The Struggle from $1M to $3M (HOME SERVICE EDITION)

In this video, we will visit 4 home service businesses, all different industries. They're making over $1 million in revenue and trying to get to $3 million in revenue very soon. Now, this is a very hard time for any home service business, and most businesses stall at this size. They pass $1 million, they spin their wheels and never get to $3 million. Let's see if we can give them a roadmap to scale up past $3 million. Every home service business stops growing for for one of four reasons: a lack of liquidity, a lack of leads, a lack of labor, or a lack of leadership. I call this the 4L framework. We will use this framework today as we fix these four businesses. Think of the 4L framework like this: to grow a business, I take liquidity, cash in the bank, to advertise and get more leads. Then I have a whole bunch of customers because I got all these leads coming in. I have the next constraint. I need to go find more laborers. And once I get a bunch of laborers, I get 10, 15 employees out in the field, I need leadership or managers to help me grow the business. These are the 4 reasons why every small business stops growing. And so we're going to go to these 4 different businesses at each of these 4 different stages of the 4L Framework and try to solve the constraint and unlock the next stage of growth. Each of the 4 businesses we visit today will struggle with one of the 4 L's in the framework. Let's start with liquidity. Good Hands Roofing. They're almost on $3 million in annual revenue this year, but they struggle with liquidity. They don't have enough money in the bank, and it's a lot of cash flow problems that really shouldn't be there. Let's see if we can turn this thing around. No, we need to make more money.

It could have taken us out of business.

Today we're in Pennsylvania visiting Malan from Good Hands Roofing. And if right now you're doing hit and miss and it's creating 30% of your leads, we should probably focus on that. A family-owned business that did $1.6 million in revenue last year. You guys are doing good. You literally are going to double the business. But there's a major problem. They don't know their numbers. We're paying like $12,000 to $15,000 a month in online stuff.

Do I know the actual return on revenue? I don't.

That's $120,000 to $150,000 of revenue. So if it's not producing that, we're losing money on it. In just the first 4 months of this year, their bank balance dropped by $120,000.

If this continues in this direction, then we're going to be out of cash real quick.

Everyone's like, I will take checks. And then they wonder why we have $200,000 in outstanding invoices. According to their reports, more than $278,000 of completed work still hasn't been paid for. They're robbing from you. It's unethical. Suddenly people get dementia once they owe us money. This is the Business Breakthrough Show. Collecting money later is never, ever a good idea. I always want the money sooner. My name is Mike Andes. I'm the founder of Augusta Lawn Care. We have over 170 locations worldwide, and I travel the country helping small businesses scale to the next level.

It opens up my mind to the pain points that I've been feeling and how to solve them. So I appreciate that.

Our goal is to give Malan a 6-week strategy to get the business to $3 million in revenue this year. Hey, Mike. How are you doing? Good to see you.

I'm Malan.

Malan?

Yes.

Awesome. And then your brother's Melvin, right? Yeah.

So my name is Malan Fisher. I'm the owner of Good Hands Roofing, co-owners with my brother Melvin Fisher. Just as we've been growing and God's blessed our business, It's been niching its systems and software, is putting them in place.

This is a sick shop.

Thank you.

Do you guys own this?

Uh, my dad built it for us, so we rent it from him.

Sweet, that's awesome, dude. Do you want to kind of do a little bit of a shop tour? Just show me around a little bit.

Yeah, last year we really went all in on the business. We built this in the fall, but we already kind of outgrown it a little bit. Business has been the most humbling experience of my life. It's not easy, but it's a tremendous amount of effort and responsibility, but it's It's a good time at the end of the day. Like, I enjoy the responsibilities.

Where were you beforehand?

Just kind of like a little rundown, probably like 1/4 the size of this.

Really?

Wow. Yeah.

Yeah, you've already outgrown this basically. We got the important things. Let's go.

Yeah, I got the pull-up contest. Yeah, I mean, we try to stay organized in here as best we can. Obviously, it's not the most cleaned up, but we're working with what we got at the moment.

They have no structure around follow-up for invoices. That's like where I currently see the hole because because on the P&L it has so much in overdues, like $280,000 in invoices, invoiced work that hasn't been collected.

We do roofing, siding, gutters, soffit, fascia, work on primarily the exterior of the home. Putting a lot of time, a lot of money, a lot of effort into this now to set it up for my brother and family. And like, my ultimate goal is for our employees to be able to be part of the business, and if they want to, if they want to buy in, you know, pay them well, but also make a profitable business for the owners. Because I think a lot of businesses out there, you pay the guys well, and then the owner doesn't make anything and it's just a vicious cycle. And Mellon's done a good job with that. He does, he's great with numbers and just the backend of things, good at setting up systems. We have 11 employees and we're looking to go from $1.6 million to $3 million.

Last year was $1.6 million. What's, what are you kind of targeting this year?

So I was thinking like lofty goal-wise, we could hit $5 million.

This year?

Yes. Oh wow. For myself personally, I mean, I would love to, I would like to break a 3, I would like to sell $300,000 in a month. I think $280,000 is the best or $200,000 last August. But last month we did— or this month we were at $250,000. So I'm trying to close some today and, you know, last week.

They're on pace for $2 million this year. I want to say they're shooting for $3 million. Yeah, but they're on pace for $2 million.

I think we could have.

Yeah.

But then during February, we were investing a lot into like a new website, a sales process. And I just realized like there's just so many different processes and systems that we don't have in the business yet to go to that level. If I don't build the foundation of the business, then I'm just gonna build a house that's gonna crumble down on itself. I'm always someone that if something's not working, then I'm always gonna reach out and talk to people and figure out how to make it better.

I don't wanna diminish the importance of systems. They're very important, but I think it's such a nebulous term and it's actually used against many home service business owners 'cause it's so nebulous and it seems like so theoretical that you need to like hire a consultant. Or you need to go like get education or pay for a course to get systems and you need to unlock these secrets. It's like, look, a system is simply simplification and standardization of a process and is the opposite of complex and custom.

So I think realistically, probably around $3 million this year, which is already, you know, 100% increase, which is good. Like that's phenomenal. But the biggest thing is build something that's sustainable, something that runs without Melvin and I always being hands-on. Earlier this year and even towards the end of last year, I was just running everywhere and meeting with old customers you know, running some of the scheduling, but, and Malin coming off the field more has helped a ton.

So your role with Melvin, so is he mostly sales? Yes. Got it. So then you're more ops?

Ops, and then I work in the field.

Right. So you're very hands-on operations, like you're out with the crew.

Yeah.

And is there 2 crews or 1 right now?

Technically 2.

Okay.

I mean, we have like 6 guys out in the field, 7 with me.

When you see how much money they have in the bank and then realize that 4 times that is sitting there in accounts receivable, and you just gotta ask yourself like, what would happen to this business if they could immediately just have all that money in their bank account? Like, oh, they'd be like less stressed out, they'd be able to grow, they'd be able to expand. And then they just go over to the office there.

Yeah, yeah, this is our little office. We actually bought this and we had it at our other shop location and then we moved it here.

Oh cool.

Alvin, he's in here full time, takes phone calls, manages production, gets like work orders ready for the crew.

Good to meet you, man. Nice to meet you, Mike. You hustling over here?

So these are each of our jobs. I kind of assign each crew, so it's basically Zeke that's doing them.

These are our bigger jobs.

About a month booked out then? Yeah, about like a month and a half. Good. Somewhere around there, honestly.

But one thing is to buy everything cash. So we have so far, except one of the shingle buggies we bought way back. First one we bought, we bought it with a loan, so we're still paying off on that. But everything else has been cash. And sometimes that's been stressful and hard, but it's— I think it's, you know, it's the way we want to set up our businesses, that we don't want to pay a bunch extra in interest. What's up, Mike? What's up, brother?

I'm Melvin. Melvin, good to see you.

I'm trying to get 300.

These guys motivated me.

265, we're close. Not yet.

Oh yeah, I think she's gonna sign today.

The fact that you can do $280,000, $300,000 a month in revenue and 2 months ago do $80,000 to $90,000 is very scary. That's like a huge seasonal swing. This year, the big change in February, like the website, starting ads— did you need that from last year? Do you think that's just the next level, or what was Yeah, I mean, the whole thing with the website is we had an original one built.

It didn't have like any SEO built into it. We have a marketing company that we spend $3,000 a month on. They content create for us and then they also handle our social media.

They also do a ton of marketing for what they're getting. It's not like a great return. I spend $40,000 in the quarter and make about $500,000. I feel like a 12x return. On roofing, you should have higher. That's— it's $3,000 for that and the $3,000 for the website separate.

But that $3,000 will go up to $6,000 once we're done with the free performance because we didn't pay the $18,000 initially. We did— we broke it out $3,000 a month.

So basically $9,000. So $3,000 website stuff.

Yeah.

Other $6,000 is managing the ads and also creating content.

Yeah.

For every dollar I spend in marketing, I want to be able to make $20 of revenue within the next year. That's like a very general rule of thumb. Project-based work, I'm looking for a 20x multiple on marketing in the first year. And the reason I need a higher return than recurring is with recurring I can keep them longer.

From there it was during February whenever that cash got really low and it was looking like it would continue to go low just because sales were pretty low. Like our sales for February were at our break-even for as far as revenue produced-wise. In February things got pretty tough, right? Our bank account went from like $160K down to $40K. There was even a job that we had to go back on that we still have, like we'll probably have to pay out like $15K to fix it. We had to go back on and fix. Thankfully, we were able to fix all the damage, but the amount of cost that it took to fix the job was— if it would have gone worse than it did, it could have taken us out of business. All this stuff kind of piled up at one time.

Yeah.

And so it's like, okay, if this continues in this direction, then we're going to be out of cash real quick.

When you see how much money they have in the bank and then realize that 4 times that is sitting there in accounts receivable, like literally 20% of the revenue sitting in uncollected revenue. And that's what turned a profitable quarter last quarter for them into a negative profit margin.

I was definitely, yeah, anxious about the whole situation.

And then in March, when it jumped to— so $91,000 in February, did it jump to like $150,000?

We hit $240,000 in March, and now we hit $250,000 in April.

Have you heard the 4L framework? Kind of what it is? The 4L framework is about solving the constraints in growing a business: liquidity, leads, labor, and leadership. In that order. Once you have liquidity or cash, I'm going to turn that into customers or leads using advertising. When I get a bunch of customers, I'm going to need more laborers, employees to actually go do the work in the home service industry. Once I get a bunch of employees or laborers out in the field, I need to go get managers or leadership, and that costs more money, causing more pressure on liquidity. And the business cycle continues. From a liquidity perspective, usually we want to have like a month's worth of revenue to be comfortable. In that case, like we've got like $200 grand in the bank right now. Right now. And so when you have 30 or 40, it's certainly difficult. So when I look at the books, there's two things I looked at. One is you got a cash accounting and you have accrual accounting. Cash being when money hits the bank, accrual being when the jobs are done. Big tip-off with their financials is the fact that when you look at their cash accounting, which is money— when does the money hit the bank account— versus their accrual accounting, in other words, when the work was completed, it's way different. On one of them, they had like a 10% profit margin, and the other one, they were losing like 10% profit, like negative profit, like $70,000. When you you see that difference in a cash accounting versus accrual, you know they don't do a good job collecting the money because you shouldn't have that much of a difference. There shouldn't be the 20% swing when you switch from accounting, accrual and cash accounting, unless you have a very, very long time to collect the money. Now on the books right now, like on your balance sheet, there is $278,000 of accounts receivable. But how much in like the real world do you actually have outstanding invoices. Actually produced? Like, does that sound like a decent number?

Yeah, well, I wouldn't say that much necessarily. I know there was a job that we did, like a reframing over the wintertime, reframed the inside of this wedding venue that burnt down. The guy that was there, he struggled to like pay us up. It was a job that we break even on, but then he owed us like $40K.

I just want to see how they're collecting on the money. There's— because this is an easy fix. If this is simply a function of we don't collect the money fast enough, Boys, this is going to be a fast turnaround. There's like 4 things they need to do. And then the other money, because there's another $100 grand of uncollected, is probably just older stuff.

It'd probably be more jobs that paid their deposit, but that revenue is not produced yet.

Got it. Okay, cool. So we're like $150 to $200 maybe of like uncollected.

Yeah, I would say $150.

Okay. Usually when we do a turnaround or a business breakthrough, we're trying to talk about each of the 4 L's. In the framework. However, today we recognize the most important bottleneck in the business, and that is liquidity. They're not collecting money fast enough after a job has been completed. When I look at the constraint currently, I actually think liquidity is the main thing, and that's just money in the bank. Because right now, if you had $200,000 in the bank, you would feel A, less stress, B, you could continue growing and it not be a huge risk risk of the business. And so liquidity, I think the biggest opportunity here is actually just your collections process. Do you guys start together, right? Okay, is it 50/50?

Yeah, good stuff. Some days the one puts more work in than the other. It really, it cleans out in the wash. And we work well together as a team, like we're best friends. We hang out a lot, play golf. But the biggest thing is you have to respect each other. You have to respect each other and love each other. And you each have a lane and you each have gifts that the other person doesn't. But it's been a It's been super, super fun. We're both gifted in different areas, but the biggest thing is we have a very strong relationship. You can do more with two brothers than you could with just two friends. It's like two and a half people. You just have to have respect and love and know you each have gifts that the other one doesn't.

And communication. It's rare that we come to a turnaround, like any sort of, you know, where we come out for a Breakthrough or a Turnaround and it's not related to leadership and labor, especially for Breakthrough, because usually the biggest constraint to growth in a business is really just the leader. But I actually don't believe that's the case here. They're capable of building a massive business together.

Evan's a big part too, man. He helps a ton. I felt like a chicken with my head cut off before he came in. He's, he's huge. So I can vouch for them.

They're great owners, honestly.

They're great.

Everybody loves working for these guys and They're just so good together.

Honestly, they work really good together. I appreciate that. It's better to serve than to create something that serves yourself. So for me, my goal is to hire young men, provide them with a job that provides good income so they can provide well for their families and their children, and build a business that supports not only the customer and the business, but a business supports the employees.

They are capable of building a massive business together. It's simply just coming down to like, I think they underestimate how much they know, and therefore they pay people to learn stuff. Also, just basic systems, like collect money. You're not robbing Peter to pay Paul. Get the money beforehand. We need to get $120 grand in the bank. How far away from that are they now, you think?

We're probably like $60K right now.

It's just like with this size of business, there are fluctuations. You basically have a week's worth of revenue in the bank right now. That's when I look at the business, I'm like, it's not a bad business, it's doing well. It's just simply all the money that they've earned is sitting there ready to be collected and just needs a system around. Like, literally 20% of the revenue money sitting in uncollected, uncollected revenue, uh, like jobs done have not been charged. That's all your profit and some. Unless you're financing charges, you should never— the customer should never owe you money, right? Like $60,000 on a $240,000 a month business, we're basically a week. And like the gyrations on a $240,000 a month business, like $40,000 or $50,000 can go like that.

I actually don't think that's a horrible thing because you're growing so We try to move fast. Like, we try to identify and react and just move fast. And biggest thing is have faith, not be afraid, and just go for it, you know.

I wouldn't take it as like, oh, I'm doing a bad job. It's just simply growth sucks cash. You're growing extremely fast. You're almost gonna double this year in revenue. Like, that's awesome. At 23 years old, he's accomplished a lot already. And, you know, for all the chitter chatter in the comments saying, that's not a profitable business, it's not anything hard to grow. Okay, well, were you 23 running a $1.6 to $2 $3 million business? Probably not. He's done something right. When you have that much momentum and you have a solid team in place, focus on one thing. And right now that one thing is collections. If he fixes that one thing, he'll have more cash in his pocket. And if he has more cash in his pocket, I happen to believe he'll be able to do a better job of running the business, marketing the business, selling, and then ultimately give back to the community, which he cares a lot about. From a quality of life perspective, getting a 120 would be like a That's a big win, I think. Now the question is, how do we do that? And I think there's several things. So collections, like people who don't pay right away at the end, we need to have a process in place. Now when we look at trying to improve how much money we collect on overdue invoices, there's a lot of ways to attack it throughout the entire sales process. One is simply like changing the terms and conditions on our estimate. So for example, right now, do you charge any fees after say 30 days?

We don't enforce it.

Okay, the first place I'm going to attack in the sales process is when the customer gets the estimate. I'm gonna have clear terms as to when the payment is due. First off, so we kind of create a 6-week plan, like how do we actually solve some of these constraints? So payment conditions and terms of payment terms, we're gonna actually enforce them. Right now, does it say 30 days is your invoices?

Yeah, yeah, it'll say on there.

Yeah, man, like we just can't do that. We are a bank. Right now. Sometimes what happens is people look at very successful companies and home services and they say, oh, they're doing X, I should do that as well. When in reality they did not grow the business to that size because of those tools. So it's like, oh, all these— all the companies around me have brand new trucks, I should get brand new trucks. No, the reason they got brand new trucks is because they are really good at selling and marketing, because they're really good at leading people. They're a great boss. Get good at those things. Like, those are the actual skills that build the business. And then all those other things we just attribute success to, like new trucks or they got this software, they got this tool, they do it this way. It's like, that's not necessarily why. There is a time value of money. Like, if I can just hold money away from you, I'm making money, you're losing money.

Right.

This is how the banking system is built.

Okay.

Is you give me money today, and then I will give it back to you in 3 years from now, but the holding cost is where I make my money.

Okay.

And so you are paying those fees right now. Like, there's no actual fees going for your P&L, but that cash flow churn is what you're feeling right now. And that's why February was so brutal, 'cause revenue goes down for just a little bit, and immediately you get hit. Business is very basic. You simply need leads, you need a team, and you need to lead them. And if you do those things, you'll grow a big business. And then if you tack on all this other stuff, people will attribute the success of the business to those things. And that's like a very faulty thing. We are collecting 30% of a job, we're paying out all the materials, all the wages, all this extra stuff, and then we're hoping they pay us, right?

That's funny you say that because It's kind of how it's been feeling lately anyway.

Yeah, yeah, because that's what's been happening. Like, your employees aren't gonna wait 4 weeks, right? Your vendors aren't gonna wait 4 weeks. You pay for the materials before the job gets done. Like, if we were gonna go the next level with him, is I would have said— we would have talked about how to delay payment to his vendors. Because if he can figure out a way to pay his vendors every 90 days instead of every 30 days, that gives him more time to collect on the invoices without going negative cash flow. You always want to delay payment to vendors, and you want reduce the amount of time, I should say, that it takes for customers to pay you. That's why in Copart we track time to get paid. I'd never want to have negative cash flow, being where I have only collected 30% and I'm paying out 67% of job in material costs, direct labor, etc. So we're in the hole in every job because just materials cost more than 30%. Like, the payment terms on the estimate, I think we need to go 7 days overdue. So like, after 7 days we start to charge fees. But I do expect that when I do inspection and everything's good, that I collect the final bill.

Really what it is, is my time has been in the sales a lot. So, 'cause usually I would follow up with those customers and kind of keep it all in my head. But now we have to have delegate that, delegate that to office manager or Millen was on the project manager on the job site more. Just because like if a job gets done on a Friday, my Monday, Tuesday the following week is already booked out. And so I call, so I'm like, I can't call them just say, hey, can I do a sales follow-up Monday, collect the check, and so then it gets pushed back. So that's what we're working on. We really addressed that and started attacking that last week. Basically put that out to the customer before the job is sold.

And I think I make it part of the sales process, like, and I think it's a good thing, okay, because like what you're showing there is like we need this money to pay our team and we can't be footing the bill. I would change your sales process to actually bake it in. I actually think it's a huge value proposition.

My biggest goal for this year is to set up a sales process so that if I get hit by a bus, like Mike says, that it would be able to be taken on. You know, what happens when I'm not here? He's gonna fill that role.

People hire you right now because of the higher value. You're not the low-cost, like, subcontractor out there. Like, they want that. So you just, like, lean into it. Like, Melvin was like, hey, like, we have a local team, we pay our workers comp, We do our insurance. To do that, we need you to pay as soon as possible. So that's the first part. The next part is I don't even want 7 days. I want that money as fast as possible. Now, I don't even want to have to charge any sort of late fees. My goal is to get the money right after the job is completed. And so the question is, how do we do that? Is we're gonna have either a credit card on file or an ACH on file. So payment on file.

Do you charge credit card fees when customers use credit cards then?

So right now, how do people pay?

They can pay with credit card. I don't— we don't have the fees set up yet. I usually tell them to pay with check.

You're either paying the fees or you're paying in holding costs. Holding costs— everyone's like, I will take checks, and then they wonder why we have $120,000, $130,000, $150,000, $200,000 in outstanding invoices, right? And so I would rather eat the fees and raise my prices by 3%. I'm always amazed at how business owners are afraid to A, pay 2 to 3% in processing fees, or B, give a 5 to 10% discount to get the money up front, and yet they're willing to pay the bank 10 to 20% in interest on credit cards and lines of credit that are required to bridge the gap because they don't collect money soon enough. Bonkers. Right now you're more worried about processing fees when, when literally 20% or more of our revenue is sitting wrapped up just waiting to be collected.

That's, that's true. Yeah, but then do you pass those fees on to the customer?

Then I personally just want the money as fast as possible. I don't want to create any friction for people giving me money. I guarantee if tomorrow you just went into QuickBooks and just changed all of your pricing to 5% up, your close ratio would hardly change. It's at 40%. It's pretty good. But what I do know, if you were immediately able to offer credit card processing, your customers would pay faster. And furthermore, they'd be able to click a button and just pay instead of having to send you a check, which now comes down to, oh, my checkbook, I'm out of town, I'll get it to you. And then that's where this cycle of invoices stacking up happens. This is like the ultimate treadmill of every seasonal business, whether it be home services, whether it be retail. It's like, ah, the next season we will make it back. Like, if I just make it through the next season, it's like, no, no, like, just focus on the fact that if we don't collect the money, we will go out of business. It always is a factor of like, if I just go a little longer, I will get the money. Like, eventually they will pay, and that's true, but by the time that they've paid, you have other invoices that are also overdue. And so you're on this treadmill and constantly like, oh, in a few more months we'll be fine. We'll be fine. We'll get back to the busy season. And the busy season comes and then guess what? End of the year, you're feeling like you have a little bit of cash going into another off season where the same thing will happen. So what you could do, because processing fees, if that's a big deal, say, hey, if it's ACH on file, no charge. If it's a credit card on file, then you can pay 2%.

And you would do that beforehand.

We require this before they even start the job, before they accept us. When they go to click accept estimate, it says, fantastic, you will pay deposit and put card on file. I can see the numbers. You guys give money away, like to charity and stuff like that.

10% of all of our profits goes back to local charities. One thing that we're adamant about is giving back to the community.

So like, we can do more of that if we just do a better job of collecting the money. And the best time to collect money is when the customer is like, yes, I want you guys to do my job. It's not the end of the job when they're like, thank you, that looks great. And now you have no leverage on them. So you're going to bake in with Melvin on the sales process, he's going to collect card information and/or ACH.

I think one of the advantages is I'm one of the owners, so I care a lot. And that's one thing that we're trying to learn is how do we incentivize and build so that the next salesperson, or the 10 that come after us, after me, what's going to motivate them to care and go the extra mile.

Yeah, I just don't think it's the current constraint the business because I believe that if they systematize the way they're doing their marketing, they'll get less leads, higher quality leads, increase their close ratio to 60%. I think they can easily do $3 to $4 million in revenue with just the one salesperson. So that's why I didn't spend any time like how to scale up the sales team and do commissions. And it's like, you got something that's good. You can double the business without having to figure out that constraint. And so figuring that out at the this size is a waste of time in my opinion. Like, just focus on the current issue, which is we don't collect on invoices fast enough. So you can have QuickBooks here, roofer here. Roofer is— we sign everything and then we go over to QuickBooks and they put in their payment information that's stored on file. And the day they walk off that job, you're charging that card or you're charging their ACH.

And the 30% when the job gets sold?

We haven't got there I still think it needs to be higher. Now, right now Good Hands is charging 30% as a deposit or down payment on any invoice that's more than $250, and I like the fact that they're at least collecting deposits. We have a deposit threshold already of, of $250. I like that. But we need to increase the percentage to 50%. The reason is because otherwise we are losing money on every job before we get the money back.

That.

We get 30%, but then we're paying 30 or 40% to materials, another 30 or 40% out to direct labor, and we're actually going in the hole until finally and hopefully the customer pays us after the job. On a $10,000 job, you're getting $3,000, you're putting $6,000 to $7,000 into it, and then you're hoping you get the other $7,000. Collecting money later is never ever a good idea. I always want the money sooner because I'm going to use that money to pay my employees and buy the materials, the direct cost of the job. By not getting the money up front with a deposit or not collecting on the money right when the job is done. These are the hidden costs that don't show up on a P&L, but they're costing you money every single day. This leads to a treadmill of cash flow where you're constantly running, trying to get the next job, but you're still falling behind. And the faster you run, the more you fall behind because you're not collecting on the money that you've already earned. And I can't afford to go $40,000 in the hole before I get the $50,000 at the end of the job. So 50% minimum. Why would we not do that?

I've just seen it being used as a selling point to not have to pay as much money upfront versus paying more at the end of the job. That way you can be satisfied with the work and they have a right to be satisfied with what's been done on the project and then pay the rest of them.

But see, here's the thing. If you hadn't grown by 4x year over year and you're on pace to double, I would say that's a problem because we need more leads. Leads is not a problem. We're doubling, tripling, and quadrupling the size of the business year over year. A year. I don't see it as a constraint. The constraint is the work that we're doing, we're not collecting the money. When I look at this, the reason this is helpful is because, like, you notice we haven't filled in anything else because this is the only problem. The only problem is that we do good work, we have leads, we have good labor, really solid team, and a really good leadership team. We just don't collect the money once we've made it, right?

I thought that was our least problem.

No, no, money is important. Money is important.

You know, when I took a look at our business, I thought this was our least pain point, but it turns out that in order for us to scale, it's— it is our most pain point. I had no idea, but because Mike came out here and were so generous with your time, like, I've been able to see that. So I'm very grateful to you guys for that.

I think you separate yourself from the competition though when you have these sort of requirements. The reason we do all this is because the people will show up— showing up on your jobs and working your properties are fully insured, they're fully licensed, everything's good to go.

And just include that in sales process.

Yeah. And then it seems way more legit when I require this stuff.

Okay.

That's why big companies have big contracts. If someone else— let's just say a customer is like, well, so-and-so is like willing to do it, just get the job started. Well, first off, I don't want a customer that is even comparing based on like potentially not having to pay. I want a customer that trusts us. And if we haven't built that trust for them to pay me a deposit, I haven't done my job. Like, we have to focus on the sales process of selling Good Hands Roofing and the value compared to the other guy. If we do that correctly, this all makes a lot of sense.

And that was a big paradigm shift for me, was realizing that customers don't just buy based on price. I used to think that was the reason customers buy, but they don't. And it's that, and also if you— the lowest price person is generally going to go out of business or isn't going to make getting money. He's not gonna have a profitable business.

I would just change your deposit threshold to 50%. That would be 20% of your revenue in your bank account. It's like 20%. That'd be an extra $30,000 to $40,000 right now in your bank if we would have just had that one thing different a few months ago.

Yeah, that makes sense. I see, see where you're coming from now. And you need something to separate yourself from every other— that's a lawn care company, a roofing company— you need something to separate yourself. From the pack, especially in today's information age. We see everything a lot more deeper now. Like, you see so many more roofing companies simply because of the social media age, and everyone's on social media that has a roofing company.

So we're going to change the payment terms, we're going to get payment on file, and we're going to charge at least 50% down. I would also offer a paid-in-full discount. In the perfect world, every single one-time project would be paid in full, 100% before the job even takes place. But a lot of times home service business owners, we're concerned by the fact that if we require that and we make it mandatory, that we will lose out on jobs. And you could be right, but what if you could give them the option to pay in full? When they had a $15,000 job, you required 50% down, but you gave them the option to pay in full. And you might even give them a discount if they were to pay 100% of the job before it even got on the books. Now you all don't have a ton of recurring customers coming back to you. But there are people that know, like, and trust you. They've seen your stuff online, they've seen your website, they trust you guys. 10% off if you pay us up front.

15% is a good profit margin for roofing. So I would prefer maybe to do 5% off if you pay in full.

Give them a discount. Like, if you're able to save $1,000 off of your roof because you paid in full, that might be of, of, uh, importance to someone. This is also— I use it, someone says, hey, we're really watching the budget, like, we really really like, can you guys squeeze this down at all? Well, you know what, Mr. Jones, we do have another discount. If you pay the whole thing up front, then you do get 5% off, save you an extra $1,000. So I'll actually use it as a sales tactic to bring the price down. So one feature that we have inside of HomeWorks that I didn't have done when we were down over at Good Hands Roofing was the paid-in-full feature. Now here's what's crazy. We added this feature inside of HomeWorks where when someone's going to pay a deposit, 50% down or whatever you have you have as your deposit threshold, they just have this one button that says pay in full. They have the option to just pay the whole estimate, the whole invoice upfront. What's crazy, 10-15% of people, especially your customers that have done service with you for a long time, they'll just pay the whole thing upfront and it helps your cash flow dramatically. And so you gotta go check out this feature because it's just one button and immediately be able to have all the cash, 100% of it upfront. Instead of having to— what they're doing right now at Good Hands Roofing, and where we're basically funding, we're being the bank to the customer. If you're tired of doing that, you got to get a handle on cash flow. And if it's not the paid-in-full feature, make sure you use the deposit threshold feature where automatically when customers pay, you already have determined what percentage of the estimate they've got to put down. So when you get an accepted estimate, you're not responding back with a 50% invoice. You're just knowing that once the estimate is accepted, they've already paid the down payment, the deposit. So go check it out, HomeWorks. I built the software, and I hope it's helpful for you.

Would you lead with this one then?

No, no, I would leave that in my back pocket for price-sensitive customers.

Okay, I like that. That's a good call.

I would also say I'd probably put another one in my back pocket for seasonality, because you have such a massive ramp from February, March, and April, like $90,000 to $200-something thousand. We have seasonal problem. And so the other thing, if someone's like, I can't afford that, no worries, we can save more if you're willing to wait 8 months to do the job in the middle of our offseason. I am willing to go in half the cost if someone's willing to reduce the scope of work, pay me upfront 8 months in advance, and I do the job in 8 months in the middle of my offseason. Honestly, the vast majority of home service business owners, including myself, don't really like to ask for money. What we like to do is use the office or the admin person as a scapegoat and say, I guess the office office will take care of the money. Like, I'm just here to do the work. The office will get the money from you versus just be like setting the expectation that it's part of the process. And that is like, we get the deposit, we lock you in, the office gets you on the schedule. When we do the walkthrough, we collect the rest of the payment. And I know that's not comfortable, but it's the difference between growing the business this year to $3 million for him versus having to keep it at $2 million simply because he cannot afford the massive cash flow gap that's being caused caused by not collecting money up front. And so I would really craft with Melvin, like, when someone comes down to the end and I give them a price, if they're not happy with it, I can move. But there's 3 ways I get them in.

I like that. I like that a lot.

There is no world in which you would rather have money later than sooner. None. Zilch. Nada. This is why in Copilot, when we roll, when we make the feature, all new members to Copilot will have it defaulted on to where every single customer just sees the option of paying in full. Like, you would be shocked at how many people just rather pay the whole bill up front than wait after the job. And you get like 25% of people just pay the whole invoice upfront without doing any payment terms. Last thing we do is automate collections. Now let's assume for a moment that Good Hands doesn't collect a deposit. They don't collect the money right when the job is completed and they don't get a card on file or a bank account on file to charge the customer if things go awry. They've got to at least have an automated system for collecting on that invoice after the job is done with texts, emails and phone calls going to the customer. Day 1, day 3, day 5. I'm going to harass that customer until they pay me because until they have, they're robbing from me and it's costing me money every single day. Now, because we have our payment terms ironed out, because we have credit cards on file, this shouldn't really happen much. And that is customers not paying. But we do need to create some automated follow-up texts and emails going out to the customer. I'm doing 1 day, 3 day, 5 day, 7 day. You can do it as much as you want. I will harass the person until they pay me. They're robbing me. Problem from you until they give you the money. Now, in any CRM or software system that you're using, you should be able to set this up. For example, inside Copilot, I'm going to create after 1 day a text message. Day 3, I'm going to send them a phone call. After day 5, I'm going to send them an email. I'm going to keep following up with the customer until they pay me. And in every one of those messages, there's going to be a link to the invoice to get payment right away. But again, all of that shouldn't be happening because we should have collected a bigger deposit. We should have collected the invoice choice right when the job was done, and we should have had a card on file or ACH just in case that didn't happen. Again, we are trying to avoid this by all this other stuff— card on file, payment terms, the fee stacking up after 7 days, uh, painful discounts, deposit threshold being high. Like, all of this should prevent this from happening, but this is your last line of defense, and that is like, we need to collect the money.

That's funny because you're not gonna like this one, but last week we just like finished it like $70K job, and he paid 30% down, so it was, I think it was like around $40K, $42K. So I said, hey, I'm going to call you up, can I do the job inspection now? He's like, yeah, go ahead. And so I did the final walkthrough, and he's like, oh, where are you guys going to come back up for the check, or do you want us to— how do you want to do it? Do you want—

and I was like, oh, don't, don't worry about it, the office will send that to you later. No, we need to make more money, we need to collect every Every dollar possible. Okay, final inspection equals money in pocket. So we're gonna completely avoid overdue invoices by attacking 3 distinct areas. First, during the estimate process, I'm collecting a larger deposit. Then at the job being done, the inspection, the walkthrough with the customer, I'm collecting all of the invoice. And if all else fails, I'm gonna have a card on file. The third part, a card on file or an ACH bank account on file. You'll charge the customer. I should never have an invoice overdue by more than 7 days. I would really look at your sales process and your inspection process as that is when we collect money. No job walkthrough or inspection happens without money going into your pocket.

And also would be probably good for us to schedule those job walkthroughs as soon as possible.

Yes. Oh, it's like within 24 hours, because the longer that sits, the more they're gonna come up with all these random little things. Once you've solved the problem, all the materials All the direct costs have been spent. That is not when I want to be collecting money. Like, anytime after that, all bad news. They're like, oh, that one shingle looks off. Oh, and then all of a sudden it's like, oh no, you did a horrible job. And then you have all the leverage against you, you have 70% of the job sitting there. You have $42,000 against you. They're robbing from you. It's unethical. And we will sit on that property and we'll just like sit there and be like, yo, you got to pay us. And if you're not, I have a credit card, I'm going to ding it right now.

Right.

And that's also going to look a lot cleaner than on our cash basis accounting?

It'll line up perfectly, right? It'll be beautiful. Cash accounting will be ahead because we collect money faster, right? Right. But then our accrual will be like, well, the moment we finish the job, we're getting paid.

I mean, this is really cool. Like, it, it opens up my mind to a lot of the pain points that I've been feeling and how to solve them. So I appreciate that. I think one question would be, how do build systems and processes and SOPs inside of a business.

So this is another thing that I— words that people use to sell fancy things. Unfortunately, we have a whole bunch of people wanting to sell systems and processes and checklists and procedures and SOPs as if it's a magic sauce, when all that is is, hmm, does this simplify this process? Does this standardize this process? Oh, let's create a script. All that script is is a standardized way of doing X. Right, systems and process SOPs. I agree it should be done. I like to think of it like this. I think, I think like this, it's like, look, how do we create a place in which systems occur, right? So there is two ways of doing something, either the simple way or we can do things the complex way. Okay, there's two ways to do a job. One is a standard way The other way is custom. Boom. We want to live right here. Simple, standardized services. Now what you talked about is very true. Like you're pruning things that you, hey, we're growing the business. Why? Because as you scale, simple will work better. Standardized will work better. When you start doing every job as custom and every job is complex, you live in the land of treadmill operator. You have to be on every single job site. Every single job site goes wrong. There's mistakes made on all the time. You do not want to be living over here. So instead of like, like getting all focused on paying a bunch of money and like feeling inadequate, that's what I hate the most. Like, I hate the fact that like we just talked to someone that runs a $2 million business and feels inadequate to like run their business, do marketing, hire when they are fully capable of learning this. 8 hours on YouTube. I just don't like the nebulous terms of systems and SOPs. It makes everyone feel inadequate to be able to run their business when reality, all it is business is simplification and standardization, and it is avoiding complex and custom, period. So in my opinion, instead of saying how do I systemize the business, I say how do I create simple everything and standardize everything? And by doing that, I create a system. Because if you standardize the way you answer the phone, you create a system. If you standardize the way you do invoicing, this is the way you do your sales process with Melvin, that's a system. We just get called these SOPs. It's like you just We do it the same way every single time. That's what standardized means. Simple, standard. If you just live in this world, you will create systems by osmosis. So anything that's complex, anything that only you can do, bad news. Anything custom where every single job is different, every single— we need different types of equipment, everything—

just get rid of it.

That's what you're already doing as you've been beginning to grow. The first thing when we get to a customer's job Brand new customer interested in a new roof. What's the first thing you're doing?

I do a full roof inspection.

Great. Number 2, what's the next thing you're doing?

We have like an inspection checklist on CompanyCam, and then from there we go and create the estimate in Roofer.

Okay, and is that in like the truck and then you go back in the house? Yes. Got it. So then I'm going to say we're going to be priced, and then I'm going to assume we present that price to the customer. Yes. Right, so then we're going presentation, inspection. They're going in their truck for 20 minutes and they're coming back in.

Yes.

Great. Okay, so he's printing out some pictures, he's showing that, he's, I'm assuming, showing pricing information.

Okay, showing different products that we have, and then trying to— the goal is to get a close on the spot.

Yeah, yeah.

Let's go close and paint.

Estimate. Yeah, you got it! Let's go! 5 things. There's your simple standardized process for every single sales, sales call, right? Now the presentation part sounds like it's going to be improved with software. Yes, great. But now there's 5 things that he's going to work through every single time. And then what I would do is I would do a recon on every single estimate, especially big ones, or however you want to figure this out. Where do we lose this job? Do we lose it in the inspection? Do we lose it in the price? Do we lose it in the presentation? Do we lose in the close or do we lose in payment?

Hmm.

Then you're gonna find out. So, because right now this is what you're thinking. You're thinking close ratio, 40%. I look at it as I lost 5% here, I lost 10% here, I lost 4% there, I lost 8% there, I lost 6% there. I want to know that because right now you are assuming that if we change payment terms, we're gonna lose more customers. Hmm. I don't believe that's going to happen. I think you have less than 1%. That would be a problem. You're losing them up here. And honestly, like what I did with him with like the sales process, he made the sales process. I just asked, so what's the next step? And what's the next step? And what's the next step? That's all I did. And so some people just need to sit down with ChatGPT and YouTube for about 8 hours and they'd figure out most of these problems. And they're capable. Like, yeah, they're fully capable. They're more capable than a lot of the people that tell them about the systems and processes. Like, just because you can use ChatGPT better than someone else doesn't mean anything. Liquidity, all— there's only thing I care about. We need $100,000, $120,000 in the bank. We need to work on the collections process. That collections process is all the 6-week plan. The rest of it I'm talking about, not even putting the 6-week plan, because I don't think it's actually the bottleneck to the business. I think if you fix this, the business can grow and it won't be as stressful.

I have the little chart here with me. A couple days after you guys left, I would say maybe a week or two after you left, I was going over the bank account, and on On paper, we were of course like pretty profitable, but then I looked at the bank account and our checking account went from like $100K all the way down to like $11,000 in like the matter of like 3 days. And it was just like a light bulb moment of, okay, now I know this is what Mike is talking about. It just opened my eyes to see it a little bit more from your perspective. So we updated our payment terms, 50% deposit down, rest of the job due upon job completion, deposit threshold of 50%. Paid-in-full discount. We didn't do that one much yet. That hasn't been— we haven't seen too many objections as of now as far as price. Automating collections business has been going very good. Like, we had our record month in sales in April, and we're hoping for another record here in May. I think our goal was to do like over $200K in April, and then we ended up doing like $340K as far as getting money in the bank, like getting the money at off of what people owe us. We've been cleaning up the accrual-based accounting as well. Yeah, we've definitely been able to do a better job of it. So as of now, and of checking and saving, if we combine the two, we are currently at— wow, what a blessing. I didn't even know we were at this much, but we're at $130,000 plus. Dang, that's crazy, man. We're like $180,000 right now.

Yeah.

So that was like Yeah, that's a good feeling, man. That's a really good feeling because recently after you guys left, one of our trucks broke down. A tree fell on one of our vans during a storm. One of our trucks blew a transmission line. We had some extra money in the bank that helped us go out and buy a new van and really not see it a big stress on the bank account because we were able to collect on money ahead of time and also collect on money that was actually actually owed to us. The thing about Mike Andes and your guys' teaching really that I really appreciate is like Mike is such a down-to-earth guy, and the way that he cared like about us, like about our business, mentored us, and the way your whole team did, like really yourself, like that meant so much to me. It finally settled in my spirit that like, okay, wow, I'm running an actual business. And the way Mike was so encouraging to me. And then it also showed the guys on my team that we care about improving the business and this isn't just something I'm experimenting with. Like, I'm serious about this. And yeah, like, it, it really lit a fire underneath our whole team. So man, I'm just super thankful for that. Thank you so much, man. What's like one piece of advice that you'd give to, um, first of all, I have a ton of respect for what you've done in the Yeah, sounds fine to me. But if you were to talk to somebody in my shoes or looking to do it on yourself, what's one piece of advice that you'd give?

Just focus on one thing at a time. So I know like right now, like, you come to this, it's all beating the dead horse of collections, but like that is the current constraint. It's easy to get like, oh, I gotta do like the leads thing and the website thing, I gotta do like all this stuff. Just focus on one thing. And if you do that, like, and fix one one thing every 2, 3 months in the business, you'll crush it. And then like time will go on, like you'll focus on other aspects of life too, right? So like family and stuff, but like, okay, I'll focus on this for a bit. That's fine. So you'll crush it.

I think taking it a day at a time, and one piece of advice that I got from you guys was just to take it one thing at a time and one step at a time and really like stewarding well what we've been given. How can I max out every area of my business before I try anything else new? I would say that's the biggest focus. And then whatever comes next is just a result of the input that we've put into the business.

Good Hands Roofing proved that you can stop growing a business and plateau simply because of a lack of liquidity or cash flow. And that is the first L in the 4L framework— liquidity. But let's move forward. Let's assume that you have good cash flow, you have plenty of money in the bank, and you don't struggle with things like deposits visits or getting payment right away. We need more leads to grow the business. So let's visit the 4L framework and go to the next constraint, and that is leads, getting more customers. Let's go visit Paramount Gutters. They do $1 million in annual revenue. They struggle with getting more leads, and they don't get enough new customers, especially during the off-season. Let's see if we can turn it around.

Almost million-dollar business.

And then $10,000 in the bank account on average during the winter. It's kind of ridiculous.

Today we're in Montana visiting David with Paramount Gutters.

At the end of this month, after everything's invoiced out, we should be at zero. If I don't get this figured out, it would continue to create a bigger snowball.

Last year he did $940,000 in revenue. Pulling some money out of my personal account, putting it in the business to cover payroll The fact that we can have $40 grand, the next month have $110 grand, the next month have $50 grand.

The hole gets bigger as the company gets bigger.

But right now has more credit card debt than cash in the bank. First 6 months were floating cash flow, so we're getting credit cards and cash.

Who's all going to see this video and David has $19 grand in credit card debt? Like, that's scary.

And it's stressful when that is higher than your cash balance.

Very stressful.

The real problem is that he loses money all winter long and leads drop off a cliff.

Lead flows die off pretty significantly. A couple truck notes, and we've got this big shop to pay rent for. At least the last two winters I couldn't keep two crews busy. This winter has definitely been the worst winter by far.

This is the Business Turnaround Show. And then the siding job that they're on now, that, that the big $200,000 one, just to be crystal clear, I want nothing to do with siding. My name is Mike Andes. I'm the founder of Augusta Lawn Care, where we have over 180 locations around the world, and I travel the country fixing struggling businesses. That's how you double the business with the same number of customers. And then by doing this, you now offer something that can be done during the winter. The business is going to be $2 million with the same number.

Yeah, doing the same. Yeah, the same crews. Yeah, I like it.

Our goal is to give David a strategy to turn around the company in the next 6 weeks. So in his application video, he was more or less like, hey, 9 months of the year things are good, the other 3 months, like basically the first 3 months of the year, is when I have my off-season and it stinks.

Biggest thing for me and the reason I'm submitting this video is my off-season, and for me that's my first quarter. It's terrible.

We are coming in the middle of the year, but so far to date he is $30,000 in the hole on his P&L. He has more credit card debt than he has money in the bank.

Last year we did $940,000, but we do— there's definitely a lot of times in the winter and we're just in bad cash crunches, you know, payroll's coming up, pulling some money out of my personal account, putting it in the business to cover payroll. An almost million-dollar business, $10,000 in the bank account on average during the winter, it's kind of ridiculous.

Ridiculous.

I think this is going to be a classic case of having to solve the offseason and going through what is his options to do that. And I think that'll be the main focus.

I had to guess.

I feel like I'm meeting a celebrity.

Oh no, man. How you doing?

I'm doing well.

Dude, this weather is great.

Yeah, good, good, good to meet you, man. Thanks for coming.

This is a great shop space you got. Thanks.

My name's David Troyer. I own a rain gutter company in Great Falls called Paramount Gutters. The door company has those 2 bays and then the other bay is a cabinet guy. So there's 4 of us in here. That's super cool.

Yeah. And y'all just rent?

We all just rent. That's awesome, man. We got our box truck, which is for our second crew. That's still here today because we're on that big siding job. We're going to be at our 30-year anniversary in August. Last year we did about $940,000 in revenue. But yeah, we got this and then the truck and trailer set up that just rolled out. They were doing gutters. So we have set up for 2 guys. Gutter crews.

Got it. And then on that siding job, they just basically are all going there?

So I got one more, one more company rig, and they all jumped in there. So they got all the tools. They're all— we have like a container out there.

Okay.

We stock quite a bit of our own material, like our downspouts and our elbows and our coil. These are some coils I have of the oddball colors. And, and see, there's two different sizes of everything too. So we have a coil for our 5-inch gutter and then a coil for a 6-inch gutter. They're different widths. So, uh, yeah, the inventory part of the gutters is— can be a little overwhelming. Got everything? Tear the gutter off, see what size of fascia board it is. You got the hinges in that? Yeah, yeah, I totally forgot to put that on the work order yesterday. We should have one more bag. If not, it should be in the other trailer. Got them.

Okay, should be good.

Don't forget market complete.

And then your office gal, she's off-site, she works from home, and just part-time?

Yep. I got Chris, she's my office admin. I got her answering the phone beginning of May, so that's been, that's been amazing. Yeah, because I was answering all the calls and not always doing the best job.

And your day-to-day, is it mostly sales? What are you focused on?

Between the sales and the production, I got her answering the calls, and then she has access into my calendar and I block off time my calendar. So she sets appointments directly into my calendar. So I'll go look at the jobs, meet the customers, give them a quote. Between the estimates and then just scheduling, like ordering materials, scheduling the jobs, telling which crew to go where, that's what my day consists of.

And then the siding job that they're on now, that the big $200,000 one, that's uncommon, right? Like usually you have smaller ones?

So we're trying to do gutters, right? Like, that's all I want to do is gutters, but I can't keep two crews. At least the last two winters I couldn't keep two 2 crews busy during the winter.

I'm getting a guess that Q3 and Q4 is really strong for him because he doesn't seem to feel huge amounts of financial pressure outside of the first half of the year. Is that constraint mostly the weather or—

mostly the weather.

Yeah, but lead flow is pretty much the same?

Gutter leads, lead flows die off pretty significantly about January.

Yeah, dude, the siding thing is gonna be a problem because he sold so much of it already. My thought might be maybe we you just do siding during the off-season?

I probably do about half retail and half subcontracted through the general contractor. You know, we can still do gutters in the wintertime. In the retail side of it, people just don't think about their gutters in the wintertime. We're trying to figure out how to cure the wintertime seasonitis. That's where I went to siding originally. It was like, well, this, you know, I had contractors asking me to do it, like, hey, you guys do such a great job, we really need siding guys. And I, me with my shiny object syndrome. Oh, you bet, I'm your man. Yeah, I like to find something new to do and not do these old boring things, you know, that I've already had in mind. But the old boring things are the ones that make the money.

Most home service business owners and blue-collar folks, because we don't come from money and we're like, oh, people are offering us money, we should definitely do that service. And I get it, it's like you're struggling so for so long just to get leads, and then when leads come in for any service I got to take it. And $200,000 of siding. Let's go. That was like 25% of last year's revenue. But it's also going to mess up his entire year because when he should be doing gutters and focusing on his core competency, he's getting distracted by some other random service.

Didn't make a lot of money. And then this past winter I was like, okay, I got this, this big siding job. I know my numbers on it. It's dialed. And that job got pushed off until we started it in like the end of April.

Like, man, you thought you were going to get—

I thought I was going to get it during the wintertime and it wasn't able to get started, and it's taken longer than anticipated. This winter has definitely been the worst winter by far. It would continue to create a bigger snowball if I don't get this figured out.

This is what people do. They like, I'm gonna add an adjacent service, I'm gonna solve my offseason. Let's add siding in addition to my gutters. But the problem is siding has the same demand curve as gutters. We fall into the trap that we just— he's currently in, which is is in the middle of his busiest gutter season, he has a massive $200,000 job for siding. So you just make your, your offseason even more abrupt and crazy by adding another service that has the exact same demand curve as your core service.

I've got so many gutter jobs signed right now. I need to have 2— I could almost keep 3 crews busy right now. And I got 1 crew out going to belt for the, you know, the 9th week week putting siding on.

He does do revenue during those 3 months. The question becomes, is it actually weather dependent or is he just getting less leads? I have a feeling it might actually just be he's getting less leads. Can you do more siding during the off-season compared to gutters, or just a matter of like—

No, no, that's what's available. Like, that's the work that I find that's available during the wintertime, just those siding jobs.

Got it. But we don't really don't advertise siding.

No, not at all. Just the contractors contractors. Yep, yep. And like this big siding job we're on now, that's through a general contractor. Got it.

And your current crew, the guys that come in for the gutters, I'm assuming they don't really have siding experience, usually?

Not normally, no.

Problem is they have sold a $200,000 siding job and it's on the books, but half his crew can't do the work. And so if you want to become aware, I can still be profitable if I keep someone around for 3 months. I gotta reduce the amount of complexity, reduce the amount of custom services, otherwise I'm gonna be always, I can't hold people, keep people. Just build the business where you don't really need to keep them and it'll still be profitable.

I lucked out, I have a pretty good crew right, right now on that siding job. Like, I've got more experienced labor out on that siding job than my gutter crew. Like, right, and the gutter crew brings in more money.

Yeah, so basically the first half of the year is us getting to zero essentially because we dig ourselves a hole in that.

That's where I'm at, right? Like, I was just with my accountant yesterday and like, at the end of this month, after everything's invoiced out, we should be at zero. Like, we're, we're going to start making money.

That's just because like January, February, March is just so— we just get beat up, right?

Yeah. Our revenue dips down and then my profit margins dip down. Like, I don't make near the profit margins on these siding jobs. Yeah, we can step into the office. It's not much.

2021 is when you started, right?

I started in 2022. $90 grand, then we went to about $640,000, and then last year we did $940,000. I'd love to break that million-dollar mark this year, and I think we will.

Having a revenue goal is actually like not really the greatest goal usually because it's, it's arbitrary. It's an output. What's easier to control is we will cut out siding, we are going to add a service that fills in our off-season. Like, focus on the inputs will generate good The output is a shot in the dark. The debt isn't super frustrating to me, like, or like a big red flag, because like it's all collateralized with the trucks.

Yeah.

And then the challenging part is the first 6 months we're floating cash flow.

Exactly.

Between credit cards and cash.

Exactly.

And that's the stress we want to try to avoid. Have you seen the 4L framework? Yeah. Cool. From a liquidity perspective, really, when we look at like what are some of the constraints, and then we can figure out like what's the solution stuff.

Yeah.

But like liquidity problems, I think it's mostly we have a cash crunch during first half of the year. For sure. And the challenging part with that is second half of the year, once you start feeling like you have money, then you're like, oh yeah, I don't really have money because I need to stack this money up.

I'm gonna spend it all.

Yeah. Right now, what's kind of the monthly— if like there was no revenue coming in, what is the cost? Like we have shop space, insurance, the truck payments.

Floating around that $20,000 mark.

Got it. So we really need to do at least probably $40,000 a month to kind of break even.

With the amount of labor it takes to do that, $60,000 is about where we break even. Like that first winter, we went into lockdown mode, more or less. Like, I didn't have quite the debt. I was running out of the shop at my house. Boy, that second year, we got a little more guys, you know, got a truck note, and we got this big shop to pay rent for. This winter has definitely been the worst better by far.

In April you had a big month. Was that when the deciding got paid 50% down?

That was a— it was, it was a deposit, wasn't 50%. Yeah, it was a deposit. Okay, yeah, we're getting started on that.

That's what I figured because I'm like, wages stayed the same and then we had this revenue.

Yeah.

So I'm assuming like your hardest month this year was probably March.

Yes.

Uh, revenue's still up before that big jump in deposit.

Yeah, yeah, that was tough.

But in general, it's just like we have a crash crunch in the first half of the year.

In the first quarter, yes, we have cash.

Got it.

You can solve that.

And then we have credit card that we're floating throughout that time.

Yeah, it ranges from $10,000 to $20,000, which is, I think right now we're at $16,000.

Yeah, and it's stressful when that is higher than your cash balance. Yes, very stressful, yes. Okay, I got you, I got you. I know exactly what it's like. So credit card balance, first half of the year, same thing. Okay. From a leads perspective, we'll come back and we'll like go through these and fix them. Ultimately, if leads stayed the same for the first quarter of the year, we wouldn't have the liquidity problems. The constraint is leads. It's like, how do we get more leads during the offseason? What I'm concerned about is adding in siding, which has the exact same demand curve. Yeah, as gutters. When gutters are busy, the siding is also really busy, and when the gutters slow down, the siding slows down. So I don't see it as a service I should add to my business to solve the offseason because all it does is compound the complexity and the insanity of spring rush.

Just to be crystal clear, I want nothing to do with siding. Okay, you don't have to talk me out of it. I, I'm so sick of this cycle. Yeah, and the siding has the same demand curve. We get busier with siding in the summer if we would do siding jobs.

So, right, everyone thinks, oh yeah, I'll add to the service, and all they're doing is adding another service that has tons of revenue when their core service is also super busy, just compounding, like how many employees I need, how many more trucks I need, making it more crazy. And then your off-season looks even worse because a function of revenue is even less of a percentage compared to your best months. So siding, bye-bye.

Yep.

Yeah. Okay. When I look at your website, there's definitely some low-hanging fruit in terms of focusing on—

if you looked at my current website, I did.

I should have. Is there a new one coming?

New website? Yes. Like ready to go.

I'm sorry, I should— no, you're fine. No, you're fine.

You're fine. It's— I want you to look at it, but it is quite a bit better. So what prompted the rebrand and that stuff? I knew I needed to get the truck wrapped. Truck's wrapped. We almost had a design in, and then I got onto the mascot idea, and then that derailed everything. And I went and got the mascot made, went to Fiverr. Somebody off Fiverr made the mascot. It's like, well, if I'm doing this rebrand, I might as well do a new website.

—just in terms of highlighting the existing services that we are offering, having service pages for each of the things that we do offer, etc. I think having a great website will bring enough leads to potentially help with that area. If you're like David and you're trying to grow your business, whether you're doing gutters, landscaping, cleaning, and any home service business, I highly recommend checking out homeservicewebdesign.com. We build hundreds of websites for different home service businesses, and many of them double their business in the first 12 months. Go check out some of our work. We'll see you on the other side.

I have room to grow on my sales side of things. Yeah, I don't know if you notice, none of my trucks are wrapped either.

Okay, everyone thinks that you need a mascot because we have Max and Augusta and we have Monkey Man— don't know his name— from Paramount Gutters. But realistically, what you need to have is something that is identifiable to the customer, something they remember. And sometimes that can be your name, kind of a cool off-the-cuff name or the trucks. And that's why we want to wrap the trucks, 'cause we want to be remembered for something. The color of our trucks, the color of our uniform, the name of our business. And sometimes a mascot is helpful, but a lot of times it does not fit well with our brand. It's not memorable. So don't think that just adding a mascot and slapping on your truck is somehow gonna solve everything. But Monkey Man, kind of dope.

Where's the monkey come from? It's a mascot we just came up with it this spring. And we're getting the wraps. I don't know if you noticed, none of the trucks have any decals or nothing on them anyway.

That's what we're working on. When we look at like the 5 ways to cure seasonitis, and I know you've read the book. Seasonitis is the disease that many home service business owners have. I made up the name, but really what it is is that for one quarter of the year we have seasonality where leads drop off a cliff, revenue drops off a cliff, and it kills many home service businesses. The first one being lockdown, not really possible when break-even is at $60,000. Exactly. If we didn't have the shop space, we didn't have any debt. If you still operate this out of your garage and there's a couple thousand dollars a month of expenses, we could do it and it'd be fine. The first cure is to lock down, that is lay off everybody and shut down the business for a few months when leads start drying up and we don't do any work. Everyone just comes back in the spring. The second one, more and better, is a function of like, can we advertise or get more leads during the off-season by simply advertising more. Tier number 2 for seasonitis is more and better. That's upselling, getting more and better jobs from our customers. The challenging part is like, say for example, with gutters and even a website, yeah, is you're gonna get a massive amount of leads, but our hope is that we have enough leads to get us by during the off-season. So the lead flow, when does it really— when you feel it hard, like it drops after Thanksgiving.

When is that? It's really busy up until Christmas. We're pushing hard. And then January, it feels like we're just catching up on all the loose ends. And then all of a sudden February, it's like, oof, why aren't the phones ringing?

Like, okay, got it. So we're strong all the way, and then all of a sudden just drops off close to like 2 to 2 and a half, 3 months maybe. Yep. Okay, Q2 is we're just going to juice Q4. Yep. We're going to advertise, we're going to get tons of leads, we're going to try to take what may be our second best quarter and actually just get so many leads. We're going to probably spend quite a bit on marketing and then just book ourselves out through that. Otherwise, yeah, that makes sense. So that's one option, and I think that's probably going to be part and parcel of the next thing. Like, if you get dumped snow, if you get 2 feet of snow here, do you have to basically stop operation? Essentially, yes. Okay, cool. That's the part I want to solve, because if you have a bad snowfall, you could have a month where you're in the— yeah. All right, we'll come back to that. So adjacent, I'm gonna do Tier 3. Tier number 3 is adjacent services. These are other services I can cross-sell to my customers. They have a different demand curve than my core primary offering. Tier number 4 for seasonitis is adding a recurring service, some sort of a maintenance plan that keeps me busy during the off-season. Tier 4 being recurring revenue. I know right now we don't have any. I look to it as like, I'd love to have it. It's because the lumpiness of the revenue. Yep. The fact that we can have $40 grand, then next month have $110 grand, the next month have $50 grand is just hard to cash flow. Yep, yep. Right, especially when we're trying to, from a liquidity perspective, have one month's worth of revenue. That means you basically have to have $100 grand in the bank just to be able to float by. Exactly. 5 is a whole different brand. I feel like that's where you've gone with siding. We don't even really have a site for right now.

No, and that's— it's, yeah, direct to the contractor.

And cure 5 is the last thing we want to do. And cure number 5, the last but not least, is adding a completely new brand, completely different, kind of like siding versus gutters, completely different. And it's the last one we should offer. But right now with Paramount, he's offered siding when he's doing gutters. But there's a whole bunch of juice to squeeze in tier 2, tier 3, and tier 4. Have you ever played with the service side of gutters in terms of clearing out gutters and things like that?

So in the past, when we get a call for gutter cleaning, it's a pain in my butt. Yeah, because I'm pulling my guys off an install. Normally that's in the spring. —yeah, and that's in the fall, especially fall. We're super busy and I'm pulling my guys off installs to do these $250 cleaning jobs. For 2 gutter crews, I have like, I think it's 6 guys right now, and I only need 5 guys for my gutter crew. I got one guy that's really good. I'm gonna get him set up in his own rig. I want to try and do gutter cleanings this fall. Okay, so he's gonna be helping me out with some of my LeafGuard installations, my repairs, and my gutter cleanings. Yeah, I don't know what that's gonna look like. Like completely, but I'm very open to doing something like that.

Okay, one opportunity is when you sell a new install, trying to get them on recurring. The challenging part is no one thinks about cleaning out their gutters until they're chock-full.

So like sell a gutter cleaning package. Yeah, right. I've thought about that, and I know there's other guys in the industry, not necessarily here, but on the Facebook pages and whatnot. The only issue I might see with that is I also sell leaf I'm almost selling against myself. Like, hey, sign up for my gutter cleaning or buy my LeafGuard.

Or think of it as options, right? So like, hey, we install your gutters and then afterwards we have two options. LeafGuard, higher upfront cost. Or do you just want to be on this where we have a lifetime warranty and if there's a leak or anything happens, we will come back and fix it for free as long as you're on our maintenance package. And here's the thing, you could actually sell both. Just because you have LeafGuard does not mean you're going to have leaks in your gutters. And after a snowfall, if things don't get adjusted. Yep. The reason I like the, the maintenance, and I think we can sell it well, is your slowest period of time is when the snow's melting and it's getting back into spring. You can do all of your adjustments to people's gutters in like February, March. Instead of just a warranty, you actually sell it as a service package.

Service package.

Like, we're going to come early spring and make sure that after the snowfall we're going to adjust everything. We're doing inspection, slope right, make sure slope right, make sure that if anything breaks on the joists, the downspouts didn't get readjusted, a snowfall. You could definitely take every single existing one-time project and try to turn it into a recurring. Okay. And then I would just schedule the service visits when you're slowest. Yep. It's like, we are not putting gutter checkups in the middle of July, August, October, October. Like, there— we're not.

That would be tough. Yeah.

If someone calls and they want gutters, you're just getting them on the one-time. Yeah. It's after that one-time is installed to, hey, would you walk through Everything looks great. You show them pictures, whatever it is. Hey, we have a couple options. We can do Leaf Guard so you never have to clean these things out again. We can have the service package. And by the way, if you get either of these, we warranty these forever. If there's ever a leak, we come back. And then the service package is we're gonna come and clean out your gutters. So middle of your off season. We're gonna come early spring. We're gonna adjust if there's any damages. And if there's any leaks throughout the rest of the year, it's all covered.

Taken care of, yep.

So what we're really trying to do is build value in that maintenance package. 'cause everyone and their cat wants to sell recurring revenue. And so a customer is used to being upsold. But if you can actually prove that the value of the recurring service is greater than if they do this à la carte and that like most of our customers need this à la carte thing, why not just do this other thing that is cheaper and allows you to be able to have peace of mind, adds like way more value. So just saying like, oh yeah, we like lifetime warranty. Well, the problem with that is you might not show up. There might not be real value attached to that insurance policy. And that's why people hate paying insurance 'cause like you might not ever use it versus like, hey, I'm going to give you home insurance, but even if you don't use it, we're going to do X, Y, and Z in your property. And that's what we want to offer in that maintenance package. I think what would be interesting is if you start thinking as the business scales is you have your install crew and then you have a maintenance crew. The maintenance crew can do the leaf guard and the cleaning, right? Because you don't need a lot of skill to put leaf guard in. So I don't want someone who has like construction ability putting in leaf guard. So you could actually look at it as like, hey, I apprentice people, they come in, they work on the maintenance crew, and then you get elevated related to the install. So you can take a lower-level employee and make them profitable. So I think recurring slash maintenance— you can go top-line revenue much faster when you have one-time projects and big contracts. What grows a lot slower is recurring maintenance, is recurring revenue. But the value of the business is extremely high when you have recurring revenue because it's much easier to step out of the business if not every single job is different, different. Every single job is complicated and completely different every single time. The opportunity with installs is you can grow very quickly. It's $600,000, $1 million, you're going for 1.2. Like, you can grow fast. The recurring is gonna be the slow trickle. Yeah. The goal though is to be able to cover your expenses with your recurring. Okay. So you know at all times in your back pocket, my expenses are getting paid for. By adding in this recurring maintenance package that he can upsell existing customers, we're hoping that we We can make these big lumps in revenue that are up and down. One month making $150,000, the next month making $20,000. We want to level this out. This will allow much more stability inside the business. Are you usually meeting the customer in person for the sales?

My new website has an online price calculator. You can price your own gutter system out. It still kind of requires a site visit for me. So I'm going in for that ACL surgery, so I'll be on crutches for 2 to 3 weeks at least. We're about to experience how well these online estimates can do. Should I try to do away with in-person estimates?

No, I don't think so. I think it's a function of we need to have a sales presentation either before because they want to meet us or after when we're going to upsell them. If we can take a $3,000 average ticket when we sell gutters and upsell them into Leaf Guard or potentially into Ice Guard, we could turn a $3,000 customer into to a $5,000 customer. That's almost doubling the business without getting any new customers. You look at it 3 stages. The lowest barrier is we install. Yep. The next one is we install it with a leaf guard. We're getting about 30, 35% of those people now. Then there's this third stage, which is we want to get them on a recurring maintenance package. And like, this is the trifecta. Yes. Yeah, gotcha. And so I would probably have some sort of incentive for your crew, because I'm assuming you'll go back to the job at the end.

Do you? No, nope, I don't. And I try— my crew does very little interaction with the customer. Like, I try and do all my upsells beforehand.

What you do is say, okay, if I'm in person, I'm going to sell it up front. Yeah, right. So I'm there, I might as well have the leaf guard. And I would have a like this size piece of paper where I'd be like, we have 3 packages, we have 3 options for you. Now that we have a 3-tiered sales system, we need a presentation to be able to make sure we can actually convey this to the customer on our website, over the phone, and in person via this printed off laminated sheet. Everyone loves options. Instead of you saying it's $3,000, $3,000 for your install, then we got the $1,500 off the leaf guard, and then we got you on the maintenance package. I would also discount my leaf guard if they get on the maintenance package.

Yep, yep, have some sort of— okay, okay.

So you have this ramp, because now if I can get $1,200 over the next 3 years from someone I know these gutters are new and I did a great job. I'm willing to give them a really good deal on leaf guard. Like what's the cost on leaf guard? If you're paying $1,500 for the customer? I'll probably have $400 in leaf guard, something like that. So I'd be willing to almost break even on it. On the leaf guard. So you say, hey look, it's $3,000 to install. We got $1,500 for leaf guard, or you pay $600 and you sign up for this other package.

And the idea would be the lifetime value of that maintenance package package.

You just got to keep them for more than 1 year. Yeah, as long as—

and then, and then we make more money than if they would have just bought the leaf guard. Correct. I see. Yeah, correct. I figured he was going to do something with the upsell, and I really like the maintenance plan. And like, one of my first concerns was, how am I going to be selling against myself with the maintenance plan versus the leaf guard? Like, how's that going to work? And then he talked me through that. I think it'll work really good. And doing some of that value-add stuff like, hey, this is— we charge this much for the visit, but you get one of these visits in the maintenance plan. Like, that's cool.

So that's like the trifecta. And I would really try to measure is how many people convert from 1 to 2 and from 1, 2, and 3.

Yep. Yep.

And then what you could do is if you're doing in-person, great, you're going to actually have this printout. You're going to be like, here's the packages and you're going to sell for it. Yeah. If you are not in person and they sell over the phone or via the website, and then just sign up for one or something. I would incentivize the crew, like, to upsell this stuff. Yeah. Okay. He said it cost about $600 for the leaf guard. He installs it for $1,500. So I think we can afford $100 to the crew if they're the ones on the after sale, they upsell the customer. Now, before the sale, he's trying to upsell, but if we miss that opportunity, whether it be phone, web, or in person, and the crew does it, I'm very happy to give my crew $100. Like, you're going to spend that money otherwise on a Facebook ad, so why not give them the money? So this also becomes like you change it now to the team to where like, hey guys, here's how you sell the leaf guard and here's how you sell the maintenance package. And you're willing to really incentivize them to be—

for doing so. Exactly.

Well, if you want to change a culture, you want things to be very visible. And so I'm going to take the hit on my taxes and I'm going to hand out cash to the team at a team meeting to reinforce that like hundreds of dollars are being given out every week. To the people that are doing this upsell thing. So that way for the people like, I'm not gonna upsell, like I am not a salesperson, I don't wanna do this. Like, oh man, they just made $500. Oh, they made $1,000. Like they start to actually feel a little bit of FOMO on the fact that they're not adopting the system. So I would really think about one from a lead perspective, just, and the labor perspective is like upsells, upsell the 3-tier path system. A lot of times we think that we need more customers and more leads and more advertising when in reality we just need to take the customers and the leads that we do get, convert more of them, and upsell them even more stuff. Sell more stuff to the people that are already giving you money.

So we're doing a one-two punch of recurring maintenance and then also just selling more and better.

Exactly. Yeah. So we're using cure 2 and cure 4, right? So cure 2 being more and better during that last quarter, trying to get more leads for the off-season, and then cure 4, which is over the course of time building up our recurring revenue. Let's take it back to cure 3 for a minute, which is adjacent services. Like things that are aligned with gutters but not gutters exactly. And specifically stuff that we could potentially do during our off-season. And so my question is, what about doing things like ice dams or repairing broken stuff from the snow or even putting in like tape that is heat tape. Right. Yep. Does that ever come up automatically?

I'm afraid what would happen if I were to sell that ice dam removal, we'd have to have some clear language in there. If I'm selling them a leaf maintenance package and they get ice dams, they're going to call me and say, hey, you're signed up. I'm already signed up with my, with your maintenance program. Come do my ice dam removal versus upselling that. But I don't know. But I also have the market of everybody I haven't worked with yet. Ice dams. That's cool. When the weather's bad and I can't do anything else, that's when the ice dams happen, and that's when we could do those.

What about installing heat tape?

Just haven't got a lot of calls for it, I guess. Anything like this, the heat tape, the ice dam removal, those type of services, I'd have to market for.

Okay, so this is how I look at it. Our Tier 1 package, all right, so Tier 1, that is install only. All right, so install only. Then what we're going to do is we're going to have Leaf and then we're also going to have Ice Guard. Heat tape. And that's gonna heat tape. Okay. And then this is going to be maintenance. So this is like tier 1, tier 2, tier 3. Yep. Maintenance. I think this new 3-tiered sales strategy will really serve Paramount Gutters well. We're already getting the install, but then tier 2 is is how can we upsell them into either IceGuard or LeafGuard? And then the third tier, the best, the crème de la crème, is we also sell them a maintenance package where we get recurring revenue. And so every time we sell, we're like, this is the cost to install. And then there are two big problems with gutters. They get blocked up and they get frozen. Which one of these do you want? Or do you want both of them? You potentially give one of the way these for free or a huge discount if they sign up for this. The goal is now we sell everything. Yeah. So we take a $3,000 customer, turn them into a $5,000 customer with recurring revenue. That's how you double the business with the same number of customers. And then by doing this, you now offer something that can be done during the winter. The reason I like Ice Guard and I like even doing the steam thing potentially is when you cannot install gutters, that's when you can be doing this stuff.

That's when we can be doing all this stuff.

So even though you might only do it for 2 or 3 weeks. Yep. Outta— yep.

It's the 2 or 3 weeks where you can't like We're sitting on our hands anyway.

Exactly. Yeah. And then you're going to run ads when everyone has a ton of snow and can't get out of their house and they're worried about things breaking. They got a leak coming through the roof. Yeah. Now they're calling. You run these. Yeah. You run an ad. It's showing that and you just show like the steam, how it works. Yeah. And you run it to a contact us. Now you're sitting there with your phone because you're not doing anything else. Right. Just waiting for people to send messages. Yeah.

What I like about Mike is it's very practical. He doesn't say, oh, level up, man. Man. Like, do better, sell more. Like, he says, do this upsell, sell this ice dam, um, preventive package on this gutter. Like, just very practical. And in a world of fake Instagram influencers and bozos just peddling their crap, like, you know, they took an online course, now they're business gurus— like, Mike is very refreshing. And so that's what I really like about him. And then, and then this winter he really started talking about the seasonitis thing, and I was like, yeah, I feel that.

I would also say is in your maintenance, you might be able to increase the price if you include one time per year steam. And what you say is like, hey, usually our steam is a minimum of $249 to do this, right? So we're going to do that and these other two things where we're going to check out after the snow to make sure things are lined up. We're going to clean the facade outside of the gutters, and we're going to clean the gutters out. So this is almost like install preventative, like preventative stuff being leaves and ice. And then we have our maintenance plan. Yeah. And so anything above $99 starts to get a little expensive, I feel, for the maintenance plan.

Okay, okay. I would agree for $99 a quarter.

So inside of this, we're gonna have cleanup or clean out. I really— yeah, clean out. We're going to have Fix It, which is going to be kind of like a warranty. Yeah. Oh, a little bit more like that. And then we're going to have one-time steam per year. Got it. So now we're going to have one— when it gets snow after a couple years and we have 300 people on this.

Yep. On that main—

guys, snow, great. Can the gutter job— yeah, we're all going on.

Not come in, get on the steam truck. Yeah.

So you have— you keep your crew busy, and I'm okay with the fact that we might literally only use it a few weeks a year. But it helps me sell this because I say, hey, if we come out one time— this is actually— this is what I lean into— $249 is what we do for steam cleaning, and that's already included in your $99 a quarter package.

I like it. And that steam machine, that's not that expensive either, so it's not like we're buying a whole new truck and adding a whole new—

yeah, that shouldn't be a big deal. Forget discounts. I think this is what we lean into then.

Lean into that, that steam.

Steam alone's $249. Yeah, and that's included in your maintenance package. Included in your, you're paying $400. You're basically getting a clean out of your gutters and a warranty lifetime for $149 a year. Yep, I like it. And then you really just have 2 visits a year guaranteed, one being, and then one any sort of fixing or repair stuff.

Yep, yep, that makes sense.

You will come around back to that. Leadership side of things, the team's pretty solid.

Yep.

And like, you got good foremen. I don't see that really as a huge—

especially if we can keep my, my lower level guys busy during the winter and I don't have to hire. A lot of my gutter guys hate hanging siding, so I know like this winter I lost one guy just because he didn't like siding.

Is it higher skill? Is it different type of work? It's all the above.

On an average week, my gutter crew will be on at least 10 different job sites. Installing gutters is not hard work. The siding, we're just, you know, it's a mindset thing. We're going to be out here for however many weeks and we're just plugging away. It's stuff they barely know how to do and they're on the same job site day after day. They make the same money. But a lot of my crew is younger. They don't care about the money as much as the experience and having fun.

Cool. Yeah, I think like really from a leadership perspective, all we're trying to keep the crew busy during the winter. So just, it's like, if we can just solve winter work, a lot of this, we will not have people, good people leaving because they hate signing. Over the next few weeks, we have work to do. I'm going to say rebrand with one wrap plus website. Got it. Yep. I want to see truck, if ideally wrapped, with you, your crew, something that identifies Paramount and the monkey. The next part is going to be cure 2, which is Is ads in winter. In Q4, when we're trying to fill up Q1, we're really targeting the fact like winter's coming, winter's coming, like alert, alert, alert, right? Trying to get more gutters on. And then you're going to schedule them 6 to 8 weeks out into February and March. That's our goal. And then I would have a Q4 ad, which is going to be trying to fill Q1, and that is going to be very much leaning into like winter's coming, don't have leaks in your $1,000 gutter repair, if left off, could this winter cause you $20,000 in damage.

How would that work if I'm marketing it like that and then I don't get there until the wintertime?

Because when you get in the sales presentation, you can—

You can explain, okay, got it. You know, he's saying, hey, these are the Facebook ads that we're gonna run when this happens, and this is the other ad we're gonna run when this happens.

Like the season-specific type offers, that's cool. Cure 2 is ads in winter, that's kind of, I don't know if he calls it that, Q4. Um, so we're trying to sell the fear of leaks and massive damage. So get your gutters on the schedule. Then we're also going to do another tier 2, which is not just selling more but also better, which is upselling. We're going to create— let's just call it a 3-tier system. Yep. So 3-tier upsell system. And so now every single time we are selling the job, we're going to sell leaf gutters and ice. Now we're So when we get slow, instead of going to Facebook first in the queue, go to our existing customers.

Go to this.

And you're gonna, like, Leaf Guard, obviously October, November, just sell this stuff like crazy. And then you just switch to texts and emails around Ice Guard as soon as it starts getting cold. As soon as the weather turns.

Yeah. And then just sell it more and better. Like, I like that as well. And it's, and I kind of wondered if he, like, I've read his new book and I saw it kind of in my head. Back of my mind I wondered what he was gonna say. We kind of just took all the approaches and took a little bit of each.

We're gonna also do a little bit of tier 3, so we're kind of doing all the cure— like tier 2, 3, and 4. Tier 3 is adjacent services, so that is going to be where we really start to actually sell LeafGuard and IceGuard individually. Yeah, yeah, as their own. So these are going to be cross-sells. Now we're moving along, we're going to do cure 4. Which is going to be our maintenance package. This is part of our 3-tier upsell system. It's going to be a slow burn, and I'm going to incentivize my crew to sell this.

So that if you're not in person, don't expect it all one year, like it's year after year slow.

Yep. Because now we take a customer that is $3,000 for installs, we get up to $5,000 on average ticket and recurring basis. The business is going to be $2 million with the same number.

Yeah, doing the same. Yeah, the same crews. Yeah, I like I like it. Yeah, this is very doable. I like it. I did quite a bit. Some of this is wintertime specific, right? But I have a solid game plan, I feel like. Update is live, the new website is on. I still need to— I believe I remember what Mike said, uh, we have to add specific pages for each service, so that did not happen. The new website's up. We got one trailer done, so that's super cool. That wrap is on the Monkey's. He's up there, he's big, and people can see it. It's pretty cool. I don't know why I didn't do it, you know, 3 years ago. In the, in the Mike Andes massive, obnoxiously large, uh, piece of paper, I've got good feedback from it. Um, it's okay. So we got the gutter quote here. This is our main quote, right? And so I write all this in by hand and fill in the total. And then we have our optional upgrades. And so leaf guard, that's already pre-filled in, the leaf guard part, and then description and totals. And then this would be for the wintertime, or, uh, heat cable removal, or any other upgrades. Like sometimes we'll do downspout hinges or whatever. So I just left that blank there. But yeah, so that's— we have our two, um, optional upgrade sections there. And then our maintenance plans: CleanFlow Plus, CleanFlow Basic. And then I'll have, you know, fill in the amounts there. And then the customer— so I give this to the customer, they'll fill in the gutter color, they'll fill in the downspout color, and then the grand total of everything that they selected. So if they check the gutter quote, the leaf guard quote, and a maintenance plan, you know, they'll fill that in, sign it, and then text me a picture. It was a material, one of my materials at the supply yards, uh, he was— he referred me to his brother's house, and he called me later after I'd given him a quote. He's like, dude, that, that quote sheet that you had, I seen it laying there on the, on the counter when I went to go get a drink of water when I was over at his house. That is so cool. Like, I love it. So that was good to hear. We're coming to the end of the summer here, so fall is gutter cleaning, and so I'm gonna come up with maintenance plans. I'm hoping to do a lot of those as well. But yeah, I'm— I know Mike said, you know, we're dealing— when we're dealing with these projects, we can get a lot of revenue quick, and if maintenance plans is just kind of slow and steady. And so yeah, I just got to be patient and push it and upsell it as much as I can. So, you know, when I, when I hand the quote to the customer, I was like, here you go, here's your obnoxiously large quote sheet. And they laugh and they're like, that's big, but, but we like it, you know, we can actually read it. We— I got that one job I pulled, I've only got one guy on there and Man, I hope it gets finished up here and then not the end of this week but the end of next. So yeah, and that's the last job. That was that big job that we had been talking about, and that is our last siding job. Um, I told the guys multiple times it's our last one, and they look at me sideways and say, yeah, huh? But it's serious. I told them it's serious. We're selling, we're selling our, our pole jacks and our tanks and, you know, our siding-specific equipment. So we're going into winter with a couple different ways. So I'm— November and December, we're gonna just try and fill our pipeline like as much as possible, right? So we're not spending right now, we're not spending any money on ads, and, and we're busy. So hopefully it can hold out until November, December. We're gonna just throw a ton of ads out there just for gutters in general and leaf guards and try and fill our pipeline into January and February and our traditionally dead, um, seasons. So that's approach 1. And then yeah, approach 2 is getting into these cold months, uh, like the ice dam remover. So I've got quotes on that ice dam machine machine, and I'll probably pull the trigger on it September sometime, get that machine in. And then in those cold snaps, in those weather conditions that are creating those ice dams, I mean, I'm gonna just throw money at Facebook and Google with very specific ads like, David with Paramount Gutters in Great Falls, Montana, these— this weather system we've been having, you know, yada yada yada, if— call us, basically. So very specific offers. That's the game plan. That's what I was thinking too. I was like, man, you need to, you need to call me in, in the wintertime or right after, then we can really see how this stuff works. But I, I feel really good about the game plan for it. It's been great. And this month— not this month, we're in August— so July has been incredible. It was the most revenue we've ever done. So that That was cool. Set her up for full swing into the gutters here this, this fall and this winter and go from there.

Paramount Gutters is a classic example of being able to solve the off-season and get more leads to be able to grow the business. Now we've talked about a lack of liquidity, a lack of leads, but the next constraint to growth in the 4L framework is labor— getting more employees. Let's go Does it all fix? They do $3 million in revenue, but they're really struggling with labor. Last year they had to fire all their employees and reset the entire culture. This is a huge problem as you go from $1 million to $3 million because now the technicians might not have as much interaction with you every single day. You've got to start figuring out how do I create systems and processes to have a successful culture. Let's see if we can turn it around.

My main guy in Dazzled. 40 people lost their jobs in one day, and it took me 6 months losing everything I had.

My name is Mike Andes, and I travel around the country turning around small businesses that are struggling.

I had my leaders not cash their checks for a couple of months.

There's no money in the bank. Businesses all have cash flow issues. We die without money.

I think he had like $15,000 in checks piled up, just not cashing them.

This handyman service does over $1 million in annual revenue. But has 22 employees and has over $600,000 in debt and liabilities. Their house caught fire.

Her husband died in that fire.

So that was a $200,000 loss on that job.

My guys are making more money than I do. That sucks.

It's going to get messy. It's going to be tough. But let's see if we can turn this thing around.

To be in business, you have to be either crazy or stupid.

Mike, how's it going, brother?

Good to finally meet you. Yeah, man. My name is Vitaly Tormazov, and as a company, we fill the gap between handyman and contractors. And so we mostly focus on the small repairs and remodels.

So how long you been at this shop?

We moved in last spring. Okay. We were renting a 40 40 just down the street from here. The people moved out, abandoned this place, and they moved out and they go, can you help me look through this place? I go, wow, this, this would be an amazing place for All Fix, but about 2 years from now, you know, because we were just not capable. So he comes back a month later, he goes, I'll let you have it for $4,000. I'm thinking, well, this is way too early. This is still But we got almost 900— 9,000 square feet here of floor space. Our real focus is the speed, being able to get in and get out of the house fast. With that, we ended up adding the building supply division, which allows us to supply materials faster and more accurately, keep our technicians out of the stores. We had an issue with guys sitting at the store way too much, and we still had to pay somebody to buy the materials. And then we have leftover materials that we have to deal with, either return them or store them. So we go, okay, so if we're gonna move in here, let's go ahead and open up the building supply store and use that margin by buying wholesale to cover those guys buying and sort and dealing with materials.

How much of it, how much of it do you do where you sell, you're selling at retail? Uh, retail, nothing yet. Oh, nothing. Okay, nothing yet.

You're buying So the, the whole point of the supply store would be to serve remodelers, to be able to fill that gap and keep the guys out of the stores.

Got it. Switching from a service business to then being retail where you're actually selling products is a completely different business. It's not even like adjacent to the service they're offering. It's like, well, we have to have it, so we should sell it to the customers. Yes, you should have it as inventory, but do we really need to sell it to the customer? That's a totally different business?

So the systems that we're putting in into supply is once the material list gets approved, 24 hours to put the material kit together and 15 minutes to load. We're awfully close. The hardest part that we found in the supply side is the vendor acquisition. All our vendors are able to bring us material, deliver material within a week. So, so the goal is without overloading it, and we're trying to make this whole thing things scalable to be about 3,000 square foot places that we can restock easily and get guys started fast.

So the goal is like, don't let them go to the stores. That's, that's correct. I'm hearing a lot.

That's correct. So, um, you know, unless there's a, um, PO, don't go to the store. Got it.

I think we use that logic as small business owners based upon Fortune 500 companies that will like go build their own solution to their problem. It's like, look, if you have a small business and you have a problem instead of going and building a new business to solve one small problem, which is literally the time it takes for people to go pick up materials. Okay. We still have to put the materials in the truck. So the only thing we're saving is the time in the store. And so instead of figuring out a whole business to fix that problem, should we just compensate the guys based on efficiency to get in and out of the store as fast as possible?

This is kind of a stock area where, where they're prepping for the jobs. And so on in the morning, The supply guy is pretty much going to take the stuff out and get them out of here. So we were kind of hoping to be able to go to public this spring. Yeah. And we did not have a product that we could feel that we could market.

And it's tough sometimes blending it to like bringing other contractors in. Yeah. I question whether or not the building supply division is a distraction from the core business, because what we're not taking into account is the fact that it takes a couple of employees to manage this retail division as well as this entire building. We have to rent it, we have to heat and get the utilities to actually warehouse and store all of this inventory. There's actual cost to that. And yes, it could also be inventoried at Home Depot or at Lowe's. And yes, it'll take time for me to drive there, but that's a lot of time that is otherwise spent on wages is now being spent on rent, utilities, and team members just to manage the inventory. So all— so these trucks, how many trucks How many trucks do you have total right now, kind of between the vans and the trucks?

So between the vans, I think there's a total of 15. We just had one that got wrecked. One of the guys relapses, and when we hired him, I gave him my personal truck because, you know, we were just short on vehicles already. No, he wrecked that one, so I don't have a truck. It was one of those, we came in tough, and then we had what one of those country songs Bad Country songs, you know. We had one of our best guys skip a step, and we spent 2 weeks, the entire crew, scrubbing cabinets and scrubbing the paint off and repainting them.

That was a $200,000 loss on that job.

We were repainting kitchen cabinets, and my main guy, my most experienced guy, decided to change a step instead of doing it the way we did the bond test, painted it his way, and it the labor that it costed 2 weeks to scrape that off and redo it, you know, that was between loss of opportunity and labor cost, that was, you know, almost $60,000, you know, for a $5,000 job. And then the other thing is we ended up, we had a whole bunch of this influx of Ukrainian refugees and we ended up bringing on 7. So then we ended up some of the people from last year, they just could not They could not adjust, so we ended up with 15 brand new people this year. We ended up with some rock stars out of there, just some really, really amazing guys, just talented tile guys and carpenters. And we added some drywallers through that too. So it was a good experience. It was really hard, but it was worth it.

Right now there's about 15 trucks, 22 guys working. Well, that's between the 3 companies. Okay, so where are those 3?

The, the 2 guys are on the supply. Okay. One is vendor acquisitions and vendor relationships, and the other one is supply management. Got it. Then we have electric and plumbing, which we lost our plumber, so we're kind of screwed a little bit there. So, but we have our electrician. He's my oldest son. Okay.

He's not planning on going anywhere, so thank God. And then the Then the third part is more of the, the main side of things.

Yeah, property maintenance and repair. Got it.

And so if you look at those three parts, what do you think, expect like 2024's revenue to be across those three divisions?

So we were supposed to be at $3 mil. Okay. Between the three, I think we'll probably $2.4. Okay. Is where, uh, where we'll— and that's to me, that's about $600,000 loss on training.

Well, like the main thing when I went into this turnaround was really like there were so many different divisions of the business, even though it was big in terms of revenue. There was everything from the finishing department to the painting, the electrical, the plumbing. There's so many different aspects that each of those could have been a million-dollar business or more. But when you have that many businesses in one entity and then you have retail and all these other aspects, that just scares me.

Throughout the last 7 years, every time we would bring a new person on, it would be a drop in our efficiency. Or revenue about $60,000 to $80,000. You know, so that's kind of what I've been figuring on our training costs. Got it. You know, when you bring in 17 or 15 new guys, that's a lot of money.

Yeah. Yeah. You know, so $60,000 to $80,000 to train up one new team member is a lot. Now let's just say that we're hiring entry-level, no skills, very green team members. I want to make sure I'm doing simpler services that I can get them to profitable for the business within a matter of a few weeks. Because what happens if I train someone up over the course of 6 or 12 months and I spend $60,000 or $80,000 and they're a great employee and they leave after 6 months? I'm in the hole $60,000. We cannot build a sustainable business relying on people staying as laborers for decades on end. They're going to usually be 6, 12, 18 months at our business. And if we can't make them profitable in that amount of time, we're never going to be able to grow the business.

When you look at the normal training cost of $60,000 to $80,000 and, and we're $300,000 in the hole, all of a sudden, uh, that hole doesn't look all that big when it could have been way worse, you know, um, if, if it wasn't for God's mercy. So this is our fab shop. Okay, this is, uh, this allows us to, um, fabricate anything that you can't buy. Got it. So this area is kind of our catch-all. We have a mechanic, he's kind of got engineering mind, so he's bringing in and servicing our equipment. And you know, we got engine to replace right now, so he's going to be pulling that in hopefully today.

Well, is that good for painting too?

So yeah, so that we drop this and we do our painting in here. And so any of the assembly. Then over here it's more of woodworking only. Anything that's, you know, they're building cabinets or something, you know, because sometimes you're remodeling kitchen and you got same cabinets throughout the house, but they want to just add a little bit. Yeah, so we end up—

find those anyway, you can't. Yeah, you can't.

And this is more of when any of the equipment, shared equipment comes in, it comes into here, it gets serviced here, and before it gets put on the shelf. Got it. That's pretty much it.

This is kind kind of like the whole shop space, basically. This is—

yeah, this is kind of the shop.

Yeah. Okay. Oh, I like it, man. So this is one building, number one. There you go. That's Aaron. Aaron, good to see you, man. Nice to meet you. And what do you do here? Uh, estimate. Okay, very cool. What percentage of the projects do you have to do estimates on versus just like sending the crew there? Uh, about 100%, really. Really?

Try to put our eyes on everything.

Okay. Things going smoothly. Cool, cool. And what approximately, like, what percentage of your jobs that you send out estimates get accepted? Do you know approximately, like, 50%? So probably right around there.

You've been with us for how long now?

Uh, 3 and a half, 4 months.

Yeah, okay. So his, uh, his conversion rate's really good. Yeah, okay. Yeah, probably closer to 50%. Okay, cool. Good stuff. Good to meet you, man.

Absolutely. Yeah. What's kind of like the blended hourly rate, do you think, if you had to? We're $120 120.

Okay, 120. Okay. Yeah, this is Max. He's, uh, he's a supply guy. So that's, uh, Cameron. He's the bookkeeping. Yeah, that's Garrett. He's the dispatch and customer relationships. Cool. Awesome. And that's John. Hey, John. He's the vendor acquisition.

Good to meet you. Good to meet you too. My name's Mike. Cool. Good stuff.

Ed lives over here. Ed, how's it going?

I'm Mike. Good to meet you. My name is Ed, been working here for about 5 years or so.

Started off as a mechanic and then just worked my way up.

I'm a project manager now.

In terms of the, like, from your perspective, when you look at the operational side, where do you see a lot of the waste? Like, I know we're really trying to keep guys from stopping at the convenience store and like getting the supplies to them, etc. Like, where are you seeing that as kind of a bottleneck? Is there anything Specific? I don't want to say anything specific. It's just, I think, just a lot of little, little things that add up. Okay. Yeah, because when I see, when I see we have like our hourly rate being like that $120 marker, and I look at how many labor hours we're actually producing, there's a big drop of how many billable hours are we getting out of an 8-hour day. Yeah, right. Just from a math perspective, if you take, you know, $2 million divided by how many labor hours there are, you're more like, like $60 $100 an hour, like the effective hourly rate. And so it's like there's a big chunk of time we're not billing to the customer. So does it go estimator then to then you, and then you go to the leads? Is that kind of how the flow works? Okay, cool.

Right now we're doing that only on bigger jobs. On the smaller jobs, we're trying to have the estimators just go directly to the leads.

Got it. Cool. Very, very good to meet you. Awesome, man. Whether it be a percentage of the job revenue, whether it be based upon and how fast they get from the shop to the job site and doing some sort of compensation there or like do something, make it a game, do something other than create a whole nother business to solve the problem. It's just a matter of like fix the actual root of the problem, which is you have waste when it comes to labor. This past year, I know we had that couple jobs that went south, but like the debt, why did it balloon this past year mostly? Like this year? Yeah.

I think it's the training.

All the new team, all the new team.

Because, um, yeah, no matter how much I look, we, you know, we had that big old dip, um, in the spring. So commonly during the winter, we hit break-even about May. Yeah. And this year we still haven't even hit it. And, and to me, that's the only biggest expense that we, we've been finding is that, that training.

Was it kind of like a one-time, like, you had to kind of clear house, or was it a matter of Just massive amounts of churn happening consistently? It was clearhouse type. Really? Okay, okay. Yeah, yeah, yeah. Getting rid of kind of the old culture, you have to refresh everything. Yeah, got it.

As we grow, as we develop, we learn to look for different talent. And up to beginning of last year, like my administrative assistant/dispatcher, her personality just would clash clashed with everyone in the office. She was doing such a good job, but the personality would just clash. At that point, our estimator quit because of that personality conflict, and then we had to part with her. So that all of a sudden, that put a lot of strain on few guys that were here.

It's rare that a business that is this old and this large actually has to go through a cultural reset. Like, it happens. Like, we all know the stories of big companies that get bought out, for example, and like everyone just gets— the deck gets cleared.

We went into overtime trying to see how we can fill that gap or that void that was left by those two positions. So trying to distribute the weight, and that was, that was tough. So they saw the financial strain of moving into this location. The administrative assistant went into panic and just became We're not compliant on a lot of things. So when you're already in that kind of situation, it's already hard. And some people can't handle hard.

And this is usually a result of a leader coming to the realization that they're way behind the times on systems, procedures, software. They're running a very unprofitable business. And that's what he woke up to and has already made a lot of these changes. But in order to make those changes, sometimes you do have to just clear the deck. Deck. And the current team is now on basically all brand new.

And so, so, um, so we have 5 that are original.

And what was the main reason for having to do that? Was it just a matter of cultural misfits? Was it just kind of inefficiencies? What was like the main driver of that?

Um, it, it was, um, it's kind of like I have a couple of guys here. Yeah, you know, he's gone now, right? But this guy and this guy, I can't get them to, to grow. Okay. You know, um, they're just— they're, they're good but not excellent, right? You know, so, um, so in other words, if somebody comes along that's better, right, you know, we'll be swapping. In the process, we end up just parting with anyone who just wasn't growing with the company, who wasn't improving. They were good at certain things, but they just couldn't make it to that excellent, excellent stage. Because we are faith-based and people are important to us, we take that really hard.

Yeah, like in the perfect world, you would have, you know, 3 or 4 new employees that are good, you train them up correctly, and then push out the 3 or 4 bottom performers. And you do that over the course of a year or two and everything would go smoothly. But usually that doesn't work. Work. Because if I'm going to replace the software and I have half my team that doesn't want to do it, I'm going to have to let them all go. And so sometimes, like, you got to tear the Band-Aid off. And for most small businesses, unless you have a ton of debt and loans you can go get to kind of float the boat in the meantime, you've got to do things quickly. And Allfix doesn't have the money. Like, okay, over the next 2 years, we're going to continue losing money, we're going to continue being super inefficient, and then we'll slowly migrate into this more efficient business. We don't have the money for that. Because like what I'm trying to prevent is like a spring like we had this year will kill us for 2 to 3 years, like in terms of just the hole that it builds. And so if the Achilles heel that was the cause this past spring is finding great laborers that are super skilled, the question is, can we reduce the threshold of skill required for people to be profitable?

That's a tough one because we pretty much been weeding out our low skill, which isn't bad.

It just, it's more a matter Like for example, if you only have 1 or 2 people that can do 1 service and 1 person leaves, you just bottleneck the entire organization if they're waiting on that 1 person for different projects, for example.

And we're not in a way because we're cross-training everything.

Okay, so everyone is kind of cross-trained.

Everyone is cross-trained. Got it, okay. We just have experts.

Got it, okay, makes sense. Yeah. But if the cost to train someone to be that jack of all trades, is to your point, 50, 60, 70 grand. Is there certain one or two services that take the majority of that time? 'Cause that's a huge cost of like onboarding somebody.

I think we already reduced it just by changing the way we're approaching and having multiple people to train.

Got it. So like kind of batching them at the time. Yeah.

Okay, okay. And that's kind of something, you know, last couple of quarters I've been talking about, we gotta get this done. Down to about $10,000. So we can onboard.

So what's the retention like with someone, if you train someone up today, you just have, so at least this year, have they been sticking around the whole time? Or is there a pretty good fall-off after a few weeks?

We had only 2 people quit in 7 years. Okay, wow. We noticed and parted with quite a few. Right, right.

I like how delicately you say we parted with them. That's a much better way of saying fired. We parted ways. We found that our paths did not cross anymore. By firing all the employees at the exact same time, there's massive inefficiencies because you have people getting trained that don't really know what they're doing. Leads to callbacks, inefficient labor, and ultimately this is what caused a huge amount of debt being acquired, dumped on the business. Is the current team here, even at like just the leadership level, no kind of financial see where the company's at?

Absolutely. Everything's open. Okay. Everything's wide open. That's one thing I won't hide.

And so, so right now, like, I looked at the balance sheet, but from a, from like just like a top-level view, from a debt perspective, where are we at? Uh, probably about $400 million.

Uh, let's see. So, so this is the last quarter. Okay. The improvement has dramatically—

since the first two quarters.

And then we, we look at, um, you know, the, the first first 2 quarters, that's where it was, you know. It was really the first quarter that really made a big old hole. Yeah.

And on that $400,000 on the debt side, what's the monthly just payment straight on that per month?

I think probably about $3,000.

Yeah, it's not bad. So is it mostly all 0% interest stuff?

Well, so one of our landlord has been awesome. Okay. He's let us default for a while, pretty much giving us an interest-free loan.

So that was kind of like the personal loan side of things?

Well, no, he just said, you know, just keep trying, keep paying, and then we'll catch up later. So there's about $30,000 on that. And then we ended up— to be able to fund this whole thing, we sold our rental properties, we took out a line of credit from under our house, And yeah, so it's this year. So I think we're probably running out of borrowable money. So we got to make this work.

Right. The positive, from the positive aspect, this past quarter has been far better than the first few.

Oh yeah.

Like the first few is really, really concerning. Just your gross margin. Oh yeah. $400,000. Most of that would be on 5-year terms then. Because like, how are we only paying $3,000 a month?

I missed the SBA. Okay, we have a $30,000.

So you're leaving that one for now?

We're just making the minimum payments on that. Yeah, just so we're pretty much just kind of defaulted to minimum right now. Credit cards? Just, yep. Yeah, as far as monthly, I don't think it has been over $5,000. Oh, the weight is heavy. The weight is heavy. But one thing I've done is really make sure I have weekly communication with everyone I owe. And it's been incredible how they've come around us. Most of the people you owe, most of the vendors, as long as you're working, as long as they see you working your butt off, just constant communication that, you know, this is where we're at. Sorry, we can't quite fulfill our commitment. It's just been cool to see. We had a store, you know, once we got behind on paying that off, they actually paused our account and paid that account off. The CEO of that store sent us a letter and a check back for all the interest, interest and late fees, saying thank you for pushing through and making it happen. So when we're communicating and making that minimum payment, and just sending them a check with a thank you for your patience. You know, even if it's a $20 check.

My concern is actually like what happens in the winter when you don't have all the work coming in. That's my concern. Yeah. And so what's been the strategy in the past? Has it been like, hey, we kind of just do as much as we can, whatever leads come in?

So as far as workload, we never really slowed down. It's the efficiency that hurts. 'Cause of the weather. Because what we do is right about this time, We start scheduling indoor work and we have lots of it. So right now, like this project where it's in the planning stages right now because we're waiting on permits. This is a $600,000 remodel. Right. And so by December we're going to be inside. Okay. You know, it's an addition. It's— we're redoing the roof and everything else. You know, one of the things that we've been trying to do for the last few years is a service contract. I'll kind of show you what it looks like. It's for quarterly visits. We got a quarterly meeting coming up and we're going to try implementing that and really putting the fall service in, fall inspections.

This would be sold basically as that kind of like a year-round checkups quarterly on your property. Here's everything we're hitting. Got it.

Yeah, so just really just preventative maintenance. Yeah, mostly inspections. Inspections and touch-ups and any of the repairs would be the upsell. Got it.

Even if we fix all those mistakes and then we fix the off-season, the amount of debt that's currently on the business is going to take a few years just to pay it all off and really establish the business financially. But right now we have a cash crunch. We don't have a lot of money in the bank. So how do we solve that in the short term? Well, first off, we could sell off all the supplies that we have as inventory inside of our warehouse. We could We could sell off some of the trucks that we aren't using because there's a bunch of them sitting around outside in the yard. Or we could look at the accounts receivable and see if we can't collect on some of the money that customers owe us. There's no money in the bank, so like we die without money. So I think the short-term fix is probably going to go after his receivables, which is $130,000 that people owe him. So I think like a relentless program over the next 14 days to get at least $60 grand. From customers that owe him something, but that's like a short-term fix. You got to solve the profitability problem too. I think there's a lot of good positive things where the company is going. Honestly, I really do. I'm mostly concerned in two things. One is the short term, like just on the cash position. And then secondly is how do we prevent this past spring from ever happening? That's, that's where I'm at with you, because it will sink a business for literally 3 years. Like what happened this spring will take us 2 to 3 years to financially recover. Absolutely. And so then it's a matter of like, how do we build build the business in a way that will never happen again.

Yeah, that's why you're here.

From a short-term cash position, because I know there's like a lot of stress in that area right now, what's the kind of strategy around receivables? Because there's, there's a good chunk there that we could get a little bit of breathing room on.

Well, and yeah, so $140,000, but realistically it's probably minus, um, minus $36,000. It's over 90 days.

Yeah, you're not going to get it basically.

No, so every— everything is here. Got it. We We don't have a whole lot of bad debt coming up. Okay, okay. You know, we got one that we are going to write off, which isn't all that big, you know, after the job was done. We did some work outside, their house caught fire, her husband died in that fire. She's a sweet thing, she tried making payments and we go, yeah, that's enough. Yeah. So it's just those kind of things.

And then because like from a short-term perspective, even though a lot of it's not going to go bad debt, we're collecting in 60 to 90 days, a big chunk of it. And that, that will, that is going to really hurt mostly when you do have that winter lull because now the 30, 60-day will catch up to you. Yeah. And so like if you, if you're starting to change it now, like one thing we, we will do with projects is like, look, when you do the walkthrough, you collect the final check and then dispatch isn't having to worry about the admin time required to collect on. It's like the lead is required to collect final check and final payment at the walkthrough.

So we did that with the sales guys right now. So the estimators, um, to do that, uh, 10-80-10, so that the final 10, they come back to the project.

Yeah. Okay. Yeah. What percentage, what percentage of the project total do you think the estimator is actually going back? Is it pretty much— that's like standard operating procedure, estimator goes back to the end of the job?

That's, that's been new.

Okay, yeah, I really like that because the thing with handymen is that there's unending things they can do. That's correct. And so like that walkthrough process I think can become collections, and then it becomes this thing.

Yes, and that's, that's, that's something that we've been working on this month.

With a handyman business, there's an endless amount of work that can be done on someone's property. And when you just solve their biggest pain point, like the roof leak, there's probably 5 other things that also need done around their and so if I can solve the problem, and then while I'm collecting the final payment, the estimator can give them a bid for the other 5 problems they also see that could be fixed. This would be a great option to be able to upsell the customer and improve the lifetime value that we get from them. I really like this because like I would love to see some recurring revenue. And what's nice about all these projects like the install, etc., like everyone wants a warranty on stuff, and so your warranty becomes your main maintenance package. Like, we will warranty all our work as long as you're on this maintenance package. We're coming every quarter. Yeah. And I would assume you probably have thousands of contacts in your database, all of which you've done projects for. Yes. And all those one-time projects can be sold into—

yeah, we have about 70% retention. Yeah. From, uh, all the people that we've done projects for. They keep going, keep calling us back. We partially lost a few last fall, last winter, just because with us changing people, our, our customer care went down quite a bit. Like we have a—

so we have a similar thing, but it's for outdoor only and that's like basically winter services and it's like, hey, we're going to do all these things. We're going to come up every 2 weeks. Here's the price. And then what we've done is like a price comparison and it's like, hey, if we come to your property literally twice, it's going to cost more than we come every other week and do all of these things. I think to your database that has never seen this product, It's a way to upsell them, which is like, hey, look, we've serviced you for 5 years, we appreciate your business, we've created a budget-friendly way of making sure property always looks good, and we can do this because we're coming more frequently. And so it's a volume discount to you. Yeah, here's the price for your house and here's all the things that we're gonna cover. And then I would just put a limit on your time there. So for example, if you're charging, you know, $215 every month, you know, okay, that's like about 2 hours a month. Month that I get billed for, that's 24 hours in a year. And you can just simply say like, if your quarterly visit is going to be more than 6 hours, then we'll do an estimate or something like that. Or this, this includes up to 6 hours worth of work.

And I'm guessing your first month we won't be as efficient, right? But once we sell enough of them, because we got filters, lights, batteries, at that point seasonally— and I broke them up up into seasonally so, uh, so we can stock material, right? We can buy bulk and stock material for that season, you know, batteries, you know, smoke alarms, you know, filters and things like that. I'm thinking what's, what's the repetition in the services? I, I think will be a lot more efficient, but I also think the amount of upsell from those is going to be way more. Yeah, because at that point we're inspecting, we're creating recommendations, right? Of what things need to be replaced.

If we can take a one-time job and sell them into a recurring service that we come back to their property every month or every quarter, that would be ideal. Well, I like the idea of monthly pricing and then quarterly inspections. And then it's a matter of like every single estimate goes to a project once completed. It's yes, we're collecting final payment, but we're also selling them this. And we already know the price going into it. Like, this is like just a fantastic value proposition, honestly. Like, the amount of stuff that you're checking every single one of these maintenance is, is huge. Um, you're checking your roof, you're checking gutters, you're cutting crawl spaces. Like, it's a significant amount of value add. Yeah. And the monthly price to someone that just paid $30,000 for a remodel is not bad. Yeah, that's kind of what I'm thinking, because it would really help during the, the slow season to have that base of— even if it was like $50,000 a month, what, like 5, it's like 2. If you got 200 customers on this and there's gonna be people like, to Garrett's point, that will call in just for this service. And then to your point, it's like, if you're not selling just $3,000 a year, you're going to sell 2 big projects to them because they actually have a roof leak. Currently almost 100% of AllFixes revenue is coming from projects. And it's not that I'm against projects or that one-time jobs are a bad thing. There's actually 3 different ways to make revenue in a in a home service business when it comes to the jobs that you do. The first is what AllFix is doing, and that is one-time projects. You serve the customer one time, it's all done. The second type of revenue is reoccurring revenue. This is where you're going to serve the customer again, but there's no frequency that's set. It's like once in a while they'll call you again. But the best type of revenue in my opinion is recurring revenue. That's where I have them on a schedule weekly or biweekly, or monthly or quarterly to be able to know in the future and project exactly how much revenue I'm going to make. This increases the valuation of my business and make sure I don't have massive ebbs and flow in revenue throughout the year. And then my thought is like, from a marketing perspective, is we actually pitch this because we know this will bring in the leads for all the other services. Yes. Well, we get them. And even if we don't make a ton of money on this, like if you're worried about the pricing, this is your lead gen. Cause you just make them happy. They're satisfied with the service.

Yeah, I've been excited to get this thing going. For some reason, I've been just— I can't have been waiting for somebody to look at it and to kind of give us a little guidance on, you know, especially like you, you've been in the repetition service. That's kind of why I have this thing.

Most of the time, we as business owners have so many things on our plate to do that in the name of efficiency and getting things done, We knock out all the small things. What if we just attack the largest problem that we kind of keep putting on the back burner that we know needs to happen? But if we just attacked it and spent 6 months ripping the Band-Aid, doing like open-heart surgery on the business, it would fix a lot of the other things. It's crazy. If you had— if you have— do you have any contacts in your database? You have?

So it's probably about 2,000.

Yeah. Like, yeah, let's say out of 2,000, you probably have 1,000 that have done work relatively recently and love you? 1,500. Okay. Yep.

I just send out stuff.

If we can get 100 of those to convert to this, that's, that's, that's 30, 40 grand a month. Yeah. If we can eventually get to the 50 or 60, I think you solve your winter issue. Yeah. And then you've solved your lead flow issue because if you're paying HomeAdvisor for anything, yeah, we want that capped by the fact that we know we have 200 people that we, we just got to go to their inspections and we're going to get 3 other 4 or 5 other jobs. Yeah, yeah, I agree. So, okay, I like that a lot. Yeah, that winter issue is just going to kill us. So in the name of efficiency, because we can get this one done in a week and this one done in 3 days, we knock all the small stuff. It's just like tackle this, which you— we usually know what it is, but it's daunting. It's— we're afraid of it. It usually means systemic change change an entire business, and that's freaky. I think it's a matter of like executing on some of the things that you've kind of just gotten started. Like, this is something I would go all in on. From— from— so I have real estate, and if someone— if my contractors would have come in when I do my remodels, and I'm usually paying between $30,000 and $50,000 a door for them to come and remodel everything, if they'd give me a warranty like this, I would do it on every single property. Because if I'm— if I'm getting $3,000 a month in rent, and for my apartments, I'm probably paying $165 a month just to make sure everything is like gonna be looking good. That's a whole lot cheaper than me calling a plumber out once a year. Yeah, like my— like just the cost of something like $300 or $400 for a middle-of-night service call, or like they don't change out the stinking vents for the heater, and all of a sudden I'm changing out the heater. Yeah. And so, um, like I think this is huge because you have 1,500 people in your database on a base of have loved you. If you can sell 100 of them, that's $30,000, $40,000 a month in recurring revenue. And then that, that $34,000 becomes twice as much because then you start upselling them. You get back in their properties, you find all the problems and then give them the solutions. Yeah. Once these service contracts are set up, this allows AllFix to be able to get and generate their own leads instead of paying for the leads from Angie's List, Facebook, Google, and other third-party sources. We control the lead flow And furthermore, we're getting these leads and these new jobs for customers we've already done service for in the past. They're in our database. These are warm leads, not cold leads. The cost really that they're preventing here is what would be a $300 quick roof patch, preventing that from a $15,000 repair.

It might be worth going customer by customer.

That's what I'm thinking. Yeah, I think this is like an all-out campaign to be like, okay, this is the goal. Like if we get 100 Weird. Like, I would probably either—

Do you mind if I get Tim over here?

Yeah, that's fine. Go ahead.

Hey, Tim, can you come down here? All right.

All right. Do people ask for that sometimes just on the upfront, Tim? Like when you're going to jobs that they're like, hey, can you like, do you warranty this? Or is there anything like they want you to come back and check it or anything like that? So a lot of questions we get is, you know, you guys do inspections, right?

And then usually when they request that, I do, oh hey, we also have a service contract stating that we can take care of all your service needs, such as inspecting, battery swaps, just the full nine yards to make sure that your home is in tip-top shape.

We're thinking about the fact that we have 1,500, 2,000 people in the contact database. How can we pitch them who are happy with our current service at a one-time project and do the recurring revenue of this, right? And then obviously, like, every quarter having the ability to upsell them when we find a roof leak, when we find this issue, it's like, hey, now we have other options. Like, if we were to go after one by one for existing customers, which would be quite time intensive, but like, is the return there? Could probably be determined if we did, say, a sample size of 30 or 40 customers. How— what's the pitch look like? The— there's two things that they say money on. One is you coming out on a service call, there's a cost already. And then secondly is them preventing a $15,000, you know, mistake or error in the house by simply having this program. I actually just pitched one of these yesterday. Okay, cool. To an existing customer or like brand new? A brand new customer, but they've known about us for years. Yeah.

And then they have their mother who lives in a trailer park. The house is kind of falling apart after I did a full inspection, you know, what exactly what they wanted to do.

Then I go, well, with her being here and, you know, you guys being across town, did you want to maybe, you know, do a service contract as well?

We provide that smoke alarm swaps.

Yeah, so then we break it down into 4 quadrants, right? So what Mike is suggesting that, um, that we go, um, one by one and actually pitch, okay, so these are the services we have been doing for you. This is what it costs and what you spent. This right here annual would prevent some of this and things like that. Yeah.

And you can just protect your downside too. 'Cause what everyone always will not do this for is like, well, what if there's a massive project that we gotta like go fix these things? It's like, this is an inspection, right? We're tuning up, we're inspecting, we're making sure, and then the value proposition prop to the customer is a little bit of savings because they're not going to have the service calls. But more importantly, you are preventing the massive repairs. And so I think it's a matter of like, even if you took your latest 50 projects that were completed and be like, hey, let's go try to pitch this and refine the pitch, because then eventually the goal would be every single time we do a walkthrough with a customer, it's like you're just going right into this. Exactly.

So, yeah. So like Christine, I think that would be the first pitch. We've been going over there and fixing stuff for the last 7 years. You know, she would probably be the first one that— well, so, you know, so it has to be refined to her. When I already mentioned, because pretty much every single one of our clients that are super happy, I always kind of segue into the service contracts. It's kind of a developing thing.

So now since we got it refined, I can actually go back to 80% of them and give it to them properly. And even if you kind of like, as you like refine the pitch, start branding it, right? So it's like, we call this our certain package, we call this our certain package, they can upgrade to a different one. It's like, well, if you want the roof included, that's going to be this additional. But you brand it all around the all fixed part. So like your biggest, bigger premium package would be called all fixed. And then it's like half fixed or like whatever you want to do. You just brand it as packages, right? Because then, then And then like the all fix is like, hey, this is our guaranteed. And then you put some sort of warranty around that. It's like, hey, if anything happens in the quarter after we inspect your roof, we cover it. And with that extra all fix stamp, you're going to get a premium price on that. You're basically selling insurance now, right? But insurance has great margins, right? Fixing like, you know, what we've— our service in general doesn't have a great margin on it. But if we can sell the insurance, that's a whole different business model. And then it's just a matter of like, okay, out of $1,500, could we get $100? 100 people? That's a stretch, but like, there's definitely people that are actually—

100 people is very realistic. Really?

A lot of people are very interested, especially when it comes to people that have their parents still living in their home. And the snowbirds.

Oh yeah, yeah. Right? They show up in the spring and that's the thing that keeps them up, is what is our house gonna look like when we come back?

So like, even if you if you took your current database and you segmented them. So it's like, okay, these are the snowbirds, these are the people that are secondary home, etc., etc. And then you pitched it slightly differently to each. So like the snowbirds, like, hey, have the peace of mind that your property is looking good while you're away and you're not coming back to a property. So I have like a little secondary, little tiny house. I hate going there after like 3 or 4 weeks. I'm like, I know the pool is going to need maintenance. I'm just hoping when I walk in the door, there's not a broken window, right? That's what they don't want to see when they come back. Back from their vacation, right? And so that's— you'd segment to them. Then the people that like are needy, like you always have been going to their property anyways, it's like, hey, you can actually save money doing this. You know, when you get there, you're going to sell them one or two other big projects, but now it's on this recurring revenue. If you think you can get 100 people on this, that's $30,000, $40,000 a month. And a lot of that's straight margin because you go to these properties, you know, you have budgeted 3 hours or 4 hours and it took 30 minutes because everything checked out.

Exactly. Yeah, after the first 2 visits, everything's pretty well checked out.

And the customer's paying for the peace of mind. They're literally paying for insurance. And then, then it starts to become just a matter of when you do work, now the warranty is our service plan. So we will guarantee 100% in perpetuity that this sink will never leak as long as this is signed. And so if someone asks like, well, what happens if there's a problem? Everything's covered 100%. you just have to get on our service plan. Cuz you know, in maybe 6 or 7 years, yes, it'll need a replacement, but they've been paying you $300 a month to— and you can cover it. Yeah, that's true, that's true. And then, and then, then you start pitching the warranty, like the, the aspect of a remodel, but like all of the plumbing, all the electrical, everything's warrantied, and I as a homeowner never have to worry about a short circuit, something blowing out, like any of that is nice. And then their point of active— highest point of activation is right after the job is done. And they're like, whoa, this is great. This is amazing. That's when you sell them this. All right. So this thing that we're talking about with AllFix is actually very common in almost every home service industry that I talk to, whether it be electrical or painting or pressure washing or lawn care, landscaping. And that is you have an off season. You have 3, 4 months out of the year where you actually lose money. And It's kind of funny because in home services, we just kind of think this is like normal. And we just think that that is kind of how it is. We lose money during the winter. We can't keep our crew busy. Leads drop off a cliff. When in reality, this is a solvable problem. And so I've created a free workshop for all of you, and it's going to go over the 5 different ways to solve the off-season in every home service industry, whether that be creating recurring revenue like we're talking about with AllFix, or that be creating an adjacent service and doing upsells. There's options to be able to make sure you don't lose money during the off season. And if you can figure this out, if you can go on the offensive and do advertising and hire and get more trucks and equipment during the off season when the rest of your competition is sleeping, that's how you take over a market. Down in the description, click the link. It's completely free. And I hope it's helpful for you. I think it's definitely an opportunity going into our kind of our slower season is taking the 1,500 people, really segmenting them, and then starting like going pitching this differently to them. It's really how we found is like we've got to be able to explain this in one sentence. Like this is like a packaging problem. If I'm trying to sell someone after the job, what do I say? We will warranty our work forever as long as you're under one of our service plans. And here's the three options. It's our XYZ package, our Z package, and our all fixed package. Which one do you want? And you will— this forever, this is warranty. Or maybe the all fixed package is the one that we forever will All Fix. Anything that we, we have touched will be warrantied. If there's a nick on the wall and we painted the wall, we'll patch it up. That's the All Fix package. Also, what's nice with the warranty is if there are things that you have to actually do repairs on, you get to move those where you're slowest. Yeah, right. It's not like it needs to be done right now. Yeah, so you can kind of move where the projects fit in. Yeah, when All Fix does the warranty inspections, it doesn't mean that all of the problems they find have to be fixed right away. This allows them to do these quarterly inspections, but then schedule the projects to get completed during their offseason. Yeah, like, I think it's just a matter of, like, we create 3 packages, like, basically good, better, and best models for this, and then we take that same— the same 3 packages and then just wrap them slightly differently for our different customer segments. So the Airbnb people, the people who are snowbirds, the people have a second house, the people that are taking care of their family, right? Like, if I'm taking care of my family's house, like, I I would be doing this in a heartbeat because like, I know their AC breaks all the time. I know there's always a leak. Like, they're going to call you in the middle of the night and I'm going to pay $500 for someone to go there in the middle of night. Whereas if this, like, I don't have to think about it. And then if there's mistakes, if there are problems, like you're just going to send me, hey, there's the estimate that we think this should be done. It probably has another 6 to 12 months in it. But if you want to take care of it now, we can get it done. Right. You start governing your lead flow too. Yeah. You determine leads come in, like, because, oh, we need more leads. Okay, let's go do more of the inspections this week. We do more inspections. It's going to bring up how many leads we got. And then you go with that. Yeah. And ultimately, like, even if your good, better, best model you have, even if the good one is like ridiculously cheap in your mind, like, we can never make money on this. The objective is to upsell them. And so if you have it as like, you name it the packages differently, but then you also like, this is like when you go to a mechanic, it's like, this is our 70-point inspection. You just have different points on each of these, right? So like the all fix is like your 75-point inspection on your house and here's all the stuff you're going to get for it. This one's a 50, this one's a 25. And you know, that 25 one is basically walking around the house and taking pictures and you know, it's going to be less than an hour in and out. But they're not going on the roof. They're not checking underneath the crawl space. It's like this is the 25-point package and you're basically showing up to their house. Well, and I would incentivize like crazy your upsell. After projects, because the level of conversion from a one-time project into recurring is a direct implication of how satisfied the customer is. If they're happy with your job, they liked your crew, and an estimate comes in right at the highest point of activation and says, why don't we just warranty this forever? They should be able to close a lot of these. And then we have this, like, instead of revenue going like this, there's going to be this slow recurring build until finally can make 60%, 70% of revenue is just from this program. Yeah, right. So I like it.

So I have people, yeah, all the way 30 minutes away, they'll call us for any little thing. Yeah, something breaks, we're the ones that they call. We have, we have people calling us to replace a doorknob.

Yeah, yeah, that's me, dude.

I stick it. And we have a $250 minimum. Yeah, yeah, you know. Yeah, um, yeah, they're okay with it. We, we have people calling us to replace a battery in the smoke alarm. Yeah, that's $250. $250 minimum.

And you pitch all those people like, hey, it's $250 a month. You just— you're going to basically take that money that we would otherwise have just for a service call. You don't have to call in. We're just going to show up. Yeah, your scheduled time. The automation is going to tell you a week before that we're showing up and you don't have to worry about the $250 minimum for a doorknob. Just get the door knob, put it next to them, we'll pop it in there. Exactly. And I really think like your big package is all fixed. Garrett, you're hearing all this, right? Yeah, this is, this is great. What we're kind of talking about is like, how do we simplify it really easy for a customer and then make it like packages? And so my thought is, and again, you all know much better like timing and all that sort of thing, but like for a customer, it's like we can protect your roof like above here, we can talk, we can cover from your roof to your ceiling inside of your house, we can cover underneath basically your crawl space, and we can cover outside. And I guess it includes foundation too, if they're not on a crawl space. That kind of would also fit in with this phrase I use a lot with new customers.

As I say, we have a team of 10 technicians who can take care of your foundation to your roof and everything in between.

It's pretty much the same thing you're saying for that. Because then what someone could do is like, hey, I want to have the year-round package, but I only really want— I'm focused most on my roof. I've had a lot of problems with it. I've had to replace it a couple times. I am tired of these massive bills, can you just come inspect that? That'd be the 1-point package. Then like the 2-point package, I want the roof and then I want the crawl space because I hate going down there. And then you have the 3-point package, which is— and the 4-point would be like the all-fix package. And that's the one you warranty. That's the one, if anything goes wrong, we will cover it. And then you mark that up and you're selling insurance, right?

So we could even go up higher on the, on the full warranty one.

Yeah, like quite a bit. Yeah. And then if you brand tying to Allfix, it becomes like the de facto package. And then every estimator when they're collecting the invoice—

Yeah, instead of the home service plan, it would be the Allfix package.

That would be—

Well, it's ultimate home service plan.

Well, think about it like that. Think about it too, like from a customer's perspective, I am literally using Allfix. If I don't use their package, well, like I'm not getting the full deal. Yeah, that's a good point. It's a matter of packaging. What are our customer segments? And then if If we have a, like a, really nail that, I'd go after the 1,500 people just ruthlessly. 'Cause if you can get 100, if you really think you can get 100 people, that changes this whole business. Easily we can get 100 people. Yeah, then it's a matter of, okay, can we do 100, 150, and then 200? And then it's we track the conversion of one-time jobs into these packages forever. It's just, it's the natural progression at highest point of activation, we collect invoice, and immediately are going to this. $40,000. Now you're asking for $250 a month. This is an easy sell.

So I was, I was really encouraged. Service plan we've been working on for the last few years, you know, Mike Andes really encouraged us to, to launch it and get aggressive with it. He's been with the service, you know, side and contracts for a while, so, so I was kind of hoping to hear his feedback. So really, that kind of changes the focus for this quarter. We got quarterly meeting coming up. So this is definitely going to be the focal point for this quarter.

Because what's killing the business is the seasonality. Absolutely. It's that one quarter a year. We call it Q4 collapse. In Q4, stuff drops. Leads, efficiency for the crew, revenue, profit, all off the board. And if we take out that one quarter of even this year, it's not bad. It's that one quarter that's sinking us. Because if Tim can nail down the packaging and what the, you know, the 3 or 4 options are going to be, who is our segments, then be able to hand that to Garrett. I think there's gonna be plenty of people that will just call in and you sell them on the phone. Yeah, yeah, we already have a good handful of them that wanted already. Yeah, and if you start putting on the trucks, that's your lead magnet. Yeah, right, you're getting people on this entry level that everyone wants and needs as dumb homeowners like myself. You get them in on that and then you sell, upsell them just consistently every quarter. And one thing that's super valuable, especially people that aren't at the house, is doing a video recap on the property. Being like, hey, just finished up the inspection. I went through all X, Y, and Z. And you're basically reinforcing the value every time you're there. But then you're also like, this one, it's leaking, but you probably got 6 more months. That's where you can do the sale. Exactly. And then even if there's nothing to sell, it's providing the value to the customer. They're like, okay, good. I can just like not think about that. It's taken care of. And in your mind, like, dude, I spent an hour there and we made $250. In their mind, I I don't have to think about the next quarter. Let's go. And that's what they're buying is peace of mind. Like you pay for insurance every single month on your car and never use it. Oh yeah.

We spend $35,000 on insurance a year. Yeah, exactly. And we wrecked 2 trucks and we couldn't use it.

Don't use it.

Because we had liability on it. And see, that's the thing.

Like the customer, they will find problems as part of the insurance and then you will literally charge charge them to go fix the problem. Yeah, you are going out and finding your leads now. You're getting paid to go do marketing. Yeah, which if they— like, if any handyman service doesn't do this, what are you doing? From a, like, a brochure perspective, if you want to design, like, make this really simple, like, there's like a point font that you don't want to go up under. Like, you want to make it super basic, and then it can eventually be sold on the upfront. Customers calling in about, do you guys do inspections? We're not going to go out and send one person. We're gonna sell them on the phone for one of these packages. And you're like, well, we got to do an estimate. No, we're going to sell them the package. And the first visit is the estimate. And be like, hey, we can, we can do a one-time inspection. It's a $250 cost. Or here's this package thing and this is all it's going to cover. It's not, you're not charging for the estimate. We're actually doing an inspection when they're— what you do anyways on an estimate.

Yeah, anyways, on an estimate.

Exactly.

So it really, it really will just become leads paying 100%, paying us like the value.

You do free estimates, right?

Well, yes and no. So, so one of the things that we've been pushing and we struggling is the design fee. We will probably be bringing in a designer.

If we had a proper designer, because currently the designer is the estimator. And right now that's sunk cost if they don't accept the job. Whereas now we don't even sell estimates. Yeah, we sell these, these programs and then a first visit is is the estimate. And we're going to get them those 5 things and options they can have. Now the designer's paid for. Exactly.

Yeah. So yeah, and we don't do an estimate.

It's all the design fees paid. Yep. And you can have, you can have like even the course of selling these for the first like 10 or 20 and having the package, you'll refine it several times. Then you'll kind of scale it across all 1,500 and then it gets handed off to Garrett where he can sell it on the phone. Phone. And it's literally right in front of his desk, like, okay, which package, which size of property, you're looking up their house, getting the square footage. There's no more time wasted with the estimator driving around doing zero revenue. You turn the sales position into a revenue-producing team member. And that's when you scale a sales team, because now you act— they're not a cost to the business.

Businesses all have cash flow issues, some harder than the other. We look on the news all the time, big old companies going bankrupt. So nobody's immune, you know, and that's, that's why I say to be in business you have to be either crazy or stupid, because anybody smart would just stick to a job.

You've already turned the business around, I would say. It's a— it's now it's a matter of like fixing that G4 thing.

It's, yeah, what we came up with this year was amazing. Bunch of rock stars, right? And, you know, the hole is just too deep to fill. And as long as we can keep hitting our margins, it'll get filled. Yeah, but going through the winter, I'm kind of warning everybody, and, you know, I'll tell you how awesome my team is. During the During some of the really lows, I had my leaders, let's say, not cash their checks for a couple of months. And Tim, I think he had like $15,000 in checks piled up, just not cashing them. They just stepped up. They just stepped up and just, you know, it's one of those you just say, Lord, thank you.

Well, let's make some more money so they don't have to do that.

Goodness gracious. Exactly. My guys are making more money than I do. You know, I think probably that's what kept me alive really and decent with my wife and strong, I guess, with my wife is that from the very beginning, from the day we started the company We got on a small salary and we just kept that salary throughout the years. You know, we haven't given ourselves a raise, we don't take any draws, we don't, you know, we've just been leaving everything in the company. And probably if I was robbing the company a little bit more, it would probably hurt a lot more. So we did and increase our lifestyle to be able to do that. You know, before Mike, we, we were trying to figure out how to implement P4P, you know, so we finally got that implemented. That's working in one of our companies, and the other one we're still struggling with the way the data is coming in and all that stuff. You know, we got some amazing payouts. I got, you know, one of my guys is getting that extra $1,100 a week, but that, you know, he's got some of the, you know, bigger projects getting done a lot faster. So now we're using him as an example. Okay, so this is, this is what he's doing, you know. I think where, where we did improve is we, um, we now have a team that almost worked a whole year together and we're, we're hitting those efficiencies. So, uh, the new people should be able to flow right in. Um, you know, as far as the, um, uh, training processes, um, we still don't have an ideal training process, you know, just because we got so many trades that we, uh, we work with, you know, kind of like our dispatcher, he was trying to get hired for an electrical apprentice, you know, totally different. Yeah, but With the personality test, we were able to see that he's gonna be a lot better in dispatch. Yeah, so sometimes you got guys looking for one type of jobs, but their personalities don't fit that job and we're able to use them somewhere else. So not quite sure on if we improved on that yet or not. The time will tell. This year was probably the hardest of my life just with that many brand new people people. We, we did find the plumber. He's very well experienced, and Mike, he's got a personality that's kind of hard to work with, but plumbers are kind of hard to work with no matter what. So getting him on board, and he's going to end up leading that, um, the plumbing division, and hopefully it works out. A lot of our issues were replacing tin a lot of team members in spring, so we had a lot of training that had to go in. And having Mike come in, it was more encouraging, you know, because sometimes you just kind of end up feeling like, you know, am I failing? You know, that sort of thing. And being able to have him look at it and say, okay, so you've already implemented this, you know, this is, you know, the biggest thing that he suggested is, well, more more encouraged. We've been working on the service plans and getting those implemented for about 4 years, and we now have, I think, only 3 sold. So it was, it was pretty complicated. We had to revise it twice since, you know, to make it, to make it more, you know, more accurate and easier to sell and things like that. So, so far we got good interest and, and that's going. So time will tell. We went from $300 month, you know, inspection to, um, you know, we broke it down into a smaller $79 option to pretty much get in the door and then added the, uh, the add-ons. So, um, so by, by doing that, it just really gives us the ability to come in with the add-ons instead of trying to sell a big, big price point item. Tim, he's, he's the one that's focused on the service contracts. He's optimistic that he can sell 100 this year. So right now we're still to a slow start. We're planning a marketing campaign soon as the plumber gets onboarded and all the licensing gets figured out. We'll do a marketing campaign for, you know, try to, you know, loop a lot of these things into it. So, but as far as a cash flow, our margins have been really good, you know. So now filling the hole— we still haven't filled the hole from spring. It's, it's kind of scary either way. I'm going into the winter with a worse cash position but best team ever. When I first came up with ideas to submit, I talked to I go, we're keeping everything transparent anyway, why not? You know, and, you know, at least we get another set of eyes on everything and whether we can get some new information or encouragement, one or the other, it's going to be effective. No matter how, if you're on the fence, I think it's vital to be able to get another set of eyes on what you're doing because when you are in the grind, and don't step back far enough to see, see where you are, you will be running around in circles chasing tail and getting nowhere. You know, surrounding yourself with people who can tell you you're doing something wrong is probably the most crucial thing you can do in business.

AllFix struggled with having really qualified and technically sound technicians out in the field. But there's one last constraint to growing a $3 million business. Business, and that is leadership. So we've talked about a lack of liquidity, a lack of leads, a lack of labor as to why you might not be growing your business. But the last one is the hardest, and that is being able to get good leaders and managers inside of your business. So let's go visit Warrior Outdoors. These two brothers are the owners and do over $1.3 million in revenue, but they struggle with leadership. They don't have clear roles and are constantly stepping on each other's toes. In fact, they've hired a manager, another leader in the business, and they kind of know the writing is on the wall. They've got to get rid of them. Let's see if we can turn it around. Would you rather just not have Jason around right now? Probably.

This is the Business Turnaround Show. We have frustrations on our side of things, and I'm sure he has frustrations on his side of things.

Effort stinks. I need numbers.

Yeah, you're just a number.

No matter how hard you work, you're never going to be anything more than a number.

There have definitely been times where I've wanted to get out of the business.

Today we're in Kansas visiting Luke and Logan from Warrior Outdoors.

Not a lot of people get to see their brother every day, but yeah, it's super stressful.

Last year they did almost $1.3 million in revenue, and even though sometimes I feel rich, I also feel very poor.

They tend to overthink. That's how we get stuff done, like really get it done.

So yeah, but they only have $6,000 in the bank.

We're back to zero again. Like, our payroll has been out of control.

They have over $300,000 worth of loans. They have a ton of equipment. That is not where the money in the business is at, and no one is being held accountable. Why do you think you can't hold people accountable? I'm not very good at that. She just avoid confrontation and you don't want to tell people what to do.

Luke's gonna be heartbroken. I think I'll be okay.

My name is Mike Andes. I'm the founder of Augusta Lawn Care. We have over 180 locations around the world.

He knows how to play the game and I'm not that good at it.

Is Jason the operations manager? Is Logan the operations manager? Is Luke the operations manager? Who's my boss? It's ridiculous. I travel the country fixing struggling businesses. We just said right before this, if we had to right now, given all the information we have, we need him to go. This is the unlock. Our goal is to give Luke and Logan a strategy to turn around the business in the next 6 weeks. This one This is one I'm so confident on. If you do this, it'll change everything. I want them to do it like tomorrow.

From the stressful side of things, I'm totally down for it.

For 7 years, I ran my— the business with my brother. We were really small, like we had $30,000 or less a year. Very part-time while we were in school. I know what it's like to be running your business with their brother and there being conflict. But I don't know what it's like to be running your business with your brother and the business being in debt like it is. Like, when I was with my brother, we were both making good money while we were in school, so like $15,000 a pop for each of us, paid our way through college essentially. Hey guys, how's it going? Good, how are you doing? And you're Logan, right? Yes. And you're Luke? Luke, yep. Awesome, great shop space you got here.

Yeah. Hi, I'm Logan with Warrior Outdoors. I'm currently the maintenance manager, sales manager for maintenance. I was like 12 or 14, like when I started working full-time here. I worked for Luke for the first like 6 years. I started another, like an insurance brokerage company, ran it for like 2 and a half years, and then I came back. So I've been here for about 3 years in this capacity.

Building a business with someone you trust is always a good idea, and because family is— there's inherent trust already built, it's a common connection connection, they're like, oh, I'll start business with that person. And it's not a bad thing. There are some great businesses that are built with family members. There's also a lot of struggle that comes along with it.

My name is Luke Whitlow. I oversee the design-build side of the business. I started it to like get through college kind of a thing. I'd come back every weekend and mow, and then Logan would help me. So like, for us, it's not a big deal.

Like, we have similar morals, we have a similar thought process, and you know how to make everyone mad, and you know everyone's failures and weaknesses and their past and everything that goes into that.

Like, when we're on a project together, oh, we know the next move. You don't need to talk. Like, it's crazy. I bet we'd be 3 people on a mow crew. Yeah, easily. It's ridiculous. Yeah, my wife does all the admin. She's inside.

And to have your wife in the office makes it even more difficult because then you can't go home and like disconnect from the chaos. You have to just keep talking about it. So how long have you been at shop?

Been since 2020.

Is that when you got the house or just started building?

Yeah, we just moved in here. Before, we were running out of our parents' place, like south of town. Yeah, that's Luke's house right there. Yeah, if you want a tour of that, you might need to give my wife a heads up. We used to work in the basement. Yeah, before this, and it was awful. And then there's not a lot of work-life separation. We'd be working to like 7, 8 at night, and the guys are like, you guys don't work? And I was like, they just didn't see us.

Yeah, so they do like one point $1.2, $1.3 million in revenue last year. Looks like they're on track for like $1.5 this year. They were at $529 for the first 5 months. Like, they're honestly— they'll do $1.3, $1.4 again this year, honestly, unless there's something I'm not seeing. They might be counting all their money they're earning, like, so like their accrual and not that cash accounting. That could be the case. And so like the past few years, has revenue been about the same or you've been growing pretty quickly?

It's been pretty similar the past few years. Prior to that, we were doubling revenue year after year. We got to about the $1.2 million mark and have kind of plateaued. We've gotten— gone up and down a little bit. This year I think we're tracking a little bit better.

I think we'll hit $2 million.

Yeah, the second half of the year is where a lot more of the revenue is for you guys then?

Yeah, we had a horrible beginning of the year. I don't know, just contracts just didn't get signed until like a month later than normal. So we had about a month late start as far as install and all that kind of stuff. This year? This is a weird place. It is a weird place. A lot of landscaping. Yeah, we're a small— there's like, you go like 5 miles from here, you got Epic, they're probably $25 million. Signature is probably $50 million. Hermes does about $50. There's a lot of landscaping. So we keep like our skid loader here. We have like a mini excavator. Those are our old fleet of mowers that I'm selling.

My very first stand-on was that model.

They run pretty well. Yeah, they're great.

You had this since like 2020?

Yeah, somewhere like 2018. 15 even. Really? Yeah, they got like 2,000+ hours on them. Yeah, they're ready to kind of be moved on. So then you guys got all the Vertexes this year then? Just got them a couple weeks ago. We were running all John Deeres and we loved them, but they started breaking. Really? So we're like kind of at the end of their lifespan.

It's like 45% maintenance and then it's like 20% snow and 30% project time. They have a ton of equipment. Was this all— this shop space in the back built already when you moved in? Yeah.

Was existing. We've just kind of improved the property a little bit, and then we just recently brought in our office trailers. Well, so no problem with the neighbors or anything like that? Uh, well, so we, uh, kind of— oh man, this year is the first time. This year was the first time it's actually been an issue. We're working on like rezoning and all that stuff, so that's been a huge money suck, huge undertaking. Oh really?

Yeah, just to get it rezoned?

Yeah, because like they made us resurvey everything commercial code. Yeah, we got to get through commercial code and all that stuff.

So did you bring a trailer in after that?

That's what started it. That's it. Yeah, that's what started it. It was a mess when we brought that.

Oh man, that stinks.

The county called me and said you were doing the wrong thing. Oh man, we just figured we were outside of city limits. We, we just didn't think about it. So now we're trying to do it— I mean, we always try to do things the right way, but This is Jason's office. He's our production manager.

Okay. He's out there. And did he just recently start on the production side?

Yeah, this year, like 3 months. Okay, 2 or 3 months. Okay.

What's your name? Jason. I'm the operations manager. Sorry, I just had mouth surgery, so you're all good, man. Don't talk too much right now. And is Jason— does he kind of go between the crews as well as the office here, or is he mostly in the office?

A little bit of everything. He also does our year Are you Alexis?

I am. I'm Mike, good to meet you. Nice to meet you. This is the headquarters. Yeah, it was a month ago where they did the turnaround application. This is the middle of spring rush. It should be in a better spot now. Knock on wood. From your old perspective, where's the current pain like in the business? Like obviously you've grown a bunch. This year we've had some unexpected stuff with the county thing. What do you all currently see as the constraint? I would say the—

before the money, it'd be the people. Early on in the year, we brought on our first manager. And it's Jason? Yep.

I kind of took over here in February. All right. When I started, it had 6 guys, and we got it up to 19, and I let a couple go. But now the group we've got is pretty solid.

We don't have a ton of turnover. Our culture has gotten a lot better. Like, we switched to vests because that's what we decided decided we wanted to do and like getting them to just wear it. It was me and Luke managing it, like we had that solved. Now that Jason's managing, all the old bad habits that I had like worked really hard to fight are coming back. But we have frustrations on our side of things and I'm sure he has frustrations on his side of things, but I think that overhead is kind of like straining us a little bit and we're also not really sure how to use a manager and what to expect. It's just been hard on the follow-through side of things.

I'm guessing that I think that's just the, the expectations with Jason and like that whole role and what that looks like. It's like the major kind of thing.

That's my major thing. Okay. Because he's my direct— right.

And so have you basically said like to the crew they report to Jason? Yeah. Got it. And so you've been completely removed? I should be, yes. Okay. But he's not. Got it.

Very involved. Got it.

So which is tough for both people, Jason and yourself, right? Yeah.

Before he was here I was the irrigation tech, and it was very difficult to try to manage crews, design, sales, and be out in the field for hours on end fixing irrigation systems. Right.

You or Jason basically have to be the manager of the job if there's irrigation involved. Yeah. On, on your project, is most of them have some sort of irrigation involved?

Every project. Yeah. When I say commercial, a lot of it's estates, like 40-acre houses, all irrigated. Big systems.

Okay, so you got maintenance, repairs, as well as just even installs, right? Got it. And how much of those contracts are— is it all commercial? We're probably 70% commercial, maybe a little bit more, and a little bit of residential. Yeah. In the business right now, about what, 60% is maintenance? Yeah, easily.

Yeah, probably more, a little bit more than that. Yeah, I think I have— I've already sold $1 million in maintenance for this year, for this year so far, or a little million one. And then Luke has already done a couple few hundred thousand. Yeah, we have like 3 big jobs that are finishing up on install this week too, so that'll help on the cash crunch.

And then from, from Alexa's perspective, do they call her throughout the day in terms of like routing, dispatch, or anything?

I do all that.

Okay, got it. All right, you do? Yes. So what does Jason do? Yeah, okay, 2 brothers working together. One of them has their wife in the office. They also seem to have a lot of employees for the amount of revenue they do. They have up to 20 employees, maybe 1.2, 1.3. Context, my location that doesn't do projects, just mowing, did one— it's just shy of 1.2 last year with about 8 to 12 employees. Doing 1.2 like they did and having between 15 and 20 employees, it's gonna get a little spooky, especially especially when a bunch of that is subcontractor and projects with a bunch of material costs. If they are having quality control issues, hiring a manager is not a great solution for fixing a problem. So it just kind of seems odd to me that they hire or like, you know, bring in an operations person but not an owner.

They have a lot of personnel issues. The money just adds on top of that, you know. About 2 years ago, we lost about a half million dollar account and that set us back. Maintenance contract? Yeah, maintenance contract. It was very difficult to recover from.

And they hadn't like told—

they were just like, we're just out. Well, we had had the account for what, 8 years prior to that?

So it was kind of like the foundation of the whole business.

Yeah, it absolutely was. We had grown with them like exponentially. And so when we lost that account, it definitely had us backpedaling, but we actually were able to make up that revenue that year. When we lost the $300,000 account, I made that up this, like, within a couple months. And then last year I grew another $400,000 in contracts. And is that door knocking?

Is that cold emailing? What are you doing to go up?

Yeah, both. So most of it I'll go door knocking. Then there's some big property management companies that I'll just go after those guys. I thought we were good beginning of this year. We were in the best spot we've been in a long time. We were back to zero again. So I've been personally floating the company, but it's definitely been stressful.

And when on those projects, how are we collecting? 50% down?

Yep, 50% deposit, and then the remainder is due upon completion.

And so it's, it's that 50% completion part that if we're over time and all the rest of it, we're just burning in the cash.

Yeah, yeah, we're just carrying that basically.

And is it 50% down to secure the job or at start or at—

Yeah, start basically. Basically.

Okay, is it start though, or is it like when they book the job? It's at start.

I want it to be when they book the job, and we've had a few people do that, but I haven't been super strict on it.

So are you usually collecting that check?

Yeah, or yeah. Okay, in person? Yeah, usually in person, or they'll pay online or something like that.

On projects, you think it's 50/50, or like what's the split of people paying at start versus when they accept?

I'd say most people pay right before.

So they can accept you, like, do the whole process, and then, like, as long as they pay before the day I start? Yeah. There are 4 reasons why every business will stop growing. I call it the 4L framework. Either you're going to be constrained by your liquidity, cash in the bank, the amount of leads you have, the amount of labor you have, or the leadership in the business. From a liquidity perspective, I think there's certainly, like, a cash flow issue, and that's very typical with project-based work. Whenever you're, like, End of this week we will have more money in the account, immediately there's a cash flow problem simply because it's like we are counting on the job to be completed when we should have collected all the cost of goods sold prior to the job getting started. We should never go negative on a project. 'Cause like you're gonna be profitable on a job, but if we're going below zero for any period of time, like, well, I got, I cut 50% here, then we did the job and then I ended up making a profit here, right? We made money. But if it takes, okay, there's our deposit, we're making money, but then we have all of the labor going in out. This is the part we're trying to avoid. It's like there'll be times where you have a $200,000 job or 5 $20,000 jobs and you have this massive roller coaster. Sometimes you have $100,000 in the bank, sometimes we have $5,000 in the bank. 'Cause 100 grand, you guys know, it's just boom, it's here and there, gone tomorrow. And even though sometimes I feel rich, I also feel very poor. On the project stuff, what's our hourly rate that we kind of targeting first? We're shooting for $85 an hour. Got it. And then in terms of of our close ratio on accepted estimates?

Is it pretty high? Yeah, it's probably about 70 to 80%. Got it.

And you're basically hand-holding that whole process?

Yeah, I'm, I am literally doing every single aspect from start to finish.

Okay, and what's the average ticket on those? Usually like $20,000, $30,000? What's your—

Yeah, it can definitely vary. Like, we have a job that's $100,000 right now, one that's $50,000, one that's $20,000. So like, they kind of fluctuate depending on the different aspects of the project.

So their target hourly rate is $85 an hour. I wonder if they actually hit that much on commercial maintenance, just because if you look at how many employees they have versus their revenue last year. On the other portion, from the maintenance side, what's your target hourly rate for maintenance?

Oh, we do $85.

That's pretty good. Yeah. What's your base pay here?

Most guys are about $18, are starting, and most guys around $20, $22. That's actually pretty good.

Especially if your base pay is $18. If your target hourly is $85, it means you're hitting the target, the 25% rule. I always target where base pay is less than 25% of the target hourly rate. From a liquidity perspective, we have cash flow. We also have how much credit card right now, do you think? Uh, $30,000. So it just floats, I'm assuming, like when you have cash, so we'll pay some of the credit card off.

Yeah, we pay it off completely every 14th of every month. Got it.

Okay, so we have a little bit of credit card debt, But I'm assuming it's something you're just going to keep managing. It's like you're floating that card. When it comes to liquidity in the business, they have a lot of credit card debt and they do have a lot of loans on all the equipment. But a lot of those loans are collateralized with actual assets, trucks, mowers, etc. We have a big skid steer in the back. That's fine. I'm not too worried about the equipment loans, but that credit card debt and the fact that we have hardly any cash in the bank is very, very scary.

Yeah, it's super stressful. So like, I've been paying for it.

And on the project work, how far are we booked out right now?

2 to 3 months, probably.

Okay. And is that pretty consistent?

Not always. I mean, we're being in a seasonal business. There's always those fluctuations. I would love to have a bigger funnel. The next question that comes up, great, great.

How do we just bombard you with leads? When it comes to leads as the next constraint in the 4L framework, we've got to make sure that we can actually control our lead flow.

I don't feel like that's something that we've ever had dialed in. We've started with some marketing with some mailers and stuff like that, but I don't think we've had the quantity to actually get real results. We've posted a few things this year and that's about it. We haven't gotten a ton of content. I actually really enjoy doing that, like making content and stuff like that, but I'm not— I don't feel comfortable with it, I guess, or feel like I have the time to do it. All of our business up to this point has been word of mouth. And when we started the install division, it was what, 3 years ago? Go. And we, we got like 2 or 3 couple $200,000, $300,000 jobs like right off the bat. And then it just kept kind of flowing. Up to this point, we haven't really had the need for marketing, but we haven't really— like, we don't do marketing. Like, we're just not marketers. I don't know how to market. It's always outbound for me. I would say leads coming in is not a thing. I always call, especially for commercial.

On your website, I don't see a ton of project stuff from the top of the— like the very top. I see leaf cleanup and I see residential mowing as the form to fill out and get an instant quote. Right now in the business, we're making all of our profit from projects and commercial work, and that website does not screen that to me. If in the middle of spring, in the middle of summer like right now, we're showing fall cleanups, not a great idea. We're not going to pitch that service during the summer. Instead, we're going to focus on design-build. I would really recommend seasonal offers. Offerings on that website, right? If we're at the beginning of the season, or like January and February when everyone's renewing contracts, we're highlighting commercial maintenance. We're putting our crews on big mowers, on big properties. We are saying sign up, get your annual contract, property managers in XYZ County. Like, you're going after them. At the end of the year, because we don't really want to focus on snow, we're going to focus on our contracts, those massive commercial contracts and the renewal around January 1st. So like banners and picture as well as like your current form, like your best real estate is spent right now on recurring money. Cause it's an instant price form, which I'm a fan of. Simple estimates. Let's go. Love it. It's just a function of that is not where the money in the business is at. And so if leads is our constraint, we're not hardly getting any inbound for commercial and we're not getting enough inbound for design-build. We need to scrap the part of the business that is probably making up 10% of our revenue when it comes to the best real estate on our website. And so I would, I would talk to your designer. And just really think about, okay, like, how do we reprioritize for this 4 months of the year? We're doing this for this 4 months of the year. We're doing this for this 4 months. We're doing that. If you're trying to sell something in a store, you put it near the checkout. You put it like that's the most coveted space on the shelves because it is the highest frequency purchase. And so if you want things to be purchased often on your website, your storefront, put them in the front, like tell people about it first. If you want people to put in a request form and submit one and give you a call, make those those the most important call to actions on the website. And right now, have you standardized much of your like product offerings or what products you install, or every single one custom? They're very custom, I would say. Okay, and have you ever looked at changing that? Um, I saw that. I say yes. Okay.

A part of our problem with our guys is they don't know what they're doing because we do everything. Like we are doing right now, we have a patio, we're doing a screened-in porch with a fire feature.

That was the 4x4s going out? Yeah, yeah.

And then we're doing a water feature, water feature rebuild.

Water feature, bro, that's a whole nother level.

Lighting system, lighting system, like all that's happening today right now.

Is that a function though, like you offering everything because you need the work? Yeah. Okay, when you go to a a client, I'm assuming, like, what do you bring to show them?

Yeah, so I actually have a 3D rendering program that like does the exact material we would use, so they would have a very real-world like representation. That's in the second meeting. What about the first one? In the first one, I'll have like a, like a Uniloc book or something along those lines just to kind of show them what the materials would look like generally.

So this is my recommendation. So we used to do the same thing. It's horrible. Trust me, trust me. This one I'm so confident often on, if you do this, it'll change everything. Okay, don't bring a Unilock or Belgard or any other, like, you are just opening up a can of worms for that customer to be overwhelmed with options, overwhelmed with design, overwhelmed with color, overwhelmed with the fact that that picture looks great, but is it gonna look good in my backyard? Then I need a design to validate these two things. I would recommend you have a product book. Yeah, the best example of simplification and standardization is actually in restaurants. In general, the more menu items, the cheaper the restaurant. So you look at Denny's, you look at fast food restaurants, like it's a huge menu. If you ever go to a really, really fancy restaurant, you're talking about 2, 3 entrees and they cycle them out. They are certainly not simplified, they're very complex dishes, but they're standardized. They stick to the same few things that you all have created from pictures that you have installed. And if you don't have one, you can find one online pretty easily. But you're going to say, hey, like when it comes to papers, these are the 2 or 3 papers that we install. You don't tell the customer that. You just say, hey, these are the gray ones. This is another design that works well. Like we only had 2 papers. We eventually got to 1 paper. The design was like a pretty complicated 5-piece design. It was Rio from Bel Bar. Like it was a very specific kind. We only ever did that paper, but it's because I had 4 different pictures in my product book of it in different scenarios that I feel like, okay, this is gonna be a pathway. Great. We'll turn to the pathway page. You like this? Yes. Okay, great. I'm using that. It also makes the design process like 10%— it's like way shorter. Yeah, because you have the 2 or 3 things you drag in, very simple. And you can eventually probably get away from even doing a lot of the big designs up for like $10,000, $20,000, $30,000 jobs because your pictures tell everything. And so if you want to be paid well, you either go super, super custom and every single job is different and every single job have its own special snowflake. But if you're going to do that, the owner or someone very, very skilled is going to have to be on the job, and their goal is to be able to move out of the business. And if their goal is to move out of the business, try to do it in a way that it would be easy to replace yourself. And again, what's really great is your labor gets trained much faster. So we got to where we had one type of block, one type of paver, and one type of natural stone for patios, and we trained all of our crews on those three things in two days. Space. And after that, they just knew how to do it all because we're like, okay, great. When do you see a wall? You see on it on a slope this way, and we're going— we have to put against the angle. Then there's other times we're going into the wall. Okay, we just did all of these scenarios at our shop space, and then they could do it all. Like, they had seen it. And after they do them like 3 or 4 times, they're so efficient. Because what kills me on custom is you get there and it takes half a day, and it's like, we put it together, oh, take it apart, and then put it together, and then back and forth. Finally, we get it we can just copy and paste. You can cut that whole first part out just by saying this is the same type of product every single time. And there's way less management on your part because your crew just gets so good at installing. Right. All right. So like, that's where like, I do think leads solves a lot of this problem because you've got so many leads. You'd be like, okay, we're going to cut this service out. We're going to cut this service out. We're going to cut the service out. The challenging part, you have built the infrastructure of the business in a way you have to do $1.5 million revenue, right? There is no like, hey, let's go back and take a couple of all these services out, kick Jason to the curb, and like just focus on our core 4 things. Because you've built the infrastructure, you need $1.5. You're assuming in terms of the debt, the 2 of you, et cetera. I don't see any world in which a business is profitable with less than $1.5 million with 2 owners at the top, an office person full-time, and definitely a production manager. You don't even get any leads coming for residential?

We'll get some.

We'll get some. Yeah. Randomly trickling in.

Yeah. We'll get some and we'll pick, we usually pick them up, no problem. But there's— it's not that many. It's probably one every 2, 3 weeks. Really? Wow. Yeah, it's not a huge influx.

Okay.

I don't know, Alexis, am I wrong on that? How many times do you get calls for like maintenance for mowing or anything like that?

Um, maybe a couple times a week.

If it's like a true residential, like they just want their yard push mowed, we lose that account every time. You know, like we're, we're definitely not set up for that. A lot of our stuff are like man- their nice, so like it's pretty much a commercial account and we just fit right in with that.

Basically to me it sounds more like you're both involved in sales. One's involved in the front end getting the leads, one's on closing.

Yeah, so I run basically the whole install, like design-build side of things, and then Logan runs the maintenance.

Got it, and so you both control your sales for those two distinct sides?

Yeah, so I do all the design and sales for install and then Logan Logan does all the sales for contracts. Any contracts that come in.

The delineation really is department. So all design-build, all maintenance, sales for both. The way they have it currently set up, every single person that comes in as a lead is gonna have to be handed off between the two owners. And so that is going to cause some toe-stepping. Is there like 5 other things you're also managing in the business?

Yeah, so I handle like CEO and then I handle all the sales. I could handle the production for sure. I have been for the last 2 or 3 years. My thought process was Jason handles all the production and gives me time to actually do more outbound because I feel like if I had the time to do the outbound, we could double, which is what our goal was. Our goal was to be around $3 million end of this year, end of next, beginning of next year. That hasn't really happened and he hasn't really taken it over like I thought he would with the experience he's said he had. I feel like I'm stuck in limbo between going and doing sales and actually being a good account manager to our accounts and fulfilling the production.

Logan doesn't have any time to do outbound sales because he's busy doing operations and doing the work of the manager that should be managing the crew. Once work comes in, from a production manager perspective, is Jason managing both crews? I'm just—

I'm doing install still. Okay, so I only have 2 install crews, so I'm able to manage them pretty well.

So you're basically soup to nuts, everything design and build? Yes. Got it. And then maintenance leads come in, he handles those, then hands off to Jason, Jason manages the maintenance crew. For Jason, has it been difficult with the crew, like between him and the crew, or is it between like him, middle management, and you all? Like, has that been more difficult?

I think the second relationship is a little bit more difficult from our side of things. He He's very good with people. Like, all the guys seem to really take to him, respect him. It's just we may not be seeing some of the things that we were hoping to see. I, I have a hard time like pinpointing the problem. A lot of our productivity, I feel like, is kind of slower than it should be, which could have to do with training. But I feel like nobody ever takes my budgeted hours seriously.

The next constraint to growing a business is labor. And right now we have the fact that there's low efficiency, there's not a lot a lot of camaraderie or great culture in the business, and that's in part due to the fact that we don't have a clear role for operations. Is Jason the operations manager? Is Logan the operations manager? Is Luke the operations manager? Who's my boss? There's not any clarity around the management of the labor.

It's just so different because I was in the field for a lot of years, and it's a lot easier to keep on top of people when you're out there, and you can kind of drive production. But because of the lack of production, we're behind on jobs, and then we have to pay overtime on on top of that, which really cuts into the cash flow also. I also don't do a great job of like harping on people. That's, that's never been my management style. Like, I've never yelled at anybody in my life. We have a lot of damaged equipment, a lot of damaged property that we have to deal with, and then productivity. They just don't, they don't get what's going on, and they don't really care to get what's going on. They kind of like just come in, whatever it takes is what it takes. They don't care to look at the budget hours, no I had it pretty good when I was managing it. I had them starting to like get on track with that, but we're like 60% productivity this year. Yeah, and that's been killing us with overtime. I mean, we've just been—

is that blend between both departments?

Yeah, yeah, we're pretty close to that. So that's part of our problem, like our payroll has been out of control.

From a labor perspective, we We have all identified that there's like low efficiency. Also, it feels like there is really no care for like hitting budget hours. There's no buy-in, like just culturally there's not a lot of buy-in. And then I would also say we have a manager that right now we have disconnected expectations from what they think they're doing versus what we think they're doing. Okay. And so have you talked to him about like, hey, Hey, this is like, what can I do? What has the conversation been like with Jason?

It's been sporadic. I'm not very good at that. Like, I am the worst person at accountability with the guys, and especially Jason, because Jason, he's super smart. I don't know, not manipulative, but like, he knows how to play the game, and I'm not that good at it. Yeah, as far as like managing him. Um, so I've just been struggling with holding him accountable. I thought I had been super clear about what I wanted. And then things just aren't being followed through on, in my opinion. But I also haven't been like every week meeting with him. It's like I would tell him something and then like 2 weeks later I'd be like, hey, this happened. He'd be like, no. I'd be like, okay, well, what can we do about it now? It's just continual cycle like that. And then he's had a ton of medical issues. He had all his teeth removed. He's been having surgery like every couple weeks. So he's in and out a lot. It's been a strain. And we want to be like understanding to him, but like He's missed a lot of work.

I think a lot of the things they see as problems in the crew is just a function of, you know, and then them saying they don't hold the team accountable is actually like, you can't hold anyone accountable if they don't know who they're accountable to. Who am I accountable to and what am I accountable for are the two questions you have to answer for a team member. In a team meeting, for example, is everyone looking to you as CEO? Yeah. And then what if he says something like in the meeting, like is he an owner? Like, what, what's the rule? What's the dynamic between the two of you in relation to the crew? Do they see you as the owner really, or do they see like this is a joint thing going on?

It's definitely joint, to be honest. I don't even know if they really understand that he'd be the CEO, to be honest.

So you look at both of you running the business?

Yeah, just technically we're almost running like two separate businesses that kind of overlap. Design, design, build, and maintenance.

Who am I reporting to and what are the metrics of success? And neither of those things are well-defined. And so it's not that they don't hold people accountable, they haven't created systems in place to be able to hold anyone accountable to anything. 'Cause they don't have a system in place for it. They don't have metrics, and they don't have any roles and responsibilities of the leadership team so people know who to report to. Have you talked to Jason about like his role, performance, anything like that? And how has that gone?

I have, didn't go well. Go super good. He thinks he's doing really well.

Yeah, you're just a number no matter how hard you work. You're never going to be anything more than a number. It's just, yeah, do your thing, you're here.

I'm not super good at that. Yeah, accountability, like I said, so it hasn't gone anywhere.

Generally, this really kind of goes more to like the leadership stuff, like what I fail— I'm seeing is we like sales, operations, and admin. Obviously Alex is admin. And then I'm really split on who's sales and operations because you kind of are operating as two different businesses, right? You're kind of like sales and operations slash Jason for maintenance, sales and operations for design-build. A $5 million business is going to look like you have an estimator for design-build and you have an estimator for maintenance stuff. You have an operations person for design-build, you have an operations person for out doing maintenance, and then you have probably admin with a couple assistants underneath. But that's a, that's a $4 to $5 million business. Ever considered one of you doing sales and one of you doing operations?

I think Luke's a great operations guy, he just doesn't want to admit it, you know. I'm a better outbound sales guy, so that's why I took that on. I mean, I probably upsell our book about 25% of what I sell. So if I have $1 million in contracts, I'm gonna sell $250,000 in upsells. But most of our projects are just, well, like one-off things that we don't do their maintenance. They just want a patio or something. He's not gonna go cold call apartment complex. He's not gonna go do that. Like, that's me. I do that. Like, this has been our problem the whole time. It's just like feeling like we're both good at certain things in certain fields but struggling with other things. I know Logan's a great salesman. I don't have the industry knowledge to do the design stuff that he does. As far as patios, and I wouldn't even know how to bid it. I think I'm better at holding people accountable than Luke as far as operations though. So I, I don't know, we kind of overlap.

So the only limitation from saying you are sales and you are operations is you can't sell the design build because you don't have the experience, and he can't keep the crew accountable in terms of operations on the maintenance side. Yeah, got it. Lots crossover. Yes, very much.

And we've struggled with roles. Yeah, that's very difficult. That's been one of our biggest things we've been trying to fix.

But yeah, because you're basically— you guys are crossing over departments, sales and operations, and you're crossing over like service mixes. Because like the fact that you can still talk to his crew and tell them what to do, immediately there's like, oh, like they're— I have two bosses, which is just confusing for them. There's no like clear leadership. Jason might be— that might be actually a result of him like feeling that way is like he doesn't really know his role. He doesn't have clear expectations. He didn't have benchmarks for success, et cetera. I'm assuming like both of you have pretty shared aligned goals for the business.

What is the vision for the two of you? There have definitely been times where I've wanted to get out of the business. To be honest, one of the reasons Logan came on was so that we could grow it and sell it. My vision is be like $3 to $5 million, have every aspect of the business was handled by somebody and to where me and Luke could step out for a week and then not fall apart. If it's a marketable business, it should be a profitable business. So like, if it's something that we could keep going, we would definitely do that. We have a need to grow to $3 million so it can support both of us and the management needed to, to do it, because neither of us are super great at accountability. So we're like, we need to at least have a production management level so that they can have And that was my goal.

Yeah, I kind of saw a couple times where like they inferred that because they didn't yell at people and they weren't harsh with people, that therefore they couldn't hold people accountable. Why don't you guys think you guys are good at holding people accountable? I've heard this a lot. Why do you think that?

I struggle personally with conflict. Like, I'm not, I'm not a confrontational person, right?

But confrontational and keeping someone accountable, very different. So like, why do you think you can't hold people accountable? Just haven't. So you just avoid confrontation and you don't want to tell people what to do?

I feel like personally I've held myself to like a relatively high standard for how I perform and everything, or I have in the past made the assumption that everybody else is going to have that same mindset when they approach something, and then I've been let down a lot after that. So I've been trying to kind of reframe how I've been looking at things.

If the standard isn't defined, you can't hold them accountable. So of course you're not going to hold anyone accountable because there's no standard by which to measure them on. So let's create the standard and then we will focus on is someone measuring up to that standard. All right, from a leadership perspective, this is the part where I feel like actually is the biggest squeeze and the biggest opportunity here. It's unclear as to who's running this business, who's at the top, what the dynamic is here. Even like the thought of like we moving the shop space here because they don't believe we're actually working. And we need to get in front of them. It shows some level of like there's, there's a disconnect a little bit. The last constraint in the 4L framework is leadership. And right now we don't have any clarity of where's the business going, what's our role, what's our success metrics. And we've got to figure out what sales, operations, and admin functions of the business are responsible for. Who's responsible for what and what does success look like in the sales department with close ratio and certain metrics? What does operations look like in terms of success successful in terms of efficiency score and people showing up on time. And same thing for admin. We've got to make sure we have clear roles inside the business. Suspend belief for a second and pretend like there's no cameras here, and we can take this out if it needs to be. Would, would you rather just not have Jason around right now? Like, if you just push a button, he's just gone, and you're able to manage the crew, would that be the best thing? We can cut this out. Probably. I think that's what the business needs. It can't afford another manager right now. Like, I think they're the classic business where basically they've got ahead of their and they've built the infrastructure and the leadership team for a larger business. And I'm not against that if you have plenty of capital to pour on marketing to be able to make sure the business actually gets that size. When we have $1.2 to $1.5 million revenue, let's just say this year it's gonna be higher, so $1.5. We have 2 owners, we have someone in the office, we like a 4th production manager on a lower margin because it's commercial work. And then we also have a lot of subcontractors and and design-build, like our cost of goods is higher. We have like a, like a relatively low margin to work with. Now, if we were able to scale up and because they had delineation between the 4 roles, he was able to focus just on sales and this year we're going to do $3 million. Very different conversation. So not against having other managers in place, but if you're going to scale past $1.5 and start getting a whole bunch of general managers in place, you better make sure the business has plenty of capital to actually scale that size.

The reason I haven't let him go is because I feel like I haven't fairly done a good job to tell him what to do. Okay. So like, I feel like to let him go, it's because of, yes, some things he's doing, but a lot of it's because of I just was not a good manager for him. I think he'd feel blindsided. Yeah. From my side of things, I, I think he, he is under the impression he's doing a good job because he's trying hard and he shows up. Like, he just had a surgery the other day and he was here on Monday. Like, like, he's trying to be present. Like, he's just had stuff outside of his control in some cases that have pulled him away. So I do feel like he'd be a little bit blindsided. I feel like, not that I owe it to him or that the business should support it, I personally feel I have done him a disservice. Like, I should give him another chance.

That's, that's the way I feel. But if we look at like the, the success metrics of say a crew, it is only diminished once we've got a production manager in place. You know, whether or not you think you can, can or cannot hold someone accountable, your crew's performance performed better under you than the current production manager. Like if a production manager steps in that has experience, they, the crew efficiency and morale of the team and people showing up on time, being safe and all the other benchmarks of success should go up and they have not. And so whether or not a production manager effective at a job is not whether or not someone can, they can yell at someone, not whether or not they can have a hard meeting with someone. It's what is the success of their team? Like the success of your team determines the success of the leader. And so if the current leadership, the culture has degraded, people are showing up late, they're not wearing their uniform, there's a bunch of just low care for the business, that is the success metric side, which I am going to measure the manager. Then the next question becomes, well, have I not set them up correctly to make sure they can do that? Have I not actually told them what they should be doing and what success metrics I am actually tracking? I think that's where I would first start when it comes to, you know, the labor side of things. Things, the low efficiency. Look, we gotta have a meeting with Jason. And not saying you're doing a bad job, not saying I thought you were gonna do this and you did not. Like, that will not work. Like, we've already kind of tried that. It doesn't work. Like, no one's going to take that well. Very, very rarely, unless someone was raised in a very militant home, will they react to someone saying you're doing a bad job. Like, it's pretty obvious based upon the interaction with Luke and Logan that they think that he shouldn't be around, but they also are very very gracious in the fact that, hey, they take responsibility. They didn't set him up for success. How they handle that conversation with him will be very telling as to whether or not they actually do the rest of what's on the 6-week plan. Because if that conversation goes well, they should be able to retain the employee, retain— sounds like his sons, Jason's sons, work for the business. My oldest son's coming in and helping out.

He's doing fabulous.

Getting the next generation in on it.

Big old boy, he's bringing home $500, $600 a week.

I think he's loving it. Like, that we'll retain all of them if they just have that conversation, do it well. If it doesn't go well and they start casting blame or saying negative things about his performance, that is not the time and place to do it. And you got to be self-reflective enough that if you're going to say, hey, I'm taking ownership of the fact that this person wasn't successful in their role because I didn't set them up for success, then you've got to be able to not say in the moment, even if they lash out a little bit, the negativity that you want to. You have to I could withhold that. And so if we actually want to give Jason a shot at it, it's simply a measure of like, hey, let's get really clear about what success looks like for a production manager at Warrior Outdoors. Here's the efficiency score. Here's going to be what our overtime looks like. Here's what percentage of revenue is going out the door to wages, and maybe safety cases and callbacks, for example. This is not confrontational. I would actually say the thing that you said to me, which is like, I don't feel like I have I haven't set you up for success. I haven't given you a good shot at this. We wanna clearly define what good looks like for production manager so that you can know if you're doing a good job. So I don't have to say anything. You don't have to say anything. And that we're all speaking the same language. Cause you're speaking the language of like efficiency and all this. He's speaking the language of like effort and you're like, effort stinks. I need numbers. And so like, let's just, okay, these are the things that we're actually gonna benchmark. Cause some people, some people, their benchmark is effort. It's like, if you just show up work really hard and after a surgery just walk right back into work, you're good. And that's fine, but you are very much the opposite. I need these numbers, I need these efficiencies, I need people to be showing up on time. So like make those the benchmarks of success and then you don't have to tell him anything. The language of the numbers tell him like, you stink. And so when you need, if and when you need to let him go, the numbers will just tell him the story. The 6-week plan to turn around Warrior Outdoors is as follows. Number 1, we've got to collect money fast. Faster to solve the cash flow problem. I think the first thing is like tighten up deposits. We can't be waiting a few weeks after a job has been accepted for that deposit. We've got to collect it right away. 50% down payment immediately. Collect that cash as soon as possible so I can go use it to go buy the materials and the supplies required to do the work. Right now you're doing a lot of that in person, right? Like the sales process and you're going and collecting the check, etc. Is there pushback on getting the check like right when they accept or even just on doing like through the estimate online?

Not a whole lot, to be honest. I just feel like I maybe— I definitely didn't come from a sales background, so I feel a little bit unconfident in some circumstances where I'm asking people for money, I guess.

I don't think it would add any friction whatsoever to the sales process. It's just a function of making the ask. Like, we need the money no matter what. So like, we gotta make the ask. And so So if you take out a couple little things, i.e., a manager that's unproductive, probably adding to your workload, as well as really bad cash flow on projects, we would probably be okay. Like, you're probably at 15% margin, and that's not horrible for this size of business, especially with two owners. You're both taking distributions. So tightening up deposits simply comes down to setting clear expectations from the estimate, like on the estimate, just saying this is required to get the job on schedule. Again, just change the terms. And then when you're selling the job, club. Instead of saying like, once you accept, or just to get on the schedule, they just require deposit, right? Which require deposit. Once you deposit, we lock you in. And then you use that on your follow-up process to create scarcity. Hey, Mr. Jones, we're booked out 2 months. We do need to get that deposit to get you locked in the schedule. Just so you know, we do have a few big projects coming down the pipe. I'd love to get you scheduled ASAP so we can just secure that spot. Like, we do not put anyone on the calendar unless they have paid. The second thing we got to do in the next 6 weeks is make sure the website is updated to show seasonal specific offers for season specific services. Like our 6-week plan is season specific offers.

We just never spent the money on the website because no one goes to it. You know, like we don't get like traffic to it. I'm not sure once it's there, it's awesome.

It's also a function of like the reason we don't get any leads from it is because the way it's built. Yeah. Right. And so she's already saying we're getting 2 a week or so, a couple weeks. And it's because the thing you're highlighting is that. If we could just change 2 leads a week from residential mowing to like one massive design-build and a property manager, this business looks very different in 12 months. Right, so I would really revolve the entire website around that truck and then I would highlight the different types of off— like the main services, design-build and commercial maintenance in that area. Like right on the top there. I think a meeting with Jason, And all we're trying to do there is definition of success. So in the perfect world, he stays on board. I think the next best case scenario is he leaves but on good terms. And then worst case scenario is he leaves and goes sour. I also think that standardization of product for design-build— I think I would really, really recommend standardization, creating a product book. And instead of taking Unilock, you take Warrior Outdoors product book. It's— you, you think it designed really nice. I'm sure she's great at Canva. Sure. Yes, fantastic. She is. Yeah, see, like, look, like, give us a couple days. You'll give her all your pictures, be like, these are the ones we want to highlight. Don't highlight the ones you know that are really hard and you lost your shirt on. Yeah, this guy's just like, yeah, I knew exactly what pictures were going about, but in their job So like, you know which ones, right? I do believe if you standardize the design side enough, like this is the unlock. This is fine, but the unlock here is you standardize the design side enough so you can take over sales, you can take over operations, and you don't have a production manager. That business will do $2 million very profitably. They are hitting the capacity when you have 2 managers, like that $1.4, $1.5 million, like you need a better management team. To be able to get to $3, $4, or $5 million. And so they're hitting up against that. There's a lot of leadership things I actually like kind of glazed over because I can't even address them if we don't have clear roles. What's easier to replace is your job, if I'm trying to hire someone, is sales. Yeah. Not your job is sales, operations, you gotta manage the crew, have a defunct middle manager that you don't really know what's going on with and that you don't have any metrics for success for them. Like it's easier for you to hire a salesperson. And by the way, you don't need to know how to do all these custom things. There's 4 different types of projects we install, and here's your product book to go sell. That's an easier role to replace. Let's simplify our roles and make sure the roles are clear. So I can't talk about close ratio. I can't talk about even like follow-up mechanisms and certain other systems I would have to be able to scale the business if we don't have just the fundamentals of organization in the company. This is the unlock. It is, it is. We got to simplify standardized enough on the projects to where you can sell. And that's something that we don't talk about for a business doing $200,000 or $300,000 because the, the solo operator does sales, does operations, does admin. But this size of business, now you need to specialize in order to be able to get— take it to the next level. When I hear what you guys are saying, like the goal of the business is that you eventually be able to hand this off. We need to like focus on that. What does that business look like? It looks like very standardized projects to fill in the gaps of a maintenance business this that is dialed in, like on efficiencies and the labor side.

Yeah. Luke is having a baby like this week. Yeah. So he may be out.

Yeah, I should probably keep my phone on.

He may be out for like a little bit. Yeah. So we might have to implement this like a couple weeks.

Okay, you got 6 weeks. You got 6 weeks.

So I'm looking forward to it. I think just having that clarity will allow us both to excel in our roles because like this has been our problem the whole time is just like feeling like we're both good at certain things in certain fields but struggling with other things. But having that clarity so that we can actually complement each other, I think, is going to go a long way.

The hardest thing for them is going to be standardization of the projects because you are walking away from work and those projects they're going to want to take on that they have to like realize they're not going to probably win those. But we already know that Logan knows how to do the sales. He just doesn't know how to probably like put some of the numbers in the software and do some design work, but he's already sold like water features, so they'll be just fine. Alexis, you're always the office person, always has all the dirt. They know all the skeletons, they know everything wrong in the business. So like anything from your aspect, like when you've overheard kind of like the general directions, anything like doubts or like questions you have? I'd say my biggest concern is not implementing can't immediately. Like right now they got a fire under them. And so I want them to do it like tomorrow. Okay. Like I want it to happen immediately. Bravo. Bravo. It's like music to my ears. They tend to overthink and it becomes easier to just keep— the more time they get away from it. Okay. That's why you're here. You're going to hold them accountable and make sure it happens.

Alexis always is doing that though. So we're used to that. That's how we get stuff done. Done, like really get it done. So yeah, yeah, she— if she wanted to, she could probably be a better CEO than me or Luke because she's so aggressive with that stuff.

We're going for timelines, let's go. Let's just— okay, all right, all right. So number 1, the tightening of the deposits, that's going to be 24 hours. That is simply a decision made now on the sales side, which is currently still you. We, we got to get there, but like within 24 hours, we don't leave the job without collecting and We're using scarcity as a way to make sure that is possible. Second thing is clear offers on the website. Within 24 hours, we're going to make a request to the web developer of what we want changed. We're going to be clear with what those things are. So within 24 hours, you can ask that. Within, let's just give it 2 weeks because sometimes web designers are slow, they'll have it changed. Perhaps ambitious. 2 weeks is ambitious. Yeah, she's kind of slow, but 3, I I would really hope so. Okay, well, I'll give you 3. It's okay. Number 3 is meeting with Jason. Number 3 is gonna be in 3 days. Let's go. I would have a meeting between the 3 of you. In terms of how that meeting is gonna go, I would have some notes. You're not going to go into it blind because you both have admitted that you don't like confrontation. This is not a confrontational meeting, but we need to have organization so you don't stumble your way through and then emotions get flared up and you start saying stupid stuff. Nothing negative is Jason said within 3 days we're doing that and we're going to promote Jason. Either promotion away from the business or promoting the irrigation department and in a year hopefully we can bring him back. Only positive things said there. Alexis will keep you accountable. She'll throw darts at you or something if you are saying negative things. She will. Okay, so that's 3 days. The fourth one is standardization of the product and design. How long will it take us to make a product though?

I don't think it'll take that long. A week or two.

Okay, so 1 week to make the product. Book. So one week is product book. We're gonna do another week, and this could be a day, but I'm gonna leave you a week for it, and that is training around the design software. Anything that you think he doesn't know that he needs to know— might mean you go out and do a few estimates with him just to make sure you're both on the same page and easier transition. Also, during that training process, you're thinking about things like estimate notes, like, hey, what are the gaps here that we need to standardize? One week of training after one one week of creating the product book. And so what are we looking at? August 1st, you're gonna be the salesperson starting August 1st? Yeah. And then that week we call you. How's it going? So we will know whether or not we hit these benchmarks. Yeah. Anything else, Alexis, besides timelines on this? That's all I can think of. Okay. All right, cool.

He's got a really good, like, gift of understanding like where we're at without like knowing us or spending a lot of time with us, being able to come in and like just with some financial numbers and then like 10 or 15 minutes just even beforehand just getting to know us. I feel like, like that's, that's a serious gift to be able to like do that, but have that perspective and, and then have actionable stuff for us to do. I think really is super valuable. So I'm excited about that. Yeah, I was super impressed. I was like, dang, this dude just get right to it. Like, he knows me better than I know myself. I was like, what the heck is this? But yeah, no, it was super cool. I'm like super appreciative of him and coming out and all that. Um, yeah. Hey man, thanks for letting us come by.

I appreciate it. I appreciate it. Absolutely. I appreciate you letting us come out. There's a lot of other people that are in the same boat, same problems. And so if people say dumb stuff, just ignore them. They're just being whatever. But there's a lot of people that take a lot from someone like your size and be like, okay, if they have problems and I'm trying to grow to that size, maybe I need to redo my business now. So when I get that size, I don't have that same problem. Right. So I appreciate it. It's really a part of the community and just trying to give back to them. So. All right. Thanks, guys. Thank you. You have a good one. Yeah. Enjoy the sunshine. Yeah, it's a little hot today. Goodness.

Really well. He took it really well and he's just been—

it's been a lot better fit for him.

I think he, uh, it's more his groove, his, his cup of tea, I guess. So he's been killing it on the irrigation side and so it's been going good. It's just like one of those things where you've— I don't know, you may build it up bigger in your head than it actually is, you know, and then it ended up being no big deal at all. Yeah, so that's what he's doing. Um, the irrigation tech only. We moved them from salary to hourly, like same rate but just hourly. So you got everything same compensation as far as like how much he's getting paid, it's just a little bit different. Um, we're, um, reworking our, um, just our terms basically. So all future work is going to have that set up to where we collect the deposit in order to get onto the schedule. So, uh, Luke had the baby, he's 3 weeks old, he was born on July So, so I've been kind of— I've been holding on the sales and ad or sales and operations for a little bit, um, so Luke could have some time with them. And then Monday morning we're hitting it split. So I've been doing all the sales meetings for the install though, so I, I think I have pretty much 100% of the sales now. And Luke's gonna hit, hit the ground running hopefully next week Monday for operations. Like, Luke's been working on getting that, like, while he's been off, he's been working on getting that like set system, like the written, like the product sheet and exactly what we're going to offer. So we should be able to implement that in the next couple of weeks or so. That'll make my life a lot easier for sure. Yeah. And we're working with our web designer also to kind of bring those seasonal offerings to the forefront and then also kind of simplify our standardized install offerings also, just so we can have a little bit more direction when somebody clicks on our website. So they're not always just seeing a leaf removal page or something like that. So that was definitely kind of a— at least for me, it kind of hit the pause button on most things. My family, definitely my priority over the business. So that took kind of forefront of my, of my bandwidth. And then Logan's done a great job holding down everything in the meantime. So that kind of ate into our, our productivity. Busy as far as our goals, but I think we got a lot of things in place, kind of getting ready to, getting ready to go on all this. So yeah, yeah, every time I get on YouTube, I see a new Mike Andes video, like, oh, is it ours?

Warrior Outdoors was trying to solve the leadership problem. And that wraps up the 4L framework, because if we can solve liquidity, if we can solve a lack of leads, if we can solve a lack of labor, and we can solve the lack of leadership in the business, we will infinitely grow the business and we'll certainly get it past that million-dollar marker and all the way through $3 million in annual revenue. Now, I made a full course on how to solve the off-season problem because for the vast majority of home service businesses, their liquidity problems, cash in the bank problems, start with the fact that for— during their off-season, they lose money. Click here to watch the full course of how you can solve the off-season season problem in your home service business. It's 3 hours. It's a marathon. But by the end of it, you'll definitely double your profits. Watch it here.