The Lies Home Service Owners Believe About Growth

If you have a home service business and you're trying to go from zero to $3 million in annual revenue, this video is for you. This is actually a question answers session that I had with over 20 home service business owners that are all trying to grow their business past that seven figure marker. And we're going to be talking about sales, operations and admin at every single size of business and what you need to do to be able to get the business to the next level. So all of their questions are really revolving on the business model they're trying to build. Whether they should do multiple locations, how they should h general managers, and overall the structure of fixing the off season for their specific industry. So without any further delay, get ready for a marathon of questions and answers. Here we go.

So if you were to ask a technician on a rainy week, how's your capacity? They're going to say, oh my gosh, I'm slammed. I'm barely going to be able to get everything done. That's different than in August when your, your lawns aren't growing like crazy. So can you define for us a little bit of a broader spectrum understanding of capacity corporately, structurally? What is my understanding of capacity supposed to be so that I can decide the entire company is going to move into profit mode or back into growth mode at this time?

Great question. So it all comes down to the amount of budget hours that someone can complete as an employee. Now does that number change between employees? Yes. Does that change based upon the time, the weather? Yes. And so do you mind me asking, do you use homeworks or I copilot.

Right now or not?

We're on service autopilot.

Perfect. Yep. So they, they fortunately do a budget hour column. You can just manually do outside inside homeworks. We have it where you can see it for on a week or per month schedule. And then you can see the individual's capacity. So reason I'm saying that is because all you really need to know is how many budget hours of capacity do I have, what comprises of that is individual people on your team. We generalize, as I say in the book, 30 budget hours or 75% capacity for a 40 hour week. Because most people are not going to drive time, load time, et cetera. Now I know that some people is 28, some people are 32, some people are 38 in terms of their capacity. That's why like in homeworks, you can individually change the budget hours for each user what their capacity is per week. Um, down the road I'd like to do it Per day because that also plays into it. That being said, I would look much more look at, especially as you grow in terms of size, much more holistically in terms of how many budget hours can I complete in a week on average? And that's why I use the 30 budget hours per full time employee as a very broad stroke. Now, if you have really good route drive time, for example, and give really tight routes, that number could easily be 85, 90%. Very easily. What we do is we move that 30 budget hours based upon the time of year slightly. So during the spring rush to your point, we usually bring that down to around 27 or 28 at my location. During the summer, when the guys are just flying through stuff, we usually move that's like 34 or 35 in terms of the budget hours that that can get done. This is why in the summer guys are doing lawns fast. They're like getting off like after five hours, six hours worth of work. You're like, man, if I just had more jobs, I could fill their schedule more. Their capacity of budget hours is increasing because the conditions for them to do the work are improving. Also, if you, if you get better equipment and they can go more efficiently, also increases their budget hour capacity. Right. And so I would look at much more holistically in terms of number of budget hours on the schedule. And like when you in homeworks, when you schedule a visit, it actually shows what your capacity is for the next four weeks. So, you know, as a total, am I overbooked? Am I close to being overbooked? Do I need to watch the weather a little bit? Because it could be a little hairy. So there's some advantages there, just like seeing budget hours. But yes, to your point, capacity does change based on weather, it changes based on skill level. So if you have a whole bunch of new guys in the field, they're not going to be completed 30 budget hours in a week. Like between them and their trainer, they might get 40 done. And so it slows the trainer down because you got this newbie along with them. Right. So all of these are definitely variables. Ultimately though, capacity needs to be determined by budget hours. And budget hours need to be accurate. And so I see some people do is they'll raise prices. And when they raise prices, all they do is increase budgeted hours. And the problem with that because, like, for example, let's say it's $80 per cut. I'm just going to use mowing for an example. Okay, we raised prices to 100, but I keep my hourly rate at 80. Now, instead of one budget hour on the job, they're getting 1.25. And so now all of a sudden, again, randomly increases my, My, my capacity. I don't want that. I want budget hours to be accurate at all times. So in that case, instead of raising the amount that I am giving you budget hours, I would raise my hourly rate to $100 per hour, so my budget hours stay fixed. And so the problem I see most people actually make your own capacity is their budget hours are not accurate. So assuming that is accurate, then I can start figuring out, like, seasonality. You can start bringing, okay, I'm going to do 28 per person during the summer. It's going to be 34, 35, 36 budget. But then knowing approximately per week how many budget hours you can do within the constraints of how many employees you have is the key. Also, we also have. I talk about having personal capacity or, sorry, labor capacity, which is what we've been talking about budget hours. The next thing is asset capacity because you can increase labor capacity. In other words, how many budget hours can my crew get done by increasing your asset capacity? In other words, buying more trucks. Right. And there's also structural things like better route density. You can also do to increase their. Their capacity. You could switch out capacity in that regard for the word efficiency. Right. Like, if my guys get more efficient, they can therefore get more budget hours done per week. Right. Does that kind of answer your question? Drew?

Drew.

Sorry, I was kind of a little.

Yeah, it does. Yeah.

That was great. Awesome. Yeah. And then in terms of different employees, I 100% agree. And that's why P4P is so powerful. Because as they get more efficient and there is someone that is more capable and completes 38 budget hours to everyone else's 28. Yeah. Across my entire team looking at 30 budget hours per person. But they're always way above. They should be making way more money. And that's why then tying budget hours to their compensation is the thing that starts making budget hours be super consistent. Like, we can book out way out in the future with certainty of days of a project. Because I am very confident my crew will finish their. Their routes because their compensation is tied to budget hours. So they might say, hey, boss, it's raining tomorrow. Can I just work 16 hours the next day, take tomorrow off? Because I know I'll be able to be way more efficient. And they'll do that instead of just sitting in the truck having heat on for the first day.

Right.

So it can. When we, when we switched to P4P. We saw that their capacities level out a lot more instead of having huge spikes and valleys. Derek, Yellow.

All right, how's it going? Thank you. Hey everybody. So my, mine will be a little different obviously because everything is mainly lawn care and landscape. So watched a lot of the content and read the books and stuff like that and I've, I've kind of tweaked it towards my industry. Right. So I want to do the multi location. That's kind of the path I want to explore. My current location. I'm like a hybrid of the working gm slash full time or the full time gm. Yeah. So everything runs without me on a day to day and I don't answer phones. I have an assistant that answers the phones. I got drivers that do all that, that do the deliveries. A lot of orders come in online or she, she takes the orders. Right. So I'm at the point where, you know, what is the determining factor? Where I know the second location is something that I should focus on because obviously like, like you were saying, you know, once everything runs, if you've got the revenue, you've got the income, then you can gauge it to go to the second one. Sometimes I feel like I'm not, I'm not really doing much because I'm focusing on like SOPs, you know, marketing stuff like this. And I feel like I have a lot of time where I could go branch and start the second location. And I guess I'm just kind of wondering like what is the actual gauge that tells me good to go? And then I have a secondary question.

After you answer, are you asking if you're good to go in terms of leaving your current location or if you should do a multiple location, like a secondary location?

No, no, no. If, if I'm ready to go to the second location.

Yeah, if the business can run without you, like someone can become a customer. Everything gets done in terms of the work and everything that goes along with that, including training the employees. So usually that's the last thing people can get out of operations for is training new employees and hiring them. Right. So the actual training and hiring of a new team member is usually the last thing that people let go of. And that's what in the book I talk a lot about, like using a software platform where they submit videos because that's something that's probably the hardest thing for a GM to learn is hiring. They can usually train pretty decently. If you have a good system and a good checklist and especially in your, like it's It's. You'd make this a checklist. It's the hiring part that you don't really want them to learn on your dime.

Right.

And so that's where I think you could do a lot of video based interview and application stuff. Use any sort of ATS applicant tracking software.

So we do that now. So we have like when our applicants submit an application, we require them to send a video. But, but I'm doing the hiring, my drivers are doing the training. So I built out like a whole training sop you know, like a field training would. So they have to go through the steps. They got 90 days, all this stuff. My guys are doing all that. So I'm, I'm doing the actual hiring though.

Okay. How many stops per day did they have on the truck?

Usually around 14. It's hard because like we can do a ton of deliveries, but if, when we start throwing pickups in, you know, we gotta, we gotta drive to the site, pick it up, we've gotta drive to the landfill, dump it, and then we gotta drive to the next site. So. So that varies daily. You know, if we have deliveries, I mean we can just rapid fire. Cause it's just deliver, go to the closest yard, deliver. But last year we ran two trucks and we were running, I mean basically 12 to 14 hours a day every single day. Well, Monday through Friday and then Saturdays, eight hour days. And then I bought a third truck at the end of the year. Obviously it's basically bled me for the last couple months, but you know, knowing that come spring we're gonna need it. My thought process though, when talking to my team is, is that, you know, I'm on the mindset. Like you speak of the 800,000 in revenue, the small team. And I could just raise my prices slightly. I can't get away with a 20% increase.

Yeah.

Just because of how the market works with dumpsters. I mean, we all have the same item. We have a metal box that people put trash in. But at the same time, most people are looking for the cheapest metal box. Not that we are, but to raise it substantially, I won't, I won't be able to get away with that. And so I was thinking that with this third truck, if I, if I raise up prices a little bit, which is going to slow my, you know, my intake down, keep those guys busy still 10, 12 hours a day doing all these deliveries, I could take the third truck and branch off and start another location.

Yeah, and I think so typically the safest way to start another location is going to be increasing the asset capacity. Like you have buying the third truck and then starting to market in the new territory, knowing that it's going to be inefficient to drive back and forth, whatever. But the safest way to do it, which is. Okay, so like, how far is the new market? Like 45 minutes away.

Yeah, there's another question with that. But basically a third 30 miles is what we do now. So I would go right outside that 30 mile to where I get the next 30 miles.

Exactly.

So you just start accepting those customers, change your website, like to accept that service area. I would, in the perfect world. This is from Augusta. Knowing this, I would start another website. So, for example, like if you have yellowbins.com. yellowbins.com territory name, and then do a second one, which is like a branch of your website, and then start a new Google listing in that market. So you'll rank better because if you just extend your service area, you'll increase a little bit if you get a second Google page with a website that's designed just for that location, way better. So I would do this physical address, even if it means giving someone a free bin and saying, hey, get. Get the verification inside your new territory, get a Google page, get a website built specifically for that market. And it looks on like two locations, just like we do to Augusta. You can see like we have different pages, different everything. And then if it goes bad, the worst thing you're gonna have to do is close down a Google page and a Facebook or in a website. Right.

Okay.

If it goes well and starts taking off, that's when you say, okay. And I'm gonna some space over there to park. I'm gonna get a second truck. I'm gonna find a general manager. And then you copy and paste.

And so basically we already kind of do like your same concept. So I have like my current trucks and the dumpsters at a storage yard. I do own the storage yard, but it is an RV lot and I. And I rent spaces for myself. But in this other territory, I've already. I've already got the storage yard, like where I've talked to them. I've got the pricing. Not we're going to commit, but I've got all the things that works. Currently building the website. Right now we're changing the homepage to where when they do select book, they will choose the location.

So that will reduce your. That will reduce your conversion by like 40%.

It will reduce it, Yep. Okay. Okay.

Yeah. So that's why I'm saying, like, having two different pages, like, everyone wants to make it easy for them, but the customer. As soon as you put that there, that will reduce your conversion massively. So, for example, we tested at the very beginning with Augusta, it was like, okay, we can just have one form, and then they choose their location. As soon as we did that immediately, even at 10 locations, it dropped our conversion to it because they have to think about what's going on.

Right, so separate ads then for that. That area with a separate URL, like, separate landing pit, like all that, everything. Yeah, I think. I think that's. That's all that's on my head right now. So.

Cool. Yeah. Like, the. The. The lowest risk way to do multiple locations is extend service area, start marketing it with a separate website, and then when it's ready, you break it off for the sake of saving all that drive time. Because you're not gonna be profitable when you're driving 45 minutes one way, 45 minutes back. It's gonna be super inefficient, especially with 14 stops. Let's call even eight or nine or ten in a day. Like, you just lost all your profit. So.

Right.

It's not gonna be profitable, but it's more safe so that when you do break it off and you do start parking the truck over there and hiring an employee from day one, they're above break even.

Right. Okay. Awesome. Thank you.

Hannah and Nick, you're up.

So we're going through, obviously, using the off season to. To work on our systems and things, and I've been going back to the basics on our pricing models. We've kind of been doing the thing of, like, you know, what's. What's the market rate? And then we fit within that. But going back to that, I just. I don't know how involved I need to get into this price sheet or if I should just be continuing on with the market rate. I know that you have. I just finished up a couple of your online courses, the landscape business course, and other stuff. And so.

So are you.

Are you thinking about temporarily reducing prices to capture market share? Is that what you're thinking about doing now?

Yeah, we want to be able to go into the market this year with an offer that's, you know, like Hermosa says, you know, stupid if you said no.

And.

And we liked your idea about the. The free, low cost things like the fertilization stuff, because we already have the. The licensing for that stuff. But where'd you go? So, yeah, I guess. How. How deep do you usually recommend going with that.

Yeah. What's your, what's your close rate last year, do you know, Nick?

We don't, because we didn't really track it. We, we had a, a majority of our work coming from project management companies. And so that was a big problem.

We didn't do advertising last year. We put out, two years ago we put out like 3,000 flyers direct mail. Not every door direct, but got a list, sent them out to high income homes and we've been working off of that for projects ever since. And then the lawns has just been organic growth from where our crews have been for the most part.

But if you had to guess of estimates that you send, not necessarily ads, which is estimates sent in General is like 50% closed, 70% close. Where are you at?

Probably like 70.

Yeah, it was like so we could increase our prices based on that.

Yeah, like I don't think you need to reduce prices to make an offer. So, so good that people don't say, don't say no, especially because you're 70. If you would have told me, hey, we're like 30, 35, okay, then I'd say okay. If you rate, if you lower prices, you will probably capture more share of the market. I think if you lower prices, you are simply going to cut into your margin and have an 80% close rate. That's what's going to happen. And if you just look at last year, let's say it's 20, you're 20, 25% profit. Okay, we get someone 20% off. Is that really going to make an offer so good they can't refuse? Probably not. But you just give away all of your margin for probably going from a 70% close rate to an 80% close rate. Because there can be 10% of the mark if you charge a dollar. They're not using you. Right. So like they're just not like you're going after like the lowest value customers by getting this very lower in price. I would be much more looking at things like a freebie. Things that are low cost you a high value to them. So for example, we mentioned before, like a corporation is $200, you can mark it as a $200 giveaway instead of just lowering your price and giving all of your margin away. Give a freebie that cost you maybe 20 bucks in labor to be able to give that away. If you're really trying to. Again, I am assuming you're trying to grow to capacity, right. You're trying to backfill and fill up your truck. Great. So that's the goal. Let's not give away all of our profit margin in perpetuity by lowering price on a per service basis. Let's just give them an offer upfro that can absolutely, you know, increase customers coming in. But I don't think you really have a problem with when it comes to close rate like your pricing. I don't think your pricing is the problem. It sounds like it's a promotion, like we've never promoted, right? So like when we promote, yes, you might not have a 70% close rate. That would be a very interesting number to know. When I do actual advertising and I get leads, what's my close rate then? But based upon 70% of customers saying yes now, I don't think pricing is going to be moving the needle much. It's going to be much more an upfront offer and then you just nailing what type of promotion you're doing. Whether be door hangers or yard signs or whatever you're going to do. Nailing that is going to be the thing, not pricing.

So then our next question is with both of us being operators. I've been in the landscaping industry for 15 years and then Nick's been like five I think now.

Yeah, something like that.

So do you have a recommendation on how to. Like our goal, our goal was kind of to split things up and start to have one person staying home and working on systems a little bit more. But we've been so busy and we have projects that we were trying to be stopped with last year. They're carrying over into this year. So we're planning on having one of us run projects and one of us run maintenance. But do you have a recommendation on how to split up roles so that we're not overlapping and frustrating our employees and frustrating each other?

Yeah, 100 sales, operations, admin. We gotta figure out which of which of those you both are gonna go into and then which one you're gonna split or delegate. Right. So sales are gonna be the highest leverage. Operations is gonna be slightly lower. Admin is going to be the lowest. So first off, I want to make sure like first off, when it comes to sales, which of you immediately, like, I'm the salesperson or is it kind of we just do both of us.

It's kind of both of us because I think that we're both pretty good with customers. I think that if it's more of a project based then I go over there. If it's, if it's a maintenance thing then she usually does. But yeah, it's it's kind of 50. 50.

Okay. I've seen some couples do this decently well where it's like hey, everything to a sales operation admin for projects. And then everything was sales operation admin for maintenance. And they really make a service division. The challenging part with that now becomes if either of you leave for a couple of days, you have a problem, like a big problem in their departments because you know, Hannah doesn't know how the projects are being ran, how it was sold and who's over here working and vice versa. So that can become a huge constraint and put a lot of stress in the relationship. I think if I was you, I'd be trying like are you trying to grow like down the road?

Our goal is to stop all projects temporarily grow the maintenance side and then the irrigation is a lot easier to get a higher margin on in our area. So we're trying to do a flat rate irrigation system for like 90 of the irrigation stuff so that we can maximize our budgeted hour profit. And then, but right now the goal is like stop, like finish out the projects that we've already committed to and that's it. We're not taking on any new project. We're focusing on yeah, maintenance first and then once we have one location that's able to grow maybe two locations, then we'll start growing like a third location basically operating in tandem with those two. That's pure irrigation.

Cool. And what was revenue last year?

6 or 6. 25.

Okay. Okay. Yeah.

Like it's going to be different this year though that work. It's going to be a whole new situation for us because we lost a big client in Washington. We already spoke to you about that on previous call. So that's what, why we completely got rid of Washington. We're only operating in, in North Idaho now and we're trying to focus on the higher income markets with full service from spring turn on to your fall blowouts, maintenance packages that just split up into monthly payment. But it's, it's going to be different than how we operated because we're going to be done with commercial.

Right.

Who's better at operations like dealing with the team. Are you guys going to split that too?

I, I, we both can fill the role. Like this is the hard part is that there's not really any like thing that one of us can't do for the most part.

Yeah, I think as far as the maintenance goes, I would be the better person with the team because I, I've.

Done it and we're getting Rid of projects. Right, so like projects. Yeah.

Short term.

Yeah.

For the short. Yeah. Until.

Right. Irrigation. Yeah. If I had to, if I had to guess, I think that from the, the fact that we have a project limitation in terms of skill, I would probably be pushing. Nick, you try to move into sales and Hannah into operations. Because if we're trying to get rid of a lot of the big projects, that means, Hannah, you should be able to do most operations and lead the team, make sure everyone's dialed in. Anything doing the work is you. Anything with getting the work, that's, that's going to be all Nick. Right. And yes, you can do that, which is great because if, if, if Nick needs to go out, you could cover the estimates. Right. Especially because now it's me, mostly maintenance. And you can push off irrigation because Rarely is it a 911 situation. Right. The delineation though, between sales and operations is is this getting the work or is this doing the work very simply? And if I was you guys, I would write down everything you guys do on a daily basis and then just ask yourself, is this sales or is this operations? And then the other categories, me, admin. And I think that's the rule I would be trying to delegate if I was you both. Because both of you have skills that are higher leverage than admin. So whether it be a part time admin person locally or be a virtual assistant, I think spending time making those systems and handing all admin off is what allows you to get over a million by Nick focusing on sales, hand on operations and having an admin person take that stuff off your plate. But you'll need to get really clear in terms of here's everything I do in sales, here's everything I do in operations, and here's everything I do in admin. And when there's a gray area, you both look at each other and say, which of these three categories should this fall into? So that way you're not stepping on each other's toes. The team knows exactly who to go to when it comes to calling out operations. Oh, there's something wrong on my equipment. Operations, okay, there's something wrong. I do a work order, change that Sales, that's getting the work. So the clarity for the team, but more importantly the both of you to know who does what. And then there's going to be obviously times where sales is really heavy and operations not. And you could compensate for each other and help each other out. But it's clear in terms of who do we like? The buck stops with sales, with Nick, it stops everything with operations. If we're running way behind, we need to hire more people. That's all on Hannah. She should be thinking about the budget hour capacity and where jobs are going on the schedule. She should be communicating the admin to be able to make sure that everything's going smoothly. I would highly recommend pushing in that direction so you don't step on each other's toes. That's actually the thing you're trying to guard against.

Yeah. So just a quick thing for the pricing. Do you. So when you say raise prices, you're talking about raising prices on your current customers. Right. So then you just send out the mass text and say like, hey guys, we got a. You know, raise prices.

Yeah. And to new customers as well.

Yeah.

Assuming that the inflow of leads is so high you can't stay up with it. Right. So sometimes what people will do, they'll raise prices to existing customers because they know they have good service, they know people will stick, but they'll keep their price the same for new customers because they know that that's the entry level price. They need to prove their worth before they can raise prices. But if you're like way over capacity, like leads are just pouring in, you actually need to raise both to new customers as well as existing customers.

And do you do that mid season?

I do it when I hit capacity.

No matter what.

No matter what. Because if what's the middle of season or like a month left of spring rush. Okay, so what are we going to do? Like turn away new customers, right? No, we've got to raise prices, remove our lowest value ones and get room for space with probably within three or four weeks to replace all of them.

Right.

And then like if you're hitting capacity, it's usually you are in the spring rush, you're hitting up against it. The only reason you would not raise prices is if you think you're going to lose 20 or 30% of them, which as long as you get service, it's not going to happen. But assuming that that is the case, you wouldn't do that towards the end of a spring rush because then you lose them for the rest of the year. And usually as Churn kind of took your number, recurring is dwindling. If you guys can figure out promotion though, that means that you can turn on promotion when you need to refill the basket of leads. That's why that will be the unlock. And that's why I want some separation. I want Nick to be thinking about sales and promotion all day long. Upsells using the texting inside of copilot like do all of that. That's all sales. Now figuring out a monthly email and a monthly text based upon the entire year you figuring out that system, having it scheduled as a to do remind you the day before via text message. Like setting all that stuff up is the thing that allows you to be able to grow. But now you know who's responsible for it. We build custom websites for home service business owners just like you and you get a 15 minute free consultation about your website. Because our team on average when someone joins as a client we increase the number of leads they get by almost double 80% within the first 12 months. In fact if you go to our website you can actually go through and see all the different websites that we build for a whole bunch of different home service businesses that have taken their business to the next level. Go check it out and book a free consultation call today. Andrew's next. Go ahead Andrew.

Hey. So last year we did about, I did about 256 000. It's just me and another employee. So I got myself into a bad shop space lease. Thought it was going to work out like spacing wise and everything but nothing works. And so I was wondering if you kind of had like any metrics as far as like revenue percentages to go to shop space. Because right now I'm at like after I sign this other thing it'll be like 33 50amonth.

Yeah. What's your monthly rate on the current lease that you have in place? It's $2,000 a month and the new one's 13.50. What, what's the advantage of moving from the 2000 to 1300 one? Just the cost savings of 700 bucks.

Well the $2,000 a month is an indoor space and so it's like extremely difficult to like park and everything. And then the actual parking for my employees outside is atrocious. And so the 1350 is a outdoor space. So I don't. It's much easier to like move stuff around and that type of thing.

How, how long do you still have the existing lease?

Nine months.

Okay, so it's an eighteen thousand dollar mistake. Yeah, yeah, it's an eighteen thousand dollar mistake. Have you talked to your landlord about getting out early?

I have not. I'm going to after I have this other one set up.

Did you, did you, did the landlord use a real estate agent to get you to sign the lease?

Yeah.

So if I was you I would go to them be like hey here's the problem I'm having with the space right now. I've found another space and I'm wondering if you'd be willing. If I get an agent, I'm willing to pay their commission if they can come in early and try to find another tenant. And if not, that's fine. I will pay everything out. But I'm just being like, just be really upfront and honest with them because in nine months they're have to do this anyways. If you just say, hey, can we do it earlier? And I'm willing to pay the commission on it, but like, can we just try to get this off sooner? Then maybe you pay for two or three months, whether they're finding a new tenant and then someone else comes and signs a new lease with them. Okay.

And then what? Do you have any idea of, like, what that commission would be?

Like, the percentage you just ask them. Usually it's like depending on. You're probably looking at three to four grand. Just depending. Very much depending. And they might already have an arrangement with an agency like, or a brokerage. So I would just put all the cards on the table to your landlord. It's only nine months. At the very worst is an $18,000 mistake.

Yeah.

And we live and learn. And at the very best, you may be paid the next two or three months and then you can get out.

Okay, so you. Are you like, what is your percentage? Do you have a shop space percentage? Like, am I somewhat in that right now, even with the 3350?

No, like, if you grew by, you know, grew, like you're thinking you will, then. Yes, but like. So in the book I talk about under 15% is the goal for your admin. Right now you're spending over 15% just on shop space. But admin for me includes like answering the phone, all my utilities, everything they do with admin. So you are significantly higher than that. Okay. The 1350 makes a lot of sense at 400,000. Let's go. That's more like like 4%. That's good. I like that. Okay, so definitely moving to 1350. I agree. If it's also going to allow you to have like, better operational efficiencies because like parking is better, etc. You're going to have to just rip this band aid off. You're going to make a couple of decisions like this as you get the career, your career up and running. You're going to make some mistakes. It stinks. Hopefully you can get a little bit recouped by getting someone else in there. But honestly, even if you pay for three months and a commission, you're basically at 10 grand anyways. Yeah, right. So it might be one of those things. It's a hard lesson to learn.

Okay, and then another question I had. So with me going to around like 400,000, hopefully next year, I mean this year, keep forgetting it's February. I have hired another person. He'll start in the second week of March. And with that I'm wondering like I'm in the working GM type thing. So I'm wondering how will I balance like estimates and working in the field at the same time with. Because we already work until like 7, 7:30pm if not later during the spring and then doing estimates after that and everything. So how do, how am I supposed to balance that? Is it like should I hire someone virtual to answer the phone, whatever. And so what, what's your advice on that?

Yeah, like in the perfect world, if you can get someone on a per minute basis, because you probably only have one or two inbound leads a day, even during spring rush, you might be paying a couple dollars a minute. But if they can just get that information to you and answer the phone, awesome. So at your size, a permanent rate for a phone service is any better because you spending any time trying to hire an admin right now is not worth your time. And so permanent rate is what I'm trying to find someone to answer the phone or do some admin tasks maybe for you. But you don't need a full time admin, you don't need a part time. I don't want you training anyone how to answer the phone. So like that's why answering service is going to be useful. And then also I would time block to where like let's just say call it from 5 to 7pm every night. That's when you do estimates, meaning you get off at 4, 3, somewhere in there for, with your crew member. And then you're going to go out and do estimates. And if you're like, well we're already working 12 hours a day, six days a week, you're above capacity, Right. So that's when you're going to have to need another employee or another truck to increase capacity to be able to continue growth. Because if you're working 14 hours a day, six days a week, you're going to eventually break down either you, your body or your employee's body. And so you're above capacity at that point.

Okay. And so then if, since I am above capacity, then would I with my I'm starting a second truck because right now it's just one. So this year with the second truck, would I split the route that I have now? Because we, we mostly do only mowing. We do mowing four days a week and then prop projects Friday and sometimes Saturday. Um, so would I split my route like kind of in half? Um, or only give them like a certain day or like, I don't. I'm not sure.

How many budget. How many budget hours of mowing do you have right now per week?

I'm not really sure. I'm not super.

How many customers we did about. It was about 75 in this up per week. How many of them are bi weekly?

None of them.

Okay, so 75. Okay, great. And what's your average cost per cut?

About 70.

Okay. So you probably have about 60 budget hours worth of mowing, if I had to guess, per week. Which means that's about two full time people, I. E. What you're doing right now. There you go. So that's you and the other guy working by you splitting the one truck off. They'll increase their capacity by about 20%, but you're going to need another employee pretty, pretty quickly. I would then try to get it to where the capacity that one mowing truck is able to handle all the mowing and then the second truck, probably you is doing projects and estimates.

Okay.

That's usually a very efficient route. Like method is like one truck with two crew members doing the mowing. You know, right now if you have 60 budget hours per week of mowing, that will keep them busy. And then you open up the capacity for that second truck to do the property cleanups, do projects, and have more flexibility on your estimates.

Interesting. Okay.

Okay.

Awesome. All right, thank you very much. I appreciate it.

You got it, brother. Derek, you're up.

All right. Two quick questions that I thought of. So a little different, obviously for me again, dumpsters. But the off season kills me because nobody wants to do any work when it's cold out and I need them to do something. So I will say so. About 80 to 85% of our business is a, is a residential market. That's, that's what we really focus on. We like the stay at home moms, the handymans, the, you know, so. So that's what we're working with. You know, our big thing is like clean dumpsters. Like we wash our dumpsters, we do driveway surface protection, like all the fancy stuff.

Right.

We're the bougie dumpster company. During the off season. We just like die. I don't really have any ideas. The, the only thing that I know that some of the other dumpster companies do, but they don't focus kind of on the primary residential like I do is, you know, they'll just let a can sit somewhere forever. You know, they'll get some, some kind of like trash service in a way. But again, we're still like more, they're more expensive than like waste management or your general trash service because we're talking a roll off. So I just don't, I just don't know. I just want to know if you have some ideas off the top of your head.

Yeah. Like what turns a month to your off season? Is it just the winter?

Yeah, like November, we, we still say decently city, but that's when we drop November. And then like December is just dead. January's dead. February is going to be pretty dead. And then March is going to like skyrocket. So March through like September, full throttle all the time. November's like, oh, this is nice because we're not full taught. And then December is just like, oh, we have nothing to do.

How many of your customers are repeat customers?

Not a lot. I don't have the percentage, but I mean, not a lot. Probably like 25.

Okay, and what's your CAC as a blended for the whole year right now?

What. What do you mean?

What is that customer acquisition cost? Sorry.

Oh, I don't know. I don't know the number.

So I think in, in the event where you don't have recurring revenue, you have to figure out how can I spend money on ads to at least break even during the off season.

Right.

So this is, this is essentially cure number two inside the off season book. Have you, have you got that one, Derek, by chance?

Actually, I think I just got it after I did the webinar. I bought all three, so. Yeah.

Yeah.

And mikeandy's.comworkshop is the digital, like the course version. It's all free. And so this is cure two. And what you're wanting to figure out is, can I break even with my customer acquisition cost if I spent money on ads? And I would be looking at like creative things, for example, or like Christmas, Thanksgiving, people getting ready for that. You know, can they get a dumpster and do a, you know, full house clean out? Maybe if you can give it for 50% off, can we still at least, you know, get our cogs covered potentially? Right. And so you could just be like, hey, this is the Thanksgiving deal. This is the thing. This is The Christmas deal, this is the New Year's special. And you can just put like 9 99/499. Like, really lean into the discounting. Assuming you can drive enough demand and bring your customer acquisition costs down low enough, you might be at least skate by a break even.

So I do the Black Friday, the New Year's. I didn't do like Google Ads for it or anything. I mean, we run Google Ads constantly, but we didn't do ads for that. I did like Facebook and then like, I did the text marketing, like you talk about, because we run, we want to go high level. So I literally got like one or two rentals. I didn't slash the price. We gave like 50 bucks off. But one of my ideas was. And again, I understand that it's everybody's opinion and whatever you want to do, but I thought about, you know, come November, December, I come out with like, winner, a winter pricing. And like, straight up, let's say one of my cans is, you know, 425. I come out and I'm like, it is 299. Now, obviously, I'll run my cost, make sure what, you know, we're making some money. But I would rather have my cans out rotating, rotating cash flow. And then come spring, it's just like, hey, they go back up and obviously people question it. It's like, hey, that's winter pricing. You do your project in the winter, you get a better deal, you spring rush. Because then we're always out of cans. I mean, what's your thought on that?

Yeah, like, I think most people dramatically underestimate how low they can reduce their price when the alternative is making nothing. Because the only thing you need to cover is your variable expenses, which is essentially fuel and labor to get the thing there. Right. And so if you can have winter pricing, by the way, also it allows the person that is, quote, price conscious and says you're really expensive to now look at a lower price. Like, oh, hey, if that's too expensive, your immediate downsell is, hey, if you're willing to wait for your project another couple months, that, that just got cut in half. You save a few hundred bucks. Now, to most people doing a $15,000 remodel, that's probably not going to be enough for them. Like, oh, yeah, reschedule for three months. That's where we want to be careful. Like, there's not a lot of price flexibility or like time flexibility for most people to wait five months on this sort of.

Yeah, I think most of it's Going to be just like getting people in the winter to say, you know what, I'm willing to do the work, but that's my next. And I'm trying to make this really quick because I already got to go. But, you know, I still have contractors that are ordering through the winter. So am I giving them the winter pricing? And, you know, because they're still ordering regardless.

Yeah, that's the. That's gonna be the hard part, right? Is you're gonna have to face like, am I will. Like, what percentage of your bins are out during the winter usually?

I would say probably like 25%.

Yeah.

It's low.

Yeah. And like, during the summer, we're like 95 at all times.

Right. So I would do two prong strategy. First, I would try promotion. I'd figure out a promotion strategy. You need to know your customer acquisition costs, because if you're willing to give it $200 away on a bin, what if. What if. If you just did a really good ad strategy, you could pay 150 and get a customer and not lower your prices and not do a discount thing. Just, just literally spend more money on ads. And by the way, there's a whole bunch of brand awareness that happens to people who don't buy during the winter and they come to you in spring.

Right.

They don't show up in the ad cost. Right. So I would first do that. A lot of times people are so quickly, like, I'll cut $300 off. Whoa. You can get customers for $150. Right. So I would first figure out my ad strategy and really dial in like, like really good targeting. Putting, like, how many people in your contact list? Like a few hundred.

Like 1500.

Fantastic. You do a look like audience inside Facebook. So it's going after those people and then people that look like them inside of your market. Like, I think that's the strategy I'd be using. I'd be going after that one and make another one. Calling contractors out specifically, like, attention contractors in XYZ market. Like, I would make a contractor one and make a residential one. And then I would focus on ads and figure out that cac, because that's the CAC that you'd be giving away customer acquisition costs that you'd be giving away in form of discount. And then you just ask yourself, would I rather get new customers and go on the offensive or would I rather go on the defensive, cut my prices and scrape by. I have a feeling you're going to be able to get a customer for under 200 bucks. And in that case you'd rather just go on the offensive and get the brand awareness that residually comes in with ads instead of just giving a 200 discount and then becoming the discount brand.

Okay, last question real quick. So the com. The commercial side of things, I have a lot of. So I, I own another company that deals with like commercial vehicle wraps and signage. Right. So all my business there is B2B. I know a lot of contractors in construction, but like big level construction. So they don't, they don't use my dumpsters because they're using like the big boys. And that, that can's getting dropped and it could be there for 45, 60, 90 days. Right. So in my opinion, that's two different business models completely. And I haven't wanted to explore the commercial side. Right. But there is a part of me that's like, well, you know, these cans are constantly out, they constantly rotate and there is a return on investment with that. It's just, it's just longer. My cans make a lot of money because I flip them every, every week they flip. I, I guess just what is your opinion on those two different, you know, business pass? Like, is it worth setting my can somewhere long term and only making money when they call me because it's full, which could be 45 days, 60, 90 days.

Yeah, I think that I would do that during the off season. So I would have a really good promotion strategy going into your slow season of hey, we now our prices go to this. If you keep the can during these months, but the can comes back to us in spring because they're contractors, it's B2B. They understand numbers and math and business. So you can just be honest like, hey, where there are residential people, stop using them. So because of that we now have this great deal for commercial contractors. As long as you keep it during these months, it's way cheaper. I think I would probably still do that after just trying to change the promotion lever because that's going to be an easier, like less of a drag operationally just adding leads at the top of the funnel versus changing the model and how you do things in terms of pricing. But that would be my second thing I would go to is like, do I change the model to where like in October I'm promoting to all my contractors that they can keep the bins longer. And here's the new pricing for contractors only allowing you to potentially have a two prong approach that you are for contractors, you give a discounted price because you know they're going to be keeping the bids longer, but they keep the bins. They're out. Like we want to get capacity. And then you have another approach, which is I do ads to residential customers, but I'm not discounting it. I'm simply using the CAC instead of the discount.

Okay, awesome. Sweet. Thank you so much for your time.

You got it, man. My pleasure. A few more here. Go ahead, Sergio.

All right, thanks for squeezing us in.

Hey, you got it.

So I have two quick questions for you. So this, this year, with spring rush coming around the corner, we plan on going into profit mode. And since, you know, maintenance is gonna, well, maintenance, recurring maintenance is basically our bread and butter. How, how would you give me advice on how to deal with like the landscape projects that come upon, you know, like, let's say I have already a client that we do the maintenance every week. And then they say, hey, are you interested in doing this project such as installing sod shrubs, you know, all the landscapes? How would I deal with, with all of that?

Yeah. So like, this is when it's going to become to play right here. Let me just pull this up. This is inside the book here. So this is what you're going to use, this matrix right here. So if it's a one time job and it's not time sensitive, your priority you're going to give them is very low, right? If it's a one time job but it's time sensitive, well, now it's kind of in the middle. Like they, if you say, no, I can't do this for three months, they might go find someone else, right? So now it might be some more time sensitive, but this is the part that you have the most juice to squeeze. It is one time jobs they're asking you to do, they're not time sensitive. You're trying to immediately book them in July because during the spring rush, you're trying to focus on recurring time sensitive jobs, which most time is maintenance because you can't let things sit for two or three months, right? So I would just be in your, in, you know, in your market, you'd be like, these are the months where we are focusing on recurring jobs only. And the only way someone can squeak in is their existing customer with a very time sensitive project and I'm charging them a premium price. But everyone else, like when we, for example, in my market, when we hit April 1, we are now officially booked till July 1 for projects. So if someone's like, hey, like when are you Next available? On April 14, they're book. We're booking into July because we just know we're going to have so much recurring work coming in April, May and June. I don't want to be booking any projects.

Okay, so would you say that it doesn't matter? Because what I've been afraid of, like, in the past is not to book them in because, you know, I mean, they're already my clients. Right. But for them to say, hey, Sergio, well, I know that you're really busy, so I'm just gonna, you know, hire someone else to go ahead and do. Would it be. I mean, I guess it is what it is, or would you approach it a different way?

Well, the bottom line is, from your perspective, you're at capacity. In other words, there's so much work coming in, you can't handle it. If they leave, you have another. You have other customers. Right. We have to just look at from a purely objective perspective, which is if they left, if you have so much demand, you can't handle it, they're going to be replaced. And if they want to wait because they see the value in your service, they just want to stick with one contractor. They know, know, and like and trust you, great. If not, I'm really sorry, Mr. Jones, we're booked out to July because I want you to be able to get as much recurring customers as possible during the peak when you're not going to be getting those recurring customers in July and August, it stops now.

Okay, that makes sense. Now on my second question is, okay, so we haven't really done any marketing because it's all really been organically, you know, recommended, like the neighbor comes out, whatnot. But this year I decided to started doing door hangers, which I was already getting a little bummed with the, you know, one of the guys, I guess, did 80,000, only 150, and I only did 5,000. So I'm gonna try this out because I've always. So I'm a big believer. When I did, the first time that I did marketing, I did business cards, and I would go up to the doors and I would actually knock to see if I could interact with the. With the client or the homeowner. And that worked out pretty good the first year that I did it. Now this year I'm trying. Trying it a different way because the year that I did the business cards, you know, when they wouldn't open the door, I would just kind of slide it in the crack and just leave it there. But I know sometimes they'll miss it or they'll open the door. And it'll fall out. So that's why I'm doing the door hangers this year. Just in case they're not home, I could just leave it on there. But I didn't put any information like anything like where they could fill it out like an insta quote. I just basically put like our name of our company and like in the back the information that we do. I don't know if maybe that's something that I should just. If I, I mean, just finish the 5000 and then change that or is there any ways that. Or other marketing ways that, that I should approach the season, you know, if there's any other ways that I can do it.

Yeah. Knocking on the door when you're doing yourself is definitely going to be your highest. Like the percentage is gonna be the highest. Now usually most people would rather when they scale it, just do door hangers. Mostly because it's harder to train people. Like I don't want to get in the business, have to teach people how to talk to people at the door and knock on the door and like have a comp structure and all this stuff.

Stuff.

So usually when as the owner I would knock on the door because I know that I can get about five times as many more people to say yes if I talk to them. That being said, having the door hanger is going to way outperform your business card when it comes to if they're not home. Right. So you're trying to like the, the at home, you talking them is going to be the best. Below that is going to be a door hanger. Below that is your, your, you know, your business card. So you're definitely upgrading the people that are not home. I'd still knock on the door if I was you because you have the skill of, of gifted gab versus training. That is going to be a whole different business. Not to say you shouldn't do it like pest control. It's a big deal door to door. You can absolutely scale that up. It's just harder usually to focus on that in terms in addition to operations.

Okay. Now realistically, like Speaking for about 5,000 door hangers, what is like my percentage that I should, you know, probably get out of that then if you can.

Get one of a hundred, you're crushing it. I think most people, if they're just getting started, 1 out of 200 is more likely depending on the time of year, depending on literally one day, the next, you can get drastically different based on the weather. So I would, I would spread that over the Course of a couple weeks. I wouldn't do it all in one shot just in case you're early or too late. And then you know, track the numbers from that. But if you wanted of a hundred, you're doing good. If he's doing one or 200, it usually makes sense. Anything above that starts to not make sense usually just because the cost, the cost of just delivery starts to get too high.

Yeah. Okay. Now as soon as I finish those 5,000, would you say change it up like you know how you mentioned the QR code and that way it'll take them to where they could fill that out. I mean would you say I would change it up like that?

First I would do the 5,000 so you have a benchmark of how many customers you're getting per hundred. Then I would do a split test which is the next 5,200. 2,500 have a QR code. 2,500 of them have just where they completely write them in. And then you'll split test that one variable at the same time. And you can very easily measure like I would do every other door. So that way it's not like based upon the neighborhood or the time of day or anything like that. But then you know, if you scan the QR code, it comes in your form that's from them. If they send me a picture with it written, that's one for that one and you keep track of those two things.

Okay, okay. Okay. Now is should I focus on more ways to market or should I just do door hangers for now? Maybe like the web. We have a website and I try to look at it on Google, but it does, it's like, I mean our ratings are pretty well it's a 4.6 or 4.7, something like that. But we've only because we started implementing like getting reviews from our clients this year. And right now I have about 20, 20, 21 or 20 something reviews. But it doesn't, it's not like one of the first ones that pops up. So how can I help that? You know, keep going up on the.

Search engine it get more views. Also I would optimize your site for conversion. Not necessarily even SEO. Like I want higher percentage of people when they get to your site to convert. So like a few weeks ago on home service Millionaire channel I did a like an hour long of like diagnosing sites. Watch that, try to copy what I'm talking about in terms like where as the request form goes, the speed load, the page load speed as well as like Your images, your video being optimized. There's a lot of little things you can do to increase because you don't actually care about ranking on Google. You care about getting more leads. Right. So everyone likes, like, how do I get on top of Google? Like, why would I want to more people to see your lousy sub shop. Right. Make the sandwich better. Like, make it. When they get there, they convert into being coming a lead. And so I would focus more of my attention on conversion. And then you'll get more reviews, SEO stuff. Yes, that's there. But right now, the biggest lever you can pull is that if one to 400 people so up to your site are converting to a lead, if you Change that to 1 out of 100, you will 4x the amount of leads you're getting. So instead of trying to get like incrementally better with SEO, let's just focus on converting more people that are already showing up at the website.

All right, sounds good. Thank you, Mike.

You got it. You have a good one. Alexandra, you're up next.

Hey, Mike, how you doing?

Good, brother.

I just wrapped up this last December, my second year in business. And for context, 100 of my marketing efforts for the last two years were in mowing clients and reoccurring revenue. And the way I attend those were through door hangers. This year, I'm looking at it in a second acquisition channel, specifically Facebook ads. Doing an offer for that. And one of the questions I have, three total is what my expectation should be for this year for the acquisition channel. Do you think I could try to learn it during spring rush and also try to take advantage of the season to get me 50 clients from that channel? Or should I to purely kind of try to aim for just the growing season mentally, knowledge wise for Facebook ads?

What were your numbers on door hangers? How many door hangers did you put.

Out in the last two years?

Let's just say last year, 2025, maybe.

Like 80, 000 door hangers.

You put out 80, 000 door hangers in 2025?

Yeah.

Let's go to the man.

All right.

How many customers did you get from that?

I think it was around like 150.

Okay, so not great numbers. We can improve that though, because you're. You're right around 150. Like, I'm sorry, you're about one in 500 right now. Yeah, yeah.

Right.

Okay, cool. Did you figure out a customer acquisition cost from that?

Yeah, it was like 150.

Okay. What'd you do in the Door hangers, you have QR code. Like, what was your offer?

It was just the instant quote. Door hangers. For context. My first year I would get three clients for every thousand. So I think the big thing was printed prices. But also my prices were higher in my second year.

Oh, I got you, I got you, I got you. Okay. Okay. How much do you have a spend on Facebook ads?

Well, I'm dedicating to door hangers this year, 8,000 and I'm looking to spend from 2,000 to 7,000 for Facebook this year.

Okay. Yeah, like I would be really interested to see if you could just dial in your door hangers more. 150 is not great, like in terms of customer acquisition cost, but I think you could do better, right? Like you know which markets are working well, you know when to put them out. I would really play with having introductory offer. So a lower price that you cross out in the printed and you put like. Did you do that already?

No, I was going to add in this. This year I'm looking to do the first month three offer. And I think that alone will lower my acquisition cost from anywhere to from 150 to 100 to 120 just due to the better offer.

So I. So, okay, so I would recommend a few things. One, I would cross out the price and just put a lower price. That alone will increase your conversion dramatically because then they're getting a discount. I would not offer a free month. It's too much cost to you because you have actual real hard cost on that. And I could very easily really backfire on you. If you want to give something away free, give away something like a fertilization or a core aeration that might cost you five or ten bucks in actual costs and to them might be worth 200 bucks. Right. So a core aeration that you are literally going to do in 10 minutes, you can value that to them at $200. Right. So you can just say, hey, after your first month of service, you get a free core aeration which kind of lines up with your spring rush. And that's a $200 value. You get that as part of being part of a mowing customer. Now you've done their service for four times there, solid customer, they've paid you. And then you can give the freebie. But I do, I do the cross out on the door hanger. If you did that and the freebie around like a corporation or treatment, that should basically double your conversion from 1 to 200, 250. And then you can make sense of like a 70, $80 customer acquisition cost. That's something that can scale and probably is gonna be difficult to beat in your first year of Facebook ads because everyone just thinks a new acquisition channel is gonna be better. What's going to happen is you're going to start there with no information and you have to do testing again.

Right.

So you know you have something that kind of works. Like if it's 150, 150 customers, okay, it's not great. But we can absolutely work with that and just make it better.

Okay. So as far as Facebook, do you think I should still try to experiment this year with it on a smaller level? Because I see it happening. I would like to the following year, full on, use it as an acquisition channel. You know, given a better business, more funds, I would already be looking to market more. So I see it, I could prepare this year knowledge wise would be, yeah.

You could definitely test it, see where the customer acquisition costs are coming in. I see too many people thinking that a new customer acquisition channel is going to solve their problem versus just you already have a customer acquisition cost that you can work with and just refine and make it better. And I would not abandon $150 customer cost. I just focus on making it better. Like when I started Augustin and scaled my customer acquisition cost was 200 bucks. Cause I didn't know what I was doing. Right. So you can make it work. It's just a function of. You can also just keep refining it and get 150 to 75. And that I think is very much possible by offering like a freebie around a fertilization, crossing out the price and giving a lower price. Do you have a QR code right now, Alexandra, or do you have them.

Write it in just for the website? They, it's, it's printed pricing. So they just have to contact us and we schedule them.

Okay. So but like do they have to fill out their information on the door hanger and send you a picture? Yeah. Okay. So like switch to a QR code immediately will increase your conversion rate.

Really?

If you have a QR code that goes like a jot form and then that information just comes to you, that's going to like increase your conversion rate there. Because now they don't have to write something out on their, on their phone. If they scan a QR code, it will pre fill the whole form. It knows their phone number, it knows their email, it knows their address. It'll do that in two seconds versus them writing out with A pen? Like I don't even have a pen, for crying out loud. I have a marker. But like if someone gave that to my house, I would just be like, oh, well, I can't fill this out, I guess. Right. So yeah, I would try those few things. And then also. Yes. Do you want to spend a little bit on Facebook ads and try to improve it? Great. I think that you have something to work with. And abandoning the acquisition channel almost always leads back to a waste of time and energy. Okay. And instead of just doing more and better what you're currently doing.

Okay, thank you. And my second question is this year at one point we were, I was billing over 200 invoices at the end of the month and given it was my first year with cards on file, I didn't want, I wanted to reduce as many mistakes as possible. So I would quickly just double check every invoice, bulk double check them, and then I would bulk bill them. But I noticed that maybe it was just anywhere from three to eight mistakes at peak. Right. Do you think it's worth the time to try to do everything correct or should I just bill and then they contact us and we try to fix the situation? Or should I be looking at installing maybe automatic like four week billing at this size? If not, when do I look into that?

Yeah, if you're doing, if you have auto billing on and there's mistakes happening, it's mostly actually your problem with dispatch board, like, like a daily screening of did the jobs get completed correctly, did they get skipped? If you do that every day, there should be no reason. Like when you say there's an error, you mean like a billing, like they got billed for something they shouldn't have?

Yeah, yeah.

And what's also happening by the way, is they're, they're not getting billed for something that you did do that's by the way happening the same rate. It's just they're not going to tell you about it. So if you're getting eight mistakes that they call you about, you're also getting eight that you're not getting, you're not charging for. And so this is actually much more of a scheduling and admin problem, which is on a daily basis we're going to go through the whole dispatch board and make sure anything that was skipped is skipped, anything that was completed is completed. Nothing should be staying back last week or yesterday that was not addressed completely. And if you do that every day, then the end of the month like everything should be automatic billing and no problem.

Solid.

Okay. That makes sense. Yeah. Spring Roach was pretty crazy and it was mostly me doing all three hats. But this year's a little different, which leads me into my third question and the last one. I will be hiring my first inbound VA over the next month to two months and I've already created all the scripts SOPs for them. I made it a big priority during the off season. My goal is how do I not screw this up? How do I retain them? The. The hiring fee for them is like 3,000. So I'm using an agency to hire someone from Latin America.

Are you using somewhere?

I'm using an agency online. I don't remember their name.

Okay. Okay.

Yeah. But my idea is I've created a bunch of the scripts and SOPs. I'm looking to probably create videos, walking them through everything. I also have to do checklists like reports at the end of the day. From my understanding at least this is the first time for me. Is there anything else I should watch out for or you recommend I keep in mind.

What was your revenue last year?

200,000.

Yes. Like your, your admin person is not going to have a full time job right now. So you can really create a lot of things for them to do like reporting, checking the dispatch board. Like all those things. Just need to have a solid SOP/ a video that they can just watch and copy. And so do that now and hire them a month before you think you need them because it is not easy to train them up. They are not going to step in and just watch your video and do it right. They're going to make so many mistakes you're going to pull your hair out. So hire them prior to the spring rush, otherwise you will let them go in the middle of spring rush because they will be so frustrating. Especially if they're from latam. It's very difficult to train them. They don't think they're just going to watch your video and do it correctly. I've just trained too many of them.

So what should I do actively on a day to day basis to make sure they're on track?

Do what you want them to do really well before you train them. So if you're making eight mistakes a month on, on invoicing stuff like we need to iron that out, the system is not good enough yet to actually train it because if you just train them what you're currently doing, that 8 will just turn to 18 very quickly. And so we need to nail it before we scale it. So nailing it becomes we gotta dial in Things like that, the billing issue. So that when we train them, it's done right. Because otherwise any, no one's gonna come close to you on admin in terms of how you're doing. So if you're making eight out of, you know, 200 mistakes, that's a 4% error rate. We don't want more than 1% error rate. If you're already at 4%, they're gonna be eight to air rate, can almost guarantee it. And what happens is you need to hit spring rush and you just will fire them because you're so frustrated.

Okay. And then on a daily basis for the first month or two, should I be meeting up with them, going over questions they ask or should I daily. One hour a day, two hours a day, 15 minutes.

15 minutes. They should be able to go through everything. They don't, they're blocking, blocked on. So just say hey, at this time every single day we meet and you go over anything that you were blocked by the day before, whether that be jobs that were messed up, reports that didn't connect correctly, someone not clocking out correctly, an email that someone's mad about, they're gonna, they have their time lock and they better be a very structured meeting in terms of what you want them to go over in that meeting. Like I want you to start with the email, then I want you to go over our reports, then I want you to go over future projects and stuff that you gotta do like in terms of scheduling or scheduling materials and equipment. So I, I think you got to really dial those things in. Most people will end up firing their first overseas hire and they'll be super frustrated and then they'll cause a way worse problem in the business because you're going to go to 400000 run rate this year and then you'll fire them in a little spring rush if you don't have the right systems.

Okay, Be careful. That's all my questions, Mike. Thank you.

You got it Brian, go ahead.

Hey, good afternoon, my name is Brian, that's Joe Favelon, North Carolina here. So my wife's active duty. I got up active duty. I was doing this part time for two years from 22. I got full time when I got out last 10k. Last was it two years ago. So in 2024. So this last year we hit 400,000 about profit margin, about 30%. The part that I'm trying to still figure out is with my wife being active duty, she's going to go, she's going overseas for about a Year, she's not going to know where we're going to go for about a year and a half. And obviously my wife wants me to go with her. My goal is to keep the business run it. I've seen all the stuff you had, listen, some of your books and audio and obviously the. The goal is to have a GM run everything. And then me just kind of, you know, whatever state I'm at, help monitor, maintain, stuff like that. So the couple questions I have is what recommendations would you have for me with a short timeline of like a year and a half, two years to, to focus on. And then a couple of my mentors. One of them, he owns like, like 20 different little restaurants, Jersey Mike, stuff like that. He told me, don't ever give away like the money aspect of your business. Because he's had multiple people, like do fraud stuff for X amount of money. So he, he never gives away like the money part, if that makes sense. He always makes sure he maintains the books. He gives, like, you know, his GM to do all the GM work, but he always does all my money. So the two questions I have, like that is, what can I do to set myself for success in a year, two years for when I have to leave Fayetteville in the general sense? And then do you guys do anything in general to make sure you stay safe of people like frauding you?

Yeah. So in terms of the money side, I would assume it's like access to the bank account, access checkbooks, access to payroll, things like that. So a lot of that, yeah, it can be outsourced. I would get someone like a bookkeeping service to run payroll, stuff like that. So they didn't ever even have to touch it. And it's just like they talk to the bookkeeper when there's, there's bank stuff when there is stuff like that. Or they talk to you. So you can absolutely make it where it doesn't seem like you're trying to guard anything, but just like bookkeeping and payroll. You go talk to this bookkeeper. If you have questions about the numbers, if you come to me, like, and then they don't feel like you're guarding them. Like, oh, no, you can't have the bank passwords. Like, no, no. Like the bookkeeper, they do all that. So for us, like command center, it's like, if the GM has a question, they're coming to command center about their bookkeeping. Right. So I would really recommend using a third party for bookkeeping and payroll that you can keep accountable. So like home service, cpa Might be an option for you, I don't know, but like it just be a function of getting a bookkeeper that handles all that money stuff for you. And then it doesn't seem like you are this arbitrary, you know, handcuffing them from that side of the business. The thing that I would be doing is going probably entering profit mode somewhat prematurely. And so you might not be above 500,000 yet, but I would go to stage one and just start from there in terms of the stages of success and like go into profit mode. Focus one of your time and attention this year on recurring revenue simplification of projects. Anytime you're getting called out on a project, we're cutting that surface. Like if there's, if there's a service that only you can do, it's off. Because you need this business to run without you. And to do that you have to simplify and standardize. Same stuff every single time. It needs to be simple and easy to replicate. And if it's not those things, we got to get rid of it. And so the only marketing that I would be doing, Brian, is to be able to increase the amount of recurring services and simple services that you could replace the project based stuff that currently is taking a lot of your time and energy. That's the only marketing I'd be doing in preparation for when you can say, all right, we're out and I'm going to be able to leave knowing that I have a general manager that's been trained up, knows what's going on and I'm not requiring them to do really complicated stuff.

So we, we do that already. I like, me and him are both military still in the military. I'm ex military. We, we like simple stupid because it's easy to communicate. So I keep my, my services symbols, approach lawn care bushes and then every so often like sod and then seeding. That's essentially the only things we really provide. So we keep everything just basic in a general sense. So it helps me, helps us train all the employees with that. So that part's good. I just. So it sounds like I just need to get a profit mode to get everything just running pretty much by myself or without me.

Then yes, like you basically skip that step if you're like, hey, it's all recurring, it's all simple services. Great. We still get to raise prices, go into profit mode. We got to find a general manager, train them up and we've got to also make sure that they're incentivized. The creating incentive system for that gm because ultimately you just want to come back to a business that's doing slightly about the same revenue, maybe a little higher and is running well. That's all your objective is. So if you have to give a big chunk of that profit away, I would not mind that. Like, if I was you, I would be giving 50% plus of distributable cash to your GM because let's just say you have $150,000 of distributable cash. I'm happy to take 75 grand for doing absolutely nothing on the other side of the country or the world.

Right.

Like, I would really encourage you to incentivize heavily that general manager when you're gone because you need them thinking like you. And the only way to do that is make it where like a truck going down and having a $6,000 repair puts them out of a bonus this month. Like you need them to think like an owner. And the only way to do this to massively incent them on profit sharing.

Awesome.

That.

Thank you for the info.

You got it. Absolutely. And I. And I would. Yeah.

Keep.

Keep the relationship good with Matt because I'm sure he could always step in and help while you're gone. Jarrett, you're up.

I'm Mike Jarrett from Buckley, Washington. I have a quick question, but first I want to thank you for coming to Seattle last January. The Blue Collar summit was a huge eye opener for me and helped us dramatically in our business. My question is what you think our business should look like in our region at the 800 to a million revenue mark and maybe a first step to implement right away. Currently I'm running the sales, operations and admin and then bookkeeping and accounting are outsourced. We have four employees and hit 675 in 2025. In 2024, our payroll expense was much higher and we only did five, 10. And I would say a lot of that has to do with going to blue collar. Summary it last year.

Awesome. Yeah. So like, I think the first thing I'm looking at is delegating admin. The thing that's going to hold you back from being able to scale past a million or even just being like having more freedom in the business. Even if growth is not your objective is going to be delegating admin. It's also the lowest leverage thing in the business. So like if you can. Do you have someone already answering the phone, you do all of that?

Yeah, it's most. It's mostly myself. Yeah. Pretty much everything. So though.

Yeah. And it might take you 6 to 12 months to really nail this. Find the right person or right answering service. But like right now you answering the phone is like a $25 an hour task when alternatively you could just go do work for a hundred bucks an hour or let's. Let's go crazy and be go doing sales or sending a text message to everyone which is probably $300 per hour worth value. Right. So at your size you're going to start bumping up against that this year which is like you just get overwhelmed with admin but because it's loud squeaky wheels, your attention goes there instead of growing the business or focusing on the team I. E. Sales and operations which are higher leverage than admin. Okay.

Okay.

Yeah, I'm definitely in the bottleneck. I know that I've been stuck in my ways for since 2012 and this is like a huge thing for me just learning about you and all that you're doing for us. But that definitely makes sense.

That's perfect.

Also on Home Service Millionaire, I think it was a couple days ago there was a. I think thumbnail says something like go hire an admin or something like that. It was for a million dollar company, does gutters, it's called down about the name of their company. I talk all about admin stuff. Like a ton of stuff around admin. Getting your first one. He's the same position, he's doing everything and he knows like that's his bottleneck. So I ad nauseum talk a lot of stuff about, about admin in that. In that video. Okay.

And then so at the, at the 800 to a million revenue and just say I didn't want to grow past that. If, if that's the case, what do you think it would look like? Would we still have. So we'd have somebody doing admin for us and I would still be doing sales and operations.

Yeah, like that would be very profitable if you can get an admin person to either a work during your your busy season. Just even that if they could work six to eight hours a day just for your busy season, that alone will be allow you just like flexibility. You have the margin and you can focus on building a team and sales ideally too in the perfect world you'd be able to get someone like virtual that can handle like 4 hours a day during the entire year to make sure you're never in the email inbox. Like you're never figuring out what's on the schedule. Like you can start delegating more to them. But all I'd Ask is like anything with admin. Get it off your plate. Focus on operations and sales. Running a million dollar business, doing that, you can have very good margins. And I think you could basically just delegate just admin and be able to focus on operations and sales and get to a million.

Okay.

Okay.

And I thought I only had one question, but now that you say that we're using Jobber and we have been for a long time and I just feel like I'm just like stuck. Like I don't know. And I'm not sure what I should do, but it just, it doesn't have enough systems for. For maybe our size of business. I don't feel like is that accurate? Would you say that usually once you.

Pass 500,000 here, you'll feel a little bit of that in Jobber. The question just becomes, is it worth the pain of switching? And so like yes, you know, it just, just really would come down to that question. I think if you're not trying to grow a whole lot more and like, hey, we can make do. Adding like switching softwares when you're not trying to grow rarely actually unlocks anything besides just a whole bunch of more tasks for you to figure out and like do switch over. So don't do it for the of like being in homeworks. I would only do it if you're like, I want to reduce my marketing spend using the mass texting feature. That makes sense. I want to use the upsell feature with my crew. Like you have a reason to. To flip over besides just like, oh, there's some pain because a lot of times you'll switch and there'll be pain in another area of any software because they're all built slightly differently.

Sure.

And I'm doing all the sales and estimating, you know, and I just feel like I'm guessing on the estimates a lot more than I should if it was. I mean my brother uses LMN in Arkansas and. And I've heard good things about Homeworks but just having more, I mean everything about it, like the job costing and all that, we just don't have that with Jobber.

And so I'm just kind of like the price like.

Yeah.

And it might be too Jarrett that you get your admin, get them going, focus on that this year. And then maybe it's a matter of later this year when we have like the price book and instant quotes that those are like the price book will help dramatically with the job cost thing. Yes. The instant quotes would be a reason why in my opinion, people should, like, I'll. You'll hear me talk about homeworks a lot more when we have instant quote pricing, because no one has it. And I'll be like, this is a feature that in and of itself, people should move over for because of the cost savings on admin and the. The close rate being so much higher. So you might just wait too, like, grow the business, focus on the admin side, dial in those systems so that when you do the swap over, you're ready to go. Okay.

Yeah. And especially for, like, the Christmas light. We do the Christmas light. So like, we had to do 35% install for landscape install, and then 35% revenue is from maintenance and then 30%, probably from the lights. So I. I don't know, just the reoccurring jobs. I think that maybe another software. But yeah, I would. I'll do that, what you said. So I. Thank you so much. Appreciate it.

You got it. Last but not least, Drew, take us away.

As I was looking at the revenue thresholds for the different operational modes, it did seem to dial down to about a hundred per employee. You know, 3 million, you may have up to 30 employees, right? 800,000. You may have up to eight employees. That is drastically different than a solo operator. A solo operator, you're operating at possibly 200, 250k. Now, is that difference swallowed up in the overhead that the larger structure requires, or is it possible in the more complicated models to have technicians or your team. Right. Push past that hundred thousand and operate more as solo operators? Why the extreme gap of $150,000 between the solo operators max and the appearing max in the other. In the other models?

Yeah, because in the solo operator model, every single minute is efficient. Usually I see efficiency scores around 110% for solo operators because you literally leave your house, go do the work. You're extremely efficient all day long. You're never stopping. So it's just inherently, you're usually around 30 to 40% more efficient as a sole operator because you have equity essentially. The second part of that is when a solo operating region have the range from 0 to 250, is if you're just in growth mode, usually you're going to have to get an employee around 100,000 if you're trying to grow through it. But if you stay at 100,000 and like, all right, I'm staying here, and you start raising prices because you have such small amount of supply, let's just call it one labor, you. You raise prices very quickly, very fast. I see people doing over $200 an hour for some solo operators that just been in profit mode for 10 years, and they just keep raising prices because they have such little demand. Their pipeline is so full of a wait list of customers that want to get on their schedule. They just keep raising prices. Prices. And so it's really a matter of staying in profit mode that allows that revenue per employee to start inflating. So, for example, at my Bellingham shop, they have about six employees and do 1.1 million. So they're almost around 200,000 per employee. The thing is, they've been in profit mode for over five years. Right. And so it really comes down to how long are you in profit mode is the driving force usually of revenue per employee, and the inflating of that number really comes down to how long have you been in profit mode. That's why a location that goes into Profit mode at 500, 550 can be doing a million dollars a few years from then with the same trucks and same employees.

That makes sense. Yeah, that makes sense. All right, well, I'll let you close us off then. Thank you for your time.

You got it. Thanks, brother. All right, everyone. Really appreciate you all. Hope you all have a fantastic rest of your week. Look forward to a great spring rush ahead, and we'll talk soon. Take care, everyone.