow? Like last year?

They get pissed off.

They do?

I mean, like, what can we do, right?

Okay.

So this is the other thing. Going into this season, I put too many eggs in that basket thinking, because I've had good winters in the past, but I'm trying to keep us busy up till the winter and through the winter this year. The last couple years I pulled away and took my gas— took the foot off the pedal. That kind of fucked us the last 2 winters when there was no fucking— there was no winter really, you know what I mean?

Now this year we're praying for snow.

Okay, I've had like one—

I hate snow, so this time I'll be like, all right, it's snowing, at least Bezn's taken care of it.

I've had like 1/8 of the sites, um, for snow and de-icing, and I was a subcontractor for another company at that time, and I pulled in like $300K, and I think I walked with $200K of it in my pocket after 2 and a half, 3 months. So last year, if we got a winter, I was projecting we'd do $800,000 to $1 million. We ended up doing $140,000. This year, I think we can do a million plus if we, if we hit a— if we get a winter. Like, if we get, you know, 12, 13 pushes of snow, which a couple, like, you do more than one push in per site, right? So if we can get 12-ish pushes of snow and then like a regular 30+ deicings, fuck, man, I'll make a lot of money, bro. The margins are crazy. Like, sometimes they're like— No one wants to do it because it's so infrequent. Yeah. So it's like here compared to like everywhere else in Canada, like Alberta, Ontario, It's a regular service. Here it's more of an emergency service. So that's why the margins are so high, right? Right now I have like— this is just the list of them right here, and like how much they pay per de-icing. But I think my de-icing run is about $10,000 per night. And even with my subs and whatnot, I think I make about $7,000 profit for one night. And that's like my guys barely going out. I just quoted like another 15 properties yesterday and I have like another 15, 20 to quote. The winter rush hasn't even came. So I just said no. I got the Surrey Fire Halls. I said no to them because I didn't want that contract. I'm probably gonna have about 60 accounts for snow.

Is it per push, right?

Per push and per clear. There's a few on monthly, which kind of just balances cash flow a little bit. I'm trying to put out a few more because of how bad the winters have been. If I get a good winter, I'm gonna be rich. This year I'm gonna keep our focus on landscape. If the winter comes, it comes. If it doesn't, fuck it. We're gonna keep landscaping, you know what I mean? We're gonna be good, but Keeping things small for the next little while and having me out there, it's just gonna help and it's gonna help the money, right?

The challenge with snow and other services that are based upon the weather is I cannot build my business around it. It has to be if it's gravy, if it happens, awesome. However, having the liability of my— in my opinion, having 40 or 50 on-call staff people for a part of the business or service that may or may not happen, to me, I don't want that kind of business. I don't want that kind of service. And so I would need him to get focused on the 9 months of the year where there's no possibility of snow, making those profitable so he's not relying on the Hail Mary every single winter of having a bunch of snow. Because like last year, it didn't snow here at all. And he— that's why he's in this situation. If last winter he would have had a really good snow season, it would have been the Band-Aid for the next 9 months and we wouldn't be here because he would have had enough cash. And so in a way, when you have one service that's so profitable, it can actually mask a lot of other problems in the business. And then all of a sudden that service goes away and we're in a world of hurt. So what I'm trying to get at is like what my whole objective was, like trying to focus on the project is I would love it to be where we have a 24-hour— we try to meet them and then another 24 hours we get the project proposal to them. Because I think this will sell well, like your proposal, your email, it looks good.

Yeah.

I think it's just a matter of getting it to them within 2 days instead of 6 will help.

So usually I'm like that, and that when I'm off the tools Right. But when I'm on the tools, it's a little bit harder. But that's what I've been playing around with ChatGPT. Now, if I can just get off the job for a second and get on my notebook, figure out the pricing, and then I can get ChatGPT to build it all while I'm on the site. And that's what I've been working on. So like, like yesterday when I was driving, I was able to send a contract estimate, everything, while like I went to the site in North Van. On my way back to Surrey, I was able to send out the Estimate, contract, some other information while I— before I even got home.

Look, I love AI. We build a ton of stuff with MCP and API access at HomeWorks. I'm a huge fan of AI. However, it is also a huge crutch for people like Faizen that are trying to just like, I don't want to think about it, I don't want to organize, I don't want to create systems, so I'll just throw everything at this AI machine that will do the job decently most of the time. The problem is all of that context and learning is not transferable to any of his team, to any admin person down the road, and he is still the bottleneck. It just so happens that he has this like magician behind him throwing stuff up with AI and creating the contracts and creating the estimates and sending out estimates and emails. That is great. But you still need systems to make sure that you can pass that along to someone else down the road and that the job notes, the emails is actually like it's documented. Right now I am— I have seen 4 different softwares. I have seen spreadsheets. I have seen AI-generated spreadsheets for his numbers instead of QuickBooks. So I knew the balance sheet was completely wrong. And the numbers that I saw in pre-coaching, completely different than the real numbers. Because why? He just threw numbers at AI and it came up something. And so the biggest risk of AI is being confident in something that looks like it's 100% legitimate, because it's very confident that this is the right answer. And you actually now build your business around the data that completely false. And in this case, if I would have used the balance sheet from last night, the coaching would have looked completely different because the numbers were completely different than the reality. We can work on that because like I think time blocking will help a lot with that. And that is like instead of us driving out to North Van for that, and then like we just have a governed time where like I do estimates during these times, I do admin during these times. Like you've heard me talk about like sales, getting the work, operations, doing the work, admin, getting paid for the work. Time blocking will be very helpful because now you're going back in the field to be able to be like I'm out in the field with my crew. I'm only focused on getting the job done efficiently. And then when I get home, these hours, these are the hours that I am spending on admin.

Yeah.

And that's when I can like— like, you can crank way faster if you're here.

Yeah.

Versus trying to drive and do that and risk your life. And we don't need that happening. You have a daughter. So like, I would prefer like a time blocking for you to be like, hey, if someone contacts me throughout the day and I'm out on the job, I'm gonna immediately be setting them up for an appointment. during these hours, that's sales. And then I'm doing operations, doing the work for this period of time with my crew. And then there's this other period of time where I'm doing admin, and that is firing off the estimates, making sure everything gets paid, everything on the computer.

What do you think that is, like, your—

out of those, like, is your weakest area?

Maybe tracking and full structure to things. Yeah, proper structure.

Do you guys have a highway use permit right now for this on-street bin storage?

No, we don't have it for the bins here. So I need I need those gone today. They don't need a highway use permit. City of Delta wants us to have a HUP, highway use permit, for these bins. So he's like, oh, they've been here for a couple days. I'm like, no, man, they just got here this morning. I'm like, well, they should be gone tomorrow. But he's like, I want them gone today. We got to get all this dirt off the sidewalk. All right, Chris, you got to get this like way into there and all this off too. I'm going to go get Pauly. Grab a water or something. Yeah, I mean, I'm learning more and learning the capabilities of different things and using technology more. Maybe potential for a part-time admin assistant, so while I am in the field, maybe I could start off with a student or something, you know what I mean? So next year potentially, you know, something like that, and then I can focus more on the field and then eventually get back out of the field. But for the foreseeable future, for now, I just I see myself there, but just the money is so much better when I'm out there too. What is it? Oh my God, you're done. Is it good? Yes.

Right now we have— if it doesn't snow, we have unprofitable snow. Maintenance is unprofitable because we have inefficient labor, expensive labor doing the work, and projects are suffering because you're trying to do all 3. Like you're kind of juggling between everything, you're handling everything. I want it to be where it's like we get maintenance off of your plate, we know it's profitable by 20-25% at least because Ash is doing it, he's happy.

Yeah.

You don't have a $37 an hour person to worry about sapping the clock, and then all of your time and attention just goes on these projects. And when you do that, we'll get these jobs, these estimates out way faster if we're just focused on them versus driving to our maintenance site out in North Van, which I don't care about the bid. It's the fact that it took you an hour there and an hour back, and that's a time should have been with the crew when we're trying to optimize for profit because we just need to get jobs done efficiently. And you have enough jobs coming in if you have two a day. If we get a close rate to like fifty percent, you'll have enough to keep the crew, you and a couple guys busy on projects being very profitable. And I would rather be like instead of you constantly on this treadmill of trying to find jobs, you book out yourself three, four, five, six weeks. And then when you go do bids, you're like, yeah, not $1,000, it'll be $1,200. So this new focus on the projects and not thinking about the maintenance and him being in operations and him time blocking, all of that is just so he can get the estimates faster, get the proposal sent out quicker, and get this close rate from 15 or 20% back up above 50%. Doing that will double the amount of new jobs he's getting, be able to book the schedule out, and make more money on the projects. Right now we need like Survive the next 2 months and get some more money in our bank account. And to do that, it's gonna require you making sure that we start at— like, we're making money at 7:30.

Yeah.

Not 10:30. And that's gonna mean being there in the morning, making sure they have everything they need, going over the materials, what's— how the job's gonna go. You guys show up and you guys are like a well-oiled machine. And then you're gonna be like, hey guys, I'm out at 2 o'clock, I got estimates. Then I pick up my daughter and then I get to spend time with her for a few hours and I can lock in Send out whatever proposals you did that day. So I'm giving you an hour of admin per hour of sales, which means if you meet a client that evening, you have an hour to put together the proposal. If you can't do it within an hour, I don't want the job. You're gonna crush on these jobs that are like $5,000 to $30,000.

Yeah, the quick ones are way more profitable, way less stress, in and out, money.

Yeah, the $300,000 thing that we don't even know if we're gonna get, I can guarantee you they will take 90 to 120 days to pay. Yeah, it'll be like pulling teeth. You don't not have the cash to be able to float that. And like, I don't need 40, 50 guys hating your guts because you can't pay them, right? So I wouldn't even worry about that, that project. I just focus on the fact that we know we— like, $60 cost per lead is not bad for projects. If we can just get that close rate higher and then close more, more of them at a higher profit because they're actually being managed well by you, we'll crush. That's like literally all I got. We got Ash going into maintenance as a subcontractor.

That's big.

Jordan and one other team member being projects that you're going to manage. Time blocking, operate sales, operations, admin throughout the day.

Yes.

And then getting a 24-hour turnaround on all estimates, and that will increase our close rate so you can fill up your schedule. Then next year you focus on pay for performance so that you can scale and get out of the field, because that pay for performance is the system that replaces you as eyes on them all the time. Kudos to you for being a great dad and prioritizing that. I know that's tough with everything that happened, and so I try to make sure in the time blocks that's honored. And you can adjust the business to fit your lifestyle so you want to love the business. Like, I want them to change their schedule to start 7, 7:15 so you can be there, right? To accommodate your lifestyle, make it more sustainable instead of like now— because if it takes you away from your daughter, like, who cares about the business? So like, let's adjust the business to your lifestyle.

Absolutely.

And then we can make it a little more sustainable. For sure. Going all in on projects, like, are you nervous with that?

No, I'm fucking in it. Let's do it. Yeah, we're gonna get it. We did make a change. We didn't go exactly that route, but I think when I was talking with Mike, I think one of the main things was kind of getting maintenance off my plate. It wasn't very profitable, but what I ended up doing was I switched Ash over onto a salary. So it's a fixed rate per every 2 weeks or every month. So he gets that fixed rate, but I also promoted him to maintenance manager. He does deals with all the communication He's the first point of communication where I moved to second point of communication, which takes some relief off me. I always know what I'm paying him. And with the kind of salary now, if he wants to finish his day earlier and get off earlier and get everything done faster, he's able to and still gets paid the same amount of money. It also works for him because a couple of the sites are biweekly, so he has a chance to make extra money on those days. So it's still a very good pay for him and it works for us both. So we kind of— that's what we came up with for now. It was just kind of too hard to put it together with the full subs. set up in a short period of time, but this ended up working well and it's working well so far. So what we did was, so we're basically down to essentially 4 to 5 guys a day. So Jayden, it's me and Jayden running the construction projects, and then we bring on a helper on the days that we need. So that's working well. So it's, you know, I got my boots on every single day and I've been working, you know, working my days and it's going well with me and Jayden and me being on site.

Yeah.

Like we're killing it on projects Like from step, first step to finish to the cleanup of every single day. It's very comfortable on site. Excuse me. With me being there and having Jayden as my number one guy. So I'm not fully like with a set schedule. Like things changed in life. Like my daughter's soccer started and then like other activities started. So I'm trying. So I kind of essentially do my meetings on evenings and then on Saturdays as well. So that kind of works for the time blocking for meeting clients. Sometimes during the day, like while the guys are working, if I have them set, I'll just hop on my computer, hotspot it from my phone, and I'll do some of the work there. And then in the evening, I try to— I still do use that 7 to 9 slot to do a good amount of the admin work. So that one's a work in progress, but it is a lot better than what it was before. Team dynamic is okay. I haven't— so I send out like I've I put a full proposal together for Ash when I set that up and we talked on the phone a little bit, but I haven't been able to have that meeting with him. I don't know what's been going on with him, but I still need to have that meeting. So that's one thing I haven't fully done yet. He was supposed to come meet me on Sunday and on Saturday he never showed up. So I think I need to put my foot down with that one and just get this meeting done and really get us on the same page. So that's important and I haven't fulfilled that one fully. I needed a kind of like A little bit of a shakeup, a wake-up call. And I think that's what it was. And again, like, I've built this business from the ground up and I've had times where, you know, there's so much money coming in, but like things were messy. And I think it was quick. Like, Mike, it was just quick and, you know, some notes and like, not so like, it's not like we sat there for, you know, like a full day, but like just important points from someone that knows. So I think it was good and it made me really think and start thinking different ways and it's working. And it's benefiting us and it's saving us money. And the quality is a lot better than when we were running 15, 20 guys and 4 jobs at a time. So it's working right now. So what came out of it so far, it's getting better is what I can see. So I'd say my close rate, I don't know what I listed, was it around 20% then? I think I've doubled my close rate from what it was, which is good. Right now, usually we don't book much hardscape into the winter, and right now I'm booked to the end of November. And then additional, like since I talked to him, since you guys came down, I think it's an additional $175K to $200K of projects work into, yeah, taking us right into December right now. Things are going better and just Just it was good. It was good meeting with Mike, and I think I really needed that. And the simple, the kind of simple steps and plan that he devised for me is helping and working, and we're going into a better place now. Staying more profitable with me out in the field, staying more profitable. Maintenance is more profitable now, and I think with this plan, I can. go into a slow, more of a slow growth. And then after the winter, I can really see where, where I want to take things. So I think we're in a good spot right now. And I think sometimes, like, you know, like I've been, you know, I've been there where, you know, I've been doing $1.5, $2 million. Like I've been there before, you know, but like, was it worth it or was it, was I doing things right at that time? No. So I think it's better that I got this wake-up call, slowed it down, And now I can build it up healthy. I can train my guys personally and grow us back to where we need to go in a very healthy, healthy way rather than kind of chaos where it's just stressful and you don't know when the money's coming in and how you're gonna pay your guys sometimes and all that. So