the WRONG time to start performance-based pay!

Hey, everyone, it's Mike Andes. And today I'm giving a warning and something that's very time sensitive when it comes to your business. As we're in the summer period now, a lot of people are procrastinators. We as business owners get very busy. And so when we know there's a deadline, that's usually the only time we react because, like, we're so busy with so many other things. Emails and phone calls and customers and employees and marketing and all these things happening. And we forget sometimes to take care of the biggest things in our business that would actually move the needle the most and actually solve a lot of the little problems that we spend so much of our time focusing on. And what I'm talking about today is P4P pay for performance. Now, before you click off like, oh, Mike's going off on P4P again, you know, he's. He just has a software he wants to shill us. Okay? So before we get, you know, go down that rabbit hole, let me just be very, very clear. There's two times in my mind where it's an appropriate time and the best time to implement pay for performance. If you don't know what that is, that is where the employees are going to get a percent of the labor revenue they earn for the business every single day. No longer paying the employee by the hour or salary. That is not efficient. It's not going to the highest performers. P4P is a way to pay more to the people who work harder, work longer, work more efficiently. And so if you're wanting to do that, and you've heard me talk about it for a long time, and you've kind of been putting it off and like, man, I. I know I need to. I know that's what I have to do to be able to attract good talent. But I'm just, you know, it's just I have to change and I have to figure out budgeted hours and all this other stuff. There are two times in the year, in my opinion, when it's the best time to make the switch. One is during the winter, because you have the time to make the switch. You have the time because you don't have customers pouring in. And for most home improvement businesses, we don't have as much work happening during December, January, February. And so that's when most people will and have historically switched to P4P. But it is, in my opinion that the second time of the year is the best time of the year to implement P4P, and that is during July August and September. The reason for that is because for most of us, the spring rush, March, April, May, June is insane because weather is unpredictable. You know, if you're in lawn care, landscaping the lawn, the grass grows crazy, crazy fast. It's muddy if you're working outside at all, like weather is going to play a part in efficiency that your crew is capable of performing. And what you've got to make sure is that when you switch from hourly or salary to P4P pay for performance, that within the first couple paychecks, your employees see an increase in their compensation. They see performance dollars. And performance dollars is anything above base pay on P4P, they need to see that as soon as possible. Now, if you implement during the winter when you have time, that's fine. You're going to feel more controlled going into the spring rush in terms of understanding P4P, getting all of the training, which is available for free at p4psosoftware.com training, you're going to feel more in control. However, it's going to be harder for your employees to get above base pay during the spring rush. When you got new customers, new employees, you're trying to grow the business, you're getting more equipment, you're marketing. You got all these leads coming in, estimates and complaints and yellow slips. All of that is going to create that chaos that is going to prevent employees from getting above base pay and making really good money on P4P. What you want to happen is when you switch to P4P, it's almost immediately see a bump in their paycheck. 10, 15, 20, 30% increase in pay is very, very common when you switch to P4P. And the reason you can afford that and afford that increase in wages is because the employees become 25, 30% more efficient and they cut out the waste in their day, the stops at the gas station, you know, 25 smoke breaks, the little, you know, siesta and snooze they take at lunch, all those things get cut out. When they're getting paid based upon their production, they make more money and they can make more money and you can afford it because they're more efficient. And so this is the thing. You want to choose a time of the year when that's going to work in your best interest. And yes, the winter is fine, we've talked about that. You feel more control. But if you can come and install P4P in your business during June, July, August and September, when you're probably the most efficient, during that period of time, there's not Tons of leads coming in. You probably have your crew more solid, they're trained up, they're more efficient at their job. You're not training a bunch of newbies. And that's when they make the best money. On P4P, the grass isn't growing as crazy. It's not pouring down rain one day and then three days of delay and it's muddy and things get stuck and trucks don't cuts cold. And you know, all of a sudden a random, you know, snow in the middle of May, like what in the world like that happens during the spring rush. And it's very difficult to have a sustained and efficient route of high performance for the entire pay period because of all those unexpected rain delays and new hires and all the rest of it. So I would recommend the best time of year to make the changes. Actually, right now, as I'm recording this, it's the end of June. But July, August and September, that's what I would recommend. And that's when we originally implemented P4P at the very first Augusta lawn care location. We implemented pay for performance during July, August and September. And at the end of September, it was like no more hourly. It was like a hard set reset. We'd never looked back. We've never looked back from that moment. But it was during those months because they Instead of making 17, $18 per hour, the employees are making 23, 24, $25 per hour on P4P. So of course they want to vote on the implementation of P4P. They're all for it. Now if you wait until the winter, you can implement P4P. You're going to have more time and you're going to explain it better maybe, and all the rest of it. But going into spring rush, they might be hitting up against base pay and they might not like P4P. And you might have a cultural issue in your hand because no one wants P4P to be the way that they get compensated. But if you do it now, when lawns are easy to mow, the weather is better, your crew is more efficient because they're trained up and you're not getting new customers every single day with overgrown lawns and projects that go south and the weather's crazy, this is the time to do it. This is the time to institute P4P pay for performance. Now if you go to the training is going to walk you through this three step process of switching to P4P. The first one is running the numbers in the background. You don't have to tell anyone that you're doing anything. Just run the numbers in the background and start figuring out, okay, is someone going to make more money on P4P versus hourly? What are they doing right now? That's the first step. Run the numbers in the background. The next step is explain P4P and we give you all this materials to show your team. Explain it to them at a very high level. And then institute a two pay period implementation trial period, where for two pay periods they can't make less than what they're currently making on hourly wages. Now, if your base pay is $18 an hour on P4P and they were getting paid $18 per hour on hourly, they only have upside. There is no downside. You're not going to have any problem getting those employees to switch to P4P because there's only upside potential for them if they work hard. So if you have employees that are like 20 or 21 though on hourly, and you're going to move the base pay to 18, you've got to convince them that they're going to make 23, 24, 25 on P4P as long as they're efficient. So that's why step one, you run the numbers in the background, then you explain it to them. And then in that second step, you have pay period, trial period where they can only make the higher of P4P versus their old hourly wage. And then the third step is voting on the implementation of P4P. If you run through the training, it's going to exactly show you how to roll out P4P. And it's the easiest to show that discrepancy and that increase in pay during the summer months when you're not in the middle of spring rush and when you're not in the winter when the win when work is sparse. So I highly Recommend Go to p4psoftware.com training and you can see all the training for free. And you can also book a zoom call directly with Brad, who's a cpa. He's worked with me for years. He was actually part of the original time we switched over to P4P. And he's a numbers guy, right? He's also worked out in the field and actually knows lawn care and landscaping and all the rest of it. So he's a great resource for you to reach out to ask your questions. He can see your CRM and potentially some modifications that you might need to make in your business to make P4P work. But trust me, P4P works for literally like 99% of the small businesses and service based home improvement companies that come to us, you might have to tweak a little thing, add budgeted hours, make sure you tighten up your routes a little bit out. Some projects that are so far out or under budgeted or underestimated in terms of price, you might have to do that. But ultimately it's going to make your business better. And as we head into recessionary time, this is absolutely the time you must implement P4P. When it's hard to find employees and when employees are going to start really caring about making the extra couple dollars, you better make sure you have a system like P4P where they're getting paid by their performance and not just because they clocked in. I see it time and time again where I try pass companies and you got an entire crew of guys sitting there for 20, 30, 40, 50 minutes, maybe an hour, two hours. And I go by like the afternoon, they're all still sitting there. I go by in that evening and they're all still sitting there. They're just like in their truck, eating, playing the music, taking smoke breaks. That is going to kill your small business. As we go into a period where you might have got away with that for a long time. Because the economy has been booming for the past 14 years and everything's great. As we see margins compress, the companies that will survive are the ones that will be the most efficient. So that when everyone's profit margins get slashed in half, that they can actually survive because they had 20, 25% margins and they're willing and able to get by on 10, 12, 13%. As we head into a recessionary time, if you're at 10, 15% margins right now and we go into recessionary time, you're not going to be able to operate on 3, 4 or 5% profit margins. You're going to get wiped out. I don't want that to happen. I beg, I implore you to implement P4P now. It's not going to get any easier to find workers that want to work hard outside in the elements, getting dirty and doing hard physical labor. The only way to do that is to create a meritocracy. Meritocracy that means the harder they work, the more money they can make. And the way that you do this is implementing P4P and what is going to keep great talent and great employees and people that do want to work hard and are frustrated by working with coworkers that lack off and take 500 breaks a day, it's going to be a system like this. So I encourage you. I beg, I implore you, sign up for p4pssoftware.com. Try it out for 30 days. It's completely free. Sign up for the free Zoom call with Brad as well as watch all the training material. It's completely free on our website. I know this will change your business. I cannot enter. Imagine running a home improvement business without using P4P. I just truly cannot fathom it and that's why we've made it available to you. We lose tens of thousands of dollars every single month building the software. And I know I personally will the next couple years. I don't use Augusta's money. I don't use any, any other of my business money. I use my personal money that I've gotten from my own investments and the stock market. I am using that as the resources to build the software because I know it's the right thing for our industry. I know it's the right thing for home improvement, and I know it's the right thing for small businesses. So I plead, I beg of you, check out P4P software.com, sign up today. Change your business forever. Watch this video here for a more in depth analysis of what P4P is and all the intricacies and why. I had excuses originally as to why I didn't want to implement P4P. I was like, oh no, it's going to ruin the culture and we're going to spend a whole bunch of time trying to calculate it. It wasn't that way. I was wrong. Check this video out here for a more in depth analysis.