The Confession Booth With Mike Andes | Episode 1

Everyone, it's Mike Andes. Today we are doing a call-in show, but we are putting a little twist on it. We're calling this the confession booth. And so if you have a question and you don't want anyone to know who you are, this is the call-in show for you. And so we already have a few people in the waiting room here on the livestream. But the objective here is, I know, like, we have this little funny catchphrase of spill tea anonymously. And that's really what the objective is. When you call in, you're just going to be in the queue. You'll hear a beep if you're the next one in, and your voice will be garbled up. So we'll use AI to scramble your words in terms of no one will tell— be able to know who you are. I will not say the first 3 numbers of your phone number, so no one will know who you are. Don't say your business name. You don't need to say your name. You don't need to share anything that you don't want said. But it will be anonymous. And so the objective here is— I have seen lots of call-in shows, I've been a part of call-in shows where I ask questions, but it's challenging because you're trying to synthesize it through the fact that there's interpersonal relationships between employees, customers, your family, and you know that they're going to potentially see this or hear this, and sharing some information could get you in trouble with them. And so by anonymizing this, our hope is that we can actually deal with some harder problems that you might not ever talk about on a live show or bring up on a regular Q&A. So we are going to have the live call-in show be much more anonymous. So your name will not be mentioned. Your phone number will not be mentioned. You don't need to mention your business name. You do not need to mention your name. Nothing, nothing like that. The phone number here is 361-733-3332. And we got a few people in the waiting room already. So if you do call in, just hold on. You'll be able to hear my voice and you'll be able to hear the livestream. And then when you are live in the waiting room, you'll hear a beep and you'll be able to start sharing your— let's just call it confessions. Okay. So without any further delay, let's go ahead and bring in the first caller. I will not be saying their first few numbers of their phone call. So first caller, go ahead.

Hello? Can you hear me?

Yes, I can.

Okay. Uh, thank you. So yeah, I'm just calling in. We run a, we run a lawn care business. Um, and I don't know, like we scaled up to, to like just over a million the year before.

And is that 2025?

Yeah, yep. And this year, like, we're shooting below that. I don't think we'll make it back up to a million this year. Probably only gonna hit like 800, um, maybe 850, depending on how snow goes. But Mike, I wanted to ask you, because like, even though we've, uh, we're expecting less revenue this year, like, it's just been so hard personally with how it's scaled up, and I don't know, there's just been a lot of drama with me and my family. We're trying to balance the business and then home. Do you have any advice on that?

What specifically? When you say there's drama at home, is it your spouse, is it kids? What's going on? This is kinda why we have the show, so.

Yeah, well, I mean, I would say it's between me and my wife. Like, I'm just— I'm working so much on the business, um, because it's just, you know, it takes up a lot more time. And like, there's just been a lot between— like, she worked in the office with me for a while, but then like she, she had to step out. We had to get a part-time person in here just because it was too much for both of us to be in this all the time.

And how long ago did she step out?

She stepped out like 2 years ago.

Okay. Probably. So this year, the revenue dropping from $1 million to $850,000, do you think that's a result of you being distracted with everything going on at home, or is that some other force that we're not talking about, like marketing or crew members or some other issue?

No, I, I do think that's on me. I think that, um, I'm a little distracted. I'm just, you know, I'm trying to get home and like be there for dinner. Then like we have kids, so like trying to make it to their games. But yeah, it's just, it's hard to do both. And even though we've like, we've tried to scale back a little, It's just, I don't know if we've gotten any less busy. If that makes sense.

So when she stepped out of the office, was it just because of friction because of the two of you, or was it because of financial issues?

Uh, I mean, there was, I would say we just didn't work good together. I would, yeah, I would just say that we didn't work good together. And it just, you know, it's like, it was just work at home and work in the office. We just couldn't get away from it. Yeah.

How many years have you been married, by the way?

Yeah, we're going on 6 years now.

Okay.

About 6 or 7.

What is she expecting to change? I'm assuming the business has grown a lot and a lot of your time and attention is on that. Now she's wanting you to focus back on the family. Spending time with them, has it been like a matter of as you've grown, it's always been like the carrot is like just a little further and you've been growing, growing, growing, and now this year kind of hit like, is she threatening to leave or?

No, it's just so, it's, yeah, I guess like as it's been growing, like we just expected this thing, you know, we could grow it up. We were trying to get to a million in revenue. We hit that. And then we were expecting to be less involved in the, you know, the day-to-day, have a few team members that could like step in and take things on. But it just seems that like, as we've kept growing, like when we hit the 500, hit a million, it was just more work. It was just, you know, like it, it never got to where we could like step away from the business. We couldn't go on vacation.

Mm-hmm.

Okay.

So I agree with you that right now the stuff at home is probably the thing distracting you from the business. But I think we need to solve the business problem so that you can have more bandwidth at home. And so I'm going to work backwards because I'm sure there's a lot of other things with the personal relationship and the marriage that we haven't talked about that would probably be better with, you know, some sort of counselor or therapist or something like that. But like, let's start with the business. The reason you're spending so much time working inside the business and feel like you can't get home and can't get time off after so many years of building this thing is— I'm going to go out on a limb and say you're working crazy hours right now, like sunup to sundown, 7 days a week.

Yeah.

And is that— is that the thing that gets her mad? Is that the thing that makes her frustrated?

I mean, definitely. Like There's weeks that are slower, but I mean, especially now with it being spring rush, like it's just, we've gotten so busy, and it's just hard to find enough people that are trained up to fill the schedule, so I end up having to jump in here and there, and then I got X-Men afterwards, so yeah.

Okay, so I think the first thing I would wanna establish with her is what does success look like for her? Because otherwise, I feel somewhat nebulous in terms of what we're chasing. Like, is it the fact that she wants you off by 5? Is it the fact she doesn't want you working on the weekends? We need rules of engagement. And so, like, for my wife and I, we created what we called the Constitution. That's when we first got married, after it was like, hey, we had our vows, but like, here's the things that we expect from each other. And I would recommend getting really clear on this so then you actually have a goal to push towards instead of just being like, I need to work less. Because it's a slippery slope into you resenting her and her resenting the business. And so I would first have a conversation with her. So I'm gonna put wife convo. And it's a matter of what does success look like? And that is, do I need to be at home for dinner and what time is that? Do I need to be off on Saturdays and Sundays? What is the thing that she's trying to solve for? Like right now I've heard, like she wants more time with you, she wants you home more present, et cetera. But try to get definition around that because then what we're gonna do, is we're going to go raise prices and stop chasing growth. And correct me if I'm wrong, but like, I'm going to assume the year before a million, like 2022, 2023, 2024, I'm going to guess you were like growing very quickly. Like, what were the years of revenue from like 2022 to 2024?

I mean, I guess, yeah, we were, we were, we, it was, it was a big year. We picked up a few trucks and we probably went from like $500,000 Maybe, maybe $600,000 up to that kind of million-dollar mark.

Yeah, so you've been in growth mode, and growth mode puts strain on every system of the business. It sucks cash, and it also puts a lot of demands on you as the owner to be there at this size of business. And so I would highly recommend getting off that treadmill, and the reason that you feel like this is a down year is because you've gone down 15% in revenue, but that's because of distraction of what's at home. And to solve what's at home, We need to be able to have more bandwidth. And in order to have more bandwidth, you likely need an operations manager. You need someone like the unlock from you going from, let's just call it from a growth perspective, $1 million to $3 million is finding someone that's good at operations so that you're not fighting fires with your crew and with bad customers and jobs that go south. And so right now, how would you just bring someone up? How much would you, how much would you have to pay, do you think, for an operations manager? Like in your market, would you have to pay $80, $90 grand? What do you think you have to pay?

Yeah, I mean, at least $80,000.

Okay.

At least.

Let's just call it— let's call it $80,000. Okay? So, we're going to go and we're going to get an ops manager. And we're going to assume they're going to cost $80,000. Now, here's the thing. How are we going to afford that? You're going to raise prices by 15%. And if you raise prices by 15% on $850,000, you will pay for this operations manager. And so first we have to get clarity around what is the goal. Is it time off at a certain time of day? Is it getting home and having supper? Is it getting to the kids' events? Is it having the weekend off? We have to establish that so that when you create the job description for your operations manager, you actually incentivize you not being called after a certain time, you not being drawn into a project on the weekend. Um, that is in the job description. It's tied likely to their incentives. So their base pay might be $80, but they can earn $90 if your phone is not ringing after a certain time, for example. And all of this is going to be paid because you're gonna raise your prices. Now, the reason that you haven't raised prices is 'cause you've been chasing growth. And you've been in growth mode for so long that you can't even fathom the thought of raising prices and potentially hurting top line revenue. But ultimately, this whole business, 100% of it is in jeopardy If this goes wrong, because if, and this is like, this is why the confession booth is like, literally, this is why it exists. The fact of the matter is if this issue that's currently happening at home spirals into more than what it currently is, which is a little bit of friction, and like, but her having to leave the business, and then if she ever left you, that's 50% of the business walking out the door, and it's likely going to tear this whole thing down in a court. In an illegal dispute, and I'm protecting against that. So we are prioritizing the personal relationship. It's already hurt the business by 15%. And so if you're afraid of raising your prices and losing 10 or 15% of your customers, like, er, no, news alert, you've already lost 15% of your revenue because of the issues at home. And so I would highly recommend having the conversation with your wife, determining what success looks like, asking for 4 to 6 weeks of grace and then giving her the plan of, I'm going to go hire an operations manager and raise my prices. And you will lose some customers. But I promise you, the current trajectory of losing 15% year over year because you are personally tapped out and you don't have the support of your spouse, which is probably going to lead to even a lower year in 2027 if this continues, it's going to get worse, let alone putting the risk of losing all of it. If this really spirals out of control, we have to prioritize that first. So I appreciate you calling in. I think for anyone listening, now being married for just about like a year and a half, it is incredible the delta of discretionary effort that I can put towards work when what's going on at home, we're good. And so even though the business is the beneficiary of the stress, It is the beneficiary of all of this downstream distraction. It is just showing what's at home. And so we have to get the support of your spouse. I can't stress this enough. I know most of my audience is young guys. Having the support of your significant other, whether it be girlfriend, wife, et cetera, is everything. And so if you optimize for that, a lot of times the business will take care of itself because now It is so powerful when your spouse is telling you, "Get out there and go," and pushing you onto the field versus trying to pull you off. And a lot of times that is because you have not aligned the incentives of the business growing with what they want. And for a lot of us guys, I'm talking to you for a second, myself specifically, my goals are to grow the business. My goals are to build the company, grow top-line revenue, make more money. She could care less. And so whoever this was just called me, I'm gonna go on a limb and say your wife isn't any more proud of you at a $500,000 revenue business compared to $1 million compared to $5 million. She just wants you to be at home. And so we have to make the business growing align with I will be at home. And for a lot of us, it's this constant carrot of like, well, if we just grow one more year, if we can just get one more truck, if I can just get, if I can just add this new service, if I can go into this new area, if I can just figure out this marketing channel. And so your spouse gets worn out year after year after year of constantly being told it's about to come. And the reason it's about to come always is 'cause you're on the growth treadmill. And so get off of it by raising prices and being like, maybe an $800,000, $900,000 annual revenue business is actually what you need to serve you and your family the most. Not a $5 million business. That's fine. If you could take $850,000, raise your prices, and I happen to believe you probably won't lose as many customers as you think. You're gonna raise it on existing customers, you're gonna raise it you're gonna raise it on existing prices for projects upcoming. If you do that, you can afford a very qualified operations manager. $80,000 base, I would put that ramped up to $100,000, and those incentives would be tied around profitability, and then them not calling you. You're like, I can't afford that. You're going to raise prices, and if you raise prices by 15% on a million-dollar business, that's $150,000. you will afford the operations manager and have extra profit left over. All right, we got callers coming in. Next caller is live. Welcome to the show. Thank you for coming on. This is fun.

Hey Mike, thanks for having me on.

Yeah, what's up?

Yeah, so I'm having a little bit of a problem, um, with my business, my family's business. My father, he started a landscaping and hardscaping company about about 22 years ago. I grew up around the business and about 5 years ago I joined on as an operations manager to kind of take over the operations role from my father as he was trying to transition into retirement. And, you know, our initial plan was 5 years ago was to have him kind of step back from the operations role and have me step in. But it's just been a little bit hard as I feel like I've had the title of operations manager, but he hasn't given me any of the responsibilities yet. You know, when people, when our employees come to, when they have any questions, they always go to my father instead of coming to me, and I feel like I just have the title but not actually any of the responsibility. So I was trying to get your advice into, you know, what I can do to kind of step more into the operations role itself in terms of responsibilities and not just have the title there.

Okay, so just so I'm on the same page. When you started with your dad, how long have you been in the business, like working in the company?

Yeah, so full-time I've been working in the company about 5 years.

Okay.

Obviously I grew up around the company, but full-time it's been about 5 years here.

Okay, and did you immediately start with the title of operations manager, or did you start out in the field with the crew?

Started out in the field and then kind of worked my way up. After about 2 years there, into the operations manager title.

Okay, and why does your dad think he needs an operations manager? Like, he's run it for 22 years the way it is. Has it grown a bunch, or is it just like he wants out of the business? Does he want to hand this off to you one day? Like, why is he even bringing you up in this role?

Yeah, so the original plan was to bring me up in this role so that way my father would eventually step out of the company. But he just has been having a really hard time letting go of the operations side of the ball and stuff. He essentially is looking to retire and just be an owner of the business and not actually be involved in the day-to-day, but he's just, he's been doing it so long, it's been hard on him to actually take that step back.

Okay, and when you say, like, is he, are you guys stepping on each other's toes a lot? Is he coming in and like, when you say something, is he going and telling the crew something else? Or is he like, checked out of the business? Like, what's his involvement in the day-to-day?

Yeah, he's still very, very involved in the day-to-day. Um, he does go, uh, kind of behind our back and, like, talk to the crew. Um, like, if I— if I'll say something, you know, he'll kind of say something else. Not necessarily always intentionally. Sometimes he doesn't realize that I've kind of told the crew something. But, um, yeah, he, he oftentimes, uh, he's very involved in the day-to-day still, even though he, he said to me 5 years ago that trying to step out and have me step in, but it just hasn't been happening.

Okay, so first off, do you have any equity in the business, or is this 100% him and he's just like, hey, down the road I will hand it off to you?

Yeah, no equity currently. It's him and then down the road he wants to hand it off. That's the ultimate goal that we're trying to work towards.

Okay, so you're working towards, but do you guys have any like actual plans for this? Like, do you have a timeline? Is it like 2030, or is this just like, hey, down the road at some point you'll get the business?

We were hoping that would be by now, that I would have fully stepped into the operations role and been able to lead the teams and the crews, but that hasn't happened. All the crews too, when they have any sort of questions, if there's any question that comes up on a job site, they always just go straight to him instead of going to me, and that's been kind of a key issue. I just, just feel like I have the title, but I don't actually have the responsibilities and the values of being a leader yet in the company.

Right, okay. And what was the revenue? I missed that part. How much revenue are you guys doing a year?

Oh yeah, we do about $1.4. Last year we did about $1.4 per year.

Okay. Alright.

Million. Million.

Okay, so I would highly recommend— I feel like your dad, if you guys had talked about it and you guys had agreed that, hey, we want to by this time, 2026-ish, have you taking the business over, I'm gonna go out on a limb and say he's also frustrated. That it's not happening, and he might not be voicing that. He might actually be somewhat thinking the exact— he could very well be on the next line of this being like, I can't get this handed off to my kid. And so I would highly recommend having more role clarity. Right now he is kind of jumping in, as he probably has for the past 22 years, between sales, operations, and admin, but he's asking you to do operations and If you're the operations manager and yet when your crew has a question or wants something, they come to you, you say something, and then they just go to someone else, like, that's, there's no role clarity. And at 1.4, this will keep you at this size forever because he's still the hub that everything is tied to. The crew, decisions from you, I'm guessing he doesn't like let you make decisions autonomously. And so I would highly recommend sitting down with him I'm like, "Hey, Dad, there are 3 departments in every business. Sales, get the work. Operations, do the work. Admin, get paid for the work. We've got to figure out all the things that you do and I do every single day and put them into these buckets. And if it's going to be a split 50/50, we've got to determine who's taking over and is their name is next to that role in the business." And so, for example, for me, when it comes to operations, my first question is, when someone wants to call out or calls in sick, for example, who do they contact? And that is the operations person. The person that gets contacted when the crew's not showing up. And at 1.4, that's not multiple people, that's likely supposed to be you in terms of getting the work done, 'cause it affects you. It doesn't affect getting more work, it doesn't affect getting paid for the work, it affects you getting the work done with your crew. And so I would take everything you do in a day, everything he does in a day, and then just put it up on a wall and be like, Okay, sticky notes for every single one. We're gonna organize it into sales, operations, admin, and we've gotta determine who's doing what. Like right now, do you do estimates at all? Are you just out in the field with the crew getting the jobs done?

I'm just with the crew. I've done a couple estimates. I've also tried to raise prices for a couple of our customers, but my father, he just went behind my back and apologized to all the clients that I tried raising the prices on. We've been kind of butting heads in terms of the actual operations a little bit, Essentially, you know, he's very old school in the way that he runs the company, and I'm trying to modernize it a little bit. But yeah, I'm still doing, doing some estimates as well there.

Okay. Yeah, so like I would have this conversation with him. Even the fact that like raising prices is a two-person decision in this company at this size isn't necessary. Getting paid for the work is an admin's role. So whether you have an office manager or you have That has nothing to do with operations. And so I would focus on getting role clarity between these 3 departments. Now, when you have a $5, $10, $20 million business, this starts to get sectioned off. And outbound sales, inbound sales, operations starts looking very different based upon certain type of services. Admin starts having different sectors of accounts payable, payroll, et cetera. At your size, it's likely that this is a 1-person job for sales, a 1-person job for operations, and a one-person job for admin. And we gotta get clear in terms of all functions of the business and then assign that function to a role. And right now, when I hear there are price increases that we are having disagreements over, I hear probably your dad that usually does estimates over here. I see the operations manager over here. And of course we're gonna have disagreement 'cause no one's clear on who's responsible to get paid. And so, I would have this conversation. I'd get role clarity. I remember doing this and I was stepping all over the toes of my office manager at the time, which was Liz. And we had a 3-hour conversation and we wrote down the 40, 30 or 40 things that I did every single day. And we just started delegating it, like everything from opening up the gate in the morning to opening up the shop, like unlocking it to at the end of the day, like who would close up the cash register. Every single thing I did, we just listed it off. And then just started delegating it. And it had to fall into these buckets of sales, operations, and admin, because I just, otherwise, I was in the email, she was in the email. She was answering the voicemail, I was answering the voicemail. Then customers get contacted twice. Then I get frustrated, 'cause I'm out doing estimates and I'm also in the email inbox responding to people. You have to have role clarity, otherwise it will inevitably create friction inside the relationship. Whether it's father-son, whether it's spouses, whether it's just coworkers and employees. If you don't have role clarity, especially at $1.4 million, It will not grow, and furthermore, you will just constantly be colliding into each other throughout all functions of the business. What type of customers you get is one person's responsibility. I don't need to be balancing— it slows the whole organization down when I can't just make decisions as a salesperson. Operations, I shouldn't be bringing 3 people in about the fact that someone is late to work, or is gonna get a performance improvement plan, or that a customer's job went south. A customer's job going south is the last thing you want your salesperson to hear. Your admin doesn't need to deal with it. That's an operations manager's job. And so having role clarity, and it's likely that underneath each of these there are 10 to 20 different tasks that just need to have clarity of who's responsible for what, and then putting the name of the person that is responsible for these 3 functions. Now if you're a smaller business and not doing $1.4 million, whoever that was calling, if someone else is listening, and you're doing $300,000, $400,000, you're not gonna have one person for each of these. But as you grow the business, especially past $1 million, we have to have role clarity. Otherwise, it's just constant war with each other. 'Cause we're stepping on each other's toes all the time. Your office and admin person is trying to be in the email and answer voicemail, but you're bouncing in there on the weekend messing them up. And you're supposed to be focused on getting more jobs. You're supposed to be focused on training the crew. And so, if you're smaller than 1.4, I'm gonna first delegate this task admin, then I'm gonna delegate operations, and then as I pass that $1.4, $1.5 million, then I focus just on sales. But just make sure that when you delegate it, you really actually let it go. You're not bopping in on the email on the weekend. You're not checking the voicemail. When you hand off operations, you don't do what the father of whoever just did this, like, oh, I want you to be my operations manager. See how discouraged his son is? Like, if you, again, I'm just trying to make this relevant to everyone else listening. If you have an operations person or a general manager and they're responsible for the crew, Don't go around their back. If an employee comes to you after you know they just got an answer from the GM or from the operations manager, you back up your operations manager and tell them to go back to the operations manager. And you say, hey, did you already run this by so-and-so, the operations manager? Oh yeah, okay, whatever they say, I'm going with it. And you say, well, what if I wanna add to it? What if I actually disagree? It doesn't matter, 'cause as soon as you inject and you jump out of your role, at this size of business and you jump into operations, you have handicapped forever your operations person. And that is far more detrimental, handicapping another role inside the organization, far more detrimental to the business and the growth of the business and the culture of the business compared to like one job, one customer, one instance going wrong. You can always go behind a closed door and talk to your operations manager, but don't have the people that are reporting to them come around them to you and then you give a different answer. Very detrimental to the culture of the business. I'm absolutely in love with this show. Alright, we got more people in the— oh yes, thank you, I appreciate that. If you want me to come out to your business and do this in person, and you don't mind, like right now this is anonymous on the— what's this show called? This show is called the— I'm already blanking.

Confession Booth.

This is the Confession Booth. Thank you, Jace, in the back room. This is the Confession Booth. But if you don't mind it being more public, I will come out in person, see your operations and actually do all of this with you. You can apply on the Turnaround Show right here. Go down in the description of this video. There is a link. Takes you 5 minutes. I'll come out in person. It's completely free. But if you would like me to see more in depth of your actual operation with your team, how you do things, I'm happy to come do it. Just apply. It takes you literally 5 minutes. You submit a quick video. We have filled both spots in May. We now have a couple spots in June coming up. All right, let's go ahead and go to our next caller. We got a few more in the waiting room. Thank you all for being patient. You're on, you're live, go ahead.

Hey Mike, how you doing?

Good, how you doing? Thanks for coming on. Welcome to the Confession Booth.

Doing well, thanks for asking. Good to be here, good to be here. I have a pool cleaning and maintenance company. We do around 620 a year. Um, you know, I got around 6 techs, uh, and I got a dispatcher, an admin person. So wait, is that 2 people going pretty smooth?

The admin person, do they— did you dispatch? Just one person?

Uh, one person, one person. Yeah, sorry about that.

You're good.

Yeah, uh, so essentially, you know, we've been having some slip-ups due to quality, and, uh, primarily I try to put some, some things in place to, you know, kind of tighten tighten everything up. And, uh, I have a, uh, senior tech pushing back pretty hard against me. You know, he's been with us for about 4 years. He's a great guy, the guys really love him, but, uh, you know, I'm, I'm thinking he's kind of doing some shady stuff behind my back.

Like what?

Well, uh, last week I, I found out he was texting some customers saying if, if they ever need anything changed Do we lose him?

I think we lost him. Oh, you can call back in, see if we can catch him. Okay, so while— let's try to get him back on if we can. Um, okay, so we have a pool business that's doing $620,000, has 6 technicians, 1 admin person. Sounds like we have a rogue employee. Um, let's try to get him back in. I don't know who that was, obviously, but if you guys can get him back in, I'd like to just continue it so it doesn't break up the show. Um, okay. Um, are they back in the show here? Can we pull this one in? No? Okay, well, hopefully whoever that was can call back in. Okay, is that it? Hello? Can you hear me? Is this the Pool Man? Check one, two.

This is not the Pool Man, this is the Grass Man.

It is? Okay, all right. Well, we'll come back to the Pool Man. Uh, go ahead, welcome to the show, thank you for coming on.

Hey Mike, this is— can you hear me?

I can hear you.

Am I the right one?

You don't have to say your name though, you're good.

All right, I ain't gonna say my name. Uh, here's what I'm going through. I have gone through two general managers in the last 6 weeks. Both of them started the season with us, excellent employees. I asked for a year-long commitment from them because we were going to take on some large contracts. Um, both of them gave that, and then within 4 weeks of each other, so they're quitting and going off to do something else. And so that means I am looking at stepping back into the field, um, and I'm curious, what can I cut out so that my business does not suffer so much? We do mowing, we do fertilizer, weed control, and then we make a little bit of money on the upsells and other services. But if I can no longer be in the office selling those on a regular basis, the upsells are gonna suffer. What is my solution? And the other thing is, how can I stop losing general managers at such a great speed?

Okay, are these two different locations, or did you burn through one GM, hire another one, and burn through them?

Burn through one GM, and hired another one, and then he, 2 weeks after taking on the GM position, said he's gonna be leaving here after a number of weeks.

Okay, and again, this is anonymous, but like, did they say why they're leaving, or they just like, "Hey, I got another job," and they didn't really give you anything clear?

The first one said, "Hey, there's no future in grass cutting. There's no future in lawn care," which tells me that I didn't do a great job of painting the vision for him. The second one, really has not given a reason as to why he's leaving.

Okay, so two things I would do is whenever someone says there is no future, I love the fact that you took ownership of like the hiring process. The other part of it is though, like you've technically won that game of, because you got them on board. So there's hiring, then there's onboarding. And I think what you're currently struggling with is the onboarding ramp. And so there needs to be career progression once someone is inside of a role that does seem monotonous. And for example, when it comes to home services, I'm assuming like, are they managing like 6, 10 employees? How many are they managing?

He's managing 6 employees, yes.

Yeah, so like when you're managing 6 guys and you're doing the type of services you are, there's not a huge amount of variety and newness between days in the week or weeks in a month. And so it can very much become like their first couple weeks they realize, oh, this is gonna be the same thing all the time. So the first thing I would do is reset expectations during the hiring process. Most the time when someone leaves in the first few weeks is a mismatch of expectations versus reality. And that could be expectations around the compensation, that could be expectations around their role, that it could be expectations of what their day-to-day looks like. And so getting really clear with the expectations of what the job actually feels like is important. This is why for us, a lot of times when I hire a GM, I want them in the field first for at least a year before I move them up into management. The challenging part, sometimes you can have an excellent manager that doesn't want to be out in the field. At 6 technicians, I need my guy, my general manager, okay with being in the field a little bit. And so I would reset expectations during the hiring. Go ahead.

Both of them have been in the field. One was 5 years— in the years for 5 years before he became the general manager. He was my one of my first hires, uh, and the other one has been in the field for 2 years. So I— they know what they're getting into. They're working GM alongside myself. I just couldn't handle all the employee phone calls and doing sales and, you know, client calls as well. So I was trying to I guess technically you could call them an operations manager over a GM, right?

Yeah.

Like, but I was trying to get them more into the GM role where they handled sales and stuff.

Got it. I will say this. If you— this could actually be the reason then. If you're pushing someone to do sales and they've been in the field for 5 years, they almost always will push back because they're so used to— and obviously for 5 years as they've been in the field, they're okay with the work. If you're pushing them to do something that's completely out of their wheelhouse and makes them super uncomfortable, that's when they're just like, I can't do this. And they don't— they might not say that to you, but it's fact that for 5 years they're okay with the, quote, monotony of doing the actual physical labor. When you put in front of them the progression to have to do sales or those office and admin work, they've never done that before. And so I really like the idea of like, this is more of an operations manager role and you don't have to do sales, you don't have to do admin. That might mean down the road you hire a virtual admin or you take on sales or you try to automate more of your sales, especially around pools. Sorry, it is not pools, sorry. Especially around like if you do fertilization, lawn care, you can get a lot of this to be like instant quote, over-the-phone estimates. I would push that really hard so that you don't require them to have to do sales.

Mm-hmm. What should I be— in the fact that both of these fellows are leaving that uses up my queue of solid people to put into that role. So obviously I will have to step back in. What should the business look like for the rest of the year?

Yeah.

Can you convince them? We need to focus on mowing and fertilizer weed control.

Right, can you convince them to stay on as technicians or like they're gone?

They're gone, they're gone. One of them's committed to another project that starts August 1st. Mm-hmm.

I think for now, I would definitely hire technicians. I would make sure that you step into the role of GM, which is doing operations and sales for the time being. I would focus— if you have to cut anywhere, yes, I would focus on the recurring revenue side to prevent you from having to be in operations as much, because operations with one-time projects is far more intense. I would then start restructuring the business to automate sales as much as possible and automate admin as much as possible. I.e., get it off the plate of the future leader of the business. Because I happen to believe you're really solid leading your crew, and it's evidenced by the fact that you had someone stay with you for 5 years. What is happening though is they're being brought into a, quote, GM role, and they are feeling like they should be getting an easier job, it should be better, and then they're hitting with the reality of you gotta pick up the phone and do upsells. You gotta go do estimates, you gotta meet and talk to customers, and that's something they are not comfortable with. You gotta pick up the phone. To some of them, it's more— a lot more scary than going back to a customer's house after a yellow slip or a callback.

Right, that makes sense.

I know it's not— it's not a fun one, but I think— I think after— after you— you take a step back, you put yourself back in the operations and sales side of things and get some solid technicians out in the field, I would just focus on a year of how do I simplify this business? How do I make sure that most, as much as possible, is recurring? If I do that, I can then make sure that the sales and the admin is more streamlined, that can be farmed out, delegated, or put online via like instant quotes or over-the-phone estimates. And then I'd be taking one of my technicians and moving them to a role where most of their job is managing the team. 'Cause that's something that is very hard to automate. Like, no one wants to have their one-on-one meeting with a robot or with AI. They want to have a manager. And so you're trying to replace yourself there, but you're also asking them to do sales and admin, which they are not comfortable with. And so I do not require, when I've built a location and I'm handing it off to a GM, I do not want them to have to do, like, switch from doing the work to, like, selling tons of jobs, doing follow-up phone calls, because the likelihood of them going and doing their own thing, they're entrepreneurial. If they can do that, if they can start up and spin up a business and grow it fast, That's a very, very talented, very expensive person. If I can build a location though to the point where it's mostly recurring revenue, I'm able to get sales basically automated or over the phone, and they get sales and admin to be farmed out, delegated, hired elsewhere. Then their main job is to manage the team, hire, train, and make sure the work gets done. Operations. And I want to keep them out of sales and admin as much as possible because they're not comfortable with it. And if you're going to go out and try to find someone that's good at sales, operations, and admin, you're looking for a unicorn and they exist. They're just expensive. You're going to have to pay 6 figures. You're going to have to pay 6 figures for someone that can grow a business, that can get all the crew online and you never answer a phone call, and admin to also make sure that emails are being handled, payroll is being handled. If they're going to manage all of that, it's a very expensive role. And so I love the idea of having career progression for your technicians to move into a general manager. Once they're there, I need more career advancement. So, you're like, well, what if they want to be able to do sales and admin down the road? I want this GM starting out here on level 1, and then maybe after 6 months, after a spring rush, they go to level 2. Maybe after an offseason of being profitable, they go to level 3. And each of these could unlock more compensation, but at least have a different stage or career progression for this GM to move up into. And maybe they even want to do sales one day. Maybe they want to start their own location for you. Maybe they would like to figure out admin and how this all works. Great. That would just be down the road. And what's happening is we are throwing them in at stage 1 with sales, operations, and admin far too soon, and it puts them out of their comfort zone and they're bailing. When in reality, if they stay with you for another 5 years, they might actually be able to do that for you down the road. But right now, their expectations of what a GM looks like is very different than what the actual job description is once they get started. 'Cause you're expecting them to do sales and admin, and that makes them very, very uncomfortable. And so either A, you simplify the business and you try to get sales and admin off of their plate so they can just focus on operations, or you get them started and then you slowly bake those other aspects into the business as you back up. There's no right or wrong, either one of those will work. Did we get the, okay, I think this is the pool guy's coming back. Um, I think this is the caller. Caller, is this, is this Poolman?

Yay! Hey, can you hear me?

Yes. Okay, can you bring us back up to speed? I don't know if you dropped out or what happened there.

Yeah, so sorry, I was going through some service there. But yeah, I, uh, like I said, I really think, uh, something shady is going on behind my back. Um, uh, just last week, uh, I found out that the senior tech Uh, have been texting customer from personal phone, and he can tell— he's been basically telling them if anything ever, uh, changes that he's there for him. Um, and, you know, uh, believe it or not, two of the younger guys were saying they might leave with him. So I'm just— I'm, you know, I'm— I can't— I don't know what to do, Mike. You know, I'm scared about firing the tech because I'm scared Some of the guys are going to run off with him and start their own thing. You know, like I say, he's a great guy. He's been around for 4 years. I just, you know, it's kind of hit me out of the blue and I'm just wondering what to do.

So for your pool business, the $620,000, is that almost all recurring revenue like cleaning or do you do installs and like repairs as well? A little bit of both?

No, we were strictly just a pool cleaning and a maintenance company. That's it. That's all we do.

All right, so if someone, if an employee is, have you confronted him about this or is this just like you've heard about it from customers or like another crew member tattled on him?

Well, you know, I've heard it from a couple other guys. I obviously don't wanna say too much, spill the beans out there or throw anybody under the bus, but you know, I've heard it from one of my guys that, you know, he's been kind of looking around and you know, I've actually gotten a message the other day from, another customer just letting me know that he's been reaching out and he gave him their personal number and that he's been there if they ever need any extra side work or anything like that.

Okay, so we are going to prepare for war on this one. When someone's doing that, they're basically preparing to tear down the business and they're gonna potentially take some of your team. We're past reconciliation. This is past like, let's have a conversation. We are going to prepare to let these people go. I.e., this one lead, all right? Now, we have this asterisk next to these other two team members. Like, first, what is he saying? Like, to poison these guys, what is he saying? The lead technician, like, is he telling these guys something weird?

Well, basically what happened is, you know, like I said, whenever I called previously, we've been getting some, you know, quality complaints, more or less, and I put a couple things in, you know, in, process there. Like, you know, say for example, I, I put in a, uh, you know, a, a plan to do some GPS tracking, uh, require some photos after the job's done. Um, I did say no cash side work after I got that text message, just being very clear. I didn't point him out or anything like that. I said no cash side work, and then I also said no skipping stops. And, you know, he, he kind of pushed back hard on that, and he said that, you know, he's been with the company for 4 years, he doesn't feel I trust him or the guys, and that's kinda where it all went down.

Okay, so I do think that if we were to replay this, how we position some of these changes to the systems of the biz, maybe we could have positioned that slightly different to the team and explained to them the why of why the GPS is important, why tracking things inside Software Xander, that's important, that's part of running a business. We've crossed that line and now you have someone sour against you, we gotta get the cancer out. The longer the cancer stays in, the more of these technicians he's gonna pull away and potentially put the business at risk. And so if I was you, I'd be trying to find a replacement for not just this person, but probably one other technician. Now, the good news is you got 3 technicians that sound like they, they've not really been poisoned by this guy. So I would be as fast as possible looking to hire 2 technicians. If you hired, so hire 2 techs. If you had these guys in your back pocket, you would immediately fire this person knowing you can get the work done. Now I understand he's like your top performer, he's been with you for a while, but when a culture has a cancer, you cut the cancer out and the rest of organisms thrives. And so I have seen it time and time again where I go into a bad culture or a culture in a cancer in our organization, you cut out the cancer and all of a sudden everyone gets like 30% more efficient because All of a sudden, they don't have to spend all their discretionary effort towards rumors and saying stupid stuff about each other or about the boss or about customers. There's not this underlying tension of what's happening inside the company. Is my job even safe? It's like you have to get rid of the cancer. You have to. Now, you're not doing it and you haven't done it so far because you're afraid that if you do that, you're not going to get the work done. The good news is you have recurring revenue. You don't have one-time projects that are time sensitive. And so I would highly recommend you fire this person. There's no conversation. They've already talked to customers, they're souring the culture. We need the cancer out as fast as possible. We have never fired someone where I'm like, man, I wish we wouldn't have fired them. There's never been a time 6 months later, like, I wish I had them back. So go hire the 2 technicians. Tell them, hey, I'm starting you on this date. So like, today's May 4th, you're starting— what is it? May 18th or 20th, give them 2 weeks. This is the date you're starting, and then you're gonna fire this person right before that. And if you have to let this person go before that, at least you know very shortly you're gonna get these 2 technicians to be able to get enough labor force to get the jobs done. Does that sound like something you can do?

Yeah, I just—

Go ahead.

I just don't know, you know, if I should— Give it, you know, a little bit of time as far as like a buffer to when I should fire him, or should I let him go immediately? Because like I mentioned before, I mean, I got two guys that potentially might leave with him, and I'm just trying to figure out, do I do it now or later? I just kind of feel stuck.

Look, I'm on board with cutting this guy today. I'm on board with that. The problem is, if these two guys leave with him, half of your labor force is gone, and you will likely have a huge detriment to the business. Now, I'm a fan of that. As I've done more firing, I have seen time and time again that ends up actually being the best move. I also am hearing you, and the reason why you haven't done this already, 'cause you know you need to do it, is because you're afraid that you're not gonna get the work done. And so I'm trying to straddle both by saying go hire the technicians, have them ready to go, and then go fire the person. 'Cause like, I would say no matter what, you need to fire them. If it's today or in 2 weeks, you gotta fire them. But I happen to believe you won't fire them today 'cause you're afraid they're gonna take 2 other guys and now you're stuck with 3 technicians. If you think you can limp this business along for 2 weeks with you and 3 technicians, I would do it today. You have to cut the cancer out.

Alright, that sounds good, you know. It's gonna be a tough one, but I believe I can do it for sure.

Alright, brother, best of luck to ya. I appreciate ya. Alright, we got another caller coming. First off, Love the show. Thank you everyone's called in so far. We got a few more callers in the queue, but if you would like me to come out in person, uh, this QR code or down in the description of this video there's a link. You can submit a quick video. I'll come out in person and do all of this. Now the confession booth that we have today is completely anonymous. Your name will not be said. You don't have to say your name. Uh, you don't have to say anything. I'm not saying your phone number when you come on. It's the confession booth. But if you don't mind me coming out in person with a camera, highly recommend it. But for today, sorry guys, the confession booth, this is the number to call. We are live. Let's go ahead and talk to the next caller. You'll hear the beep when you come in. Welcome to the show. Thank you for coming on. Hello, hello.

Hey, um, so I operated a landscaping company for about 2, 3 years. I was just doing around $100,000 a year. And then in March, I purchased another one. And so the revenue of the last— the one I purchased is around $500,000. And, uh, so it's a big jump. The problem I'm running into is I had to use up basically the rest of my cash to put the down payment down. Um, we're owner financing half of it. I purchased— I put up half of it. And, um, we bill out once a month. For all of our services. And then it takes, I mean, another 6 weeks for us to get paid. We're about 2 months in, and, uh, me and my brother purchased it with me. Um, we haven't paid ourselves. We've just been barely making payroll, but on paper we're very profitable. So I'm wondering, my question to you is, would it make sense for me to try and go to, um, like automatic payments, maybe weekly, um, and try and ask the clients if they want to do that? And if so, when's too early for me to do that? Because I'm worried about with the transition of purchasing this company, if I start changing so much up right away, they're just going to be scared and I'm going to lose a lot of clients.

Got it. Okay. If you don't mind me asking, what's the monthly payment on the acquisition for the owner finance?

So with the company and the shop that we're in, the guy that we purchased from owns the shop and he's renting it to us. Um, we're looking at around $18,000 to $22,000 a month. Yes.

So $18,000 to $22,000 per month as part of the owner finance deal.

Yep.

Got it. And when you pay that, because that's like a big chunk of your revenue, are you able to make like profit after that? Like you're saying you're profitable on paper. I'm assuming that's because—

we're looking at— we're about $20,000 $20,000 a month is about what we're profiting after making our payroll and making our debt payments, where we've got about $20,000 left over. But it's just, I mean, it's all accounts receivable. Okay.

Okay. So this is simply a cash flow problem. And right now, are you mostly doing residential or commercial?

It's all residential.

So, yeah, I would definitely switch to much faster than 6 weeks to pay. Because right now, if you're profitable after paying $18,000 a month in owner financing, you're running a really good operation. How much longer does this— like, the payment's going to be like another couple of years?

We should be debt-free in about 3 years.

Okay. That's quite a while. Okay. So, whoa. Okay. That's probably— you buy it for like $350,000?

Yeah.

Yeah. Okay. Okay. So you might have overpaid a little bit, but the fact is—

It came with equipment. It came with equipment. It was about $90,000 worth of equipment.

Okay, okay.

So I was leaving that out. That's why it was a good deal as far as the client base. The equipment came with it, that's why it was so much higher.

Okay, and so if you change today the payment terms from, hey, we send you an invoice and you pay us over the next 4 to 6 weeks, if you sent everyone an email today saying, hey, card is on file required, why do you think that would get everyone up in arms about that?

So our client base is a lot of older people. Most of them are retired. Um, and it's a lot of like retired communities. So, so many of them so far, we're about 2 months into this, and just explaining that we bought the company to them has been confusing and they've been struggling with the idea. We haven't lost any clients. Um, luckily I had done subcontracting for this guy for about a year before, so they know my face. Um, but they're just, they're still already just getting confused enough with us taking over. And so I'm worried that if I did start trying to change the billing process, we're just going to have people like, oh, it's too confusing for me. I'll find someone else.

Yeah. So I think the same way that you probably feared the confusion around changing the name of the business or did you even change the name or just like, hey, new ownership?

We did. Yeah.

So the same way.

I mean, even just that was so much.

Right. But ultimately, I agree. It is so much explaining to customers. 100%. You didn't lose anyone. So I think the same thing is going to happen when it comes to payment terms. It is going to confuse some people. I don't think you're going to lose anyone over it if you handle it correctly. And I think even though they were confusing, if you went and did this acquisition again, you probably would have handled it slightly differently, how you talk to customers about the acquisition. You're going to take everything you learned from that and now you're going to communicate to the customers about payment terms. And so You're not going to just be like, it's required tomorrow. You're going to actually pitch this as a very positive thing for them. Hey, we've had a lot of feedback from customers that it's tough to like get the check in the mail. They are living in a secondary house. They live out of town. We're making this easy. You can now go to this link, put your card information on file, and we'll charge you automatically when we create the invoice. You'll just get a receipt. I think if you do that correctly with a text and email, you'll probably get 40 to 50% of people signing up. That will probably be enough to help solve the problem, but I would love to see it 100%. And if to do this, like, if you do this with a lot of violence, like, how many customers do you have? Like, total recurring customers?

About 80.

Great. I think if you took one week and called all these clients or visited them in person, you could get this to 100% compliance without losing a single customer. And so if the entire weight of the business right now on your shoulders is accounts receivable, and that's the constraint to the business, get violent with it, and you just need to talk to, let's just call it 15 customers a day. If you talk to 15 customers a day and you're like, in person, hey, get the card now, I'll go ahead and put it on your file. We'll charge it automatically. No more do you have to write checks. Don't worry about— we're going to cover the processing fees. Go ahead and take that L for now. That's not a big deal because down the road we want to hit capacity and raise prices. I'm not worried about the 3%. Just get the card on file and now you're in person so they're not worried about security and all this stuff. Just do it in person or over the phone. If you do 15 clients a day, you'll solve this problem in 24 hours, and I believe it'll be the same way that happened with the acquisition, which is you will lose zero clients. To some it might seem confusing, but for the vast majority of us, like Leila Hormozi says, fear is a mile wide and an inch deep. And so it seems horrible and it seems difficult, but at the end of it, this is the unlock to solving the business. And by the way, if you can just hold on for 3 years, which you can do if you have good cash flow, but you can't if you have no money in the bank. You can run out of oxygen and go bankrupt with a profitable business that's growing fast. And so to prevent that, we've gotta fix this problem. It is the constraint to the business. And if you can survive for 3 years, which I don't know about this acquisition, $350,000 on a $500,000 annual revenue business, even with $90,000 equipment, $18,000 a lot for most people. They would be suffocating 100% of the cash to the business. The fact that you're able to pay that and still be profitable on paper, Just means we got to fix the cash flow problem, and if we do that, we unlock a really solid business in 3 years that you own. So, excellent job. Don't know how you are pulling that off. Fantastic work. Next caller. I'm not going to say where you're coming in from, but you heard a beep. Go ahead.

Mike, this is actually Miguel. How are you?

Good. You don't have to say your name, but there it is. Miguel, welcome to the show.

I know. It's all good. This is a health question for the most part, I would say. So I'm in the point, we've been in business almost 24 years. We're a printing company. And right now I'm in the point we have, um, 4 people in customer service. One of them is part-time. And then we got our graphic designer and our production person. So where I'm debating right now is I'm the best one obviously at sales because I'm the business owner and, and, and, uh, we working on the better process, sales process for our employees. So what I'm debating on is Should I hire an assistant so I can do more sales, so I don't do a lot of the small tasks? Or should I look for a manager or an assistant manager with the potential of being— helping me run the shop?

So I would ask what is—

That's kind of what I'm debating.

Totally. Like, no matter what you do right now in terms of delegation, Miguel, it gives you more time to do higher leverage tasks. And so the, the best way to delegate, in my opinion, is rank all the things you're currently doing from lowest leverage to highest leverage. Getting more sales is probably the highest leverage thing in the business for you right now. Anything besides that would be a target for delegation. Now, I believe there are probably some tasks you do that you could hand off to these admin folks. You just gotta delegate it. You gotta create a system and hand it off. And so I think a lot of times we jump to like, I've got to get an operations manager or get some manager versus just like, oh, there are like 12 tasks I do just because that I could just hand off.

I'm getting such a bad connection, Mike.

Oh, you are?

Can you guys hear me well?

I can hear you really good. Can you hear me?

Yeah, I know.

Might be on your end.

I don't know if you can hear me there.

Okay. Well, I think the recording will definitely help. At least so far. I'm going to drop the call.

I just try to call back.

You're good. You're good.

It just sounds robotic.

That's weird. Shouldn't sound robotic on their end. Should only sound robotic on our end. But yeah. So in the printing business, even though it's not home services, it's still the same thing. You got sales, you got operations, and you got admin. And I believe that right now, Miguel, at his size and doing very well, probably is doing— I'm just going to make this up— 60% of his day is probably doing sales. I would go ahead and guess that 30% of his day is doing operations. And I would assume— I'm just going to guess— 10% of his day is doing admin. And so, yes, he could get an assistant to help him with sales. He could do that. I first, though, want to delegate all the lower leverage tasks in the business, which is admin and operations. If right now he's doing a $100 per hour task in sales, I want to hand off anything I can go out and delegate by hiring someone for $50 an hour or $30 an hour in admin. Now, everyone also thinks— the other question Miguel had asked is like, hey, can I just go get an operations manager? Yes, that would give you 30% of your day back. But I, before I do that, I want to make sure I get this. This is the easiest low-hanging fruit in the business, which is the low leverage task that I'm going to guess is things like checking the mail, opening up the office, adjusting the thermostat, getting coffee, filling up the fridge, ordering things from Instacart to fill up for the office team. These are little things. I'm not saying Miguel specifically does this, but I believe that many of us could simply ask ourselves, what am I doing? The 40, 50 things I'm doing in a day. And I think some of them are really low-hanging fruit to get delegated. and do this first, 'cause this is likely no extra cost, not a lot of systems building, no time of Miguel to be able to hand this off to his existing team that's doing admin. And then I go after operations. Also usually easier to find an admin person compared to operations. Also usually easier to find an operations person, especially if you're doing work like operations out in the field, like the printing, usually easier to find that person than a Rainmaker like Miguel is in sales. It's easier and cheaper. And so this is the way I want to delegate all aspects of the business: admin, operations, and then sales. All right, next call is coming in. You're live. Welcome to the confession booth. Thanks for coming on.

Hey, how are you?

Good, good. Can you hear me?

Yes, sir. Can you hear me?

I absolutely can. Go ahead.

Yep. So I just— so I live in Mount Juliet, Tennessee. Uh, right now I got about— I got 5 guys that work for me full-time. We got 2 different crews that work. We got lawn care crew and they cut 143 yards weekly with 2 guys. And then I got the landscape crew that landscapes every day. Um, and my question is, which I have tons of different questions, I'm at the point I believe that I can grow more. We bought another truck and I just bought it a couple months ago. I got a good deal on like two Isuzu trucks for one price. I went ahead and got both of them. That truck's sitting right now. Um, I run so much getting materials and stuff like that for this landscape crew. And we do a lot of like retaining walls and stuff. And in the beginning I was like, I'm just going to keep it simple. I'm just going to do nothing but maintenance and stay away from all the hardscapes and stuff like that. And I started growing more into the hardscapes as we got better at landscaping. And then now at this point I'm like pushing back. It's like I almost just want to go all in, all residential lawn care, and do away with all the big stuff.

Is that just because it's dragging you back into the field?

Yes, exactly.

Got it. And what's keeping you from doing that now? Is it making up a big chunk of your revenue, like 60% of revenue is landscaping?

Yeah, it's a big chunk of it for sure. So we did— on the residentials, it brings in about $18,000 to $19,000 a month. And then we grossed, we, we, I made $250,000 this year. Um, so, and the thing about the residential that I like, it just brings in so much landscaping by having so many residential people. Yep. You know, I've always thought, should I go commercial? But I don't want to go commercial because I feel like if I have commercial, I'm not gonna, I'm not gonna get all those landscape jobs as well. So it's like I'm back and forth, like, which way do I need to grow? So, you know, we're doing well. I just, I just like, you know, I don't know, should I just step back and go to the basics? Just, just trimming shrubs, mulching, pulling weeds, and keep it at that, and do away with like these fancy retaining wall designs and stuff like that, and French drains and sod and all that stuff, and just do away with that stuff and really just hammer in on the small maintenance.

So I don't, I don't think it's like my mowing crew. Go ahead.

My mowing crew, like, they, they go Monday through Friday, Monday through Saturday, and I don't have to do a thing, right? Like, as long as I make sure all the equipment's maintained and have their schedules ready and stuff like that, make sure the customers are happy when they're calling. If they have a problem, we address it very easy. But on the other side, the landscaping, that takes a lot more effort. Yep.

Yeah, like, I don't think this is a function of one or the other. I don't think you say I'm going all in on mowing or I'm going all in landscaping. I like having both. I think that you will get more choosy with the type of one-time projects that you take on when you don't need the work. Here's what I mean. I would look at your entire year and I would say, okay, this is December, this is January, all right, this is July in the middle of the year. I'm going to determine for every single month of the year what services am I focused on. Let's just say, for example, that we know that, okay, spring rush, we have a lot of mowing and we're going to get a whole bunch more of these mowing jobs. But then we know that after it gets warm, it starts to be where we don't get a lot of mowing jobs. This would be a great place to be able to put some of those projects and any jobs that are going to come in, these one-time projects, I am going to sell them into these months. All right. And then I might get, you know, a month in the fall, for example, where I can go out and still get some more recurring mowing customers. But when I'm focused on the recurring jobs, I'm not also slotting in all of these projects. I'm going to sell these one-time projects to my existing customers and upsell them during times of the year when I'm slower. That could be your off-season, that could be your winter, that could be your summer depending on what type of grass you have, but I've gotta determine which months of the year am I focused on recurring jobs and my existing customers and what time of the year am I open to doing one projects? 'Cause I guarantee you, when there are tons of yards pouring in like spring rush, that's when you're tempted to do the whole mowing thing. When there is no more mowing grass 'cause there's a drought and the grass hasn't grown and everyone's canceling or going to biweekly, that's when you're happy you have projects. And so instead of thinking I've gotta like shift from one to the other and like, oh my word, I have too much mowing and I'm overwhelmed with work to now like, oh my word, I don't have enough work. Instead of that, I'm just gonna determine which months of the year do I focus on recurring and which months of the year do I focus on one time. And I'm gonna make sure that when I focus on recurring jobs, all these customers, 'cause now if instead of 140, I had 200 yards, I happen to believe that if I upsell them, when I get slower, I'll fill in these gaps of the year just fine. And I'll probably be selling them the type of jobs that I want, 'cause I'll promote one-time jobs or cleanups or smaller projects that I know I can do without me getting involved with things like drainage, where every single job looks different. Right now you're doing those because you're using those to build revenue, you're keeping your landscaping crew busy, and I think that instead of, like, it's gotta be immediately, Just shift over time. Right now it's 60/40. Maybe it goes to 50/50 this year, and then next year it's 60% maintenance and 40% projects. But the way you get there is when the going is good— Spring Rush— you've got to make a determination what you're focused on. And if your focus is, I want to build recurring revenue, I'm only going to sell recurring revenue during that time. And this is why most people will never build the recurring revenue enough to where they can jump into it for the majority of their revenue is because they try to do both projects and recurring during this time. They're overwhelmed and they stall the amount of recurring customers they take on because they're so busy trying to stay up with all the projects. Why? Because they've— we've all bought into this logic that first-come, first-served estimates is somehow equitable and fair and democratic, when in reality, based upon the service, I will determine when that job goes on the schedule, and how far I'm booked out is completely dependent on what type of service you're asking me for. If it's in the middle of spring rush and I have 30 leads a day coming in for mowing and projects, 5 of them, let's just say 5 of them are projects, 25 of them are recurring. All right. You're like, how far are you booked out? Well, for these guys, these projects, I'm 2 months booked out because I'm not doing any more work that's one-time projects until July. Whereas these bad boys, I'll get you on this week. And so, what so many of us have done is like, well, you have capacity, you have time on the schedule, you should be putting these projects. No, I'm not. There's certain times of the month where I'm going to focus on recurring work 'cause that's what I really wanna build. That's the recurring revenue, that's the quality of revenue that I would rather focus on. And so, the whole objective of building a high-quality revenue business The challenging part becomes when you're getting leads from both projects and recurring, one-time jobs and recurring, maintenance for commercial and for residential, and you've gotta be the filter to determine what gets through when times are busy, 'cause you can't service everyone. If you service everyone, that's when you feel burnt out. That's when you feel like you're running around like a chicken without a head, going after all these projects and getting all the stuff set up and all the materials and all the rest of it, 'cause you're focused on this when you should be just mining this recurring work while the going is good. Next caller is coming in. Welcome to the show. Thank you for coming on.

Hey Mike, can you hear me?

I can. Can you hear me okay? Yeah, it's rock and roll. What can I do for you?

So I am, I am 16 and my business is under my dad's name until I'm 18 and fully licensed and insured. I have 2 Skaggs stand-on mowers and I want to know, I have about 19 clients, 6 of those being biweekly. I want to know how can I scale my business more with, with, because I have no like driver's license because I'm behind schedule on that. Um, how can I scale my business more having no license? Like I have a 16-foot trailer, my dad drives me around, et cetera. What are some things I can do to have more revenue based off of just mowing and slightly landscaping?

Is there any reason you cannot get your license? You're in the confession booth, so you don't have to worry about people knowing who you are.

So in Indiana, you cannot get your license until you're like 16 and 90 days, and you have to, uh, so you have to finish 30 hours, which I'm actually on my computer working on right now. So there's 30 hours of online training you have to finish, and then you have to do 6 drives with an instructor. I can't get my license until July, and the driving academy is about booked up until mid-June, and they're telling me I won't get it on time, so I might not get it until August.

Okay, why do you have to wait till July? Is it because you just turned 16?

I turned 16, uh, in April.

Oh, oh, did you say you're 15 or you are 16?

I just turned 16 in April, yeah.

Got it. So 90 days past April is May, June, July. Okay, got it. So July is the earliest. Now, can you book your appointment for your license now, or do you have to wait the 90 days and then book?

So you have to finish the 30 hours of the online driving academy, and then you can start booking your 6 drives. And then once you pass all those, that's when you can get your license.

Yeah, like, I, I'm a big fan of being violent with this. Like, yes, we could do workarounds, of how to grow this business. But ultimately, you getting your license is the big unlock. And so 30 hours.

Yeah.

Yes, we can look at that as like, that's a long time. That's also, if you really got ruthless with this, 2 days. Right. And then booking the—

see, they, they limit you to 3 hours a day. Okay, so 10 days, like 10 days at 3 hours a day.

Cool. So that, that's the only thing we do from 6:00 AM to 9:00 AM every day is those 3 hours. So in 10 days, that would be completed. Now, the 6 drives, are we— are those hard to get to? Like, or who— because they're the backup of those, those 6 drives?

Yes. So I just called them about an hour ago. They're booked out until late June. So I— they said that I won't get my license July 1st, and they're not sure because school's getting out soon how, like, booked up they're going to be. Past that. So if I don't get it done now and start scheduling my drives, then it'll be like late August before I ever get it.

Got it. So we're going to do it in 10 days and we're going to be before this end of school. So 10 days, we finish the 30 hours, we immediately schedule the drives so that we can get our license immediately. Like, again, like we could talk about all ways of getting around this and like trying to get your dad to drive you around or how do you get better route density and doing door hangers or customers of your existing customers, upselling your existing— we could talk about all that. Delivery of materials so you don't have to drive. Like, we could talk about that. I just want you to get your license as fast as possible so we stop doing workarounds. Make sense?

Yeah, that's what I've been told by all of the local lawn care guys is once I get my license, that's gonna be like the top, like the top thing for my business. And I have, like, I have a pretty good reputation around my neighborhood. I've started to pick up a few commercial accounts out side, and it's, my dad drives me around. I just bought a brand new 16-foot trailer. I'm really trying to do this after high school, but I agree with you there that my license is gonna be the biggest part of it right there.

Yeah, absolutely. You know what to do. I would just be violent with getting the 30 hours done. That's 10 days. Everyone makes big things out of little things. It's 30 hours, 10 days, 'cause you only do 3 hours each. Really hard that this could be just done in 2 days, but sounds like you can't. 10 days, you're gonna schedule all of your drives, and in early June, let's hope we can get this business on track and ramp this bad boy. You already got 19 clients before you even got your driver's license, my friend. You are already winning. Uh, next up today, we got another caller coming in live. Welcome to the show, thank you for coming on.

Absolutely, thank you, Mike. Hey, so my question is, uh, basically like what comes first, the chicken or the egg, right? So we do, uh, fencing here in Rhode Island, and we did like $2.5 million last year. Profitability is low. We're at 8% after I pay myself. Um, we're at 8%. So I'm like, how do I know the bottleneck is myself? Because I run production. I'm also the general manager. So I'm like, I need to hire a production manager. But if that costs me, you know, a good one to do what I do, maybe $80,000, Like, then I don't make enough money as the business, so I'm kind of like, do I— like, what do I do there?

Okay, so right now, if I asked you what is keeping you from $5 million, is it getting more customers? Is it getting more employees? What's the current constraint?

So the constraint is because we subcontract everything, like, I don't want to train new people. It's kind of like I'm already like lost that touch. So I, I, I'm not bringing on new contractors because so many people cheat. So we need to babysit them, but I don't have the time to do that.

So this ops manager would basically babysit the subs, is that correct?

That's what I'm— yeah, exactly.

Okay, right now how much are we spending per year on marketing?

$100,000.

Okay, um, if you didn't— if you did not spend that money in marketing, do you think your business would —go in half?

Yes.

Okay, so what are you doing for advertising right now?

LSA, we're the number one Google-rated in the state, and Facebook. Got it. Meta.

How much are you spending on Facebook ads right now?

About $40,000 a year. Got it.

Okay. So, $100,000 in ads is generating, let's just call it $1.2 million in annual revenue. And so, that's a 12—

It's 2.5.

Yeah, I know, but I'm assuming half of it's from the ads. So, if half of that's coming from ads, right? And so, I'm trying to find the constraint. And so, I believe that if you can figure out how to spend more on ads and go from $100,000 in spend to $200,000 in spend, And we go to $5 million. Well, let's just call it $4 million because we figure out how to— You're saying the constraint is you've got to go get an ops manager to manage all these subcontractors and babysit them. Is that correct? Yeah. Yes. Right now, are you— When— How much of your time is spent on sales versus doing this job? Operations manager.

Right now, I'm the op— I do none of the sales. I have a sales guy who already does that. I'm focused on operation and then I'm all like CEO-level stuff too. Got it. Okay. Not much, but— Yeah, no, I get you.

I happen to believe though that if you hire this person for $80K, I understand that right now it's scary because that's going to take you from $200,000 in profit to $120,000 in profit, which starts to get really skinny. I understand that. And especially with like the fencing industry, you have a lot of accounts receivable. That can be very scary from a cash flow perspective. The thing is this, you spending now, probably unlocking 70% to 80% of your time that you're currently spent doing operations manager for an $80,000 position is a steal. You unlocking this person is probably going to put you to $3.5 million just by you focusing on stuff other than management of subs. Like, if you just went— if you just focused on sales and unlocking more opportunities, you would probably take this to $3.5 without increasing your ad budget. And so a lot of times it's easy to get wrapped up in—

Should I expect myself to do other production?

I would say if you're gonna do anything in the business, so you're right at the size right before $3 million where I still like to see you in sales. Now, before I say that, do you feel like you're not good at sales?

No, I'm okay. Okay, okay.

So I happen to believe that if you're able to get someone for $80,000 to manage the subs, you focusing what right now is probably 70% of your day, just shift it to sales. That alone will get you to $3.5 million. And if you're like, well, I don't know if we have enough leads. Okay, great. Let's, let's go ahead and just move your ad spend by 20%. Move that to $120,000. I happen to believe though, if you Even if you just spent time on sales?

Yeah, we have the leads. Okay. We're turning away so many people because of the labor constraint.

Okay, and is the labor constraint at the sub level or because you can't manage the subs? I can't manage them. Okay, alright, my friend, I promise you, hire an operations manager. If you can get them for $80,000, you're gonna have a very short term, like probably 30 days of less profit. You focusing on things besides operations is going to unlock this business, I can guarantee you, to $3.5 million. And it'll make you more profitable because this $80,000 is basically your ticket to unlocking $1 million of revenue. And if you're doing sub work, I'm going to guess you're 40% to 50% gross profit on that. And so you will likely be, I'm going to call it, 20% to 30% profit on the extra million dollars in revenue. 'Cause the only thing standing between you and that is getting an $80,000 overhead person, which is scary when you have low margins, I understand. But the next million dollars that you're gonna unlock is likely 20 to 30% profit because you already have the leads. Leads are not a constraint in the 4L Framework. If leads are not the constraint and you're like, I just gotta get labor, I just gotta get people to do the work but I can't manage them, now leadership becomes a constraint. If you hire that leader, You will likely unlock $1 million of revenue without spending any more money on ads. And this $1 million in revenue doesn't mean you have to go higher, get more trucks, more equipment, more overhead. You're just gonna make 20 to 30% profit. And now this 8% blended will go probably to about 15% profit. All of a sudden, a 15% margin business on $3.5, you're looking at $400,000 in net profit. And that, my friend, is a fantastic business. Last call of the day on the confession booth. Welcome to the show. Thank you for coming on.

What's up, Mike?

What's up, brother?

Nothing, man. See, you switched to the black shirt. Yes, sir. Recognize you, man, without the yellow shirt on. What can I do for you, man? Oh, I don't know, man. I have, uh, I've, uh, I've had— so basically I have a We're doing about— we did about $1.3 million last year. Started 5 years ago from nothing. Um, I've had 2 general managers to help, like, you know, because I know I'm the bottleneck of the business. But each time I've had both general managers, basically I've caught both of them stealing from the company. So now the company keeps growing and I'm just holding everything together. But I feel like I've been burnt so many times that like, I know I need to hire a GM, someone with the skills to help us, you know, so take some stuff off my plate. But I'm just wondering, what is like your vetting system? How do you know someone? How do you give someone the reins and trust that they're not going to be able to steal from you?

Yeah, like the first thing is incentives. And so them stealing from you should hurt them just as much as you if the incentives are appropriately aligned. So let's first start with comp. For these GMs, were they base salary? Were they profit sharing? Were they getting a percentage of revenue? What was the comp looking like?

They were both just salary.

Was there, was there any upside or incentives?

Um, no. Okay, okay.

And were these GMs that you hired previously technicians in the business, or did you hire them from the outside?

No, both of them were more like— they both had like that gift of gab. They were like good talkers, good salesmen type skills, you know.

And was their role sales-based? Like, was it— would they have to sell throughout the day?

Yeah, exactly. They're used to— their skill sets was more towards sales. They weren't really operation guys, you know.

What if you hired a salesperson and then you, as the business grew past $2 million, you hire an operations person?

Oh, well, I don't want to hire the salesperson because I kind of want—

I want to do that. Okay. Yeah, totally.

So this is what I want that to be.

Great. This is what I would recommend. Don't hand off sales yet. You're asking them to do a job that they— is very hard to find. Like, that's you. I want them to do operations. Yeah. And that is managing the crew. Their, their, their, their bonus should be massively tied to the profits of the business, or at least the efficiency of the crew, because that's what operations is like, doing the work efficiently and profitably. You focus on sales. As the business gets closer to $3 million, then you can think about hiring someone to do sales. But asking a GM right now to do the job that you're really good at is going to cause frustration for you and for them. And if they don't have any incentive for the business doing any better because they only have a base salary, the only way for them to make more money is to steal. And as much as that stinks that they have that level of morality, it's just human nature that I feel like I'm entitled to more And if there is no way for me to make more, I will find a way.

Yeah, that is true. I never thought of that.

That's a good point. I would strongly recommend looking at it as right now you have likely delegated all the admin in the business. Awesome. $1.3 million. Very good. Right now you're doing sales and operations and you're trying to find someone to be this role in between. This is why, in my opinion, if you're going to hire a GM to take over both of these things, You got to keep the business smaller because at $1.3 million, sales is a full-time job. Operations is a full-time job. You are going to what we call the GM+ model inside the Copy and Paste Millionaire book. And now I want you to do is focus on just finding someone to do the work operations. But the business is too big for this person to also do sales at this size by themselves. And so find someone that will do operations really, really well. And then as the business grows to like $3 million, then you can replace yourself at the sales level. All right. We got a couple more people just hanging out in the call queue. Next caller coming in live, coming in hot. Go ahead.

Hey Mike, how are you? Fantastic. What can I help you with? Great. So I own a moving company in Toronto. Last year did half a million. In September last year, I hired a head of sales, you know, in order to just, you know, grow past $1 million, but the things turned around and he was not performing at all. So my goal is to be, to do $1.5 this year. So far we have done $200K till date. And I fired him this morning, is because he was not performing. He was doing less than $20,000 in sales and he was just managing one guy in terms of sales. So I'm out of, I'm a little bit out from sales, not fully. I'm doing about $10, $15K on and off, I have operations covered. I have good guys who's taking care of operations by themselves, so I'm not even looking at it because it's— they're fantastic of what they do. So my question is like, I'm spending about $5,000 a month in ads. I'm— I need— is not a concern at all for me. I'm getting good leads. Uh, so what can I do to be at 1.5, uh, in this situation? I have a couple of people are offshores in Philippines as well, uh, so it's a cheap labor and they're also performing really nice as well.

Yeah. So you have delegated admin very well. Awesome. You said operations is covered. No problem. Leads we're fine with. And so the thing that gets you to 1.5 is you focusing on sales. Ah, and so this head of sales, the reason it didn't work out is because he likely didn't have someone like you showing him exactly what to do to get to 1.5. And he's probably not the caliber of person to build your business for you. Because you're probably not paying him what he— what a head of sales that grows $1 million of extra revenue does. Because if he was capable of that, he'd do it himself. And so I think personally, you focusing on sales is going to be the best thing for your business. You'll get to $1.5 million. And then when you're at $1.5 million, that's when I say you go find someone to do sales.

Okay. Okay. So I— my maximum that in a month, in 30 days, I get my capacity of maximum is doing over $35K, right? On top of that, I cannot do anything more than that. So in order to hit $1.5 million, I need to at least $100K a month. So that means for other stuff, I have to keep on hiring more people who can do at least $10K, $20K, $30K in order to fill that $100,000, $120,000 a month gap. When you say that's possible, that's reasonable. Totally.

When you say that, when you say per person, is that per salesperson? Yeah. Yes. Got it. So that's— this is actually the thing then. This is a mismatch of titles. This is not a head of sales. This is a sales associate. You are going to become the head of sales. You will hire sales associates to answer phone calls, sell jobs over the phone. Like, these are likely very low-skilled salespeople. And if you call them a head of sales, you will overpay and they will be disappointed with the type of work they do. You are the head of sales and you're gonna go hire absolute savages that are good at sales associates and you're gonna give them scripts of exactly what to do to be able to sell jobs. This person, head of sales, felt like they were walking into a job where they're gonna be a manager of salespeople. They likely walked in handling most of the sales themselves. And so I want you to step back from it instead of being CEO and be head of sales and fill that role, the highest leverage role of the business, before you step out of the operations is, I am selling. Do that, and then underneath you create the scripts and the systems that a sales associate, much cheaper, much easier to find, much easier to ramp, and not expecting this incredible white-collar job, that person's gonna come get their teeth cut, and I guarantee you, if you hire 3 or 4 or 5 of them, on your way to 1.5, there'll probably be a savage that wants to become the head of sales that replaces you, at 1.5 so you can get to $3 million and you step out of being the head of sales. Alright, next caller coming in hot. Welcome to the show.

Thank you for coming on. Hey Mike, how's it going, man?

Fantastic. What can I do for you, brother?

So I got a tutoring business in Florida and I think we're about to hit our slow season. It's very new. I just opened pretty much in December and, uh, last month we did about 9K. So we're super small. Um, basically just, uh, calling to get any kind of advice for how you would approach like the slow summer coming up. Um, and then like I feel like I'm doing the right thing with having contractors as shooters and just kind of taking the percentage off the top of that. Um, just wanted to get your advice over the overall business.

Yeah, totally. So we helped Mathnasium a little bit, uh, on one of the turnaround shows. And so AI is certainly going to be a headwind for your industry, but I also believe that, uh, it is going to become more important for especially people that are challenged with just sitting in front of a computer. AI is not going to be useful for them to sit in front of a computer and learn. So I see a lot of value still. I think how you make an offer for your off-season is really important. So when it comes to mowing, for example, we create an offer for the winter when we slow down typically to keep someone's property looking good throughout the off-season. Your off-season is your— is the summer months when people are not in school because they don't have homework that you're usually helping them with. And so what I would do is I would create an offer around increasing, like, for example, the math scores. Like, so much of our education system now is on scores. You can create an offer around getting people up certain grade levels or scores and guarantee it over the summer. And you wanna attack the point of greatest pain in this case, which is going to be when they get their report card at the end of this month or next month and they're like, oh my word, they're falling behind in math, they're falling behind in English. And then you're gonna create a guarantee around getting them to that next level And the only thing that you're going to tie that guarantee to is them showing up.

And what would I guarantee you? Like, to maintain grades and then like do a money-back guarantee? Or how would you do that?

Yeah, personally, I think you can make a money-back guarantee around getting them to their adequate grade level or one level higher. So for example, my kids in grade 5, they got a decent level. I want them to be at grade 6 level though. And get ready for next year. I want them to be testing at grade 6 going into grade 6 so they feel a little more accomplished. Or they're testing at grade 4, I'm just making some of this stuff up, you know the metrics better in terms of how this is graded, but they're testing at math level 4, they just finished grade 5, they're going to grade 6, I know they're gonna be left behind. You guarantee, hey, by the end of the summer, they're gonna run another test, and you show what test you're gonna run, they'll be at grade 5 level and up to speed, And if they're not and you've showed up every single time, you get your money back. The thing is, a lot of people are gonna miss one or two, so you could probably disqualify half of them, but more importantly, you're going to be able to offer them something that solves their problem and isn't just a supplement. I want you to be the surgery, not the supplement. The surgeon gets a lot more money than the person sent, you know, getting a supplement for $1 or $2 or $3. Just guarantee it happens.

Okay. Yeah, I was thinking about that. And then like, do you think— because I'm not actually doing the tutoring, I'm just contracting all that position out. So do you think I should drop the price or talk to my tutors about trying to lower prices as well or just keep them the same?

Or— Yeah, I would probably do a two-split option. So it's like, hey, during the summer, if you want your kid in here, I'm going to make up a number. Don't worry about it. It's going to be $199 per month. For 3 months. I'm just making this up. Don't worry about it. So let's just call it $600 for the summer. Or you can do a $999 package, which is going to include some exclusive one-on-one tutoring and it's going to have the guarantee. So I would actually keep this your current price so that you're not cutting price on this. But I give you permission to make a lower entry level offer for people that are just like, well, I don't— I'm not going to show up every time. "The kids got sports, we're gonna be away for a few weeks." Great, we'll put you in this program. Let's just call it what your, you know, a little bit lower than your current prices are. But then have the premium offer that is much more of a one-time thing. Like, I would not do a monthly on this. I would do, it's a one-time, you pay up front, $999, but then you unlock the guarantee, assuming you show up every time, and we guarantee they're gonna get to this certain level. And what's nice about your business is there's metrics. Like, you can score the kid.

Uh-huh. Right, right. Yeah. Yeah, that's good and bad because it's also like, you know, they can't measure it either sometimes. Yep. No, I get you. Anyways, but yeah.

Cool. Hope that helps. All right, man. I think it's mostly about the offer in this case. For every business, if you have an offseason, It's crippling. And whether you are in lawn care and that's your winter, or you're in tutoring and that's the summer break for kids when they get off school, we've got to solve that problem. And I believe that when someone gets their report card at the end of the season and they realize that their kid is behind is a great time to sell them a guarantee and make it a premium offer. Make it higher cost. This is why at HomeWorks, for example, we guarantee someone grows their revenue by 10% And more than 99% of people do because we just make sure they get through onboarding. We make sure they use the software. And my whole focus is get them to use it. And so in this case, your offer is tied to them showing up because you know if they use it, they'll get the result. So, thank you all. This is the very first, what we call, confession booth. Thank you all for showing up today. I know there's some more in the call queue, but we will come back. We'll do this again. If you enjoyed it, let me know in the comments. I would love to know if this is a format you enjoy. But if you would like me to come out in person, they'll put it up here. There's a QR code. Also down in the description is a link and you can apply within a matter of 5 minutes and we will fly out in person. It's completely free. I do all the coaching and the way that we're breaking this down over 10 minutes, I will spend a couple hours with you going in detail for your business to hopefully get it to the next level.