The TRUE Hidden Secrets of a Successful Landscaping Business

Everyone likes to talk about how fast they're growing. We had 50% growth year over year. What was your revenue last year? Hey, everyone, Mike Annis here. Today we're going to be talking about the four different secrets you must know to grow a lawn care landscaping business. These things are not talked about most anywhere else because these are the actual keys to growing a successful business. Now, these are the top four out of the 10 that I made on a video on landscapebusinesscourse.com and a lecture last week for all of our members. Now, currently, Augusta Long hair has over 120 locations. But when it had one, and I was just getting started, I didn't run my business using a lot of these keys. And I had to learn these the hard way. Rewind. All the way back to 2007, 2018, I had one location and it was doing about 1.4, $1.5 million in annual revenue. I was there every single day, and if anything went bad in the field, I'd be jumping out there. But most of my day was spent doing estimates, 15, 20 estimates a day, just cranking those bad boys out. I was working a lot inside of the business. I was probably making about $100,000 a year in profit at the best. If you go back a couple more years, I wasn't making any money. Even though we were doing 1.2, $1.3 million in revenue, I wasn't making any profit, honestly. And I didn't have any systems, didn't have a lot of procedures, and I was not using the things I'm going to talk about today. And if you fast forward just a few years to 2021, I took home distributions from the business of over $300,000 in profits. Okay, there was over $300,000 in profits I took home, like away from the business distributions. After my salary, I was already paid $300,000. And what's crazy is in 2021, I worked there probably 30 to 40 minutes a week. I would go there for a meeting. Actually, in 2021, I was still going there twice a week. So probably an hour a week. I was working there. I'd go there for a couple meetings and that was it. I didn't do any hiring. I didn't do any sort of the sales or estimates at all. And yet I was making multiples more in terms of profit and distributions to myself. So what changed? The 10 things I share in this video is exactly what led to me turning that business around just a matter of a few years and creating the systems and procedures. And I'm not even gonna talk about pay for performance today, which is completely revolutionized in that period of time. That's what happened in those few years. But these are the keys that you need to know, number one, when it comes to buying new equipment, because everyone loves buying new equipment in this industry. But what you have to figure out is the price multiplied by the profit percentage equals the revenue you need to make from that piece of equipment or that truck in order to break even. So if the price of that piece of equipment is $50,000 and my profit percentage is 20%, guess what? I've gone and make $250,000 in revenue just to break even on that purchase of that asset. So you're like, well, I need to go buy another truck. Great. If it's $50,000 and you have a 10% profit margin, you now need to make $500,000 in revenue from that piece of equipment in order to just break even on the acquisition. So you might want to think about twice before you need the new fancy shiny sprayer or new fancy shiny aerator or brand new electric zero turn. That's 30, $40,000. Before you think about doing that, run this equation to determine how much in revenue do I actually need to make just to cover the cost of that acquisition. The second thing I had to learn in order to build a successful business was that redundancy at each position on the org chart was extremely important. Because if one thing happened to one person in my organization, everything got wiped out. Bad news. So from the office and the admin side of things, to the sales or the estimators position and all the way out to the production team and those working on the field. I didn't want to have any one person, including myself, if they get hit by a bus. If I get hit by a bus and I'm the salesperson and all sales come through me and no one else knows how to do my job, guess what? The business falls apart. People lose their jobs. People can't provide for their family. If I get hit by a bus. The same thing is true if my office person gets hit by a bus. If they have all the information and the only person knows how to run the software, they're the only person that knows how everything in the office works and they get hit by a bus, guess what? The business is in a really bad spot. So you've got to create redundancy at the admin level. That's your office position. That means that they're going to make tutorials on Everything that they're doing. You potentially outsource of this to a call center so you don't have to even worry about the fact that one person's gone for the week for a vacation that, like the phone still gets answered. This is admin and office side of things should be completely delegated and redundancy not necessarily even delegated. You might still be doing this if you're a smaller business. But redundancy means that other people know how to do it. Maybe one of your key employees or your spouse also knows how to open up the email or respond to estimate request forms, whatever it might be, make sure that those things are covered and there's redundancy, which means there's backup to each one of these stages. Admins. 1. Sales. Are you the only person that knows how to sell? Are you the only person that knows how to do the pricing? You're the only person that can meet the customer and talk to the customer and do the estimate proposal. Bad news, because if you get hit by a bus like I did back in the day in 2018, I was underneath a dump truck, got caught in the PTO and it wiped me out for a couple weeks. I couldn't do any work. Guess what happened to sales? Almost came to a screeching halt. I was literally videoing people from the hospital bed, making sure that things got done correctly on projects. Why? Because the sales of my business had not been created. Redundancy at every single stage of the org chart. Admin sales and production. Production is out in the field. The crew, the workers. If one person in your organization is the only person that knows how to do a specific service, guess what? If they get hit by a bus or they leave or they go get hired by somebody else, you're in a really bad spot. And this happened to me too, because back in 2017, 2018, guess what we were doing. Don't tell anyone. We were doing artificial turf. Big dump trucks. We have massive rolls of turf, massive projects and putting greens. All the rest of it. Guess what? One person in my company, I kind of made the manager for that division. They moved away, they left. And guess what? I'm now stuck with a bunch of turf. A bunch of people that aren't really super confident knowing how to do it. I don't know how to price it. I haven't done a lot of these jobs. I don't have a lot of experience. So guess what I have to do. Close down the division after a bunch of losses and just eat the expense of all the turf we had purchased and all the materials. And so bad news. I should have had someone else be trained on how to do the turf. I should have made sure that it wasn't just him and a couple helpers, but rather him and maybe one of his helpers. He trained up all the way to be able to do the sales side for the artificial turf, create redundancy at every single stage of the organizational chart, as well as every single aspect of the business. For admin sales and production, number three is that diversification is for idiots. That is a quote stolen from Mark Cuban. Diversification is for idiots. Which means he's talking about the stock market. Like, you don't need to get 1,000 stocks, just get, like, the top five, 10 winners. That's what his. He's saying, diversification for idiots. People don't know what they're doing is they diversify because they don't know what they're doing. So therefore, they're just like, oh, well, not all of these can fail. And that's what I feel like a lot of people in lawn care and landscaping do. It's like, I'm gonna do all these different services and all these different pricing methods and all these different types of packages. They don't know which one they should be to put all the eggs into that basket. And you're like, oh, that's not safe. Well, if that basket's the one that's going to absolutely perform the best, you put all your eggs in that basket. Diversification is for idiots. What should we be doing instead of diversification? What you should be doing is focusing on simplification and specialization. Now, when I say simplification, everyone always thinks that that means you should only mow grass and pull weeds and nothing else. That's not what I'm saying. Simplification means instead of doing 20 services, you do four. And that means that you might just standardize the paver patios or the retaining wall blocks and make sure the designs and the shapes and the sizes of what you do install is standardized. Okay, I didn't talk about standardization, though. I talk about specialization. I know it's a lot of S's, but specialization means if I'm going to a doctor and I'm going to someone who does general practice or a family doctor, and they do kind of a little bit of everything, you're not going to pay them as much, maybe $150 per hour, but you go to a specialist, someone that only does neurology, only does heart surgery, for example, you might be five six, seven hundred dollars per hour to meet that person. Was their time worth more? Yes, because they're specialized in something. So instead of being a jack of all trades, master of none for 20 different services, maybe you just take a few of those services and it doesn't mean they have to be basic. It could be complicated services, but get rid of all the other ones. Because when you specialize and you become the go to person for XYZ service in your market, the price gets jacked up. You might just do ponds, but if you just do ponds and not every other service in the green industry, you can become very specialized and make a lot of money. Or you can simplify everything. Simplify the 20 services down to the top four. And I guarantee you, by the way, those top four services are making up 80% of your revenue anyway. So just focus on those focus instead of trying to be diversified. So focus on the services that are making the most money. Simplify them and make sure you're specialized in them. Do not try to be jack of all trades, master of none. Diversification is for its number four. But before we get there, before we get there, the gentleman's agreement is still intact because I make these videos for free in the middle of the night to make sure that you push the subscribe button. And it's like when you go to the store and you go, there's a little jar there, it has the pennies inside. It says give a penny, take a penny. Now that completely operates on trust. And you notice most of the time it's not empty like people come steal the pennies. If you need an extra penny when you're checking out, just grab one. But if you have extra change, you should throw it inside. I make these videos completely for free. I put pennies into the jar with the only expectation that as you take pennies out of the jar in the form of taking this content for free, that you also put a penny back in the jar by simply tapping the subscribe button. The gentleman's agreement has been signed. Number four, focus on profit percentage, not growth percentage. Everyone likes to talk about how fast they're growing. We had 50% growth year over year. What was your revenue last year? $80,000. Great. That means you made went from $80,000 per year to $120,000. Don't worry so much about your growth percentage as your profit percentage. Why? Because everyone's so focused on growth. The only reason to grow is so that way when you as you become profitable, that number is bigger. That's the only reason to grow. The reason for that is because in our industry and landscape and lawn care, people are not going to value your business based on growth percentage. Everyone gets wrapped up into that because that has been like sensationalized in the media when it comes to startups. But these startups are high tech, which means they can scale from like 1 to 5 million. 5 million to 80 million. 80 million to 300 million. You can't do that in lawn care landscaping and be profitable. And so we in our industry are going to be valued based on profits. A multiple of your profits, not a multiple of your growth rate. No one cares about your growth rate when it comes to lawn care and landscaping, okay? So focus on your profit percentage. And if you do this, guess what? You're going to sleep better at night. Because if you have profits in the bank and you have money stacking up, it's a whole lot better to be doing that. It's a whole lot better for your blood pressure and your heart rate and your life expectancy and your relationships and your physical health and your mental health and a whole lot of other things by having a higher profit percentage versus growth percentage. Because growth percentage causes stress and growth sucks cash. And no cash in the bank means I run out of oxygen and I die. And you don't want that. So focus more on your profit percentage than your growth percentage. I would be so happy if in this industry we started bragging more about our profit margins than our growth rate. Because every. Everyone always comes up to conferences like, Mike, we grew 300% last year. We grew 80% last year. We grew 10% last year. I think, I don't care about your growth rate. I care about your profit margin. Don't focus on your growth percentage as much as your profit percentage. Now you might be asking, well, what should my profit margin be based upon the size of business I am. Watch this video here. It's going to answer and tell you exactly what your profit margin should be based upon the growth rate and the amount of revenue that you're making every single year in lawn care landscaping. Click this button right here.