The Secret to Building a $1M Service Business!

Everyone always wonders what numbers you need.

To know in your business and everyone.

Talks about knowing your numbers.

I remember a couple years ago there was a video you had that gave a formula.

But today I'm going to be talking in very much detail about the one major number you must know in your service based business. But assume a $500,000 growth rate, just like we just talked about. I don't care what home industry you are in, you have made $140 on a custom that really cost you 280. This number can tell me about so many different aspects of your company, from.

Profitability to rate of growth and so many more things.

I really believe that your prices should fluctuate throughout the year. Let's rewind the tape about six months.

Ago to Landscape Summit where I talked about close ratio.

How do you get a high close ratio? What's the fast way? Just change price right away.

All right, guys, let's get on your.

Feet one last time. Landscape Summit 2023. The man, Mike Andes, let's.

Dude, that was a setup, man. Seriously, Goodness gracious, thank you. But I want to talk about close ratio. It's something I talked about right from the beginning and something that I think is super important for us to know. And so I know my talks especially been kind of up and down from inspirational to very, very tactical and back and forth. So we're going to end off with a little bit more tactical. And that is something that I feel is one KPI that we all need to know because I think it really determines so much inside of the business. Right? Regardless of what stage of growth you're in, when it comes to selling, either you're buying someone's excuse or they buy your conviction. And it's been said before where you can talk to someone who has the most ridiculous, stupid conspiracy or some idea they have, and if they have so much conviction about it, eventually you're like, man, maybe they're right. Maybe we didn't land on the moon. All this sort of thing we start to think about because they have so much conviction towards this simple idea or whatever it might be that you would otherwise think is crazy. Because there's so much conviction, you start to question yourself as to whether or not you might be wrong. And so the same thing is true when it comes to selling an excuse from a customer. Their conviction that your prices are too high, their conviction that your reviews online are not satisfactory, that only can be outweighed by your conviction in what you're selling, your vision, why the business exists, and what you believe the product does for your customers. When we look at close ratio, one of the things that close ratio directly impacts is your speed of growth, how fast you are growing the business. A high close ratio implies a high rate of growth. If not. So if you're saying, well, I have a 70, 80% close ratio, then you need to check your attrition. If you're not growing, if you're above a 60%, 50%, you can even say close ratio. And you're not growing in annual revenue, you're not growing the number of customers, there's a very good chance that you have a problem with attrition. You have customers leaving. Back to what we talked about yesterday. That is holes in the bucket. Those are customers leaving because of bad customer service, speed of communication, and a myriad of other things that make a customer leave or they're just dying, which is a real thing in our industry. High rate of growth also means a high financial investment is required. We're going to do some math here in just a second, but you heard me say it time and time again. If your business is growing, it's going to suck cash. In my opinion, you can't really judge the business for how profitable it is until you stop growing. And so for some people, they get out of this business and it's always. It's not funny. It's just, it shocks me because they went from 150 the first year, 300 the next year, 600 the next year, 850 the next year, and then they quit because there's no profit in their business. Say, I can't make any money. I'm running myself ragged. And ultimately they're right. However, they've never taken one single year to stop growing and realize that they actually have a lot of profit in the business. All that profit has just been going, going out the door towards growth because growth sucks cash. I'd implore you, if you believe that your business is super unprofitable. But you look over the past several years, you've been growing by 100% a year, 80% a year, 50% a year, to actually take a year where you stop growing and then make a justified decision as to whether or not you're profitable in your business. I think it'd shock you how much growth actually costs. All right, marketing spends $10,000. That's what we're going to be spending. And then if our customer acquisition cost, remember, that's the bot of the funnel. How much we're spending to get a customer is $100. And we're going to get 100 recurring clients in this example, right? So $10,000 spent. If my customer acquisition cost is 100, I'm going to get 100 recurring clients. Now, if the annual value of each of those clients is $2,000, then that would assume that the new revenue generated from this marketing campaign and this marketing spend is going to give me $200,000 in new revenue. If I have an hourly rate of $80 per hour that I'm charging the customer, my daily revenue is at a 75% efficiency rate, which means I'm going to complete six budgeted hours in eight hour day. Right. Again, pretty standard. And yes, during certain periods of the year, you can crush that. Other periods, you're not going to be close to it. But if you're at a 75% efficiency rate, that's going to mean that you're at six budget hours per day in an eight hour day. Six times 80, $480 of revenue that you're going to get from mowing. If you have eight months of mowing in a year, and you can do all this math yourself for your industry and for your market and for how much you charge and all your rates. But if you do eight months of mowing, that would be 160 days. That's 20 days per month. Assuming that you're working five days a week and four weeks a month, that's going to be 160 days in a year. That would mean that if you have 160 days multiplied by 480 in revenue per day, you're going to have a revenue per employee of $76,800. And, and you're going to need 2.6 employees based upon this math. All right, what that means if there's 2.6 employees, you're like, well, I need 2.6 employees to be able to grow by this amount. Here's the deal. All of us can easily come up with the number of your marketing spend and what you want to do in new revenue next year. What we don't do is the rest of the math that we want to show, and that is how much this growth is actually going to cost you. Because how we all in our mind say is, oh, it's going to cost me $10,000 to grow the business by 200,000. Not true. Because those 2.6 employees means I'm gonna have to buy two more trucks. And if the two trucks are gonna cost me $20,000 a pop, and I'm gonna get two mowers for $10,000 a pop. Cause I need 48 or 52 inch mowers in my market and I'm not even assuming any other equipment but just the mowers and then the trailers. At $5,000 a pop. If you have an open air trailer, again, these are pretty realistic numbers. That means that you have to actually spend $70,000. Not including the fixed costs like insurance, other type of shop space that you might have to buy in order to be able to house and store all the equipment and the new trucks. So in reality, the growth that you're expecting of $200,000 next year that you think is only going to cost you 10,000 is actually going to cost you 70,000. This is what I mean when I say growth sucks cash. And we all only run two numbers. I'm going to put $10,000 in the top of the funnel and at the bottom I'm going to make 200,000 in new revenue. But what you fail to realize is that you just spent $70,000 in order to.

Fulfill on the sales that you've got to just do the fulfillment side. I'm not even talking about all the other stuff involved with all the more leads and the estimates that are needing to go out and the office administration of 2.6 employees. I am simply looking at the direct costs that are associated with fulfillment of when it comes to $200,000 in new revenue in your mowing business. Okay, so if you're project based, this is what it might look like. Okay, again I'm just running math for you. You can change all these numbers yourself. $10,000 in marketing spend. Let's assume a higher customer acquisition cost because we're going after large projects and the annual value that is the one time project value of each project is $10,000. I'm going to get 50 customers. Assuming again that I have a $200 customer acquisition cost and I'm going to spend $10,000, that means I have a new revenue of 500,000. Again, this is two and a half times, I guess 150% more than the revenue you would begin in mowing with the same customer, same marketing spend. Because with mowing we got $10,000 in marketing spend and we generated $200,000 in new revenue. This is why I do not believe that just I can't just ask you what your revenue was last year and this year and determine what your growth rate is because depending if it's recurring versus project is a completely different ball game. I would much rather grow my business and have a $300,000 mowing only business than $500,000 worth of projects. Only in this example we had 200,000 new revenue for mowing and 500,000 in new projects. Again, simply because our annual value is so much greater. That's why you can scale and grow a project based business, this industry, so much faster. And that's why typically when I see people going towards projects or saying I want to get into landscaping, it's really just that they're impatient because it is so much faster to go into projects and go after the ten $15,000 jobs and go from zero to a million very, very quickly. Well, again, whether or not your projects are mowing, we just increase revenue by 500,000. Let's assume our hourly rate because it's a project based business is $100,000. Again, assume that our daily revenue is a 75% efficiency rate. That's going to mean that we earn $600 per day per employee if we have 10 months worth of projects. Because now we have an extended amount of time that we can do projects. In comparison to mowing, which is much more seasonal. We can now assume 200 days out of the year are going to be, that's 20 days per month times 10 are going to be spent on doing projects. Revenue per employee is $120,000. Now, how many employees are we going to need? We have to remember that this total value of revenue includes the cost of goods. This includes your materials, your dump fees, your estimate fees. All other revenue associated with these projects is not just labor revenue. So if we assume that $500,000 is our total revenue, but 50% of that is material costs, project based, like delivery, estimate fees, dump fees, all these other costs that are directly associated with those projects. We can assume that 250,000 of that is labor revenue. In this case, you would need only 2.2 employees in order to be able to get this $500,000 in new revenue. So you need less employees and you're literally going to get way more revenue. And I'm not trying to make a point here by the way, about mowing versus projects. That's not what I'm trying to get at here at all. What I'm trying to do is convince you that whether you're mowing or you're doing projects, growth sucks cash. And this is the math behind it. So If I need 2.2 employees for project based work, I'm going to have a truck trailer and probably get a skid steer and excavator so I can pound these out much faster. And that's what allows you to be able to charge the hundred dollars per hour because you have a higher level of equipment. Total initial cost with a $40,000 truck, it needs to be bigger, it needs to be able to tow a lot more because you need to pull the skid steer excavator, a $10,000 trailer because it's probably got to be rated much higher than a mowing trailer. Your total initial cost in order to be able to grow this business by half a million is not $10,000, it's $100,000. This is why companies run out of money in this industry all the time. And this is why people have to take on debt they didn't expect having, they did not budget or account for. Because they only look at, I'm spending $10,000 on marketing. I'm expected to get this number of customers at this dollar amount per project, I'm gonna make $500,000 in new revenue. And they don't do the math on what's actually going to cost in order to be able to get that new revenue. Growth sucks. Cash. For many of us, we need to take a year off from growing. We have a lot of pride wrapped up in this industry around how fast we are growing and what our revenue was last year compared to this year. When it has absolutely no bearing on whether or not your business is successful, whether your systems are efficient and whether or not your business will be profitable, and definitely not. As to whether or not you are a good leader, I'd really recommend. This is something you might want to talk to a franchisee about and get more information because we talk about this a lot at Augusta and that is growth mode versus profit mode. I believe to the core of my being that you can't. You have to choose one or the other. You don't make any money, any profit when you're in growth mode. There are people that can grow their business and they still make profit. But it's very, very rare. It's very, very rare to go from a $500,000 business this year to a 500 to a million dollar business next year. If we just use the example that we just used of a project based business, let's assume that in 2021 they did $500,000 in annual revenue. Let's assume that in 2022 they did $1 million of revenue, then assume a $500,000 growth rate just like we just talked about. And so what they're assuming is, well, on a million dollars, I'm running 10% profit margin. What they don't take into account is the fact that $100,000 is going to be required simply to fund the growth by buying the truck, the equipment, the trailer and the excavator, etc. And so their entire profit margin is wiped out. They give up on their third year simply because there's no profit in this industry. I can't make any money and I'd like to go back to a job where I can have some security for my family so I at least know I can pay the bills. And they're right in that moment in time. And the balance sheet would state one thing. But if you look a balance sheet shows a snapshot in time, an income statement can tell me a whole lot more of a story for your business. Those two things combined can basically tell anyone that that knows how to read them exactly where your company is at. Oh, this is the perfect time. HomeServiceCPA.com, talk to Brad in the back, it'll be great. But when it comes to determining whether you're not in growth mode or profit mode, I don't believe you can really optimize profit if you're growing by more than 20% a year. Again, we're assuming you're above a reasonable size business. And I'm not talking about going from 100,000 to 150. That's 50% increase. But literally it's not too many. It's like 25 more mowing customers a year. You do one more days worth of work and you're gonna pick it up. Right? So, but as a sizable business, once you have employees, I don't believe you can really say you're in profit mode if you're growing 30, 40, 50% year over year. Because that money that you are making, all the profits you are making, unbeknownst to you, is being spent on growth. Growth costs money. It doesn't just happen. We gotta stop bragging about how much we're growing. And a lot of times when you're smaller, the only way you could actually have some sort of sense of pride is to not share your top line revenue, but share the growth you last year. So when someone says how much revenue do you. I ask this question to almost every person asked me a question. This is what they say. So we did $400,000 last year, we did $150,000 the year before that. The reason they're doing that is because they think that I'm not going to think much of them when they say 400,000 and so to compensate for that and make sure that they do have some sort of pride left, they're going to, they want me to realize that they more than doubled the business and that's fantastic. I'm not taking that away from you. That is a great accomplishment. But ultimately that's not what grand rate's be to going profits. And anyone that I hear that from, I'm immediately knowing that they are taking too much pride in top line revenue and growth and they're going to eventually struggle to switch over to profit mode. And in the time of when we're going to peak fear and a lot of despair in the small business world and especially in our industry because we are so financially illiterate. Unfortunately in this industry, because of that, many will give up during that period of time instead of realizing that the only thing they need to do in their business was stopped growing. In profit mode, you're raising prices, you're reducing close ratio. All of these things are so important when it comes to determining am I maximizing profit or am I maximizing my growth? In my opinion, if you're going to have any sort of vision or goal or strategy for your company in the short term, you need to choose one or the other and be very clear with your team as to which one you're on. Because if you have general managers, I was just talking with Chuck today via text, he's my regional manager about compensation for our general managers. And we have different programs and things. And one of the things we were talking about is, well, do we want to be in profit mode after quarter two or if someone wants to really go for it? Do we incentivize a regional manager based upon just top line revenue in just year one? So if we want to grow really fast, you have to realize incentives matter. But ultimately you as the business owner have to determine are you in growth mode or are you in profit mode? And I truly believe most in this industry need to take a really hard look and ask yourself if you'd like to hear other keynotes just like this. Make sure you sign up at mikeandy's.com summit for landscape summit that's coming this coming October to Equip Expo. Equip Expo happens on Wednesday, Thursday and Friday, but on that Monday and Tuesday, right beforehand, downtown Louisville at the Omni Hotel, we're gonna be having Landscape Summit and we're gonna be having a host of incredible speakers that will take your business to the next level. Bring your spouse, bring your manager, your key employees, and take your business to.

The next level in 2024.

And I truly believe most in this industry need to take a really hard look and ask yourself, are you growing for the sake of pride? If you mentioned top line revenue numbers and then give your year before, it's a good inclination. Just step back and just be self reflected. I'm not pointing fingers here. I did this all the time recently. Like, man, he knows a lot. I went through all this garbage. I know what it's like to be in the despair. I know it's like to want to give up. I know all of that. I know exactly what it feels like. And trust me, it's more recent than you think. When you're in those moments, you have to realize that potentially the only reason you're feeling that way is because the financial stress has gotten so much, because you put the pressure on yourself to grow simply to compensate for the fact that you feel small. Compared to what? Compared to somebody else? Compared to someone on a stage. Again, personal capacity is important. But remember, if your relationships and your personal health are failing because you're pushing yourself to grow so much, and because of that push to grow, you're financially strapped, stressed out of your mind and your relationships and your physical body is starting to fall apart. You're not going to succeed. The dumbest thing I've ever heard is I'm so busy. I took the decals off my truck and don't take new clients, but I'm struggling financially. The reason for that is you're speaking out of both sides of your mouth. In one way, you're saying, I can't take any more leads. So therefore I'm going to artificially restrict that by simply removing the decals off my truck or not doing any. I don't want signage, no uniforms. I and people say this all the time as a sense of pride, like, I don't need it because I've got so many customers and the phone's ringing off the hook. And yet those same people struggle financially. Here's why that's absolutely ridiculously stupid, is because if you allow the leads to keep flowing in and you raise your prices, your close ratio will go down, but the number of new customers you have will stay the same. Here's why. This is supply and demand curve. Don't get overwhelmed. It's not that complicated. All right? We did a whole bunch of this last conference here was that last conference. Raise your hand. Okay, we can move pretty quick. This is a supply and demand curve. What you can do to raise price. There's several Things you can do to raise prices. Number one in my mind, though, is the thing that doesn't cost money. Because the way that you can raise prices is increase demand. How do you increase demand in your business? There's a question. This is where the part you answer, right. Typically, the best way to increase demand is marketing, advertising, spending money you don't have money to spend. When you don't have any money in the bank, there's nothing to spend on marketing. And so for the person that's saying, well, I don't have any cash, how do I increase my prices and I'm going to lose customers, here's the thing that you do. Supply is right here. Increasing demand. If you move this axis right, or not this axis, this line right here, and you move demand forward, that means more people are calling you, more estimates are coming in. If you move demand forward, either artificially, using marketing or word of mouth or whatever it is that increases demand, may the market, the economy is doing fantastic. Real estate's doing fantastic. That increases demand. This is what I was talking about last year at conference. I said demand at the peak, we all need to be raising prices. If you move this line right here and you shift forward, you move the quantity, you move the demand this direction, the equilibrium will move to here. Can everyone see what I'm doing? All right, it is going to move to right there. This is the price. This is the equilibrium where the transaction takes place. So if you increase demand artificially or you're so great at what you do and everyone talks about you, or the economy is doing good, and this is what we talked about last conference. I said you must raise prices because demand is so extremely high right now and everyone's lining up for your services. You've got to raise prices. That was demand moving this direction. Another way to increase your demand, increase your prices is to move the other line. And this is something that we have not talked about in this industry for years. And you can decrease supply. If you take this line and you move it to the left, you reduce it, it means that the price equilibrium is going to move from here. And now it's going to move back to here, which again, this is the price on the x axis or the y axis. And so here, this is going to be your price equilibrium. Your price will be higher. How do you reduce supply? You stop buying trucks and you stop hiring people and you stop increasing your capacity. Another word for supply is capacity. If you keep increasing the capacity that we talked about on Thursday night, your labor capacity, hiring employees.

And you stop buying more trucks and equipment that increases your asset capacity. If you stop doing that, you're able to raise prices. So in the case where someone says, I am so busy, I'm getting so many leads I cannot answer them, can't get back to them, I'm just going to turn off my phone, I'm not going to respond back to them and, and I'm going to take the decals off my truck. What that is telling me if they are also financially strapped is they do not realize that they are underpricing their jobs because if they just raised their prices, it would immediately fix the problem of having too much work. Because what you would be doing is increasing the price while reducing supply. Hey look, we're not going to take any more work, we're not going to get any more customers if the jobs are still pouring in. Just keep raising your prices until you hit an equilibrium. And that might mean you have 15 or 20% close ratio, but you've raised your prices by 40, 50% and now your margins are double or triple what they were last year. And that's what profit mode looks like. Not a whole lot more revenue, but way more profit constrained supply capacity to increase price. Does this make sense? I need a yes or a no. Yes. Okay, good. It was overwhelmingly less. I heard a couple no's, so talk to someone else out there.

All right? It'll be great.

Follow up strategy. This is going to tie in directly to your close ratio. Again, this is one KPI. Everything that I can determine from this one number, your close ratio. If you don't have a good follow up strategy, I can guarantee your close ratio is going to be affected. You have a 48 hour time window that typically most estimates are going to be accepted. In the vast majority of your estimates. If you look back, go through your quotes and see how many of them were accepted and and when they were accepted versus when they were sent, the vast majority of them are going to be accepted within 48 hours. Those are also usually the best customers. The ones that accept two weeks later and somehow expect the same thing to be done for you to remember everything and be right back on track with them. Those are usually your worst clients. They're the ones that typically have the most callbacks. However, during that 48 hour time window, I got to ask you, is your follow up process efficient, automated and is it going to be able to make sure that it closes the jobs? 48 hours is what you want to maximize? A critical mistake that we talked about already is having pending quotes Sitting on your CRM, it will absolutely crush your close ratio. You need to get an answer from these people. If you have to go knock on their door, print out the estimate and go back to their house and say, Mr. Jones, I came here three days ago, I've returned, I've called you three or four times. I'm not hearing anything back. I just want a yes or no. You're not going to hurt my feelings if you say no. But if you say no, I want to know why. But if it's yes, I can get you on for next Thursday at 2 o'.

Clock.

Speed is your best follow up strategy. Everyone's like, I want a follow up process. Follow up process speed is literally the only thing that matters because at this point you've already determined the price with the customer. Remember, the two biggest variables as to whether or not you're going to have a high close ratio is what? Speed and money. That's price to the customer and that is the amount of time it takes for them to transact with you. This is why Amazon wins, because it's extremely efficient in time to be able to go on my phone and order whatever I want from a multitude of different vendors, the best price as possible. That's why they win. Critical mistake. You got to get those pending estimates to have won or lost. I don't care if it's lost, I just need an answer. And your speed is your best follow up strategy. We already talked about this. All humans want time and money. That means that all customers want things faster and cheaper. The number one way to be able to dictate and move your close ratio is speed and price. So what that means is you can move price up. If you move speed up. You mean you can literally raise prices simply by doing things faster? Absolutely. Here's why. Because if you increase the speed at which you're following up these estimates, if you're doing automations or text and email and all the rest, you're increasing speed. Guess what happens to your close ratio? It goes up. And what happens when close ratio goes up? Your growth goes up. And when you hit capacity and you're growing, you know what you do, right? You raise prices. It's all a domino effect, all triggered from close ratio salesability. This is another factor that can be determined simply by your close ratio number. When I look at someone's close ratio pricing and follow up strategy, all these things we're talking about, your pricing strategy, your profitability, all of this, your rate of growth, all these things that we've been Talking about speed at which you're growing, etc. All of this is determined one KPI. This is why I literally tell people all the time, what's your close ratio? I need to know that number because it determines so much. And you'll literally, if you hear me in a Q and A session or if I'm doing a coaching call with someone, you'll literally go through. Not like in my mind, I'm not doing a checklist, but you'll literally start hearing me going through these things when someone's saying they're struggling on certain things. Close ratio. Okay.

All right.

I know if they're in growth mode, I know if they're in profitability mode, I know if they're above capacity, I know if they're below capacity, I'm then going to be looking at their follow up strategy. I'm then going to be looking at what is their sales ability. Like you gotta be really self aware if you actually want to be a good salesperson and realize that you might not be the best salesperson and that's fine, but you can improve. Have you ever thought about filming yourself? Throw a camera on yourself. Throw at least just your audio in your pocket. I'm amazed at salespeople who have never watched themselves. You know how painful it is to watch my own stuff? It is extremely painful. I hate it. But the only way I've ever improved on communication and speaking is by watching myself and going through that painful process. So if you want to get better at selling, you're gonna have to get better at communicating. And if you're gonna get better at communicating, you better believe there's gonna be some self analysis and looking at how you do sell and analyzing and see how you can get better. All right, one thing, let's just, let's go back to vulnerability here. I'm messing up.

All right?

Okay. So when I watch myself speak, this is what I used to do all the time. And I still do it all the time. I go like this all the time. I pace cause I'm a pacer. In college I would consistently walk when I was studying and trying to memorize stuff. I was the guy that would spend all night before reading the textbook and I would literally take my textbook and walk back and forth in my room to stay awake. And I just digest as much as possible, take the test and get through. The problem with that is that it's extremely distracting for all of you listening. And so what I've had to force myself to do is realize it's okay to plant my feet and be directly on with you. Because if I don't do this, you're not going to feel like I'm confronted confronting any issues directly with you. By me doing this, you will feel like I am more shifty, that I don't really know what I'm talking about. Cause I'm not planted and looking directly at you and confronting the issue that's in front of us. That takes doing some hard work and watching yourself, how you communicate cause all of us to yourself. Because you listen to yourself 99% of the time. You think that's normal. You think it's normal to cross your across your arms when doing this in and of itself will remove you from your sales prospect. And they'll feel like you're hiding something. And that if you actually were talking to someone and you could feel like they were somehow threatened, then instead of having a direct shoulder to shoulder to them, if you just turned your shoulders just a little bit, they'd feel like they could talk to you a little bit easier. These are little tiny things. But you've got to be self aware and be willing to work on yourself. There's two things I can't do for someone, whether it be inside of Augusta or any other business owner. I can't help you sell and I can't help you lead your team. And so when it comes to sales, the number one way to fix this, the number one way to improve this is to record yourself. If you're not at least putting your phone in your pocket and pushing record while you're selling a very challenging customer. That's like the lowest level, lowest hanging fruit that I would suggest you would do. Here's what you might find out. And trust me, it's going to be extremely painful to listen to. I hate listening to myself talking. But it's the only way you're going to get better. And so what you're going to do is you're literally going to get in front of you, okay, here we go, this is normal. And then you're going to see what happens when you start getting confrontation. You're going to start hearing how you handle objection. You're going to hear what you do when you go back to a customer's property and they complain in front of you to your face very differently than when they're on the phone. And you're going to listen to yourself and be like, that was a dumb thing to say. Why in the world would I say it like that? I should have said this. And next time guess what will happen? You'll say what you wish you would have said in the first place. And you'll learn and become better at your communication skills by being self aware and being okay with the fact that you aren't perfect. That's okay. None of us were born great communicators. None of us. We've all learned communication by somebody else. We'd be parents, teachers, people that have helped us with English, like all of that stuff. You've gotta realize this is a thing. I don't care if you're 40, 50, 60, you can learn this better. And a lot of you, I really appreciate you, like, man, every year we come back, you're getting better at speaking. We can tell the improvement. It's not because I enjoy it and I'm up here just loving speaking. It's because the fact that I am dedicated to making myself get better at this. And if you want to become better in your business and grow and you want to improve your close ratio and you want to be able to raise your prices because your close ratio is going higher, you will have to address the one thing that you can control and that is your ability to sell. And that sales ability will have a direct impact on your close ratio. Literature that you give away during an estimate. Is it easy to throw away? You're like, well, how does this impact sales ability? Well, sales ability is direct impact on close ratio and how your sales ability directly correlates with your literature. Are you giving them something? And if you are, is it easy to throw away? Does it feel like I'm like, for example, spend the extra two, three or four dollars and get something metal or wooden instead of paper. It'll be harder for them to throw it away. Give them a magnet instead of a piece of paper. Give them something card stock instead of this cheap 3 cent piece of paper you got from Office Max. These are the little things that are going to allow you to sell better. Because hopefully if it's metal and they're like, ding, ding, that's pretty cool, it might end up on their desk instead of the garbage bin. It'll also allow you with the literature to have a good closing point. A lot of estimators that I have seen and I've several times asked my franchisees to throw that audio in their pocket and I want to listen to them talk to a customer and then we'll analyze it together. They've never been so nervous in their entire life because they've never done it with themselves, but let alone with me. Literally critiquing Every single, single word. And I'm not the. I'm not perfect at this. Trust me. I have a lot of. A lot of room to grow in this area as well. However, the part I see people struggle with the most is how to close the estimate. I don't mean, like, sell the job. I mean, just wrap it up. How do you wrap it up? In a nice little package and be like, you go back in your house, Mr. Jones. I'm gonna go. Bye.

Bye.

Like, there's like a weird, like, okay, we talk about the weather, and then we're like, yeah, we'll get back to you sometime. And they have some question of the estimate. What do you think about price? The reason people are talking about price to you is because you don't know how to stop the estimate process. The estimate is a form of gathering information. Is not the time to start talking about the weather and start talking about your kids and start talking about the project. And then guess what it's going to move into. What do you think the ballpark price is? Oh, Mr. Jones. Kind of these different ranges. Just depends on these things. Well, what about this? And now you're talking yourself into this hole that one day you're going to get really hurt in. You need to have a very clear sales process. This is what I say when I get there. This is what I say to get the information I need. And this is how I finish the quote, the meet with the customer. So that's the literature. Typically, that's the way to break the thing. Hey, Mr. Jones, I appreciate you having me come out. I'm going to go ahead and take a video of the property so I can send this back to the office. Let me go ahead and give you this brochure. It's information about our company. Feel free to go back inside. I'll take that video quickly and head back to the office. Within 24 hours, they'll have that estimate sent over to you in your email. All right, thank you. Bye. Bye. Shake hands.

Get out of here.

I don't want them following me around with my video. It's awkward. It's weird for them. It's weirder for me. I want to say things about Mr. Jones to my crew, about the fact that if he walks out the back porch, he will fall when he goes down two steps. I want to be able to say that in my video. I need him back in the house and just hope they don't have any ring cameras. All right, let's just. Let's just do a little poll.

Here.

How many people have had a customer call and say that based upon their security cameras, they have seen your guys peeing on their property? Oh, that is such a bunch of garbage. That is such a bunch of lies. Okay, if you have had someone call you because they saw your employees act out on their property using their ring cameras, raise your hand. I still think you're all lying. That's a bunch of garbage. Okay, video of crew and video sent to the client. Again, your ability to sell is going to be the fact that when you leave that quote, they know what the next step in the process is. There's a lot of talking. There's some stories being shared about that. Ok. You're like, no, it wasn't peeing. It was actually they were smoking a blunt and doing a bunch of other stuff. I know what it is. See, you're like, that's nothing.

Ping.

I wish.

We are not going that direction. Okay, so the video for the crew and the video on the quote for the client. All right. Are you able to wrap up the sale with the customer? Mr. Jones, would be great meeting you. Here's a little literature. I'm going to make a video again. It sets them up for the sales process. They know what the next step is. Okay. Within 24 hours, I'm going to get this quote. That person out there outside walking around my house is making a video. So the crew knows exactly what they're going to do when they come on my property. And then the office will be able to know exactly what to price the job at. I'm going to get that email, I'm going to accept the quote and then the crew is going to return with that video in hand and I'll get my job done. All hunky dory processing your sales and how that role is extremely important. And a video for your crew and a video for the quote on the quote for the client is important as well. Make a personal video. Mr. Jones, this is Bob over at Augusta Lawn Care sending out your quote right now. I've got the quote back from the estimator. Compress it really quick, throw it on your email, attach it to the quote. Really good personal touch. Speaking of personal touches, back in the day I had this brilliant idea. It was actually a good idea except the fact that we wanted to scale and focus on other stuff. But I actually think this is a good idea and everyone's welcome to steal it. On the process of getting the quote information, the lead, you might say on the phone, we would always ask the customer at the Very end of the phone call, after everything was confirmed, we'd say, hey, Mr. Jones, by the way, do you like Pepsi or Coca Cola? Just wondering. And they'd be like, what in the world? And they'd give us an answer. All right, I appreciate it. Thank you so much. Have a great day. And they'd just be super bewildered. And they'd usually forget, even if it was the next day that that question was asked. However, the next day the estimator would show up to the quote, hey, Mr. Jones, heard you like Pepsi. Here you go. You know how much that blows people's minds? So you can take that one. It's free. Free of charge. Let's go. You say, well, I'm not great at selling. I'm also not going to be good at recording myself. I'm just a miserable failure when it comes to sales, and I can't afford to hire someone on the sales side of things. I'm ops or I'm admin. Those are my strengths. But sales is not my strength. And you cannot afford to go hire someone that is great at sales. The way to avoid this as your roadblock to having a good close ratio is going to be to eliminate in person estimates as much as possible. What people don't realize is the customer acquisition cost is good. That's the cost to get them to become a customer. However, usually what we don't calculate in that is the indirect cost. We look at the cost of the ad cost per click cost per lead customer acquisition cost like this is fantastic. The one thing that's not taken into account is the fact that there's other costs involved to actually getting that customer. These are indirect costs. And this is the reason, in my opinion, why there's not a lot of project based companies that are doing nine figures, not eight, there's plenty of them, but nine. Because it's extremely hard to scale to that size. If you look at the top 100 lawn care and landscaping companies, the vast majority of them are recurring. And the reason for that in my mind is because of the cost of doing an estimate. Let's run the math. Cost of doing in person quotes. Let's just assume that we have a $50 lead acquisition cost. All right, it's gonna be a little bit different if you're commercial. By the way, a lot of this, whoa, that's a lot. Lot of phones that just popped up there. But if you're doing residential, let's just break down the math. $50 lead acquisition cost. That's the cost I have to spend to get a lead, an estimate request form, a phone call, email, whatever it is. Let's assume that we have to drive 15 minutes one way. So 30 minutes round trip to this quote. We're going to spend 20 minutes with this customer. We're going to spend 10 minutes to prepare and send a quote. I see this oftentimes being 30 and 40 minutes because people don't have systems around creating their estimate calculators and matrixes around this. However, let's just be conservative and assume that that's one hour's worth of labor. If we're charging $80 per hour to our customer, that's the number you need to use, not your hour dollar per hour that you pay your employees. That's a flawed method of calculating this $80 per hour that we're assuming. That's what we charge our customer. Therefore, one hour's worth of our time is going to equate the cost of $80. We're going to assume that we drove 20 miles, so 10 miles there, 10 miles back. Let's assume we drop $0.50 per mile for fuel and truck maintenance of $10. Total cost of doing the quote, $140. If we have a 50% close ratio. Now we're paying $280 per client. If we are on average getting a $50 mo out of this whole little kerfuffle and we have a 20% profit margin, that means that we're making $10 in profit per mo. That means that in order to recoup the cost of $280, I have to mow this person 28 times just to recoup the cost of acquisition. Let's look at this cost of doing over the phone estimates. And Ryan and Brittany, congratulations again. They were the ones though that really pushed me very hard on switching everyone mandatory to over the phone estimates at Augusta. Probably a year before I thought we were going to. So kudos to them. Let's go ahead and look what the cost of doing the same quote, same efficiency level with doing the quote over the phone. We still have our lead acquisition cost. We still got to get the estimate request to come form to come in. However, we're able to nix the 15 minute drive one way and coming back 20 minutes with time with the client. You don't have to spend that time. Let's assume it takes 10 minutes to prepare and send a quote at command center. We do this in about 8, sometimes 9 minutes depending on the territory. That's our average time to completely measure, get all the card information and Put them on the schedule. Alright, eight to nine minutes. Let's go at 10 minutes to prepare and send a quote. So let's just say $10 worth of labor. If I have $50 lead acquisition cost and I have $10 worth of labor to prepare the quote, my total cost to quote is 60 bucks. Total cost of quote is 60 bucks. We have a 50% close ratio. Now instead of having a $280 per client customer acquisition cost, that's the true cost, not just our advertising. Direct spend is going to be $120 per client at $50 mo. Same effective profit margin of 20% $10 per mill profit. Now we can recoup that cost in 12 mo's instead of 28. Check this out. What happens if you lose this customer after three months of mowing? You've effectively lost money on this customer. If you lose this customer in three months and you've gotten done, let's just call it 14 mows. We're going to assume that's half of this right here. You've made $140 on a customer that really cost you 280. This will completely change your cash flow. Stop doing in person estimates for services that can don't really need it. Mowing, you don't need it. Another thing that you can do is drive by estimates for simple services like property cleanups, mulch installs, trimming of bushes. Trust me, you get enough information one minute on a phone to get a pretty good idea of what they need on a cleanup. For example, if you can do that, you can at least, at least you can take out the 15 minute drive, 20 minute meeting with the client. You can take that part out. You're still going to have to drive there if you're doing a drive by estimate, but at least you can cut out the $20 extra time with the client. All right. And furthermore, what's also better about drive by estimate is your route optimization for your estimates will be much better because you're not trying to meet certain time deadlines or ranges of time that you have to meet them all in. You can simply make the most efficient route in the middle of the night if you want just to get by their property and see it really quickly. It's much more efficient in that manner as well. But here's what's really cool. Because if you do over the phone estimates, you stop going to their property and lollygagging for 20 minutes about their lawn that you could literally look at in three seconds in person, or maybe 30 seconds on a aerial View, if you went and did that and you cut all that out, you would be able to take the money that you save here and use the savings to create more leads. And that's what will allow you to grow the business. And you'd be able to do it effectively because essentially you only need to keep the customer a couple months in order to be able to get the cash back you invested to get the customer. If your attrition rate is 50% and it's taking you a year to be able to get recoup that cost, that means that half of your customers you're losing money on every single year just because of the customer acquisition cost is required to get them onboarded. Customer acquisition costs, bad marketing can be fixed with a good close ratio. Alright, so if you man, I'm just not good at marketing all this, if you have a great close ratio, check this out. We go back to the picture you took of the funnel that we talked about on Thursday night. Increasing the effectiveness of your ads by 50% that's supposed to be is is not easy. It's extremely hard to change your creative, change the text that you have and increase the effectiveness of your ads by 50%. It's not hard if you talk to a marketing agency that's trying to sell you something, but trust me, it is a lot harder than you think to improve the effectiveness of your ads by 50%. It's not as easy as everyone's gonna tell you that's trying to sell you something. However, increasing your close ratio by 50%, that would mean going from 20% to 30%, that would mean going from 40% to 60% as a 50% increase. Doing that can be done immediately after everything we've talked about in the past 30 to 40 minutes and it's going to have the same exact effect on your business. The same exact effect. Why? Because if you look at that funnel, if I am able to take a horrible cost per click because I don't know how to do my advertising, but I'm able to have a really great close ratio, I can counter, it's counterbalancing. So if I double my cost per click because I'm a horrible advertiser, but at the same exact time, because I'm so good at closing and sales ability and I follow up and all the things that we talked about, I'm good at communicating, I'm able to get my close ratio up by 50%, I literally will have the same exact customer acquisition cost. In terms of this, I really believe that your prices should fluctuate throughout the year. And in my opinion, your prices be inverse of the weeks that you are booked out. And that is your capacity. When we look at this dotted line here, and this is just very general, if you live in different markets, different climates, this is going to be different for you. However, when we look at the number of weeks that you are booked out, let's just say in January, right here, this line here, the dark line, is the weeks booked out. Okay, when you are booked out all one week, it's a really good idea to cut your prices and make sure you're closing every single job because you need to keep the guys busy. How do you do that? Do you cut your hourly rate? I wouldn't recommend it, but maybe you bring down your material markup. Maybe you reduce or eliminate your estimate fee. Maybe you reduce your dump fees. There's ways to be able to reduce the cost to the customer without changing P4P if you don't have a lot of jobs in the schedule. And this is why when I walk into the belly, I'm sure Dylan April know I want one number and that's how many weeks are you booked out? Because it's going to be very clear to me as to what they're doing at their pricing and it's going to tell me exactly what they're doing with their close ratio. Because the close ratio, if we are not booked out very far, better be high. How do you get a high close ratio? What's the fast way? Just change price right away. That's why when you have no jobs on the schedule tomorrow, you're starting to call estimates and give them a price reduction. Like if you get on the schedule tomorrow, we'll get your price deduction because that closes deals. That improves your close ratio. But if you're 12 weeks out, probably a good idea to make sure you're closing almost every single job. How do you do that? Lower price as you go into spring rush. Again, this is just based upon a market, a climate not yours. So March, April, May, June, extremely busy. I don't want a high close ratio because my lead count is so incredibly high. That is my demand is so incredibly high. And what happens when demand goes up? Price should go up as well. Assuming that supply stays current and stays the same. If I increase my supply, why demand is going up? Price stays the same. And that's why when people are like, oh man, I'm getting all these leads, I'm gonna keep buying trucks and equipment. Okay, it's fine. Just remember, you're not gonna make any profit because your price probably won't be going up. And if that didn't make sense, watch the recording. Listen to that like three or four times. Trust me, that will change your business. When you are six, seven, eight weeks booked out in the middle of spring rush, you want to raise your prices so that way your close ratio drops to the point you don't need to expand supply anymore and buy a whole bunch of trucks that you're only going to use for two or three months. Does anyone have a purple card for Q and A priority? All right, so we have our micronators. Jaden, Rachel, come on up. They will hold the microphone, they will tell you when to sit down. And there are no follow up questions because not only you want to ask a question tonight, so be considerate of others. All right, if you have your purple priority card, I need you to stand up. Okay, we got one here and one here. I think that was only two or three or four or five. Okay, so they saved theirs from Corey's for today. Very smart, very smart. Okay, so when they come to you, go ahead and sit down for now. The ones that are waiting. All right, go ahead.

Hey, Mike and everybody, My name is Eric. My question to you is, I remember a couple years ago there was a video you had that gave a formula for, to determine if your moes met your, basically your, your hourly rate. I forgot what that formula was. I'm not sure if you knew it, but I've been, that's, I can't find the video.

So that's my question. You're just looking at budgeted hours, right? So if you're hitting budget hours on a job and you're, you're, let's say your price, you're charging $80 per hour. Okay? If you are consistently hitting one hour on that job and that's consistently on every visit and on an average over the course of a year, you're always at one budget hour. We're good on pricing, but if you're taking an hour and a half, well now your effective hourly rate is 52 or $53. That's the one you need to raise prices on. So you just need to track your clocked hours on every job versus your budgeted. And the ones that you're consistently over on clock compared to budgeted, those are the ones you need to raise prices on. If that makes absolutely no sense, stick around for copilot because they'll tell you exactly which ones those are.

Hey, Mike Marcus from San Antonio or how Would you suggest building a large, profitable, profitable and successful business without neglecting your time with your family, your friends, your loved ones, you know, losing that quality time with them?

And is that an important thing to you?

Yeah.

So have a conversation with the key people involved and making sure that balance stays in effect. Right. And be open, honest and realizing that if it's is it more important you than the business?

You got to get clear on that because there will come a time you need to choose between the two and you need to know exactly im immediately it needs to be okay. If family's more important and there comes a time it's like family or business, you need to know which one to choose. Okay. All right. So talk to them. Get what their thoughts and opinions are. But ultimately you need to decide which one's more important to you and that might change throughout life.

I'm Marcus from coeur d', Alene, Idaho and I was just curious if I rank first on the local Google 3 pack, is it necessary for my website to rank really well too to have like great SEO and if so, what are some tips? Is it much different than my Google SEO?

Yeah. Well, if you're ranking well in Google local services, Google listing and Google Ads, remember that you're renting that space. You do not own that space. And so although you do want to be there, ultimately you are a renter. You're paying someone else to have that real estate. I would rather buy real estate that I own because tomorrow I don't have to pay for that new lead that comes to me. So ultimately, ultimately, still to this day, native organic search is going to be the winner of who wins because guess what, your customer acquisition cost is minuscule if you're getting a click from organic versus paying 20, 30, $40 for an ad above that.

Vitaly out of Vancouver, Washington, we were being so punctual last year about thanks.

For buying lawn care media this morning I saw that.

Thank you.

You're welcome. It was free because I got the card.

I know I saw your name.

But.

I still got it.

So really appreciate you. First off, second off, last year we were so punctual about raising the prices on maintenance. Obviously going into recession. We, you know, like what do you think still continue raising the prices every year because we might see like a big backlash from it or like what's your I guess game plan going into this year?

Recession has no impact on your price increases. I got this question a bunch this weekend has nothing if it starts affecting your close ratio and that number of supply and Demand, that's when you start moving. I believe that the best operators won't actually be affected a whole lot because as the bottom 30% of our market and our industry gets wiped out, the top 10% will suck all of them into it. So although your typical demand will decrease because there's a lack of supply, that is there's not as many of us around, you'll be able to absorb it and you'll be fine as long as you're in the top 10% and you're ranking high on your Google organically. Cody from Lansing, Michigan. Nice and loud. What's that? Nice and loud. Okay. Cody from Lansing, Michigan.

Other than ensuring that you're ranked as.

High as possible in the three pack and just your website, is there any way to even semi accurately predict the leads that you may get from a website or being highly ranked on the three pack on Google, why do you want to predict that?

Seems like a number that would you.

Want to project growth and see what you need to buy and stuff like that. Exactly. Okay, cool. So what I would do is look at last year. Take your marketing spend, divide it by how many leads you got from that, and that's gonna come up with your lead acquisition cost. Start at the top of that funnel. Say, I know what my lead acquisition cost is. Okay, now what was my close ratio last year? And run the math backwards to the point. It'll tell you how much you need to spend and based upon what you spend, how much you're going to earn. So you basically need your cost per lead from last year. You'll need your close ratio from last year. That will give your customer acquisition costs for last year. And then you're going to divide that number by how much you're willing to spend. Let's say it's $5,000. Divide it by the number that you're going to have. That's, let's just call it 100 bucks. That means you're going to get 50 customers. Then you got to determine what was the lifetime or the annual value of the customers that you did get last year. Multiple. Let's call it 2000. We now have, what did I say? 50 customers. Multiply 2000. You're going to go by $100,000 in annual revenue. Run it, do the next matrix, which is, okay, If I grow 100,000 in revenue, am I going to hire employee? Yes. Am I going to need a truck? Yes. Am I going to need a trailer? Go through that and you'll determine how much you need to spend on top of the marketing spend.

My name is Elliot Arborist with Landmark Tree Care from Auburn, Washington. And how do I determine cost for charging for estimates and how to notify.

The clients of that? Do you charge for estimates currently?

No.

So I would do that very slowly because it's going to impact your close ratio in a positive way. But what it's going to do is it's going to reduce your conversion rate.

All right.

So the amount of people that become a lead will diminish. Go ahead. That's fine.

How do I determine what that cost should be when I start charging?

Start at five bucks. Right. Because if you've never done it before, I don't want you to say 50. And then immediately you have no leads because your conversion ratio will change. Yeah, but your close ratio will go up because you're having a more sophisticated buyer.

So let's just assume my prices are right. I fall into that. Three week wait, four week. I don't think that'll happen with mowing, but if it ever did, that'd be great.

What do you mean? Like booked out? Three or four? Yeah, booked out. Which.

All right, I know that'd be really hard for mowing.

Yeah.

But if that did happen, are you still saying raise the price? Even though I'm already, you know, with spreadsheets and everything, explosively have got my right prices.

I'm really talking about project. In that case, I'm not talking about raising prices on your mowing customers like recurring. I'm talking in that case, more project based work. So let's say the 30% of your revenue that might be coming from our property cleanups, mulch, etc. That's what I would first. Because it's more liquid.

I took that note for sure. I figured that. But you know those times where it's like I've got so much mowing that I don't want to do anymore. You know what I'm saying?

So there's a multitude of things you could do. You could increase the prices on your initial mows. You could change your requirements for mowing. For example, we require weekly. During these months we require a card on file. Just create more and more filters to keep the worst customers out. Give it a clap up for these amazing mic runners. Let's go. Best Q and A ever.

Neville was Zion Lawn Landscape, Louisiana, Baton Rouge. My question, it's more about the software that is coming up. One of the issues that we have especially for installation or design build, it's more about inputting those numbers so you can have a Prediction and have you can be able to see overhead. And with the software that is coming up Copilot, we are excited about it. And I know I heard some of the stuff that features that will be coming in with P4P which is great. One thing I was trying to access how is you talked about a lot of these numbers, but I know where you're going. Yeah.

I'll answer your question.

Are they gonna.

It's very low priority for me. This won't happen until 2025 in my opinion. The reason for that is because overhead numbers thrown into a calculator are almost always wrong. I consistently see this on lmn. They have great budgeting software. The numbers people are putting into that software are incorrect. They're not able to accurately predict what they're things like indirect labor are, what their real office expenses are, what their taxes actually look like, the real cost of the fuel. They're not good enough at that. And the vast majority of us using those budgeting softwares are making inaccurate decisions based upon inaccurate data. And so until I can. I can scan your. Our goal down the road is to be able to scan your QuickBooks and to be able to sync up with it not for the sake of bringing transactions across, but to scan your profit and loss statement and give you that data based upon actually AI that looks through and says no, these are the actual numbers and these are the exact percentages of fuel, insurance, et cetera.

Hey, Mike, Michael Reed with Quiet Lawn. You were talking about growth and profit phases. When you're opening a new location, are there benchmarks that you kind of say, hey, I want to be in growth mode until we get to 300,000 and then we're going to slow down to get to profit mode and then we're going to kick it back into this to gear into growth at this time. What kind of benchmarks do you have? Like when you open up a new location?

Yeah, so Augusta we have three different stages that we believe is the most profitable for a lawn care business in terms of size. And so I need them to accelerate to one of those as fast as possible. And that whether they go to stage one or stage two is dependent on their them as the GM and their abilities. If they can sell out to Wazoo, I want them to get past 500,000 as fast as possible. And we incentivize that first year on growth because I'm not concerned about profit after that. A lot of their compensation is based upon profitability. And so for me as an investor, I usually want profits within, you know, ideally three months. I just want to start seeing profits coming back in and cash flow positive. But if someone's growing very quickly, I'll just keep shoving money their way. If they're growing at a good rate.

Hey, Mike.

So I'm going to ask you a question about winter services, right? I know you guys stopped doing those.

We stopped or started?

Stop. You stopped.

Oh, we do winter services. We don't do snowplowing, so.

Snowplowing?

Yeah. Okay.

Am I crazy for wanting to possibly sell that portion of my business? The years that I've done, the anxiety and stress, stuff like that. I kind of want to. So at first it was like, you know, we wanted to produce re more top line revenue. Correct. But now it's like we don't really need it because we're, we keep pretty busy during the summertime. So I was like, you know, if we took those two months off, the guys could enjoy it.

They could.

I could go down to Mexico or Hawaii somewhere, you know, a whole month.

Is that more, more important than the money you're making?

To me it is.

Easy decision.

Perfect.

Yeah.

Thank you, Carter from Sacramento.

So what's up, dude? Business boot camp, season one. Let's go.

So I love the over the phone estimates. The only question I have is where we are. Everyone likes a package deal. Shrub trimming, fertilization, weed control beds, cleaned out, all that in one monthly price. How would you do that over the phone? Would you have the customer send you pictures of it or drive by and look at it, Use a drone to get in the backyard to see pictures? How would you.

A lot of depends on the size of your service area. If it's very small and you have a very good targeted area territory that you're targeting, you can do drive bys and it's not going to affect that number as much as we talked about because you'll get be two minutes away from their house. What we try to do is sell them the, the entry level service that's gonna be mowing. So you called for mowing and all these other services. We're gonna sell you a mowing, get your car on file, and after the first service, we'll let you know what all the prices are gonna be for bush trimming, weed, weeding, etc. But we can sell them the fertilization package, we can sell them the mowing, get them on the schedule with their card information, and then just tell them you'll confirm the prices for the other services after their first visit. That way again, if you're doing videos and things, your crew could literally take a video for you. You can then pump out the estimate to that client and everyone's like, oh no, people aren't going to do that without having the full package. Trust me, most of them will take you up on the mowing and the fertilization. As long as you have a good price, they'll just be happy they don't have to worry about it anymore. Again, speed is important. You're going to make some inaccuracies on the over the phone estimates, but it's made up for the fact the speed of getting those out infects your close ratio and the rate of growth for your business so much more.

Hi, Dylan from Tacoma, Washington.

Oh, another business v. Camper. Oh my goodness. Okay.

Thanks for coming, brother.

So, as you know, I'm kind of trying to ramp up and be in more of the sales role this next year. So I've been actually thinking a lot about trying to do the remote estimates or over the phone estimates. And I guess my hang up or excuse for not doing it was always miss out on upsell opportunities. And we tend to have big initial cleanups in my market, which could range from 400 to over a thousand bucks. So my question is, how does that logistically look? Do you just send out the basic estimate over the phone just to get that locked in? Low price for recurring. And then do you tell them, hey, there could be an initial fee that ranges between this and that? How is that approach? Because I always just feel like, oh, I can't get into that because I have this big cleanup that I need to quote initially, the likelihood of them.

Accepting the quote for a cleanup after you've already locked them in for mowing and they're happy with that first service is significantly higher. And if you're using videos correctly and you give your guys an incentive on P4P to be able to get 10 bucks, 15 bucks, if someone accepts a quote that they shoot a video for, you'll ask them on the first visit to take a video of that property. You'll shoot the estimate and before they leave the property property for mowing, the the client will already have a quote for the property cleanup and you'll get on the schedule right away.

Hi, this is Brandon from Charlotte, North Carolina. I have a question on what your exact follow up is. So if we get a phone call comes in, it does not get accepted or rejected those next 48 hours, what are you doing? If you call them, like, is there a certain time that you call Them, they don't pick up. Are you leaving a voicemail? Are you texting them? Are you emailing? Like what is exact process for this next 48 hours?

I would say all of the above. Talk to one of Augusta if you want to get the exact one. They all have somewhat similar or different, I should say in terms of what days they want to do it. Some people have the call going days later, some have it the next day. It's really up to them. It's an automated process that lets the office know when to call and then same thing with emails or text messages, whatever you're using. Just I don't think there's any wrong way to do it. As long as you're focusing on. It's not, it's not, honestly, it's not like, oh, it's a 21 day thing or it's a 14 day thing. I don't really think it's super important. The copy of those emails is important, how they're written, extremely important and really what they're trying to achieve. Focus more on the copy of those emails and text messages than the frequency. As long as they're within that 48 hours, that's going to be your best return. Typically though.

Hey, Mike, Sam with troops mowing, curious.

If you can break down your P4Pmodel with your office staff? No, I'm not going to. It's. It's very similar. We currently do. The bottom line is with P4P in an office setting, you can't give someone a percentage of revenue based upon getting things done fast because one air in the office in a thousand could cost you tens of thousands. One error on a mowing route could literally cost you a return back to visit. Right. And so the cost of a yellow slip is so much more significantly greater. And for us personally at Augusta, our owners have been very clear they'd rather pay a loan little bit more, but make sure that we are doing things correctly and have a higher quality ratio. And so we have a based upon the minutes that are being spent on this on the account and then they're getting a percentage of that revenue and then if they're going too quickly, they're going to get yellow slips docked down. So they still get yellow slips as they make mistakes. Anything that we have to pay back the franchisee due to a mistake comes out of their paycheck. Hi, I'm Angie Lee and I was wondering the transition between the solo operation and the growth and how that works, like if you start out solo, how you can transition to Growth. Are you talking about Augusta Long Care? Like solo operators? With. With Augusta, in essence, the transition is within two years. You have to go from being a solo operator to becoming a growth. I would say the transition is. It's a good entry point, but we ultimately want you to have a territory where every lead inside of that Terry comes to you. Because with a solo operator model, you're not guaranteed the leads. And so talk to one of the franchisees. Look on the website. That'd be great.

Hey, Mike Franklin with Next Door Lawn and Landscape. So we've been kind of analyzing the asset capacity and using up to that because we have more trucks than we do people right now. We're trying to figure out what our goal should be for this year, revenue wise. Because typically we lead, I call it, from the feet up, where it's like we have this many expenses. If we're working this many hours at, you know, 70% efficiency, then we just charge this. And that's how we've always done it. But we don't want to set a goal that's like completely unrealistic. So we're trying to figure out how to get to that number that it's achievable, but still a challenge.

What was your revenue last year?

236.

And what do you think your capacity is? Just give me a number. Don't do the math that we did the other day. Just like, do you think you could double with the trucks that you currently have?

One truck was not even used, and so, I mean, we could probably get 350.

And you're asking whether or not you should grow that much.

I guess we just don't want to save 500,000 when it's like we can't get to that.

It doesn't matter. Make a goal way down the road and then just take the action today and tomorrow and the next day. Don't worry so much about where you guys are going. It doesn't like, just know the end goal, the vision, and then start making steps towards that. That's why I'm not really in the goals. Like, oh, I gotta have a revenue projection for next year. It's not really that important. It's not gonna change whether or not what you do. Just have execution at the end goal where you're running towards and keep running towards, and how far you get is inconsequential. And having some random arbitrary number is only gonna either A, disappoint you or B, you're gonna cross and be like, oh, now what do I do? Now it's November and I passed my goal, and you're seeing meaningless, right? So don't worry too much about that. Just take the actions based upon what you know is right for the business in the moment and move forward.

Mike, what's your equation for break even?

Basically, your fixed expenses plus your variable expenses is going to equal what you need to pass or pass in order to, in terms of revenue to break even. So it's not, it's not a perfect number because as you move up in revenue, your, your, Your variable expenses go up. That's why it's a bit of a gray number there and sometimes hard to calculate because month to month that will change. Your variable cost depends on how many employees you have, a whole bunch of other overhead expenses. So it's a little bit murky, but usually you can tell by simply looking at how profitable was I last month. What did I do in revenue? When did I ever break even in a month? That's typically around what your fixed expenses are going to be.

So how big are you on having the managers wait on the guys getting back to the shop, and is that a priority for your company, on having the managers there when the guys get back to the shop? Because we run four tens and, you know, our managers are working five days a week, so having them stay till 5, 36, 30 sometimes, and, you know, and then have to come in on Friday as well. How big of a priority is that for you?

It sounds like you've reached the size where there's multiple managers, so it's a little bit easier. I would recommend that a manager be there when they show up and when they leave. If you are the owner, operator, and you have maybe four or five employees, there's nothing more disheartening to come back to the shop after a really long day of work and the owner's not there, they will think every bad thing. You might be in the hospital with your kids, but they will think you're on a boat and doing some fun thing, and they'll make up stories very quickly. And so I would personally, for my general manager, my expectation is you're the first one there and the last one to leave. And if you don't like that, then you're gonna be an employee out in the field where you can be done early because you finished the budget hours.

Hey, Mike. Ronnie with Electronic Lakeland, Florida. I wanted to ask, because I haven't seen it anywhere here, which I was a little surprised. What is your mission statement and what.

Is your reason why, from a Business perspective. It's to change the level of professionalism in the landscaping industry. I just want to see other people improve and not make the mistakes I made. Yeah, I'm really passionate about that. Yeah. Mike, Coca Cola or Pepsi? Coca Cola or Pepsi? I don't know what they taste like, honestly.

No, that's really not the question. Okay, so you're.

No follow up questions. Hey, so you're investing in your own franchise, Buying a couple sites. I don't remember where they are. There's like five or eight of them, right? Four of them out in North Carolina. Yeah.

Okay. Aren't they all overlapping in their same area?

Yep.

I don't believe that a big service area is needed to grow a million dollar business. Everyone thinks you need a big service area. I'm trying to shoot between like 30 and 60,000 people in each of my service areas, about 3 mile in radius or less. And they'll, they'll all do half a million 800,000 over the next few years.

Why not have just one location and.

Spread them out a little bit more.

For that area to dominate it in like a little bit bigger area?

Yeah. So again, talk to some of our franchisees. They'll go in more depth. But basically my opinion on this is it's hard to find someone to run a $3 million operation and build that hierarchy. Especially when I'm not there as the owner. It's easier for me to find an owner, to find a working GM that can cover the expense of their salary by working the field three days a week. And then for them to manage three or four people if they go down, it's easier for me just take one of the three or four guys underneath them. Like, hey, we got all the calls. Everything handled at command center. You just need to hold the team meetings and make sure you hire the new guys. We'll handle over the phone estimates. You just literally need to manage the crew and I'll give you higher wage. It's very easy to find. Working GM's extremely difficult to find people that can run a 2, 3 million dollar organization. And you're gonna pay them way more. And it changes your overhead structure to where now not only are you more dependent on them and you'll pay them whatever because you can't find anyone else that can run a 30 person operation. But it's also a way for me to be able to keep upward mobility inside the organization and attract great talent. Because they know that there's GMs popping up all around them and they know that if they're a good performer. I'm probably going to be like, hey, next year, please. Thank you. It's right across, you know, four and five miles away.

Hi, Mike. My name is Dakota from Tucson, Arizona. Just want to thank you for what you do and the info you share. I'm a smaller business here at one crew going to two crews. And what I'm struggling with, it's relative to a question just before this. Not too far, far before. I'm struggling being at the yard. We operate out of a yard where we're at. So we don't have an office on site and we probably won't. I operate out of my house, probably will for until we're about three or four crews. So how do I keep morale up? Or what could I do if crews are rolling in at different times out of a storage lot unit area where I feel like I'd just be showing up to show my face. I make sure to do morning meetings once a week at least, and then catch up with the guys throughout the week. But I started doing those just because I didn't really have a culture and it's hard to be there with crews rolling up at different times of the day.

So you're saying, are you question about whether or not you should get a shot?

Well, I don't think we will have that until three or four crews. It's just like the question was, you know, hey, it's like you mentioned demoralizing to not be there when the, you know, at the end of the day, especially on the long day.

So you got to communicate because if you're on the field, which you are as a player coach, you need to communicate where you're at and also times otherwise they will think you're partying it up. Even if they see one of the trucks out, they're like, oh, yeah, he must be like eating someplace. Or they'll see you driving by a Dunkin Donuts. Like, he probably went to Dunkin donuts. And so you'll need to communicate. Hey, guys, I'm just wrapping up. I've got three or four more jobs remaining. I'm over at Mr. Jones mowing his lawn. A few more when you guys get back to the shop. Just put your keys up. Appreciate you guys working the day. They need to know where you're at. That is the end of landscape summit. There's still one more announcement, but okay, let's clap it out. Let's go.

Thank you all for coming. I really appreciate it and it means a lot to me. Everyone that puts so much time into this. I really hope it does help you. Our goal is always to make sure that this is the best of the best that we can perform at. And I believe every year we do this, it'll get better and better. So with that, thank you for coming. And announcement number two is now underway.

Well, it's kind of sad Because Landscape Summit 2023 is almost over.

After this video, we will pack up everything and within a matter of hours, this whole room will be basically cleared out.

Over. There's one more announcement I want to talk about.

This is the fifth year that we've had Landscape Summit started off with about 50 to 60 people and over the past five years has grown to what you see today. Now, there's one problem.

That is that we live in a little town called Bellingham. There's not a lot of people. And this is actually the largest conference center that we can get a hold of for a weekend at a hotel. And I love the atmosphere of having a hotel and then having the ability to have the conference center on site so someone can stay at the conference center.

We've kind of outgrown this. So the question has always been where can we move Landscape Summit to be where be most advantageous and accessible to my audience, the people that want to be here. And the next problem is Bellingham, Pacific Northwest is not the best place to be at in the winter, nor is it the most accessible. It's expensive to fly into Seattle and then get a rental car or fly into Bellingham and pay a lot of money for that connecting flight. How can we make it most accessible? Well, the announcement I have to wrap UP Landscape Summit 2023 is that Landscape Summit 2023 is an interesting is not over.

Because there's going to be two landscape summit 2023 events. And here is the announcement.

We are moving Landscape Summit to Louisville, Kentucky, right next to Equip Expo. Equip Expo this coming year is going to happen in October on a Wednesday, Thursday and Friday. However, on Monday and Tuesday, Landscape Summit 20202023 will reemerge at the Omni Hotel in Louisville.

My goal is to make this the.

Largest business focused landscaping event that this industry has ever seen. Now it's going to be an action packed two days, Monday and Tuesday, with some of the best speakers because we're already there. The fact of the matter is that so many of us already go to the event to see the newest, the greatest, the flashiest equipment and technology at the event. We might as well have Landscape Summit right next to it. So you can come for the entire week. Monday and Tuesday for Landscape Summit, Wednesday, Thursday and Friday for Equip Expo. It's going to be incredible. And it's happening at the Omni Hotel in downtown Louisville that literally you could stay at the rest of the week and get a shuttle to Equip Expo and the entire trade show.

Now, when I say going to be the biggest event, I'm acting out of faith because we need at least 600 people there just to break even on this event. It's going to be expensive. We have to fly our entire team there to be all set up and get everything ready to roll. Obviously, the Omni Hotel is a little bit more expensive than Four Points in Bellingham, Washington. However, it's going to be the event of a lifetime. My goal is to make it the centerpiece, the kickoff event for Equip Expo 2023.

So although, although it is with heavy.

Hearts, we're going to be now leaving each other here. Just know that in less than one year, we're going to be able to see each other again. The fact of the matter is, in this industry, it can get very lonely working by ourselves every single day, dealing with employees, dealing with customers, dealing with the economy, dealing with so many factors that coming together in person has an unparalleled advantage.

To be able to see what's working for other people, learn from those that.

Have succeeded, and to be able to get the camaraderie and community we need to keep fighting the fight. So thank you for coming to Landscape Summit 2023. The next few months are just the intermission, though, because in October 2023, we'll see you again. Thank you for coming to Landscape Summit and we'll see you in Louisville.

Bring the band in.