Showing REAL Financial Statements from my Lawn Care Business

Hey, everyone, it's Mike Andes, and you're listening to the Business Bootcamp podcast. Today I'm going to be going over the actual profit and loss statement from our Bellingham location. That's the first one that we ever did for Augusta Lawn Care. So before we get into today's show, though, a big thank you. Today's sponsor, which is Gusto, if you haven't Already, go to gusto.combootcamp Try out their software completely free for 90 days, where you can pay your employees via automatic transfer. And we're coming up on the end of the year, so you can definitely run your W2 and your tax forms for. For all of your employees very seamlessly. Check it out today. It's one of the best services out there for your payroll needs. All right, so today we are going to be sharing with you the profit and loss statement for the Bellingham, Washington location. I'm going to share this on the screen here, over here. Probably Josh will put it in here. And this is the actual P and L, the report from QuickBooks. And if you haven't watched last month's Definitely do that. You'll see that we again, I always believe that the income statements, that the profit and loss statement tell a story. They tell a story of how well a business is doing and the trajectory and the progression of how a company is moving. And so couple things that we will look at and be able to learn from in this report. And I really hope it inspires you to grow your business, to get it to the point where you can step away and have managers and you can have profit sharing and all the rest of it. So just to add some clarifying remarks here, if you don't know who I am, my name is Mike Andes. I have Augusta Lawn Care is my business. And this is the first location. Now, we have 26 locations, 24 of which are franchised. So franchises are all around the country. And, you know, if you want to become a franchisee, definitely should check out augustalongerservices.com franchise, get some more information. However, what we're doing here at this location is I don't spend my time there. I don't know the jobs. I don't know what's going on. I have a great management team, a great team of staff that is working there all the time, working their hearts out. I so appreciate them. And.

The thing is, I spend Tuesdays, sorry, Mondays, Wednesdays and Thursday mornings. I go there for team meetings and for usually about 20 to 30 minutes. So literally, I'm There maybe an hour and a half a week. And then if you include drive time and everything, it probably takes about three hours of my week per week because I do go there for the team meetings. And so that's really the how much time I spend. I have great managers there that manage the operations, manage selling the jobs, estimator, things like that. They have Command center which is, supports all our franchisees, that takes all of their calls, that does all of their, you know, creating the estimates and sending to the customers, et cetera. If you've heard about Command center in the past, you know, it's a big selling point for the franchise. You know, take those things off of the owner's plate. But Bellingham, at their size, they still use it. It's a great service because it scales with you and allows you to, you know, they answer your phone calls and all the rest of it. So really, really cool. But let's go ahead and jump into this P and L gonna go ahead and show it to you here and hopefully we can learn something from it. Alright, so for September 2020, the service income for this location was $173,181. And we use service autopilot and that would break down this revenue a whole lot deeper. I'm not gonna go into that, but basically about 60% of that is usually recurring maintenance. And then 40% of it is like projects and landscaping and that type of work. And that varies. Usually it's around 50, 50 though across a whole year. But for this month, September, quite a bit of cleanups and recurring work. Weeding and mowing, obviously. All right, so in terms of expenses, you got advertising and marketing. They did do a little bit of that because towards the end of September the guys were working so fast out in the field on solo mowing routes that we were kind of running out of mowing jobs. And therefore we started really eating into our project based work that was on the calendar. So we ended up not having a whole bunch of on the calendar and doing some marketing, but not a whole lot. $1,600. It's like less than 1% of revenue and we spent that on a variety of different things. But anyways, bank charge and fees, that's just going to be from interest. Probably the negative $6 means that we actually made money in the expense column. It's probably from interest anyways. Credit card processing fees. We got $3,500 for credit card processing fees. And again, if you've heard me talk about that before, people think that's crazy. But Trust me, that 2% of revenue or whatever it is is the best money spent because we don't have a huge amount of accounts receivable. We don't have to keep a lot of cash in the bank because we don't have $150,000 worth of receivable. Usually it's 15 or 20,000. And so that's due in part due to the fact that we do have credit cards on file. We have automations that we build for the franchisees that do collections and try to get the customer to collect, try to get them to get a credit card on file if they're overdue. They things like that. So that's pretty like I'm happy to pay $3,500 a month even though it is a lot of money to get make sure that we our cash flow is a lot better. Employee other this is usually things like uniforms if we're trying to help out a specific employee. If they're just struggling or something like that in terms of family needs issues we will give them money there. But most of the time that's uniforms and other stuff that's employee related. Fuel expense $2,500 for fuel insurance and licensing. That's going to be two major things. That is our general liability insurance and then our auto insurance. I know for a fact that's going to be going up a little bit when we were new in November. Not looking forward to that but it shouldn't be too bad. So that's pretty general. We just had a really good deal the past few years. Office and software. So this is going to include everything to do with the office as well as paying for things like service autopilot. Again service Autopilot is not cheap. We pay like 500, I think $600 a month for for service autopilot because we have so many people out in the field. I think it might even be more than that. Honestly I haven't looked recently but it's a substantial amount of money. But they all have their own app, their own user account and we use it a lot. And then this also includes we got some new computers and things like that in the office. So that's what that $1,400 is there payroll expenses. This is the main reason why the profit margin is a little bit lower this month is because we had three pay periods in the month of September. We had it on the 1st, the 15th and the 30th. This only happens like once or twice a year where you three pay periods on the same month. But that's why the, you know, if you look at your labor to revenue percentages here, it's so much higher than normal because we had three pay periods in the same month. So that's. This is an uncommon thing. But again, you're going to have this in your business. And I want to show and be honest about when we have months where it looks like we don't make as much profit. And that's because we had three pay periods in this specific month of September. Refund $2800. Hey, cost you money? I have no idea what that's for, to be perfectly honest. But obviously they thought that we needed to refund someone $2,800. Not seen that in months. I'm looking at this the first time right now with you all because this is the 3rd of October as I'm reading this and I hadn't seen this. So that's the first time I've ever seen a refund like that. I'm imagining there was a really bad job that went bad and they just decided to give the person their money back. Or it could also be a charge back. So I could be completely wrong here. They might not have made a mistake. It could literally be someone like dispute a charge or we charge their credit card and then it did a chargeback. Something crazy like that could have happened. It's very possible. So I don't want to throw them under the bus. It's very possible just some sort of a credit card chargeback or dispute or something like that. But that's a $2,800 expense for this month which might go away if the dispute is resolved and things like that. But again, I'm just showing you what the actual numbers are in our QuickBooks, rent, utilities and shop expenses. So we do rent a facility. Right now we're looking hopefully in about a year and a half or so to be able to move into a place where can build on our own property and bring franchise the studio everything under the same roof. However, right now we do rent. We have a really, really good deal. But this includes our rent utilities which is like our Internet and trash and the portable toilet and a whole bunch of stuff like that. The Internet at this shop is ridiculously expensive. Like 500 something bucks a month just to get good Internet. But we have to do it because we have to bring a line way down the road Anyways, long story. So rent utilities, $2,200. Again, the Mount Vernon location, which I'm going to make a separate video for the Mount Vernon Location that's smaller that we started this year that we used. It's also Augusta lawn care franchise. And we don't have a bunch of shop expenses and utilities and offices and stuff like that. And the model is very, very lean because they use command center for everything. So definitely check that video out. Coming out pretty soon. Taxes paid. $25,000. Gotta pay Uncle Sam. Tools, supplies and materials. This is gonna be mulch, gravel, stuff that they used for the job sites. Again, if you have a lot of landscaping jobs, your revenues are gonna be higher, but you're also gonna have cost of goods, that is tools, supplies and materials that are going to come off of that number. So that's why maintenance, you're usually getting paid for the labor, not for the fact that you have all these materials and blocks and pavers and soil and all the rest of it baked into the price. So that's just a straight across. Tools and supplies, materials coming off of our revenue as an expense. And again, we do do a material markup. So we make money on those materials per yard. We usually do at least 20 to 40% of a markup on materials. All right, Truck and equipment expense. We didn't do a whole lot this month. We had to get some racking for. For the trailer, the setups. And then this is probably a lot of maintenance and repairs, things like that, just on all the equipment. But we didn't buy anything big. No trucks were purchased last month. No big trailers were purchased last month. I'm just trying to think. So this will all be repairs and small things that we probably would have purchased in terms of like Trailerracks.com, which, for Trailerracks.com where we get all of our trailerless setup stuff, we have a discount now for the franchisees, and that's on the dashboard and that they give us a 15% off discount. So that saves us a couple hundred bucks this month. But you can see we paid, you know, $3,400 or most in just taking care of our trucks. This probably includes some of the mechanic. We have a mechanic that comes through every so often and just fixes little things on the vehicles, as well as just parts and pieces for all of our different mowers and all the rest of it. So the total net profit for the month was $34,387.82. So again, the margin, if you look at strictly the margin of the business for the month, was pretty low. Like, let's do the actual numbers. So if we do 173 let me just pull my calculator here. We do $173,000 in revenue, so we do 34,387 divided by 173,181. So our profit margin last month was 19.8%, which isn't horrible, but if you looked at last month, it was considerably higher. Again, the reason for that is because we had three pay periods in this month. We also did profit sharing for the employees in the field. And so this is something that we just recently instituted. And this is actually their first quarter of getting profit sharing for those in the field. We've done quarterly profit sharing for management in the past. We started doing it now for those in the field. And we're going to be talking a lot about this at Landscape Summit 2020, sorry, 2021, which is going to be next January, so in just a few months. So definitely sign up for that landscapebusinesscourse.com conference. We're gonna be talking about the profit sharing program that we have instituted that I love to death. And I've just seen massive nothing but good from it and just can't wait to share it. This is gonna be awesome. So anyways, we're gonna be talking about that Landscape Summit. It's the profit sharing program that we have in place for our employees that are out in the field, not for the management. And the managers will get paid next quarter in terms of their profit sharing for those in the field. They got paid in September. So that also includes is why the payroll expenses are a little bit higher than usual, is because we did do the profit sharing for them in September for those out in the field. So definitely come to Landscape Summit. We're going to talk about the profit sharing program. We're going to talk about the profit sharing program for this location as well as a manager ran location like Mount Vernon. So really looking forward to that. Any other takeaways from this for this month really would be that, you know, this is a business that I have not had to spend a lot of time at and it's been six years now in the making, almost where I can be completely removed from the business. The business is running without me and still very profitable. The quarterly. So if some people are wondering, like on the last video they were wondering about, you know, what's your average, you know, profit margin? Well, I can say right now because I looked at it just a few minutes ago, the quarterly profit margin for July, August and September. So Q3 of 2020 was 24 and a half percent at the Bellingham location. And so it's very good. It's very good. I don't think that's going to be for the whole year. I think we'll be like more like 21% for the whole year and I'd be happy with that. Again, like I don't have to spend time. It's great. Managers in place. We raised prices in September on both our mowing and and our landscaping jobs and that was what funded the ability for us to do profit sharing for those out in the field and not just the managers, which I feel very strongly about and I actually feel is like one of the best things we've ever done. And so yeah, I look forward to sharing about the profit sharing program at Landscape Summit. Make sure you sign up landscapebusinesscourse.com conference sign up for the conference and we will see you in January. If you have any questions, post down below. I'll try to share my numbers as much as I possibly can every month if I have time. But definitely check out the other video that's coming soon about the Mount Vernon location. This seems out of touch, out of reach. Like, oh, I'll never grow a business that big. Lots of employees and all the rest of it. You need to watch the Mount Vernon location. It started this year, has a manager and an employee and that's it. Alright, so definitely check that video. Smaller operation, did 24,000 revenue last month and that might be a little bit more achievable for you in year one and two. And like if you're just growing your business. So definitely check that one out. It is also doing very, very well. Look forward to sharing those numbers with you. Until next time, Be great to Nothing Else page. You'll be listening to Mike Andes on the Business Boot Camp podcast.