SPRING RUSH MAYHEM: A Masterclass for Seasonal Businesses

If you're an entrepreneur and you have a home service business, here is how this presentation is going to make you more money. Number one, we're going to figure out how to schedule jobs during spring rush to avoid burnout and make sure you don't have to turn down leads. Number two, we're going to make sure that every single quarter out of the four quarters in the year are profitable, including what we consider the off season. If you don't know who I am, my name is Mike Andes and I'm the founder of Copilot CRM. We have over 700 companies that we do their software, make them more efficient and profitable, do over $1 million in daily transactions, and then Augusta Lawn Care, which is a franchise. I have a over 150 worldwide locations inside of Augusta Nation. We do over $50 million in annual revenue. All right, it stinks to stop taking new leads during the spring rush. Literally the time you've when waiting for all winter long, all off season long, and if it's not spring for you, it might be a different time of year. Just insert whatever timeframe, the go time, the time when you get tons of leads. And if you're in home services, most of us have a very seasonal lead flow and we know it's like to have a rush of customers, literally people pounding down the door, the door, the phone is ringing off the hook, leads are pouring in. And if you have to turn off your leads during that time, it's painful, it's the time you've been waiting for. But if you don't prepare correct, you have to turn off your leads now. It also stinks to lose money during the off season. And I know what it's like to burn tens of thousands, hundreds of thousands of dollars when I go from the end of my go time, my on season to switching to my off season and all the cash reserves that I've been saving up going out the window. Now, at the end of this presentation, I'm going to share with you my $50 million bet that I have in order to fix this problem and the massive bet that I'm placing in order to make sure that these two problems are solved for home service businesses. Now let's go back to the two big problems. Number one, stopping leads during spring rush stinks. Losing money during the off season also stinks. Why does this happen? This is the old way of running a home service business. And you could also, on the Y axis, the one that goes up and down there, I have money there. But you could also say Number of leads. You could also say demand, like the amount of people thinking about your service during that time. And you can see most of us have a massive spike in demand, a massive spike in leads, a massive spike in revenue during a period of time in the year called the spring rush. Now, this is inefficient. This is what causes many home service business owners to be unprofitable and eventually quit, which is the ultimate failure. Because many of us, if we just stayed in the game for three to five more years, would actually figure out this demand curve and what I'm talking about today, you'd actually come to this realization without having to watch this presentation. But my hope is that if you're in year one, two or three, that you're able to avoid the scars and the pain of this chart. Because this chart is the reason for many home service and seasonal businesses going out of business. Seasonality kills businesses. This way stinks. It's why it feels like a roller coaster is you're literally riding the demand curve. You're riding the seasonality curve of your industry. And it is absolutely brutal for profitability and morale. This is the new way. And you can see that the spike in spring rush is not as crazy high, but also during the quote unquote off season, our revenue, our leads, our demand doesn't go as low. And if you watch my content for a very long time, you will remember a phrase I said years ago, and that is higher lows, lower highs. By doing that, you'll stay in the game. But today I want to make sure that you understand that by doing that and having higher lows and lower highs, you will actually make more money. So let's first talk about how to manage the spring rush, because we've established that it stinks to have to turn off leads during the spike in demand that comes in the spring and, and that it stinks to lose money during the off season. Let's first attack how to manage the spring rush effectively. The first thing I'm going to do is prioritize time sensitive jobs. I'm going to use lawn care and landscaping as an example, but insert whatever home service business that you run in any industry, and this applies during a rush of leads, whether it be in the spring or any other season, I'm going to focus on time sensitive jobs. These are jobs that must get done within a matter of days or a couple weeks and cannot be put off months down the road for lawn care and landscaping. If it's in the spring rush and someone asks for a Mowing service, I can't push them off three or four weeks. If I do that, the lawn will go from two and a half inches to six and a half inches and all of a sudden the Lawn will take 10 times longer on the first cut. The customer will be unsatisfied, their HOA will write them up and they'll probably go to a different service. So I need to prioritize something like mowing in my industry because if I wait or push off the customer, I will lose the lead, make the customer unhappy, and tarnish my brand. So I need to focus on making sure there's room on my schedule and I budget accordingly in terms of the hours that I can have for my crew to make sure I can fit in. Time sensitive jobs. I'm also going to prioritize recurring jobs. Now, recurring jobs means it happens every single week, every other week, every single month, some sort of recurring basis. You're not just going to do it once a year. You're not just going to do it intermittently. You're not even just going to have a reoccurring, which means sometimes the customer comes back to you intermittently. We are going to have them on a schedule where, you know, you have predictable revenue. In the software world, they call this monthly recurring revenue. This is dependable revenue we know is going to come in every single month. The reason I'm going to prioritize this type of revenue is because it will help even out the curve of the entire season. It's going to allow me to make sure I can still make revenue even when the leads stop coming in. Because the problem with Spring Rush is that leads for all services come pouring in at the exact same time. It is up to us to filter out which ones are most important, and we've established that it's going to be time sensitive jobs and it's going to be recurring jobs that I can have recurring revenue for the rest of the year, even after I've initially signed up the customer. So that way it doesn't stop. But my lead flow, my revenue doesn't immediately stop and I don't have these massive peaks and valleys. Recently I was hearing from a landscape hardscaper that they went from $80,000 a month in revenue to over a million dollars in monthly revenue the next month. That's a lot of revenue and I'm super stoked for them. They have a great big business, but that kind of massive spike is very hard to sustain and plan for. And it's very hard from a cash flow perspective. To to actually accurately predict what your lead flow and what your schedule is going to look like. I don't want that kind of business. I want something more stable. And recurring jobs is where that revenue comes from. So what I'm going to do during the spring rush is I'm going to move time insensitive jobs into the off season. These are going to be one time jobs, not recurring. These are projects that I can move off into the off season that are time insensitive. In the case of lawn care and landscaping, if I am prioritizing recurring and time sensitive jobs, that would be mowing, that would be a bush trimming. I can't push bush trimming off for four months. I might be able to push off for two or three weeks, but definitely not four or five months because the property will get overgrown for mowing. I have to prioritize it immediately like we've talked about already. But if I'm also offering a service like installing pavers or, or building a wall or installing a hedge, that is a time insensitive job, I can push that off two or three months past the spike in leads. That way, when all the leads come pouring in, I can filter out the ones that are time insensitive and one time jobs and move them at least a couple months off into the future. So I can focus on recurring and time sensitive jobs. So the question is, what happens if you're at capacity during the spring rush? We're talking about the spring rush and how to manage it. What happens if you're at capacity? There are three different types of capacity. Think of capacity as your limit, the max that you can do in these areas. And there's three different types of capacities that you can have. The first one is asset based capacity. Now when I think about assets, I think about your trucks and your equipment. If you have a certain amount of trucks, certain amount of equipment, there's only so much revenue you can do. There's a capacity that you'll hit before you say, hey, I have to buy more trucks, I have to buy more equipment in order to be able to continually grow revenue. So the very first capacity is how many trucks, how much equipment do you have, and what's the max or the capacity amount of revenue that you can produce without having to buy more trucks and equipment. And remember, this is at max capacity, which means you're using the truck all the time, you're using the equipment all of the time. And what kills me is when I go to home service businesses, they have five trucks and they only Use one or two of them every day. They have five trucks, a whole bunch of equipment, and they have one or two employees. That is an inefficient use of your assets. And therefore your revenue is way lower than what your max capacity is for for assets. The second type of capacity, and something you're going to bump up against during spring rush is labor based capacity. Labor in this case is simply your employees. If you have a certain number of employees, what's the max amount of revenue that you can produce without overworking them? And overworking them means working tons of overtime, Working so many hours, do they want to quit? Working so many hours that they walk off the job. This is your labor capacity. How many hours can they produce? How much revenue can they produce before they're maxed out? And if you go above capacity in the short term, you'll make more revenue and you can go above capacity in the short term. But if you continually are exceeding capacities of assets, all your trucks and equipment, your labor, all of your employees, if you're constantly going above max capacity, they'll eventually burn out and you'll collapse your capacity. Cause trucks will break down, employees will leave. The third capacity, also something you don't want to go over, your max capacity, is personal capacity. This one's a little harder to calculate because it really comes down to what is your personal capacity. You have to judge this for assets. It's very easy to say, okay, I have X amount of trucks. This is how much revenue I can do based upon if the crew is filled inside the truck. For employees, it's very easy to say, okay, they work 40 hours a week. They're going to complete 30 budget hours per week of work. Multiply that by my hourly rate. Boom. There's my revenue capacity for labor and for personal capacity. It is very difficult to sometimes quantify because it really comes down to what is the amount of revenue that you can produce without losing your marbles, without having psychological, emotional, physical problems that occur in your life simply because you're overworking yourself. This number can be improved the same way that you can buy more trucks, buy more equipment, and hire more employees to increase asset and labor capacity. You could also gain more skills. And hopefully this video helps do this to increase your personal capacity, which you can operate a larger business without losing your marbles. So what should be done if you're at capacity, in other words, all of your assets are being maxed out. You're using all of your trucks and equipment every single day. Those trucks are filled up with laborers and Those laborers are being maxed out. They're working full time, all the time, and you're start or you're starting to bump up against your personal capacity, and you're starting to feel like you're going to lose your marbles. What should be done? First off, if you're at capacity and if you're in profit mode. Profit mode is defined as you are maximizing for profit instead of growth. And you can switch between profit and growth mode in the year. So, for example, a lot of owners at Augusta Nation will take the first six months of the year to be in growth mode, and then they will switch to profit mode. If you're at capacity in any of these three areas, assets, labor or personal, and you're in profit mode, you're going to raise prices. By raising prices, you're going to reduce your close ratio. You're going to reduce the number of leads that get converted into paying customers. By doing that, you're going to dampen how many budget hours are on your schedule. You're going to dampen how much more demand you can sustain. But in this case, we're not going to extend the capacity. We're not going to buy more trucks, we're not going to hire more people. We are simply going to raise prices and be more profitable. That's why it's called profit mode. We're going to maximize for profit, not for growth. Now, if you're at capacity and you're in growth mode, which means you're trying to grow at all costs, and you're not as concerned about your profit margins as much as simply generating more revenue, getting more customers, and having a high close ratio that converts more leads into customers, what are you going to do? We're going to buy trucks and hire employees. Because if we're in growth mode, assuming that your personal capacity can handle it, the only thing that limits you is assets and labor. And so in order to keep growing and you're bumping up against capacity, the only thing you'll need to do is buy more trucks and equipment and hire employees. By doing that, we increase our capacity and, and can continue to grow revenue, let me say very quickly, by having a strong brand and having a customer service quality measures in place and a great website and painted and decal trucks and uniformed employees. And you actually answer the phone when people call and you actually respond to them very quickly when they ask for an estimate. If you do all those things, let me just say this. Being in profit mode and raising your prices usually will not hurt your close ratio. As much as you think, less customers will leave than you think when you raise prices to existing customers. We're doing this literally at my location right now. Over 300 customers. We're raising prices on by 25 plus percent. A new video in the future will break down. What happened? When is the best time to increase capacity? So, okay, I am overwhelmed, overworked. I'm in the middle of spring rush. When should I increase my capacity? That is buy more trucks, hire more employees. Well, it's actually not in spring rush. The goal is to get ahead of the demand. In other words, plan for the fact that during spring rush you're gonna get a ton of leads. Like after your first couple years in the industry, you should know that, like during spring rush, there's a whole lot more leads that come in and there's a ton of work and you're just not gonna be able to handle it if you don't get ahead of the demand when it comes to increasing your capacity. So what does that mean? That means hiring employees before the spring rush. You might say, well, I need five more employees. I'm not gonna go hire them the day that spring rush starts. I'm going to hire them four to six weeks before and stagger their start times as I go into spring rush. So that when I hit spring rush, I have full capacity. I've maxed out the amount of budget hours they can perform. Cause they're efficient, they're trained, and they have high quality. Going into the spring rush, they're trained. Going into the spring rush, they're hired. And that means being prepared far in advance, including buying more trucks and equipment. There's no reason to be buying trucks and equipment in the middle of spring rush. Guess who else is buying more equipment, buying more trucks, and hiring more employees during the spring rush. Because they're all maxing capacity too, your competitors. And so if everyone has their max in their capacity, everyone's in the market to buy trucks. Everyone, everyone's in the market to get more equipment. Everyone's in the market to hire more employees. Get ahead of that demand by preparing for this rush and actually hiring and buying trucks and equipment to increase your capacity before the spring rush. So we have covered how to manage the spring rush. Now let's go ahead and cover how to manage the off season when it's not, when leads are not pouring in. And I see a lot of home service businesses where leads will be. They will decline by 70 to 80% during the off season. So the first thing is to avoid fixed expenses Fixed expenses are costs that you have that do not go down when your revenue goes down. So think loan payments. This is why I am vastly against going into debt when you're first starting out in your business. Because by doing that you have a fixed expense. And when you're first getting started, most people don't have a great handle on the off season, and that's what kills them. And so they have rent, they have mortgages, they have loan payments, they have insurance, they have all of these costs that don't go down. Your revenue goes down. On the contrary, a variable expense goes down when you have less revenue. Think about it like this. If you have less revenue, you're probably driving your trucks less. If you drive your trucks less, your fuel expense goes down. And it's a variable cost. Labor is your biggest variable cost. But some people make it fixed by putting people on salary. And as we'll see about talking in a moment, they keep their crew on all off season long, essentially making it a fixed expense. We want to avoid this at all cost. This is why I don't want you to get a massive office that's three or $4,000 a month until you're a very large company. I want my admin costs under 20% of my revenue. That's all my office wages, my office rent, utilities, equipment, software, et cetera, under 20% in order to be able to focus on operations and sales. Because we have admin operations and sales. I don't want admin being bloated. And a lot of times that's the area I see getting bloated and spending 30 to 40% of revenue on all these fixed expenses and debt, et cetera. It's okay to have debt, especially once you're later on in your business and you know exactly what the return on that investment is going to be. And you figure it out the off season to ensure you don't have so many fixed expenses that you actually drain all your cash reserves. Now, another thing when it comes to the off season is seasonal labor for seasonal work. A lot of us would agree that we have seasonal work, but a lot of us also don't see the fact that we should be having seasonal labor to match the seasonal work. We have a certain demand. We should match the supply with the demand, and that means seasonal labor. This means not having people on full time all the time. If you're going to have work sometimes, you should also have labor sometimes. So the question is, should we be keeping employees full time year round? This almost bankrupted me when I First got started with Augusta the first five years. This literally almost killed me. Why? Because I would have to save up 70 to $100,000. And that was basically all my cash for the year. And that was like October and November. And I would spend all of it on just keeping my crew busy and full time because I thought I needed to keep them year round. So we did the stupidest stuff, like we baked cookies for customers, we did free pressure washing for our customers, we went and did like free estimates for commercial properties and property managers. We did anything and everything possible. We reorganized and organized the reorganization of the shop. Like did equipment maintenance, a lot of things that were not efficient and definitely didn't produce revenue. And because of that I lost 70 to $100,000. Basically all my profits and all my cash reserves just got flushed down the toilet. And every single off season we must decrease supply or increase demand. So we're going to get back to that in a second. But let's go ahead and go through this. So I want to talk about alternatives to year round full time workers. Okay, so some of the alternatives that we can have is laying off all or some of your team and guaranteeing them a start time. So you might take your entire team or just have a segment of your team that is full time and then the part time crew. The part time crew works full time, but only for maybe seven, eight or nine months out of the year. But you're going to lay them off and you're going to tell them, hey, it's December 1st, you're off, we're laying people off, but you have a guaranteed start time to come back, for example, March 1st. But give them a guaranteed start time. A lot of times during our off season in the home service industry, they can go easily get a retail job, a manufacturing job, a delivery job, because the holiday season is inside of our off season. And so my goal is to be able to make sure they're taken care of. For some people, they don't mind having three or four months off of the year and working crazy hard, crazy hours for eight or nine months. For other people that need the full time hours, I'm going to give them this expectation when they get hired. So they already are planning for the fact that they're going to leave for three or four months, get a full time job somewhere else, and then I'm going to make sure that I'm able to pay them more and pay them very well and give them benefits, etc. So they want to come back. And I was shocked that when I did this, most of them came back. Like the vast majority that I laid off in the winter, came back in the spring. I was able to give them more benefits, paid them more, because I didn't have to flush all that money down the toilet during winter. So guess what? They wanted to come back because they could make more money at my place of work. Another thing to think about is what about seasonal laborers? And everyone thinks about programs like the H2B program or getting immigrants to be able to come work for you part time. I'm not a huge fan of that because I'm relying on the government to bring my labor source. I don't like that, I don't like being at their mercy. But one thing to think about is a lot of us only think that the pool of labor is in the 10, 20 mile radius around our shop, around our office, around our service area. When reality, the question is, are we just thinking too small? What if we actually had seasonal work that we hired from outside of our area and we put them up in housing or we gave them an allowance for their rent? Yes, it's going to cost you more. But my question is, is it cheaper than paying them for a third four months out of the year where you're not needing to pay them, you actually don't need their labor. And so can you go get a cheaper labor market, a cheaper labor source and increase the amount of people that could work for you by simply giving them an allowance to come move into town for six, three, seven, eight months, some seasonal amount of work and be able to advertise your job listing far outside of your local area. Another thing to think about is short term contract labor. Now I don't mean 1099, these are going to be W2 employees, but when I say contract, I mean like when you hire them, you're like, this is a three month stint just at our peak season. That's the only time you're working. And all of us as business owners typically think more long term. But there's plenty of people in labor industries that need a three, need a four, need a six month stint between jobs before, before a life event, before they go to college, before they get married. And so having a short term contract where they know going into it they're only working for a short period of time can absolutely be a, a win for them and a win for you because you're not worried about laying them off. They come in expecting to be able to only work the shorter amount of time and to attract talent for those three or four months. When leads come pouring in, I'm willing to pay more because I don't have to worry about trying to keep them busy for the other nine months out of the year. So we've talked about this fact that we must decrease supply or increase demand. So what do we talk about? Decreased supply is we don't have full time labors when we don't need them in the off season. We try to have short term workers and contract labors when work is busy. That is is a form of decreasing the labor supply because we don't need all this abundance of supply of labor during the off season. But another way to do this is to increase demand, which means we're going to increase the number of leads during the off season instead of reducing our workforce and our labor supply. Because off seasons we will make you poor. Our goal is to create season specific offers for season specific services. At Augusta Lawn Care. We have five different tracks or season specific services that we offer. Some of our owners will just continue mowing based upon their market. They can make this work. Some of our owners in more northern climates will do snow plowing and salting and services that are around the ice. Then some of our other owners will do what we call winter services. The grass might stop growing, but they can still do cleanups. They can still blow off the walkways. They can keep recurring revenue coming in during the winter by servicing their recurring mowing customers just in a different way. Also, the big power button, some people will lay off everybody and go into lockdown mode. And that is simply we're going to lay off every single person. And we're only going to keep the general manager busy doing some of the labor, equipment maintenance, et cetera. But we're just going to crush all expenses and only produce enough revenue to basically cover our fixed expenses and our general manager's labor. That's it. Everyone else gets laid off and then the last option is Christmas lights. And that's what leads me into my $50 million bet. Because I believe in five years that this revenue stream, this season specific service and a season specific offer that we're building in Augusta will, will in five years generate $50 million or more in revenue doing just this one thing and that's Augusta Christmas Lights. We are doing a massive effort towards this, building new branding, websites, trademarks, et cetera. Because this is a problem in our industry. And I'm talking about lawn care, landscaping. But any home service business will have to come up with another service, a season specific service to be able to Give season specific offers to their customers if they want to go on the offensive and increase demand during the off season. Here's my hot take, and this is why I'm making a $50 million bet on this is we as home service business owners work too hard to not make $1 in profit for every $5 of revenue that we make. I have seen some of the hardest working people in the home service industries that work crazy hours not making any profit, making 1 to 3% margins or losing money. Why doesn't that happen? Why don't we make at least 20% profit margins? One thing, Q4 collapse. I call this Q4 collapse because 1/4 out of the year demolishes the entire year of great performance and great profitability. Why? Because of this. The old way. Look what happened in Q4. We had a collapse of demand, a collapse in revenue, a collapse in leads leading to Q1 massive losses. This happens in most home service businesses and you might have a switch of demand, you might have a different seasonality. This curve of demand and revenue might not look exactly like yours. But I can guarantee you if you're in a seasonal business, your demand curve, your revenue charts, your profit and loss statement looks something like this. And it's going to kill your business. Here's why. For all the tech, for all the people that love math, look at this chart. The dotted line on the bottom is where you break even. This is the amount of revenue that you need to produce just to break even in the business. I'm gonna actually make this bigger so you can see it very, very clearly. So this is the break even, the red line is the break even point. This is how much revenue you need to be able to make to cover your fixed expenses and make profit. Realize that in Q4 and Q1, you dip down below that line and actually start to lose money. This is where you actually start to go cash flow negative. Also realize that in the middle of spring rush, look what happens to our demand. It gets so high that we get above our capacity. We can't actually service all of these leads. We have so many leads coming in, we have to turn them off. We have so many leads coming in, our crew gets overworked, we have so many leads coming in that we begin to exceed our personal capacity and start to lose our marbles and have mental collapses and our relationships and our family get affected. Not good anywhere. There's shaded area on this chart. Bad news. And think about like this. Look at all. If you look at the bottom line, the timeline of month, months of the year. If you look at all the areas that are shaded in the Q1, then you have Q2 and then you have Q4. This is why owning a home service business, any business that's seasonal, is absolutely horrible. Because if you run the business the old way, most of the time you're either losing money or have so many leads coming in you don't know what to do with them. This is a recipe for disaster and a recipe for giving up. And that's why we want to solve it. Because this is the old way. You lost leads in the spring rush and you had negative cash flow in the off season. Horrible recipe. Who wants to do this business? But watch what happened when we did everything. We talked about this video. The new way is that we don't exceed capacity during the spring rush. Why? Because we took all of our one time big projects that were time insensitive and we moved them to the off season. We focused on recurring revenue that balanced out our revenue for the rest of the year. We focused on creating season specific offers for our season specific services so that we could actually go on the offensive during the off season. And because of that, I was able to be profitable for every single quarter. Not by a lot. There's still some seasonality in Q4 and Q1. There's still a spike. There's still a massive increase amount of demand of leads and revenue during the spring rush. But because I was able to even things out and manage my spring rush well and manage my off season well, I was able to stay profitable year round. Let's recap. There are four takeaways I want you to have from this video. Number one, during the rush focus on recurring and time sensitive jobs.

Number two, season specific services and season specific offers. So we're going to create a season specific service for off season. We're going to create a season specific service for off season. We're going to do the same thing for spring rush and focus on certain services at certain times of the year. The third thing is we're going to have seasonal workers for seasonal work. Why is it so hard for us to understand? You're going to have to either lay people off or increase demand. Increase leads by offering services in your off season and fourth off seasons will keep you poor. I don't want you to stay poor. I want you to become poor to do the things in this video in order to make sure that your spring rush doesn't overwhelm you and you don't lose money during the off season. Watch this video here. If this is like, hey, this is pretty simple stuff I want to go to, like, where's the 2.0 version of this? How does it get harder? Watch this video here where I talk about going from $140,000 of the budget all the way to having six locations and over $4 million in annual revenue.