The Brutal Truth Behind this Landscaping Business...

We're right around half a million dollars in debt.

At this size of business, an owner trying to juggle everything is recipe for a breakdown.

Our subcontractor sent me an after tax, we're gonna have to highlight, do a couple layoffs. Like, I don't think he's gonna be super hurt if we have to lay him off. He jumped in a truck and stole it. Now he's threatening to sue us.

He's on the brink of collapse.

It is stressful.

I'm aware of some of the financial decisions that I didn't agree with. I don't know what sharing with him. They don't have enough money to make payroll. Would you tell him that?

Oh, 100%. I tell them that. Really?

They're.

Why?

If you want to have a conversation about his finance, you can be here and we can have a conversation about his finance.

Hey, everyone. My name is Mike Andes. I'm the founder of Augusta Lawn Care. We have over 150 locations around the world, and we do over $50 million a year in annual revenue. We travel around the country trying to help small businesses and home services turn around and get back on track. Today we're in Michigan with Alex from Faith Lawn Care, and there's been a lot of bad things happening recently. The team has really had a lot of infighting. They tried raising prices, and they lost one of their biggest commercial contracts. And worse yet, there's thousands, if not tens of thousands of dollars every single month having to go towards debt payments. Let's see if we can turn this thing around.

Alex, how's it going, man?

I'm good. How are you?

Good, man. This shop is awesome.

Thank you.

Relatively new or just new concrete.

Nice to meet new concrete.

Okay, cool, man.

Good to see you. I'm Alex Krugin. I own Faith Law and Property Maintenance. I've been in business since 2018. This is my third landscape company I have owned.

So all these bays are yours.

Then we have the three here.

Okay, Three.

Okay. And then we have outdoor storage like a mile from here. Yep. So we just pay for the. The one parking spot. And we've got, you know, our four plows here. We got one over in the shop as well. We tried keeping some of the equipment outside when we first moved in at the other shop and at the main shop, and that just. It didn't work out. We had issues with the landlord and.

Then with the rent. Did that include the office space too, then?

So that's an additional. Oh, it is. Okay. Y. That's included in that 3200 is.

Oh, that's great.

Is the office on these two?

Okay, great. Well, did you get everyone rolling out for the day?

Pretty much. So last couple of trucks rolling out and.

All right.

You missed the drama this morning. We had to let somebody go this morning.

Really?

Always fun, but man, I'm sorry. That's all right.

All right, so full disclosure. When we do these turnarounds, we are there to do coaching and try to do some interviews, get some shots of the crew. But this is all in a matter of just a few hours. You'll see at the end of the video, like, it just went in a very different direction than we thought.

And.

And it's a little bit crazy. You want to go in the office?

Yeah, let's go up front.

Let's do it.

We'll try. Come on in.

Dawn. This is Mike.

My name is Dawn Lear. I've been doing spreadsheets, all the invoicing, payroll.

How long have you been here for now?

A couple months.

Okay, cool.

Very cool. And were you working in another lawn care landscape before or.

I was at a landscape supplier. I've been doing spreadsheets, all the invoicing, payroll.

I look at the P and L and kind of like what things are going on. I know some of it you said, hey, I'm not for sure if all of it's not necessarily on the books or organized. Like, half of his P and L is just debts. John Deere Payment 1. John Deere Payment 2, 3, 4, 5. From your point of view, what's the biggest kind of struggle right now?

Cash flow.

Okay.

Cash flow is definitely the biggest struggle. Like this week is a payroll week, and it's like 10 grand in the bank. There's going to be $20,000 in payroll. And it's just every pay period, we're always struggling to come up with payroll. We always do two, three thousand dollars left in the bank account after. After payroll. And it's just like scrambling for two weeks just to get everything built back up just for another payroll to hit. I've heard a couple people complain about how the payroll is going. A couple people not getting their W2s, getting the direct deposit right hand checks. And it's just like the time we build, actually build up. Any money really is in the winter when we go through Christmas lights, we have our Christmas light money. Our labor drops way down in the winter. And then we do pretty dang well on snow. If it snow, if we do pretty well. First hardscape project, huge one. First big hardscape project. We're doing half million dollar hardscape. The hardscape division is called Treasure Treasured Earth. So when I bought Treasured Earth, we're in the last two weeks of that project. So we're cons were five grand a day in plants, then landscape lighting. We're just shelling out cash like crazy. I don't use credit to buy material. And they still owe us 50,000 puts. Another 30, $85,000.

You know, you've got to spend the money in order to make the money, but you got to have the money to spend. So I think he had a conversation with that homeowner last week about, you know, we've got to buy all these plants for you. You've got 700 and some plants in your yard. It's a lot of money.

So that money's still hanging out there. We have another, we do some subcontracting for another landscaper. He's out, you know, 20 grand and then we have probably another 30, 40 in just regular receivables and mowing. Then we have some Christmas light money that's, you know, we've started doing our Christmas lights for the year. So we've got 50 grand of Christmas light money that's hanging out there. So we're well over six figures owed to us. And it's just, it always seems like there's a crap ton of money owed to us, but we're just, we can't quite grab it to get there. And that seems to be always the hold up is getting the bills paid. The money's out there, but it's just not in the bank account where it needs to be. Between employees, the bad employees. I have so many good employees too. But between the bad employees and the money, it's just what completely just ruins business.

The other problem on the balance sheet is just the debts. So give me like a rough breakdown. I'm going to go ahead and guess I didn't get a balance sheet. So I'm going to guess it's like 30 to 40,000 on like short term debt that is like high interest that needs to get paid off a little bit more. Okay. All right. So around 50,000 for that?

About 50,000? Yep. Okay.

And then for equipment.

Man, I don't.

Know, about 400, 400,000, 50,000. We're right around half a million dollars in debt. So that's with all the equipment and a couple of short term loans too.

And that's because mostly the trucks.

Six, seven, eight, I think there's 13 total. Seems like, every time I turn around, you're putting five to ten grand into a truck. And that's just, you know, like, we just got done putting 10 grand into bucket trucks last week, so now it's just like, okay, well, now we got plants to buy and we have payroll to do. And we're.

Is the bucket trucks for the Christmas lights?

Yes. So all the Christmas lights, all our Christmas stuff that. This is all stuff that just comes down and goes up? Yep, every year. But a lot of our stuff is, like I said, stays up.

And what percentage of the lights is most commercial? Commercial and musical.

It's like 75%. The bucket trucks are just so darn expensive. I mean, what are they, 100 grand their new ones? Like, 140, dude. Not gonna lie.

That's pretty sick.

Oh, it's awesome. I mean, that's. That's the newer of the two trucks. So we got. We bought a 2011 three years ago, and it's, you know, 60 grand still for a used truck. And there's only one guy in the state that works on bucket trucks. Oh, mercy. Oh, yeah. Two, three days fix. All right, cool. Four. Four weeks later. And he's like, I'm sorry, man. You know, trying to get parts and this and that, and it's just like, okay, well, we need it, like, next week. So a couple trucks that are a little bit older. One of the bucket trucks has paid off the other one. We still owe probably 40 on that. I mean, look, four new trucks in the last year. You know, it's 50, 60 grand a pop. New skid snow raider walk behind mower that no one's used. Six to eight months left on the John Deere. Equipment, trucks, mowers. So we bought six new mowers last year. I'm aware of some of the financial decisions that I didn't agree with. We just don't have time because we were aware of our routes, and we were like, we can't use this. So now it's sitting at the shop. I probably went a little crazy with purchasing new equipment. We probably should have been a little more conservative and gone with some used stuff. But stop spending money, stop spending money, save money, stop spending money, save money. Like, it is that simple. It's that simple. We're spending right around $40,000 a year on repairs on trucks.

Between the $50,000 kind of shorter term debt, 400 to 450.