The Biggest Hurdles to Growing Your Lawn Care Business

Hey everyone, it's Mike Andes and you're listening to the Landscape business course podcast. Today we're answering questions about the roadblocks and the barriers that you as landscapers are facing as we go into 2020. We're going into the Facebook group. We are answering questions directly from other business owners like yourself. But before we get into today's show, a big thank you. Today's sponsor, which is Jobber, if you haven't already, go to getjobber.com im andys a n-e s and you can try out software completely free on trial basis. This is the time to switch over CRMs. Okay, if you're going to make a change in your CRM, literally the next two weeks are the best time for you to do it. At the end of 2019 as we head into 2020, even if you, maybe even January and February, if you don't start mowing or you don't really get busy at all until the spring, this is the time to switch. You do not want to switch in the middle of spring. You do not want to switch in the middle of the year for tax purposes. This is when you want to do it. So if you haven't, make sure you check getjabber.com im andys and thank you so much to Jobber for supporting podcasts like this to help landscapers like you. So we're gonna answer these questions and I'm also gonna be giving some more information about Landscape Summit, which you really need to sign up for. It's gonna be the best as I'm adding more to it and starting to get ready, getting my notes ready, getting the other speakers ready that are from Augusta. This is going to be the best conference you've ever been to, I can guarantee that. It's January 16th, 17th and 18th. There's no fluff in this conference. Alright? There's no, like, we don't have like a trade show and like a whole bunch of sponsors and things like that. There is no sponsors. I come to the table, I bring all the value I possibly can. I bring my team there from Augusta. You can ask them questions, the estimator, my office manager, things like that. Like, they're there to support you. I'm there to support you 110%. We don't have, it's not like a money making machine. We don't have a bunch of like exhibits and booths. We're not trying to sell you stuff. This is strictly for you to get an incredible grasp of your numbers and your strategy going into 2020. And completely change your mindset. Okay, so there's another video that I talk all exactly what we're talking about in each session. But right from Thursday, when I'm gonna open up and start, I'm gonna talk about you getting in the way of yourself and creating mental blocks for your business. We're gonna be talking about that. I really need to establish that because we're gonna be breaking some things of traditional.

You might be thinking about your business in terms of how you pay your people and what your culture looks like and how you keep people accountable and what your role in the business should look like. We're gonna be breaking a lot of those concepts and I need to make sure that from the onset, you kind of break some of those stereotypes in this industry about what a business owner is, what a landscaper should be doing. And so I'm really looking forward to that first keynote. And so without any further delay, let's jump into these questions. I just really make, I wanna make sure everyone signs up for this conference, landscapebusinesscourse.com click the conference tab. It's completely tax deductible. It's a great place to bring your spouse or your business partners or your managers to this event. Over half the people who have registered are bringing more than one person. So their managers, their estimator, their office people, whatever it might be, they're coming and I really look forward to it. All right, without any further delay, let's jump to this. So I posted on Landscape Business course group on Facebook and just said, ask your question below and I will answer in the next episode. What is a barrier for your growth and success in 2020? What is holding you back? So let's go through these. These are other landscapers just like you, and I hope you can learn something from them. I'll try to answer some of these questions and if I don't know the answer, I'll just tell you. Vince Van Dam asks, how do you best navigate going from a single crew with two crew, including myself, to then adding a second truck and one more crew member without reducing profit margins too much? Alright, so this is my opinion. Again, all of these answers, in my opinion, this is just my opinion based upon looking at hundreds if not thousands of landscapers and their business models. I would say the easiest way to do this is on that second truck. Don't spend a lot of money. Get it secondhand, paint it if need be. If you're needing another mowing setup, do a trailerless setup if possible. Or get a small trailer like don't get brand new expensive things. You do not want to spend 30, $40,000 on getting the second crew set up. You want to be like minimal as possible. So when we do.

A triggerless setup for our mowing crews, which we're going to be getting two or three in January, I'm going to try to get a video of that set up for you all when we set those up and how we, we put them together. But when we do that, it costs us less than $10,000 all in. I mean truck paint, decals, all equipment with racks, all of that on there, 10 grand, like pushing it at 12, like I sure hope we don't get to 12. So that is much more scalable and gonna be better in terms of profit margin. That's what Vince is asking about, profit margins. I would keep that truck as cheap as possible, okay? Because if you're going to scale to much larger business, that second truck might only have a livelihood of three to five years for you. You don't need to go out and get a truck that's brand new and gonna last 20 or 30. Go out, get a truck that's going to get you by, you can pay cash for it. Doesn't need to be anything fancy. It's gonna depend on the type of work, what type of truck, things like that. But you do not need fancy. All right? When you're growing your business, the number one thing that's gonna keep you from growing is a reduction in your cash flow and a reduction in your cash reserves. That's what's gonna hinder your growth, alright? And in order to keep your cash flow good, in order to keep your cash reserves high, you must absolutely, must watch your expenses in terms of being flashy instead of substance. When you're first starting out, you do not need big trucks. You do not need fancy stuff. When you're getting started on your first few trucks. If you want to do that when you're down the road and you want to get yourself a really nice estimate truck and you know, pay on payments or 30 or 40 grand, like that's your prerogative, that's your goals, whatever aligns with that is fine. But when you're just getting started, it is absolutely like fiscal suicide to be spending $30,000 on a brand new truck for your second vehicle. I'd much, much rather have three used trucks that are going to last me five to six years and get me to the place I want to be from a business standpoint. Because I promise you, those three trucks used and Painted, looking nice are going to produce much, much, much more revenue than one really bright and shiny brand new truck. So my biggest suggestion in order to.

Keep without reducing your profit margins too much is number one, would be to minimize the cost of that second crew by reducing your equipment cost. And two, make sure that you have a pay model in place so that when you have that second crew going out and now you are no longer actually able to be with your crew members all day long, that they're actually being efficient and producing revenue for the business. Carlos Rodriguez asks, how do you get all your 12 month contracts to pay as you go? Is this possible?

Yes, it's possible. Most of the time people are trying to go from pay as you go to contract. But if you're trying to go from contract to pay as you go, the big thing is selling it to the customer in terms of their interest, what's best for them and how you do that is in the middle of winter when they're kind of annoyed by the fact that they're paying 200 bucks a month and you're not showing up for five minutes a week, that's when you pitch it to them. That's when you say like this is the perfect time, December, January, February. When you literally aren't doing anything on their property and they're paying and they're kind of annoyed by that. That's when you go in and you try to make the sale. Don't go in the middle of summer when they're paying 200 bucks a month and try to pitch them on the fact that no next month it's Gonna cost you 400 because you're there so much and you're doing all this work and fall cleanup and leaves and all this stuff. Don't pitch it then pitch it in the winter when services are, you're really not doing much other property that is basically paying for the annualized services of the spring and the fall beforehand. Try to pitch it when it's. When it's cold, when it's the slow season, and when they are going to see a drop on their first bill after you make the change. Alright, hopefully that makes sense. Andy Burleson asks, I think Andy's coming to the conference. I think most of these people are anyways. Andy. Yeah, I think the number one thing holding us back is myself. How do I stop being a control freak micromanager and let go and delegate more and replace myself? Also, do you think it makes sense at my bigger prop, at say bigger properties or commercial stuff to split up Duties to two separate crews. For example, one crew only mows and edges and another crew only does the bush trimming and bed maintenance. So in terms, first of all, Andy was addressing the fact. First of all, kudos to Andy for being self aware and humble enough to admit that he's getting in the way of himself and his business. That takes a lot of humility and it's the first step in changing it.

I was and I'm still in a lot of this sort of trying to fix this part myself too. Delegation. I have multiple businesses trying to figure out where people should be at what, where I need to be in certain aspects of each business, where I need to delegate more and not micromanage and then areas I need to make sure I take ownership of and actually push through and get done and that are gonna move the needle for the business. So this is also something I really have to work with. And as we grow, replacing myself as I move out of roles is important. We're actually going to talk about Friday morning. I'm gonna take an entire keynote at the, at the landscape summit on how to get out of day to day operations and key retain 15 to 20% profit margin. Alright, so this is what we've done at Augusta. This is a step by step process that we have used to get me out of the field completely. And obviously that revolves a lot around P4P. But also how do you, how do I then pay the people that are stepping in an estimated role and office manager role? Like how do you pay those people? How do you make sure that they're not, they don't have perverse incentives. So those are all things we'll be talking about at the conference. We'll take an entire session on that. But Andy also asks on bigger properties, should you split people up based upon the type of services that they're doing? So for example, if you had like a massive property, one crew would mow an edge and another crew would do the bush trimming and the bed maintenance. I do think that's possible. Especially if your business model is all around larger properties and commercial. It's very tough to do this based on what I've seen. When you have a skew of commercial, of residential, like half and half and you expect the same crew to do residential, doing small properties and then go to a big property and then split up and do different things. Based upon my, my, my experience, I've seen that be pretty troublesome. However, if you have a large enough company, you could have a commercial crew that does that type of split up of work and then a residential crew that takes care of those separately. P4P. In something like this, you just need to make sure that your budgeted hours are split up for these services accordingly. So how much time should it be taking for mowing and edging? How much should be taking for bed maintenance and for bush trimming? And Friday at the conference, we're spending an entire day talking about P4P. We're going to develop your own personalized, tailored P4P systems for your business and answer every one of your questions. There's a reason why I haven't talked about it super specifically on this podcast or in these videos, and it's because if I did, you would have thousands of questions, literally. Like, it just. It would be. My inbox would be full and it would be horrible. And a lot of you get more confused than anything and just not take action. That's why I'm taking Friday at the conference to go very deep on exactly what's going to be, how you can roll it out, how to make it, the switch from hourly to P4P. We're covering all of that, actually. On Friday, I'm actually gonna have Lee, who is our estimator at Augusta, at the local shop. He's actually into a keynote of himself, himself, and he's gonna be with me. And you can ask him questions about, like, as an estimator, what was the change like and, you know, what was it like from a project management stamp perspective? And he's kind of like the leader on. On the side of, you know, getting the estimates, selling the jobs. How was that transition from hourly to P4P? And so he'll be there. You can ask him questions that'll be on that Friday. We spend the whole day making your P4P system. Doug Morse asks, I'm just trying to get through as many of these as possible. Doug Morris asks, my biggest thing holding me back is being worried about hiring. Ha ha. It's a tough nut for me. A tough nut to crack for me. Anthony replied back, if you think about it, you have more risk by not hiring. That's a good point. So.

Doug, is the biggest thing holding you back is being worried about hiring. So this is the thing.

And it's hard for me to say this because it sounds like I'm. I'm just trying to sell like, promote P4P. But it helps us big time. We are hiring people now for our spring rush, and they're willing to sit around or get another job in the meantime, for the next two, three months. Two months. Two months. Because our pay is competitive, our base pay, plus they have the opportunity to make more every single day with using P4P. So money talks. At the end of the day, you cannot expect people to make decisions that are alignment with your business without one giving them information, which is like open book management. And number two, without P4P, those are the two things you must have. And paying them like an owner, paying them like based upon their performance. And so money talks like if you want someone to do something, if you want to incentivize a certain behavior in your business, money talks, okay? So whether it be things you don't want happening in the business, make it a penalty on their paycheck. You know, if you do want something to be done, reward them with money. Money is the reason they're coming to work. They want to put food on their table for their family, they want to pay their rent, et cetera. Like if you just said, hey, you're not getting paid for the next three weeks, guess what? No one's gonna show up to work. Okay? So they're coming for the money. Use that. That is your way of leveraging what you want done in the business. Okay. And if you're paying competitively enough, they will change their course of action. They will. Like for instance, the hiring part. We've never tried to hire people two months in advance, but it's working just fine. We hired two people last week, I expect to hire a few more next week. Like so that's, that's a huge advantage if you're able to pay more. And you're only able to pay more if you're on P4P. And you only can do P for P if you have right culture. So that's what we're talking at conference. And that's really the answer to a lot of these questions in my opinion. Russell Michelle Pridgeon McBride. Wow, long name asks. Either us doing SEO or hiring someone we can trust is one of our biggest struggles. Also finding the one key full time employee. So it sounds like you're just starting out, Russell. Finding that one key employee you are, that is a sales game. That is you selling the dream of what your business is going to become to some person that would like to start a business. But for some reason they realize that they're not an entrepreneur. Entrepreneur, that's who you're going after. The person that wants to grow this tired of their 9 to 5 or is tired of working with a company that even might be bigger than you so that gives them some experience. They have some experience working with that company, but they want to actually take a company from like very little to very big and they want to be part of that process instead of just the maintaining of a company that's been around for a long time, has a lot of customers, makes a bunch of money and they get tired of that. So that's who you should be going after in my opinion. Going after the person that has the experience. You're going to go out and you're going to probably have to pay them like a considerable amount, but like they're going to come with you and you're going to sell them on the dream and it's not, you're not going to pay them a whole lot more. You might even pay less than what they're currently making. But you sell the dream of what it can become. I don't necessarily think you should give them ownership stake or equity in the company, but I do feel like you got to sell them the dream of what it can become and that the ride and the experience and the journey is going to be worth them leaving their more stable position or more high paying job. Kevin Fairburn says hiring have to create a better hiring process to find and retain the best in my market because it's all about finding the right people and putting them in the right places. That's correct. Cool. So I 100% agree again once you have P4P. So Kevin's one of the franchisees from Augusta Lawn Care, just got trained up last month. So once he gets in the habit of P4P and gets really good at answering the questions and seeing the scenarios and be able to answer questions from prospective employees or like people that you're interviewing.

It's a great, great tool to hire great talent because guess what? No one's going to come and work for you if they don't feel they're a great performer because otherwise they're just gonna be hitting base pay all the time. And if they are, then you're gonna fire them because it just telling that they're basically just scraping along. And so like outside of winter when we get slower, our routes aren't as dense. The guys don't, aren't as efficient just because it's raining and all the other things. That's the only time where I see people in our company getting multiple pay periods in a row where they might be hitting base. Otherwise literally 1 out of 5 or 6 pay periods they might hit base. Like literally that'd be the lower end Most of them are consistently higher outside of winter. And so.

The hiring process and attracting great talent is baked into P4P. Once you know the system enough to be very confident explaining it to someone from a high level, very, very simp. But then also when they have questions about the details, being able to give those answers. So that comes with confidence. You know, six months after doing P4P, 100% in your business, that's the sort of confidence you get. And then you can, you know exactly what your base pay needs to be. You know, you can make a competitive rate with everyone else just with your base pay, but then also give the opportunity and the average earned dollar amount in your ad on Craigslist or indeed, or wherever you're advertising and be able to really go after people that are high performers, your industry, and people that are, you know, working at your local competitors. Shana Tice I agree with Kevin. Hiring is our toughest barrier. Donald Kirk says, I can't get people that want to work, they want to show up, but they want to do as little as possible. Then when I sit and talk these people about what they are doing, then they get mad and never show up again or they quit on the spot. Then I do hire, I think, our good employees. I start getting, when I, when I do hire someone I think that is a good employee, I start getting more jobs. Then they quit. And now I'm stuck with all this work and not enough employees to do the work. Customers then start canceling on me. I'm stuck in this rut that I can't get through. It's a vicious cycle. This is completely true. And that is completely tied to the fact that hourly pay.

Creates entitlement.

And hourly pay caps. What you can pay a high performer because you've got to get like this middle ground. For example, let's say a really high performer person at your company makes $20 per hour. Someone that's just starting out. Absolutely, a horrible worker. You're paying them $15 an hour. Okay, but so literally you're paying the high performer 33% more. $5 more than the. The guy's making 15%. Okay, so $15, 33%. That's $5. You're paying 33% premium in order for said second guy, good performer, to work for you. Okay? This is the fact. The guy making 15 bucks an hour might lose you 5 bucks an hour because he's just a horrible worker. Slacks off, goes to.

Gas stations, takes long lunch breaks on his phone all the time, shows up late, damages things on the jobs, et cetera. The guy that's really good who's making 33% more at $20 per hour, literally might be earning you $40 per hour, net like profit of $40 because he's just a killer, amazing person. But guess what? You're only paying him $5 more per hour. What P4P does is create a level playing field of complete meritocracy that says when you earn the business more money, you will make more money. In P4P, that scenario would look something like this. That really low performer would, would be making $15 per hour because that might be base. But then that $20 per hour guy is gonna make like 25, 26, $27 per hour. And guess what? Then the $15 an hour guy has one of two options. One, he says, you know what? I want to make that much money. I want to actually do something with my life. And I have the opportunity to go out and get it every single day by showing up on time, performing better work, figuring out how to become more efficient. Or they keep hitting base every day, they're lazy and you fire them. Okay? So I truly believe P4P fixes a lot of these problems right? From attracting great talent to then screening out people who are not good employees, to then retaining people who are all star players. This is a very real scenario that Ron Ronald just brought up and that is you have a great worker for you, then they leave and now you're stuck with all the work that they were performing and you got to go out and try to find subpar workers to then do the work that this other person was doing because this other person left because they couldn't make enough money with your company at the end of the day. Alright, so that's why P4P works. Okay. Mark Koch says, still trying to figure out my cost of doing business. I used LMN program and it said $35 per hour. Hard believing that.

You're probably pretty close, Mark. You're probably pretty close. I see that that's a pretty consistent number that does fluctuate a lot from different types of size of businesses, different types of services, the business model in terms of how much overhead, shop or not shop, things like that. However, $35 an hour is in that range that I see quite commonly in terms of how much it costs to do business per hour. But again, it ranges so much like if you just take the average hourly. So for example, we have a franchisee down in Texas in El Paso and shout out to Abraham and he is his Hourly rate is like literally 80, 60 to 70% lower than what we have. Almost 80, actually. Yeah, like a lot lower. Yeah, like 80% lower than what we have to pay here for our base rate in P4P. Right. And it just. That is going to drastically affect what your dollar per hour is for cost of doing business, your overhead. Right. So, Mark, it's probably not completely unrealistic to think $35 per hour, but if anyone's out there, like, oh, I'm 31, or like I'm 56, it completely depends on your market, size of business, your business model. But that is not out of, outside of the common range. I see, Mark. And for a lot of people, that's when they start putting it, connecting the dots, like, oh, like if I'm making 40 bucks an hour on a job and my cost of business is 35, I'm running a very tight ship. Like, very, very narrow margins there. Like, there's not much room for error. That's like one broken sprinkler head. And that whole day worth of profit gets wiped out because you're only making $5 more than your cost of to operate. So that's where the knowing your numbers is important. And that's not out of average or the range that I see. Mark, which, Mark, I hope you're coming to the conference. Amity.

Says how to assign or separate process. So Amity Morales says how to assign or separate processes by employee or position in the offices when you're solo. We do it all as we grow. How do we know what to delegate, how to divide responsibility in the offices. Thanks. Happy New Year, Mike. So this is specifically Amity. It sounds like you're trying to figure out how do you split up roles within the office. That's a really good question because at first you're, you know, one person kind of do everything. They can be routing, scheduling, billing, answering the phone, answering emails, contacting your crew throughout the day, all of that. It gets a little more complicated as you begin to grow. Right. So what we've done at Augusta is take all the things that can't be done that need to be more tailored to our business under the office manager position. And she's going to do scheduling, routing, contacting customers. Sorry, contacting the crew, like all the organization and communication. But then the command center is going to take all the calls in, take in all the emails, send out all the estimates. They're going to answer estimate request forms from the website. All that stuff can be done by the command center. And so that's going to save us a lot of money. But then if you don't know what Command center is, it's what we offer the franchisees. But we're doing it for our local shop because it's going to save us a lot of money. It's also much more scalable because we can put five or six office assistants on in Command center that are working actively on estimates and saying there's no way I can hire like six or seven office assistants year round for our local shop. But I know with Command center we can. So in terms of delegation, I would take the things that like we just, I just talked about that we gave to Command center that are more. You can create a system and they just pound through it. So for example, creating estimates, that's something that should be done, systematized, done the same way every single time. The way that you create the estimate, send it to customer, if you make attachments, whatever, that should be a system. How do you answer the phone and create like a to do or set up an estimate? That should all be a system. All the things that you can make systems for should be delegated to someone else. So if you amity, I know you're probably in the office for your family business. So if you're hiring someone else and you're gonna pay them 15 bucks an hour, I would delegate out the things that are one reactionary, I.e. phone calls, emails that are immediate, things like that. The reactionary things are gonna distract you from what actually is gonna move the needle. And then two, I would give that person and entrust them with things that have very clear systems. How to answer the phone, how to set up estimates, how to answer estimate request forms, how to send estimates. Those things that are very systems oriented that you're just kind of like you just need time to do, that's what you wanna give that first person in the office. And then as your business grows and you have multiple people in the office, like we had 1, 2, 1, 2, 3, 3, 3 office assistants. 1, 2, 3. Yeah. And then one office manager. So four people in the office at Augusta last year. And the way that they split that up, it gets different because like when you get in the middle of spring rush now those three office decisions are gonna actually split up. Okay, you're doing estimate creation, you're answering the phone, you're doing the emails, you're doing other clerical things. And so that's the way as you grow, you start subdividing even more person in the office. That delineation you want to really give away the things that are, number one, making you reactionary, picking up the phone, because you got to pick it up right away. And second, things that can be completely systematized and they just got to crank out, it's a matter of time. So that way you can focus on the things that change all the time. Routes, schedules, all of the things that happen throughout the day. You want to be focused more on those things.

Tony Mulhern. My mind, that's what is holding me back. Tony, I hope I see you. I know you emailed me. I hope you bring your wife too and you can bring your daughter. That'd be great. Quinn, call out or no show is a killer for us and a big thing that will hold us back from expanding 100%. This kind of ties back into what I said about money. Like, I'm sorry, they're coming for money. Until it hits their paycheck. I've said this several times. Until it hits their paycheck, you cannot expect them to change. Until the dollars on their paycheck are affected, you cannot expect them to change. Yes. Great employees grade A Type A wonderful dream. Employees are going to just want to work hard and be part of a great team and be a great team player and give 100% every single day. Because they also give 100% in their workouts and in the way they eat and in every other aspect of their business, there's like a go getter. But guess what? Those are a rare commodity. They're very hard to find. They're very hard to keep. You got to pay them a lot of money. And so it's very unrealistic to think you're going to scale a business that way. That's why you have to make sure that you get people that are money motivated and then you use the money to dictate what happens in the business. So if you want them to produce revenue, you should pay them based upon how much revenue they bring to the business. If you want them to perform more quality work, you should pay them and take away money. When they damage things. When things are damaged, you should take away money. When they're not damages, they should be getting their full paycheck, right? So this is what P4P is all about. These are what's baked into the system. This is the thing I want to teach you all at Landscape Summit. Please, please, please. I promise you will not regret signing up for this conference. It's going to be like, it's not going to be huge or it's not it's gonna be less than 100 people, I can guarantee that, probably less than 80. And you're gonna be able to see me, talk to me one on one before, during, after keynotes, during lunch and breakfast. So I really look forward to seeing you all here. Just go to landscapebusinesscourse.com conference or click the conference tab. I want to see you there. It's gonna be an absolute great time. The relationships and the bonds that are created at this event is going to be life changing. And you're gonna be able to hear from Liz, who is my kind of operations manager and really works the office at Augusta Lawn Care locally. What she does every day. She's gonna be giving a keynote on, she titled it Focus on the Mission. She'll be talking about how to support the founder, especially for someone like myself who's stepping away from the business and how she kind of controls a lot of things and operates a lot of the business. She's gonna be talking about that. It's gonna be a great keynote for your employees to hear. Great for. If you bring a manager, they need to be in this keynote. It's also gonna be a great time for, you know, Lee, he's going to be talking about estimator. That might be you as the business owner now, but if we're going to actually create a goal and a roadmap to get you out of the business, you need to know what an estimator should be thinking about. How should they be paid? How do I compensate them? We're going to be talking about all of that at the conference. I really look forward to seeing you there. So make sure you go to landscapebusinesscourse.com and sign up today. I'll see you next time. Thanks so much for joining us today.