Stop Paying Employees By The Hour (Coaching Call with Mike Andes)

Hey everyone, it's Mike Andes. I'm the founder of Augusta Lawn Care. We have over 200 locations around the world. I'm also the founder of Homeworks. We've processed over a million dollars in revenue for home service business owners every day so they can grow without breaking. Today I'm going to be having a one on one coaching call with someone that owns a pool service and they do maintenance and they also do repairs. We're going to be talking about how they can do a version of pay for performance when they don't use budget hours and they want it to be really, really simple. This is going to be really helpful if you're trying to dip your toe in the water of paying people based upon how hard they work and not how long they work. Let's go ahead and roll the tape. My pleasure, brother. What can I help with? I, I went through your doc a little bit. Kind of know the business a little bit but maybe just give me a bit of background and we can jump right in.

Yeah, sure. So look at. I started the business right around 2019 kind of as a side thing with the partner. Did everything wrong a few times. So eventually I had another business. I went all in on this. We grew very quick, but we grew with the wrong prices once we started to scale and so kind of went to that situation, am I going to sell it or am I going to raise prices? Did that and essentially what we did was what was killing us was the chemical. We included chemicals and once the summer hit it just, you know, your numbers flip and you were already low to begin with. So. So what we did was we just did a service. Our operational cost built in and then we did plus chemicals and make chemicals a profit, you know, instead of an expense essentially. We consolidated, got rid of some property managements, went back down to about, we went from 220 to about 170. We grew. We had a little bit more turn that year because people were trying to sell with the new pricing or recycled to new ones in. So we ended with about 195, but we doubled our, our revenue. But then me and my business partner split up after that. So. So I went back down to about 110. I rebranded. I invested a lot into the branding websites online, you know, pretty much skyrocketed right back up to about 170ish pools. But again making more revenue this year than we've ever have. And so now. And we had to retrain it, the new team, everything. And so now I'm kind of like I'm kind of getting a better feel. Didn't do the best job tracking my, my, my numbers, but this year kind of cleaned it up. And so now I'm heading into 2026 and just had a few constraints and questions as far as strategy to get to where I want to go to, as well as, you know, changing the, the pay structure within my business. I think I'm a little insecure with what I'm doing, paying my guys. And so it kind of makes me scrape to the bottom barrel type of people. And I kind of hold on to them a little bit longer, I think, because I know they're a little cheap, you know what I mean? So I'm like, I'll tolerate a little bit too much. So. So what I kind of was thinking and I saw your pay for performance, and I'm trying to, kind of trying to figure it out in a way with pools, I pay per hour, I don't pay per pool. And so what I wanted to kind of do and I wanted to get your feedback on this is essentially I have a standard that I want them to meet as far as the amount of pools that I need them to do, really, to make it worth it. And so that's about 50 pools. And so I feel like if they hit 50 pools, they get an extra $50 per week.

Is that 50 pools per week?

Per week.

Got it.

So that's about 12. That's about 12 a day, four days a week. So I leave one day open for filter cleanse. And so filtered cleans. I also, right now I currently give them extra $20 on top of their hourly. And so I wanted to kind of do a tier system of if they, if they service 50 pools, they get an extra 50 pools a week. If they do 60 and above, they get, you know, 80 bucks or 70 bucks. And then if they go to 70 plus, which is rare, then. Then I give them even more. And then I would kind of balance it with callbacks and going over budgeted hours.

Yep. Yeah. Like, I think in all with PvP, it's really just comes down to a matter of quality and quantity. Right. And so the quantity is the number of pools. The quality becomes callbacks. Right. And so if you're not going to use budget hours, that's fine. The only trouble with when you say pools is some pools take longer than others.

Right.

Are they generally pretty much the same, though? Yeah.

And you know, and we're kind of at that point too, where it's kind of worked into the service costs, where we can kind of determine this pool is going to take a little bit longer. So we usually charge a little bit more anyways, and so I'd kind of have to get a little bit more. The way I schedule it now is based off of the pool. So I'm like, I know this one. On average, it takes about 30 minutes between servicing and drive time. And then if it's a dramatically big pool, then I'll adjust accordingly. Or if we have weather events, I'll adjust accordingly.

Yeah, that's the only problem, in my opinion, when you say, hey, because I like the idea of, like, really simple, like, number of pools per week. The problem is, if they get two big pools on today's route, does that throw them under the bus? Right. And then they'll feel like you're gaming the system. Whereas budget hours kind of scales up and down with that. Well, you could. What you could do, Dylan, is you could just do it based on revenue. Like, if you make X amount of revenue, you get a bonus because the revenue, I would assume, correlates directly with the size of the pool.

Usually. Yeah, usually.

Usually.

So, yeah, yeah.

Like, simple, the simplistic, the simplicity of number of pools. Love it. Just as soon as you start giving them an incentive like that, you will get more pools done, but they will start grumbling about the size of the pool. And he's playing favorites because they got me on the. The route that has all the big pools.

Right. Well, I'm already facing a little bit of that also. I'm also facing, you know, oh, well, you know, I have to do these many pools, and he only has these many. And so, you know, there's crazy because.

They'Re getting paid by the hour right now.

That's what I said. You know, I'm like, bro, you're making more money, man. I don't know. I don't get it. But that's what I'm kind of facing. And then there's a little bit of, like, you know, this is what it is, man. You know, like, this is how we pay.

How. How would you.

How would that play out as far as based off revenue? How would that look as far as the way you're seeing it and describing it?

Yeah. So you could take your average. Like, what's the average pool service cost about?

Let's just say a regular pool with chemicals, about 200 bucks a month.

Okay.

But per service, well, that'd be about 50.

Do you char. Do you charge us on a monthly basis and we come weekly? Is that like your most common thing. So 200. Okay, got it. Okay, so then in this case, you are charging by the service. You are charging on like a monthly basis. So I like your pool idea. Just realize you're going to have a few customers where all of a sudden it's going to come an issue. And you could, you could manually adjust this by saying, okay, they're a two pool. They're a two pool client. You know, like their, their service counts as two client, two pools. The reason I'm doing this is I'm trying to keep as simple as possible since you don't do budgeted hours. And so if I was you, I would not just do 50, 60, 70, I would actually go lower and with smaller increments because If I'm at 40 and it's Friday afternoon, I'm like, there's no way I'm going to hit 50. I'm just going to toast the rest of the afternoon. I'm. I'm going to be chilling for the next three, three hours. Whereas if I'm already hit the smaller scale, I have incentive to keep going.

Okay, I like that. That's a good way to look at it.

Like, like you probably break even on their labor at something in the ballpark of 30 pools, right?

Yeah, I would say so.

I would start like at 35. There's a bonus 40. There's a bonus 45, 50, 55, 60. Because what you want is you want them like, hey, boss, I want an extra couple pools in my schedule today because I want to hit 70.

Okay. Yeah, no, you're right.

I think here's the thing, you got to ask yourself too, like if you're going to be okay or not okay, but like an underperforming employee, let's say they like 35 or 40 pools in a week. What would you pay to have that person double output? You're not gonna have to pay them double when they do 70, but you're gonna make double for the business.

Right?

So I would be very nice on my bonuses because, like, you might, you might be able to pay them 20 to 30% more, but get twice the output right now.

I mean, I thought I was. And correct me if I'm wrong, because I do pay per hour and I do have a schedule, and I make the schedule based off of the route. What I say so is that not budgeted hours.

Budgeted hours would be where every single service, they go to it, the price and the amount of time that they are. Like their budget hours would correspond differently. So think said otherwise, you have this unit of pools. We have a unit of budgeted hours. That budget hour amount for a lawn service, for example, could be 0.5, it could be point 7, it could be point 1.4, it could be 3. Because the size of the lawn difference. Right, right. It would be like me saying, like I, hey, if you do more than 10 lawns, then you get more money today. Well, I could throw them a lawn that takes them five hours and then they aren't going to get a bonus. So the most accurate form of P4P is when you use budgeted hours. But as long as the vast majority of your pools or your service units are very similar, then I think you're okay simplifying it. Like you have in my case, that would be like if I only serviced a type of lawn that was generally within say 2 and 3,000 square feet of turf, I could probably get away with number of lawns as my unit for P4P. Hey everyone. Inside of the book copy and paste millionaire, I Talk about the P4P system being so instrumental to be able to have the business run without you, where your employees are paid based on how hard they're working. If this is something you're interested in, this is the perfect time of year during the off season to figure out the software that makes this possible automatically within a matter of a minute per employee per day. You can pay your employees based on how hard they work and not based on how many hours they worked. So go check it out, people, software.com. the first 30 days are completely free so you can make sure it's working for your business. Set up a call with lael, our support system here, to be able to make sure it's implemented in your business correctly.

But how much of a percentage or how much would you take off of the bonus based off of callbacks and going over hours? Usually, yeah.

So if you're going to use a simple system, so like we do it differently with a full system of PvP, a yellow slip is you have to go back to service. So I'll say like for you guys, when you guys have a complaint, do you have to return to service or is it just like, hey, we're sorry, we'll change, we'll do that differently next time.

Both. We get both.

Okay, If I was you, I would make a yellow slip as simple as you remove one pool from their count tally. So it's like, okay, for example, you're at 60 this week. Great. You just got a yellow slip, you're at 59. So the only thing you really have to track is number of pools completed and number of yellow slips. I would personally probably say I would count a yellow slip like a five.

Like five pools.

Yes. Yeah. So you might be at 65 this week. You're crushing it because you're going so fast. You get a yellows up on a Thursday, you're down to 60.

Okay.

I like meaning now if they do, if they do, if they do two or three mistakes a week, callbacks, they're probably not making a bonus. And furthermore, when they're crushing it, like on Monday, Tuesday, Wednesday, Thursday and Friday, they get very, very cautious because they don't want to lose one tier of bonus because of one mistake. Okay.

All right, makes sense. Now another thing, I guess now that we're on this pace structure because I'm. I mean that's, that's for pools. I'm kind of separating pools, filters. And now I have this new position kind of developing the repairs, which is usually me, but now I'm kind of like, kind of got a guy who I'm working into the. Into that position I kind of have as a hybrid as of right now. But I guess maybe I'm struggling with. Because I think in the future what I would like to do because I have a preventative maintenance inspection checklist that they go through with filter cleans that I kind of wanted. Like with upsells, I give them percentage of the cell.

Yep.

However, the repair guy would you, you know, would probably be installing it. So I'm giving commission to the guy who's selling it. But at the same time, usually that repair person is the more expensive technician and I want to incentivize him too. I'm just trying to figure out how I would do that and also remain profitable. And everybody kind of gets a piece. That makes sense.

Yeah. So on. Do you install the pools too?

I install. We only deal with equipment, so only equipment related. Filters, pumps, heaters, automation systems, chemical feeders.

So you're saying the person who installs like a heater is going to be cheaper and easier to find this one who repairs one.

No, vice versa. So. Oh, okay. What I'm saying is the, the service technician, the cleaning tech can clean filters. And I haven't doing a checklist. So we have simple seals, little upsell opportunities and potential, you know, pumps, filters, heaters, what they can, you know, promotions they can push when they're there, which would eventually then if approved, would get transitioned into the repair department. Now if that tech. Now if that cleaning technician were to sell that I would imagine he'd get like a commission off of that. But I'm also trying to incentivize the repair technician as well. And so I'm. I mean, I don't know if I just. It's as simple as just raising prices. Maybe it's just a different position. So I don't know how to incentivize as far as commission based for the.

Yeah, like you could, you could keep doing where you give a percentage to the pool tax or the pool cleaning guys. I think what you could do, if you really want to make this pool thing, like bake this into P4P, you could just tack a number of pools onto their. This week's schedule on their P4P based upon upsells. Hey, you got an upsell? Okay, that's five pools. So then there's this metric that they're constantly ruining their mind, which is like, I produce pools all week long. I have minus like demerit points if I make mistakes, and I can get ahead even further if I upsell a bunch. So you could do something like that. I'm not saying that's what you should do, but that'd be like an easy way for them to get compensated without worrying about, okay, what was the percentage? And they get a commission and all this other stuff. And it just be very much like if you upsell someone on a heater, you get three pools. If you get someone on a filtering filtration system, you get whatever, five pools, whatever. And then they have this metric every week that gets reset for the person that's going out and doing the repair or switching out the, the systems. I would probably be doing much more of a commission basis with a base pay because, hey, you're going to make a minimum of this amount per hour. But I'm also going to track this percentage of labor revenue that you earn, and you're going to make the higher of those two things at the end of every pay period.

Okay, I like that.

So that way it's not straight commission. It's not like they. They feel like they never. Like they. Something goes wrong, that they give them the security of the base pay. So maybe it's 30 bucks an hour. It's like, hey, it's $30 an hour base pay. However, we're going to be giving you 30% of labor revenue, which everyone is higher at the end of the paycheck. You get it?

Right? Okay. Because I was, I was struggling with. It's. Because it's a new position. Wrapping my head around that. I Like that pool. That pool concept, because it's very simple, and I want to make it as simple as possible. Now, I guess another thing, I kind of maybe know the answer is funny when I'm writing it down. I'm kind of. I'm answering it for me, for this question, for you. But I would say around my location, I've done a pretty good job. I mean, to pool guys, they don't. They're not very professional. So our company looks legit out there. So we get. And people are starting to recognize my little turtle man. It's pretty cool. But. But I feel like I'm at the higher end as far as pricing, as far as market wise. But I'm kind of at that point where I feel like I was gonna start raising prices again. So my goal here is to get to about 250 to 300 pools. I think with the. The margin that I'm at, the job roles and the org chart filled out, I kind of have a good feeling. And so I know the pricing that I have right now works well. I can get there, but. But I'm. I'm kind of like, you know, considering instead of going 160, because right now my price is anywhere between 160 to 200 plus chemicals. And so I'm just thinking about making that 180 to 220 plus chemicals. So I don't know if I should go aggressive once I get to where I want to go or just do it now.

Yeah. Like, there's two ways you can think about it. One is, while I'm at capacity, I can't take any more jobs on. I should be raising prices to existing and new customers. Right. And that's the one I usually talk about. The other way to think about it is if I raise my prices and I sell more customers at that higher price, it gives me an extra 50, $40 per month per customer I sell to go put that right back into marketing and get more custom.

Right.

So if you sold. If you sold, let's just call it 10 more customers, and they're all $50 more per month compared to what usually would be getting for the pricing. That's 500amonth you go spend on ads to get even more leads in the door.

Why? And then in my head, when I was writing it down, like 160, 180 is like, is that a huge, you know, difference? 20 more dollars a month? I mean, maybe.

Are you that capacity right now?

Well, I just fired somebody this week, so, yes, but I wasn't. But I Mean, I'm gonna hire somebody here. I wanted to get this pricing or pay figured out first before I go to my next person. But I'm gonna hire somebody and get prepped. Get them prepped and ready for the. The season, essentially. So, I mean, I guess if I was going to fill out the work chart and I was going to hit the markers where I want to hit, essentially I need two more people, but I'm going to try to do like one at the beginning of the year, one towards the end, and then I think from there I'll kind of stop the growth depending on the success of the plan. So I guess that's like.

Do you have a. Sufficient cash right now to grow?

Yeah, I would say we're probably at about 40k, which is about, you know, we probably do about. Let's just. I separate the service and the repair side. On the service side, we probably bill about 40 grand a month. On the service side can be anywhere between 20 to 80 grand a month.

Do you know what your customer cost is if you. Have you ran ads before?

Yeah, so that's where I messed up this last year, because that's where I was kind of. I was trying to budget for ads. So I spent $40,000 on marketing last year. And then when I was doing the numbers, that was about 20 grand in wraps, and then it was about 9 grand with the marketing agency that I have. And then the rest was in Google Ads. And I didn't do a good job at separating the type of leads because we get two different types of leads, one for service, one for repair. And so I didn't get a really good kind of time, like, estimate. So in my mind, I'm like, all right, I spent about 20 grand and I got about 70 service clients. That's how I'm kind of thinking about it because I didn't organize it well enough.

Yeah.

Which we fix in this year.

Yeah. Well, the thing is this. If you. Let's just say it's $300 cost, customer acquisition cost, which is quite a lot, and a lot of that's going to your agency. It sounds like. Let's assume it's 300 bucks. That's. I get that from 70 new customers and $20,000 spent. So I think we could probably make that more efficient. That's my first. You know, we can definitely. I think you could probably run some ads yourself without having to pay them nine grand. But let's assume for a moment it's 300 bucks, like just short of $300. If you spent 10 grand on marketing, you would get 30 more customers and get to capacity. Like you get. You'd hire other person. You get 30 more customers. You'd be kind of like, I have to raise prices. The reason I say that is because if you raise prices, let's say by. By 2015 to 20%, you would then be making about $8,000 a month in extra profit.

Right?

So this is where it's like, do you go spend 10, $12,000 in marketing, immediately get to capacity, then raise prices and make eight to $10,000 a month?

Right. Well, see, and that was my.

That.

Right. That's the decision that I'm. I guess I'm contemplating. Like, do I just raise prices for the new clients coming in and then just start there, or do I just get them at. With the prices that I know work and then raise them?

Yeah, there's always. There's always like a balance. That's why I asked how much cash you have. If you were like, hey, I have, like, I have 15 grand in the bank, I'd probably be like, okay, let's go ahead and raise prices now and make sure we're profitable. But I also know that if you, if you have a. Like, even at 300, the math kind of makes sense. And that is go get 30 to 40 more customers, I. E. To capacity, where you're like, I have to raise prices because I need to lose some people. And now all of a sudden, you make $8,000 more a month if you raise prices by 20% across the board.

Well, I was actually going to raise. Well, am I existing either way I go, I'm going to raise certain prices anyways. I was going to. I got some 150, so I'm going to go to 160. And then, you know, now that I charge for chemicals, I kind of have a little bit more of ways to increase prices in ways, you know, subtly kind of like chlorine cost acid, like, you know, little different ways. So.

But see, if you were at capacity, like, if you, if you actually gassed it, you got an extra 40 customers. And you're like, I have to get rid of some people or I have to turn off new ad, new leads, then you would go raise prices a whole lot more than $10. A certain, like $10 a month. You go like, okay, it's from 160 to 185. And you're like, I sure hope I lose at least 10 or 15 customers because I my at capacity, I can't take anyone new on. And so Determining what that number is is probably what I would be doing if I was you. Like, is it, is it 220, is it 230? How many customers can you serve? Given your current trucks and the amount of employees you can put in those before you're like, I am, I will be tapped out. Because if you can sprint to that and then raise prices on all your customers, that's where you immediately make the business much more profitable.

Okay.

You have way more confidence to raise the prices more than 10 bucks if you are at capacity.

See, I was, I was, I guess maybe the way I was thinking about it was like, I got my safe, my safe part of the business there that kind of works. And then everybody else coming in, is that a high prize? And if I get them, I get them. If I don't, I don't. I got my safety still there. You know what I mean?

I would say that I would, I would do that if you were like cash constrained. Right? But because I, I think it's much more like your, your pro growth. I know that because of the amount you spend on wraps, like you wanted to grow this business. So like, and you have enough capital to like, and you have a customer cost that isn't great, but like we know what it is. You could technically just sprint to capacity and then raise price on everyone.

I think that's a, that's something to think about. Maybe it's just, you know what it is, the fear of like just the, the confrontation of raising prices dramatically once you get to that capacity. I think that's what it is. But that's a good plan. That's a good plan. I mean, you've probably done this a few times where you raise prices maybe even dramatically. Do you usually get any bad reviews when you do that?

If you do, they're the best bad reviews to have. Like, if someone says that you're too high of price, they don't, they're not saying anything about, about your service. And so what that does. The only type of person that's gonna be scared off by that is a tire kicker and a low priced person. Like if I went, if I went to a restaurant, like I do this quite often when I look at reviews, like I'm price insensitive for my food, I'm going to buy good food, I have it in my budget, I don't care about the price. When I look at reviews of a restaurant and all they're saying is like, oh, it's too expensive. That is like right over my head. I'm like, I don't care. I'm price insensitive when it comes to food. Right. So your best customers aren't put off by that. The worst customers that you don't want, when they see, oh, this person's so high price, they raised my price. Great. Get out of here. You're. We're wasting my time anyways, you know.

Right. Hey, by the way, just because I watch your show, have you seen very too many profitable pool service companies out there?

Oh yeah, I really like pool service. And specifically down like the southern states. Like, pool service is one of my favorite, not gonna lie. Yeah. Pool service is right there because it's recurring, it's, it is somewhat mechanical in terms of like you have the upsells and repairs and if people don't. The reason I like it, if people don't take care of their pool and it goes green or something crazy, the price goes through the roof. So that you have this risk thing that they have. It's kind of like lawns. Like if you don't cut your lawn, HOA is going to call you. Like there's, there's a penalty if you don't use my services.

Yeah, I know, you're right. That's what I say. I say. Well, usually I say they'll get rid of the gardener first and then they'll get rid of us. Because the city's gonna come if the pool's great. You know, I've had long, long grass my whole life, so it's all good. But. All right, man. All right. I think that's, I mean, essentially, I think that's pretty much it. Let me look at my notes here. What's your turnaround usually? I mean, I guess it's a different business, but on, on getting somebody out in the field after training usually is what you try to kind of work it towards.

We do two weeks for entry level folks, but what we're trying to do is in those 10 days, like five days per week, we have checklists of what they need to be learning, right. So like the very first day they get in the field, they're not for us going to like hop on a zero turn mower of drive a trailer, right? Like day one is you're going to use a blower and that's it. Day two, you're going to use the string trimmer and that's it. And so we slowly roll them into all the things that they'll need to get done to be able to go solo.

Right. There's most of the Landscapers, do they run solo or do they usually go and cruise?

It just depends on services. We do a lot of solo, but more so it's like they have the capability of being solo. Like they know how to do everything. That's the main focus.

I think that's pretty much. It is your softwares that you use just based pretty much in launch landscape?

No, about half the. Half the members are outside of landscape. I know that. What software are you using now?

So I use Housecall Pro and then. And then I also use Pay the Pool Man.

Okay. Pay the Pool man is probably like very specialized to what you guys do and so I don't know that one very well. House Call Pro and like homeworks are very similar in terms like what we're doing. But I would stick with it until there's pain. Just like it's not worth switching softwares unless you're like, there's a pain point I'm hitting and I need to grow. But if it's working for you, just keep doing that.

Yeah, just because I have two softwares and that's never fun, you know, I just want to.

Yeah, I know, I know. We're ending early. So when. When you kind of do the pay stuff, email me back because I'll email you the recording for today. Just be like, hey, this worked. I had a couple issues with this or any other questions you have, put them in the email and I'll shoot you a loom video real quick and just try to give you as much value as possible.

Awesome, man. I would appreciate that, man. Thank you. Thank you, Mike, for your time.

You got it, brother. You have a great rest of your weekend.

Are you as well, bro? Thank you.

Take care. Bye Bye.