The future of the lawn care industry

Hey everyone, welcome back to the Mike Andy show. Today is going to be an audio only version of the podcast. This is not going to be on YouTube or anywhere else. This is actually an interview that I was getting interviewed about the lawn care industry. What I see in the future as opportunities and when it comes to the baby boomer generation, when it comes to selling a premium service, and what I see as over the next five or 10 years, when it comes to software, robotics and where leads are coming from in the lawn care landscaping industry. So if you're in the lawn care industry, you're gonna love this one. Again, I was getting interviewed by Hugh Wilson who's the host of the Lawn Hustle podcast. Now, right from the get go of the podcast, you're gonna notice that Hugh has a very, very raspy voice. I wanted to give some upfront cause he talks about the very end of our show today, but he actually recently overcame throat cancer and after having the surgeries, et cetera, he does it has really affected his voice and, and so that's why his voice is so raspy. But what's cool is this past year in February, he decided he wasn't going to let that define him and he was going to go ahead and start a podcast. Perhaps the most upfront way of showing your voice and actually making that public is to start a podcast. That's what he did. He loved the lawn care industry, he wanted to give back and he would not let cancer define him, despite having a very challenge, a big challenge when it comes to publicly sharing your voice with other people. So big shout out to him. Massive kudos and respect. I wanted to share this podcast on his behalf and he is from the Lawn Care Hustle. Let's go ahead and launch the show. Hugh Wilson, Mike. And he's here and let's see what we got.

Welcome back to the Lawn Hustle. I am your host, Andy Wilson. We own and operate professional lawn maintenance in Newcastle, Indiana. We are doing a podcast series on Meet the Pros. And today we have Mike Andes with Augusta Lawn Care and Copilot CRM with us. Thank you for joining the Lawn Hustle.

Thanks for having me on, Andy. I appreciate it.

Let me ask you, what inspired you to get into the lawn care industry? I know you were in medical college and what inspired you to make that change from pursuing the medical field into lawn care?

Yeah, so the actual start was actually when I was 11 years old. So my brother and I started Andy's Lawn Care basically to pay our way through college. But the kind of the inflection point you're speaking of is when I was 18 and I'd finished my undergraduate degree, was headed to medical school and decided that I didn't want to be in the medical field. And the reasons behind that were mostly one, I knew I was entrepreneurial. I didn't want to do the same four or five procedures for the next 40 years. My career and I was going into brain surgery. So like that's where I really wanted to focus. But in doing that, I would have been doing the same stuff a lot of the time. And then more importantly was I had volunteered about six weeks over in Kenya at several clinics and orphanages. And that was a phenomenal experience. But coming back to the US and seeing this, the amount of insurance and paperwork and the politics around the healthcare system, I just didn't really want to get involved with it. I was much more interested in seeing the patients. And so I said, you know, I'm not going to go to medical school. Pulled the plug on that. And the only thing I really knew how to, to do realistically to make money was lawn care. So that's when Augusta Lawn Care got started back in 2014.

And you offer franchises and you are nationwide, basically, is that correct?

Yeah. So the first five years was just my one location and I was running that myself. And the ups and downs of that and figuring out that I didn't know I was doing and then kind of restructure things and implement systems. Within the past five years, yes, we franchised the business and now there's 155 other locations around the world.

I was doing a job in Muncie, Indiana, which is about 13 miles from here, and a big yellow truck pulled up across the street. Augusta Lawn Care. So we had a nice conversation with the man operating Augusta in Muncie. And what keeps you passionate about lawn care?

Yeah, like I think it's a sleeper industry. I think it's a lot of people think of it as like second rate or you know, low barrier to entry. It's a very, very fragmented market. People look at down on the, on the industry as a whole, whether it be the laborers or there be the owners themselves. And so I kind of got that firsthand coming from the medical field and being, you know, everyone thinking you're super smart, going to college really young, etc. And then you go do lawn care and there's immediate like some sort of, you know, you're less than or that's not up to what the standard is. And so I would like to change that perception, I think a lot of that has already happened in professional, but the profess of industries like H vac, electrical, plumbing, I like to do the same thing in lawn care and landscaping. I think we can use technology, I think we can use community to be able to, to create that sort of notion around this industry and allow for people to get started. It's not necessarily a bad thing. That's a starting a great starter business for someone in their 20s or 30s or 40s or their first business ever to be able to gain skills of hiring and marketing and sales and the things that are required for any industry if they want to move on to something else that they're more passionate about down the road.

I was going to ask you, and I think you kind of answered the question already if there was a myth related to lawn care that you wanted to debunk. And I think one thing is people think, oh, you run a lawn care business or you mow yards, so you must not have been able to find a job someplace else. So to debunk that, I think we have some of the brightest minds in the green industry. What is your thought on that?

Yeah, I think any industry where you have a great market, regardless of how good the market is, how much people want to pay for it, whether it be software, some fancy crypto or new world, whatever happening, if you have a bad operator, if you have a bad business owner, if you have a bad leader, that business will fail and therefore the same token you can be put in a quote bad industry. Let's just assume for a moment that the lawn care she's quote bad and everyone's in a race to the bottom, etceter. If you're a great operator, you can actually take a massive chunk of that market because the bar is so low to be able to win in that industry and so it's so much easier to stand out in a market where the professionalism is low. People don't have websites, people don't treat their employees right, they don't do open book management, they don't do pay for performance. These are the type of things that I actually think it's like, why would I make it harder to go do something that's harder in a different industry? Like I've got to go build something brand new. The world has never seen the next Facebook. I got to go build that. Why do I put my pressure on myself to do that when the success rate of that is so low compared to home services where everyone needs a service. The baby boomers have all the money in this country and they are willing to spend it on quality service at their house, which is their biggest asset in their portfolio. Why would I not go after the low hanging fruit of that? And why would I gain skills of our business, hiring, marketing, sales in that industry before going trying to something that's much more of a moonshot, has a much lower degree of success.

Everything rises and falls on leadership. And if, if you're a good leader, you can stand out in our industry and you can be successful in running your business and finding financial freedom. You said one thing about pay by performance. Can you explain that a little bit for us?

Yes. The basic gist actually happened about three or four years into my business when I realized that people were paid in my organization was completely arbitrary. It was based upon like if they asked for a raise, if they had been around for a long time. It was completely subjective and a lot of it had to do with the fact that at the time there was one individual who's actually still working with me today, name is Brad. He asked for a raise and I could not afford it. I knew he deserved it. I knew he made a dollar to less than other people in the organization that were not as committed, had not spent as much time there, did not have the skills that he had, but I did not have the money. And I realized it just is so unfair that someone gets paid the same amount or a dollar to less or more than someone else when they could potentially be having a two or three times more impact to the business in terms of profitability out there. Has probably worked with someone, Was like, seriously, I'm making $2 more than an hour than you and I'm literally producing twice as much revenue for the business. Like that's not fair. And so basically pay for performance, or what we kind of term P4P is essentially a way to pay your employees based on how hard they work. The harder you work, the more money you make. And in summary, to break it down further, just they earn a percentage of labor revenue that they earn for the business. That's what they make is their wages. So it replaces the dollar per hour notion that I basically come here, I punch in time, I do as little as possible in that time to basically make sure I don't get fired. And the race to the lowest common denominator of effort expended on the job can get eliminated. Because now it's a matter of if you perform well, if you work hard, if you get more efficient, if you pack your own lunch, if you stop, stop being at every gas station and taking 500 smoke breaks, you can make more money, right?

That is very interesting and that's something I want to look into for my people.

I actually heard you talk about this on a another show, might have been one of your podcasts, when I heard you talk about it. Because I'm a frequent listener to your podcast.

I enjoy mowing and working and educating myself at the same time and not just listening to country music. So I like to educate myself as I'm working.

How have you seen the lawn care industry evolve over the years that you've been involved and where do you see it going, say in the next five years?

Yeah, like I see in terms of the last five, 10 years, I've seen it definitely evolve. In terms of community, I'm really pretty happy about this. Whether it be influencers, whether it be conferences, whether the events. Much more of a unity around the fact that together we can be a lot better. I think the big stigma I see a big thing holding back landscapers in general is the fact that we can't talk to our competition and we can't share numbers. We don't meet up with our local competitors. And because of that we feel very lonely. And when we're not doing good, we feel like we're the only one doing bad. And so we quit. When we do well, we can't tell everyone else, we can't tell our competitors, we can't even go on Facebook groups and tell people there because they'll start to tear us down, down and poke holes in our own what we're saying. And so the sense of community is so important. And so we have. It's at its strongest point inside of Augusta Nation, inside of the franchise. However, even as a broad stroke, I think across the industry we're getting better at just like, hey, Rising Tide floats all boats. Let's help to help each other. Let's improve the industry as a whole so we can charge higher prices. We can really delineate between professional and under the table operators so that the consumer is more educated. These are things that I think are positive in terms of going forward. I think the delineation between successful operators and those that will quit within the next five years is going to be software. And so when you look at 600,000 landscapers in the United States, for example, right now you can delineate very quickly based on which ones are successful, based on who has a great looking website that's designed well and ranks well on Google. And I would say the vast majority, if not all the profits go to the companies that have a great looking website. I think as time goes on that's become almost obvious. I think the same thing is going to be true for software and it's going to become more commonplace. You're going to have to use it to be able to be efficient enough to be able to compete with the market. I do believe it's also going to be the thing that delineates professional and the under, under the table type operator. And I do believe that the there's a market, there is a premium customer that's looking for a premium service and they're willing to pay a premium price. And that's the market I'm after because I want great profit margins. I want to be able to have a 25% profit margin and if I can't get that, I don't want to be in a race to the bottom. And the deline the value given to the customer is going to be segmented based on who has a great client portal, who accepts credit cards on file, you can mass text and mass email their customers. These are the type of things I think software can do. And what we're really trying to focus on Copilot is how do we actually take all the numbers inside someone's CRM and actually down the road be able to tell them what to do in their business, when you should hire, who you should raise prices on, which services are your least profitable. That's really what we're trying to focus on. Going forward with Copilot, what role does.

Sustainability play in your business in terms.

Of like the economy or from a economy.

Work efficiency.

Yeah, like ultimately at the end of the day we create a product. Everyone's like oh, you're a service based business. No, our product is that we have to make grass order. Let's just say that's the product that we're trying to sell. And.

We can make that optimized, we can make it much more efficient, whether it be in software, the right type of equipment, the right type of training of our crew, the right type of compensation model. And so if you just take all of those things I just mentioned there four or five things and made a crew 10% more efficient because they had good equipment, 10% more efficient because they were compensated correctly based on performance. You made them 10% more efficient because they actually had a great route. It wasn't they were driving all over town. You made them 10% more efficient because all these little dominoes that stack on itself because of efficiency and training. You train them correctly, et cetera. That's the difference between someone that could do the job for $40 and make a bunch of money and someone has to charge 50 or 60 and still can't make a profit. And so the ability to be able to cut out waste is an inherent skill that we want to teach our frontline team members. And that's what P4P does. It's like, hey, look, if you can do the job in less time and make the customer happy, go for it. You'll make more money. So we incentivize the efficiency. And so instead of just talking about efficiency, like, oh, we've got to train them more, we got to do like do dash cams, we got to track them. Why don't incentivize them getting creative and actually using their head instead of just their hands to be able to be more efficient and therefore make more money?

Is that the number that you try to reach every year, that 10% growth each year?

It really depends on the stage of the business. Like we are big proponents of you grow to capacity. And capacity is essentially when you, in order to keep growing, you have to buy more trucks and hire more people. And so I want to grow to that capacity level. And then at that stage, I have this option. I can either enter profit mode or I can continue in growth mode. Profit mode is I'm going to be able to raise prices and not going to buy trucks and equipment. Growth mode is I continue to go buy trucks and equipment and I continue to get more customers and I continue to grow revenue. And so I'm a big proponent of at that stage when you hit capacity. Making that distinction is mostly determined based upon how much money do you have. If you have $100,000 and you hit capacity, you're probably going to continue growing by truck or two, hire a couple more people, continue to expand the business. But if you're cash strapped, if you're in debt, if you're really struggling financially, that's when I would say raise your prices and stop growing the number of trucks that you have on the road, the number of employees you have, and increase your profits. Because raising your prices by say 15 or 20% could effectively triple your profit margins if you're running a low margin business. And so that's our general ethos.

Do you raise your prices annually?

I raise my prices when I hit capacity. And so I really don't believe it's based upon timing. I don't believe it's based upon annual adjustments for inflation. I believe that when you hit Capacity, you raise prices if you're in profit mode. Now, if you're not in profit mode and you just want to maximize growth, you're not going to raise prices, you're going to keep growing. Guy in more trucks, hiring more people. And so I think the notion that raising prices based on the timing of the year or the time of the week or the weekend or the spring rush or whatever, I think it's all a fallacy. You hit, you hit capacity. You need to know what that is. In other words, how many jobs can I actually do before I have to overwork my crew and I have to work overtime or my trucks are getting beat up because they literally are working 12, 14 hours a day. And so determine what that is. And then when you hit that, knowing that this is the point in which I'm going to raise prices and make this operation more profitable. And I believe that the vast majority of landscapers will go out of business because they stay in growth mode far too long. They never actually switch over into profit mode. They never actually raise their prices, never actually raise prices. So they lose some customers. And for that reason, we people that, oh, there's no money in this industry. Like, there's no, you know, you can't make enough money. Everyone's, you know, low prices, like, yeah, you've always been in growth mode. You've always been, I hit capacity, I buy more trucks, I buy, I go out and hire more people. You've never actually entered profit mode when, when you raise price by 15 or 20%, if you've done a good job for your customers, very few of them leave. And that's the beautiful thing about great home service business is people don't want to leave. It's a very sticky service if you've been serving them well.

Right. You and I both know it's sometimes a challenge to get new or hire new people. But like you said, if you're organized and you're set up to where you're paying them and you're giving them nice equipment to work with, nice trucks to drive, and you're paying them according to what they're worth and what they do, you know, I believe you can be successful in, in growing a lawn care business. What trends do you see shaping our industry as far as was you at equip?

I was there beforehand. I never actually went to the event this year, but I've been there every other year.

Yeah, well, I've seen all this battery powered equipment. Is that the trend or is that the direction that you think our Industry is going to.

Yeah, I still have a, I still don't see a compelling argument as to how it's going to make us more money. I see. Right now I talked to one of the founders of one of the big battery operations. I said, look, us as owner operators, we now understand that using a battery operated piece of equipment probably has the same performance if not better than gas in most instances. And whether it is the charge time, whether it is the how long they last, whether it's the power, their performance in the weather, the elements, etc. What you have not yet convinced me and you have not yet proven to me is that it'll make me more money and that's all I care about. For example, if you just tell me if you use this thing for four hours a day, within six months you're going to be net positive on this investment. Now I've got myself an investment, but they speak in broad terms and they very much compare themselves to gas. And so it's like, well, if I have this thing that works gas and I know I can make money on this, why would I go over here and spend twice as much for battery? So the price of that will come down, it'll eventually make sense. But I'm in no rush to get into battery because if I ever see that the math makes sense, I will go buy some. There's no reason to be a pioneer in battery technology. The customer is not willing to pay a single penny more for battery compared to gas. Now unless you're in a municipality or a university setting golf courses, some of that matters. But the vast majority of customers will not pay a sing red penny more for battery compared to gas. So what it comes down to is simply a math game of which one makes most sense financially for me as the owner operator. And that is not. I think there's a messaging and a positioning problem for that the battery operated world. But once they convinced me that when within three, six months I'm able to recoup my cost of the battery technology and now every dollar I would otherwise been putting into a gas tank is now coming in my pocket, now we're in business, eventually that cost will come down, but right now it's so much higher. Like right, $300 on a weed whacker. You know which money, how much gasoline $300 will buy for a weed whacker? Like it will take ages to actually recoup that. And then the question is, do I actually have the battery in that amount of time? Has it been damaged? Has a crew Member left it at a job site, has it fell off the truck, et cetera. And so I think it'll in time, yes, battery will become much more of a thing. It'll just be a matter of the technology coming down in cost and then the performance improving of the batteries. And there's a lot of really good tech around that. I don't think it'll change this industry, I really don't. It's like literally just changing the fuel source. And so I think what will be much more transformative is in the next five to 10 years is the software side, and then the next 10, 20 years, the robotic side. And really taking away a labor that starts to move the needle in terms of the efficiency of a crew. Because if I can get work of two people done, but now I have one driver that does the fine edging and the blowing off, but I have a robotic mower that can do the mowing side that starts to actually change the unit economics. And I'm willing to pay 30 or $40,000 for it. If I cannot have to pay an employee 40, 50, $60,000 and deal with all the other things that come along with an employee, that starts to make a lot of sense financially. And so until this technology, whether it be software, whether it be battery operated, whether it be robotics, can actually prove the operators that we will make more money in some given period of time, it will not take off. And so I feel like that's why we had this big lull in technology for the past 10, 20 years in lawn care, because none of this technology actually makes us more money. We need to get more customers and we need to hire laborers. And like that's been the focus. And it will be continuing until robotics probably comes and really changes the industry.

I was in California in April.

And the Airbnb where we were staying, there was a mowing crew that pulled up to service the property across the street. And I noticed the guy started up a gas powered blower, still BR800, put it on and blowed off the driveway and the sidewalks in the patio. When he shut it off, I walked across the street and I asked him, I said, I thought you guys were required to use battery powered. He said, they have to catch us first. So he wasn't sold on battery powered. And that's kind of where I'm at as well. I've had some companies reach out and send me some battery powered equipment, but the batteries are only lasting 20 minutes. So it's really inconvenient. I'd rather just, you Know, fill up, be able to run the backpack blower half a day on a tank of gas instead of having to go through five or six batteries in no time at all. So I do believe that it's a long ways off, but. But we're probably heading that direction anyways. But.

How do you find success for your business and how should we define success for our businesses if you can share some insight.

Well, the key part there, you asked is for your business, right? Because I personally would define success as contentment. Not complacency, but contentment in terms of the business being successful. That metric is going to be termed like what are the goals you've put out in put out in front of you and are you hitting them? Because what looks like success for you? Let's just say if you're like, I want to build a $10 million business, fantastic. Well if I only want to build a million dollar business, I'm quote, quote successful. When I build a million dollar business, you get to a million and you're nowhere close to your goal. And so it really is super subjective. Like what are your goals? Are you hitting them? That would probably be a measure of success business financially. But like contentment for me is like the North Star of.

That was great. I.

Appreciate that answer, especially the contentment part. I think some people set unrealistic goals instead of setting a smart goal, something that they can achieve, and by setting that unrealistic goal, it brings discouragement and they sometimes just give up too early. You know, they can be right on the verge of finding success and accomplishing their goal, but they give up because it was an unrealistic goal to begin with. So the contentment part, you know, whatever state you find yourself in, be content. And.

If you could change one thing about our industry, what would it be?

Oof, that's tough.

I would probably say in the short term, in order to be on Google, you have to be licensed and insured. I think that it would, it already has whoever ranks well in terms of their website. But if I could change that and then also remove a lot of the middle, the middlemen in the industry. There's a lot of the Angie's List, the home advisors, the Yelps of the world, even Google Local services, they suck out all the profits of this industry. And the reason is because we stink at marketing, we cannot go get our own leads and therefore we pay all these middlemen gobs of money. I was talking to someone the other day and 25% of their revenue was going to these lead sources. To get these leads. And it's like a drip. It's like, it's literally a drug that you cannot get off of because if you do, you don't have any revenue, you don't have any jobs. You now built this infrastructure, you have hired people, you've bought trucks and equipment to sustain this lead flow that is essentially rented from these third parties. And so if I could change anything, I'd probably strip them out and I would make it required to be licensed and insured in order to be on Google, which would prevent probably more than half of landscapers from even being in business because they would have no lead flow. They wouldn't be able to go on TaskRabbit or all these other little places and get jobs. And that creates a very low threshold of professionalism or industry. But more importantly anchors the customer's price expectations from people who actually want to make a living and actually do it professionally to be able to charge what they need to. And so if I could change one thing, that's probably, that's probably it. I just cut off the leads, essentially, like govern everything around the leads that's good.

In my area, we're an industrial city. A lot of factories have laid people off and the economy is not as well as it used to be. And it's convenient for everyone to just run and buy a trailer and a mower and call themselves a lawn care business. So, you know, I have found out though, that they usually fall as quick as they rise because they don't do the proper or take the proper steps to become a legit business. And most of them are not licensed or insured. They're just out there cutting somebody's grass for 20 or 25 bucks just to keep a little money coming in.

But that would be great. I wish that could happen in our industry.

Yeah. And I think too is like the baby boomers start to age, I think, I think though, as they start to actually find lawn care service providers, what's going to happen is they're going to get wise to this, that they can always get someone cheaper, they can always get someone that's offering a new deal every single spring rush, or they can just decide to get a reputable company that's going to increase their prices, they're going to pay a premium price, but they're going to show up with a uniform. Professional employees, they're going to have software and they're going to be willing to pay that. Now, the first five, 10 years of their experience with landscapers, they might not. They Might hop around. But eventually, eventually I think they'll be willing to pay a premium price and they'll be willing to lock in with a reputable company. I think that's going to. That's going to be a trend over the next five to 10 years as the baby boomers get past their 50s, into their 60s. And now it's no longer an option that if their landscaper doesn't show up, they just go mow the grass themselves or. And they don't want to have to ask for estimates every single season from different providers. They just want to lock in with someone and be a loyal customer. I think it's going to continue to be a trend. Especially they get second houses. They start to have city houses and then secondary homes in suburbs. I think it's more of a trend.

Let me ask you, what hobby do you have that rejuvenates you?

Building the businesses? That's. That. That is really is my hobby. So I work out a lot. I have a gym. I enjoy that. But that's mostly just a necessary evil to say. Sharp. But I love building business. It's absolutely my passion.

Well, I can see your passion and I can feel it when you talk. So that tells me you are completely committed and sold out to this industry, and I appreciate that. There's too many people that are, if I succeed, I succeed. If I fail, I fail. And they don't really put a whole lot of effort into it, but I can see you're not that type of person. You are sold out completely, and you are committed to this industry, and I want to thank you for that. I've been a fan of yours for quite some time, and a couple of times at equip, I seen you from a distance, but I never got to meet you. And I wanted to. But I'm so glad that you joined the Lawn Hustle today. And I hope our listeners found some value and what we talked about. Let me ask you one more question. What book, movie, or person has influenced you the most?

Oof. That's tough. Okay. So my whole life, like, currently in the now.

Let's just say in the now.

Okay, in the now. Okay, okay. Because if I had to go, like, people would be more like parents. The book would be the bible, like that if I went broad. But, like, let's just focus on business for a second. Definitely. Alex Hormozi. He's been sort of a. A pseudo mentor of mine for the past two to three years when we chimed in, growing everything. He obviously has a couple books of his own, his friend and kind of the co author of his books is my coach, Dr. Trevor Cashy. And so I admire them both tremendously. They're really the only two people I follow on Instagram, for example, is Dr. Cashy and Alex Hormozi. So those would probably be the two for now.

Are we leaving anything out? Is there anything you would like to share with our listeners?

No. I really appreciate you having me on. And regardless of the success I have in business, I just wanted to commend you for getting through what you did and with your throat cancer and getting through that. But then more importantly, having the guts to start a podcast and get through what people say about that. I admire you tremendously for that.

Well, I appreciate that. And that was my biggest fear is, I guess I feared people being critical of my voice, but I had to come to grips with the fact this is who I am. I can't change that part of me. I can change what kind of person I am. I can change how much I can make for my family and support my community. But there's some things you just can't change. And I just jumped in with both feet. And I appreciate you coming on my show today and we will hopefully be able to do this again real soon.

Absolutely. Thank you, Andy. I appreciate you tremendously. You have a good day.

Okay? Thank you.

God bless you as well.