Strategic Planning for 2025 (Coaching Call with Mike Andes)

Everyone, it's Mike Andes. I'm the founder of Augusta Lawn Care. We have over 150 locations around the world. Every member that joins Copilot CRM, I have two coaching calls with them. We spent over an hour and a half going into every single business's three year projections and their next 12 months.

Unless that person can move the needle by four or five, $600,000, we aren't going to make any more money next year.

It's a great time of year to figure out what is going to be my three year plan and then work backwards to what am I going to do this next quarter. What are the two or three big things? If I could accomplish those, would my dreams a reality in the future?

If they don't sell, there's no one else in the business that can sell big projects.

That's what we talk about on this call. But the Q and A section I wanted to share with all of you.

I think it's helpful.

So let's go ahead and roll the tape.

I'd say our biggest goals for next year are software implications with Copilot and starting to track our numbers more and kind of reducing our services and focusing more on filling up our mowing route. This was our first year, like he said. In our first few months we were actually working for another landscaping company while we were acquiring customers for our own. And then we eventually split off, but there was times where our route wasn't completely full so we started doing other different jobs. So I kind of want to focus back in on a few services and, and start tracking our numbers more.

Good stuff. All right, Joey.

So for our first goal, we have developing leaders and implementing P for plea and other employee incentives and then tracking and systematizing advertising, hiring and bookkeeping as well as improving all our services, staying busy in the winter and changing the website to kind of go with those service changes.

Good, good. What size, what's your revenue going to be in 2025, Joey?

2025 at 400.

Okay. Yep. So you're going to that $500,000 state. Okay, good, good. That's when system ties and starts to make sense.

Right.

A lot of times you can just get away with good sales from zero to 500,000. Right. It's. It's when you hit 500,000, like okay, we actually have a system for bookkeeping now. We're getting up transactions. We need payroll nailed down, you know, so, so yeah, it's a very natural bottleneck we'll hit up against there. So. Good stuff. Love it.

You and the advertising, a lot of that is being able to track it and kind of reporting back because right now we don't really know 100% who is coming from where. So.

Awesome. Love it. All right, Chris.

Hello there.

We got you. Yep, we can hear you.

So for us, we just switched to co pilot maybe 30 days ago. You know, happy to hear all these people their first year that are doing it because it's going to dramatically change their businesses. So we're in year eight this year. We're about 800,000 so far this year, so should hit a million by January 1st.

And our main, main goal is to take advantage of all the automation. Everybody I deal with that we've tested copilot with because we're not invoicing with it, thinks it's the awesomest thing. I started tracking this summer our hourly jobs, like every maintenance customer, we just automatically put a thing in. If someone asks you for something, they could do it. So with copilot you can do upsells which is trackable and easy. So can't wait to see that. I imagine just that alone will probably be 20% increase with the same people, same customers. We're really going to focus on getting that going. And I'm not even, I can't even run Copilot versus the person who's been been learning with your staff. So I want her to be able to do 90% of the sales reoccurring, get out of the design builds that I have to be involved in so I can then focus on, you know, efficiency, routing, talking to customers and actually, you know, go mow a lawn. It's been years since I've been able to do that. So get back some of my time, spend my time doing stuff that brings in more revenue. That's my big goal. Love it. Need to find a way to have to track where I'm at with that. But that's something we're working on for sure.

Awesome. Good stuff. One thing I would say, oh, because we have a couple 1, 2, 3, 3 owners. I think off the top of my head that are they joined August they're already doing million plus in revenue and lots of projects. And so this year they all basically have been in the same thing. And it's not easy because you have, you've purchased trucks, equipment, trailers, etc to do the bigger projects and now you're going to switching over. But every single one of them are continuing this path. And the reason for it is because to your point, what you mentioned is a lot of recurring services can be sold over the phone. You don't have to go in person and go do an estimate. So it's not just the time it takes to manage the project. It's also the amount of time it takes to just go do sales. And so, you know, and it's tough like this. The band aid pulling off is not easy next 12 months. But it definitely, like, to your point, like, buying your time back gives you more flexibility. You're not tight like Most. Most even $2 million outfits I see have an owner that does sales. And without them, the business would still stop. They might be able go far away for a few days, but ultimately if they don't sell, there's no one else in the business that can sell big projects.

Yeah.

And it's a very complicated skill. Sorry, go ahead.

Yeah, so that's in, like, I understand, like, we're, we. We want to make it reoccurring. We want to make it consistent so that somebody else can sell it. And that is the goal. I had an eye opening experience where I'm in a business roundtable of a group of eight other guys and one of the guys hurt his back. So luckily he was way ahead doing stuff because he was planning on going to the Netherlands for a month and he hasn't been able to do create anything for about six weeks now. And like, if I couldn't go out and sell, yeah. 14 people don't have a job. So it scares the crap out of me. You know, aside from maybe making some more money, like our margins are.

Our accounts receivable is pathetic. Like, it just makes you mad every day. And so we will be going to, you know, the Augusta way. Just need to have enough of a cushion to make sure that that works. Unfortunately, the expenses.

Just do it slow. Just do it slow. You know, like, everyone's like, I'm gonna chop everything. I was like, hey, man. Like, we can start off with. Let's like tracking it. We always is like, just track percentage of revenues recurring. Right. So it's like when you on your list of services and the revenue per service, you're okay, mowing, weeding, bush, trimming. I'm gonna say these as maintenance, these ones as projects. I want this number going up in terms of percentage of revenue just so you have some directional, like progress. Yeah.

Well, how to see, like when. When my office lady, Alyssa, when she sells something, like, I help her do this because she's learning, doesn't know the lingo. She is so stoked. And she's like, I'm gonna Sell a bunch of stuff. So we've, we haven't done many, maybe like nine estimates with it, but we've gotten every single job. So she's just fired right up. Like just. And the system is so sweet. It's really gonna, it's really. I feel bad for our competition to be honest.

I could throw into it, it would just be bonkers. But thanks for creating it.

Good for you man. Yeah, like I think even to the advantage you have your size too. You have enough people in your database. You send out a text message to all your one time projects. You can, you might be able to fill 15, 20 of your revenue would just by upselling them into recurring. Right. And I think too one, one thing that I was talking with one of our owners earlier this year cause he was, he knew he needed to make the change. I was like hey, like let's take this a little slower. It's just standardizing the projects. So it's like hey, let's take out the. If you have 20 different types of projects, you do, then take out the five that you know you can't do without you literally being on the property. Okay. Boom. Now these other 15, let's try to figure out one form of block for the wall, one type of paver for the patios, one like very standardized. So I always think about like you can, you can create a systematize something by either simplifying it, I. E. Taking the project out completely or be standardizing it, which is we're going to do it the same way every single time. And sometimes that works. And that's why you know, there's still plenty of money in projects. It's just a matter of can I standardize it at the point where now I can send almost any of my crew up to the estimate or my. Or my lady can do it over the phone.

Right?

Yeah. Well and we've been testing it to the point where I'll go sell it and like we're dealing with people that aren't necessarily worried about costs. They just want to make sure it looks real nice and we make them comfortable and you know, tell meet my guide. You know, these are the grades, this is where it's going, this is the rough design. And then I'll show up when they're putting sand in on a forty thousand dollar job like and, and they did it amazing. Like he made a few mistakes but they were. I was scared of giving them power basically but it motivated them like it was like giving them a 20 raise. Like yeah, crazy. Awesome.

Let's go. Thanks. Cool. All right, well, we've gone through the goal session, but if we have a little time left over. So if there's any questions whatsoever I can help you with, feel free to just unmute yourself. It doesn't have to be the goals or copilot. It can just be anything to do with business. If I can help you. Because those will probably be the last time I have one on one video, the Masterminds. Every weekend I have those. So in at the very top of the Facebook group, there is a post that is pinned and there is a link to the Google form. Anytime you have a question, drop it in there and I'll answer it every weekend and we send the recording out. So you don't have to be on that one live, but this will probably be from a live perspective one of the few times I can interact. So if there's anything I can help you with, feel free to just unmute yourself and I'll hang out here for the next little bit if you have any questions.

One of our biggest things that we're running into right now, since this is our first year, is kind of getting idea of what taxes are going to look like and preparing for taxes and making sure our cash on hand isn't going to go to zero when we do have to pay taxes or if we are going to have to pay taxes. And then kind of a second part to that question is regarding sales tax. That was one of the things you mentioned before with this other person. And as of right now, I haven't been charging sales tax for any of my services because I found conflicting answers on whether or not I was supposed to. And so I don't know if you have any advice on where I can find that information or if you happen to know.

So on your first question, are you talking about income tax in that case?

Yeah.

Got it. So first off, are you an S corp right now?

Multi member LLC.

Got it. Okay. And then in 2024, after you pay your. All right, you remember. Okay. So you're not taking a W2, I'm assuming? No. So what's profit going to look like from the business then in 2024?

We've reinvested quite a bit.

Yep.

Our statement right now says we brought in about 55, which that is kind of a skewed number because before our CRM, that's not including all the processing fees. So that number would probably be closer to 60.

Got it.

Right now our net profit is around 15. Our cash on hand's about 7,000 and I'm kind of like I don't want to spend any more money to make.

It through the winter.

And we have snow contracts and stuff like that, but I don't know how much I'm gonna have to pay in taxes. And so it says 15 right now. But that could end up being, we've paid ourselves maybe eight over the last six months, you know.

Yeah. So with your standard deduction that you're going to get, you probably aren't going to pay any taxes or very little if at all. That's usually very typical. Your first couple years you're investing most of the money back in the business. There's not a lot of profit. Now when you get over about $40,000 a year in take home profit like net net after everything is done, that's when you're going to usually talk to your accountant or a good account is going to see it and they're gonna, they're gonna file 11th 20s form on your taxes which is going to, you're going to start to be taxed like an S corp. Now once you do that you'll have to pay yourself some W2 income. Do it, you know, low, but you'll need to pay that as an employee of the corporation. And then, then you can start really thinking about like what am I going to pay in taxes on that? From my perspective, I would not worry about that at all. 0, nada nilch. Get an accountant, they will tell you when to switch over to switch over to the being taxed as an escort. And then what I would recommend is after they do that in November, December of every single year, meet with your accountant and ask for an estimated tax liability. So I meet with my accountant in December, I mean every month but like in December our goal is let's guess how much I'm going to be paying on taxes and then I can adjust if I need to go buy trucks, if I want to go start another location, where does my investments need to be going. But right now Quincy and Alex, I would worry about this at all because you're being, you're going to be an llc, you're going to be taxed an extra little bit of amount because you're not an S corp. But it's fine because you don't have to file as an S corp. So you save a lot on taxes, a tax preparation. So that's why usually once you hit around 40,000 plus in profits, take home is when it makes sense to go be tax an S corp because it costs three times as Much to file typically as an S Corp compared to an llc. Okay, so again, go ahead, go ahead.

Just one kind of thing to add on to that at this point, not to worry about it is good information. But at this point, how much should we look to in terms of like paying for an accountant or a cpa or should I worry about doing it myself? Is that like, like what kind of.

I recommend getting somebody. I'm super biased. We have home service cpa and so the reason I say that is because my very first year when I got a CPA they saved me $5,000 and I was a very small business. And the reason they did is because they said you need to file this form for last year. What's cool about the Form 1120. So you file that and you actually file as taxes and S Corp, you can do it retroactively. So they did that immediately, gave me a $5,000 check. I was like, oh sick. I should have had this accountant person a long time ago. So even at a smaller size, even making 40, 50,000amonth a year in profit, I recommend getting a cpa. It doesn't have to be an expensive one. I think for it's a couple thousand dollars home service. If you're an S Corp, it's cheaper than 699 or something like that if you're an LLC. So check them out, see if you. Maybe that's the next year thing once you grow a little bit more. But I would recommend at least getting some eyes on it because there'll be something like your standard deduction isn't done correctly or you didn't file something for your office deduction from your house. Like they can save you a lot more than you spend. So. And then in terms of sales tax, I would just recommend just call the department of Revenue because a lot of times the reason it's a little hairy is landscaping versus maintenance can be two different things. Sometimes we've seen where they, they require sales tax on project based work construction like paver patio or retaining wall, but then not on mowing. And that you can set that up inside copilot to charge correctly and then just run the report of how much taxes you've pulled. And then just at the end of every month I just go in there to look, look at how much. Oh, I got X amount of sales tax and I go give it to the government. So just get nailed down. Which state are you in? Quincy, Iowa. Cool. I'm pretty sure I know that one. But let me just triple check Iowa sales tax and you guys do mowing mostly?

Yeah, mowing, landscaping, snow removal. And we've done a bit of like material delivery and some junk removal. So I don't know if that's in a different category with the materials and all that.

So you are subject to sales tax and use tax. So again, your customer pays this. You just got to make sure set up inside copilot so that they are paying it and then you run the report and you give it to the government. So talk to the department of Revenue. They'll walk you through how to like give them the money. They somehow figure that part out and then. Yeah, just make sure it's set up inside copa. You can. It is set up to where we use an outside plugin that will actually like take your ad, the address the customer know what the use rate, use tax and sales tax is. But you can also manually do it. So feel free to look at that. Cool. Thank you. Yep. And if you guys need help, feel free to talk to ATC and they can help you set up your taxes if that's, if that's a struggle. Slippy out. A question here said what are. Mike, what stage do you recommend hiring an estimator?

I only would hire an estimator if I was trying to scale past 800,000 and trying to go to or past 1.5 million. So there's a video went up today on my main channel and it talked about how a million dollars is not the target. What I don't really talk a lot in there and what I'll talk a little bit more at conferences. The reason I'm saying that is because that's usually when you need another full time admin overhead position. You're at 5, 6, 700,000. You can manage most of the admin. The sales can juggle it all. Once you pass 800,000, usually past six to eight crew members and you need someone else to start managing and as a strictly overhead position. And so I see a big profit gap between 800,000 and 1.5 million because you have to get another overhead person. It can't just be you anymore. We always see this chasm between 200,000 and 500,000 because that's usually when you go from producing revenue to being overhead. I see another chasm from 800,000 to 1.5 million simply because you've got to get another overhead person like an office full time office person or an estimator or an operations manager. And that's very normal. But in my opinion, a lot of people will get past 800,000. And they wonder in the wilderness of 1.1, 1.2amillion dollars in revenue with two overhead, full time people at the top and they don't make any more profit. And so I would have a very clear path to 1.5 million. Even if that means you need to optimize for profits for a year, get more money in your account and then attack a year and just go 1.2, 1.8 and grow bigger. That would be my recommendation. So if you're going to hire, the right time to hire, an estimate in my opinion is when you have a very clear position in terms of cash, you'll get past 1.5 within 12 to 24 months. I think too many of you wondering in the wilderness of a million 1.2, they have two, three overhead positions, an office person, ops person, a mechanic. And all of a sudden they, they literally need to make $70,000 a month to break even because they have all this admin, they have an office that costs two, three thousand dollars a month. Their, their insurance alone is thousands of dollars a month. So your fixed expenses got so high because you have people on salary, etc. So I, I always caution someone when they're starting to think about like hiring an estimator, like oh, it's easy, think about it. Last year you made $120,000 in profit. You're gonna pay this person $70,000. So unless that person can move the needle by 4, 5, $600,000, we aren't going to make any more money next year compared to last. So I really recommend having you really taking a year like I do earlier in your business at that 200,000 level. Like take a year, increase your profits by raising your prices, increase, you know, focus on your close ratio, don't spend more marketing, have a pool of a couple hundred thousand dollars to go at and just go from 800,000 to 1.5. I highly recommend that otherwise you will get delusional because around 1.1, 1.2, you start stalling out, you're having a hard time getting your office person going, having a hard time getting the estimator fully motivated. They start dropping the ball. It's very frustrating. And now what happens is when they quit or when you have to fire them, it all falls on you. And now you're at 1.1, $1.2 million trying to juggle three positions, sales, operations and administration. And so if you're trying to scale past 800,000, I'd be thinking about okay, if I'm hiring estimator it means that I am delegating sales. That means that there's operations and their admin, which means that's what you're probably going to be doing. Now if you're like, no, no, no, like, I'm really, really good at sales, then don't hand off sales. You're the estimator. Go find an office admin person and then you're going to juggle the other two, operations and sales. Now, once you pass 1.5, you can use your 4 to have a head of head of each of these divisions. Sales, estimator, admin, office manager, ops, operations manager. That's a really solid 2, 3, $4 million business. But I see a lot of people get past 800,000 with anticipation to get to a million. And now they've crossed 6, 7, 8 employees. It's easier to manage. And all of a sudden they start spinning their wheels. It's hard time finding another manager. They lose that person and they're back in the field. Like, it gets really messy. Just be careful. I would keep a good amount of cash before you make that big jump. Cool. Any other questions before we call it a Happy Black Friday? Oh, yeah, go ahead, Chris, just unmute yourself. You're good. Okay, here, I'll ask you. On mute. There we go.

So one thing I noticed before we did any invoices in co pilot, it pulled in the charge that you guys charged for co pilot and it's. It's in American dollars. Is there a way for me to. I'm just. I haven't invoiced with it because I was scared that it would. When it ran somebody's credit card, it would charge American instead of Canadian. Is that a setting in there somewhere?

It's a stripe setting. So as long. So for example, in our stripe account we use USD. So it's going to charge in USD. In your stripe account, you would set it up in how which Are you Canadian?

Yeah.

Yeah. So you set up as Canadian. It'll bill in Canadian.

Okay, perfect.

Yeah, I'll look into it.

I just had no. Didn't know where to look for that, so.

Yep, you got it.

Awesome.

I think, Joey, you're on mute yourself. Go ahead.

I was just wondering if you could go over the profit sharing again for your office manager. The last three or four years, we've pretty much been spending everything on equipment. So kind of wondering about that.

Are you hiring off this person right now?

We have one.

Got it. And are they on hourly salary? Any profit sharing right now?

Just hourly.

Okay. Yeah. And do you find that they're just not motivated. What's your goal in adding profit sharing for them?

I guess kind of to make it more fair and then incentivize them to align our. And.

Yeah.

And then also.

Okay, yeah. Are you, is the business substantially profitable right now, like 20 plus or not really?

Yeah.

I'm in the field, so yeah, it is now.

I got you.

Yeah.

Okay.

So if someone's an office manager, they are taking over all admin functions. I'm talking about payroll, routing, invoicing, everything, answering the phone, the whole nine yards. I would, I would, I would, I would consider doing profit sharing. I don't want to just have an admin helper that answers the phone getting profit sharing because they don't have any real control over it. They don't control whether or not I buy trucks, whether or not I do marketing. They don't have no decision making power. So if, well, I would probably say Joey, unless that's like, if this person, like you know them, like they're super great and you're just trying to retain them.

Yeah, it's my brother.

Okay, then, then you do profit sharing. Because if this is just someone who's helping out and they're doing a good job, you're like, I just want to kind of incentivize them. I would take two or three metrics, like their close ratio, the number of calls they take, the number of out of leads that come in or something like that. I make another metric. I wouldn't make it on profit chain because they have no decision making power. But if it's someone like your brother, I want to grow with this company, he's thinking that and you want to make a position of it, then I would do something on profit chain. Gotcha. Yep. Typically like when I talk about like the heads of sales, admin and ops, those are the only people I want on profit sharing of the whole company. And then the team out in the field is getting a split up chunk of a percentage if they show up on time. Right. In terms of attendance. But admin is very difficult. You, you really want to be careful with giving them profit chain because they don't have any control over it. Like it's all up to you as to whether or not you spend money on marketing. You spend more on my hire, you give people raises. And the last thing I want to do is incentivize something they can't have any control over. So that's the only caveat.

And then is the employee, is that a quarterly calculator?

Yeah, we do quarterly, we do 10% and then they lose their cut of the profit sharing if they show up late or if they are, they call out. And so we just define that as anytime after 6pm so they don't give us that much heads up notice. It's considered call out and they do it once, it's half of their quarterly property. If they do it twice, then there's nothing. Gotcha. Cool. All right. Anyone want to do the last one or we can call it a day. Cool. All right, well let's go ahead and call it. Yeah, that's it. So hey, if you guys ever have any other questions, feel free in the mastermind at the top there, drop them in there. As you've gotten, you know the past little bit in copilot more often, there's ever things that you like, hey man, this would be super cool. There is a form that we have from air traffic control. They can give that to you and submit stuff there. Even though it might seem like we don't get it done right away, we do keep track of how many people are asking for certain things and that's how we prioritize our roadmap. So whenever you're like, oh this would be really cool, just drop it in there. We are not going to be doing it for you tomorrow but it allows us to be able to know what people are wanting. So feel free to always do that. I know 2024 has been more of a back end infrastructure building to make sure your copilot's much more stable and we don't have bug hell like January last. However, in 2025 you're going to start to see features and so we really want to make sure we actually hear what you guys need and the best way to do that is submit that form. So anytime we can help there, feel free to do that. But I appreciate you all tremendously. Hope you had a fantastic Thanksgiving and a great holiday season up ahead. And yeah, feel free to take those, those documents though share it with someone else. I know some people are pretty close to each other here. Look at the map, meet up with other copilot members, see what they're doing with automations, what they're doing with the upsell thing. Like even what I have done, I'll see other people inside COPA doing stuff. I'm like I never even thought of that then. So like meet up with other people. I just cannot stress enough. See their workflows, watch them dispatch for an evening. If they have 5, 6, 7, 8, 10 crews that they're sending out. You can learn so much, so highly recommend it. But I appreciate you guys time today and we'll see you soon, hopefully in the mastermind. Take care, guys. Bye.