Stuck at $400K–$800K? THIS Is Why You’re Not Scaling (Q&A Marathon)

Hey, everyone, it's Mike Andes. I'm the founder of Augusta Lawn Care. We have over 175 locations around the world. I know it's like to scale from zero to a million dollars struggle, try to go through the wilderness of profitability and grinding and hustling out in the field. I also know it's like to go to multiple locations, have general managers try to figure out how to get to more locations. And today we're going to talk about the entire process. Every question you can think about scaling your business, we're going to be covering today. Now, in the chapters below of the video, you can scoot forward to the next spot where it might be more relevant to you. So if you hit one of the questions that might not be super relevant to, go ahead and skip forward. Hope you enjoy. What's one piece of advice everybody on.

This panel can give to everybody else.

About scaling their business? The mindset around scaling, what does it.

Mean and how did you scale your business? I mean, going back to when. When I first started and I mean, yeah, you by yourself and.

Eric's brother was, you know, kind of bail me out.

And then.

It'S kind of like just jumping on the ledge, which we're all used to that as entrepreneurs. I mean, you kind of jump off a ledge every day.

But, yeah, I mean, you just kind of gotta go for it. I don't know if that answers your question, but, you know, I think that's. That's. That's the biggest thing for me was just, you know, kind of a leap.

Of faith, if you will, you know.

And it's daunting, It's. It's scary, but you just gotta come through it.

And what's the worst case?

I guess, you know, I care about the little stuff a lot more than the actual homeowner does.

So to me, that was the biggest thing, is telling myself it's okay to let go. You will get done, you'll be safe, you all work out and.

Yeah, that's good.

That's good.

I was thinking about that last night. Yeah, true.

We're here. Let go.

You do more jobs and you can scale up and you can.

Yeah. Be out.

You gotta kind of relinquish a little bit of that, too.

You gotta be willing to do that to your guys. Yeah.

And it's not going to be perfect, you know, but you just gotta kind of trust that you've set it up properly and.

You know. Yeah, well, that's. That's one thing that kind of stops a lot of Solopreneurs from scaling up from growth. And then scaling is the fear that, you know, you hire someone, they're not going to do it right, or the.

Clients are going to no longer trust your company because they can't generate the five star reviews.

So, you know, how did you overcome that? Dennis, when you like, you know what, I'm already tapped out. I'm burning out. I know you have a full time job too, right?

So, you know, what was your mindset like?

What did you have to do to shift the mindset and say, you know what.

I'm gonna go for it and these are the things I have to do. It's a little both.

It's one, you gotta find somebody that you trust.

Right. But it's also, you know, leap of faith.

Hey, let me go.

Let's see how it goes. And it goes well, if that question's good.

Josh.

Josh Parks.

So I'm not as hard headed as you. I only failed four businesses, not you.

And really what it was is on this round, working with a coach, I needed systems. And that's. You can't scale anything.

I like home brewing beer. You can't take a homebrew beer recipe and go mass produce it for everyone. That beer will not taste the same. So you have to scale the recipe. And so the systems have to scale to the size of your goal of how big you want to create, your organization, your team.

And so that's what I've worked on and been working on for years with you is what that we begin with the end in mind. The what I envision this to be 10, 15 years from now. And we're working on those systems that can grow. With that, from systems of sales to systems of hiring to systems of. I learned a new thing. Off season is now a four letter word.

I like that.

So, you know, creating those systems that are repeatable and easy to. They're not so complicated either that a technician can't. You're like, you know, I don't know what to do because this recipe is too complicated. You know, we can go in. So that's, that's what I'd say is make sure you have good systems inside of your business that are scalable to.

The size that you want.

Maybe you don't want to be, you know, X big, you know, but awesome. Mike, you obviously scaled your business pretty big.

So if the 4L framework which we just talked about is, is a thing that you have to go through to grow, I think that the reason that most people don't scale Their business is because they focus on everything but the constraint that they're actually facing in the moment. And so I actually agree with David that to him this is actually the hiring thing not relevant. Because that's not his constraint. Right. The constraint in that his growth and his scaling up is leads. And so I like, I just want to, I'm going to preface on the last one here. I don't want anyone to hate on David. All right. I appreciate you speaking up.

Because that fiery passion and the hate for the constraint that you're currently having in the business is a thing that will fuel the change that you need to have in the business to actually overcome the obstacle and that constraint. So in order to fix a hiring problem, you might have to change your indeed, ads, right? To, to fix the constraint of leadership, you might have to change the way you have your culture set up and to be able to attract managers and all stars to fix a lead constraint, I might have to change the way I advertise. I might have to change the way I do my branding. I might have to change the way I do my Facebook ads. I might have to change the way I do my website. And so to relinquish control to any other human being or entity outside of yourself based upon the constraint that you have in the business is the reason why we as small business owners stay small. The reason we do not grow is because we put on the economy, the administration, the a franchisor, a dealership, a customer. Someone else has power over us as to why we cannot overcome the current constraint of the business, whether that be liquidity, leads, labor, or leadership. And ultimately, someone has figured this out in every industry. Someone in business. Build a 10, 50, $100 million business. It's possible. So once we identify that it is possible, we have to realize the only reason it's not happening for you is because of you. And I speak here as a franchisor and a franchisee. So it's not Eric's fault. I know what it's like to be Eric because I have 170 people that point to me. It's always Mike's fault. I'm also a franchisee. I own Anytime Fitness, and so I know what it's like to also want to point at someone else. And as soon as I give power to someone else based upon the constraint I have in my business, I will not overcome that constraint. And so if you're having trouble with leadership, if you're having trouble with getting laborers, if you're having trouble with leads, if you're having trouble with liquidity. To relinquish power to any other human being outside of yourself is asinine. Cause someone's figured this out. There's a formula to get employees, there's a formula to get leads, There's a formula to be able to attract laborers. And so taking ownership of that is the first step. And then get relentlessly religious about just attacking it and only that. And so that's why it's not a bad idea to David's point, to not listen about figuring out labor constraints or leadership constraints because he needs to figure out sales and he needs to get more leads. And so I would put all my time, energy, passion and anger into towards figuring out that skill.

This is my first year in the lawn care business and I was wondering what your onboarding for new customers looks like. Do you have them sign anything or accept a terms of service agreement? Please walk me through your whole onboarding process for new customers. So I'm not going to spend time, especially for lawn care, trying to get someone to agree you to terms of service or sign a long contract or even get a signature. The reason? Because I'm adding friction to a process that is just too much of a pain in the butt. And so yeah, adding friction hurts sales. And so if you're trying to optimize for profitability, you add friction. You make, for example, you would add every single person to get a card on file. That will reduce your close ratio somewhat, slightly. But it'll reduce it somewhat if you require 100% deposit on all projects over $10. It'll also reduce your close ratio if you also require prepayment on all services that are going to be offered this this coming month. You will also reduce your close ratio. If you require a 12 month contract with a signature. You will also reduce your close ratio. These things that will help your cash flow, these things will help you be more profitable, these things will help a lot of things in terms of seasonality. The question is, which are you trying to optimize for? Are you trying to optimize for growth or profit? So if you're in growth mode, which sounds like you're in your first year of business, I'm going to reduce those filters. I'm going to reduce the friction. Get as many people in the door. And then when you hit capacity, like ah, I like the size of business now let's make it profitable. That's when I'm going to start adding in these other layers. I'm going to do price increases, I'm Going to require a. I might do a $50 consulting.

Charge to do the estimate. That will reduce your estimates like 80 or 90%. So if you're tired of tire kickers, you'll implement that. But you won't do it if you're trying to grow. But if you're like, I don't want any more of these estimates and I only want to do them if I'm going to close every single job. Great. Add $100 design consulting fee that gets applied to the estimate and all of a sudden your estimates will drop by like 80 or 90%, but they'll be like 100% close ratio. So you'd be much more in profit mode doing that activity. So adding friction to the sales process in any way, shape or form will reduce your close ratio. But ultimately usually reduce increases your profits and, and your cash flow and reduces your seasonality. So it's a trade off. And most of the time, I recommend if you're first getting started, get as many customers, do a great job. And that way when you raise prices, you add friction. They don't want to leave.

I'm a solopreneur, I do window cleaning and 2024, I would really like to break six figures. Since I'm a solopreneur, I just do enough. I don't just do enough, but I'm just doing enough right now to pay my bills. And I'm really looking to grow. So my thing is doing with window cleaning, you can go residential or you can go storefronts or you can go both. Right, Storefronts, they're really low on the ticket item, but it's recurring. And then residential, you can go higher, but it's reoccurring. And then it's a lot more marketing cost. So which way would you take it if you were in my position to really break that six figures this year?

Yes. Like right now, when it comes to.

Your leads that are coming in, where are they mostly coming from? Commercial or residential? Like the, the leads coming in without you marketing, so.

Well, without me marketing, I'm not, I haven't gotten any leads without me marketing. I do a lot of Facebook ads. It's marketing savvy, I guess you could say.

Got it. So like, what I would I traditionally say is like, follow the. The money, right? Like if, if you start running ads and you're getting tons of commercial work coming in, go after commercial. If you start running ads and literally everyone's residential, don't force the market. Like, the market will tell you what it wants and so generally when it comes to something like window cleaning, whether you're cleaning a residential window or a commercial window, the window looks the same so you shouldn't care. It's like which one is going to be coming to me for the lowest customer acquisition cost. And you can build the business around that. I will say that you can build a recurring revenue stream from residential. It is how you make an offer to the customer. So for example, there's three different types of revenue. We have one time jobs, we have reoccurring, which is typically window cleaning. And then we have recurring. The difference between residential and commercial is, is residential customers typically reoccurring which like they do need it occasionally, like they'll call you every couple years. Recurring is nice when it comes to commercial. But what you can do is you can create an offer for residential that says hey, if you, if you actually schedule your next visit, you get a discount. Better yet, that'd be reoccurring. Better yet, if you get on a schedule, you get even a lower price. So if someone comes to you and say hey, what's the cost to do my windows? Hey, it's 1400 DOL. But if you schedule for the next, you know, every six months for us to come out, then the price is now 9 99. And so you can force the market into going the type of revenue you want simply by make changing the offer. And so I would though first, before even saying that, I would say like, see what comes in when you start marketing and advertising and follow the money. Don't try to force the market into something that might not be coming your way.

Well, just to add to that, just to make it a little bit more clear right now, I started doing door to door. That's how I first started. So therefore I knew residential. So the marketing and the ads that I run are pointed at residential. I haven't run any ads towards storefronts or commercial. Right. So therefore that's why the residential is coming in. No storefronts are coming in. But I have been thinking of the recurring instead of the reoccurring revenue. So that was kind of just to specify there.

Yeah, so like if you're, if you're used of going after the, the residential customer, I would just change your offer but not change your market. Like if you're used to going after that customer, you're used to marketing to them, advertising to them. That's your niche. I would just also say when you build your website, when you post on Facebook, when you post on social media, make sure you're targeting that buyer. Right. If you're making a bunch of pictures and videos and your website looks very residential, you're going to get residential customers. Like it's no surprise unless you make it very delineated on your website like commercial and residential. And it looks too different. It looks very different. So I would be just be very careful with your branding because your branding will dictate whether or not you get get residential or commercial organically.

Got it? Okay.

You got it, man?

Yeah, got it. Thank you, man. I've been thinking on, on, on piggybacking on that last question. Since I'm a solopreneur and I really want to grow this year, I've been thinking of adding pressure washing as well and just having those two main services.

So far it's been all about window cleaning. Should I just stick to window cleaning, really grow that and then maybe upsell in the future a couple years from now? Or should I just go ahead and maybe try both and try to grow through different avenues? Fill in the holes?

Yeah. Like if your goal is okay, build a million dollar business. The question is, has anyone in your area built a million dollar window clean business? If the answer that is yes, it means it's not. You're not constrained by, by the market. And so the only reason I would add more services is a I can't grow a business big enough or with the current service mix I have, or B I don't get any leads for the current service that I offer for a series A period of time. The problem I have with adding pressure washing for you is that your demand curve for window cleaning is going to match the when the demand curve for pressure washing. So I would say I would focus your marketing on one service. I would get really, really good at that one service. And then when you get so many customers and then you add pressure washing, it'll be an immediate win because you'll immediately have a huge database of customers inside of copilot to upsell. I think right now by adding more services you get, it's dangerous because you start adding, you get five businesses running out of your one company all doing $50,000 a piece and all of a sudden you have like no systems. Very hard to train employees, very like it's very hard to make that profitable. So I would just zero in on one. And it also gets confusing the customer. You start adding all these different brands and we do all these different services. It's hard to focus your marketing message and your advertising too. So I would just stay focused on on the one.

Got it, got it, got it. Okay, thank you.

You got it. I bought my business from my dad last year, and I've never worked actually in the business. I've always worked on the business. And it's. We start with 80 customers, and so we grew it to about 160 during the summer, and now we're probably running 120. But it's only ever been one guy working on it. So how do I get in? When. At what point should I get another guy for him to go out and work with? Because I have another job outside of lawn care, but I'd like to be able to do this full time. Cool.

Got you. So right now, how many trucks do you have? I have two trucks. Got it. So he goes in one, and then you go in one sometimes. Is that right? I have a totally other business, a totally other job, and so I am certified arborist and do trees and all that. So I'll go and do that when we get projects. But I'm never in a truck. I'm usually totally. So, like, let's just say assume that, like, the capacity of this one individual sounds like. Let's just call it 150 customers. I'll just make this up 150 customers. That means that as soon as I get a second guy, you're increasing your capacity to 300 customers. Now, that's your labor capacity, I. E. One employee, 150 customers. Now, your asset capacity is the number of trucks you have. And right now, Two Trucks is telling me that you could get 300 customers without buying another truck. Because if you hired one more person, you'd go from 150 customers capacity to 300, and you wouldn't need another truck because you already have the other truck purchase. Is that correct? Like, you have the two trucks? Yeah, I have two work trucks, and then I have a personal truck. Cool. So I would be giving you green lights to grow. Like, I'd probably be trying to even market to try to get to 250 or so customers as soon as possible. The reason I say that is because as soon as you add that second guy, you're probably almost going to become unprofitable. Like, basically break even the business if you just added their salary. The hope is that though you're able to grow to 250 or 300 customers, I. E. Grow to capacity. So what you really want to figure out is, like, what's my capacity limits for assets and labor? So for labor, right now you have 150 customer capacity by getting a second employee that's going to go to 300. Well right now if we have one employee in each truck, we have two trucks, we have a asset capacity for trucks of 300 customers. So basically I'd be hiring someone else and I'd be growing to 300 customers as fast as possible. The reason for that is because you are most profitable when you're close to capacity. So Whether you have 300 customers or 3,000, your asset capacity and your labor capacity once you hire someone is going to be around 300 customers. I want to get to that as fast as possible. And so as long as you have the budget to go spend on marketing and you have the confidence you're going to be able to scale quickly. I would do it. I would not do it. If you're like I might get to 160 or 170 customers next year. If that's the case, then it's likely that you will not make any more profit by having a second employee. And then I would do is just raise prices 150 customers you got and just make it more profitable. GM and office manager. So I'm assuming $52,000 salary for each with profit sharing 800,000 annual revenue. This would put us at 13%. And this doesn't even include shop print software, ad their admin tools. This accurate or would I be overextending myself paying non producing employees too much? Yeah, so I'm not actually a huge fan of growing like staying in growth mode all the way till $800,000 in annual revenue. I actually believe that the profitable way to do this to not have to have a full time year round office person is going to be to grow to 500,000 and then raise prices and optimize in profit mode until you hit 800,000. So I'm going to go into a ton of depth in this at Blue Collar Summit and break this down a lot more. But I have looked at not just all the locations at Augusta, but probably 150 plus other businesses and their P&LS. And I've compared across different industries, not just lawn care and landscaping of the sizes of the businesses, which business owners get to eventually become absentee and really broke this down a lot. So excuse me, I'm going to show a lot of that at conference. But I will say if you're going to be in growth mode past 800,000 and then try to stop growing, I actually think that to your point you would need a full time year round office person at least and then also a general manager I think that this is going to be avoided though. If you have four to five trucks, five to six employees, maybe seven employees max, but you stop growing at 500,000 in revenue. You really focus on your recurring services during the winter in the off season. So that way you have a lower amount of spike. So for example, I've seen businesses that do 800,000 and they have $150,000 in monthly revenue during the spring rush, but then they go down to 10, 15, 20,000 during the winter. I would much rather have half as many trucks. And throughout the year they do. We only do 60,000 because I don't have to staff up or get trucks and equipment required for 110, 120, $150,000. I can rather keep it much more consistent. So by doing the consistent route, I am going to have optimized pricing, I'm going to have very much recurring services, I'm going to have very simple services, a lot of which I will not need admin because it could be done.

Sold instantly on my website. So that's what really my focus is to try to eliminate the need for an admin. Like admin is just going to suck your profits out. It's an overhead expense. And for a good person in admin you are going to pay that, just call it 55, $60,000. If they're going to have them run everything plus taxes, plus benefits, plus you have an office staff now inside of an office building. So like it gets very expensive. I want to prevent that. And I do believe a general manager can run four, five employees. However, you're going to stop growing usually around that 500,000 level and then optimize for profit, I.e. raise your prices two or three times to get to the 800,000 level. I'll be talking about this at length at conference. So at 7 to 800 lawn mowing and cleanups, do you have another truck aside from the 3 to 4, so you can do sales in person and estimates. So essentially once a general manager becomes a full time estimator and full time like they're out of the field, essentially that's when I am going to move to this model. Now I have locations inside Augusta that do 6, 700,000 and the general manager is still working in the field to two to three days a week. And that's a very, usually very profitable location. If you're running around that 7, $800,000 per year marker, let's just assume that's your revenue for a second. That's when you usually do start to see that you again need a full time general manager. And that's when I'm usually gonna give them like a car, right? So it's a little cheaper for them driving around doing estimates. I would really push you to say how can I do estimates over the phone and how can I do them? Maybe I can't do, okay, I do over the phone, I need to do a drive by estimate. So instead of doing in person estimates with the customer, I'm trying to drive by estimates and I can't do drive by estimates. I would really like to do over the phone estimates. And ideally I like to instant pricing for my website, right? So like in the best case scenario I'm having instant pricing right below that. I'm gonna have over over the phone pricing. So I have to go drive around below that I'm gonna have my drive by estimates. So I can stack a whole bunch of estimates in one day. Usually you can get 20 or 30 of these done depending on your route density. Instead of like maybe 8 or 10 in person estimates. And then very last is like I do in person estimates. So if you can simplify and standardize your services and the way you do your estimates enough, you'll be able to do, you know, higher up on that continuum in terms of, you know, how you send out estimates or how estimates get created. When you're in profit mode, you don't spend any more money on marketing. Is it really just solely organically that you rely on when in profit mode? Would it make sense to market for more recurring customers so you can reach capacity faster and raise prices even higher, but not buy any more trucks, get more employees, et cetera. So typically you want to grow as quickly as possible to capacity and it's at capacity you have the decision to enter profit mode. Now, there's no reason if I'm going to be raising prices and cutting customers to also be marketing and buying more customers. So I do need natural demand to optimize for profit, right? It doesn't make sense. If I'm going to go raise prices by and lose 10% of my customers and then go pay money to refill the 10%, I would rather let natural demand and like, okay, I can only handle 200 customers, I'm at 205. Time to raise prices. I now lose 10%. Okay, back to 185. Okay. Now over the course of the next month or two, I gained 15 more customers. I'm back at capacity and I can raise prices again. So I do not want to have to spend money on marketing because it defeats the whole purpose of raising prices and losing customers.

So you're kind of finding, speaking on both sides of your mouth if you're marketing and buying more customers, but then raising prices and losing customers. It's very rare cases I would do that because if you're at capacity, you need to lose customers. And you only would do that if you are. If you know that you're not going to spend more money to then refill those customers. So ideally you are basically pushing up demand past where your churn is at. And if that's not happening, then you have a problem because you can't raise prices without having to then refill that churn with marketing advertising, which defeats the whole purpose of being in profit mode. So I would usually market like mad, get up to capacity, then be able to raise prices knowing that I'd lose some customers. But it's fine because I have enough lead flow coming in organically to be able to replace that churn. So yes, that's like what profit mode is defined as. As long as you're naturally lead and organic flow is greater than churn, you'll be okay. Now, if every single ad or every single lead you've ever gotten is from, from like a Facebook ad or Google Ad, and you have no website, you have no Google local services or no Google listing, you have no Google reviews, you have no Facebook presence, your trucks aren't painted, now, you're not going to get organic leads. So then that's your problem. But I'm assuming that you have those things in place. So when you turn the ads off, what most times happens is people still get most of their leads, even once they turn the ads off and they're all afraid to do it, they turn their leads off and still leads are pouring in, they're getting referrals, et cetera. Especially if like by raising that price, you're able to serve the customer better, your referrals will go up. So something to keep in mind, I've seen that happen time and time again.

It's primarily truck washing, mobile truck washing.

So you go to. What's that?

Do you go to them?

Yes, sir.

Correct.

Cool. Awesome. Got it. Yep.

So.

So we, we wash anywhere about an hour out and I've got, there's a certain area close to like the Penns Ohio state line that's about an hour and a half out that there's a lot of business available there. So I'm trying to figure out what, what's the best way to kind of target that you know, I actually have a guy that lives in that area that works for me. So do I just, you know, start. But having him take a truck and trailer home, I mean, is it that simple or do I start marketing in that area? What do you think?

What's your main customer acquisition channel now? Is it like shops that refer you to their customers?

A lot of door knocking really going around? Yes, sir. Yeah. So I have a sales guy that works for me that between him and I, we try to knock on like 40 doors a day. Big trucking customers. So we'll go around to these companies and just, we've got some, some flyers that we hand out to them and just try to get them signed up on a routine basis.

Cool. And like the average customer, how many trucks they usually have? Like 3, 4, 5, or we're talking like a fleet of 20, 30, I'd say 20 30. Okay, cool.

We have a company that has 200 trucks, but then we also have some that have smaller amounts. So, I mean, it's, it's all over the place.

Well, that's interesting. Do you think you're, you're, you are demand constrained, like, in terms of like your current service area, like, there's no one else that really needs your service and you don't know who to knock on next, or is this a function of like, it's just a bigger area?

I'd say a little bit of both. So, like, if I'm driving down the highway, pretty much every company that passes me, I've talked to them.

Now typically I've, I've started to realize it's just a matter of time before they end up losing whoever they're using and they give us a call or whatever. But it's also just, I know there's a lot of business in that particular area, so I guess it's a little bit of both. Like, I wouldn't say we're completely maxed out on our demand, but at the same time, if there's a lot of work in that area, it just kind.

Of, I don't know. Yeah, I think the thing to be careful of is you can always make sense of expanding service area because, like, honestly, you can always prove yourself right because you always, you will get more customers there. So, like, it's very hard to say, oh, it's a bad thing because you can always make sense of it. Same thing with adding services. Like, it's always easy to justify it because, yes, you will make more revenue. So it just becomes like, do you want the kind of business where someone takes the truck home. Do you want the kind of business that they're there two hours, three hours away from you? Do you want the kind of business like that's what it comes down to. And then there's a matter of like, well, does your, is your close ratio lower there? Because over here you have more brand equity, brand, brand awareness in the local market. So like it just becomes a function of what kind of business do you want to build. Like and like what? I would also ask like how many employees you currently have.

So full time employees, I've got five. But on the weekends whenever we're washing trucks, it could be up to 10 guys, typically.

Cool. Would you ever want, would you ever consider doing a satellite location? Yeah, because I feel like, I feel like that 5 to 10 marker could become a general manager that runs that one. And then how far away is this other area? Like two hours away.

Yeah, so. So a lot of the companies that we already do are an hour away. We will drive an hour max. But then I'd say an hour from there. In that hour gap, there's a lot of opportunity.

Yeah. Like I would say, like, I would probably, if I was you, instead of being on sales road, you and this other guy, I would probably try to go into profit mode. Take your current customers and raise prices as you hit capacity. I would try to get to six to eight employees instead of that 10 side. But you're probably going to shrink a little bit anyways just by not constantly working on sales. But then by raising my prices and turning that into profit mode, you could technically afford a general manager. Now the intermediary here, the intermediary is that you kind of juggle both for a second. From a financial perspective. If you don't have like 100 grand to kind of like, okay, I know I'm going to have a bit of a dip in profit if I have a general manager. Great. You could kind of manage that one as is and send yourself or one other person going to the sales three hours away. Maybe they stay over two or three nights in a week or whatever and sell jobs and then just hire one person. You could do it kind of halfway or you just go, okay, great, I am going to set this date. We're going to raise prices, we're going to stop doing sales working a general manager or promote someone into becoming a general manager. We're at six to eight employees at this location. And I'm going to go over here and I'm just going to crush it. So it's kind of what business do you want to build? But that, that model, that size, like I was thinking one to two employees. So as soon as you said five to 10, I think general manager, because the people can manage six to eight employees pretty well. And then as long as you're not in in growth mode and you switch it to profit mode and you're not doing sales instead, that one person door knocking is just managing the crew, you'll be profitable.

Okay, makes sense. Gotcha. And do you think I need to buy more equipment for that area?

What might be interesting is even if you took one truck, for example, over there, that would then be the one truck that currently you're doing all these sales to fill. So you take the one truck to get started and Jack, do you think you would go over and start it or do you think give a salesperson that would do that?

I'd probably go myself.

Yeah. That's what I recommend. Like especially your second location, even inside of Augusta, when people are like, I want to start second location, great. Find an operational GM that can just run the business. They don't need to do sales, they just run the business. You as an entrepreneur, go do the sales for the new location and you ramp it up, you get to four, five, six employees. Because that's the skill that if someone else had the skill, they would probably go start their own business.

Right, Makes sense.

So. So I would, I would say if you're thinking multiple locations, three hours is a long distance to try to juggle one location. And even if you send someone with a truck there, they're going to feel so isolated that eventually they'll probably start their own thing.

Right, that makes sense.

Yeah.

Got it.

Cool. Okay.

I appreciate it.

So I got two questions. The first one is what? Last year we was at around 120,000 in revenue. It was our first year. We started in March, and now this year we're at 26 right now, 26,000. And so I'm looking to go to 200,000 this year. What are some key points that you can suggest that I need to be looking at and kind of working on right now to get to 200,000?

I assume you just, you've hired an employee this year.

Well, I did, but I just let them go yesterday. It just wasn't working out. Wasn't weed eating and just kind of slacking big time.

And so what's your goal for the business, Gavin? Are you trying to grow to like a crew? Are you trying to just make it really profitable? You, like, as a job? What Your goal.

So I want to grow and just kind of, you know, ransom, repeat, you know, just as, as big as I can get. You know, I kind of want to use your systems and join Augusta. So I'm just trying to, to get there right now and try to get, you know, a franchise location, you know, maybe in trustful and, and then go from there and kind of hit, you know, the areas surrounding my, my routes about 47 miles wide in total. Yeah. Yeah. So you know, I'm hitting a bunch of different communities, but my, my co pilot saying that I'm, I'm still doing pretty good as far as.

Right. Efficiency score. So last year I talked to somebody, a co pilot that we was doing a coaching call and they said that I was around 30 something percent profitable. So I mean, it seems like things are working out. You know, I'm not really sure. I'm not good at all the numbers, but I'm just, I'm good at hustling. That's about, you know.

Yeah. So like the skill that you have acquired to date is that of a laborer. Like you can get the work done as you pass 200,000. The skill that's required is to go that from a laborer to that of a manager. And so that's what your first employee didn't work out. Right. The unlock will be can you become a good manager? Can you actually lead people? Then it's a function of like, well, why did he leave? And it's not a matter of this person individually. It's like, okay, why was he slacking off? Okay, well maybe I should institute something like pay for performance because then they actually are incentivized to and motivated to move. So the skill that you lack, and I don't say this in a derogatory manner because I lack skills too. But like the only skill you lack between 200,000, 500,000 is the skill of a manager. Like can you hire someone, train them up, keep them efficient, make them accountable, have one on one meetings, have team meetings, have safety meetings, compensate them correctly. Like those are the skills that are required. So getting more customers, you've proven you can do that. And at 200,000, we believe you can make you be very profitable. You will probably be 50, 60, 70% profitable if you just did the work yourself. So it's not surprising me that you're at 30% profit. If you are 3% profitable on a $200,000 business, that's $40,000 a year, you should probably just go flip, flip burgers if that's all you're going to do, though. And so I would venture to believe that there's a lot of inefficiencies. And it's being masked by the fact that Gavin is a hustler and works crazy amounts of hours. Because being 30% profitable, when you're out in the field, if you were replaced by an employee, that 40 grand goes gone like you're at zero. And so I actually think either you have in. You do have inefficiencies because the massive service area, or your pricing is way too low for scale because you could make it profitable and you have at your size. And so what usually happens is once you go from labor to manager, there's a period of time. Okay, I actually have to reduce my service area because now it costs me money when I'm driving. Because in the past you just drew more hours, like to do who cares. Now it's actually going to cost you to have inefficiencies in the truck or the equipment or the downtime. And so the rethinking of labor to manager is going to be what's required and gaining skills of that of a manager. And that's not an easy thing to do, but it's certainly something that can be acquired in terms of books, audiobooks, broadcasts. It's not a matter of, like, get customers. It is a function of how do you become a great manager.

Right.

Okay. So it's probably my. My hourly rates at 75 right now. So I would assume that the 47 miles, you know, I need to. To just, I don't know, raise prices or just can. And, and that way that I condense my route or just condense my route and raise prices.

I would probably get. I would try to identify what is the area I'm actually wanting customers. I would do all my marketing there. I would. I would identify what my max capacity is in terms of number of customers, which I think you're probably pretty close to it right now. So, like, how many more customers do you think you'd serve now, Gavin, if you had one employee, like a decent employee?

Well, I have a hundred cuts right now. And so if I do. If I get up, if I have an employee and he, you know, takes on this, this. This truck and he has an employee that works with him, then I can go out and, you know, I. I could do, you know, it's probably 70 yards. 70, 80 yards myself.

Okay, but let's just say you didn't have an employee. You're basically at capacity right now, right? Like 100 lawns by yourself. Got it. Oh, yeah. So this is, this is a good time to be able to cut back now, because what I would do is take your 47 miles and be like, okay, great, if I get 10 more customers, I like, I am over capacity. I'd have to be working weekends and all this crazy stuff. Great. Instead of 45, 47 miles, let's just try to get down to 20. I bet if you had 20 miles, you would probably still hit like 60 to 70% of your customers. And so what I would recommend is every time you get a new customer for the next few weeks, you're going to eliminate a customer that's 47 miles away and then the next one that's closer and that's closer from you. And you're like, well, do I actually remove them? No, you give them a price, a price increase that's substantial. Like, I'm talking 50% price increase. And if they say no, they weed themselves out and they say yes. Okay. We will drive the extra 5, 10 minutes to their property.

Gotcha.

Okay. And one more question about Christmas lights. So on the second year, do you charge the same amount that, that you charged for the first year?

We usually give them a discount on years after the first year because we have all of our cross on the initial install. And so we want to incentivize. We make all of our money on years two, three and four. And so we want to incentivize that. So usually we give them like a 10 to 20 discount.

Okay.

All right, great.

Thank you, Mike.

All right, it's Marcos. So I asked a question two days ago about is it possible to jump from 400 to 800 if you have the cash reserves you mentioned? You need at least 150 to 180 to make that jump in one year.

Assuming you don't have the assets already required to get to 800,000.

Okay, so if we have the four trucks already, how much would you say we have to have in cash reserves to make that jump?

Well, first off, I would fill out the, the workbook because your asset capacity is almost at 800,000. Four trucks, two employees. In each is eight employees. You're going to be right around the $800,000 marker if you're at capacity. So I generally believe this is more of a capacity problem and you need less cash than I said because you have the assets required. Typically, the reason gross sucks cash is because you need to expand asset capacity. Sounds like you don't. You might need one more truck, likely more Likely would be a estimated, estimated vehicle. Okay, so you likely don't need that much money to grow to that size.

So how much would you say we would like, need to, you know, be safe?

Your constraint is not liquidity, it is leads. So knowing your customer acquisition cost is what will then determine how much you need to spend to get the number of leads required to get the customers required to fill that revenue.

How big of a service area, like, should I be shooting for? So, like, the city I'm in currently is like about 100,000 population, but the surrounding cities are probably like 60 to like 80. Like how big of a service area should I focus on? I'm just starting.

Yeah. Ultimately, when it comes to service area, the smaller the better. The fastest way to grow your business in terms of top line revenue is add more services and add more service area. And so because of that, we always go after adding more services and adding more service here we keep expanding how far we're willing to travel because it's the easiest and fastest way to grow revenue. It's also the least profitable because the further out you have to go, the more windshield time there is, the less your guys can make on pay for performance. The more gas and fuel you use, the more wear and tear in your vehicles. The list just keeps going on. Same thing with services. It's like, well, if I just add one more service, it's simple, it's easy. You know, we're already at the property. Yes, you're right. But again, that's another thing you need to train employees on. It's another sop you've got to create. That's another thing your office staff has got to be trained on. And you create more and more bottlenecks by adding more service area and more services in the business. And so the thing I'm always thinking about is how do I take a one mile radius or a two mile radius and just boil the ocean? Because if I can take a 1 mile radius and I know of a hundred thousand people, like you have plenty of opportunity to grow a big business. So the reason I say is because like we built to almost a million dollars in annual revenue in blaine, washington. You can look it up. B l a I n e. It's like six or seven thousand people population. But I was able to hit every single house for like a thousand bucks. With every door, direct mail, I was able to get in the local newspaper, full page, like $800. And so everyone knew who I was, even though I had 1, 2 and 3 trucks when I was first, getting started for a few thousand dollars, I was just pummeling, like, facebook ads all the time. And so you're able to get way better penetration. I would rather boil the puddle than trying to go after the ocean. And so even a hundred thousand people in my mind is too many to go after. I would be much more centralized and focused on, you know, 2,000, maybe 3,000 homes that you really want to go after. They're your ideal customer. Because if you get inside that market and you have door hangers and you have yard signs and you're knocking on the door and you're running face ads in this small area, all of a sudden they start to see you everywhere. And you actually get the benefits of brand awareness instead of just direct response marketing. Brand awareness being that they think of you when they think of your service without you having. Having to see an ad. And it's only achieved by you constantly touching them. And easiest way to touch someone more frequently is either a, spend way more in marketing or b, just go after a smaller market, a smaller area. And so this is why, like, in blaine, everyone knew how I was. They thought I had like 10, 15 trucks with when reality, it was simply a function of like, I do not. I do not market outside of this small area. So once our current location, 53,000 residents is built up to $500,000 in annual revenue, would it make sense to branch out to satellite locations 40 to 60 minutes away with 60,000. With 6,000 or less residents that are surrounding towns that you can bill more per hour because of the lack of competition for mowing services and turf care, or stay in contrate on my current location. If the satellite locations were viable option, it would make sense to rent space for mowers to be stored out at turf care. Traveling will be much easier and more practical. So I would say inside 50,000 residents, you can build easily $500,000 business. You can absolutely optimize it because you have enough lead flow to get it to 800,000. Be very profitable. I would then do one, not all. I would not extend my service area. I would go one area that's 40 to 60. That's a long ways away. All right, you're not gonna make any money on these jobs. I would wait to be in profit mode before I do this. But this is the most conservative route. You do this two to three years, you get the business up, and then you make it into profit mode. Then I'd go to one area that's outside my. Outside my territory and say, okay, I will Take jobs in this area. I'm going to do some marketing and I'm making enough profit on this, my first location, to actually put some in marketing and not make any money. Because I know I'm driving 46 minutes away. I'd get 20, 30, 40 mowing customers in that market and then I'd start a location there. The reason I would start the location there is anyone driving back and forth 40, 60 minutes, you're just never going to make money. Now if you're like, well, I'm going to get a satellite location over there. You can be very easily start to become multiple cultures if you're trying to split one GM between the two or even if you're hopping between the two. So I would try to get a General Manager for one and then move to the second one. And if you do that after making one in profit mode and really scaling it to that 7,800,000 level, you'll have the confidence to go to the second one, have a general manager in place, be able to afford to pay them well, and you'll have confidence that you're going to a market where you already have a full, you know, one person route for the week. You know, 30, 40 million customers. That would be like the kind of ideal case scenario. This past year I was scheduled in the field at least three days a week and then I had my guys out on the other crew. I mean, like I said, I'm going to try and have two full separate crews. Should I schedule myself in the field? My concern with me being scheduled is I had to fill in when people called out and it put me in a really bad place because we're so small, you know, two full time, one part time, and then me.

So my plan is to have two crews of two this year and have me not scheduled on a truck. Should I be scheduled because I'm kind of running as a gm, right? I'm not. I'm involved in the business heavily. Yep. What's your revenue for this year, Connor? 300,000. 300,000? Yeah. Tough spot. So I would say when it comes to scheduling, do you use budgeted hours? Right now I'm gonna start. I've been using yardbook and so I've.

Kind of just been.

I know how much long the routes take. And I was on last year I was full time mowing in 23 and then 24 is when I kind of was part time in the field. Cool. Yeah. So this is a math equation. Right. And it comes down to budget hours. And so I know that the switch to using budget hours instead of just going off the top of your head is a bit of a, you know, a bit of a task. But if you can do that, this becomes a math game, right? Cause like how many full time, how many full timers do you have, Connor? Two.

Two.

Two. And then, then you just. Two full timers and you. Cool. So for example, some people are like, okay, Well I have two full timers, so 40, 40. And then all this, let's say I work, you know, 30 hours in the week. Okay, great. Now it's 110 hours I can do a week. Right. And then that's how they start scheduling. When reality, you know that some people are going to call out, some people are going to get sick, some people are going to not show up to work. So what I do, we, we schedule at a 30 budget hours per 40 hour week. So a full timer does not complete 40 budget hours, they complete 30. That assumes a 75% efficiency score. Because if I take budget hours divided by clocked hours, it means they're going to complete 30 budget hours if they work 40 hours in the week in terms of clocked. So I assume the 75 efficiency score. What that does is if someone doesn't show up for a day or two, it means everyone's going to probably have to work an extra couple hours over time. Right. But what it prevents is you scheduling 120 budget hours worth of work and then realizing that if anyone doesn't show up, you're working on the weekend.

That's what, and that's what I've been.

Doing, you know, because I went from working like 12 hours a day when I was in the field and then I bring guys on and I'm like, oh, wow. Well after eight hours they're pretty much sick of me. So yeah, yeah. So I would just schedule for 30 budget hours a week and then if they get finished on a Thursday, they're off for the week. Like if everyone shows up to work, usually have a short week. But what you're doing is you're planning for the fact that occasionally and as you grow more often than not people, there'll be a gap and then you'll be able to have the actual time allocated to take care of that. So usually if, if everyone shows up at our cruise, we'll usually work 35 to 36 hours a week. But if someone show up, then we, we make up for it. Like we have the, we have the, the capacity for it. That's why in your budget hour capacity Charts inside copilot. If you start getting within 80% of your capacity, it starts to turn yellow. And if you go above, your capacity goes red. Because then I can anticipate in the future I want to stay within around that 80 marker of my budget hour capacity to. To make up for the fact that people are going to be not showing up, et cetera. Okay, so would you say it's reasonable to expect with. Basically we've done about 300,000 and like I said, it was BA. It was one crew and then a half mowing ish crew. Would it be reasonable for me to. My goal is with two crews to go 500,000 next year. Is that a reasonable expectation with four full time guys? Yeah. It comes on your pricing. Right. Again, this is a math game. Right. So if I. Yeah, we're pretty good. We're north of $100aman hour.

Yeah.

So it's just a matter of like, okay, If I complete 30 budget hours per week and I'm charging $100 per, that's $3,000 of labor revenue. How much materials do I usually charge? Well, sometimes you. Some projects it's about 4,000 of revenue per employee per week. Tie that by 4 at $16,000 per employee per month. So you can just run the math once you figure out budgeted hours. Budget hours will be like a huge unlock for you.

Thanks for having us. We're happy to be on copilot. I'll keep this brief. Ran into some trouble with trademarking issue. I sent this question on the group as well. You might probably be thinking I answered already, but dying to hear what your thoughts are. So we started this company 26 months ago. We're on track for about 850,000 to a million this year. Just hired a superstar sales guy who's on this call and somebody hits me with a hey, by the way, you're using my name. So he's using riptide pressure washing. He's, you know, a couple hundred miles north of us. We're using riptide soft wash. We're not crossing paths. We registered the businesses roughly within a week and a half of each other. But he went the next level and trademarked riptide pressure washing, soft washing, roof washing, and a bunch of other crap. So he's basically forced a name change on us. How would you tackle moving forward the next four weeks once we solidify with a new name? What would, what would your strategy be in terms of notifying existing clients and changing your digital advertising stuff? Just give me like a high level 32nd. It's a big one.

So first off, I wouldn't stress about this. Customers don't care about the name of your business. And so what I would do is have you already switched over to Copa Marco, or not yet?

No, we're about to. We're going to start May 1st, but I just did the onboarding this morning.

Cool. So that makes it easy because you're not like, whether you're switching a software or you are switching like bank accounts and all the other stuff that you're gonna have to do. You're gonna have to like ask customers for their card information again. So you could kind of just merge these two. I would not overthink this. I would do, I would, I wouldn't even send an email to everyone telling, hey, Riptide is now this name. I would bake into my first email correspondence with them that I'm already doing, whether it be an invoice, an estimate or a marketing email down the road. And no one cares that Riptide changes their name. What they care about is like, I got an invoice, I gotta get paid. And you need to get their card information on file because now you don't have it from the last account. And so I would just bake that need for them getting their card information into that same email. And that same email could just say, hey, exciting news, Riptide is now X, Y and Z. I would, if I was you, Marco, I would say, hey, due to this, now you have the ability to and just list off all the positive things about why copy is going to be helpful. Like for example, I don't know what you use in the past. Like now you have automations now you can put your card on file, like list off some positives for them. But I would bake it all in one email. I would also not make a big deal of it to confuse customers. I'm assuming you're like changing your logo and everything or is it just like a very small change?

It's going to be a name change at the bottom of the logo, but the wave, everything will stay in the graphics side. So we're trying to keep it as easy as possible.

Cool. Yeah, Customers won't even notice. It'll be great.

Okay, perfect. Thanks, man.

Yeah, you got it.

How do you get over the bridge from being mixed up in everything to having someone who can run at least the mowing side? How do you get. Get out of the field is mostly my question. And then when, from that point, do you have the ability to start Another location, yes.

Like a general manager is going to be what everything hinges on in terms of the profitability and success of a location. So finding them, that's a different topic in terms of how do we actually build the business in a way where we can actually hand it off to a general manager. That's what we want to address here. Because everyone wants to work on their business instead of in the business. They don't want to work in the field. And I agree. This is how you grow the business, is how you are able to expand. This is how you're able to think of more of as an investor in the business instead of that of an operator. I agree. That's what we should be doing. The emyth says it all. The thing is, most businesses don't have enough systems to allow anyone else to be successful doing what you do. And so again, going back to like, what do you do every day? What makes the business 37% profitable is your juggling. And so either A, we need to reduce the number of balls, we need to reduce the number of things that we have to juggle every single day, simplify the business, et cetera, or we need to make sure that the next October octopus that comes along, that is the general manager, has extremely detailed sop, standard operating procedures on how to juggle all the balls. There's only two ways to make this easier. Improve the, improve the, the effectiveness of training the next octopus, or B, reducing the number of balls of the octopus has to, has to balance. And so I always go to the easiest one first, which is going to be reduce the number of balls. And that's going to be simplify and standardize the business. So I'm going to look at when I get contacted from my crew throughout the day and they're in a panic and I need to jump into the business. What is those? What are those things? I guarantee you 20% of the services you offer are creating 80% of the amount of times you get dragged back into the field. And so if you're going to hand off something like mowing, usually more simplified, I'd do the same thing. Okay. On these mowing jobs, which customers do I need to get rid of? Is it the ones that are way outside my service area? Is it the ones that have a certain size property? Is the certain one on the certain side of town? Is it the people that don't have full service? Is it the ones that don't do the weed control? They're always complaining. I'd be always thinking about what are the customers, what are the services that, if I cut out that 20%, would make the job way easier for someone to come in and become the octopus. And so, again, if you think about yourself as the octopus, you just reduce balls or you figure out how to train an octopus better. I can do both of those by removing balls. So I do that first. Then once I say, okay, I've reduced my service count. I've reduced the amount of issues that happen throughout the day. I've reduced the number of employees that I need. I've reduced the amount of services that I offer and therefore the amount of training required to get an employee to being profitable. Once you've done that, now I start figuring out how do I standardize everything inside the business and make an SOP for a general manager. So how does an estimate get responded to? How do you answer the phone? How does an email go out? What does an estimate look like? What's the template for it? Like, you just start thinking about all the things you do throughout the day. It would be super helpful for almost every one of us. Every single day that you operate as an owner, just keep track of all the things you're doing. Because the question is, how do I focus on the growing the business is. You usually let go of many of those things. Now, I don't think everyone should do that. From day one, if you're doing 150, 200,000 in revenue, you are not going to start being on this delegation quest of all the 30, 40 things you do in the business. Oh, I should, like, I should have someone else do my marketing. I should have it. Someone else answered the phone. I should have someone else do my email. I should have someone else open up the gate in the morning. No, you're in grind Mode. You're at 150,000. It's you and one other employee. Stay there. You've got to be in the business right now at that stage of business. But if you're at that 700,000, 800,000, you're starting to go from manager to architect. We have to step away from the building and actually start to analyze it. If you're at that stage, it's now a function of what are all the things I'm doing in the business and how do I hand those things off. So if we look at 0 to 200,000, as this is labor mode, Laborer, like your job as owner is labor, then as we go from 200,000, 800,000, that's the role of a manager. Now, as you get up against that 800,000. That's when I generally believe you're ready for a second location. And I generally want to make sure you're very profitable at that stage. Because the big overhead expense of a general manager stepping in is going to cost the business and they're not going to be as good at balancing all the balls as you as the owner are. And so that's where the 800,000 steps into. Then as the role of the owner being architect, you're doing multiple locations, you're potentially scaling up a different service, you're doing other things that are in the business operations every single day. And so I always think about those three different characters. A laborer, a manager, and an architect. And architect. The main job of the architect is to hand off things to a manager. And that manager will only be successful if you have simplified the business and standardize it. And the effectiveness of the labor hinges on the manager. And so it's a trickle down effect that if you don't get that that jump correct, you'll just constantly be burning through GMs over and over and over again. And it is absolutely a skill to be able to become the architect and hand things off to a general manager.

I struggle with two different business models for our future. And one is I really like the package of like a 500, $800,000 location situation. But I also struggle with potentially just doing one larger location, kind of like the gentleman over there at 1.5 million or so to make that make sense. They would be about 15 miles apart from each other in that case. Or we could end up with like a larger commercial spot centrally located to like a million metro. And I just struggle. Like yeah, it'd be nice and packaged at 800,000 ish with one overhead position. But then also it'd be nice to have everything in one spot and then potentially offer like a tree service to those companies as well. And then it'd be shared between the two locations anyways.

Yeah.

What's your revenue right now?

600,000.

So I would grow to capacity 750 to 800,000. I would raise prices one time and see what that does to your profit profit margin. And then one year later make the decision to either a take all the profit you just got from doing one year of profit mode and throw that into jumping to 1.5 or being like that was pretty cool. Let's just do it again. Because I have a feeling that if.

You just raise your prices one more.

Time and brought another $80,000 to the bottom line, you make more Money doing that than going to 1.5. But you won't even know what that feels like until you've raised prices one time and been in profit mode for one year.

Okay.

We did have a 27% profit margin while growing this year, which I thought.

What was last year's revenue?

480.

Okay, cool. All right.

And then also have like a really ideal operational instead of like a gm, like an operations manager in mind. And I just feel like long term he probably wouldn't be satisfied with just like coming in and already having a business set up versus I don't want to build it around one person, but I see a lot of potential to have sales office manager. And then because I'm sick of answering the phone, but having me do sales operation manager, really strong one. And then also having an office manager, I know you're kind of pushing away from that. I just, I mean on my future projection spreadsheets it looks really good, but.

It comes down to what, what you're trying to optimize for. Like if you want the bigger business and have the larger structure, you can, it's not like you can do it and you're profitable in doing so. Your pricing is probably high and like I can, I can just tell. So like you're probably pricing really good and so you haven't hit that, that, that same profit crunch, which is fantastic. You want to keep growing. You have license. It sounds like you have the people to do that. The question is whether or not you split it off or not. That's a personal decision, right? I think that it's a matter of, I think you're going to need three people outside of yourself to get to that $1.5 to $2 million marker. Is it easier to find them or is it easier to find. Let this gentleman, you break it off and you go start another one, et cetera. That's just simply a personal decision. Okay.

And then maybe have like a call service or like maybe a central office, even if it's on like a private property or something to answer phones for all those locations.

Yeah, once you get over 800,000 and you say you get two locations, it starts to maybe make sense, especially during the spring rush, to actually have something in house. So for example, you can do four.

Months of the year where you do.

Have in house full time person, other eight months of the year, you outsource it. So that way you don't have to go get a fancy office.

It's temporary.

When it's really the. They can balance thing out one at a time. But even an $800,000 business during the off season, they're not being efficient in the office. They can't. There's not enough calls and enough emails and enough leads. They're getting one or two leads a day, maybe three compared to 10, 15, and 20 during the spring. And so their efficiency just drops down to usually 10 to 15%.

Do you recommend growing like really fast and then making it really profitable like a little bit later, or do you recommend growing like a lot slower and more profitably?

Yeah. So it comes down to your risk tolerance. I would say this. In general, the most profitable way to grow is determine what your capacity is in terms of if you use all your trucks and all your employees every single day, so max asset utilization, what would that revenue be? And when you hit that point, you're going to be at kind of the most profitable stage of your business because every, all your trucks are being used, all your employees are being fully used. At that point you have the decision, do I raise prices and slow down growth because my close ratio is going to go down but increase profit, or do I go out and buy more trucks, hire more people, increase the capacity so I can continue to grow? The part you're asking is really, what am I willing to give up efficiency of being close to max capacity? What I mean by that is if you right now have two trucks and you're at max capacity, buying one more truck and hiring one more person is going to be the most conservative thing to do. The more aggressive thing to do would go buy two trucks, hire two or three people, and now you've jumped your capacity way higher. And now you're only at maybe 50 or 60% of your capacity, which is going to lead to less growth. But it's. Right, it's going to lead to less efficiency and profit, but it's going to allow for a faster growth trajectory. And so really what I want to know is what is my max capacity using the current trucks and employees that I have? And if I'm going extremely aggressive, I'm going to get quite a bit ahead of that in order to be able to take on usually a spring rush of a ton of leads pouring in and be able to flex into my capacity that I've now expanded. Does that make sense and is there any follow up on that?

Yeah, absolutely, it makes sense. Yeah.

And so really comes down to your risk tolerance, because if you're willing to have less profit and you have sufficient cash reserves, you're probably going to increase capacity, that is buy More trucks, buy more equipment, hire more people sooner than later. So that when you get a rush of leads, you're able to absorb all of that it and maximize growth. And hence you are in growth mode.

As I think a lot of guys probably know. Well, I guess back up a little bit. Obviously you know, it's probably your goal for some of us that are in maybe not metropolitan areas, probably assume there's more than 800 in that market and you're talking about the $800 model having one manager over that area. Why not have two general managers, same market copilot CRM's run a GM's? Why wouldn't that?

I would see a problem with that. The alternative to doing that though is just simply go to 1.5. Right. So generally that's what most people will do. Because inside of a five mile radius, I generally don't see it being worth breaking into two and having two different shop spaces. And I usually recommend if you're going to split it and have two different general managers at the equal amount of power, having them in different spots is viable. Now if you're a rural area, you're assuming you'll larger space, is that what you're saying?

I. I was assuming working from the same location and then you minimize the.

Cost of another location.

Yeah, I see just as much complexity with having to split the business and have two general managers operating from one location serving a same five mile radius. I don't see enough cost savings in a five mile radius to say we should split the location. I would probably just go to the 1.5 or this is my better raise prices and stay 800,000. Like if you have enough leads to come in to get 1 to 1.5, why just do 800 and raise prices 3 times and make an extra 100 grand in profit? Because you make the hundred grand in profit, you will probably make more doing that than growing from 800,000 growing by $700,000 to 1.5, including all this extra infrastructure. I just raised prices.

Like the reason I made.

When I analyze 250 locations, I include locations that are in 2, 3, 4 million dollars in annual revenue. And still the location that had been in profit mode between 500 and 800,000 still made more profit and so many times that jump includes so much assets, more management, larger shop spaces, fixed expenses go up and all of a sudden we make just as much profit. If we would have just raised prices at 7,800,000 and that money flows straight to the bottom line like 70, 80% profit margin.

I have a question about like overall growing. So last year we kind of went into profit mode. Did a little under 500, 000 in revenue. Still ended up buying a lot of equipment, like $80,000 worth. But we ended the year gross profit like 90,000. A hundred thousand. So our question kind of is like should we grow or should we just like do another year of profit? Because if we did grow, it would just be maybe like one more mowing truck and we'd still have to work out of a public storage.

So like our overhead wouldn't go up that much. Like 300 bucks a month maybe just to get the extra space. Because like to get a shop space in this area, it's like you're looking at 600000 minimum just to get one that's even for like four or five crews. So I just wanted to see like what your thoughts are on that.

Like what eventually do you want to grow like a million dollar business? What's with the long term goal?

Yeah, yeah, we want to, we want to grow, you know, past. I'd say like 10 mowing crews and a couple landscape crews is like our goal. So like maybe 2 million.

Yeah, if you, if you can do it profitably like you add another crew, I, I'd go for it. Especially because it aligns with the goal of growth. Now if you want to make more profit next year, then that's a different story. I would hit capacity, raise prices. Right. So it simply determine, okay, am I in profit mode or am I in growth mode? If you're in growth mode and we're going to grow to that next level, it means when you hit capacity, you're going to buy another truck and you're going to expand by another 50, 60, 70 mowing customers. Right. If you're gonna profit mode, you're gonna raise prices instead.

Okay, so we, so we already raised our prices this year like a significant amount, like 10 to 15% for mowing. Just because like we get so many leads due to our SEO is really good in the area. So that's why I'm like our leads aren't a problem at this point. It's like not even equipment, like we have an extra truck. So it's just sitting there as like a backup and it's a good truck. So our thoughts was just like do we at this point like our next I guess ceiling is the labor and the other crew and would it make sense for us to do that or just save up one more year and try to get an actual shop location?

Next year I wouldn't be saving up another year to get a shop location. I wouldn't be doing that. I would focus on the business. You know, buying a 600, 000 real estate asset is a completely different business. You got 125, $150,000 down payment. I think if you spend that money right now in the business, you could take it to the million dollar plus marker. You'd have plenty of money to buy a couple trucks, et cetera. So I would not go the shop route and I wouldn't try to go in profit mode for the shop. Because if you do a $500,000, $550,000 business, do you have no business buying a $600,000 shop? Right. So by growing, affording the shop becomes more affordable as you grow. So next year you do 750,000. The year after that you do 8, 950,000. Now you have more crews. Now it makes more and more sense to actually go buy a shop space. And then you turn the profit lever on a 900 million dollar business and now you're making an extra hundred thousand dollars in profit because you raise your prices by 15%. Now you have the, literally the mortgage payment and you go, you go do that in one year. Okay, so like double the size of the business, in my opinion, then hit the profit lever. Right. So run a little bit tighter the next couple of years, get it to 800,000amillion, and then raise your prices. And then with that raise of price by 15% on a million dollar business, there's your mortgage.

So I just rebranded my business this year.

It was, it was kind of like a high school business that I started and then I went full time pretty much this year. And I just wanted to know from.

Your perspective, obviously you started Augusta and.

I wanted to know if you could.

Go back in time when you first started, what things you would kind of.

Do differently and what you would change.

In your perspective on the business of lawn care and landscaping. And, and how would you go about.

Kind of moving forward and trying to.

Grow and scale your business?

Yeah, like one thing that we did well was I focused on a one to one and a half mile radius at the beginning. So we didn't move outside 2 mile radius until we were over a million dollars in revenue. So that's the first, that's the one good thing I did. Everything else I messed up in the first five years. And so I would say in terms of what that is, it's added too many services. So I should have done is taken an extra two or three years to grow to the million dollar marker and just focused on simple services instead. I added artificial turf, we did retaining walls, putting greens, we did.

Patios, we did everything. And so yes, it grew revenue very quickly, but that was three years of very painful unraveling. All of that retraining, the team, redoing pay for performance, it was a pain in the butt. So yes, you can grow faster by adding more services. That's the number one thing everyone does. Because you could easily have zero to a hundred thousand dollars in annual revenue for any home service business is the easiest in the world. You literally put up a few Craigslist ads, a couple of Facebook ads and you got a hundred thousand dollars a year in business. Now what most people do is they build a million dollar business doing that 10 times. They do a hundred thousand dollars of bush trimming, they do $100,000 of aeration, they do $100,000 of chemicals, treatments, etc. I would much rather have a business that is $500,000 of one of those services than 100,000 of 10 different services that equal up to a million. And so I would just really, really focus your core, your service mix and your service offering. Massively mute button, bottom left hand corner.

There it is. I found it.

Sorry about that. You're good. So I had a question.

Like I said before, I have a business partner.

We're 5050 and we're looking to do like the aggressive Augusta growth model, get.

To 500 profit, you know, 800 get a GM kind of deal is.

Does that need to change with having a business partner, a 5050 like the.

The revenue or any of that.

Are either of you active in the business?

We are now. Yeah, we again we plan on going to 5, getting the profitability 8 and then getting a GM that kind of, and taking a step back and, and.

Possibly then doing other locations and, and growing it a little more.

Yeah. So you know, given the fact that you're both going to step out, I would say it's okay if you're both going to stay in the business at say 6, 7, 800,000 and take salaries and work on the business, usually there's not enough profit for distributions. And so as long as you're saying, hey, we're going to build this thing, we're going to be really, really profitable, we're going to put a GM place, then you just be like, what do you split your distributions every month or quarter, how you're doing your distribution distributions. So if you're 50, 50, hey, any distribution in the month, you, our GM gets a chunk of it, then we split the rest of it totally fine. Obviously, you know, you're gonna make less distributions, but also you're gonna need less capital required to start a second location because you're going to split that capital expenditure.

Right, okay, that makes sense.

So usually your, your average returns, like return on invested capital, will be the same, but you'll have less returns and less invested capital. He talks a ton about planned growth and using retained earnings, a percentage of profits to go towards anticipated growth, or putting in your budget to replace things, mowers, trimmers, trucks, etc. For us, how do we go about planning to replace these items? What would you say is a good planned percentage amount of retained earnings go towards growth? Specifically, I need to replace two trucks over the next 12 months and want to do it on a cash basis. So I wondered if something like 20% of profits should go towards replacement. I think that generally that general purchase like that should be in a budget. Just trying to refine this idea and get organized. So really, really dirty way of doing this, in my opinion, is you can take the amortization schedule, divide that out, and figure out exactly what you should be saving every year. So for example, if your assets all combined right now are $150,000, and let's just say your trucks are depreciate at 5, 5 over the course of five years, you should probably be setting aside $30,000 a year in replacement costs. Right. So it's like a very, very quick and dirty way of doing it. You could obviously extrapolate the fact that you're going to probably use the truck for 10 years and not five years. You could do that. But to be conservative, you just use your amortization schedule and it's like, well, some things you just need one time. Yeah, but things get broken, things, you know, get stolen, etc. So I like to use five years. I'm going to assume I have to replace everything every, every five years. So you can just take all your assets sometimes and just literally divide it by five and be like, okay, I need. As you grow the business, you might have 3, $400,000 worth of assets. And again, this is sellable. Not just like what you bought it for, but what they could be sold for and what you would have to replace them with. And then just like, okay, great, that's my assets. Divide that by five. I should be probably setting that aside each year if I'm going to try to stay cash, like all cash. Right. So obviously, Dave Ramsey is very, very much in the cash side of things. And so that's why he would be talking about this.

But yeah, that's what I'd be trying to do. Set aside that 5, 5, 5 year amortization, so 20% of your assets every year. If you're really trying to stay cash only, I would also say that like the question is like, well, what are you doing with that cash for four years while it's waiting? Right? It might be better to actually grow the business market, et cetera, so you can get to capacity, raise prices and now all of a sudden you're making two, $3,000 extra a month. All of a sudden that pretty quickly can make up for any sort of loss of trucks, equipment, etc. So obviously he's very, very, very cautionary and conservative. There's definitely an approach here that is much more aggressive, that has warrants. Because if I'm just going to save up money for four years, five years waiting for a truck so I have to buy it. If I would have spent that money in the business, would it have improved the business by 60, 80, 90, $100,000 in annual revenue? Would that have increased my. If I have profit margin 15 to 20% multiplied by say 10, 15 grand of profit times that by those four years now I made $60,000. Should I really have waited to save that money? Like that's where the balance to that equation is. I'm not saying one's right or wrong, I'm just saying that's the, the scale of like risk versus conservative. My question is whenever. Okay, so you have the winter services. I've worked really hard on raising my.

For the winter services in the way that I'm doing.

What's the best way to go about swapping it over to the 12 visits? Because like right now we're doing two big clean fall and one in the spring, early spring. But then it's like we're doing snow removal, we're profitable. Why would I switch that? Thinking too much on that? Should I stay where I'm at because.

I'm established and unprofitable?

Well, the question is, do you have seasonitis? Like does revenue drop by more than 50% if. No, nothing needs to change. If you don't have negative cash flow and you're profitable during those months, nothing needs to change. So do you have season nine those months or not?

We do. Okay. I mean, I think it's getting better. We swap the prices like really late. Okay, so maybe I need to just go through another.

Potentially.

Yeah.

If you if you're only losing, say 2, 3, 4% right now, and you raise prices by 10 or 15%, there's a good chance that just raising prices alone will get you out of, you know, cured seasonitis.

My question is, what do I do with my guys the other two days? Because want to keep them around. I don't want them to be like, oh, this just isn't working for me because they're only in 30 hours.

They're getting 30 budgeted hours of work completed per week, which is going to be 40 clocked hours on average.

Okay.

But that's the general that I'm talking about the working gm. Now you're talking about your crew members. Is this correct?

So I still have to be with them on the job, every job.

Okay.

Arborist. Yes. Okay.

So what I'm trying to figure out is what can I do to keep either keep them busy on the other one day that they don't do stuff.

Yeah, I hear you. Yes.

Yeah. So, yeah, I'm just trying to figure out how to reduce capacity, keep them with gainful employment.

Yeah. So this is going to come down to project management, because every single day job is going to have setup and it's going to have teardown that does not require an arborist on site. And so it's going to come down to, can I get a system in place to where my arborist shows up for the two hours that's required for them to be on site and do that work? But then two hours around that for prep and for wrap up is done by people that we do not require that work to have an arborist on site. And that will come strictly down to time management and project management.

All right.

Because I have, right now, I have to be on every job in order for anything to get done besides what you said.

Right.

So delineating between prep and actually the, the part where the arborist must be on site, it will unlock the ability to almost double your production because you'll have one arborist and two crews to.

Clarify for the first two hour or so, just have them go and set up.

They drive there, they cut the initial branches, they set up the trucks. Everything's ready to go. Arborist needs to show up at within 10 to 10, 15 minutes of when they need to be there. And that will all come down to can you perfectly align the two crews together? And that will be difficult, but your, your constraint is finding that arborist. All right, so you want to build everything around the constraint and make sure that their time is efficient because what kills your business is having that arborist sitting there and waiting while people that could be paid 20 bucks an hour are hauling branches.

And one more question that I'm trying to rack my mind around is for project based company, let's call it project based without recurring or very little reoccurring work. What are some things that I can do that doesn't necessarily conflict with what I'm already doing? Because our ticket price is around 2,200, I just feel as if the smaller simple services late that I could come up with would conflict with. Whenever we do have work, I would.

Sell every one of your customers a 99 per month subscription. That $99 gives them priority when a storm comes. And any dollars they have spent of that $99 goes towards the bill when you show up. So there's actually no cost to the subscription. They pay $99 every single month and it rolls up until there's a storm. And when the storm comes, you service them first and that money that they've put into that, that account is going to then go towards the bill for that storm. So they get priority and there's no real cost to the priority other than that they are giving you the money up front. Does that make sense? Because if you can take a $2,200 customer and they're a quote one time job, $2200, let's say for a lifetime, and you can convert them now, in addition to the $2200, you then get them on a $99 per month subscription. That's another 1200. You increase life, the annual customer customer value by 50%. If you keep them on average for two years in a subscription, you're going to have doubled your revenue without doing anything. Does it make sense how I talk about like rolling it up?

It does.

It's conflicting though. Like whenever storms come in with direct insurance billing, we're able to be double of what we're charging because of the expedite, two to three times what we charge.

So you need seasonal labor for seasonal demand. When you have a massive storm, you need to have a workforce in place that you are pulling from out of state and you're pulling them in and you're paying them way more. But you can because you're in double and triple for the revenue. But again, I can't depend on one or two events a year to build a sustainable business. I need to have that recurring revenue. And now if we serve, let's just call it 300 customers a year, if we get 150 of them on $100 per month subscription. We now in one year have $15,000 per month of recurring revenue 12 months out of the year. Not 3 or 4x in one month because there's a storm. I would rather have the distribution and lose out on two weeks of a storm but have that recurring revenue coming in year round.

How would you pitch that?

I would pitch them like this. I said, Mr. Jones, right now, how much you paying for your home insurance by the way? You can figure this out on public record. So like you know, you're paying a couple hundred dollars a month for your insurance.

What we do is we actually offer this service.

It's a subscription, a membership to Trinity Trees Tree and I would name it something around Trinity Tree and then I would say it's $99 a month. Now keep in mind, when there's a storm, you get first priority. If we're not on site within 48 hours, we'll refund you all your money. Now when we come to your property, we're going to take all the money you've put into your account and put.

It towards your bill.

Which means if it's a two thousand dollar bill and they've only put 600 in, you're still going to charge them for 1400. But there's no cost to the membership. It's simply a way to, for you to go get money on a recurring basis.

I've been on the edge of starting my own company for quite a while. I've landed in the home service or home improvement and I'm kind of really leaning towards potentially exterior cleaning as far as, you know, power washing, soft washing, things of that nature. Now there's a couple other companies in my market who already have like a good bit of the market share. And I was just curious and wanted to know say your opinion as far as the size of city that I'm in, whether this is even anything that's viable or doable. The city I'm in about 400,000 in the metropolitan area is about 650,000.

I'm just kind of, I'm going back and forth while I want to do this or a different idea and I'm just trying to land on top of something.

Yeah, like in general I believe that you can build a million dollar business as long as you have more than 10,000 people. So from a, a market cap size, I'm not concerned about it. And when I'm evaluating markets, the one thing that I actually do pay attention to is not so much how much competition There is, but are there any players that own a large percentage of the market? Because then I'm facing brand and brand is something that's extremely hard to compete with. And so if you look at the market and say, okay, there's 20 different competitors, but two of them own 60% of the market, I would be less inclined to want to go there compared to another market that might have 60 competitors, but no one owns more than 1 or 2% of the market. I like fragmented and I don't mind more competition. When someone though has a brand, they have a massive moat that you're not going to be able to scale to that to beat their customer acquisition cost because they can simply get customers for cheaper than you because of their brand awareness. And that's just a hard wall to scale.

That's kind of where I'm at. There's, there's probably two or three maybe top and four people who, one of them has, I mean they got like four 400 five star reviews on Google. Another one has probably like 80 to 100 or topping over 100. And then everybody else around there is, you know, 20 to 30. I mean, some guys only have a couple, so they have a great brand. I'd love to replicate it. And I mean, essentially that's what I'm looking to kind of built in, start and potentially franchise in the future, you know, something I'd be proud of. But that's just when I see that it's definitely a little daunting, I'm like, I don't, I don't know if it's compatible or competable, I guess.

Yeah. The hard part is honestly assessing correctly what the market size is, that's the hardest part. Because if for example, both those two big players only own 5% of the market each, and then there's 60 other players that are breaking up the other 90%. I think that's a great market because what that means is you'll probably get to that 5% of market share pretty quickly. But when I'm, when I'm talking about a smaller market, if someone owns more than 30 or 40% of the market, it means that they have so much brand awareness when people think of that service, they think of their, that company and it's just going to take you way more money to break into that market. So I would really just try to correctly assess what percentage do these two, two, three, four big players have? Because if they did it, it's a good, there's a good chance you can if you just simply follow the correct recipe, which you pro. As you probably know, it's like they have their trucks wrapped, they're insured, they have a great website, they have people to answer the phone. Boom, you probably have yourself a million dollar business. It just is correctly assessing what the market size is actually the most challenging part. And so I would look through all the competition and I just ask, can I become one of the four really fast? Because 90% of the market is split up and fragmented over course of a ton of different competition. Next caller is from 609. Welcome to the show. Thank you for coming on.

Hey, what's up? My name is Dylan.

Dylan, welcome. Thanks for coming on, man.

Yeah, absolutely. Just got a question. So two quick ones I think. First one is when after your first location were you like I want a franchise and when did you know when to like did you have a mentor? You just kind of jumped in and figured it out as you went really.

Whether it be starting a second location, whether it be franchising, whether it be starting anything new. Usually you're not going to feel ready for it. And so I knew the goal, the goal for Augusta was the change level of professionalism in the industry. I knew that to do that we would have to franchise because we needed the location and we needed to compete with people locally. Um, I thought I was going to do it in about a year, maybe two years after I did. But I realized if I didn't do something that would challenge my executive team, they would have moved on. And so I actually did it prematurely knowing that I was doing it, quote unquote before I was ready. That being said, you'll never feel ready and you'll usually feel inadequate, especially if you have any sense of self reflection and can like analyze, you know, be critical of yourself. And so usually we have two extremes. We have people that have uninformed optimism and just jump into everything. And then the flip side, we have people that if you actually are self aware enough, usually will doubt yourself because you're always will feel inadequate and you'll always feel unprepared and you always feel not ready. So for you, are you considering a second location? Are you considering franchising? What's your thought?

I'm considering franchising. You know, I really like, I don't know, I kind of have the same passion as you. I just think a lot of landscaping industry is just a couple guys who just have a pushbubble and stuff and just want to make money. But the rest of you know, other people who actually want the professionalism side of things and all of that, you know, it really shows and you know, I just want more guys in this industry to where we're not looked at as, you know, just like, you know, oh, you're a landscaper. Like how I want to be looked at, like electricians, like, like, you know, plumbers, like those guys, like legit, a legit company, a legit industry. I mean, and so I'm really passionate about the same thing as you. I think it's just more like, you know, I get stuck in the how to go about it. But it's kind of dumb because, you know, I got to the point where I'm at right now just by learning, just jumping in like the majority of us. But I think it's more just like the question of like, you know, because when I'm, when I listen to your, to all your podcasts and everything, you know, you have so much knowledge on like what you're talking about with like taxes and everything like that. And I'm like, where does this guy go to learn all this stuff? Like, did you have a mentor? Did you just jump right in? You just learned it? Because I know I can take MBA courses, I listen to as many books as I possibly can, but I just, I always feel like it's just I'm lacking the knowledge, if that makes sense. So I don't know, did you have a mentor? Like when you, when you start like the second location, or you, you just did it yourself. Either way is impressive. Just curious.

Yeah, I didn't have any sort of mentor coach until last year. And in part because anyone that is going to be so far above you that you want to actually pay to be around usually will not talk to you unless they can get value from you. And that value is going to come in the form of either A, lots of money, B, some sort of equity, or C, they just want to see you succeed and then be able to co sign on your success and be like, hey, it's part of why they are successful is because of me. And so most of us need to just focus on creating evidence of success in order to attract a great mentor. Like a great mentor, if they're good, if they're great, they don't even. They have tons of people wanting to be mentored like that want them to mentor them. And so it is never a matter. Like my coach for example, hasn't taken clients for ages and like to become a client is basically impossible. So why would he take me? First off, not really sure. Secondly, there needs to be Evidence of success that when they look at the track record of what you're doing and executing on, they're like, okay, if I pour my fuel on that, they'll become way better. And so, but back then I was still creating the resume required in order to be able to attract a mentor into my life. And so I think most of us just need to focus on that and as like create a resume that is undeniably better than anyone else in the industry. And to do that, you're on the right path. Books, podcasts, et cetera. And if you can make your passion this thing called business, and you love reading annual reports and you love documentaries about entrepreneurs and you love these books, it becomes your passion and your hobby instead of any other hobby that fills people's time. And so I just simply have done more reps, not because I am more gung ho about making more money, but simply because I love this stuff. It's like if I go on a vacation, I would just read annual reports, I would just look at numbers and data. I would just run experiments using software. That's what I would do for fun. And so it's not that I'm better, it's simply a matter of I've been gifted this weird DNA that loves this stuff.

So I guess my question is, is like, how do I, how do I fit those payments into my, into my like, you know, into my numbers and make it make sense so, and stay profitable.

So why not keep doing what you're doing? Because if 24% is good, is it just, it's just a matter of like, hey, you got older trucks, you now have the money. It's like, do I go upgrade the trucks like, or are you trying to get more trucks? Is it more trucks or upgrading the trucks?

Kind of the, the main, really upgrading them there, you know, we've been salting and plowing and then some of them are only two drives, two wheel drives. And it's like, it's really hard to, I mean taking out your fleet can make a huge difference. I mean, I've thought about going your route, but it's like with where we live and the size of our account, it's really served us well to you know, have a 20 foot trailer with two 60 inch mowers and a 36.

Totally.

So that our routes, we can always, you know, fit them in instead of driving to two sides of town twice.

Yep. Yeah, like ultimately you're going to do the math on is like okay, 2,024. Looking at your P now like what, what? Like I'm not asking the question, just like I'd be looking at how much did I spend on repairing the trucks. Right? Because I would imagine on your fleet of several trucks, you're probably spending 15,000 on like, okay, this motor went out, this, this, you know, whatever cylinder, what it just goes on, right? So if you're paying 15, $20,000 a month now it's a matter of, okay, a year. If you're paying that now all of a sudden becomes where you can spend two or three grand a month and basically break even. The thing is you're taking on debt so you're adding risk to the business. And so I think at 24% profit margin, at 750,000, how I'd be making sense of this is instead of trying to get to a million, I would personally be like, okay, I'm gonna raise prices. And by raising the price I'm going to pay for these trucks, because if you raise prices on all of your mowing accounts by just even 15%, you'd immediately be able to afford brand new trucks for the entire fleet on the payments. And so the leverage at 750,000 that you have with a price increase increase is so substantial. And so I think you're in a really good spot to raise prices. Like I saw you send the financials over, the media team, they sent it over to me and like, like my first inclination, yeah, now it's time to raise prices. And I, my immediate thought was like, I knew the trucks were older and like you will be able to afford for literally probably what, 30, probably 4 grand a month in payments. You'd have a brand new fleet of exactly what you want. If you raise prices by 15, that.

Makes a lot of sense.

If you raise prices by 15%, this is how you make sense of this. If I do this price increase, I get new trucks. All of a sudden people want to raise price. Like I would do that. And then it also adds a lot of value to your brand. It add value to your existing customers. And you would you pitch the price increase based upon like all these additional things they're doing for the customer. And I genuinely believe less than 10% of people would leave.

Yeah, and that's why you market, to fill in who leads because you raise prices the most. Time those people come back and for the listeners, like who is listening? Like I went from 480 to 750.

Yeah.

And I'm doing the same amount of customers, but it's, I raised the, I mean probably 20% of my customers.

Yep.

And that's really the big change. But I have one other question, if it's allowed.

Go ahead.

It's about basically, mm, I've got two, and we're just starting out. And it's kind of you. You knew I had Holly, I had my brother trying to do it. I realized over time that I probably hired the. I could have hired the wrong people, but I didn't have the systems in place.

I guess my question is like, what I'm scared of is, like, being the face. And you talked about that. And it's like, I've been really good about, you know, being the one on the. I did everything this year. But it's like, how did that transition go for you? Whenever you were the one on the phone, the face, you were answering everything.

I guess it's creating the system. Right. And then the VA runs the system.

Yeah. Like, anything you can do to simplify the business is going to allow a virtual assistant or an office person to operate much easier. And so I've always thought about. In terms of creating systems, it's like I just. Before I even think about creating a system, I want to simplify it and standardize it. If I don't do that, I can't expect anyone to do the same job or even 80% of the job that I did. And so if it's like, oh, man, this is going to take forever to create a system around it, then just cut it out. Especially when it's 750. Like, if you watch my recent content, like, I want to be growing around that 7,750 marker and then just raising prices and optimizing. I don't want to buy more trucks. I don't want to hire more people. And so I can make a lot of sense over the next 24 months in this business by getting new trucks and hiring an office person and paying them well by simplifying the business and raising prices. So if I simplify the business, I cut services out that are requiring me to be there. They're requiring a lot of hand holding by an admin person. And you're always on the phone with these type of contracts or customers. I'm going to get rid of them. I'm going to raise prices to my existing customers so I can upgrade the trucks, which also reduces the amount of admin because it's very difficult for an admin and office person to schedule and route when the. The trucks are constantly breaking down. They're inconsistent or. Or they're not the same. Like, by having Five different types of trucks, which I'm a fan of to get started and grow the business. Like just get what you can, get them used, you get out there and hustle. But as the business gets to profitability, if you can standardize the trucks and standardize the equipment, it makes it much easier to hand off to va. And so in my opinion this is a matter of, okay, let's raise prices immediately, get more steady trucks because the ones that currently are falling apart, let's get that take squared away. We can easily pay for it with just a price increase. I also think that price increase would be enough also to pay for this admin person and paying them well like we have at the, at our command center over the past few years, increased pay base pay by more than 50%, added medical benefits and added 401k, added PTO in this the past four to five years and the quality of your candidate does go up and the amount how long they stay with you goes up. And so like this year will be our first year going to spring rush where like 90 plus percent of our team in the office has been here for more than a year. They're not new employees. Like I don't even think we're going to be doing new training because everyone stayed. And so there's definitely benefits of paying people more and giving them the incentives and giving them the bonuses. And so especially when it comes to office and admin, if you have one or two people, especially if you have one, they have so much inherent locked up knowledge of your business, it's scary. And so the only reason I would ever want to give someone the keys to my business, if I know those keys don't leave with them when they walk away. That's why I want standards, systems, procedures and simplification because I know if they walk out the door, I can quickly give those keys to someone else and they can pick up where they left off. And that is the I see over and over again at that $800,000 to $2 million marker, you have one All Star in the office that juggles all the balls of admin. And as soon as they leave, no systems were created and therefore when they leave, the business will literally cut in half because now everything just falls back on the owner and they can't, they don't have the systems to give it off to someone else. It's a very dangerous thing.