The Playbook No One Follows... And They Stay BROKE
In this extensive segment of Mike Andes' video, he walks home‑service business owners through the transition from a solo operator to a full‑time General Manager (GM) and then to a GM+ leader. He begins by highlighting a low‑cost lead‑generation method using HomeWorks to send one‑click estimate texts and emails, showing how this can replace expensive Google/Facebook ads. He then details the financial strain that hits at the working‑GM stage, where profit margins collapse due to added labor, insurance, and overhead, prompting owners to raise prices. Hiring the first employees is framed as a cultural decision; poor early hires can set a low standard for the whole team. Andes introduces a self‑scoring worksheet (1‑5) covering hiring, training, retention, and estimate speed, urging owners to focus on their lowest score to unlock the next growth stage. Moving to the full‑time GM phase (revenues $750K‑$1.5M), he explains the shift from field work to sales focus, recommending a strict delegation sequence: first admin tasks, then operations, finally sales. He stresses the importance of standardizing services and equipment, eliminating complex, low‑frequency jobs, and moving revenue toward recurring contracts for predictability. In profit‑mode, he advises raising prices, improving crew efficiency, and avoiding unnecessary hires, while in growth‑mode he suggests rapid service‑area expansion, acquisitions, and adding new service lines, even though these tactics can be less profitable. At the GM+ level (revenues $1.5M‑$3M+), Andes focuses on leadership development, key‑man risk reduction, and building a talent pipeline. He outlines the need for internal promotions in profit‑mode versus external hires in growth‑mode, and describes using Section 179 for tax‑efficient expansion. He warns against lingering owner dependency, urging owners to become “spare tires” rather than the core engine. The latter part of the segment introduces a systematic workbook: a chaos diagnostic that checks sales, operations, and admin systems; an owner‑dependency signal checklist; and the 4L framework (Liquidity, Leads, Labor, Leadership) to pinpoint the primary growth constraint. Finally, he guides owners to create a 90‑day action plan, identify their leadership hat, mode (profit vs growth), weakest department, and primary constraint, then set a single high‑impact action with measurable success metrics and accountability. Overall, the content blends practical, data‑driven tactics with mindset shifts, urging owners to build repeatable systems, delegate strategically, and evolve their leadership role to scale sustainably.
Chapters
Most home service businesses do not fail because the owner is lazy. They fail because the owner is solving the wrong problem. They work harder, they try new marketing, they blame employees, they blame the economy, they blame politicians, but they never actually diagnose what stage of business they're in and what constraint is holding them back. And if you do not know your stage of business, you will apply the wrong strategy. And if you apply the wrong strategy, your business will stall. In this masterclass, I'm going to walk you through the exact progression from $0 to $3 million in annual revenue in your home service business. At each stage, your role changes as the owner. Your doubts change, your focus changes, your strategy must change. What worked getting you to $250,000 will not get you to $750,000. And what got you to $750,000 will cap you at $1.2 million. And what got you to $1.5 million will completely break at $3 million. Every revenue level requires a different version of you, the owner and entrepreneur. Most companies do not stall because of market conditions. They stall because the owner refuses to evolve. Now, here's how this is going to work. For each stage of growth, I will break down your role as the owner, the doubts you are probably experiencing and what you should actually be focused on. We're also going to look at what profit mode looks like and what growth mode looks like at every stage of business. I'm also going to give you a direct pep talk about what this stage really feels like. Also, there's a workbook activity to make it personal to your business. Then we will move into something most courses never teach: systems. Because effort without systems equals chaos. And scaling chaos multiplies more chaos. You will complete a diagnostic that scores your sales systems, operations systems, and admin systems, and your level of owner dependency. By the end of this course, you will know exactly what stage of business you are in, whether you should be in profit mode or in growth mode, which of the 3 departments in your business is broken, what your primary constraint is, and the single most important action you need to take in the next 90 days. Not 10 actions. One. Clarity is power. Most business owners try to fix everything all at once. The ones who scale fix one bottleneck at a time. If you complete the workbook honestly as we go, by the end of this masterclass, you will not just feel motivated. You will have a diagnosis, a direction, and a defined next move. And that is what actually changes businesses. So let's get started. Before we start the course, some of you might not know who I am. I wanna give you just a very small background on my experience in home services. So I started mowing grass when I was 11 years old and I paid my way through college doing Andes Lawn Care, just my last name. When I was 18 years old, I dropped outta medical school and realized that I didn't wanna spend the next 40 years of my career doing one or two operations in the operating room. And so because of that, I started going back to the only thing I really knew how to make money, and that was mowing grass. That's when I started Augusta Lawn Care. Fast forward to today, we now have over 200 locations around the world in United States, Canada, and Australia. We did over $60 million in annual revenue. I'm also the founder of HomeWorks, where we help home service business owners with software and their field management to be able to make sure they can grow without breaking. Now we've also developed over 1,000 websites for home service businesses at homeservicewebdesign.com. So that's kind of the 30,000-foot view. We have over 100 team members across all the different companies, whether it be answering the phone for all the owners, doing all their marketing, building out the websites, building software. And so that's sort of a little bit of background on myself. Now let's go ahead and jump right in. We're gonna go over the 4 leadership hats when it comes to scaling a home service business from $0 to $3 million in annual revenue. Now, it's important that we understand these leadership hats or these revenue ranges, because as we go through the course, I'm going to be going through each and every one of them and giving you specific information so that as you get through these stages, you know exactly what to do. Now, the first leadership hat is what I call the solo operator. Now, keep in mind that these revenue ranges are going to somewhat depend on your service. By no means do I think that someone that is washing windows is going going to make $500,000 per employee. However, I also know that someone doing concrete or electrical or HVAC might be able to pull that kind of revenue in. And so I'm going to give you the leadership hat name, the revenue range, as well as approximately how many employees are going to be at this stage, because really the employee size and the team size is going to be the real dictator of what you as the entrepreneur have to do in terms of being in the leadership role. And that's really what the leadership hat is. It's not necessarily your job title. It's really the function of the business that you're serving. So as a solo operator, usually you're going to be doing between $0 and $250,000 in annual revenue. Now, as the name implies, solo operator, you don't have any employees yet. And so you're working by yourself. Now, if you're in a low margin, low revenue service and you're only charging $50, $60 an hour, you're not going to make $250,000 on your own. However, there are absolutely services that are very skilled and very specialized where a solo operator working by themselves can be super efficient and absolutely make over $200,000 in annual revenue. Now, the next leadership hat is the working GM. Now, you might be saying, well, I don't have a general manager. I'm the solo— I'm the operator in the business, in it every single day. Well, remember, the leadership hat is just the name of what the leadership role is. If you begin to scale multiple locations, the working GM would be an actual general manager. But if you're the operator in the business and the entrepreneur, you might still be serving as the working GM, the general manager inside the business. Now, typically, most home services that are in this stage are between $250,000 in revenue and $750,000 in revenue, and they're usually going to have between 1 and 8 employees. Again, very service dependent, but that's generally the range that you're gonna be finding. Now, at the working GM size, the working GM is doing work in the field. So when someone's doing $400,000 in revenue, I consider them a working GM. And so if they're trying to say, look, I wanna get off the truck and I don't wanna be out in the field anymore, I say, whoa, whoa, whoa. As a working GM, the biggest indicator as to whether or not you're gonna be profitable is how much revenue you're producing. So the working GM still produces revenue in the field, especially when the revenue per month starts to slip or there's not a lot of leads coming in. They're going to actually be producing budget hours, producing revenue in the field, doing the actual work. Thereby their name is working GM because they're still getting work done. Now at this stage, $250,000, $750,000, 1 to 8 employees, they have to learn the skill of management. And hiring, 'cause for the very first time, they have to hire employees. Now, especially at the beginning of that stage, it can be very difficult financially because now you're not producing as much revenue out in the field 'cause you have to manage people and you have to learn this whole new skill of management. Very difficult time in the business. Now, the third stage or the third leadership hat is the full-time GM. In terms of revenue, this is usually gonna be between $750,000 and $1.5 million in revenue. Usually you're gonna have 5 to 15 employees depending on the service. Now, the full-time GM is finally when you are off the truck. You're no longer in operations and you're focused most of your time on sales. And at this time now, you do need to go hire someone to help you in operations, like an operations manager, as well as an office manager, because at this size you're getting enough leads and you have enough customers where you need other support in the management and overhead positions. All right, let's move on to the fourth stage. So the GM+ is the fourth leadership hat. It's going to be between $1.5 million and $3 million+. So I've seen businesses— this structure worked very well, even up to $5 and $10 million in annual revenue. But given the fact that we're trying to get you to $3 million, let's just say from $1.5 to $3 million is going to be the revenue range. And depending on your service, this is going to be between 10 and 30 employees. Now, when I say GM+, again, this is the leadership path. I typically see this hierarchy and this look of the organization chart being a general manager and then having mid-level managers in sales, operations, and admin underneath the GM. Now, you might be the GM and that's totally fine, but this size of business, you are serving in the role of a general manager. So let's go ahead and go into our workbook. And I highly recommend as we go throughout today, You can scan the QR code. You can also look in the link in the description and download for free this workbook and take your time and really spend time creating an actual plan for your business. So if you go to section 1, we're going to be going over the current leadership hat that you're in, and you'll be able to very quickly identify based on how much revenue you're producing, what role you are playing, what leadership hat. Now, the only way that these, these, these revenue bands and these rules might not apply to you is if you only have 1 or 2 employees and you're doing $1 million in revenue. Then this might change. But for the vast majority of home service business owners, these revenue ranges will work. So I want you to go ahead and check the stage. Which leadership path are you currently in? By having this, we'll be able to identify exactly what part of the course you should focus on. And as we go through the course, you'll be able to pick and pick apart what is relevant to you versus something that might be in the past and you're just recapping versus maybe something that's in the future. Having this is so important because so many of us listen to massive entrepreneurs and business owners talking about things that they're doing in their business that if we were to try those in our smaller business, it would actually not work. Mostly due to the fact that, 'cause what works for them at $5, $10, $15, $100 million in annual revenue is not going to be the thing that we need to do in our business at $100,000 in annual revenue. And so being very clear what stage we're in and what leadership hat we are wearing as the owner-operator of the business is very key. Important. Now, as we go throughout the course, we're gonna be talking about those 4 leadership hats. We're also gonna be talking about 2 different modes of running your business, either profit mode or growth mode. I wanna explain those in depth so that as we go throughout the course, not only will you be able to identify the stage of business you're at, but also what mode am I in? Because at every single one of these stages, some people are gonna grow really fast. They're in growth mode. Others are gonna grow slower, Most of the time because they don't have enough money in the bank to actually go out and spend money on ads, hire more people, and buy more trucks. And there's gonna be times where you might have more cash in the bank and you might go into growth mode, and then you realize you don't have enough cash on hand, you don't have a lot of money in the bank, and you go back into profit mode, and that's fine. At the end of the day, when I'm using these two different modes, let's go ahead and break down what this means. Usually when you're in profit mode, you are cash constrained, meaning you're trying to stack cash in the bank because you don't have enough money yet to get to the next stage of growth by buying more trucks, hiring more people and expanding operations. And typically, you're going to go into profit mode. Now, you could be going to profit mode for two different reasons. One, you need to stack cash in order to go back into growth mode and invest back into the business. Or you might just be happy with the current size of business and be OK with staying in profit mode indefinitely. And honestly, if you figure out the size of business that you're happy with, that you're content with, that serves you and your family and your goals, There's no problem staying in profit mode indefinitely because being in profit mode for a long period of time, you get higher profit margins, less stress and less chaos. And so there's nothing wrong with that. But I also realize that as you're growing through the 4 different stages and leadership hats in your business, there's going to be times you might pause for a year or 2 in profit mode, stack up cash and then go back into growth mode. Ultimately, when we look at profit mode versus growth mode, It's what are we optimizing for? And in my opinion, it's one or the other. We're either optimizing to put more money in the bank account and be more profitable, or we are optimizing to grow top-line revenue, get more employees, get more trucks, and get more customers. That's growth mode. And I truly believe having distinguished between these two different modes is super important. So we actually know what the goal of the business is. When people ask me questions about their business, Sometimes the very first thing I ask is, are we in profit mode or growth mode? In other words, are we trying to put money aside, whether it be for retirement or being able to get out of the business or being able to get our next home and save more money and be profitable? Or are we trying to go to $1 million, to $2 million, to $3 million in annual revenue? 'Cause growth mode and profit mode change every single decision in the business. So let's go ahead and explain what these two modes are so that as we go through every stage and leadership path of the business, we can give personalized advice as to what you should be doing. So growth mode. When I hit capacity, I am able to decide between growth mode or profit mode. Now, when I say hit capacity, that means if all of my trucks and all of my employees were operating full-time, 40 hours every single week, and if I still had work that needed to get done on the weekends, in the evenings, people were starting to work overtime, I am overcapacity. If all of my trucks are getting used so much every single day where they start to miss tire rotations, miss brake checks, miss oil changes, they're not overcapacity. They should only be used about 40 hours a week in order to make sure that there's plenty of time to clean them, do routine maintenance, and make sure that all the oil is topped off, et cetera. And so I always think of capacity as how many customers, how much revenue could I do without any of my employees working way more overtime or all of my trucks being worked into the ground. Now, in the short term, going overcapacity, working overtime, having your trucks going out in the field, out in the field 7 days a week, in the short term, you will make more money. But in the long term, exceeding capacity limits are going to cause burnout. Burnout for your team, burnout for your trucks, and burnout for you personally if you go way above capacity. For some period of time, maybe even a few years, you working weekends and evenings, 7 days a week might be what's required to get the business off the ground. But doing that for 5, 10, 15 years, many times will cause burnout. It'll cause relationships to get fractured. It'll cause divorce. It'll cause physical breakdown, mental breakdown. And that's ultimately what I don't want to happen. And so going into profit mode is, okay, when I see that happening, when there's trucks that are literally breaking down and I can't afford to get another one, and we have so much work coming in, leads are just pouring in. I am trying to hire people. Everything's going crazy. All these new leads are pouring in. Customers, instead of just buying more trucks and hire more people when that's happening and you're overwhelmed with work, we're just going to raise prices. So growth mode is when I hit that capacity, I go buy more trucks, I hire more people, I get more equipment. I typically go into debt and I keep raising the ceiling of the capacity that the business can perform. More customers, more employees, more trucks, more shop space, more insurance, just growing. And that's going to be caused by having more customers, more demand than I have supply, labors. Now, on the opposite side, when I cross that threshold, instead of going out and extending capacity, buying more trucks, hire more people, I go into Second, profit mode. That is when instead of doing those things, I'm just gonna raise prices and get rid of my lowest profitable customers by raising prices to my existing customers as well as raising prices to new customers that are coming on. This is profit mode. And by doing that, I'm going to put more cash in the bank. I'm not gonna spend as much money on marketing. Ideally, I just send texts and emails through HomeWorks in order to be able to make sure I upsell my existing database. Ideally, I don't spend a lot of money on marketing because I'm not trying to grow. I'm simply trying to maintain my current recurring revenue and replace any of that churn with leads that are coming in organically from seeing my trucks, my website ranking well on Google, as well as referrals. That's profit mode. And so instead of buying more trucks and hiring people, I don't do that. I just raise prices every single time I hit capacity. I stack cash, I don't go into debt, and I make more profit. Now let's go to Section 2 of the workbook. I want you to identify which mode you are in. Are you in growth mode or are you in profit mode? So on the inside here, select the statements that describe your current behavior, not what you think you should be doing, but just give me a quick understanding of where you're at. So on the sliders, if you're all the way to the left, that's going to be more profit mode. If you're all the way to the right, it's going to be more growth mode. This is a continuum, meaning you're not always going to be 110% in profit mode, but there's definitely going to be a stance or a leaning that you are in these different sections. For example, when it comes to stacking cash versus growing fast, being fully booked out versus having open days, if you're hesitant to hire versus you're trying to actually hire ahead of the demand, these are indicators as to whether or not you are in profit mode or you're in growth mode. And if you fill out the chart, inside of the workbook, you're going to very quickly identify, am I in profit mode or am I in growth mode? And if some of them are like back and forth and sometimes it looks like you're in growth mode in one area, like hiring, but then you're in profit mode in a different area, this could create a lot of tension in the business. I want you to be able to identify which of these two modes I'm in because I believe it is binary. It is either one or the other. Once we've identified that, or at least which way you tilt, and the way that we should be going. That way throughout the rest of this course, as I give instructions for every single stage and every single leadership hat, I'm going to also be speaking to if you're in profit mode versus growth mode, because at $600,000 in annual revenue, for some people, the next year they're going to do $1.2 million. For other people, they're going to be like, I'm just happy to do $650,000 and make a little more profit and put some money in the bank. Neither of those different business owners are doing it wrong. It's simply a function of which mode are you in and what are you optimizing for? Are you optimizing for profit? Are you optimizing for growth? All right, let's move on to the next part of the course. And that's where we talk about the trifecta. There are 3 different sections of every single home service business, 3 different departments. There is sales, operations, and admin. Now, when we look at sales, I look at that as getting the work. Think of this as everything to do with estimating, sending out emails and texts to customers, upselling customers, doing over-the-phone estimates, everything that was getting new sales, even advertising, marketing, creating Google Ads, LSA ads. Anytime I'm driving traffic to my website, whether it be door hangers, yard signs, you name any sort of advertising, getting the work is sales. Now, when it comes to operations, that's the next department of every home service business, that is doing the work. Now, you can be really good at sales, but if you don't do the work well, eventually your business falls off because churn is really high. In other words, customers leave. Once they come, they leave very quickly 'cause you don't do a good job. If we don't ultimately solve the problem of the customer doing the work and we don't do it well, eventually the business will fall apart. I have to maintain a certain level of quality to make sure the customer is happy, and that's operations. Now, admin is what I consider getting paid for the work. This is all the other stuff to do with the business that has to be done, kind of greasing the gears of the engine. For example, you got to run payroll, you got to answer the phone, you got to answer text messages. You've got to make sure that everything inside the business, the gears of the business get, you know, the credit card's got to get paid off. All the different communication mechanisms is admin. And I want to have these 3 clear distinctions. As we go throughout the course, you'll be very easily able to identify, am I Speaking to the sales, getting the work. Operations, doing the work. Or admin, where I'm getting paid for the work. Now I want you to go to section 3 of the workbook. We're gonna go over the trifecta, sales, operations, admin. And we're gonna look at which of these areas you might be feeling a little bit of brokenness in. First identifying, if we were to take just these 3 aspects of the business, where is the weak link? In the armor. So if you actually look at the HomeWorks logo, this is actually what the logo is all about, these 3 chain links. It's sales, operations, and admin. These are the 3 links that hold the business together. And if any one of them are weak, the chain falls apart. And we all know that a chain is only as strong as its weakest link. And your business is only as strong as these 3 links of the business. Sales, getting the work. Operations, doing the work. And admin, getting paid for the work. And any one of those things, if too weak, cause breakage in the business. For example, if I can't— I can get tons of leads with sales. I can do the work really, really well. But then if admin doesn't collect well, we don't have an automation process. We don't have any cards on file. We don't have deposits. And we have a huge amount of accounts payable, people owing us money, or accounts receivable. We have a huge problem. And everything else, sales and operations, could be doing good. Leads pouring in, getting the work done at a high quality standard. But if admin is our weak link, still the business will fall apart. If there's so much overdue invoices piling up and we're not collecting and our cash flow is horrible, it's taking us 60, 90, 120 days just to collect on the money that we earned in operations, our business could very well go bankrupt. The same thing is true for any of the other departments. For example, you could collect money really fast. You could do really good work. But if you can't figure out how to drive more leads and convert them on your website and actually do follow-up, with phone calls and texts and emails and automations, the business falls apart. And so it's not just that the trifecta is something that is a fancy whizbang. This is in every single home service business. It's literally part of the logo at HomeWorks, the software, because our entire idea is how do we connect sales, operation, admin so you can grow without breaking. Let's look at Section 3 and identify which of these 3 departments in the business is going to be your bottleneck. So if you look at sales, we have 3 different measurements, and I want you to put on a scale of 1 to 5 for each of these things. Now, 1 is broken. You just know it's horrible. It's basically nonexistent. 5 would be excellent. Okay? 3 would be average. So let's first talk about sales, the first link in your business. Customer acquisition cost reporting. So CAC. CAC is just customer acquisition cost. How much do I have to spend to get 1 new customer? If I don't know that number and I'm not tracking my cost per click, my cost per lead, and then finally my customer acquisition cost, we have a problem. I get clicks very easily from Google or Facebook, or I drive awareness to my website. That's clicks. And then some percentage of them convert and I get a lead. This is why having a great website is so important, 'cause if clicks don't convert to leads, I don't even know where they went. They just disappear. And the fastest way to grow your home service business is to make sure that I go from like 1 out of 200 people that visit my site converting into a lead, if I can just change that to 1 out of 50, all of a sudden I would 4x the amount of leads that I'm getting. This is why Home Service Web Design, we're able to almost double the amount of leads in the first year for our clients is because we just focus on this one thing, conversion. How do I get more clicks to turn into leads? But at the end of the day, cost per lead still is not paying the bills. I need customers. And so then the question is, What percentage of those leads, cost per lead, become customers? Customer acquisition cost. And so this is, this is the funnel we need to understand. And so the first metric I want you to scale yourself from 1 to 5 on is your customer acquisition reporting. Do you actually know what that cost is? How much do you have to spend in the top of the funnel? How much you spend on Facebook ads or Google ads or door hangers or yard signs to actually produce one customer? All right. The next metric I want you to scale yourself on 1 to 5 is close ratio. Do you feel like you close the majority of your jobs? Now, this is the thing. You might have a 100% close rate and think that in this case you're a 5. But in my opinion, if your close rate is over 70%, that's actually a negative thing because it means that you could raise prices immediately and immediately raise price by 15% and probably not lose hardly any customers. So I ideally, if you're in growth mode and we identified that in section 2, if you're in growth mode, I want your close rate to be between 50 and 70%. If your close rate is lower than that, you might be in profit mode because in profit mode I want you between 30 and 50% close rate. Now, if you're under 30%, you got to diagnose your sales process. You might have bad follow-up. You might be really slow to get to customers and actually give them an estimate. And so there's other structural problems if our close rate is under 30% or over 70%. But if I'm in growth mode, I want to be between 50% and 70%. If I am in profit mode, I want to be between 30% and 50% close rate. Now, what I want you to do is score yourself based on, you know, if you're in growth mode or profit mode and whether or not you fall into those ranges. And so give yourself a 1 if you're way outside of that range. Give yourself a 3 if you're just barely inside of it. But if you're right smack stab in the middle of the range that you should be in for growth mode or profit mode, you can give yourself a 5. All right, let's go to speed to estimate. Again, this is a range 1 to 5, and I want to think of like 1, you just know that you take days to get back to people, days to actually submit a quote back to them, and it takes days to even hear back from them, and you don't even really have a process to follow up with them. That would be your speed to estimate. How fast do I get the estimate to the customer? Now, if you're able to get the customer the estimate over the phone or instant quotes on your website, That would be a 5. Okay, so that's sales. We've talked about 3 different measurements of sales, and I want you to give yourself a score of 1 to 5. Now let's look at the second department of the business. That's operations. All right. Labor efficiency. Okay. I want you ideally to be over 70% labor efficient. How do I determine that? It is going to be my labor efficiency is budget hours divided by clocked hours. In other words, how long should the job be taking divided by how long the job actually takes? For example, if I have a 7 budget hour job for the day and it takes 10 clocked hours, that would be 7 divided by 10. That would be a 70% efficiency score or labor efficiency. I've got to be tracking that number. Now, I, I would love to be over 90%, but if I'm under 50% labor efficiency, my business almost always is very broken at operations. So using that kind of scale, 50 being really bad, 70% being pretty good, and 90% being superb. Give yourself a 1 through 5 on the scorecard. All right. The next metric we're measuring when it comes to operations is customer satisfaction. Are customers generally satisfied with the work that you're performing? Again, give yourself a 1 through 5. 1 being almost every single day there's stuff blowing up. Customers are mad. Reviews are coming in negative. Employees are extremely unsatisfied with even working your business 'cause they feel so bad about the work being performed. They aren't being trained correctly. And ultimately customers are complaining. That'd be a 1. 5 would be you literally have never had an online review that's bad. Customers are always satisfied, giving referrals. They never complain. There's never anything negative said about your quality of service. Okay, let's look at admin, the third link in the business. When it comes to scheduling system, score yourself from 1 to 5. 1 being is completely haphazard. You don't know what's going on. It's literally a matter of whoever is complaining the most, you put them on the schedule. 5 would be have a process in place, use budget hours to schedule everything accurately regardless of how far your backlog is. You know exactly where jobs should be going. All right. The next metric on the scorecard for admin is billing systems. Again, it's like, do I have cards on file? Do I have deposits that are paid automatically? Do I collect cards on file and deposit before the estimate is accepted? Or this would be the opposite, negative. I'm constantly chasing money. I'm constantly running after people for the invoices that they owe me. I have tens of thousands, if not hundreds of thousands of dollars overdue, and it seems like no one wants to pay me. And even though on paper I'm profitable, when I actually look at the bank account, there's no money there. My cash flow is horrible. Okay, so give yourself a 1 on that side if it's more that direction. All right. Last metric on the scorecard for admins, overall organization. This one's not necessarily a number in terms of being able to identify organization, but you know, if a business, if your business is organized, you feel a level of being in control. If you show up every single day and you just know that everyone has a checklist, everyone has all the tools and it's labeled in terms of what truck they're supposed to show up at. You have job notes and videos for every single job. You're probably a 5. If you show up every single day and you're manually having to help people with their equipment, You're having to move things from truck to truck. There's constantly chaos happening in the business. People are forgetting tools and equipment. Things go missing. Things get broken. People don't show up to work. Overall organization is low. So give yourself a 1. All right. So now what I want you to do is go ahead and add up all of each of these factors: sales, operations, admin. And you're going to very quickly identify, is it sales, operations, or admin that overall I have the weakness in? And then Look for the lowest score of all of these different categories to identify the bottleneck for you to be able to fix that department. For example, when it comes to sales, if I have, you know, a great, a 5 out of 5 on something like my customer acquisition cost reporting and my close rate, but my speed to lead is a 2, 'cause I know it takes me a few days to even get back to customers, that's the weak link in sales. If I look at operations and like, well, customers are satisfied, but I don't even know budget hours, I don't even know what my efficiency score is, Well, that's a 1. We've got to identify that as the problem for operations. And then if you look at overall, it's like, well, you know, I schedule really good. You know, billing is really good in admin. We don't have a lot of overdue. We have a lot of cards on file. But honestly, every single day feels like a firefighting operation. Organization is your problem inside of admin. So these are some of the very quick and dirty— these aren't even metrics. These are just scaling yourself from 1 to 5. And a lot of times We can get really fancy with figuring out certain ratios and percentages and what percentile in the— according to the average in the industry, we can get really fancy with it. But a lot of us know if we just scored ourselves 1 to 5, are we actually good at these things or these areas of weakness in the business? And so based upon this exercise, we should be able to know, is getting the work the trouble in my business? Is doing the work the problem in the business or just getting paid and greasing all the gears of the business? Admin, is that the actual constraint to growth in the business? So we've laid a big foundation and we're just getting started. Uh, I wanted to make sure that you understood the trifecta: sales, operations, and admin. That we understood if you're in growth mode or if you're in profit mode. And we laid the foundation work for the 4 different leadership hats in the business. With all of that being said, we can now dig into these 4 different leadership hats and sizes of business and really dig deep in terms of what your role is, the problems you're gonna be facing, and give you a specific diagnosis of what you should be focused on if you're in profit mode versus growth mode. So let's get started with the first stage, which is the solo operator. Again, this is typically between $0 and $250,000 in annual revenue. Now your role at this size of business is everything. You're doing everything in the business. You're the estimator on sales, you're the operations manager, 'cause you're doing all the work, and you're doing almost all of your admin typically. That's what the role of the owner is. Now, what doubts are you as a solo operator going to have at this size of business? First off, you're going to be wondering, did I make a mistake starting this business? Because a lot of us left a 9-to-5 job or we had, we have offers to go leave and be a, get a job someplace else. And you're like, I might've made a mistake. And you wonder if you should just go back and get a W-2, get a regular job, something with more consistent income, especially after like you go through the off season and you have like, negative income from your job or from your business. And you're like, man, a job sounds really cushy right now. The leads, they're inconsistent. At this size, you don't have a lot of a marketing engine. You might not have everything firing on all cylinders in terms of referrals and upsells. And so you ask, look, why are leads so inconsistent? This is one of the doubts you have. Can I actually get leads year round to make this a more consistent lead flow, as well as revenue engine. Another doubt you have is, should I keep spending money on ads or save money? Because every time you open up YouTube or you open up social media, someone's talking about the next door hanger campaign or yard signs or websites or Facebook ads or Google ads. And you're like, where should I spend my money first? And you might even have a few thousand dollars and you're wanting to spend on growth, but you're wondering like, am I just like kind of blindly trusting this person, this agency? Am I just throwing money and hoping that I get leads? Is it actually worth it if I spend money on Google and Facebook, or am I just literally putting money in the pocket of Mark Zuckerberg and people who have way too much money, and I have no idea what I'm doing? So these are some of the struggles. These are some of the things that you're worried about at this size of business. So what should we be focused on? So despite all those doubts, what should we be focused on? Close rate at this size of business is everything. I do not care about how profitable you are as a solo operator. For everyone in Facebook groups, you're raving about their 70-80% profit margins, and they're running a solo operation and doing maybe $120,000 in revenue. Am I saying that there's anything less than about them? No. But you're a solo operator, you're gonna have really high profit margins because you don't have a lot of expenses and you're doing all the work. I don't want you to focus on how profitable you are at this stage. For— if you're watching this video, you don't want to stay a solo operator. You recognize the fact that being solo, although it might be high profit margin, down the road, eventually you break a leg. You have some sort of difficulty physically. Eventually you get older. Eventually, after 20 years, your body doesn't want to keep doing the work every single day for 12 hours out in the elements. And so we've got to create ways to be able to hire people and create systems. You recognize that, you know, you got to get beyond a solo operator. To do that, you've got to have a good close ratio. You've got to have a high percentage of the estimates that you are sending out being accepted. And that number is far more important to me, your close rate, than your profit margin. And so for anyone that might feel less than because you're like, man, as I started to grow up the business, my profit margin started slipping. And I hear all my competitors talk about how they're still making 70%, 80%, 90% profits. They're solo operators, and at that size, you're going to have high margins. I do not care about high profit margins if you are continuing to grow through this size of business. I want you to focus on getting Google reviews, Facebook reviews, any online reviews, and I want you to focus on direct response marketing instead of branding. Now, this is one of those things where people at this stage see other businesses that are doing $10, $50, $100 million in annual revenue, seeing what they're doing with branding and thinking they should do that in their solo operator business. And doing that is wrong. Doing branding when you're this size is the wrong move. What's the difference between branding and direct response marketing? Direct response marketing is I'm asking for a response. I'm trying to get them to take action. It's called a CTA, or call to action. I am telling them to click now, call now, get a price here, scan this QR code. I'm telling them to do something. That's direct response marketing. Branding is usually things where I don't tell them to take action. I'm just generally making them aware of my product services. For example, when you look at an Apple commercial, very rarely are they like, for $999, buy today. You might see on T-Mobile or Verizon, but they're not— Apple themselves, when they make an ad, it's branding. They're simply putting their devices out in some beautiful nature, friends and family getting in touch with each other, the grandma, the grandson talking to each other, using these devices in the wild. They've almost never are telling you to go to your local Apple Store today and buy, and here's the discount, and here's all the specifications. They're not. They are simply branding. But to think that your small business with a small couple thousand dollar marketing budget is going to be able to do what they're doing, which is boiling the ocean, spending billions of dollars to do that, is wrong. We want to focus on direct response marketing where we get customers to take action and become customers. By doing that in a very small local area, and I say local, I'm talking like 1 or 2-mile radius. When I get to focus on a very small area like that, using direct response marketing over and over again, then by getting more customers in that small local area, my truck is now moving around inside that 1 or 2 neighborhoods over and over and over again, and customers start to see me over and over and over again every single day because I'm servicing the same small area. My truck, my equipment, my uniform is the branding required for them to become customers without me spending more money on ads. But don't think that you're going to put billboards and run radio commercials and do branding exercises and somehow convince your 300,000 people in your market to come buy from you. Now you've diluted all of your marketing efforts instead of going after a couple neighborhoods to this entire massive area and it's usually going to lead to a very wide distribution and service area and being unprofitable. I wanna do direct response marketing in a very localized market. Not branding, direct response marketing, where I'm asking people to become customers, because once they become customers and I have a tight route, now all of their neighbors and all the people in the area see me over and over and over and over and over again. That's the branding. I want you to focus on momentum at this stage, Again, we're talking about what are we focused on as a solo operator? We're focused on momentum instead of margin. All right. I want you to focus on sales. Selling is all I care about here. There's a reason why even at Augusta Lawn Care, where we have over 200 locations, I see some people leave training and take an entire year to get to this stage of being a solo operator. I see other people within a matter of a few days get to this stage. Why? The difference is the skill of sales. The ability to be able to tell your friends, family, people on social media, the barber, your accountant, the person at the coffee shop, everyone you have interactions with. If you can just sell them and talk about your products, talk about your services and convince them to become a customer, you can get out of the solo operator stage so fast because the amount of supply, the amount of budget hours you can complete every single week is so low as a solo operator. You actually don't need to sell a whole lot to fill your schedule and move out of this stage of being a solo operator. It simply comes down to your ability to sell. And most people, when they hear sales, they think slimy salesperson, they think someone being pushy. And because of these negative connotations, they never push for the sale. When in reality, if you actually believe that you are the best service and the best option for the customer, one, and two, you cared for the customer, you would push for the sale. You'd have the conviction in knowing that because I care for this person and I know I'm the best option, I'm willing to ask some uncomfortable questions. I'm willing to follow up with them via phone call. I'm willing to push because I know I'm the best option to solve the problem for the customer. And if you're like, well, I don't really believe that, we have to start there. Because if we don't have a good quality service that we believe in and have conviction, we'll never be able to sell. And so if you don't know what you're doing, if you're making stuff up on the fly, if you're trying to learn from YouTube University and making mistakes on customers' property, there's a high likelihood you don't have the conviction to tell them you're the best service. You tell them that you are the best vendor to solve their problem. And because of that, when you come up against a sales objection, you just cower. When they say that they want to, you know, talk to their spouse, wait for other estimates, they're looking for cheaper deals, you just, okay, well, call me back whenever you want. The reason you do that and the reason you step back there is because you don't believe and have conviction in your product. Now, at this size, solo operator, I want you to focus on one thing. And is booking your schedule 2 to 3 weeks out. If you can book yourself out 2 to 3 weeks and you have a steady pipeline of leads coming in, then you can go move out of solo operator and pretty much hire someone right away because you have plenty of work coming in. So I want you to focus on putting jobs on the schedule, recurring jobs, one-time jobs, as much work as possible. Don't have a 20, 30% close rate. I need you up around 70% close rate. And that's what I want you to focus on at this size of business. Now, at the pro— at the solo operator size, for every single size that we're going to talk about in the course, we're going over what I would recommend you do in profit mode versus growth mode. Because remember, some of you might be in profit mode as a solo operator and you might not have enough cash to go and go hire employees, get another truck and expand. And you might stay in profit mode for a year, 2 years, 3 years. And that's totally fine. Anyone that tells you that you have to keep growing at all costs has some ulterior motive. And there's absolutely this notion that we keep growing and growing and growing, go into debt, buy more trucks, get more equipment. It's like, for what? Well, I want to have freedom. Okay, well, freedom comes from profit, not from getting more trucks and getting more equipment and hiring more people, which ultimately, if you don't have systems, creates more chaos and actually takes away from your freedom and the time that you have wanting to give to your family. And so whatever you started the business for, Most of the time, it's not on the other side of growing top-line revenue. It's on the other side of staying in profit mode. Let that sink in. For any size of business, it is not on the other side of more revenue that all of your goals, hopes, and dreams happen. It's on the other side of staying in profit mode consistently. Now, what you got to determine is what size of business do I need to get to that once I put the business in profit mode, it will serve all of my goals and the needs that I have for it, for my family, for my personal life, and the things that I'm trying to achieve outside of work. And for many of us, that means building a business above solo operator so it can run without us and have employees and systems and processes and management in place that can run without you. And it's going to take a lot longer to build. But being in profit mode is the thing that unlocks that. Now, at the solo operator stage, whether I'm staying there for a couple of years or If you're watching this, maybe you just want to stay there indefinitely, and that's okay. What are we doing? What are we focused on if we're in profit mode as a solo operator? Well, we're not going to be spending a bunch of money on marketing because we can't be spending 5%, 10% of our revenue on advertising. I talked to someone the other day spending 15% of their revenue as a solo operator on Google Ads only, just Google Ads, and between their agents. I'm like, this is crazy. If you're trying to stay in profit mode, Now, that could be okay if you're trying to grow in growth mode, but they weren't growing. That was the problem. If you're in profit mode, meaning I'm not buying more trucks, I'm not hiring more people, I'm staying at this size, I want to be doing low-budget marketing. This could be like door knocking. It could be getting Google reviews and asking all your customers for them. It could be your Google Business Profile, optimizing it. Okay, so let's walk over the things. First off, door knocking. Doesn't cost you anything. Just takes you time. And as a solo operator, A lot of times, especially when you don't, you're not super busy in the spring rush, you have more time than you have money. And so I want you to go spend that knocking on doors, talking to property managers, knocking door to HOAs, whatever your target customer is, focus on doing low-budget activities to get in front of them. Not spending money on ads. That is a very high cost, low time required when I'm spending money on Facebook and Google. Does that mean it can scale more? Yes, but at this size, if I'm in profit mode, I don't, I'm not worried about scale. I'm just trying to optimize my current size of business. So I'm doing, doing door knocking. I'm getting reviews. If you don't have at least 30 Google reviews in your market, go get them today. Ask existing customers, ask past customers, send them a text blast through HomeWorks and ask them for Google reviews, at least 30. And then what I want you to do is optimize your Google Business Profile. Now, on every single page, when you're looking at search, at the very top is local service ads. From Google. Those are paid. Below that is usually going to be Google Ads, also paid. Okay, very slightly different programs. Nonetheless, it's paid. Now below that is Google Business Profiles. Usually you see the map and you see the different profiles with reviews and information about the business. And then below that we have organic traffic, i.e., who ranks the best on Google based upon keywords, the speed of your loading of your website, your overall design. A lot of different factors go into it. But when it comes to your Google Business Profile, That can be optimized and it doesn't cost you a single penny. So when you go get those reviews, I don't want you just to respond back to them being like, "Thanks so much, Bob," when they left you a review. I want you to actually submit a review, a response to the review that's optimized for Google. So if you want to use ChatGPT or Gemini or some other AI product, put their response, their review into the chat and then ask, AI to give you a response that is AI and SEO friendly. It's going to give a couple sentences that are going to include keywords like your service area and the types of services that you offer, and you're going to use that as your response to that review on Google. Now, that's just one way to optimize. That way, Google, when they are going through all the websites, all your competitors, they see thoughtful responses with keywords around your services and your service area inside of your responses on the reviews. Now we're also going to optimize our Google Business Profile in several other ways. You got to be posting organic new content to the Google Business Profile on a regular cadence, at least once a week. You can put pictures, you can put videos, you can put offers. I want to consistently be giving Google data. Google loves data. Their entire business model is built on the back of getting more data. And so if you can make sure it's updated constantly, your Google, Google Business Profile, with the service that you offer, your hours of operation, having a verified address, not just a service area, but a, a, a business address that is verified on your Google Business Profile. These are little things that you can do to optimize your page, and this is not going to cost you a single dollar. That's why we're in profit mode. We're not trying to grow and spend a bunch of money. We're not trying to grow really fast. We want to conserve our cash and be as profitable as possible by not spending money on ad platforms. To do that, doing this free version of marketing, which is just optimize your page. Make sure you go through the pain in the neck of verifying an actual address for Google. Put pictures at least once a week. We do it 3 times a week at Augusta. We post a new picture and it's always a different angle of our trucks, of our equipment, of our crew showing our brand. All right. The other thing I want you to focus on in profit mode as a solo operator is you're going to obsess over your close rate. And you might have heard, well, you said obsessed about close rate. What close rate should I be if I am a solo operator and I am in profit mode? Between 30% and 50%. Okay. I don't want you to have a 90% close rate and you're like, well, I'm in profit mode and I'm focused on my close rate. Okay. Profit mode means that I'm able to get enough customers on a regular basis from Google Business Profile, from my ranking automatically on Google because I have a great design. From all the reviews that I have, I'm drawing in enough traffic and referrals to replace my churn. I do not need to have a super high close ratio. I don't need every single estimate saying yes. If they're saying yes that often, 90, 95% of the time, your prices are too low. And so I've gotta raise my prices to the point, 'cause I'm in profit mode, between 30 and 50%, I want people saying yes. And if you're like, well, I can't do that, I gotta keep my schedule busy, then we're not in profit mode because we're not to capacity. The whole objective is we get enough work to where we're at capacity and then we raise prices. And by raising prices, you reduce your close rate. And so for someone to say like, "Oh, I have a 90% close rate, but I'm in profit mode." No, no, you have not raised prices enough to be able to reduce close rate to the point of 30% to 50%. And make sure that you're at this close rate because I've got to be in profit mode and making money. If you're $40, $50 an hour, and you have a 30% close rate, there's a really good chance your sales process is really broken. You don't have any good follow-up. You're really slow to get back to estimates. So don't let a close rate that is low somehow justify, oh yeah, I'm in profit mode. Keep in mind, I always want to optimize my sales process and do things that are free, like setting up automations and homeworks to text and email the customer and remind them of a quote. So don't get lazy with your close rate simply because you're trying to get between 30% and 50%. I want to be dialed in on every aspect of my sales process so I can keep raising my prices and still be within that range of 30 to 50% close rate. Now, at, in profit mode, I am going to accept lower margins to create a backlog. Okay. What that means is I am focused mostly on getting work on the schedule. And even in profit mode, I don't want to be just a day or two booked out. I want to be at least 2 or 3 weeks booked out because If I am a solo operator, that means if I stop working, the work stops. I would like, for the sake of peace of mind, have a couple of weeks of work on the schedule. And again, you're like, well, what happens if I get started in 4 or 5, 6 weeks booked out? Great. You raise your prices and decrease your close rate. Now, what I want you to do here too is most of the time, if you're in profit mode as a solo operator to reduce your costs, because that's what we're trying to do in profit mode, you pretty much handle all of the admin. And so really getting focused on time blocking is going to be really important because as a solo operator, you're doing sales, getting the work, operations, doing the actual work and admin. You're doing everything. So to do it efficiently, I want you to time block. For example, for the first hour of the day, you might focus on sales, doing follow-up phone calls, sending out proposals, doing any work order changes, following up with any customers that you have a pending estimate. Then you might go work 7, 8 hours out in the field doing operations. Then you might come home doing admin for voicemails, emails that are sitting in your inbox and everything else that's got to get done, paying the bills, sending out checks, etc. So having time blocks allows you to be efficient and prevent you from having to go out and get someone in the office, go out and get help on the weekends. If I can just really figure out my schedule, create a backlog of 2 or 3 weeks, I'm never scrambling for work and then time block my days So I can do sales, operations, admin efficiently. This prevents me from having to go out and get a virtual assistant or get an office person or get someone to answer the phone if I stay at this size. Again, I'm assuming we are in profit mode and staying at this size for some period of time as a solo operator, okay? Now let's assume that we're in growth mode, okay? I think for the vast majority of us in the solo operator size, we know we need to grow past this and we're gonna stay in growth mode. So if you're in growth mode as a solo operator, You're going to hear me. I'm going to tell you the opposite. And this is why it's so important, the distinction between growth mode versus profit mode. If you're in growth mode and you're trying to grow quickly, I am going to probably do paid ads, Google Ads, Facebook Ads. I'm going to do those things only after I have a great website. This is one thing that people hear. People talk about ads. Oh, I'll go run ads. So they go run ads, Facebook, they run Google Ads. And they usually don't have any tracking. They have a horrible website that does not convert. And then they say Facebook ads don't work, Google ads don't work, local service ads don't work. They say all of this stuff about advertising platforms that they don't work, when in reality, they do not yet have a mechanism, a website, that actually converts those clicks into paying leads. And so if you do not have a great website that converts people into leads, don't go by clicks and drive a bunch of traffic to it. It's like having a really bad Subway sandwich that you make at your sub shop and then spending gobs of money to advertise people to come. What you're gonna do very quickly is get a bunch of negative reviews and you're gonna get a bunch of people saying how bad your sub sandwiches are. And so if you don't yet have a good website, don't drive traffic to it. Fix the website, fix the sub sandwich before you go out and spend money driving traffic to it. Otherwise, you're just going to accelerate how fast people know how low of quality your product and service is. And so the first dollar you're going to spend is on your website. Now, there's different levels of this. You can build your own website for about $50 a month on something like Squarespace, Weebly, Wix, the list goes on. Now, if you want to go up a little bit more, you could go and spend $5,000, $10,000, $15,000 with a custom build website of your own. Now, home service web design and lawn care web design are services that I've provided where there's not an initial upfront big huge fee. It's just a flat $499 per month with no contract. And we do that so you can have a grade A, top of the line website from day one without a huge upfront cost. And I would only do this if you're in growth mode. If you're like, I'm going to stay at $200,000, I'm going to stay at $150,000, I'm going to stay a solo operator, I'm going to be in profit mode, then don't do this. You just need to focus on things we've already talked about, like optimizing your Google page and getting reviews. But if you're going to keep growing, your website is the first dollar we spend on. And the nice thing about home service web design and lawn care web design is there's unlimited changes. And that's the reason I prefer that over a one-time build is because you're going to want to have different banners during your winter compared to your spring. You're going to have different offers based upon the seasonal services you're offering, and you'll want to change your video or your pictures on your site. And that's why we have unlimited changes at the subscription level. Now, if you don't want to do this or you build it yourself, that's fine. Go check out the website and go to the Our Work page and you can see dozens, hundreds. We have now done over 1,000 websites at Home Service Web Design and Lawn Care Web Design, and you can use those as inspiration to build your own site. I don't really care. Just build a great website so that when you run ads, you're driving to something that actually converts well and you get more leads. Okay, so we're gonna run ads on Google and Facebook, but only after we have a great website. Now, what does a great website look like? It's gonna be an estimate request above the fold, meaning they don't have to go to a different page just to ask for an estimate. I'm gonna make sure I have a clickable link for things like my phone number. I'm gonna make sure it's very obvious when I first show up at the website what services I provide and what service areas I am serving. That's why it should say something along the lines of, serving Whatcom County, with lawn care and landscaping services, for example, because the customer, when they show up your website, that's the main thing they're looking for is like, do they serve me and do they serve my service? Do my services that I'm looking for? Will they solve my problem? And the next thing they're looking for is, okay, I got some of my information and get an estimate. Make it easy for people to give you money. Okay. Now the next thing we're going to be doing in growth mode is we're going to be getting a CRM. It stands for customer relationship management. Software early. If you're staying at $100,000, $150,000, you're staying in profit mode as a sole operator. You don't need a CRM because you probably have 15 or 20 customers and you can probably keep track of them all inside of an Excel spreadsheet or inside the Notes app of your phone. But if you're going to grow beyond that, if you're going to stay in growth mode, get a CRM. Now, I'm partial here because I own HomeWorks, but I don't care if you need to use Jobber, Service Autopilot, Housecall Pro, the list goes on. But if you're going to scale beyond a solo operator and stay in growth mode, you need a CRM. Okay, so at HomeWorks, we're really geared towards the business that wants to go over $250,000. That's why if you're in profit mode and you're staying as a solo operator forever, you should not use HomeWorks. Only if you're going to scale above $250,000 should you actually use HomeWorks. But by getting in a CRM early, it allows you to have the systems in place at sales, operations, and admin to keep scaling up. Now, if you're going to being growth mode at this size, usually you're gonna hire help sooner. So you're gonna, might get help as like a virtual assistant or an answering service so you don't have to answer phone calls throughout the day. It's the thing that slows you down. You're out in the field doing work and all of a sudden your phone's ringing. It happens 20 times in a day and you're like, oh, it only takes 2 or 3 minutes. But the problem is you spend 10 more minutes trying to take notes on your phone and then get distracted with other emails. And you're constantly context switching from operations to admin to sales. All throughout your day, you're doing an estimate, then you're going out and doing some work, then the phone rings and someone's asking you about their billing, and then you're flipping through things inside of your truck cab, and you're context switching all day long between sales, operations, and admin. And this constant phonetic energy between these three different categories is what causes a lot of waste that goes untracked. And so it's all the switching costs from sales to admin, admin to sales, sales to operations, operations back to admin, throughout the day that's causing you a lot of pain. Now, if you're only staying at profit mode at this size and handling 10 or 15 customers, doesn't matter. If you're trying to scale beyond that, I'm gonna go ahead and spend money to save time. I'm gonna hire a virtual assistant or an answering service, and I don't care if they charge me $2 or $3 a minute, because if they answer the phone 2 or 3 times throughout the day, I'll close more jobs on people that have a pending estimate, and I'll also be able to focus my time and energy doing the work out in the field where I'm likely making $80, $100, $120 an hour just staying focused on doing the work. And so people freak out, like, $2 a minute for someone answering the phone is crazy. If you just didn't answer the phone and spent that time working out in the field, you would make $2 a minute. And furthermore, you'd save all the time before and after of wasted, and it'd be a better customer experience 'cause someone's answering at a phone in an office at a computer instead of you out in the field with a blower in the background being loud. And so it's better for the customer and it's more importantly better for you to stay focused on your time blocks throughout your day and not get distracted. So you're gonna spend money to save time. That's ultimately what we do in growth mode. We're trying to buy ourselves the business growing faster. So buying speed and we're going to target a 70% close rate. Between 50 and 70% is what we wanna be at if we're in growth mode as a solo operator. So if you're only closing 30, 40%, I'm looking at your sales process. If you're at like 95%, again, I know immediately you gotta raise prices, but I'm targeting 70%. That's like the perfect number at this size of business if you're trying to continue to grow. All right, so Mike's pep talk. If you're a solo operator, I want you to remember you're at the top of the first inning. Now in baseball, if you get way ahead in the first inning, you still got 8 more innings. You gotta play good defense. And if you get way behind in the first inning and you just feel like you're getting beat up and everyone's scoring on you and hitting home runs, You got 8 mornings to catch up. And so you're at the very start of a very long game. And at this size, every single job is gonna feel massive. Every single lost job is gonna feel devastating. Someone leaving a bad review, something bad happening with a customer or a job going south, it feels horrible. Everything is a big deal to you at this size. I would also keep note that I would be very weary of making only solo operators that are in profit mode and staying as solo operators Try to prevent being only in their friend group, in their social media, on their Facebook groups, et cetera, because everything is a big deal to them. And so now you get caught up in these little things in your business that become big deals, like leaving— a customer leaving a bad review is horrible. I know it's a gut punch. It's horrible, but it shouldn't take your entire week. It shouldn't take all of your brain space. Think about the biggest business in the world. They get bad reviews. Every single hour, every single minute, likely. And so staying focused, if you're growing past the stage, on the bigger picture is the thing to do. I want you to focus on singles and doubles and not home runs. Stop trying to hit home runs. Home runs come in the form of massive contracts, huge projects, and you're like, "Oh man, I could double the business if I just get this one customer." It also means that if you got the customer and then you lost them, you have the business and you're going to have to buy more trucks, hire more people, get more equipment to be able to get that customer. And now if you lose them, you're in a bad spot. And it's unlikely you have the manpower, the skill, and the ability to have profitable work done on these huge contracts if you're outbidding people that have been in business for 20 years and they have— they have the equipment, they have the manpower, they have the scale and the infrastructure. If you're outbidding them as a solo operator, there's a really good chance you could lose your shirt. All right. Now, this stage of business as a solo operator is the hardest physically. Physically, you're going to be working long hours. Your body is going to feel it a lot. You're going to be out in the elements, the sun, the heat, the cold, the winter, the snow. Physically, you're going to— you're going to be working the longest hours and your bank account many times will not show it if you're in growth mode. If you're growing through the stage and you're getting a great website, you have great software, you are running ads. All of these things combined are what allows you to get past this stage. But usually you don't see the money showing up in the bank account. And for that reason, this is why a lot of people stay solo operators, because they start scaling, using software, running ads, doing websites, and they realize, oh my word, I don't see any more money in my bank account. And they go back to being a solo operator in profit mode where they just do all the work themselves and they get rid of their VA, they get rid of their office person, they do everything themselves because they have a higher profit margin and there's more room for error because you're at 70, 80, 90% profits. Okay. It is normal to feel this way at this size of business. You're working crazy amounts of hours. Physically, you will be drained. And if you have a spouse, it's really good to get on the same page because the stress that you're going to experience here is physical stress. Be careful to think that growing the business will always lead to something better. The grass is always greener on the other side of growth. Keep in mind that this stress that you're feeling now, this physical stress will change, but it will not go away. Let's go to section number 4. This is the solo operator section inside the workbook. And I want you to score yourself from 1 to 5 on these different areas of the business. Just score honestly. There's no reason to inflate this. You're not sending this trying to brag or anything like that. You just want to know genuinely where do you rank on these different aspects of the business? So first off, lead generation confidence. How confident are you that you can drive more leads? As a solo operator, if you're just relying on people to call you or word of mouth, that can be very difficult because you don't control the faucet of people that when you need work, you can have them showing up at your doorstep. So can you knock on doors? Do you know how to get customers to upsell and get other services sold to them? Do you know how to run Facebook ads or Google ads? If you can't, if you literally just waiting for the phone to ring when it gets slow, that's a 1. All right. Online reviews. Are you actively getting them? Are you having automations from HomeWorks asking for their online review, that'd be a huge plus. Are you showing those online reviews on your website? That'd be a huge plus. If you're not doing those things, that's gonna be a low score. All right, your close rate. Again, we know based upon if you're in profit mode or in growth mode what your close ratios should be. 30 to 50% for profit mode, 50 to 70% should be your close rate for growth mode. If you're close to that, awesome. If not, give yourself a lower score. All right, the last metric we wanna, look at is schedule fullness. When you look at the entire year, are you consistently 2 to 3 weeks booked out? If not, give yourself a lower score. If you're consistently booked 2 to 3 weeks minimum, sometimes 4 or 5, 6 weeks, give yourself a high score. By having this, you'll be able to look at what the lowest score is and be able to know what you should focus on. Okay, so I'm not going to focus on trying to get more leads and run Facebook ads if I have tons of schedule fullness, like my schedule is always booked out. Why would, why would I be focused on that when I should be focusing on being able to make sure I have a good close rate? And that might mean raising my prices to actually bring down the fact that I'm booked out 6 months. So sometimes people get a lot of pride in like, I, my schedule fullness is a 5, let's go. But I look at their close rate and it's 90% and their prices are way too low. So look at your lowest score. That's the thing to focus on as a solo operator. Let's move on to stage 2 or the second leadership hat. Which is the working GM size. We're doing between $250,000 and $750,000 in annual revenue. Now, the role of the owner at this stage is going to be an estimator. So you're doing all the sales and you're going to be the operations manager. You're going to still be making sure all the work gets done, but you're going to have employees. So you're not the actual person doing the work, even though you're out in the field sometimes. You're not doing all the work now. You are a manager. So when we look at sales, operations, admin, Sales, you're still doing all of it. Estimator, you're the operations manager, meaning that you're managing other people doing operations. But then it comes to admin, that part at this size, you need to get delegated as much as possible. Get rid of answering the phone, running email, running payroll, and doing all the basic admin tasks. So at this stage, what are some of the doubts that you're going to have? First off, you've started to hire people. You're going to start like, why are employees so inconsistent. You hire someone, they seem like they're good, they last a couple weeks, and all of a sudden they stop showing up for work, start— stop— they start giving complaints, start giving reasons why they can't show up to work. And like, people are so inconsistent. And when they show up to work, the work is inconsistent. Sometimes they're really good quality, other times it just falls apart. Customers are complaining, they're making mistakes all the time. So inconsistent. Another doubt that you're going to have is this size is Why am I working more but earning about the same amount as I was when I was a solo operator? Especially if you were in profit mode as a solo operator doing $150,000 to $200,000 and you're making good money, like probably six figures in profit. And now all of a sudden you're doing $500,000, $600,000 in annual revenue and still making the same amount. You're like, what in the world? And this is a huge doubt of yours. Like, why would I not just go back to being a solo operator, have less employees, less liability, have less headaches, less mistakes and yellow slips and callbacks from customers by just going back to being solo. And it's very tempting because you made the same amount of money. Okay, let's talk about what we should be focused on as a working GM. First off, we want to focus on speed of communication. Getting back to the customer is the number one thing we want to focus on. 70% of quotes that are received by a home service business 70% of the first ones get accepted, meaning you might be focused on so many things like the formatting of the estimate and making sure there's a nice video and all these things and all beautiful. But if you took 5 or 6 days to create the estimate and other competitors got their quote to the customer faster, there's a high likelihood you are losing jobs simply because your speed of communication. Now that's getting the estimate to the customer. But the same thing is true when it comes to emails, phone calls, text messages. If you're waiting days, to respond back to customers, you are 100% losing jobs. So focus on the speed of communication at every single level, whether it be web chat, whether someone's live chatting, whether it be someone answering the phone as much as possible right away within 10 seconds, whether it be text messages, whether it be emails. Don't have people sitting for 3 or 4 days before you respond to them. Speed of communication is everything. I also want you to focus on hiring technicians because now You're not a solo operator. I've got to focus on a system for hiring great technicians and making sure that I get the best talent in my market because there's a limited labor supply in your local area. The smaller the market, the less technicians. And I've got to make sure that the best ones come to my business. I also want you to focus on having systems replace memory. As a solo operator, a lot of your systems, if we were really honest, relied on your memory. Whether it be pricing, whether it be the way that work was getting done, whether it was the way that you did scheduling or went through your inbox. All of this was mostly done based upon your memory. Your memory was basically your software. And now we've got to replace all of those memories with systems that are repeatable regardless of whether or not you're actually there. All right. At this stage, working jam, I also need to start measuring and tracking labor efficiency. We mentioned this briefly before. Labor efficiency is budget hours divided by clocked hours. I want to make sure you have budget hours on every single visit, every single meeting, every single job. Everything needs budgeted hours because ultimately, at the end of the day, when it comes to home services, we are taking an hour's worth of labor. We are adding skill, equipment, training, and everything that goes into our employees. And on the other side, we're charging the customer $100 an hour. So over here, we're paying the input of $20 per hour to the employee. But then we add all these other aspects of organization, scheduling, trucks, equipment, training. And then on the other side, we get $100 that we charge the customer. Now, if that's not done efficiently, labor efficiency, then we will not make money. And so in home services, we have to remember we are ultimately selling time. And so if we are not selling time efficiently and that time is being wasted, we will not be profitable. OK, so at the working GM size, we have several employees. We're working between $250,000 and $750,000 in annual revenue. What happens if we're in profit mode? Meaning we stay at this size, we have several technicians, and we're just trying to optimize for making money. What would my recommendations be for those in profit mode? First off, I would hire slowly, maybe get 1 or 2 employees max per year. You don't need to grow super fast because every single time you add more employees, you add more chaos to your daily operations. So the hardest part about growing a business is that as you add more customers, usually your customers in the first 30, 60, 90 days are gonna have the most problems, the most callbacks, the most complaints, the most calls in general to admin are gonna come in the first 3 months. Once you solve those problems for them and get them through that time, you keep them for a long time. So most of the chaos happens with new customers in the first 90 days. Also, in the first 90 days, when you get new employees, also is most the chaos happens. They make dumb mistakes, they break equipment, they make all sorts of miserable mistakes out in the field. And so what happens if you grow fast and hire a bunch of people and you're getting a bunch of new customers and you stay in growth mode? A lot of times that creates a ton of chaos. It's compounding due to the fact that I have new customers that have trouble in their first 90 days and I'm getting a whole bunch of new employees that have trouble in their first 90 days. If they even last 90 days because of churn and then making mistakes and not showing up to work. And so I would recommend if you're in profit mode and trying to optimize for profit, don't grow super fast here. Just get like 1, maybe 2 employees a year, maybe 1 new truck per year. Don't try to go fast. Growing fast will create more chaos because growth sucks cash and growth creates chaos. All right. I want you to cross-train all your teams at this size. If you're in growth, if you're in profit mode and trying to optimize the business by cross-training your team on all the different services you offer and all of the different type of equipment that you use, it means that there's more redundancy and less chance of one person, if they get fired, one person leaving, one person getting sick, causing the whole business to fall apart. We can't do that in profit mode. We don't want chaos. We are trying to optimize things. And for that reason, I'm gonna make sure I cross-train the team on all the different services that I provide. I'm not gonna have a specialist that only does one service. 'Cause if they go out, all of a sudden I'm jumping back in, I'm trying to juggle the team to try to get them to figure out how to train on this certain service, or if one piece of equipment drops and only one person knows how to fix it or knows how to operate it, we're in a world of hurt. So I'm gonna cross-train my team at this size to make sure there's redundancy I don't have a lot of key man risk in the business. We'll talk more about that because that can grow if you don't solve it here. All right. We're also going to reduce marketing when we're booked out. There's no reason to be marketing and spending a bunch of money on ads if we are booked out 6 months or even 6 weeks, depending on the service that you provide. You know that there's a percentage of customers that will cancel once they've accepted the estimate. If you tell them you're booked out so far, And so, for example, in home services like lawn care and landscaping, I know if there's a big project, I can usually get someone to wait 2 or 3 months. For example, a paver patio or retaining wall or an excavation project. But if they need a bush trimming and their lawn is overgrown right now, they're not going to wait 2 months for their lawn to get mowed and their bushes to be trimmed because it'll be complete overgrown completely. And so you've got to determine how far of a backlog can you actually have before customers start canceling after they've accepted? Now, once you start hitting that limit is when you're gonna raise prices by a minimum of 15%. So when we hit capacity, we're booked out, we're getting to the point where people are canceling because we're booked out so far, we've gotta raise prices. Now, I hate when people raise prices by 3 or 4%. They're like, "It's an inflation adjustment." Look, I would rather just tear off the Band-Aid and raise prices by 15% minimum, minimum. I would ideally go 20 or 25% when I'm raising prices. Because I know if I'm providing a great service to my customers and I raise prices, great customers stay. The ones that accept my upsells, they have huge amounts of value compared to the price that I'm servicing them at. They're okay with the price increase because value is still higher than price. And so last year, for example, at Augusta, almost 50 locations raised prices. All of them raised prices by at least 15%. Most of them were over 25% that they raised prices. Guess what? Not one single location lost more than 10% of their customers. They're in profit mode. And at this size, this working GM phase, where you're still in the field working sometimes, but you're also managing your crew, you can be really profitable and efficient. And as soon as you raise prices one time by 20%, you could double your profits. If you're doing $500,000 in annual revenue, and you're 20% profitable, that's $100,000. If I raise my prices by 20%, I will raise my prices to $600,000. My revenue will go to $600,000 and I'll make $200,000 in profit. So by just raising your prices, you could very easily double your profits at this size of business. This is why I love this size of business is 'cause it's ultra-efficient with the GM out in the field working. That could be you out in the field working, the working GM. And I still have this lever of price that if I pull it, I can literally bring 6 figures to the bottom line. All right, if you're in profit mode, you've got to fix the off-season. At this size of business, the reason most people continue to scale and grow and get into $1 million, $2 million, they try to keep growing their business and they stay in this rapid treadmill of growth. They never go into profit mode because they don't fix the off-season. And so they're in this constant cat and mouse game of I've got to grow so much revenue and get enough profit and have cash set aside so I can just make it through the off-season. All right, I wrote an entire book, How to Fix the Off-Season. There's 5 different ways to do it. You can go check out MikeAndes.com and see the free workshop on how to solve the off-season. But at this size, if you don't fix the off-season, this is usually will cause 2 things to happen. 1, going back to being a solo operator because you're tired of losing so much money during the winter, or 2, continuing to grow bigger and bigger and bigger because you have to to get enough cash set aside to make it through the winter. To make it through your off-season. Now, there are ways to make sure you fix the off-season, your revenue continues to stay stable, your profits stay stable, and your leads stay stable. But you've got to use one of the 5 tracks we talk about inside the workshop. That workshop is completely free. You can get the book also on Amazon, but I highly recommend figuring out one of the 5 tracks to fix your off-season. If you don't, you can't really be in profit mode. To be in profit mode, you have to make sure that for every month of the year, you don't lose money. If there's any month or multiple months during your off-season that you're negative on cash flow, you can't truly be in profit mode because you have to actively go out and spend money on ads. You're trying to do all these things that are usually inefficient. You're losing money. Profit mode, by definition, means we're profitable. And so you've gotta fix the off-season. All right, let's assume you're trying to grow through this phase. You're like, hey, $250,000 to $500,000 or to $750,000, great, working GM. I want to grow fastest as fast as possible. What you're going to do is you're going to hire ahead of demand. Okay? Meaning before you even have the work, you're going to need employees. Because if you're gassing a whole bunch of Facebook ads, Google ads during your spring rush, you do not want to wait until spring rush to hire employees and get trucks and equipment. You're going to need to think ahead of time. You think, okay, I need to buy a couple extra trucks. I'm going to hire 3 or 4 extra people and I'm actually hire a couple extras because I think that you know, just based on probabilities, a couple of them won't work out. So you start hiring ahead of demand. Now, this is inefficient. You are optimizing for growth. You are not optimizing for profitability. You are actually creating a bench of employees to hire from. You're going to use a video interview to make sure that you're not wasting your time spending days doing interviews where people don't show up or there's low-quality candidates. Meaning when you run an ad on Indeed or on Facebook, you're not driving them to submit their resume and then getting an interview booked. You're just getting them to submit a video answering specific interview questions. 1 out of 10 are going to do that. The other 9 out of 10 were wasted time that otherwise were applying to like 50 different other businesses. And you are going to otherwise waste your time setting up an interview, showing up, blocking off time on your schedule instead of being out in the field doing work. And again, at this size, Working GM, the difference between making money and not making money is the percentage of your time as the Working GM that you spend producing revenue. The difference between a business that's $600,000 in annual revenue with $100,000 profit and another business that is $600,000 in annual revenue and makes no money is $100,000. And that can be made by the working GM just being out in the field producing revenue of $100,000. And so your profitability at this stage will be determined by how much you're actually in the field doing the work. You're like, "I don't want to be on the field. I want to work on my business instead of in it." This is the rallying cry for many people that go out of business at this size because they're so focused on working on the business, they never actually produce any revenue. And therefore, as the working GM inside this size, they never make money. And so I don't want you doing is, I'm working on my business, I'm hiring people. Your 3 hires that you're making, even in growth mode, could take you a week or 2 of interviews if you're doing it inefficiently. If you're allowing 100 applicants, You offer 50 of them an interview and 15 of them show up and 3 of them are good. Not great. You just wasted 2 weeks going through that process versus having all the applicants submit videos and out of the 15 people that actually submit videos, 5 of them look really good and you get them all to show up on one day and you knock out the interviews. Meaning I got a week and a half to go spend in the field doing work as the Working GM and producing revenue and making sure my business is actually profitable. At this size, I'm gonna be focused also on over-the-phone and instant quote forms. Over-the-phone estimates, meaning I want to avoid having to go drive to every single estimate. Again, I'm trying to optimize for as much time spent in operations and doing the work and producing revenue. So to do that, I'm gonna get my admin person to answer the phone and do estimates over the phone or from my website, be able to do instant quotes where customers can see the price, accept the price, and ideally inside of HomeWorks later in 2026, be able to actually put their card on file and it go inside their HomeWorks account. But for now, even just make sure you're doing over-the-phone estimates. Even if you don't have HomeWorks, make sure you're able to give the prices to the customer. So just the way that we talked about applicants getting weeded out, I want your leads as they come in to be very well qualified 'cause they've already seen the prices, they've already accepted the job price, and they're ready to rock and roll. So over-the-phone estimates and instant quote forms are installed. At this size, if you're in growth mode, and the reason I need you in growth mode, if you're in growth mode, I need over-the-phone estimates and instant quotes, is because when you're spending a bunch of money on ads, the worst thing that can sometimes happen at this size is they actually do good. For example, if you start getting leads in the middle of spring rush for $10 or $15 per on Google or Facebook, that could be the worst thing for your business, 'cause you're getting 20 or 30 new leads a day. And that could be the worst thing for your business. The same way as getting 100 applicants from Indeed could be the worst thing for your business. That's why over-the-phone estimates and instant quote forms work, because if I'm having an answering service or virtual assistant or an office person taking all of those off my plate, I can still stay focused out in operations. But if I'm driving around doing all sorts of in-person estimates, guess what? When I'm in growth mode, 100% of my day is spent doing estimates. Doing sales instead of operations. And again, the highest percentage of your time being spent on operations will determine whether you're profitable at this size of business. Now, if you're in growth mode at this size, between $250,000 and $750,000, that's usually when you start figuring out a second channel for marketing, because you'll easily be able to get past $250,000 with one marketing channel, like just door hangers or just yard signs or just Google Ads or just at this size. I want a second channel, maybe even a third channel to make sure I'm diversified and I'm not relying on one marketing channel for all of my business growth. At this size, you've got to make sure you have upsells via text and emails every single month. So for me, inside of HomeWorks, for my general manager, we have a to-do that we schedule every single month on the 15th that they've got to send a text and an email. And that text and that email have already been created as templates before the year even starts. We already know the season-specific offer and for the season-specific service for every single month. And we're gonna send a text and an email to every single customer in our database. Why? 'Cause if we had thousands of contacts like we do, if we send a text and email to all our customers, we can easily get 50, 60 estimates within a matter of 24 hours. And it costs pennies compared to spending a whole bunch of money on Google Ads and Facebook Ads to get 50 or 60 estimates. Let's just assume you're paying $50 per lead and you get 50 estimates from sending a one-click estimate email or a text blast through HomeWorks. That's the equivalent of spending $2,500 on ads. And these, by the way, these 50 estimates that we sent out a text and email to and we upsold them another service, we already have their card information. We already have their address. We have all their contact information. These are like in the bag sales. Let alone cold traffic over here that's never done service with us before. And so the fact that you can send a text to all of your customer base inside HomeWorks and 97 to 99% of them get opened up is phenomenal. And by the way, these texts and these emails that we're upselling our database, they're not gonna be super flashy and a bunch of graphics and pictures and video, although you can make those templates if you really want in HomeWorks. I don't recommend that. I recommend making it conversational. Making a couple sentences, text only, where the customer believes that you're actually talking to them and saying, "Hey, Mr. Jones, noticed on your property that you need this. Would you like me to give you a quote?" "Hey, Mr. Jones, it's the perfect time of the year to get X, Y, and Z service done before the rush comes in a couple of months. Would love to get you on schedule. Let me know if you would like that." Make it really conversational. Don't try to make it super promotional. Okay, my pep talk at the working GM stage. This stage is the most financially hard. Like, the stress financially is difficult because your margins collapse. You went from 70%, 80%, 90% profit margins down to 15%, 20% profit margins, even at a good business, because you have all these employees and you have workers' comp and you have insurance and you have a bigger shop space and you have all these extra costs that have been added up and that caused a lot of margin compression. This is why a lot of times you need to raise prices at least one time in here just to realize, like, oh my word, I have no— I'm making zero profit. Okay, great. If I raise 15 or 20% prices, my prices by that much, I can at least make some decent margin. Now, another thing to keep in mind at this size is that your first employee will define your culture. And so when you're hiring your first couple of employees, if they're really horrible, don't keep hiring because everyone, when they step in, is going to look to your current employees as the lowest common denominator before I get fired. And so they will just default to that lowest common standard. And so if you have a really bad 1 or 2 first hires, don't keep trying to build the business really fast. Take your time with your first couple employees. You're learning as a leader, but you're also making sure that the standards that you want actually get put in place. And so if they're not good, the first 1, 2 employees, replace them or train them up and get them to the standard you want before you keep building the entire team on top of those first initial employees. All right, let's go to Section 5. This is for the working GM. I want you to score yourself on a 1 to 5, and I'm going to— we're going to do it on these 4 different metrics: hiring, training, retention, and estimate speed. Okay, so hiring, all the stuff we've talked about. Give yourself a 1 to 5 if you actually have a hiring process or if you're really just flying by the seat of your pants and when you get really crazy busy, you put up a job ad. Training. Do you actually have a training process in place where in the first 2 weeks they know exactly what they're going to be doing? There's a clear onboarding process. And there's a trainer and a trainee, and they actually have certain checklist of items they have to get completed in the first 1 and 2 weeks. Third thing is the retention. Score yourself from 1 to 5. How long are employees staying with you? Notice that 3 out of these 4 metrics for Working GM is all around your employees. 'Cause this is when you're starting to get out of solo operator and you have employees. And the distinguishing factors to whether or not you succeed at this level is can you manage these team members? Retention meaning, Do you keep burning through people in the first 1 or 2 weeks? Or are most of your employees staying for years? Okay, so the years would be 5. They're burning out very quickly, that'd be a 1. All right, estimate speed, also very important. You could honestly just do this based on how many days it's taking you. A 1 would be it's taking like a week. And if you're getting all your estimates out within 24 hours, bar none, that would be like a 5. Okay, so the faster, the better. Again, you're gonna look at your lowest score here as the opportunity for you to focus on 'Cause if you fix that constraint, you will likely unlock the next stage of growth. And that is full-time GM. This is stage 3. This is the leadership hat of $750,000 to $1.5 million in revenue. What I call a full-time GM. Now, the role of the owner is a full-time general manager. And you're gonna say, well, I'm the owner, I'm not a general manager. But you're serving in the role or the leadership hat of a general manager. And maybe one day down the road, you would hire someone to take your place. Now, the reason I call it a full-time GM is because this is when you are off of the truck. You're no longer a working GM doing operations. You're focused exclusively on sales. Okay, so when we look at sales, operations, and admin as a full-time GM, you're focused most of your time on sales and growing the business. And you have an operations manager that has been hired and you're delegating all infield activities to that operations manager. And you also have a full-time admin person, whether it be virtual assistant, answering service, or someone actually in the office doing all of your admin. These two tasks have been delegated off of your plate. That's really the role that you're focused on is getting more work and sales. Now, some of the doubts you're going to have at this size are: Did I grow too fast? Did I grow the business so fast it's inefficient, it's unprofitable, there's lots of chaos. I can't even hand off operations because so many things are broken. Okay, these are some of the doubts you're going to have. The next question is like, the doubt you're going to have is like, is growth even worth the stress? Because at this point, you are stressed out of your mind. You grow a million-dollar business. You thought this was everything I ever wanted, and now I'm just stressed. You're also going to doubt, can I trust my team? Can I trust my operations manager to actually get the work done efficiently? Can I trust them to be out in the field every single day with my customers and actually taking care of them? Can I trust my operations person? But also, can I trust my admin person to answer the phone? 'Cause sometimes I go in there, they're just twiddling their thumbs. Sometimes I look in the email and like, the emails haven't been answered for 2 days. So can I actually trust my team? These are some of the doubts you're gonna have because now you begin to hand off aspects of the business and admin and operations, and you feel like you're flying a little bit blind to what's actually going on in the business. All right, so here's what I want you to focus on at this size of the business as a full-time GM. I want you to delegate in sequence. So when we look at sales, operations, and admin, I want you to delegate this direction. First, delegate all admin activities. Anything with answering the phone, sending out invoices, anything in the office, I want delegated as soon as possible. I want all of it delegated. And then you go delegate operations and getting an operations manager. Ideally, you get someone from inside of your team that's been with you for a long time. They have a lot of experience and they can take operations off of your plate. And then you focus exclusively on sales at this size. Mostly. What I see a lot of people doing at this size, they're like, "Oh yes, I am a full-time GM 'cause I am off the truck." But at the same time, they sometimes dabble in the email, they run payroll still, they still run the QuickBooks, and then also they're still making sure the crew has all their stuff in the morning, they're going from truck to truck, they're cleaning out the trucks, they're doing operations, they're still moving equipment or materials on big projects, they're still doing operations. And they're saying they're full-time GM. If you do this, this is when you feel like a chicken without a head because you're running around constantly, still switching from sales, operations, admin throughout the day. Delegate in full admin before you delegate in full operations. Then you can focus on sales. You will feel completely haywire and so stressed out of your mind if you are constantly bopping into or you have partially delegated admin or partially delegated operations. Okay, so I truly believe you got to fully delegate admin. It's the lowest leverage task. And then operations, fully delegate that so you can focus on the highest leverage task of sales. Does that mean that admin is not important? Absolutely not. Does it mean that operations is less important than sales? Absolutely not. But in terms of cost to replace, it is cheapest to replace someone in the office, is cheapest then to I replace someone in the field, and then it is the most expensive to replace someone that does sales, has estimator experience, can talk to customers. Now, at this size, I also want you to focus on standardization of services and equipment, because as you grew past a million, now you're going to a 7-figure business. You might have gotten a bunch of different services that kind of just showed up. You might have got a bunch of equipment that kind of showed up that doesn't get used very often. I want you to standardize Everything. As much as possible, do the same thing the same way every single time. That's standardization. And so same services, same equipment. So you might have had 4 or 5 different types of trucks. Ideally, if I stay in the stage for a few years, I'm going to try to get all the trucks to be relatively the same, the setups on the trailers to be the same, the equipment to be the same. The more standardization, the better. Every deviation away from standard increases the amount of problems that happen out in the field. So when customers complain and then you talk to your crew and like, well, we didn't have that piece of equipment on the truck or I didn't have that tool, I couldn't fix it out in the field because I didn't know how to fix that piece of equipment. When you hear these things, this is usually because of a lack of standardization. I also want you to set up your operations manager for success. And a big piece of setting up your operations manager for success is simplifying everything. If things are complicated, It is so much more difficult to get an operations manager to actually be good at their job. So don't be like throwing them into the fire when it's so complicated. You have trucks breaking down all the time because they're old. You have equipment that is from the 1950s that's breaking all the time. You don't have any dealers that can actually service the equipment. This is chaos for your operations manager. And so before you delegate at this size all of your operations to a manager, Simplify things as much as possible. Standardize your equipment, standardize your trucks, make sure that like maybe you upgrade your trucks to be a little newer so they're not always breaking down. So you don't have to have two backups all the time at the shop, 'cause that's a pain in the butt for the operations manager to actually do scheduling efficiently. I'm also gonna have systems for training my new technicians because I don't wanna put my operations manager in place without any training or systems for new technicians. 'Cause if my operations manager doesn't have any sort of way of managing my technicians, it's gonna show up very quickly in the quality of service. So before I get my operations manager, I'm gonna simplify, I'm gonna standardize, I'm gonna create systems for training my new technicians so that when I put the operations manager in place, I can actually show them what good looks like. Here's what good training looks like. Here's a checklist for new technicians. Here's what a good project of X, Y, and Z service looks like, and we do it the same way every single time. By doing that, I can actually standardize the rule and simplify it enough to hand it off to an operations manager. All right. We are still at the full-time GM size, $750,000 to $1.5 million in annual revenue. I'm going to talk to those of you who are in profit mode, meaning you are trying to optimize for profit at this size of business. At this size, we're going to raise prices instead of adding crews. If you have a million-dollar business, and over the course of 3 or 4 years can keep raising prices every time you hit capacity instead of adding more crews, you could very well add $200,000 to $300,000 of straight profit to the bottom line. For example, at Augusta Lawn Care, my location has about 6 to 8 technicians, 8 being in the highest part of the year, 5 to 6 during the lowest period of the year. However, we, we are a working GM. My GM still goes out in the field and does work when it gets, when it gets slow. And is producing labor revenue. However, that location will do over $1.1 million in revenue because they've been in profit mode for years. They kept raising prices. They didn't buy more trucks. Everything got standardized out in the field and operations, allowing the operations manager to do it efficiently and not have to keep adding crews, but just keep raising prices. And so I want to keep raising prices in profit mode every single year whenever I hit capacity. I'm also going to improve efficiency instead of hiring. Many times when you're in growth mode, when you're growing to 7 figures, every time you get really busy, you just immediately think, "I need to hire someone else." And so, for example, if you have 10 employees and you're like, "Man, we're running behind," you can hire one more person and immediately increase, theoretically, how many budget hours can get completed every single week by 10%. 10 employees, adding one, I should add 10% of labor productivity. But you could also do that by increasing the overall efficiency of your entire crew by 10%. And so now we have enough size and we have enough economies of scale, enough employees that if we were just to tweak their efficiency and make them better out in the field, make them more productive, more efficient, less stops throughout the day, institute pay for performance, profit sharing, open book management. These are all things we've talked about in my content. If we do these things, we improve the efficiency of the crew. And if we improve the efficiency of the crew by 10%, 15%, 20%, We don't need to hire employees. And so a lot of times in growth mode, we get lazy and just hire more people because we hit capacity. We go hire more people. That's growth mode. In profit mode, we don't go and hire more people. But what we do do is focus on efficiency. We implement pay for performance. We implement profit sharing. We open up the books to our team because we know we can get an incremental 15%, 20%, 30%, 40% more efficiency and more budget hours from our team if we do those things. At this stage, I want you to cut complex services. So I said, I talked about simplifying things. The opposite of simple is complex. I want you to get rid of it. It is so easy at this size to realize, wake up and realize you have a whole bunch of little services that are doing $50,000, $100,000, $30,000 in annual revenue. Just get rid of them. It's hard for your crew to learn all these skills. It makes it harder to train, a longer period of time before they're efficient and profitable, and you usually get dragged into them because you're the only one who knows how to do them since they're only done once or twice a year. For example, at my shop, we used to do snow plowing and it was really, really profitable. The problem is it maybe snows once a year where I'm at, maybe twice. And so every year we have to retrain the team because we'd have all the new crew and we have to retrain them and there's liability and they're on their first snow event. They hardly ever see snow. They're not used to plowing. They're not used to salting. There's lots of mistakes. Mistakes being made. So what happens? I get pulled into the field. My general manager gets pulled in the field. And so years ago, we realized in order for me to have the business run without me, we have to cut that service. And it can be tough because a lot of times those complex services are your most profitable. The ones that are the most difficult to do, they're really skilled labor. Those are the ones usually you can charge the most money for and be the most profitable. But getting rid of those allows you to run the business remotely. You don't have to be there because everyone is able to perform the simple services that you provide. Now, complex does not— by saying that, it doesn't mean, oh, I've got to get rid of anything that requires any skilled labor. Not true. However, I want to make sure that the few services that I do offer, if they are complex, I'm able to standardize the training and the products and materials that go into comprising that job. So I want to simplify and standardize and get away from complex and custom work. Now, also at this stage, because I am in profit mode, I am going to move the quality of revenue. Not all dollars and not all revenue is created equal. I look at it as you have one-time jobs, one-time revenue. This is like one-time projects like building a wall, building a paver patio, building a fence. Then I have reoccurring work, which means it has to be done more than once. but not on a certain frequency. Not on a weekly, not biweekly, not monthly, not quarterly, not annually. It just happens periodically. And then there's recurring revenue, which means there is on a schedule. I'm showing up weekly, biweekly, monthly, quarterly, or annually. If it's those, I can have recurring revenue and I want to move as much of my revenue in this direction. So if I have a whole bunch of one-time work, I want to move in the direction of reoccurring work. If I have a whole bunch of reoccurring work, I want to try to convince them to get onto a recurring schedule. So I have much more predictable revenue, high predictable revenue, higher quality revenue. I want to move in that direction because I don't want any one thing to wipe out all my one-time jobs. I don't want it to be ever where I don't know what revenue is coming in because I don't have anyone on recurring jobs, recurring visits. I want to be able to accurately predict into the future exactly how much money I'm making. Because I have a lot of recurring revenue. If you look at the most valuable businesses in the world, they have recurring revenue. All right, let's look at growth mode for a business that is a full-time GM, between $750,000 and $1.5 million in annual revenue. At this size, you're probably gonna hire an estimator and start training them, because eventually you see the writing on the wall as you get to $1.5 million plus that I'm gonna need someone to take over sales. And so you start hiring them. And the reason you're doing it now is 'cause you're in growth mode. You know that if you're going to get to $5 million, you're going to $10 million, you're going to eventually have to hire a salesperson. You're going to start hiring them now. And again, you're in growth mode. This is not something you should be doing to optimize for profit because that person sitting with you and getting trained on sales all day long for weeks on end is an absolute straight cost and overhead to the business. They're not productive out in the field and you're adding more people to the overhead structure of the business. This mid-level management starts to get built out. And yes, that's great. It'll get me to $3 million. I'll have to do it to get to $3 million. But this is why a lot of small businesses that are going from $750,000 to $1.5 die is 'cause they start adding more mid-level managers that are not producing revenue. This is why at Augusta, I really like the whole working GM model where I keep everyone out in the field, including the GM, and I have no mid-level managers, and I have all of the admin being handled outside of the office, keeping all my costs and expenses low and no overhead structure. However, if you're gonna keep growing, that's fine. Just realize you're going to have to know your numbers. Because this is where overhead starts to really creep up. The amount of employees you have in the office, in sales, starts to creep up. And I start seeing people where they have 1 person in the office for every 2 people out in the field. What? Back when you were a working GM, there was 5 or 6 people in the field and maybe the working GM that still kind of worked out in the field sometimes. There was no one in the office. There was no salespeople. There was no overhead. There wasn't a huge shop space. And so be very careful of overhead creep. And this is why at Home Service CPA, we do your bookkeeping, we do your payroll, we do your tax prep, is because so many times it's just so hard to find an accountant that actually will help you understand your numbers and what these numbers around overhead, what's good, what's bad. I got to make sure that I have all the dashboards and the metrics of my business in front of me to be able to make sure we don't crash. Because in a million-dollar business now, you have a lot of liability. You have a bunch of families, a bunch of employees, a bunch of vendors, and a lot of weight on the business, and crashing at this size can cause a huge collapse. To prevent that, we've got to know our numbers. We've got to know how much overhead we have, what our rent is, what our utilities are. We've got to have all of this in front of us, and we've got to make sure we've had— we have at least monthly reconciled bank statements from our CPA, from our bookkeeper. If you're not doing these things correctly at this size and you're trying to like, "Oh, well, I don't really know if my sales tax are being done right. I don't know if my payroll is really being rent rate. I don't really have reconciled bank statements at the end of the month. I don't really know if my balance sheet is accurate. Oh, my profit and loss statement. Like, yeah, the numbers are— it's crazy. I go on the Turnaround Show and people in their P&L like, oh yeah, like I got to explain like 3 different things. And all of a sudden their P&L is not accurate because these 5 things they didn't tell me about. It's not on the P&L. It's not on the balance sheet. And it's like, why are we doing this? And so having Home Service CPA clean up your books, make sure your QuickBooks are all reconciled, your payroll's done right, your payroll taxes, your workers' compensation, and making sure you have clear numbers at the end of every single month reconciled to your bank statement. So it's not just made up. This is why people are like, "I don't know why my bank account doesn't match up with my profit and loss statement." It's because you're not reconciling it. You're not making sure that every single month, you know, your loan payments are reconciled out with interest expense and it's all parsed out. You got to do this at this size. And if you're going to stay in growth mode, it is extremely dangerous to keep growing without having, knowing your numbers. All right, in growth mode, many times at this size, you're going to expand your service area. Usually you do this because as you get past $1 million, $1.5 million revenue, you realize that you've saturated a local market and you start expanding. This is why I like the copy and paste method, because I would rather start a smaller shop space with a working GM. But if you're going to stay one big size location, usually you do start to flex your service area. You start going a little further out and driving a little further. This is the fastest way to grow because now in these new markets, no one knows about you. It's the easiest, lowest-hanging fruit in terms of customer acquisition cost, 'cause you're gonna go into these new markets where no one knows about you and immediately you can be ranking well in their area on Google. You can be sending out and people who've never known about you are now doing service with you. And especially if it's in a market where there's not a lot of competition or there's weaker competition, you can go in and dominate. Great. Expansion of your service area is the fastest way to grow It is also many times the least profitable way to grow. 'Cause now your crew is spending more and more time behind a windshield driving instead of doing the work. And if you have 45-minute drive one way, that's an hour and a half round trip on an, let's call it, 8-hour day, we're talking about 20% of someone's day just driving. Remember that efficiency score? I was saying if you can't hit above 70% efficiency score, we got a problem. Well, right off the rip, 20% of my day is being spent driving just to my first job and back, we've got a serious problem. And so it's very hard to have a good efficiency score if you just keep expanding your service area and servicing 10, 15, 20, 30-mile radiuses. It's very difficult to actually make it profitable. So be very careful, even if you are in growth mode. All right. Mike's pep talk for the full-time growth size. This is chaos phase. It's also where you get the most psychological stress. Because you are still, quote unquote, in the business as the salesperson. But you're watching things happen in operations and admin as you delegate it that you don't like. Also, this is where the reason I call it psychological stress, because every single day at this size, something bad is happening. Employees break things, customers complain, turnover is happening, and it's chaos. Every day you wake up, you pick up your phone and you're like, what bad thing is happening today? Because someone's calling out. An equipment, a piece of equipment broke down. Someone damaged someone's sprinkler or sideswiped someone on the road. There's always chaos. You get a lawsuit all of a sudden, someone threatening to sue you. It just feels so psychologically draining. And this is also when you'll be tempted to go back to being solo, like, oh, just tear out most of my services, take my 1 or 2 top guys, and we'll just be really profitable small operations. You will be tempted to do this. This stage is where businesses either stall or scale. If you look at the Turnaround Show, and I fly out to businesses for free and we do the Turnaround Show. If you need help at this size, by all means, go to mikeandes.com/turnaround. I'll come out for free and I will help turn around the business and we'll document it for everyone else that is also struggling and can learn from your, what you're doing in your business. But when it comes to the Turnaround Show, the vast majority of them are right around this $1 million to $1.2 million in annual revenue. The reason for that is because they're having all this psychological stress. At the same time, they're realizing they don't have systems in place in admin or in operations that they can effectively delegate. And so they still feel like they're doing everything in the business. And they're kind of like trying to babysit their operations manager and babysit their office manager. And they're still kind of babysitting their technicians. And this is where it gets psychologically hard. At this stage, I want you to get through it. Like, if you're going to scale to $3 million, get through this awkward phase of $750,000 to $1.5 million as fast as possible and get good managers. Do it as fast as possible because as soon as you add 1 or 2 overhead people, you almost have to go from $750,000 to $1.5 million. Let's do the math. 20% margin business doing $800,000. Okay. If I add an operations manager and I pay them with taxes, benefits, everything, $100,000 and then maybe $70,000 for someone in the office. That's $170,000. That's almost all of my profit. And I will have to grow almost about $500,000 to $600,000 in revenue just to cover their wages. And this is why people are like, man, I'm making $1.3 million, $1.4 million. I'm making the same amount as I was at $700,000, $800,000 when I was just managing it myself. When you add these overhead positions, it absolutely crushes your profit margins again. And so build systems now or you will hit a ceiling. And you'll hit the ceiling 'cause you won't be able to delegate. And if you try to delegate, it'll create chaos that'll force you to run back into the fire and you'll get, once again, feel like you're juggling everything inside the business. All right, section number 6 inside of the workbook. Okay, so we're at the full-time GM size. I want you to again, give yourself a score of 1 to 5. And we're going to look at these 4 different tasks. Now, a couple of these, I gave some ranges in terms of numbers. So stick with me for a moment. First off, we got to make sure we've delegated all your admin tasks. So give yourself a score of 1 to 5, 5 being you never answer the phone. The email inbox is not on your phone. You're not constantly going on the weekend, checking out the email, looking at estimates that are accepted or sending out estimates yourself. All admin tasks being delegated. Your payroll is being done by a bookkeeper. Admin tasks delegated. That'd be a 5, everything off your plate. 1 being you're still handling it all yourself. Okay, now let's look at operations. Are you using video and checklist inside the Field Force mobile app from HomeWorks? Are you actually submitting the video that you take from the estimate and it's going to the crew and that and the job notes, they can do the whole project? That's the kind of delegation we need to be able to have operations so that this size of business, things don't break apart. And so my question is, 1 being nope, you are not using videos, you are showing up to jobs and walking through with each project. You don't have checklists, you don't have clear job notes, that'd be a 1. If you're using Field Forest, you're uploading videos of every job, you have clear notes, you don't have to go do the walkthrough with the crew every single morning just to show them the new job, that would be a 5, okay? Recurring revenue. This is again revenue that is on a weekly, biweekly, monthly, quarterly, or annual basis. Schedule. I want you to look at this. If you're doing a— between 0% and 20% of your revenue is recurring, that's a 1. 20% to 40% would be a 2. 40% to 60% would be a 3. 60% to 80% of your revenue, your top-line revenue, if 60% to 80% of it is recurring, then that's a 4. And if 80% to 100% of your revenue is recurring, that would be a 5. Okay? Profit margins. This is the last thing in the workbook here I want you to score 1 out of 5. Okay, if you have negative profit margins, I want you to give it a 1. If you have 0 to 10% profit margins, I want you to give yourself a 2. If you have 10 to 15% margins, I want you to give yourself a 3. 15 to 20%, a 4. And if you have 20% plus profit margins, give yourself a 5. Okay, again, go through those 4 numbers, look at your lowest score, and then focus only on that. So if you're like, well, yeah, I look at recurring revenue and— We only have about 15, but like, it's very small. We mostly just do big projects. Great. That's probably the thing that if you just fix that, it would allow you to get to the next stage of growth. And that next leadership hat is the GM+ model. This is now where we are going to delegate everything inside the business and we are the CEO. We're doing between $1.5 million in annual revenue to $3 million+. Now, this will definitely get you to $3 million. I have seen this exact structure work at $5 and $10 million companies. So the role that you're going to be playing now as the owner is CEO, meaning you're the GM at the top of the org. Okay? The business runs without you because you have a manager in sales getting the work. You have a manager in operations getting the work done. And then you have an office manager, someone on the admin side of things, making sure that you get paid for the work, meaning that you as the GM are able to leave the business for a week or two and everything still goes smoothly. Jobs still are coming in from the salesperson. They're getting done efficiently from the operations and admins making sure you get paid. That's the role is as a GM plus, I am making sure that I am really managing the business as a CEO. All right. What are some of the doubts that you're going to be having at this size? Can I trust others with sales? Because the thing that you've held on for so long, you notice all the solo operator, the working GM, the full-time GM, all of those phases. You are still in charge of sales, and sales is the lifeblood of the business. Without having good sales, we got problems because everything— if you don't get the work, then you have no work to do and you don't have any work to get paid for. And so sales is sort of the top of the funnel that is required for operations and admin to even happen. Like, we don't have any work to do and we have nothing to actually go charge on invoices if we don't get any sales. And so you've held on to it for years. It's very hard to let go of. And you ask, like, can I really trust someone to actually have that much control of my business? Another doubt you have is, like, can I actually find leaders? Can I find a sales manager and an operations manager and an admin? Can I actually find these people? And can I retain them? Because someone else will just offer them more money. Another question is, should I expand? Should I try to keep going bigger? Should I go into my local city, another city that's next to me that's way larger, has 5 million people living there. Should I expand into that, go after a big target market? These are some of the questions and doubts that you're going to have at this size. Okay. What I want you to focus on: leadership development. One quote that I always liked is, "You are not a leader until you create leaders who create leaders." At this size is when you start seeing this happen. Whether you're doing multiple locations and copying and pasting and now you're, you have 2 or 3 locations that are doing $3 million in revenue, Or if you're doing one big location, either way, you're going to have to develop leaders. And this is a hard skill to follow and a hard skill to develop because managing technicians is very different than managing leaders. And you might be really good at managing technicians that want a checklist. Give me my job notes, boss. Give me my video and I'm rocking and rolling. And now you're talking to leaders who are making decisions. Strategy is being made in the business from these people. And you will feel out of control. And if you have not yet developed the skill of managing managers, you'll jump in. You will micromanage. This is where the whole term micromanagement comes in place, is usually when you have a manager that you manage. And so be very careful at this size around leadership development. This is when investing in books, podcasts, training, coaching is really valuable for your mid-level managers. Like, I didn't, I don't need that. I was great sales manager. But your salesperson might not want to learn everything from you. You might get them a coach to be able to learn those skills when you're not there. At this size, we're also starting to think about profit share incentives. How can I make sure that my mid-level managers are incentivized to make sure the business is profitable and running smoothly when I'm not there? I'm also thinking about talent pipeline. At Augusta, we have 21 stages of success. As someone moves through each stage of their career, The reason we do that is create a talent pipeline. We're able to make sure that technicians move into general managers, that general managers can move into ownership, and we're creating a talent pipeline that if something was to happen to someone, that we'd be able to replace them very quickly. Having systems in place allows the talent pipeline to actually be used because you might have great people, but if you have bad systems, you're just taking your best technician and putting them into a role where they'll fail because they don't have enough systems. So in addition to the systems, though, I need that talent pipeline. To be able to pull from. Okay, now you're at the GM+ size, you're doing over $1.5 million. Let's talk about if you're gonna go into profit mode. If you're in profit mode, typically you're going to promote internally. You're not gonna go out and find someone from your competition and just pay them gobs of money to come and run a department. You're not gonna go find someone done sales for 20 years and just have them do it for you. Why? 'Cause you're in profit mode. You're trying to optimize for profit and you're usually going to get someone from inside of the company that is a little bit cheaper, that you can pour yourself into and train them the way that you would like. There's pros and cons of this, but usually in profit mode, this is the safest route because you're not jeopardizing the idea that someone could bring in a different culture and completely ruin what you've built. So most of the time in profit mode, when you're trying to go a little slower, you'll promote from within because you're not in a rush. All right. If you're in profit mode, we're also going to expand into service areas and new markets before starting a new shop space. So we call it Augusta Lawn Care. We call it ghosting. What it means is I have my first location, it's grown, and now what I do is I start serving this other market. And then once it gets big enough, then I'll start a little shop space, put a general manager in place and expand it. What I'm not going to do if I'm in profit mode and being conservative with my growth, I'm not going to, from day one, get a GM, a new shop space, 2 or 3 trucks, a few employees. That is going to burn money for 6 to 12 months. I don't want to do that in profit mode. So what I'll do is I'll just slowly expand my service area, get a whole route to where now when I hire my general manager next year, it will be profitable from day one. They'll immediately be full on their schedule. They're not be just door knocking from day one. They'll have a full route and a full schedule. This is the most conservative and profitable way to grow into new markets, and that is prove the demand, get the route set up, and then Get a shop space, then get a general manager before you try to spend hundreds of thousands of dollars getting the market from zero to those first 50, 60, 100 customers. At this size, when you're doing over $1.5 million, expansion is now funded by profit. And one of the biggest reasons for continuing to grow is Section 179. And this is why we use the copy and paste method that I talk about inside the book. And that is when my first location is pumping out a bunch of profit and I'm now expanding this other area. I've gone in my service areas a little longer. The drive time is not good, but I got a full route for my crew. Then I break it off. I start a little satellite shop space. Very simple out of a shop. Many times it could be out of like a storage facility. I put my general manager, a working general manager, in place. So they're out in the field still producing revenue, profitable right away because I've slowly moved in that market. Okay, I'm now going to use the Section 179 to be able to write off all the trucks, equipment, and expenditures for that second shop. And I'm doing this so I'm not getting 30% to 40% of my taxes or 30% to 40% of my income taken out with taxes. And so this expansionary effort that you're having now at this size, being— if you're trying to maximize your profit and not paying a bunch of taxes, you're actually going to only expand mostly because you're trying to not give 30 to 40 cents out of every dollar to the government. At this size, when I'm in profit mode, I'm also trying to reduce the key man risk with my managers. And so this means you might have a really good sales manager, but you gotta have someone else backing them up. Because if any of your one managers in admin, operations, or sales go down and you're the person to step back in, you are on a short leash. You might be on a vacation, if they drop out, you're back. And so you gotta start creating redundancy and removing key man risk. Now, what I see a lot of times happen at this size too is people have leaned on their spouse to be a mid-level manager. And this creates key man risk because maybe if your spouse gets pregnant, gets sick, there's a family emergency. Now you and your spouse are taken away from the business and the business really starts to hurt. Reducing key man risk is a way to make sure that if any one person in the business was removed, including yourself, your spouse, your family members that the business would not fall apart. And so I can reduce key man risk by doing two things. One, redundancy of training and having systems in place to train people below my mid-level managers and be able to replace them quickly. Or two, avoid getting to the point where I need the mid-level managers and just staying at the working GM size and having one general manager with 6 to 8 technicians and copying and pasting that. This makes it a little bit flatter of an organization, and I don't have to have that key man risk at the manager level. There's always gonna be some level of key man risk, whether it be technicians, people that know services well, but I'm trying to reduce that as much as possible at this size of business. I want the business to run without me, and there should not be a need for the entrepreneur if you're not growing fast. Any time a business is in growth mode, you need an entrepreneur. You need someone pushing, shoving, grinding, hustling. But remember, we're always trying to get the business to profit mode, and I wanna build a business model that doesn't require an entrepreneur. Because that means I will always have to be in it 24/7. And it might take me 10, 15, 20 years to build the systems in a way where I don't need to be there all the time as the entrepreneur. And I can have managers, GMs at multiple locations, or mid-level managers at a GM+ size business. That's fine. But I don't want the business to depend on an entrepreneur because if it depends on an entrepreneur, very hard to sell, very low enterprise value, and not a business most people want to have. Because it constantly means you're just one call away from having to be right back in daily operations. I want to build a business that can run without me. All right. Now, if you're in growth mode, so this is $1.5 million to $3 million in annual revenue and you're just like, I am trying to grow as fast as possible. Great. Most of the time is when you start thinking of acquisitions because you can buy out your competition that's going out. They failed to get past the GM size. They, they got a few employees. You can buy them for pennies on the dollar. You can strategically do it to move into new markets. You can launch more locations. You can blitz a market. So now when you start a location, you might not slowly grow into the service area. You might just start with day one, 3, 4 employees, $100,000 budget for marketing, and just immediately ramp up to $1 million. Totally fine. You're in growth mode and you're going to blitz the market. You're also usually going to hire external leaders that have already done what you want in the business. So instead of waiting 2, 3, 4 years to cultivate someone, if you're blitzing a market and you need multiple GMs from day one, you need multiple operations managers, you need multiple salespeople, you're gonna hire people who have done it before and you're okay with the cost that comes with and burning money. You're also usually gonna add new service lines. Again, we talked about before, when you're in growth mode, adding more service area, fast way to grow. It's also very dangerous 'cause it can be the least profitable, but we're in growth mode here, we're focused on growth. And so the other thing you might do is add more services. Because if you do one service for a customer, it's very high likelihood if you offer a different service, you could sell them something else. So if you do lawn mowing, you're like, oh, we could also do pool service because it's, all our customers have pools and we could just, you're right, you could probably get 20, 30% of your customers immediately to accept that new service. And so this is another very growth-minded strategy at this size of business and it could very easily take him from $2 million to $4 million. It's just like, I'm gonna offer 2 or 3 other services And just, yes, I'm adding more complexity. I might have to hire someone from outside the organization to train my team, but I am trying to focus on growth. Okay, my pep talk here at this size of business. You're really starting to feel like you own a real business at this size. If the business can't run without you for a week, you don't own a business. You own a really, really hard job, and it's almost impossible to replace yourself. Your role now is to actually become a manager of managers. And so you doing anything in the business is actually a bad thing. It's a sign of system failure if you ever have to jump in because there should be a manager to do it, or there should be someone redundant to be able to do their job if they fall out. Or we should simplify and systematize everything in the business so it's easier to get someone else trained up to take their spot. So this whole idea of managing managers is a different skill set than managing technicians. And many times will take 2 or 3 years just to learn that skill and learning your cadence because very personalized. I have talked to many business owners that have done 7, 8, 9 figures in revenue, and every single one has a different strategy and personality around managing managers. And so you're going to figure out what your style is, what works, what doesn't, and the type of person that is able to jive with your leadership style. And then you'll probably have to kind of shape off the rough parts of your leadership style to make sure you can retain great people. But ultimately, your goal is to become the spare tire, which is helpful if you're there and you're really needed. Awesome. But if you're not there, it's irrelevant. Like, it's a spare tire. I don't really think about it until there's an absolute calamity once every few years. And if you're constantly pulling out the spare tire every single week, in other words, the business owner is constantly coming back to the business, The car is broken. We need to replace the car. The system, the business model is broken. If after 5, 10, 15 years of you pouring in your managers and building the business, if after 15 or 20 years, you're still being pulled back in all the time, you have too many, too much key man risk. You have far too few systems. You need to simplify and standardize things to make sure that you can become irrelevant as to whether or not you're actually in the business. All right, let's turn to Section 7. This is the GM Plus. Size business. Again, we're going to score from 1 to 5 and we're going to look at first off your sales, operations and admin leadership. Are they installed? In other words, have you actually hired someone to be your office manager? Admin? Have you hired an operations manager? Have you hired a sales manager? If so, give yourself a 5. If missing one of those, give yourself a 1, 2, 3, etc. Key man risk. Okay, this is again, these are somewhat subjective to your thoughts on this, but like, if you could right now go for 2 weeks on a vacation and nothing happened bad, fantastic. You probably have low key man risk. If you could not go for 2 days without all the estimates grinding to a halt, stuff falling through the cracks, customers complaining and phone calls being missed, you'd be on one. Okay. Manager accountability. The manager that you do have in place, whether these are GMs at multiple locations or mid-level managers, do they take accountability for their role? In other words, do you have to hold them accountable to filling out metrics and dashboards and keeping up with what their KPIs are, or do they do it for you? Do they keep the team accountable to their performance and their labor efficiency, or do you have to still manage the manager to get them to manage the technician? Expansion readiness, meaning could you start another location? And you're like, well, I don't want to start a location. Just having this as a scorecard of Could you duplicate this? Because if you do, is the ultimate test of systems. When you have two locations, it immediately forces you and shows, shows all the chinks in your armor for every sales operation admin error. And so even if you don't want to start a second location, ask yourself, if I did a second one, where would things break? And am I ready for that? And if you're not, fix those things, because even if you don't start a second location, the enterprise value and owning that business will become much better if you just could have it where it could expand into multiple locations. Many times, the reason that people can't expand and their, their business model is actually not capable of copying and pasting. If they just solve those problems, even if they didn't copy and paste, it would be a better business to own because it can run without them. It runs on systems, it has less keyman risk. Things are simplified and standardized. Things are outsourced, and there's not a whole bunch of top-level management, and overhead is low. These are things that allow for multiple locations to happen, and forcing yourself to get inside those systems allows you to be able to build a better business regardless if you have 1 or 100 locations. Okay, that is now what we can look at and look at the lowest score of those things, and this is gonna be your limiter. The thing that's gonna keep you from getting to $3 million is going to be whichever of these 4 numbers are lowest. So focus on those because at this point you are no longer building crews, you are building leaders. Okay, so we've now concluded the 4 leadership hats, but don't, don't leave yet because this is really where things get super valuable in terms of the workbook. We're going to be diving into Section 8 where we're going to do a chaos diagnostic and we're going to do a systems check on all aspects of your business. And so if you haven't yet, make sure you scan the QR code or pick up the workbook in the link below, because this is a lot of really valuable ways to determine where are the systems of the business and am I weakest in sales, operations, admin, and what should I be focused on and fixing first? So if it's not written, it is not repeatable. So if you have not written things down and recorded it, it is not a system. It is not repeatable. And if it is not repeatable, it is not scalable. And if it is not scalable, it is not a business. This is why systems create freedom. And for the vast majority of us, the whole reason you got into a business and put 5, 10, 15 years of blood, sweat and tears to get it to this size and grow the business, to have the system in place and the people in place and the process in place. The reason you did that is to be able to create freedom for you and for your family. And the ticket to do that is creating systems. So let's look in your workbook, Section 8. All you're going to be doing is putting yes and no here. Okay. So it's going to go through sales systems, operation systems, and then admin systems. And then we're going to go over owner dependency signals. And all I want you to do is put yes or no. So I'm not going to read all of these. Scan the QR code or go in the link below, get the workbook, and you're going to see, for example, in sales, are leads automatically logged into the CRM? Okay. Is that automatic or is that something that you are literally putting in your notes app and then going home and putting it into the CRM later? Or is it automatic? Is it brought in automatically? Are quotes created from templates or you're just making them up custom every single time? Is pricing calculated or is it guessed? These are questions I want you to answer yes or no. At the end, you're going to see once you get through sales, operation, and admin system, there's going to be an owner dependency signal. For example, does the business slow when I'm on vacation? I answer most team questions throughout the day. Employees wait for my decisions. Just say yes if this actually is applicable to you. And then there's a last part where it's actually advanced systems maturity. So if you're over $500,000 in annual revenue, where it's going to say things like, does a standard operating procedure library exist? Do you have recordings of things that need to get done? Do you have a checklist, etc.? Do you have a KPI dashboard? Do you have weekly number reviews that happen? These are things that are for a larger size business are also important. Just say yes or no. And then I want you to count up how many of them you put yes to. If you have between 0 and 5 that have a no, then you have stable systems. If 6 to 12 of them say no, then we have weak systems. If 13 to 20 of them have a no, then we are owner-dependent. Now, if you have over 21, that's— you do not have these systems in place. The business is not scalable yet. Does that mean you're a horrible business owner? No, it means you have more work to do in all of these areas. And I would go through every single one where you don't have a system in place for those individual things and focus on it. In fact, the book Copy and Paste Millionaire has every single one of these systems in it and exactly what to do to fix it. Now, inside your workbook, we're going to do one more thing. We're going to make sure that you leave here with an exact diagnosis of what to focus on. Ultimately, though, before we jump into that, I want you to realize that the reason I did this course is because every revenue level requires a different version of the entrepreneur. Everyone likes to use entrepreneur, and we all think about the architect working on the business that's been glorified. But what's actually required of the owner, of the entrepreneur at every side of the business is different. When you're a solo operator, you need to be a great laborer. You gotta be efficient and work hard and grind and hustle and put in the effort. When you're a solo— going from solo operator, now becoming a working GM, you've got to become a great manager. As you're a full-time GM, you got to be a great manager of the business and leading your team and hiring and training and figuring out how to make things more efficient. That's what a great manager does. And the role of the owner has to change from laborer to manager, and failing to do that Although you might be really skilled at the work you're doing on the field, if you can't manage people, if you can't hire and train them efficiently, you'll stop growing. And the frustration that people have so often I see can be solved if they just be humble enough to realize that there's a fix for this if they create systems. Now, the labor as a solo operator, moving to a manager as a working GM and a full-time GM, as you become that GM+ size with multiple locations, or you're doing $2, $3, $4 million at one location, You now have to be the architect of the business. You step away from the building. The architect isn't slinging a hammer inside of the building. That's the labor. They're not even managing the labors. That's the manager. The architect steps away from the building and looks at the blueprints. They look at the systems. They look at the— they diagnose the weak points and the stress points of the building. And that's what you do as the architect of your business. As you step away, you get out of the business and it can— it can still run without you because there's management in place. There's laborers in place that have systems to follow. Most companies do not stall because of market conditions. They stall because the owner refuses to evolve from a laborer to a manager, and they fail to evolve from a manager into an architect. All right, let's move to section 9 inside of the workbook. Ultimately, chaos is not a motivation problem. Chaos is a a systems problem. So in Section 9, we're going to look at the 4L Framework, and I want you to focus on which of the 4 constraints are keeping your business from growing. So the 4L Framework is simply the 4 reasons why every home service business stops growing: either a lack of liquidity, cash, a lack of leads, a lack of labor, or a lack of leadership. Now, inside your workbook in Section 9, you're going to see liquidity could be like, If your pricing's off, your profits are bad, you don't have enough money in the bank account, your cash flow is bad, you have a liquidity problem. Now, if you think we have a leads problem, that's going to be having everything to do with your advertising, your upsells, your website. That could be the constraint for you growing the business. Now, if you say, well, we got plenty of leads, I got plenty of cash, my liquidity, my leads are fine, but my labor, I can't find anybody and no one wants to work for me and everyone's lazy. Well, then hiring and training and creating a funnel for applicants and an applicant tracking software, having videos for your interview process, because that's your constraint. Number 4 is leadership. If your culture is bad, if you don't have systems in place, this is where the leader has to step up, find other people inside the organization to be able to be leaders, and they become a leader of leaders. And it takes a lot of humility to realize that leadership is ultimately the constraint to every one of our businesses. Because if we're not a great leader and we can't lead other people, then no one will want to work for you. And no one want to be a manager underneath you managing your technicians. And so you'll be stuck in this visceral loop this horrible loop of low cash flow, low amounts of leads, and labor that constantly is churning. Solve those constraints along with leadership and be able to get the business to the next level. Now, I want you inside of the workbook to identify which of those 4 is your primary constraint. You're like, well, I kind of struggle with each of those at different stages. But if you could solve one of them, if you could solve one of them, what would unlock the next stage of growth? Because right now, if you only have $2,000 in the bank, and you're not making payroll, liquidity is your problem. And it might be the fact you have a whole bunch of overdue invoices or you don't have cards on file, or you have a whole bunch of jobs have been completed but not invoiced. That's a problem with liquidity. If you have plenty of money in the bank, but you still can't get to the next level, you might need to figure out advertising and get help from an agency to go get Facebook ads or Google ads or door hangers or figure out another marketing channel. Figure out which of the 4 constraints you're currently facing. Now we can move to section number 10. We're going to create a 90-day plan inside of here. I want you to go through each of these and fill them out. First off, I want you to identify your leadership hat. We've already done that. You're either a solo operator, you're a working GM, you're a full-time GM, or you are a GM Plus. I then want you to identify, are you in growth mode or are you in profit mode? It's binary. It's one or the other. And we've already come up with this if you've been working through the workbook. Then I want you to figure out your weakest Sales, operations, and admin department. Which of those 3 is your weakest? And as we've gone through every single of the sizes of growth, you've identified, okay, I'm either good at getting the work, I'm either good at doing the operations, like getting the work done, or getting paid for the work, admin side. And you might be comfortable with some of these. Some people just love being in the office and the organizational admin, but then they stink at going out and getting more work. You've gotta identify which of those 3 links in your business is your constraint. You got to figure out what the weakest link in your chain is. Is it sales, getting the work, operations, doing the work, or admin, getting paid for the work? Then I want you to put down your, which of the 4 L's is your current constraint? That's either liquidity, leads, labor, or leadership. And then here's where it gets interesting. After everything we've talked about today, have you taken notes? Have you heard all the different ideas we've talked about to solve these problems? I want you to write down on E what your first action needs to be. I'm not gonna put too many words in your head here because you know what it is after watching the past couple hours of this course. The thing that's just constantly glaring at you, whether it be creating systems, doing a follow-up process, getting inside of software, creating a great website, getting Home Service CPA or Home Service Web Design get set up, like using HomeWorks. These are all things that you might, might be glaring at you. Write that thing down because that's the first thing I want you to do before anything else. Now, F is where I want you to put the success metric of that first action in the first 90 days. For example, if you're saying, "Hey, I do not have a balance sheet that's reconciled at the end of every single month, and I'm flying blind when it comes to my P&L. It basically gets done once a year from my CPA for my taxes, and I don't even know what it means." Great. Your success metric might simply be having a profit and loss statement and a balance sheet that's reconciled with your bank statement at the end of every month within the next 90 days. That's great. Starting with Home Service CPA would be a good move. Any CPA, any, anyone that would just keep you accountable to making sure you know your numbers. The next one is your accountability person. If you want to reach out, you can go on Facebook groups. I have one of my own for the lawn care industry. Reach out to someone, a coach. Get someone that's actually going to hold you accountable to all the things you heard about in this past couple of hours. You're probably overwhelmed with all the things you need to change in the business, but I need someone to hold you accountable to just this one action. 'Cause you've identified the constraints, the weakest links in sales, operations, and admin. You've identified what the constraint to your growth is when it comes to the 4L framework. But now you've identified what's the action I've gotta take and what do I, what am I going to measure in the next 90 days to make sure I actually solve that? 'Cause if you solve that one thing, if you could just solve one thing in your business, the amount that it would topple over and all the other dominoes is extraordinary. 'Cause you're only allowed, you notice here, you're only allowed to fix one thing. I want you to circle what that is. And this is your focus for the next 90 days. Okay? Now, final verdict, very last part of the workbook. I want you to fill this out. I want you to do it slowly, intentionally. Pause this if you need to. And you can use Section 10, specifically C, D, and E, to guide your actions. 'Cause I want you to fill in this sentence and then put in 3 things. 3 different items. First off, fill in the blanks here. My business will grow when I become a better blank. Okay, this could be a better laborer. This could be a better manager. This could be a better architect. And when I create systems for, fill in the blank. Is it sales? Is it operations? Is it admin? Where in the business do I need to create systems? And I will take the following actions to do those things. Okay, so now I want you to write down the 3 things In addition to the first primary one that you're going to fix in the next 90 days, I want you to write down the 3 things that are going to allow you to grow and become a better leader, manager, architect, laborer in the business, and what area of the business you're trying to create systems for. Write down the 3 action items. And I would love for you to be able to take a screenshot or take a photo of your workbook. Tag me on Instagram. Tag me on Facebook. I would love to see and really hold you accountable to the things that you're going to be changing in the business in the next 90 days. If you like this course, you thought it was great, go to MikeAndes.com. I have other courses that are just as long, just as in-depth, and they're completely free. Our goal is to be able to help this industry get to the next level, become more professional, and help home service business owners get rich.
