The Framework That Let Me Work Less and Earn More

If you have a few employees and you're struggling to get out of the field, these five secrets will allow you to work on your business instead of in it. My name is Mike Andes. I'm the founder of Augusta Lawn Care. We have over 150 locations and I get to see them start from zero and scale up through this phase of hiring employees. And the big struggle is how do I stop working on the truck and start working on the business? These five secrets will unlock that for you.

The first secret is know your budgeted hour capacity. Budgeted hours are simply how long do I think every job is going to take? The budget hours allow you to be able to accurately predict how far out into the future you're booked out. And also make sure you don't randomly show up on a Friday evening and realize you still have tons of work to do because you didn't accurately schedule your jobs. So whether it is equipment maintenance and an estimate, or doing a big project or recurring maintenance job, every single task in the business has budgeted hours or bh. So I know exactly how many hours I can schedule in a week, on a day, on a month. And that allows me to be able to create a very long backlog. When I have a lot of jobs pouring in, I can still absorb them all. Cause I can just keep booking them out into the future. Having budget hours also allows me to be able to track my efficiency but for my employees and know whether or not I have high performers or low performers. And we'll talk more about that later on in the secrets. The second secret is to know if you are in profit mode or if you're in growth mode. If you're trying to grow your business as fast as possible, you're probably in growth mode. If you're in profit mode, it probably means that you're raising prices and trying to increase how much cash you're making every single month. But what determines this? It is determined by when you hit capacity and and you would need to hire more people or buy more trucks and equipment in order to get more customers. What do you do then? Do you go out and buy the trucks, buy the equipment and hire employees? If so, you're in growth mode. If you are in profit mode, what you would do is instead of going out and increasing capacity by getting those things, getting all those trucks, equipment, and more employees, instead you'd simply just raise the prices. By raising the prices, you would cut some of your customers out that don't want to pay that price and you reduce your close ratio of how Many accepted estimates are coming in. This would allow you to be able to make more profit without getting more trucks, equipment or employees. You are either in growth mode or you are in profit mode. I think it's crazy when owners are trying to grow really fast. Like I'm trying to double and triple my business, but I'm also trying to be really profitable. You're speaking out of both sides of your mouth because growth sucks. Cash sucks. Growth requires trucks, equipment and hiring people. That requires cash. You know what that does also is it drains your cash balance, which means no profit in the business. You can't be doing both. Yeah, you might grow 5 or 10 or 15% a year and still be in profit mode, but you're not going to be doubling and tripling. So don't try to convince yourself that you can grow like from 100,000 to a million dollars next year and then also make tons of profit. It doesn't work like that. The third secret is having pay for performance and yellow slopes. And yes, this book will answer all your questions. Mikeandes.com P4P free training as well. Pay for performance is essentially this. The harder the crew works, the more money they make. And I give them a percentage of all the revenue they make for the business, which incentivizes them to work as fast as possible. But I'm going to balance it out with yellow slips. Yellow slips are if they make a mistake on a job, they're gonna go back and fix it. And if there's a damage case and they due to negligence, break equipment or damage customers property, guess what? That yellow slip, that money, the cost of that damage case, the cost of going back to the customer's house is coming out of their pay for performance. This balances out speed, pay for performance and great quality yellow slips. Because if they have a lot of yellow slips, they aren't gonna make any P for P because. Because this is gonna come out of their pay for performance dollars. And the reason this is so important is because if you're starting to grow the business and you get out of the field, it's hard to do quality control. And you can't afford to hire someone full time to go check in on all the properties. So I need the ability to keep my crew accountable to each other, the customer and the business each other. Because if Bobby over there doesn't mow the grass this way very well and I come back next week and now it's way taller, I'm gonna be mad at Bobby. I've got to keep them accountable to the customer. Because now if they make a mistake and they get a yellow slip, they have to go back to the customer's house and talk to the customer themselves. And they've got to show that yellow slip to the entire crew at the next team meeting. That's accountability. And then they've got to be accountable to business because I'm not going to pay them a whole bunch of money on pay for performance. Just have a system and then if they don't do a good job, you take the money out of their paycheck. That's it. The fourth secret is make sure you know what your efficiency score is. Efficiency score is simply the budget hours the job is supposed to take divided by the clocked hours how long the job actually take. So for example, if I am going to do six budget hours of work, maintenance, mowing, project, doesn't matter because remember number one, I have budget hours for every single thing in the business. Let's assume though I do six budget hours worth of work that's billable to the customer in an eight hour day. Six divided by eight equals 0.75 or 75%. That would be my efficiency score. Like what is good? What's a good efficiency score in general? Here's the rule of thumb. 50% or below for efficiency score stinks. What that means is that more than half of the person's day is spent on waste Instead of actually completing budgeted hours, that is getting paid. Now that's bad. 50% or lower. 70% efficiency score, pretty good. That's where I see most people doing pretty well. And they start to make above base pay on P4P and we're rolling 90% or above. If your efficiency score for your crew is above 90%, that is where you start to make a lot of money for the business. And on pay for performance, the crew also starts to make a lot of money. That means that out of a 10 hour day they get 9 budget hours of work completed. Which only leaves 10% of their day for things like driving around. So how do I get that? Well, don't have a massive service here where they gotta drive 30 minutes in every single direction. Don't have where you've gotta have like juggling of crews. Because why it leads to a lot of inefficiencies. These are the type of things that if you just build the business correctly, you'll have less waste. Make it where all the equipment is the same setup. Why? So they don't forget things that have to drive back to the shop. That is Increasing the windshield time when they're not producing budgeted hours. So if you can know your efficiency score, number one, just know it. Number two is make sure it's over 70%, ideally 90% and you'll crush it. The fifth secret, what we're gonna be doing is focusing on your booked out date. That is knowing exactly which day of the month you are booked out until say. Well, that doesn't make any sense. I'm booked out like two or three weeks. That makes absolutely no sense to a customer. I need to know exactly what day I am completely booked out until. Why? So when a job gets accepted, I can immediately get it on the schedule when the customer accepts the estimate. Cause until the job is scheduled and a date of service is actually given to the customer, they could go accept another estimate from my competitor. And so I'm going to try to make sure I always know, like if you wake me up at 2am, I know exactly where I'd be putting on my next accepted project. This also allows you to be able to adjust your close ratio based upon this number. Because guess what it if I'm only two or three days booked out, I'm probably going to not add a bunch of fees like estimate fees or dump fees or material markup. Cause I need to close work and put jobs on the schedule. Whereas if I'm booked out two or three months, I should be increasing prices, I should be adding on more fees because I am booked out so far that I should be able to increase my prices. When times are crazy and all these leads are pouring in. If you have a seasonal business, have seasonal pricing, which means during peak season, if people want to get on the schedule and you're booked out crazy into the future because you know the date you're booked out till then you're actually gonna charge more. This will allow you to absorb as much profit as possible during your busy season. And then when you go into a time when you don't have as much work, then you can do more discounting. Then you can bring down your prices in order to put jobs on the schedule and ensure that your booked out date is in the future and it's not tomorrow. The last thing you want to be doing is getting jobs that get accepted and like, oh man, I got to put them on fast. That's where desperation to have work on the schedule just to keep the crew busy is what leads to a lot of people leaving a lot of profit on the table and losing money on jobs because they're desperate to keep the crew busy. Watch this video here. I talk all about solo operators and how to maximize how much money you make if you don't have any employees.