Mike Andes tells solo operators with one employee to ignore the "work on your business" advice. When you're small, spending time in the field doing sales and jobs generates more revenue than building systems. The math: 10% efficiency gains on $100k revenue don't compare to actually closing deals.
Sell, sell, sell. Just sell to everybody that has breath in their lungs. Sales make a business, customers make a business. Profit, cash flow. All right, well, kind of got a little fired up there. All right.
What are your thoughts on achieving Michael Gerber's philosophy that we should work on the business instead of just working in the business? I'm a solo owner operator of a small lawn maintenance and landscape enhancement business with one part time slash full time employee who has no experience. I have to be there for any work we do because he isn't equipped to work solo. I have no time to work on the business because if I'm not working in the business, nothing will or can get done. Okay, so this is a big, big misnomer. And this is the thing I hate about just education in general, like audiobooks and podcasts. The reason for that is because even for someone like me saying things, people will listen to one part of it and they forget that context is everything. The size of your business really does matter in terms of what business advice you should be taking. You should not be working on your business when you have one employee. I'm sorry, it does not make financial sense. You can't do it. If you're working on your business and you have one employee on the field working. It means that 50% of the labor hours in your business are non revenue producing from the get, let alone. That's assuming that this, this employee over here is perfectly efficient. So remember last week we talked about numbers and labor efficiency like clocked hours versus budgeted hours. If, if you are one of you as the owner are working all the time on the business, that is not making money for the business because you're just in the clouds thinking about your future, thinking about SOPs and stuff, systems and all the rest of it. And then you have one employee over here doing the work. You're immediately 50% inefficient in terms of budget hours to clock hours. You have a ton of non revenue producing labor that is your time because that is part of the business. And I think people jump to working on their business way too soon because this catchphrase that everyone wants to get to and attain to and hear me talking about, and shame on me for not clarifying the fact that if you have one employee, you should not be working on your business. You should be working in your business and generating as much revenue as possible.
You can be out making 60, 70, $80 per hour out in the field, or you can be sitting at home working on a standard operating procedure for your one Employee, which, by the way, probably won't stick around with you very long if you're out doing standard operating procedures and he's working, working his butt out all brains out every single day. Probably not gonna stick around for your standard, standard operating procedures anyways. So I think people jump to this way too quickly. People like, oh man, I want to get out of the field. You have two employees. Like, what are you thinking? You have one or two trucks. It's not time to work on the business. It's time to work in the business, to grow the business to the point where it makes economical sense for you to actually work on the business. Because the only reason you would ever want to work on a business is to make it more efficient and make it more profitable. And guess what? If you're doing 100,000 revenue, you making the business more efficient by 10% is going to bring in a whopping $10,000. But that $10,000 is inconsequential. The fact that you could generate 50 grand more if you would have worked in the field, you would have had 5 more. 5x the amount of revenue and profit if you were working in the business instead of on the business. Now if you have $1 million business and you're working on the business and now you work on the business and actually create 10% efficiencies by having standard operating procedures, having checklists and having team meetings, all the rest of it, now you're talking about $100,000. That is more than what you could make if you were out in the field working in the business. I truly believe until you pass half a million in revenue, you should be working in the business. I just believe that maybe not full time. As you get to 3, 4, 500,000, you're going to be kind of like part time doing estimates and training and all the other admin stuff and then part time in the field. But I just think people jump to it way too fast. And you know, when we do franchisee training, it's not till the fifth stage of growth that they start thinking about working on the business. The first three stages, all about one thing. Sell, sell, sell. Don't worry about close ratio. Just sell to everybody that has breath in their lungs. And that's the thing that people forget is that's what makes a business, is sales and getting more customers. Your standard operating procedures will not do any, will not move the needle for you until you have scale. And that's why I talk about scaling your business so that way then you can work on the business. And actually move the needle because you're actually. Your percentage of efficiency gained by having standard operating procedures is actually equal or greater to the value of you otherwise being in the field and just generating revenue as an employee working out in the field. All right? So I would highly recommend if you have one employee that's part time, full time, they don't have any experience, be out with them working. Go do door hangers. Give extra little time because now you're working with them. Go put out some door hangers. See here, do I have door hangers? Yeah, go do some instant quote door hangers. Like this one, the lawn mowing instant quote door hanger property. You know, if you got a little extra time because now they're. You're working with them and you're getting done faster, you know, go ahead and, you know, go do some door hangers While they're finishing up the job, while they're cleaning up the mulch after you've dumped it and you're blowing everything off, you go try to sell some more customers, all right? Sales make a business. Customers make a business. Standard operating procedures do not grow a business. You can have all the shiny sops in the world. Best systems, beautiful, whatever. The same thing goes to trucks and equipment, but it doesn't make a business. Customers, profit, cash flow, that's what moves the needle. All right, well, kind of got a little fired up there. All right. Hey, everyone, I'd like to invite you to Landscape Summit. It's a conference I have in January. It's going to be the 13th, 14th and 15th of January, 2022. It's here locally. And I'm really looking forward to meeting other landscapers like yourself that want to grow their business.
