The 21 Principles of the Top 1% — Home Service Edition

I'm going to share with you the 21 principles of success. These principles are what make the top 1% of business owners successful. Some of these principles are what I've used to make my first million dollars at 23 years old. Others I've learned after growing Augusta Lawn care to 200 locations around the world. Now, I do attribute a lot of success in life to luck or the grace of God and timing. But there are principles you can implement every day to fast track this luck and attract wealth into your life. Principle number one, profit mode. Before growth mode, most owners chase revenue growth like it's a trophy. More trucks, more employees, more jobs. But growth without profit is chaos disguised as progress. Profit mode is where you actually build wealth. You slow down advertising, you track every dollar and and rebuild the business for efficiency before expansion. If you're selling a business, they're looking at your profit to determine your valuation. When you're in profit mode, you cut unprofitable services, you raise prices, and you hold your team accountable to performance, not busyness. Once you have clean profit margins, then and only then do you earn the right to scale. Last year, we were on a turnaround show with Jack Mack Landscaping, and I actually told him to sell off three of his trucks because they literally never moved. He was in growth mode so long and had bought all these trucks that he wasn't even using. We used hold tools. It's a really expensive. We can get a box. We can get a box. The one truck with the box truck, could you sell that one in Charlie, you think to get another truck that's actually usable for mowing? I could, yeah. Why didn't we sell the other box truck? Oh, man. He had three or four mowers that were just sitting outside in the rain, not being used. And his employees were working kind of like part time. I said they lay two of them off. Just him and one other team member could handle all of the work. Get rid of three of the trucks that were sitting doing nothing, sell off a bunch of the unused mowers. And by doing that, he is able to free up $50,000 in cash and prevent bankruptcy. Prevent him having no cash to grow the business. He had no cash because he was constantly stuck in growth mode, buying more trucks, hiring more people, buying more equipment. And those vanity metrics might make you feel good, they might look good on Instagram, but they don't actually make you profit. Principle number two, clarity over comfort. Most people think that being nice will make them successful, but clarity is the real kindness. The top 1%. Tell the truth faster to customers, employees and themselves. When you're clear on expectations, prices and standards, everyone wins. Comfort is temporary. Clarity compounds the owner, who says, here's what winning looks like will always outperform the one that's saying, just do your best. I've got to show my team what a good job looks like, what a good profit loss looks like, what a good profit margin looks like, what what a good sales call looks like. Get clear metrics, clear compensation goals, clear checklists, a clear vision and mission for the business. This will attract great talent and shed low performers. I've had hard conversations with managers before that their apartment was underperforming and I would go into those conversations trying to give them clarity, knowing that there was a 50% chance they would leave if I had the hard conversation, but there was 100% chance that they their department would fail if I didn't have the hard conversation. Success is on the other side of confrontation and getting the clarity that your team needs to them is very important. Great people want the truth and they want clarity. Trying to tiptoe around hard conversations is a recipe for disaster. Principle Number three More and Better Before New this is a principle from Alex Hormozi where Before you buy new equipment, use what you already have. Max out your trucks, your crews, your schedule. Make sure they're being used all the time. If you're running at 40% labor efficiency and your crew is spending 60% of their day just driving around, loading up and not generating revenue, you don't need more leads. You need better scheduling, training and accountability. If your trucks are only being used for a day or two a week, you don't need more trucks. You don't need more equipment. To grow the business, use what you already own to the max. Before expanding hit capacity, use the truck every day. Make sure your team is actually being used full time. Before you launch a new service or expand into a new market, a new area, a new town, ask yourself, could you sell more of your current services? Could you advertise better? Could you upsell your existing customers? Could you do more of what you are currently doing? More yard signs? More door hangers? Recently I was actually running 130 different ads from my Facebook ads library. This is a picture of my Facebook ads library where we're running over 130 ads at one given time. The fastest way to 10x the business is to do 10x more of what is already working. If every door direct mail works, do more of them. If door hangers work, do more of Them. If upselling your customers work, do do more of them. As a side note, at Augusta we considered a test run when we do door hangers, 5,000 houses. So doing more of what's already working is the highest probability of success in comparison to doing new services, trying to serve new customers, and trying to serve them in a new market. Principle number four, Systems create freedom. You don't buy freedom with money, you buy it with with systems. Every task you repeat at least once a month needs a process, and every process that's predictable should be documented. You can use screen recordings, audio notes, checklists, but you've got to create documentation. Systematization turns your business into a machine that runs without your daily involvement. That's what separates an owner with freedom from one that's trapped in the field. I remember when I took my first Augusta location and I was turning over the office and the admin to Liz, the office manager. And I remember being so overwhelmed with the amount of work that I needed to get done. So I sat for one night and just did screen recordings in quicktime of every single thing from invoicing, scheduling, billing, charging cards, handling complaints, doing the email. And the next day I deleted the email app off of my phone. And there was things that fell through the cracks and mistakes were made. But ultimately the recordings I just saved on the desktop underneath a folder. And anytime she had a question, she could go in there and see 40 or 50 different videos, just recordings of what I was doing on the computer to handle those tasks. Document everything you're doing and then be able to delegate it to someone else. Because systems create freedom. Principle number five, the four L framework. Every home service business breaks down into four areas. Liquidity, leads, labor, and leadership. If one of those four Ls is broken, you, you feel it in profit and peace of mind. Leads drive opportunity and you get more customers. Labor fulfills on the work. Leadership multiplies it, but liquidity protects it. The top 1% obsess over the one constraint in the business. Doing so gets the business to the next level. I was talking to an owner last week and when looking at the 4L framework, they said this looks like a hamster wheel. And they're right. Because as soon as you solve one constraint, the next constraint of the Foil framework pops its head up. It's like a whack a mole game. Because as soon as you get tons of leads and you solve the constraint of marketing, all of a sudden I can't find enough labors and I can't train them up and do Operations efficiently. And then once I figure that out and I get hiring and training and recruiting down, all of a sudden I have all these technicians and all these laborers, and I need to go find a great general manager, a great operations manager, a great sales manager, and I need to find leadership. And this is why growth feels like chaos. Because the constraint and the focus of the business, and therefore you as the business owner, changes constantly. But you've got to focus all of your time and attention on the next constraint. And that feeling of pain that comes with having a constraint in the business doesn't go away. It simply means you're growing the business. I've met a lot of home service business owners that are in the top 1% of their industry. And there's one thing they all have in common, and that is they use software to keep their business organized. Sales, operations, and admin, all running on the same systems every single day. Doesn't call in sick. It never quits. Software just running all the time. That's why I created copilotcrm.com soon to be homeworks. So you can grow your business without breaking. Go to copilotcrm.com, book a call with the team, and see how you can take your business to the next level and get in the top 1%. Principle number six. Cash is your scorecard. Free cash flow. That's money you take out of the business after paying yourself a salary. Tells you how strong your business truly is. It's not revenue, it's not trucks, it's not employees. It's cash distributions. Cash buys confidence. It lets you say no to bad work and yes to opportunities. Build at least one month of revenue in cash reserves. Owners who have cash during the slow season are the ones who can make smart moves when everyone else is desperate. They can buy trucks on discount. They can hire employees that got laid off. I spoke with an owner last month that took their very first quarterly distribution. And they set a threshold of anything over $50,000 in the bank going to distribute to myself as the owner. And it was their first time where they ever were able to make a quarterly distribution. And it was only $219. But to them, this was the biggest win. Why? Because you're on the board you started having where the business pays you as an owner. As distributions, get in this habit early. Set a threshold of how much cash you need to keep in the bank. I recommend one month of revenue and every quarter. Anything above that gets distributed to the owners, management, or anyone else that gets profit sharing. Principle number seven. The Leadership Ladder. There's a reason I built the leadership ladder. Inside of the copy and paste millionaire book. We go from solo operator to working GM to full time GM and eventually GM plus we have a management team. Each stage demands a different version of you. The top 1% climb intentionally. They stop playing technician and start leading leaders, which is a very different skill. If you stay stuck doing everything, your company will always depend on you and you'll never create wealth that lasts. One person I think exemplifies this tremendously. His name is Marcus and he started off when he was 18 years old. Pushed a lawnmower at my Bellingham location for Augusta Lawn Care. Over the course of a couple years he became the estimator and and then the general manager and then he started his own location using the franchise fee forgiveness program, starting his own location as a solo operator. As time went on, he grew the business to where he was out of the field and working as the GM of his own location. And now he has multiple locations inside of Augusta Lawn Care with general managers that run the day to day operations for him. This leadership ladder allows you to know exactly where you're at in the process of of growing your business and give team members, technicians and managers underneath you an opportunity to move up inside the organization. Principle number 8 Pay for performance or P4P. Pay for performance turns your payroll from a liability into a weapon. Attract A players and push away C players because if they're not making above base pay, people end up just leaving. And you attract A players because people talk at gas stations out on the road with other technicians about how much money they're actually making. When employees get paid for results, you remove emotion from leadership. The lazy self select out and the best finally feel appreciated. There's nothing more rewarding to an A player to be able to work with A players. And there's nothing more demotivating to an A player to have to work with C players all day long and and literally make a dollar or two more per hour. The top 1% create scoreboards that let people win. They don't babysit, they pay for output. I actually remember when I took my first location and switched it from hourly pay into P4P. It actually was a result of Brad who still works with me today, asking for a bonus. And I remember we went into the shop, it was like a little storage container and he's like look, I just need have more money. I believe at the time they're having another child and honestly I couldn't afford it. There was no money. We were going into spring rush and it was after that moment I made the decision that we were switching to pay for performance. The reason? Because Brad deserved the bonus. And there were other people making a couple dollars more per hour compared to him simply because they'd been around longer or because they'd asked for a raise the year prior when I had a little more cash towards the summer and fall. That's not fair. That's not a meritocracy. And it was after that moment I realized that it was not fair that people got paid based on how long they were there, whether or not they asked for a raise or not. It needed to be based upon how how hard they worked and how much profit they earned the business. And they make a percentage of that. Fun fact. Brad is now a CPA and works at my tax and bookkeeping Firm, Home Service CPA. Principle 9 the off season shows true colors. Winter doesn't ruin your business, it reveals it. The best operators and business owners use the off season as a mirror, not an excuse. If you're broke in winter, it's not because of cold weather is because of a lack of planning. Recurring work pre selling projects, creating upsell opportunities and disciplined cash flow are the difference between panic and peace. There's one owner inside of Augusta, his name is Jason, out in Knoxville, Tennessee, that really took to heart the fact that during the off season he had to solve his cash crunch to where he wasn't losing money, but actually making money during the fourth quarter of the year. And so in year one, he's focused on winter services, selling recurring services to existing mowing customers for the winter season. And he only made $93,000 in revenue in Q4 of his first year. But he kept at it and he didn't get discouraged. And although he didn't necessarily make profit, he did better the next year though he made $162,000 in the fourth quarter of the year. And in the third year he added Christmas lights along with winter Services and added $373,000 to to his bottom line in Q4. He was able to be profitable in Q4, the fourth quarter of the year and build his business past a million dollars in revenue. Principle number 10 the price of people pleasing. You can't build wealth trying to make everyone happy. If every customer accepts your estimates, you're underpriced. In my opinion, if your close rate is above 70%, you should raise prices immediately. The top 1% don't price gouge, but they know their worth. They reinvest that profit into better people, better equipment and better lives. The need to be liked is the ceiling to your income. There was one owner inside of Augusta Lawn Care that believed he was in a really crowded market and he was inside of Florida. There was so many Chukanut trucks, so many other people doing mowing and doing landscaping, and he believed he had to be low priced and no one would be able to accept his services if his prices were higher. However, during the pandemic, he got really, really sick. And so what did he do? He needed to get rid of his customers. He had just got started that year and he doubled his prices and lost four out of his 60 recurring customers after doubling his prices. Proving that him trying to please people and just get everyone to say yes to all of his estimates was simply causing him to lose out on a lot of profit opportunity. Principle number 11 simple scales Custom fails. Every time you make an exception, you make your business harder to grow. Customization kills consistency. If a new crew can't repeat your service at the same quality, you don't have a business, you own a job. Golden handcuffs are when you are so good at your job, no one can replace you. The top 1% make simplicity sacred. They build chick fil a level predictability, not the chaos of an independent chef's kitchen. The chef's kitchen makes for a great tour, great social media, looks good on Instagram, but it is hard to scale and makes less money. I'm reminded of an owner inside of Augusta from Ontario, Canada that has 40% of his revenue coming from projects. And he started to realize after two or three years being around 1 million, 1.2 million and stalling out. He started to realize it was because he was spending all of his time in engineering during the spring rush managing these big projects and it was keeping him from focusing on building his recurring revenue. He only had about 150 mowing customers, whereas if he could focus on it during the spring rush, he'd be able to sell more mowing customers and then he'd be able to focus on upselling those mowing customers and do simple services like property cleanups and treatments. If you have a whole bunch of one time projects or a bunch of custom work and you're trying to focus on creating scalable simple services, it's going to take a year or two years to actually pull that band aid off. It can be very painful when you're making less money, less profits, simply because you're trying to move away from one time projects that are custom every single time and you're locked in on project management all of the time and switching over to a recurring simple service model they're able to copy and paste and scale with other employees doing the work. Principle number 12 Hire one level below your pain. When you start to feel stretched, that's your signal to hire. Most owners wait until they're drowning, then they hire out of panic, hire early, train slow, and buy back your time before burnout begins. If you experience burnout, it can sometimes take 6, 12, 24 months to get the business back on track. So get in front of it and and hire for the person that is going to prevent the burnout from happening. When you replace yourself with competent people, your business gains capacity for the next level. At Augusta Lawn Care, the best general managers are usually the ones that have been in the field for six to 12 months before becoming a general manager. So before the owner needs to actually get out of daily operations and hire general manager, in the perfect world, someone's already been working out in the field. They've learned the culture. They learn about pay for performance, open book management, profit sharing. They can train slowly and take tasks off the owner's plate over the course of time. Principle number 13 lead with math, not emotion. Feelings are valid, but math is final. Your emotions tell you what's urgent, your numbers tell you what's important. And they are rarely the same thing. Profit isn't a feeling, efficiency isn't an opinion. The top 1% make decisions based on dashboards, not discomfort. They measure customer acquisition costs, close rate, and labor efficiency so they can win the game. When you lead with data, your business grows without drama. A few years ago, I had to swap a general manager out at one of my locations and it took a solid six months to get that location back on track. The culture was ruined, a lot of employees were disgruntled, and the profitability location wasn't where it should be now. More recently, I also changed out a general manager, and one month they made $26,000 in profit. The next month they made $27,000 in profit. Basically the same. We didn't lose profit. We didn't miss a beat. None of the members of the team left. What was the difference? Three years ago, I didn't have the same amount of metrics, dashboards and numbers that would give me early warning signs that the location was not performing. Before it even hit the profit and loss statement, I was able to see dashboards of what's the close rate, how many estimates are going out, what's the efficiency score of the team, and by having those Numbers. I was able to make a change in leadership without any sort of change in the profitability of the location. And it didn't take six months of rebuilding the team, rebuilding the business, to get back on track. Principle 14 train like you're leaving every day. Build your business like you're leaving it in 90 days. Three months. Document everything, develop your second in command and remove yourself from daily operations. As you pass a million dollars in annual revenue, you don't prepare the business to sell, you prepare to scale. The moment your business can run without you is the moment you're truly free to grow, to leave, to sell. The options are endless. Freedom is on the other side of building systems. There was an owner at Augusta Lawn Care that had to go to the hospital for three days and could not even touch their phone. And during those three days, command center was able to step in and run their entire business. They held team meetings. They made sure everything was dispatched, everything was billed and invoiced. Why? Because everything ran on systems. So even though we were thousands of miles away, we could run the business because the systems stayed the same. And when you run the business on systems, it reduces the risk of failure. Because going to the hospital or having a family situation or a relationship problem, something that's small for three, four, five days for many small businesses, would put them out of business because no one else could run the company while you were gone. Train like you're leaving because one day you might have to, and I don't want you to lose the business because of it. Principle number 15, efficiency is love. Disorganization burns people out faster than hard work ever will. Efficiency, as I see it, is an act of love. It shows respect for your team's time. Tight schedules, clear communication, and clear job notes aren't about control. They're about care. For your team and for your customer. The top 1% make organization priority because chaos costs morale. They use videos to communicate and document processes so that the team can be more efficient. Recently, at Homeworks, we relaunched the Fieldforce mobile app that actually takes the videos to compresses it, attaches it to a job, to a customer's profile, or even to the customer portal. For the customer, they'll view it. This allows my internal team, my general manager, my technicians, the office admin, the customer to all see the exact same video. And it prevents me from having to go do project walkthroughs. See, the reason I say that efficiency is love and having videos is actually taking care of your team is before we had videos, I would actually go from job to job in the morning and do a walkthrough of the project. And my crew would be waiting for me for 15, 20, 30 minutes. And it was horrible for their pay for performance because they're just waiting for me to show up and show them the project when if I would just use video, if I just get organized, if I just document my process using the estimate video, get it attached to Field Force inside the app, and then have it on the job notes for them. I didn't even have to go and do the walkthrough anymore. I simply gave them the job notes that were clear. I would give them the estimate video and between the job notes and the estimate video, they could do the entire job to completion without me getting involved and with clear communication with the customer throughout the entire project. Principle number 16 build managers, not martyrs. Your best technicians do not have the skills to be your best manager. You will need to cultivate their talent and not just attracted. Everyone talks about hiring and getting people in the door and interviewing, but what about not just retaining them, but cultivating their leadership skills, Cultivating their talent to be able to get them to the next level of their career. If you promote people without preparing them, you create burnout, not leadership. Teach leadership as a skill, not a title. The top 1%. Invest in team training before it's needed. Because leadership depth is how you scale multiple locations. This is why at Augusta Lawn Care, we create the 21 stages of success. Seven stages for technicians, seven stages for managers, and seven stages for owners. This allows everyone to know where they're at on the map of growing their career. It allows them to be able to get to the next stage of their career and build from being a technician to a manager, or all the way to being an owner. But realize if you're going to take a technician and turn them into a manager, there's going to be skills they need. And if you don't have a program, if you don't have a process in place to give them those skills, you're setting them up for failure. Principle number 17 replace hustle with leverage. Hustle is a great start. And at the beginning of your business, you have to work 60, 70, 80 hour work weeks. But leverage is how you scale. You can only mow so many lawns. You can only paint so many walls. You can only answer so many calls. You can only sell so many jobs. The real breakthrough comes when you use systems, software and people to do the heavy lifting for you. The richest owners stopped working in the business and started Building things that worked without them. Now, you got to be careful. I don't want you to misuse this. Last week I was on a turnaround show with Eric from Vargas Lawns and he was working on the business at $150,000 in annual revenue, having one full time employee and a couple part time employees. But he was 100% out of the field, off of the truck and never even used the trimmer. As a rule of thumb, in my opinion, if you're doing over $750,000 in annual revenue, you can be out of the field that is off of the truck, not producing revenue and doing the work itself. Once you're doing over $1.5 million in annual revenue, that's usually when I see owners being able to get out of daily operations without putting too much stress financially on the business. At that size, the business can run without you. Managers are in place, but don't jump the gun and think that you and one employee means you can work on the business. Don't hear that phrase and immediately throw to the side that you're going to have to work in the business to grow it to the size where it actually makes sense to be the architect and work on it. Principle number 18 credit is king and it can be a brutal master. Using debt to grow the business allows you to free up cash. It allows you to grow faster. But warning it is risky if misused. In my opinion. I like to spend the cash on marketing and operations. Things like wages, materials. Use cash. But you can use fixed rate, low interest debt for equipment and truck loans. If you need debt to make payroll, your business is not profitable. Raise prices and ensure profitability before dumping the gasoline of debt on the business and growing it really fast. If the bank doesn't trust you to take on more debt because your credit score or your profitability, that's a pretty good sign that you shouldn't add more risk to the business. The top 1% don't borrow to feel big. They build cash cushions so opportunities chase them. Debt is a tool, but cash is control. Principle number 19 the working GM model. Every million dollar shop needs a working GM. A leader who sells, manages and trains, but still is willing to roll up their sleeves and get work done. They produce revenue, not just driving around all day shooting the breeze and being super inefficient. A great working GM is the backbone of a scalable organization. When you hire or promote the right gm, you duplicate yourself without cloning chaos. This model lets you open new locations, maintain culture and protect profit. I like to have one working GM that is responsible for all the overhead related tasks. With six to eight technicians out in the field time and time again I I have seen where people start to try to manage 10, 12, 15 employees by themselves. They actually give themselves the golden handcuffs because no one else can manage that many people. Success of a location depends on a great general manager. I have seen time and time again where I take a great location and put a subpar manager in place and the location starts to underperform. I have also seen average sized locations doing mediocre profit. We put a great general manager in place and all of a sudden profits go through the roof. At this size of 6, 8 employees, the general manager being in the field during the off season or when times are slow is the key to being profitable year round. It's very difficult to pay A General Manager 6 figures if when things get slow they don't actually roll up their sleeves and generate revenue for the business. Principle number 20, copy and paste growth. You don't reinvent success, you replicate it. Once your first location runs like a well oiled machine, your next step is to copy and paste that system. Same services, same pricing, same playbooks. Scaling is boring on purpose. If you're improvising, you're not scaling, you're guessing. The top 1% know that wealth is built by repetition, not reinvention. They become the 1% by focusing on one thing and becoming an expert. Not becoming a jack of all trades. Not by jumping from one industry to the next. From painting to plumbing to H vac to lawn care to landscaping and then back to real estate and crypto and then straight training no. 1 industry and focusing 100% of their time on it to become an expert. They get outsized returns because they put in outsized numbers of reps doing the same thing. More better. Principle number 21. There's no place to get to. There's no magic number. No. I've arrived. I've made it. If your business runs without you, pays well and gives your team opportunities, that's it. You've made it. The goal isn't 10 locations. It's not $10 million in revenue. It's freedom. Stop chasing validation and random numbers. Start building peace. Make sure your business is serving you, not you serving it. Once you put 10 years of reps in to one business, one business model, one service, one industry, you already have everything you need to live like the top 1%. Discipline, data and direction. If you want to go deeper, watch my other video here. 40 brutal truths. I wish I knew 10 years ago so I could get rich faster. That's the one that will slap you into action.