Spending BIG on Landscaping Marketing and Tips for P4P

Hey everyone, it's Mike Andes and you're listening to the Landscape business course. Today we're going to be answering questions about your lawn care and your landscaping business from other landscape business owners just like you. I want to first though say a big thank you to everyone has subscribed, joined the course lawn care web design and really supported the channel. We've been able to grow been able to use that money to really grow the channel and continually add more resources. So thank you so much for all of the support. Make sure you subscribe. 50% of the people who watch these videos do not subscribe. So don't be one of those people subscribe. Just push the button. It's completely free. It's super awesome. And so today we're gonna be answering some questions from landscapers. And if you would like to submit your question, you just gotta join the texting group. I don't annoy you with a bunch of texts. Maybe once or twice a month I ask for questions and you can submit them. So basically text the word landscaping to 855-575-126, text the word landscaping to that number and you will join the group. And when I ask for questions, you will be notified. Alright, so let's go ahead and jump into some more of these Q and A. See where we last left off. There's been a whole bunch of them coming in. Let's see here. Okay, we got a couple more questions coming in. All right, so the next question comes from.

Here we go. How often do you follow up with leads? Monthly question mark. Okay, so we follow up with our leads, like estimate sent.

The first five days after an estimate goes out is like the hottest time. After that period of time, they don't hardly remember they asked for an estimate. They don't remember who you are. They've moved on in their mind, or they've got another contractor, they've done the work themselves. And so really trying to focus on those first five to 10 days is really important. And we do it almost daily. During that period of time, the last thing you want is estimates being sent and then like, that's all you hear from them. You would rather have a no, like someone's saying, nope, don't want your services, it was too expensive, went with someone else, whatever. You'd rather have that than just like you constantly sending estimates and then like into oblivion and you never hear from them. So we always are pushing for answers and we're always pushing for decisions on those estimates. Even if it's no, I'm okay With that. Hey, Mike. Working on next year's marketing budget, we were looking at investing $65,000 next year and was wondering approximately how much revenue that would bring in specializing in mostly landscape install work. All right, so I'm always looking for a 10 to 20 times multiple on my marketing dollars, at least. Now for landscaping, I'm looking for more like 20x simply due to the fact that revenue, you have materials and all the rest of it incorporated in there, as well as the fact that you're not gonna get recurring revenue from. From a landscaping job unless you, like, upsell them on maintenance. But when it comes to landscape install work, you're not gonna get that recurring revenue. So you need to have it at 20 times what you spend in marketing. So if you spent $65,000 in marketing, I would expect that to pull in at least 1.2, 1.3 million in terms of gross revenue from landscaping. All right, That's a lot of money. You, you gotta make sure you spend that wisely. You don't wanna do it all in one month or, like, do it, you know, just don't spend 20 grand on a Print1Print marketing campaign. Like, you gotta be smart about this. And when I usually use that 10 to 20x multiple, I'm talking about, like, advertising that works. I've seen people, they spend $5 on advertising and they make $5 in revenue. It's not a good marketing campaign. You should ditch it. You should abandon it. You should figure it out. You should educate yourself. When I say 10 to 20x, that's what we use at Augusta as our standard. And so if I spend 10,000 in marketing, I expect 100 to 200,000 in the next 12 months. But for us, a lot of that's going to be maintenance. So then the year after that, we can build on it. So if you're doing strictly mowing, you might be more like 12, 13 times. But if you're doing landscaping, you need to be up 18, 19, 20 times what you're spending in marketing, because otherwise you're just not going to be able to because you don't have any recurring revenue. Right. You don't get that any benefit from selling someone today after the job. So it's definitely something you want to have a higher multiple on when it comes to revenue. But again, how much revenue should you bring in? I think you should bring at least 1.2 from using 65,000 in gross or in marketing. And that's because you're focusing on landscaping. All right, if you were just focusing on mostly maintenance, that number might be 600, $700,000. All right. And you don't have to spend that much, by the way too. We have some of the franchisees that literally spent $10,000 and they'll do 250,000 in revenue this year. Right. So that's 25x and they're mostly doing mowing. So it's not like that's the standard. I'm just saying 10 to 20x is what we want to be inside of. And it's going to range usually towards the lower end of that spectrum if you're doing maintenance. I higher end of that spectrum if you're doing install. But with maintenance you get the recurring aspect where next year you get that same revenue without the cost of acquisition.

I'm sure you probably get a million texts a day. Do you still do chats with people over the phone for business advice? Okay, so this is kind of a new thing. In the link below you'll see a part where if you want to get 45 minutes of my time on a zoom call, you can actually book a time with me. It costs money. That money I'm using because we're actually building version 3 now of P4P software for our franchisees. So if you've seen the revenue and the profit videos, you know that the franchise is still working to become profitable. And so I use a lot of the stuff that I sell as a way to keep funding what we're trying to build at the franchise and giving them more and more support, whether it be, you know, having Liz moving from the local shop into helping the franchisees more, whether it be Building version 3 of the software because we are so bullish and believe in it so much. And so one of the things I'm doing is trying to sell occasional time slots for me to help you. And if you want to get a 45 minute call in the link below, you can schedule a time and buy that. A one time kind of talk together. All right, couple more here. What are your thoughts on subbing out fertilization? We are a full service lawn maintenance company and are looking at subbing out our treatments so we can focus on the maintenance. And this will help with labor and take a lot off my plate. And according to their pricing, we will still make up to $15 per application. I feel that they will provide a better service than we can currently offer and will still be the ones in charge of the service. Cool. So traditionally I do not like subbing out services. However, if you are focusing on mowing or maintenance and you're trying to go out and get commercial contracts, there might be pieces of that contract you need to sub out like irrigation or treatments or snow plowing and that's totally fine. I like the idea of you just instead of buying a big snowplow, just sub it out to someone else. Get a piece of the pie to manage the contract. I like that. It's better than going out and trying to do oh, I gotta do irrigation, I gotta do treatments, I gotta tree removal, I gotta do stump grinding because I'm trying to get this one contract. Don't do that. Focus on your core competencies and then sub out the rest for contracts. Personally, I would not go out and try to sell fertilization on only to then sub it out. I would only do that subbing if that work was coming to me because of the services I already offered. In other words, I'm already doing a mowing service and the customer asks, then I would hand it off to a sub. Just keep in mind, it takes a lot to manage a sub if you actually have a high level of service and quality. And when they make a mistake, the customer's gonna come to you. So if that sub burns their lawn with fertilizer, guess who's in trouble? You've now put in jeopardy the mowing services that you currently offer that customer. Alright, so keep that in mind. Subbing is great. Yes, you make money, but you are liable. And I don't even mean from a legal standpoint, I mean from the fact that the services that you do offer that client could get chopped if anything happens poorly with the sub and their quality of work. So you really gotta trust that sub and make sure that they're gonna be a good representation of your, your business. All right, next question. Maybe a topic for one of your business or personal finance sessions. But I'm interested to know more about retirement accounts, 401ks versus IRAs as well as IRA versus Roth IRAs. Maybe as a business owner I should have a mix of all of them. Only downside I saw was a yearly cap on IRAs of 6,000 versus 401k was 20,000. Okay, so I made a video about this a couple weeks ago at the midweek, midweek motivation meeting that we have at our local shop. I talk about IRAs and my opinion on them, how they can be used for tax sheltering, but it can also be not the most growth, the highest growth vehicle. And there are penalties if you take money out before you retire, et cetera, et cetera. So definitely Check that out. Just look back and type in like Ira and I talked about the Federal Reserve. So. Federal Reserve Mike Andes. It'll probably pop up from a couple weeks ago. We talked about that with our local crew. All right, one or two more questions here for P4P. You charge $85 an hour and give 33% to employees. That's not necessarily true. We don't charge $85 an hour. We have a range, we charge a range. But I'd say for our franchise perspective, we range anywhere from like 50 an hour to probably 80, 85 an hour. So, yeah. Okay, and you give 33% to employees. That's $28.05 an hour. Do your employees make at or above 28 an hour since they are motivated to beat budgeted time, or does the downtime usually put them below 28 an hour? Just wondering, in case my employees ask if they will make the exact percent or the downtime will put them below. Yeah, so like when we talk about taking an hourly rate and giving the percentage to the employee, that means that if they hit budget time, they would make that amount of money. The problem is in an eight hour day, they don't get done eight hours worth of budget hours. They would. They don't. Like you got drive time and downtime, like you said, loading materials. Now, if they kill it, yeah, they can make a lot more than 28 or whatever per hour if they're beating budget hours. But if to say that, if to tell your employees that, hey, if you just hit budget hours, you're going to make 33% or whatever percentage of the rate that we're charging the customer, that's actually wrong because there's all the drive time and bathroom breaks and lunches and loading time and unloading your clippings that's not paid under P4P. So keep that in mind. Don't give that false hope to your employees. They won't be happy because they won't be making 28 an hour unless they're beating jobs. Right. Because if you actually look at how many hours they're working clocked in and divide that out, it's going to be different. All right, so basically what you're saying there, in order for them to make 28 and 5 cents an hour, in this scenario where you're charging 85 and giving a third to the employees, in order for that to happen, they've got to get eight budget hours worth of work, but they've got to get that done in an eight hours worth of clock time, which Means they probably only spent six hours at the job site. Which means they beat budget hours technically on the job. Like they only spent six instead of the eight that you budgeted for the job. So they actually really like they did really, really good in order to get that. So don't think, don't tell your employees, be careful about that. Watch the videos on the course about the transition of going from hourly into P4P. It is definitely something you want to watch and be very, very delicate. There's a company locally, massive company, I think they have like 200 employees. They're not in the landscape industry, but they're in the construction side of things. And not lawn care like at all. Like no maintenance or landscaping at all. They do H vac and AC and electric and plumbing. And like they're massive. They implemented P4P. But if you don't do that transition correctly, you're gonna lose the morale of your employees. And it's okay, you might lose a third of them and the other two thirds that step up, they can make more money and they can get all the jobs done still. Cause they're more efficient. Right. However, if you make 90% of your people mad, you get a problem. And so you've gotta make sure that transition period is good. You gotta make sure you've ran your numbers. Because if you go into it telling them that oh hey, if you just hit the budget, you're going to make 20 bucks, 28 bucks an hour and then all of a sudden they're making 21, they're going to be disappointed. But in reality they're actually seeing budget hours on the job site. You just didn't take into account the fact that they got all this other time, meetings in the morning, loading, unloading and so, you know, gas fueling up, all of that stuff. And they're not getting paid extra for that. That's not included in P4P. So definitely keep that in mind. Make sure you run your numbers based on clock time in terms of if you're trying to figure out what they're dollars per hour is, they don't care about your budget hours. They care about how long they work and what do their hourly wage come out to be once P4P was calculated. And so you got to make sure you keep that in mind. How do you avoid making trips back to the man to manage the project. Basically send your team and they know everything that needs done and what's expected. I have a mowing team, 100% self sufficient and landscaping team has questions and one or two visits at a job site by me daily, it's hard to perform applications. My role as I am the only licensed tech at the moment, it really cuts down on my productivity. More elaboration on the project videos and how to streamline these projects would be great. So talked a lot about this at the last conference. So watch the recording of the, of the conference and the course. We talked a lot about making those videos, how to do that, job notes, things like that. But the bottom line is, if you're gonna scale this business, probably not the most scalable thing for you to be doing, be the only person doing the spraying. I know that a lot of people do that because it's profitable. That being said, as your business scales, your time becomes more and more and more valuable. And if you're gonna be the bottleneck for all treatments, when you really need to be on job sites, and now you got crews waiting 30, 40 minutes for you to show up and tell them what to do or, or give them leadership, you're wasting a whole lot more time. So as the business grows, if you have a bottleneck like where you're the only one that can do spraying, you're going to really put yourself in a bad position. So I'm not saying you should cut that out. Definitely like you're talking about is like, fix the project management notes, fix the videos. That's gonna be really good. Look at the training on Landscape Summit from last year. We talk a lot about it, but when it comes to specifically in there, you're gonna want to look at the part where I talk about having a business that runs without you. And like we talk about project management videos and the notes and all that, it's in the course at the very bottom. Landscape Summit recordings go really in depth on them. However, I do think going forward, even if you fix that problem, you're going to eventually run an issue where you are doing spraying all day long and that's getting more jobs. That's great. And you're making good money on that service, but you have so many inefficiencies elsewhere in the business due to the fact that you're out doing spraying all day and all those spraying jobs have to go to you and you become a bottleneck and you'll eventually have to get rid of it or get another spray tech. But that's what I would say is like, yes, you have the right objective now, Notes and video. But realize that probably the next year or two, if you're continuing to grow, if you're continuing to Grow that you will probably need to eliminate that bottleneck by either taking the service out or hiring someone else to do the spraying. What systems have you found beneficial and important while deploying an entirely new crew and crew leader to a job to ensure efficiency and le a quality job. Two things, what we just talked about in terms of project notes and estimate video. And number two is educating and training them on doing a walkthrough with the customer and showing them how to do it and doing an actual, like, demonstration at a team meeting of how to do a walkthrough with a customer. You can watch a video. A couple weeks back, I did this with Liz at the office at the Bellingham location as part of a team meeting. We actually role played how to take a customer around and show them and educate them and get like, you want to draw all the negative things out on job site and not to do it. Like, after you've got all your tools and everything's cleaned up, do it when you have like an hour's left of cleanup. So that way they feel comfortable to point out the fact that they want a little bit removed off the trees or taken off on a certain area, the edge removed here, like that's. You want those negative comments, then you do not want it the next day once they actually take their time and look around the property. And now they. They're on their keyboard typing to the office. So we did that as a demonstration. Highly recommend that you either show that video to your team, which is totally fine, or you should do that demonstration yourself and show them how to do a walkthrough. Show them how to read body language. If the customer's kind of like, yeah, that looks good, they need to dig into that. What do you want more about, Mr. Jones? Do you want some off the top a little bit more? Do you want shaped on the bottom, like, limbed up a little bit? Like, if you're talking about tree trimming. So definitely those are the things I would recommend. All right, next question. Can you explain. Can you give an explanation of how you would structure P4P on days when the project manager or owner of the company has to step in for a few hours or even be involved during the whole project? Okay, so good question. Follow up to our last one is if you as the owner or project manager have to get onto a job site that's coming off the budget hours on the job? Okay. So you can see that on the course under P4P. On the project part, it talks about like, it shows, like, as people are working on a big job site, you're allocating the hours towards the job. If you, as the owner or the project manager, go on that job site because you're just helping them or they need help, that's gonna come off budgeted hours, and so that's what you would do. And I think I explained that on the project part of P4P in the course. All right, couple more. How do you relay the details about the job that the customer told you to the project manager? Same thing. Video and job notes. So I'm gonna go ahead and wrap it up here for today. Hopefully you learned something again. Make sure you join the texting group if you want to Submit your question. 855-575-1267. Text the word landscape into that. Check the links out below. Got a whole bunch of new stuff coming, as well as things that are already available in terms of training. Opportunity to set up that live. Call with me if you'd like that. And I just really appreciate everyone's support and subscribing to the show. Thanks so much and have a great day.