This is a BAD TIME to Buy More Landscape Trucks: FOCUS on Profits!

Hey, everyone, It's Mike Andes. Landscapebusinesscourse.com Today we're going to be sharing something that's very important for any lawn care landscaping business this time of year. We've now entered into July. We're into the second half of 2021. And regardless of what time you are listening to this in the year, maybe you're listening a completely different time. It's important to know that this is a very important time of the year, in my opinion, you to really make a big shift in the way you think about your business and switching from growth to profitability. Before we get into that, though, few shots here of our local team. And we have meetings. We have meetings Mondays and Thursdays for the entire team. And then we have an optional meeting Thursday morning, even earlier that is optional for everything to talk about finance, investing, and talk about business. We share the numbers. And so these are three of the meetings that I am there for. I'm there Monday mornings and Thursday mornings. But just a great time to connect with the team and make sure that regardless of how big you get, you still have that connection with the frontline workers. So we're gonna go along with Charlie and Kat today on a couple lawns. They're gonna be mowing. We're gonna see some broken equipment. But I really do wanna talk to you about, I think, something that's very important as we head into the second half of the year. For many people right now, we're in the middle of summer. It can seem like maybe, man, we made it through spring rush. Everything's done, and now it's time to kind of coast. I really believe the next six months, like, we're only halfway through. We're only halfway through the year, and yet people are already thinking about cruise control. They're already thinking about, like, kind of coasting to the end of the year, and they kind of get comfortable. Or more importantly, you might just be burnt out. Like, we've gone through the entire spring rush. It's been hard to find employees. It's been hot. Now it's getting really muggy in certain areas of the country. And it can be really, really demoralizing. So I want to talk to you directly about that today. This is Charlie. He is getting started on P6. It's the name of the truck. We name them P stands for pickup, and we name them off 1 through 13 now. So he's on the phone because unfortunately, he drove 15, 20 minutes away for the shop and realized that there's this piece, this edger piece, had a missing part, so you actually had to go back to the shop. So. So the moral of that story is when something is broken, it needs to be tagged and put in a specific area of your shop that people are not going to remove it and take it on another job site. It's very, very frustrating when you're going to a job site. You get there like Charlie did and you realize that something's broken. So it's kind of a twofold kind of two edged sword. Two people are to blame here. Number one, the person who broke the equipment should have tagged it. And we have a red slip that they fill out and they tag the piece of equipment so it doesn't go out again on the property. But, but on the flip side, Charlie, also, whoever is leaving in the morning, we should really be checking our equipment and making sure that everything's in operation and there isn't anything broken. Just to prevent the inefficiencies of now driving all the way back to the shop, getting a new piece of equipment, getting it fixed, or if there's a part that's missing, it really just leads to a lot of inefficiencies. And if someone is on P4P, it's almost impossible for them to make above base pay if they have to spend the first hour of the morning just going back, getting their equipment set up the way it should be. So this is Kat. She's gonna be mowing this lawn here. It's a beautiful view overlooking the Pacific Ocean. And so as she's doing that though, I want to talk about some of these specific points that I think is very important for your business this time of the year. Like I said, this is not the time to coast. This is not the time to think that we're like, oh, done for some. Like you're only halfway through the year. July 1st is literally six months of the year gone. We literally have the second half of the year remaining. And for most lawn care and landscaping businesses, the majority of them, their most profitable months and converge are the second two quarters. The second, the third and fourth quarter. The second half of the year is really where all the money is made. You can't win a game, whether it be NFL, NHL, NBA, mlb, whatever, in the first half of the game. It's in the second half and more specifically towards that very end of the game that you actually win games. And that's really where the great teams are made because they know how to clear and they don't get lax even if they are winning at the halftime. You know, halftime. And so maybe you've gone to the first six months of the year, your business is doing really good and it could be easy, like, oh, we're just gonna kind of coast through the rest of the year, when in reality, the best months of the year, profit standpoint when it comes to our lawn care and landscaping businesses is coming up. It's the next six months. So I really encourage you to be diligent about the fact that we are only at halftime and halftime is not the time to be thinking about a victory lap. You've got to win the entire game. So what I recommend you do right now as we head into the second half of the year is really start focusing on profitability instead of growth. I know that kind of goes in the face and counterintuitive to everything I talk about in terms of growing your business and hiring more people and getting more trucks and marketing, expanding the company and how that makes you anti fragile because now you have a team that, that is in a healthy business that is growing and you're able to create systems and have other people do your job in the daily operations side of the business. I know it kind of seems like counterintuitive to all of that to say, oh, well, stop focusing on growth. Let's focus on profitability. But here's why I say that. Because you, for the past six months have probably been hiring people, getting more equipment, getting more trucks, marketing, advertising. You've got to now focus on product profits. You've got to focus on profitability. And for most of us, we're really busy right now. We're not needing to go do marketing to get more work. There's tons of work out there. Now. I want you to focus on profitability. I'm okay with our franchisees and our local shop. I'm okay with them not making as much in the first half of the year if they're getting a bunch of employees and they're growing and they're getting hundreds of new customers. Like there's a cost to growth. I've always said growth sucks cash. But at the end of the day, you've got to have some, some cash to suck. You've got to be able to have something that next year if you're going to keep growing, that you have the reserves and the cash reservoir to tap into when you need it. So what I recommend as we go into July and go the rest of the year, focus on profits. Well, how can you do that? Focus on the existing team that you have instead of going out and finding A whole bunch of new people like that should have been done in the spring rush. You're going to have some turnover. You're going to have to struggle finding people. But focus on the team that you have now. Instead of going out and trying to find new people and going after new customers and advertising, creating all these new estimates. Instead of doing that and you running around all day trying to do like 15 estimates a day and get back to customers and follow up. Instead of doing 15, why don't you do five or six? But these are the people that you didn't have to pay for. These are people who just saw your truck and gave you a call. And focus that time. Instead of you running around like a chicken without a head doing estimates for new leads, why not try to focus on.

Your existing customers, but more importantly, your existing team, like your existing team that you've built up this spring rush. Develop them, give them more training, maybe have optional meetings where you start talking about their future and their career and really building up their skill set so they can do more efficient work, make more money for the business, make more money if they're on P4P. This is the time to lock in on the existing team that you've built. Stop trying to grow, grow, grow, grow. Yes, you could keep growing. And I'm not opposed that if you have plenty of money and capital, you can kind of work through. But if right now you've been kind of working month to month in terms of you haven't been making a lot of profits, this is the time to focus on profits. This is the time to stop spending money on marketing and focusing that money on increasing your close ratio. How can you do that? Instead of marketing to a bunch of new customers, you, you should be marketing to the clients that you already have in your database, the clients that can basically click a button or answer to an email that you send saying, hey, we are now installing sod, we are now trimming bushes. They click a button or they give you a call, and now you're getting leads from that people that you didn't have to pay for. You want your customer acquisition cost to be as low as possible. So this time of year, as we go into the second half of the year, I would really, really take the steam that you've been putting towards growth and gaining more trucks and getting more employees. Focus on the team members that you do have. How do you make them more efficient? How do you make them more profitable? How do you train them up to make sure that the second half of the year they are maximizing efficiency. The first half of the year is all about growth and expansion and hiring and advertising. That's exciting, but it doesn't do anything for your profit. It doesn't do anything for your bottom line. And majority of the time when you're growing that fast, you, you're actually going to lose money every single month. This is the time to make sure that you actually cash in and keep those profits. Because you're going to need them during the winter, you're going to need them during the seasonal business like we have, where there's times that are a little more lean, there's going to be times where you might not have snow plowing in the winter and you need to be able to actually pay the bills. And whether it be employees or you have a shop, you have insurance, you have all these other expenses, you can't do without money. So this is the time to stack that money aside and make sure that you have those reserves for the money. Stack that money now. And this is the time to upsell your existing customers. Instead of going after those new customers, upsell the existing ones. Stop focusing on the new shiny thing, the new customer, the next customer I want to buy, are going to buy other customers. Focus on the existing customers that you have and not just the customers that you currently do mowing for. But, but what about the database of hundreds of people you've given estimates to and you've never contacted them, asking them for another service that you're now offering or that this time of year is so important? Like zero scaping is a really cool form of staying busy during the time when mowing is not as maybe the mowing starts to get slower during the summer season for you as we go to the end of the year starts to get slow. Well, zero scaping is a way of removing grass, removing plants, installing low maintenance shrubs and gravel and a maintenance free lawn care maintenance, free landscaping for your clients. This is a great upsell. And the best thing about it, if you're upselling and trying to sell your existing customers, you don't have to go spend money on customer acquisition, buying more customers, spending money on Facebook ads and every door, direct mail and all the rest of it. This is not the time to be spending money on ads. This is the time to take the customers we've gotten during the spring rush and double down on making them profit. Making the stacking money aside, I would really only advertise outside of your existing customer base. If you're trying to fill in the gaps for Your labors. So for example, if you have eight, let's just say four laborers, four out in the field doing the work, and you're starting to run out of work. That's the only time I would advertise. Because my goal is to maximize the amount of profit, maximize the amount of hours that I can perform in a week with my employees. I don't want them only working 30 hours. If I have really good employees and I want to keep them, this is a great time to be able to make sure their schedules are filled. That's the only way I'd actually advertise. Another warning is don't buy new trucks, or used trucks for that matter. The reason I'm talking about, hey, we've been growing during the spring rush. We've grown throughout March, April, May, now we had July, August in the second half of the year. Don't go out and buy equipment. Right now, as I'm talking 20, 21 this summer, used car prices are up 45% year over year. CPI data consumer price index just came out yesterday. And 45% is the price increase of used trucks from last year's prices. That's incredible. That means a $5,000 truck is now worth like 7,000. It means that a $15,000 truck is literally now worth like $23,000. It's insane. And that same price inflexibility and price increase that we've seen in used trucks, it's. Your new trucks are not really a whole lot different. They're much harder to have variety. Like when you go to a dealership, there's like no selection now. You're not getting any sort of price elasticity. You're not able to get free oil changes. Their warranties aren't as great. They're not giving you discounts of four or five grand off a new truck. And just getting the truck to you might take a while. If you want specifics like a certain type of cab or a certain type of set set up, you're going to probably wait months for it to get to you. So if you. Again, why would I go out and advertise, spend money, get new customers spending money doing that, and then go have to go buy trucks and equipment. And if I'm buying trucks, they're cost more, they're harder to get. And I'm paying a premium price right now. So why wouldn't I take the existing trucks that I have, the existing equipment, try to make it as efficient as possible to maximize the efficiency and maximize the utilization of that equipment. So instead of that truck sitting and doing three days worth of work, how can I make sure it's moving out in the field five or six days a week and actually being used? Not buying more trucks that are going to sit for two or three, four days a week in my yard. I want to make sure I maximize asset utilization and I don't have to go buy more trucks. This might mean that you have two different shifts of workers, that maybe you have people work from Monday to Thursday and people work from Tuesday to Friday or Wednesday to Saturday. It might mean that you have a weekend crew. But preventing the need to go buy more trucks right now and more equipment is something that you absolutely want to avoid if at all possible. And I'm telling you, not just trucks are going up in price. Equipment right now is extremely hard to find. Some of our franchisees are waiting two to three months just to get a staff steel or echo trimmer or blower. Everything's backed up. Things are much more expensive than typically are. And if you can avoid buying them right now, when you're trying to focus on profits, that's really where your focus should be at. So what are the takeaways for the day? Make sure you take what you've got and work with it. Instead of trying to make new and better and more, try to focus on what you currently have. Customers, equipment and employees. When it comes to the employees, how can I take the team that I have that's already solid and how do I make them better, make them more efficient instead of trying to get more employees? Because adding more employees adds chaos. It adds, now you're training people, now they're less efficient, now they're breaking things. It causes more issues. Okay, number two, I'm trying to get the same customers. How do I keep the same customers but make more profit from them? Instead of going out and spending more on ads and all the rest of it, I'm going to try to focus on upselling my existing customers. I'm going to look for areas on their property I can upsell them on and maybe put a door hanger for mulch installation. Even though I mow their lawn every single week now I can upsell them on mulch and dramatically increase the value of that client on an annual basis. And number three is I'm going to try to make do with my existing equipment, set up my existing trucks without having to go out and buy premium priced used or new vehicles without having to go buy and put up with a massive supply chain issues in the form of mowers. And equipment, I'm going to try to take what I've got and make it more efficient. And by doing that, that is how you become more profitable.

Adding more customers, adding more employees, adding more equipment does not add to the bottom line. It does move the top line revenue. And in my mind, that's important the first half of the year, as we head in the second half of the year, focus on profits, focus on efficiencies and taking what you currently have and doing more with it. One of the core values that Augusta Lawn Care that we talk about is doing more with less. In other words, without having to buy more equipment, without having to buy more team members or hire more team members, without having to buy more trucks, without having to go and spend a bunch of money on ads and getting more customers that are new, what can I do to take with less, with less advertising dollars, less equipment, less team members, how can I do more with this? That's going to unlock a massive opportunity for your business and really keep you from the things that have always thought, okay, well, if I got to grow, I got to pour more money into it. If I'm going to grow, I got to buy more trucks. If I'm going to grow, I got to hire more people. Well, potentially, yes. But could, how could you be more efficient with what you currently have? Take away the option of buying more things or throwing money at the problem and ask yourself for solutions that are going to be necessitive that you have to come up with without spending more money. Everyone can fix problems in the business spending more money, but the people who really pay the bills, the people who really make successful in business, are the ones that figure out ways to make more profit without throwing a whole bunch of money at the problem. Getting more customers more quickly.