The ROADMAP to Building a $1,000,000+ Landscaping Business!

So without any further delay, this one's very important. Sit down, listen to this, watch this, and learn as much as possible. Hey everyone, it's Mike Andes. And today I'm going to be sharing with you the full, expanded, unabridged version of how to grow your lawn care and landscaping business past a million dollars in annual revenue. Now, in the past, I've made a very long video lecture about how to get to a million dollars all the way from 200,000, 500,000, all the way up to a million. But today, if you really want to scale the business into seven figures and beyond, this is the video lectures for you. Now, this is gonna be a long few hours long of a video course. And I highly recommend you watch this one a couple times. Watch it on a TV or a desktop screen if you can, because there's a lot of whiteboarding. Or just listen to this a couple times over and you'll probably get a lot of the information out of it as well. Now, keep in mind, this is more of a 200 level tutorial. This is not entry level. And if you Want entry level 1, watch the video at the end of this one. I'm gonna link back to the one, and in the link in the description, I'm gonna link the zero to a million. But if you wanna take it beyond that, if you wanna go to the next level and seven figures and beyond, this is the course for you.

Now, this is completely free, and all.

I expect, all I ask is that you subscribe to the channel in exchange for all of this free content. And so the first lecture is gonna be about systems. Systems are the thing that allows your business to scale and building, your business allow on systems instead of your personality.

That is so strong.

And you can sell and you can hire people and you can train people, that's all fine and good, but if you're gonna grow your business to seven figures and beyond, you've gotta have systems in place.

So we're gonna talk about all the.

Different things that systems can alleviate in the business. And the number one thing is bottlenecks. So where at each juncture and size of the business, is there bottlenecks? And how can we use systems to alleviate those pain points? So let's go ahead and just really recap from the beginning of zero to a million and then beyond what systems you'll need in place as you grow your business. Here we go.

Hey everyone. Really looking forward to talking today about bottlenecks in your business. And I want to specifically talk about how to avoid bottlenecks and get around them using systems. How I kind of think about it is if you had a river here and there's a dam in the way that is built either by a beaver, they're trying to block it, or potentially even like an actual like electric hydroelectric dam. And so you have this massive block and a bunch of pressure built behind this dam. Now a way to alleviate this. Because honestly, in my opinion, with business, you actually have to have a lot of structure and you can't have a river flowing super fast and sometimes really slow. Super fast, super slow. That's actually why sometimes they'll build dams, not even for hydroelectricity and for creating power, but just to be able to control this system of the river so it's not flooding and then there's nothing. And flooding, like have a reservoir and then be able to have a controlled release of the river. And so it's not fair to say this is a bad thing in your business. Oh, or move the dams. Like no, there's gotta be certain controls. There has to be a certain amount of structure in the business so it doesn't just run haphazardly. But one way to release this pressure that can build up over time against the back of this dam is to create.

Use like a side tunnel or they'll have a side track where it allows the water to come around the dam in the case that there is so much pressure behind this that this potentially could actually give out or the water level could rise above the height of the dam. And so this kind of a pressure release, as I like to call it, this release here and the over spill is going to be based upon in your business systems. Allowing a system in the business is going to be the thing that releases some of that pressure that's built up that's typically common around certain junctions in the business. And how I like to look at it, and what we want to look at today is there's going to be four different distinct dams or blockages or bottlenecks in your business in terms of size. And one of them is going to be 100,000 in annual revenue. One of them is going to be $250,000 in annual revenue, One of them is going to be $500,000 in annual revenue, and then you're going to hit.

A million dollars plus.

And so obviously as you grow, you can do 10, 20 million, 100 million, etc. There's more different types of bottlenecks that you're going to face. But today I want to specifically talk about these four different types of bottlenecks in the business. Now, when we think of bottlenecks, we don't necessarily usually think of a dam like I just drew out. What we think about is so sort of like the top of a 2 liter bottle, and that is where you have a whole bunch of. If you throw Mentos into a Diet Pepsi, for example, Diet Coke, and you throw it in there, why does it blow up? Why? Because it has this tiny little hole in the top that all the pressure built up in the bottle is released through and that makes it have a high velocity and spray way up into the air. And so the question is, what parts of our business are taking a huge amount of pressure, a huge amount of operational drag in the business and then causing blowups, causing massive financial, emotional, psychological issues and massive mistakes and massive failures. This is the result of this bottleneck. Because honestly, if you have a bull, if you have a bowl like this and you put Diet Pepsi in here, Diet Coke, and you throw some Mentos in, it just fizzles. It doesn't even blow up the same amount of pressure. The same amount of chemical reaction happens. However, because there's no bottleneck, it literally just kind of fizzles off in terms of the gas and there's no big explosion. You don't get something spraying 10, 20ft in the air like you do here, because in this case you have a bottleneck. So in your business, the question is, what are the bottlenecks that are taking the pressure that's going to be natural in your business. It's not going to be easy, it's going to be very difficult. There's a lot of pressure and there's a lot of things going on in the business. But what can we do to remove these bottlenecks and open up this business? So that way, instead of having bottlenecks, we have a way when the pressure does come, not if it comes, but when it comes, it doesn't create a massive blowup. And rather, we can deal with the stresses of growing the business. And because the bottlenecks have been removed, if you cut off the top of that 2 liter bottle that used to have a bottleneck, now you remove that again, that same amount of pressure, the same situation, the same issue that's thrown into the business, the same employee walking off the job, the same $10,000 balanced invoice, whatever it might be, that same thing thrown in doesn't create a massive explosion and collateral damage. And now you blow up at your wife or your husband, and now you have issues in your family and Then your health starts to deteriorate, then you can't sleep, and then now you have financial issues, now you're taking on bad credit card debt. That stuff doesn't happen as long as you can remove the bottlenecks. So that is the goal of today, is to walk through what are the bottlenecks at each of these four stages in business and what can we do to eliminate them? All right, so I'm gonna talk about these four different stages because at every stage there's different type of bottlenecks that I typically see most common at that size of business. Because the same bottleneck that you have at $100,000 in annual revenue is not going to be the same bottlenecks, the same things that are typically going to be that pinch point, the dam, the thing that blocks up and creates pressure. It's not going to be the same in a million dollars in annual revenue. So I want to talk about that from really the stages of growth. Starting off with $100,000, now $100,000 in annual revenue, typically you're working by yourself full time, usually some pretty long hours if you're getting that 90, $100,000 marker, but very doable to do $100,000 in annual revenue by yourself. Now at this stage in the business, the bottlenecks that you're going to be facing are mostly physical. Okay? And these are going to be more evident bottlenecks if you were older. Because if you're doing the physical work, whether that be like mowing lawns, doing landscaping, doing roofing, doing fencing, or doing the physical work of like at a retail store, you're selling every single thing. You're the person behind the cash register, you're the one stocking shelves, you're doing everything. You're typically going to have physical constraints on you because you have limited number of hours, you have limited physical capacity. And if you're out doing physical labor all day long, you better be very clear that you're going to be the bottleneck in that business. Physically, you're gonna be the bottleneck. You might have a whole bunch of other potential, but because you are bottlenecked at 100,000 nano revenue, typically you're just gonna start physically breaking down if you stay at this level and start to again allow this physical constraint to be a part of the business that is the bottleneck. Okay? And so the question is, well, how do we get around this stage of growth and the stage of growth of 100,000 in revenue? How do I get beyond? How do I get to $250,000 in annual revenue. Well, in order to do this without a massive blow up, you're going to need to remove a bottleneck. Now what are the bottlenecks that I typically see being in this first stage? Well, we talked about physical, but how do we solve that? Okay, first of all, project management videos. Now this is most common for home improvement businesses, but the same can be applied to any type of business where you can create standard operating procedures around doing the work. Cause this is the part that is your bottleneck is doing the work. The physical actual manifestation, the physical delivery of the product or service is the part that you're struggling with in this first bottleneck of physical. And so what we wanna do is how do you create procedures, SOPs or standard operating procedures around the work that's being done? Now in lawn care and landscaping, for example, when we do a landscaping project, the estimator goes out and does the, does the initial consult, but then they're going to make a video or we call project management video for that client and we're going to attach it inside of a group and that video is going to be then given off to the employees down the road to be able to do the work. What does this do? This allows you to not be the physical constraint, not have to do the physical work. The main hurdle that most people have at this stage is how do I just get someone to do the work for me and do it right? Well, you're going to have to create project management videos, you're going to have to create SOPs, standard operating procedures. Because in order to get past this stage where you're doing all the work yourself, you're going to have to hire people. That is the differentiation between stage one and stage two is you're going to.

Have to hire people.

In order to do that though, you're going to have to make sure you have project management videos or some sort of standard operating procedures documented with video to be able to give to a potential employee so you can move on and grow the business without a massive explosion. Because what happens is most people will do this. They won't create SOPs, they won't create project management videos. So what happens either A they as the physical constraint, the physical bottleneck in the business will overwork themselves and lead to a massive heart attack. Something really physically they start to fall apart. Especially if they're older or two, they'll hire people. But because they don't have the project management videos, because they don't have standard operating procedures, that bottleneck again Blows up and they like, I can't find employees. Everyone's just so hard to find people. And no one works out. No one works as hard as me. Why? You haven't created standard operating procedures, you haven't created project management videos to give them the tools and the step by step guide of how to do the physical work so that you don't have to. Alright? And 80% of business owners will never get past this first stage of growth because they failed to remove the number one bottleneck, which is physical bottlenecks. And to get around that, to get around that dam, that release point, you're gonna need project management videos and SOPs. What are those? Those are the systems required to get around the bottleneck. Okay, so over here we have systems required to get around the physical bottlenecks of growing your business past $100,000 in annual revenue. Now another system, another procedure you're going to need to be able to hire people is you're going to need some sort of orientation and training program. This is again another system that needs to be created in order to get around the bottleneck and the dam of physical constraint. And that's what's going to be needed. Just get past 250. Now I see some business owners doing 500, 700, 800,000 revenue and still they have not done these things. Things. And typically that's the person who will burn out or run a very unprofitable business because they've never even solved these issues. And you say, well, how do they grow their business past the first stage of growth? Probably because they're just crazy hard dropping pins. Probably just because they're crazy hard workers and they simply just will themselves into growing their business. And that's fine. That's awesome. All power to them. However, you can absolutely do this without a massive blow up, without physically falling apart, without financially falling apart, without going into massive amounts of debt on all your trucks and equipment and having employees scream at you in the face. You can get around these things by having these systems in place prior to moving to the next stage. So I'd really recommend, before you start growing your business, make sure you have a project management videos in place. Make sure you have standard operating procedures on a video, make sure you have an orientation and a training program, a checklist from new employees to be able to be like, yes, I did that. Yes, I know how to do that. Yes, I knew how to do that. And then like, okay, you are now officially through the first two weeks of training, an orientation process. It should not be hey, show up to work, here's your uniform, jump in the truck, go like they. Okay, well, who do I ask to get time off? How do I move up inside this organization? Is there any bonus program? What about medical benefits? Who do I ask about that? These are things that are really important for the employee. And if you're not answering those questions in the orientation, you can promise yourself that they're probably not going to be as engaged. And so if people wonder why I can't keep employees past a week or two, they just show up and then they just stop showing up all of a sudden. Well, they might have a whole bunch of questions that you could answer in the first 15 or 20 minutes if you just had an orientation and a training checklist and some sort of system to get them onboarded again, what is that doing? All of that's allowing you to have hiring. And that hiring is going to be the thing that allows you to get around the physical constraint and bottleneck that's going to keep you from growing sustainably past $100,000 in annual revenue. Now, this next one is what I call mechanical.

And you could even just call it technical. Alright? So this is gonna be the part of the business where you actually have technical knowledge or mechanical abilities that are the bottleneck to growing the business. Because at this stage now, you really need to know what you're doing in terms of managing multiple employees and you physically might be able to have that handled. Like, the employees do their job, that's fantastic. But now you have the problem of I've got to train them all. The technical side of the business is too much for me to be able to train all these new employees. Like, yeah, I have standard operating procedures, yeah, I have orientation and training, but I've got to train these people in some really complicated stuff and it's taking me a long time to do that. And so at this stage, to get around this as the bottleneck, them having to know certain types of mechanics, like if you do a roofing, they gotta know all about the ladders, they gotta know about the nail guns, they have to know about the shingles, they have to know about the underlayment, they have to know about how to do it around gutters and how to do it around chimneys and all these different things. The question is, okay, I know that there has to be a better way to do this, but yet I also know that I have to be able to have the technical ability and I have to have the mechanical ability to get the work done. So at this stage this stage of growth, if you want to continue to grow without a massive blow up, this is when you really need to make sure you have these systems in place to allow you to get around these bottlenecks. What are those systems? The first one is gonna be simplification. This is gonna be where you simplify the services that you offer, simplify the products that you offer, reduce the SKUs that you offer. Because simplification is going to be the way that you don't have to have as much technical knowledge, you won't need as much mechanical knowledge because you won't need as much equipment, you won't need all these complicated things. And you'll be allowed to keep growing the business through past one or two or three employees because now you've simplified things. It's easier to get people up and trained and profitable and efficient inside the systems that you have. So simplification is extremely important at this stage of growth if you're going to. Not if you're going to alleviate or if you're going to circumnavigate a massive blowup. And the whole point here is to use these systems to get around these bottlenecks so you don't blow up, I. E. Quit on. On the business. Most people will just quit at some stage of growth, mostly because they haven't implemented these systems. Alright, the next system you're gonna have to really create at this stage is the mechanical side. All right? Mechanical. Especially if you're someone like myself, there's parts of the business that I have no idea how to do in terms of fixing things like mowers and trucks and trailers and equipment. I have no idea what I'm doing. So what am I gonna do? I'm gonna create some sort of a mechanical system. Okay, is that a checklist? Is there a way to keep and document the service records? Is there a way to document who did what in terms of maintenance on those pieces of equipment, the mechanical side of things. At this stage now, you're not in possession of all the equipment at all parts of the day you have crews leaving without your supervision, using the mechanics, using the equipment, using the trucks. And now you've got to have some sort of system around the mechanical part. This is usually a lot of times at 250,000 revenue where I see business owners camping down on types of equipment, types of trucks, types of trailers, et cetera, because they get so wrapped up in the mechanics of their business and they never create a system around the fact that like, look, we got to have a certain Type of truck, a certain type of trailer, certain type of mower, and we're just keep rolling with that, or that's for a mowing company and maybe the excavation. Okay, we're going to use a certain type of excavator, we're going to use a certain type of type of trailer, certain type of dump trucks. And this is how we roll. And they don't get wrapped up in like all the different fine details in the minutia. Like, well, I got three trucks and now they leave and I can't manage them. They're driving the truck really bad. And now I'm going to spend all my weekend redoing the bodywork of this truck or the engine of this truck and I got to redo the clutch. So these are the things that bog people down. These are the bottlenecks inside the business. Create a system around having the mechanical side of the business, the equipment, the assets of the company taken care of. Okay, cost of non revenue producing employees. All right, I'm just gonna. Non revenue employees. These are what starts to crop up after 250,000 and that is employees that do not generate revenue. Rather they are office admin mechanics, lead technicians, they are managers, quote unquote, operations managers, project managers, random managers that basically do not produce revenue. Very scary. At 250,000 in revenue to be having a lot of employees or staff that are not producing revenue, non revenue producing employees. At this stage of the business, you've got to create a system around how do I reduce that as much as possible? Can I outsource my own office staff? Can I outsource the person that does the mechanical side of the business? Can I outsource these things? So I do not have non revenue producing employees on the payroll. It will suck the profit out of your business, especially at 200, 300,000 revenue. And I typically see companies that go like 3, 4, 500,000 revenue, they're like three office people and an operations manager and a full time estimator. It's like, look, you have five people that aren't even producing revenue for the business. And if you've got three or four employees out in the field, how in the world do you expect to be able to cover your overhead? And so I see a lot of times at this stage because there's technical and mechanical issues, because there's a lot of moving pieces now in the office, in the admin, phone calls coming in, emails coming in, people way overspend on non revenue produced employees. Their overhead goes through, they get a really nice Office. All of these things are because of the mechanical and technical technical issues that come up at this size of the business. They start getting too much trucks, too many equipment, lots of loans, non revenue producing employees to manage all the mechanics and the trucks and the equipment, et cetera. Don't do that. Try to keep it lean and mean at this stage so you don't have a ton of overhead. A ton of overhead is going to be what's keeping you from getting to 500,000 revenue. That's typically why I call this the wilderness in business. 200 to 500,000 in annual revenue. Because a lot of times what happens is at this stage, because of the mechanical and technical issues inside the business, people will go overpay on equipment, they'll overpay on non revenue producing employees. They won't simplify their business, they'll just add more services. And because of that they don't make any more profit at 250 versus a business doing twice as much in revenue. 500,000. But they won't make a single penny more in profit. Why? Because they did the opposite of these things. They did not simplify, they added more services, added bigger services, added more complex services and now there's all these moving parts in the business. So what do they do? They go get non revenue produced employees and managers. What do they do? They go buy more equipment, they get more into debt because they need more trucks and equipment to add more services. And because of that it adds more and more complexity which adds more and more of a pressure on the bottleneck of the business, which at this stage is a technical advantage. Alright, so now the third stage of growth where we are talking about $500,000 in annual revenue. What is the major bottleneck that I see at this stage? Office and admin and I already kind of alluded to some of these things already. But in this first, the second stage, the 250,000 stage typically is going to be like a project manager, an estimator, you start putting a lot of hierarchy in terms of team leads, etc, out in the field. But now office and admin, very, very important in your business if you want to grow past 500,000, you need good office and admin. However, this starts to trickle down into this next stage and that is non revenue producing employees. And now all of a sudden you have two or three office people, you have a really nice office, your overhead is high in this rent and you have utilities. Like you got to pay for the Internet and you got to pay for the water and the power and all this other stuff, and all of this is to feed what the office and the admin side and as business owners, we hate office and admin work. I understand you don't like answering the phone calls, you don't like answering the emails. You don't like having to get back to people. You don't have to like doing payroll. You don't have to doing invoicing and QuickBooks and balancing the books and all the rest of it. This is why I recommend that until you pass $500,000 in annual revenue substantially, that you use some sort of virtual office to be able to answer your phone calls. Do your emails, send out your estimates, do as much as they possibly can. Because I don't want you have to go hire somebody to be an office manager. Here's why. Number one, if you hire someone as an office manager for $50,000 and that's their salary, guess what? If you're running a 20% profit margin business, you're going to have to do $250,000 in annual revenue just to be able to pay for their wages. 20% of 250,000 is $50,000. That's their wages. So you're going to have to grow your business from 500,000 to 700. $750,000 and you won't see any more profit in between there. Why you have to hire an office person. And we're not talking about all the other overhead that comes with having an office staff like computers and utilities and rent and all the rest of it. We're just talking about their wages. You've got to grow the business by 50% just to cover the cost of that office and admin in person. This is the one we always jump to. And this is why so oftentimes see people just immediately want to actually like, oh man, I have like 200,000 revenue. I need to go get an office person. I literally see people embracing this bottleneck. And the reason I call it a bottleneck is because I don't want all the keys to my customer's knowledge, to what's going on in my routes and my dispatch and to my billing and my invoicing. I don't want all that locked up in the mind of one person. And so often the time I see businesses that are doing 6, 7, 7, $800,000 in annual revenue and they have an office manager who leaves and the business just falls apart because they were the bottleneck. And what's so important is you cannot just hand off the bottleneck from one person to the Next, you can't just be like, oh well, I'm gonna pass the physical side of the business along to someone else and I'm no longer the bottleneck, but now you just pass the bottleneck on. Now if you don't have these systems, I don't care if you delegate, you can delegate to another person and they might be better at the physical work than you. And if they're really capable and experienced and it might kind of improve the situation, but it doesn't remove the bottleneck. You have to have the system to get around the bottleneck, otherwise you will eventually lead to a blow up. And if you hire a really great person, it might put a band aid on the situation. But eventually if they leave, guess what? All that pressure can be released. And I don't want that to happen when you're at the office and admin level because they're out here doing phone calls, they're out here doing email, they're doing billing, I can't hardly spell billing. All these other things and you're like, great, this is fantastic. But they're a non revenue producing employee and if they don't have the system of being able to have this, a duplicatable system from one person to the next, this is what I truly believe, that until you're doing well above 500,000, I'd rather have a mobile office, someone else answering the phone by the minute, doing emails, doing all my admin work, because I don't want to train someone up for six or seven weeks on my CRM and how to balance the books and how to run payroll. And I train them all up just perfectly. And I know I'm paying them a really good salary, but I'm doing it for the long haul. And then what happens? They leave and you just wasted a month and a half of your time putting and investing all of your time and effort into what? Building a bottleneck in the business which is basically hinging on one other person. And so if they leave, you're toast. If they ask for a big raise when you just do not have the money, you're toast. I don't want to create that bottleneck inside of the business. I want to allow as much as possible for my phone, email, billing. All of this needs to be simplified and then handed off to someone else that can do it by the minute or virtually have someone else do it, have two people do it virtually part time, however you want to break it up, I really could care less, but I don't want to. The bottleneck of your business to be built around one person, two people in office and all of a sudden you have a bunch of overhead, non revenue producing employees. But most importantly, you've created a bottleneck in the business. Now a lot of times the office and the admin side is taken care of by the spouse of the owner. And this works out really good as long as they stay spouses. And so you got to make sure if you're going to build a business. I don't want my personal life, I don't want relationships, I don't want my health, I don't want anything to disrupt the business. And you might get started with your family, your spouse, your wife, your kid, whatever it might be, doing the books, answering the phone, etc. But again, what happens if they don't aren't able to make it? What happens if they physically cannot do work anymore? What happens if there is a struggle in the relationship? Do you want that to affect the business? That's why so many businesses fail, fail when there's a divorce, when there's some sort of friction in the relationship, the business falls apart because the bottleneck was built on some sort of familial tie with the business owner. And so if that ever gets broken, the business is kaput. And you create a bottleneck around the office and the admin side. Because now depending on a different factor outside the success of the business, I don't want to do that. And it could be a good place to get started. But just remember, you are building a bottleneck around the family side of the business Instead of actually getting the work done in a way that systems and procedures. Because guess what, if your spouse is doing your books, it's really easy to communicate with them. It's really easy like hey, what'd so and so say? Customer? What did they say in the email? Oh, what was their message about the other day? Because you're always with them, it's so easy to be able to just. It's so much, it seems easier just to do office and admin inside of your family. The problem is like what if that goes away? And now all of my systems depends on me being with the person all day long. Well, that's a problem because if I have to get my office an office person, who's not my wife, who is not my spouse, who's not my husband, who's not my kid, and I don't get to see them all the time, I don't have that connection with them. Do I have the systems to be able to Actually run the business efficiently. And again, this is, this is gonna be the systems for your phone service. Okay, you're gonna need a system for onboarding clients.

What emails do you send them when they need a job scheduled? You're gonna need a system for leads or sales. These are all systems that you're gonna need. You're gonna need a CRM. You're going to need to know how to do your QuickBooks or balancing the books and doing your balance sheet and, and doing your financial statements. These are all parts of Admin and office that you will need to create a system around if you want to continue growing the business and not have bottlenecks. You can, and most people do, build their business past 500,000 in revenue and they still will have multiple bottlenecks inside the business. It's not to say that you cannot grow the business past this stage with these bottlenecks. It is simply to say that if you want to build the business past the these markers, you're going to need these red systems at each of these stages in order to be able to build the business without bottlenecks that down the road are literally like a ticking time bomb and could blow up at any point. And that's why most small businesses fail, because all of a sudden they fall apart physically. All of a sudden the technical people that they've hired, that they put all the responsibility for a certain part of the business, the actual doing part of the business, they all of a sudden leave or office and admin, all of a sudden, the one person, they had all the trade secrets, only person knew how to get into all the software and run the books and everything. Well, they passed away or they move and now what, what happens? Honestly, most businesses go half the size the next year. They think, oh well, Sally always ran the books and she knew all the routes and now we don't have her. So I'm going to learn a new software. It's going to take me all the next three or four months. Months. We're just going to cut back our staff and we're going to grow back to 250. That's what happens all of the time. And that's what I'm trying to prevent for you right now. Last stage of growth, $1 million in annual revenue. And at this stage, the typical Ball and Lex that I see, $1 million plus, I'm going to go over that now. Now, again, if you like this type of content, I'm going to be starting to drop one of these every single month on mbaforantrepreneurs.com and landscape business class course.com more specifically landscapebusinesscourse.com for landscaping companies and lawn care companies. And more general topics like this are going to be for MBA for entrepreneurs. So check out both of those more generic service based businesses. Check out mbaforantrepreneurs.com if you're a landscaper. If you lawn care, I highly recommend landscapebusinesscourse.com because I'm going to be doing a lot more larger content like this. We are creating final exams for all the current curriculum. And then once you're past that, you're able to start unlocking the monthly lectures that are going to be more in depth, such as this one. All right. At a million dollars plus in revenue. Oh, the business is good. We've gotten through those other stages. Maybe you have or maybe you have not implemented all these systems so that each of these bottlenecks can be removed or circumnavigated. But now let's talk about some of the bottlenecks that will happen at this stage of business and what you will need to do do to get around them. You'll need some sort of decision making process.

This one is tough decision making process. So now at this stage of growth, a million plus in revenue, you're gonna have decisions in the business. You've gotta have a process of coming to the right decision based upon all these inputs because no longer are you doing the physical work, no longer do you have the mechanical, technical knowledge of all aspects of the business. No longer do you have the office or admin side that you are doing because you eliminated them as your responsibility as you the bottleneck. So now you've got to take all of these inputs because they're all important parts of the business. It's not to say these things are not important, they can just become bottlenecks and they typically do it these sizes of business. But even once you've grown past it, you got to take these inputs and now run it through some sort of decision making process. Which means you've got to have goals, you've got to have objectives and you've got to have a clear defined future of what the business is going to do. And that is usually going to be the determining factor of what decisions you make using these inputs. Does the output of these inputs lead you in the direction of the future that you want for the business? The goals that you have, the size of business that you want to grow, You've got to create a decision making process and that's a fancy way for saying have a plan for the company. Know what you want. From a 5, 10 year perspective, how big of a business do you want to grow? What does your role look like in five or 10 years? Because that is the decision making process that everything needs to be filtered through. All of the inputs need to come through this decision making process and ask yourself the question, does this get me closer to my goal? Is this moving the company in the direction that I want to go long term? All right. Another thing that you're have to start doing is creating a system around delegation. Because all of these things I talked about here are all important and in every single one of them I could probably have 10 different things that you need to delegate inside of that input. The physical side, for example, let's just take this one input of physical labor or physical doing, getting the product or service actually performed for the client. Physical. You would have to delegate everything from ppe, personal protection, equipment. You're gonna have to do the physical work and you're gonna have to actually like tires, equipment, all these other parts of the business. You're gonna start delegating and you're gonna have to be really good at delegating when you're at a million plus in revenue. Cause you're gonna 10, 15, 20 employees at this point. And you better make sure you're not the one that's out there every single morning checking every single thing. You'll run yourself crazy. And I typically see people doing a million dollars in revenue plus. If they have not created all these systems at each stage of their growth, what happens? They run a million dollar business, alright, but it runs them. They do everything in the business, they haven't delegated anything and if they were sick for one week, their business would fall apart. And the reason for that is because they are so confident in their abilities, which are amazing and an entrepreneur type a person, they can do a lot of stuff. And that motivation is what powers them through all these stages without having to use these systems. I promise you, having these systems at each of these stages of growth will allow you to get past a million dollars in revenue and not pull out your hair every single day and not lead to the massive Mentos and Diet Coke blow up that happens in so many businesses that causes them to quit and fail. You're gonna have to become a good meetings person, alright? Meetings. Everyone hates on meetings. Meetings are so important. I actually really enjoy meetings and it's a must be done at this size of business back here you could be like hey, you do this and you do this and hey, I'll chat with you after work and see what you're up to and all the rest of it. You don't have to have meetings because you're going to start having mid level managers. And in order to have mid level managers, it means that you're not going to have direct contact with every frontline team member. And so what are you going to have to do? You're going to start figuring out how to have meetings with your mid level managers so you're all unified in front of the frontline team members and meetings are very important. I don't care if it's safety meetings with your frontline staff, I don't care if it is equipment maintenance meetings with your mechanics and people who are doing the technical side of the business. I don't care if it is about systems and procedures inside the office and the admin. You've got to get good at doing meetings, communicating with people. You've got to create a system for those meetings. How do you present, how do you have an agenda, how do you make sure that you wrap up and give the actual points that people need to work on until the next meeting? You're gonna have to get good at meetings. When you're building a business above a million dollars and you can't micromanage through all of this, you cannot micromanage at this size of business. If you are, if you're bouncing back into the office, if you're telling people how they should be answering the phone and you're jumping in like, no, no, no, this is how you do it. And then you're seeing someone fill up the gas in the shop in the morning, you're running over, no, no, no, don't do this, don't do that, don't do that. That is not being involved, that is micromanaging. And if you're running micro and telling people, oh no, you gotta make sure you edge this and do this right, do this wrong. You're building a million, 2 million, we're talking 10 million dollar business. You can't be jumping in and being a helicopter manager. It's like, oh no, you gotta do it like this. And then you jump into their situation and start fixing it, telling them how they're doing it wrong and micromanaging. You now start leading through delegation, leading through other people, allowing leaders to grow up underneath you. And you've got to create a system around of leadership. You've got to develop that leadership, you've got to have meetings around that leadership, you've got to cultivate them and educate them on becoming a better manager and a better leader. So these are the four different stages of business, all the way from zero to well above a million dollars in annual revenue. And at each of these stages, there's bottlenecks, there's points in the business that are crucial, important points, but they can build up pressure and cause a massive blowout, a massive failure, a massive explosion if there is not a system to fix it. And everyone's always like, man, what are systems? Tell me about some systems. Okay, all of these red things are just a few of the systems required to get around these common bottlenecks that I see at certain sizes of business. And you might talk to someone who's like, you gotta talk about management and leadership and all the rest of it. And that's important. But honestly, that system, it's only going to be super necessary once you're past a million in revenue. If you're just getting started. The type of systems you need to really be focused on is do I know what my standard operating procedures are? Do I take videos of jobs and projects so I can pass it along to somebody else? Do I know how to give orientation to a new employee and train them up? These are the type of systems you need to focus on because the size of your business matters. The size of your business is going to be the determining of factor of what systems you need to be focused on. So when you listen to me or anyone else talk about systems and procedures, you've got to ask yourself, what size of business are they talking about? Because it really does matter what systems you implement at certain sizes of business and which ones are most important to implement when you're small versus when you're big. Alright, so I hope that was helpful.

Talking about systems and procedures and creating standard operating procedures in your business. Now we're going to talk about why sometimes growing your business super big not the most profitable thing for you to do. And why some smaller businesses, smaller lawn care, landscaping companies that are making a couple hundred thousand dollars in annual revenue, will actually make more profit than the business making 1, 2, 3 million dollars in annual revenue.

So I'm going to talk about that.

But before we do, we have to address the gentleman's agreement. The gentleman's agreement is a trusting relationship that I have with you and as my audience, that I, in exchange for all the work that I put into these videos, giving you them completely for free, that you do one thing for me, and that is just subscribe to the channel. Now, if you've already subscribed, this is a great opportunity to share this video with another landscaping or lawn care community on Facebook or group that you might be part of on WhatsApp.

Just share this content.

It's completely free. I'm not even putting ads throughout this entire thing just so that you can just sit down, listen to this, watch this, and learn as much as possible. And what's amazing to me is somehow that there are more views than subscribers on my videos. It just boggles my brain. And the gentleman's agreement is like, I'm just trusting you enough. I can't watch over your shoulder, but I just trust that you're going to click subscribe.

So please do that.

And without any further delay, let's go and talk about why smaller lawn care businesses will actually sometimes make more profit than big businesses.

Here we go. This is kind of one lesson. It's actually 8.22 module 8.22 that I'm going to be taking from and applying directly to lawn care landscaping industry and talking about how, how your pricing affects your break even point and your profit margin. If that means nothing to you, don't worry. I'm going to explain, I'm going to use a graph here to explain this. And if you're like, I don't like grass, I just mow grass. Well, you got to know your numbers and that's going to be how you make a successful business. I'm going to try to make it as simple as possible, but I hope this is branded in your mind. And I know I made a video several weeks ago about supply and demand curves, which is also an inside the MBA course. And a lot of you said that was very helpful to kind of break down a very complex topic and make it simple. So I'm going to try to do the same thing here and stick along. Watch this. Maybe twice. But I promise you this will be very helpful as you determine your pricing strategy and you grow your business and you're going to understand why you might not be making money yet in your business. And hopefully it'll keep you engaged in the game of, of business long enough to actually start making profit. Because there is a point when you're actually going to be losing money in your business when you first start out. So let me explain the graph and what is on the x and the y axis? So x axis, Y axis. So over here we have costs and revenue.

Okay.

So over here we have a million dollar business at the top, all the way down to $100,000 business. So just getting started all the way up to a million dollar per year in annual revenue. Revenue on the bottom here, for the sake of this example, I'm using number of lawns. But you could use any number of units that your business produces, whether you're producing widgets or phones or cars. Like this graph is universally accepted for break evens and pricing strategy. So, but we're going to use number of lawns and I'm going to also assume again, very generalized numbers when it comes to the cost per cut for your lawn. So, so a lot of this is generalizations, but you're going to get the point. And that's all that I really care about today. So on the bottom here at $100,000, I have that as our fixed cost. These are things like the space you need to operate your business out of maybe you got a couple acres next to your house, you purchase that, you have a loan on that and that's fixed expense. You have some insurance, you might have some loans that you bought your initial equipment for. Whatever it is, these are fixed costs. Doesn't matter how big your, your business gets or whether you don't do much revenue or not. Fixed expenses. Here we have total cost, which is variable cost plus fixed. That's why it starts from where the fixed cost is. Here it doesn't start at zero because a fixed cost is. It doesn't matter if you have zero lawns, you're still going to be paying your fixed cost. But as you get more lawns, you're going to have more variable costs because you get employees and more trucks and do advertising and all the rest of it. So as your business grows and you get more lawns, you're gonna also have a growing amount of variable cost and therefore your total cost is going to rise. So that's what this angle is right here. So don't feel overwhelmed. Watch this again if that doesn't make sense. But let me walk you through this. What I want to exemplify today is just how important your pricing is when it comes to actually making money in your business. So, so we're going to do a few different examples. The first example is going to be that we price our lawns, let's just say on average $40. All right, so $40 for our lawns is what we're going to price. Now let me just draw the line out here. Hopefully we can make this work. There we go. Is this supposed to be straight? So let me just try to correct this real quick. Boom. Yeah, just not great. Drawing skills. But hey, you get the point. So red line, red. So the red line is going to be that using the red line, we are at $40 per cut. Okay? That's our price, same number of lawns. So as we get more lawns, this is going to be our price. Our price is $40 per cut. What that means is that right at this point right here is going to be our break even point. Right when we cross our 20 total cost, this is our break even point, assuming $40 per cut. So about, just for the approximation sake, when we get 200 lawns at a $40 per cut price, that is when we're going to break even on this business. If our average cut is $40 and we get 200 lawns, that is when we're going to break even. Okay, now I want to go now what happens you if, if we change the average price of the cut, we keep everything the same. We keep our wages the same, we keep our fixed cost the same, everything the same. But Instead of charging $40 for the cut, we have a premium price product and we're going to charge the customer $50. Well, what that does now, I'm using the blue here is it increases the.

Scale of this. Drawing this line here, this. So now with this blue line, this is gonna be at $50 per cut. We've raised our prices. So now what that does is it moves our break even point all the way back to here. So this is our break even point, way back here. And this is why you got some people that are solo operators making a decent profit because. And they only have 50 lawns. Look at this. This person only has 50 lawns. They're doing like $150,000 in annual revenue and that's their break even point. Whereas our first guy, he had a $40 cut. So let me just write this up here. So this is $50 per cut. So premium price, $50 per cut. And this person might have a website, have uniforms, have a painted truck. So therefore they're able to get a higher price per cut from the customer because they raised the value of their service. So because of that, their break even or when they stop losing money and start making Money is at 150,000 revenue and only 50 lawns. This is like a solo operator. They're able to make 10, $15,000 a month by themselves working in the field doing 50, 60 lawns. And they can actually make pretty good money. All right, now let's go over to our first guy. He had to do 200 lawns. And just for the sake of this example, he had to do like $300,000 in revenue just to break even. Okay? So now the question is, okay, well, I'm going to have a $50 cut. How much more would I make in profit when I get to 250 lawns if I have $50 cut instead of $40 cut? Well, let's do the math, okay? So maybe in year three, okay, we're at 250 lawns, okay, let's just. So let's just do the dotted line up to here.

Boom.

So our first point is going to be here. And then we go up, up, up, up, up, up, up, up, up, all the way to here. And there's another point. So this is what's going to happen If I have 250 lawns, alright? And I'm using a dollar forty per cut price. Now this is gonna be my profit margin right here. This is my profit margin. This from here down is my total cost, okay? If I'm pricing at $40 per cut, this is my total cost. And this is going to be my profit. Very low profit margins, okay? Out of, let's just say probably 350,000 in total cost, I have maybe $420,000 in total revenue. So therefore my profit is probably $70,000, okay? That's my difference. The difference above this total cost and where my revenue is at is my profit margin. Now compare that to what it looks like. If I'm at $50 per cut, this angle here, I'm going to still have 250 lawns. But now look at where my cost is. The difference in my profit is massive. I'm running like a 50% margin business. I'm probably doing 130, 140, $150,000 at least in profit. This is not necessarily, but let's just say, for example, probably no, probably $300,000 in profit, just massively more profitable simply because I have a $50 cut instead of a $40 cut. Now let's erase these markings real quick and I'm going to show you what happens when we have a $30 cut, okay? And again, these numbers that I'm using are just subjective. It's just to show medium, low and high pricing. It's not to say that these prices per cut are wrong or right or what you should be using in your market. So let's draw though another pricing method. This is going to be the low cost method. This is going to be someone that comes in and just wants to get a whole bunch of lawns. And they're going to be the cheapest price in town. So what we're going to do is we're going to draw another line here. Going to go like this.

Bam. Okay, now this green line is going to be $30 per cut. Hopefully you can see that green. $30 per cut. Now, what we've done, because we've lowered our price, it's literally going to take us all the way to like 300, let's just say like 320, break 320 lawns and like $450,000 in revenue before we actually ever break even. Okay, so what I'm showing right now is the importance of having a higher price, a premium price, which is going to allow you to do several things. First of all, it's going to get you profitable faster. The number one reason why people in the lawn care landscaping industry fail or they quit, I should say, and they give up is because it takes them too long to get to break even. This person had to get 320 lawns and literally do over half a million in revenue before they ever actually made a single pay. And if that took them two, three, four, five years, most of us get discouraged. Most of us want to give up. Most of us want to go get a 9 to 5 job where we get a stable income for our family and provide simply because all of this line, all along here, having hundreds of customers, this person had 200 customers. And they're losing money. They have 250 still losing money. It's not until they're above 300 customers will they even make a profit. Profit. And literally they could have 400 customers. 400 customers, and look how small their profit margin is going to be. Very small profit margins, that can be very discouraging, having to wait that long to hit break even. And you're not making any money. You're losing money every single year. And so if you have a higher price, you don't need as many customers and you don't need as much time. You don't need as long of a Runway as to actually hit profitability. Couple problems that I see so often in the landscaping industry. I want to explain on here. First thing I've already mentioned that is I see pricing as too low, which causes burnout or bankruptcy before break even. So all of this time I'm burning money, burning money because I'm below my total cost. It's not until right here and beyond that I actually start making profit. So what's happening here? I'm burning through my cash reserves. I'm getting loans. That's horrible. That's what keeps a lot of people from ever getting to profitability is simply because they're pricing so low that they never actually get to becoming profitable. Alright, the second thing, second problem I see so oftentimes is something that's inferred in this example that might not be true. And this is for those of you who have already started a big business. You might be already 3 or 400 lawns or you know, 8, 900,000 in revenue. This is what you got to be careful of. You got to be careful that this fixed expense line doesn't also grow. Because if you start shifting as you grow your business, this fixed expense starts going up. We go build a big shop, we get nicer trucks, we get more debt, we get bigger equipment and we get more and more in debt. And our payment starting getting bigger. And because that bigger equipment, our insurance starts to get more. If your fix fixed expenses grow, your total cost is also going to go up. So if you're growing this way, I've assumed that we're going to stay at the same property. We're not going to get a bunch of loans, a bunch of debt. This is where I get concerned, why people increase their fixed expenses as their business grows. They get a bunch of loans on equipment and trucks, they go out and get a bunch of space and build a big shop and get a bunch of office staff, all overhead, all fixed expenses right here. And, and that's why they never actually get to break even or a highly profitable business because they move this fixed expense line item up as they grow their business. So instead of it being flat, the fixed expenses is actually angled. And that can be very detrimental. And people can be growing into oblivion and never become profitable or profitable enough simply because they keep adding loans and fixed expenses to their balance sheet. The third thing I want to keep you, want you to keep in mind is that low prices equals low profits. And low profits lock you as the owner into operations indefinitely. So when you grow your business, this guy over here, he can be doing 8, 900,000 in revenue, but because his profit margin is like 8, 9, 10%, he's only making like 70, $80,000 in profit. That owner will never be able to get out of the business because they're not going to be able to afford a manager to take off their daily take out, take daily operations off of their plate. So if you're in the place right now where you are having very low margins and you've grown a big business, you're like, man, I'm doing 7, 8, 900,000, I'm doing a million, $2 million in revenue. But I just, I'm doing the estimate still. I'm every day working 12, 14 hours in the business. I'm out on projects, still moving materials from job site to job site. I'm still trying to hire and figure out marketing. You're trying to do all of that. You've got to realize that raising your prices is an extremely fast way to solve this whole problem. This $30 cut guy could simply raise his prices and by doing so, he's gonna bring this up this way. And by bringing this up this way, he's gonna move his break even down and he's gonna increase his profit margins. And by having a wider profit margin, like we talked about with this guy here, where he's at like 50% margin here, when you have that, you can afford to go get a manager, you can afford to hire other people to take off things off your plate. So you as an owner at 800-900-A million million plus in revenue don't have to be there every day. You can go start another location, you can go start investing. But this is extremely important. Pricing is extremely important to your profitability, to your break even, to make sure you can actually get past the point of losing money. And this is why, this is why I see small lawn care businesses, small independent solo operators sometimes making more profit, bottom line profit, than companies that are doing hundreds of lawns and hundreds of thousands of dollars in revenue is because their pricing is where it needs to be at. And if you're wondering, well, how do I increase my prices? Well, maybe you are so far below in your prices that you just need to raise them and lose some of your customers, that's fine. I'm not interested in building a massive business with a bunch of employees, a bunch of trucks and a tiny profit margin. I'd much rather have a smaller business, less lawns, less overhead, but higher prices to the point where I make a better profit margin. I'd much rather be the Whole Foods of the lawn care industry than the Walmart. At Walmart, they get 1 to 2% profit on everything that is purchased. Why? Because they focus on volume. They've got to move tons of product out the door. They're going to get like 1 to 2% profit, whereas Whole Foods might get 5 to 10% profit margin. They're not going to do as much volume. They're not going to be able to send, you know, have thousands and thousands of locations. They're much smaller footprint. The size of their buildings are smaller. They don't have massive warehouses. But they actually get more profit per customer because they have a higher price. They're not trying to compete on price, they're competing on value. When you walk in the store, there's really nice paintings and there's art and the employees are more friendly and they're trained to be more around the country customers and give you more help. What is that? It's a matter of that they are no longer competing on price, they're competing on quality. If you can compete on quality, it allows you to raise price and be profitable faster. So if you're in your second, third, fourth year of business and you're still losing money, there's a very good chance that you're either starting to inflate your fixed expenses as you've grown or your pricing is so low and you need to raise it in order to have a sustainable profit margin. It is not sustainable to have an under 10% profit margin in this business. If you're under 10%, in my mind, you're vulnerable. You want to be over 15% and that's going to take some time to get there. Don't expect that in your first year. Even the solo operator guy, there was a period of time where he was putting all his money back in the business. He was under break even. But the faster you can get above break even and start making profit, that profit can be put back into the business and scale much, much faster.

So now we need to talk about marketing, getting more customers. If you're going to grow a big business past seven figures, you're going to have to figure out customer acquisition cost. So let's talk about this one key metric because you've got to figure out and understand customer acquisition cost if you're going to scale up your marketing strategy, your advertising budget and your business as a whole. So without this one's very important. You've got to figure out your marketing.

Your intake, the new business coming in the top of the funnel.

You got to figure out your customer acquisition cost. So let's talk about that now so you can scale up your business to.

Seven figures plus today. I'm talking about the one thing you need to know about marketing that most people don't talk about because they're trying to sell you something. But if you know this one thing and you stay focused on this one metric when it comes to marketing, it'll completely change your small business. And I know it did for me, and I know it done for a lot of other small business owners once they start focusing on this one thing. When it comes to a small business, every single dollar you spend on marketing needs to be spent efficiently. And so what happens? A lot of us buy into this theory that I've got to track. Okay, what leads are coming from Facebook, what leads are coming from Google, what leads are coming from the newspaper, what leads are coming from the door hangers that I put out? Regardless of what industry you're in, it is a good thing to try to maximize the bang for your buck. Get more leads, more customers for your marketing dollars. I understand that, but the thing that we focus on too much is tracking and metrics and getting the code snippets and the analytics behind where the leads came from, when what we should be focusing on is just two things, and that is simply customer acquisition cost. I'm doing this on a graph. And demand. That is literally the only two things you need to know if you're a small business business and you're spending less than several thousand dollars per month in ad spend. If you're spending a bunch of money on advertising, hundreds of thousands of dollars, then it's worth spending a lot of time and energy and money getting analytics, doing funnels, having multiple websites created to have them all be all funneled correctly. And you're hearing this from a web design company. I have lawncarewebdesign.com and homeservicewebdesign.com I know for a fact that if someone is trying to sell you on the idea that you, as a small business owner that does a couple hundred thousand dollars in annual revenue and spends a few hundred dollars a month in ad spend, is going to somehow need multiple websites and different funnels and lead pages and a whole bunch of they're trying to sell you something, or they're trying to make it sound so complicated that they need to sell you their marketing services. That's just the honest truth. At the end of the day, for the for most small businesses doing under a million dollars in annual revenue and spending less than several thousand dollars per month in ad spend and advertising budget, these are the two things you need to know. And what you need to do is you need to figure out when what part of the year is your customer acquisition costs and demand. Varying demand and customer acquisition costs are inverse. They have an inverse relationship, meaning that if demand goes up, your customer acquisition costs will go down. Let me explain and let me show you why this leads to some of the biggest issues in seasonal and small businesses. So when we look at demand. I'm going to take lawn care and landscaping for an example, but this applies to any small business that has any seasonality whatsoever. And if you're like, oh, no, I'm a retailer, I don't have any seasonality. Okay, most of your sales are probably.