this is gonna hurt (58% are DOOMED!)

Oh, man, this is gonna hurt.

I did a poll on YouTube and asked what your hourly rate is that you charge customers, and 58% of people charge less than $60 per hour. And I'm very, very concerned. I know a lot of you have heard me talk about the recession and everything coming up and how difficult it's going to be as business owners. The margin compression has already started, just crushing businesses. Literally. Last month, we spent $3,000 more at one of our locations. This location, I own it. 55,000 in revenue. It's just getting started. They literally paid 3 to $4,000 more in fuel than we would have. It was just six or seven months ago, and the gas prices weren't as high. It's crazy. Margin compression is a real thing. What margin compression is is basically because the variable cost and fixed costs of your business keep going up. Your margins, your profits just get squeezed and squeezed and squeezed. And at the same time that you need to pay more to your employees, you need to pay more for fuel at the same exact time where there's no money left because you have margin compression. And what really got me annoyed, what got me kind of down, was the fact that I believe the people charging less than $60 per hour in the service industry and in home improvement, it's gonna be rough. And so I implore you, I beg you, to do whatever you need to do to raise your prices past $60 per hour. If you actually look at $60 per hour that you're charging the customer, and then you take out what you're gonna have to pay for an employee, even if you pay them $15 an hour, by the time you pay taxes and. And all the rest that goes into having an employee, you're looking at least $20 an hour. And getting someone for $15 an hour right now is very, very difficult. And so if you take that and then you take things like gas, insurance, rent, all the other parts of running your business, all of a sudden you're going to be running on 3, 4, and 5% margins. And I don't believe that's going to be sustainable throughout a recession. If you start to lose big contracts, if you have a few employees leave, like, it's going to be a very difficult time. I beg you, while there's still time, to please raise your prices. And if you're like, well, if I raise my prices, I'm going to lose all my customers. Here's the thing. Focus on value. A transaction will go through as long as value is higher than price. Now I need you to raise price. But if you raise it too fast and too soon, guess what? The transaction doesn't take place, you're going to lose customers. You're not going to be able to close jobs. So what do you want to do? Focus right now on increasing price. But in order to do that, you've got to raise value. You've got to determine now is the time to make changes in your business and actually spend money. More money on things like branding, more money on uniforms, more money on training, more money on having an office person answer the phone, more money on your website. These are things that offer value to the customer and are going to allow you to increase your prices. You say, well, you know, I can't afford to have someone answer my phone. It's very expensive. I can't have an answering service. I understand that. Say, well, I can't have a website created by me like, created by someone like, I can't, I can't do that. It's expensive. I understand that. But think about it like this. If you have, let's just say 150 hours every single month that are being worked by your team, if you can improve that by $10 per hour from $60 to $70, that literally just brought in $1,500 of straight bottom line profit to your business just by increasing their hourly by $10 per hour. Now if you have five employees, you times 1,500 by five, that's $7,500 that you just created in sheer profit by raising your price $10 per hour. That $7,500 is what you're going to use to invest in your brand and your professionalism and training your employees and making sure you have a great website and paying your taxes so that you can be a licensed and professional business. Like these are the things that matter to customers that are going to be the most price insensitive customers, the ones that be able to stick with you through the next recession is going to be the customer that wants a licensed professional, want someone to be answering the phone and is willing to pay the price for it. I implore you. I'm already seeing companies going out of business left and right and a lot of them are in that 40, $50 per hour range. And I beg you to get above $60 per hour. It's gonna be required if you have any employees, it's gonna be required if you're even solo operator to stay up with the cost of inflation and fuel going up and trucks and tires and brakes are astronomical. I just paid 6,000. Almost $6,000 the other day because one truck needed brakes and suspension. It's crazy. And I paid $7,000 the day before for a new engine. It's nuts. If you're gonna stay up with all of this and you're gonna stay in business, you've got to raise your prices. And when people are scared by other companies that have talked about, oh, I raised my price and I lost all my customers or I couldn't close any deals. The reason that happened is because they raised price without improving the value to the customer. I guarantee you. And yes, you're like, it's a plug, Mike. You're trying to plug your products. You're trying to plug your products. Yeah, I believe in them 110%. Lawn CareWebDesign.com is 400 bucks a month. HomeServicesWebDesign.com for companies outside of lawn care industry. I it's $399 a month. I can guarantee you it'll allow you to raise your price by at least $5 per hour just by the value it adds to your customer. The fact that they can see your reviews and see your pictures and see a great looking website and have a logo and oh, it loads well on their mobile device. Oh, and by the way, you're gonna get leads for that money too. Not just the fact that you increase the value in that equation. This is the time you've gotta invest in your business and, and actually do things that are actually counterintuitive and that is spend money. I don't have the money. Spend money on the things that are gonna allow you to raise the value and the perceived value of the customer so that you are able to increase price and the transaction still takes place. You keep the customer. And some people right now are really concerned, like I can't raise price because my crew is making all these mistakes and I'm getting all these callbacks and yellow slips and people are making mistakes and customers are saying that my quality is going down. Yeah, quality is going down in the entire service industry. If you go to a restaurant, right, it takes longer. People are messing up, they make mistakes on the order. If you go to a break shop, they're always trying to train someone new and someone's messing up with the cash register. You go to a fast food restaurant, it's slower than usual. Why? Because entry level service positions are such massive demand and such churn right now. People are leaving their jobs, they're moving around and you know, this massive changes, migration of employees and everyone's still kind of high on this stimulus money that came last year. We got this child tax credit thing and we still got good cash. And you know, unemployment is super, super low. So people are just bouncing around from job, job to job. And so because of all this transition and churn in these entry level positions, yeah, the quality of people's service has gone down. And that's no reason not to raise your price. If you're months booked out, you should absolutely still raise your price. I know it's so hard when a customer says, oh man, seems like your quality has been going down and it used to be so much better. Now things are not the same way. You don't edge just the way you used to. Yeah, you got a whole bunch of new employees, you can't hold onto them. They're constantly leaving and churning out. And you've got a whole bunch of new people that don't have any experience. Like that's going to happen. But guess what? If they drop you and they drop your service, guess what they're going to do? They're going to go to a competitor that's having the exact same issue. So if you have massive demand, you need to raise your price. Do not allow mistakes, callbacks, unhappy customer. The person who ratted you out yesterday and said that the quality of your job has really deteriorated over the past six months. Of course it has. It has in so many service industries. Because we can't keep employees, it's extremely hard to find them and let alone keep them. And so, yeah, the service has deteriorated, but it doesn't take away from the fact that it cost me 10 times as much to fill up my fuel and it cost me 10 times as much to do anything because of inflation and my margins are getting compressed to nothing. And if I'm booked out two months, you gotta raise your price.

So please, I'm begging you. If 58% of people are under $60 per hour, I believe that the majority of people who go out of business over the next couple years are going to be out of that 58%. So please do what you need to do to improve the value equation. Get it higher so you are able to raise prices. You get the price inelastic customers that actually care about licensing and insurance and having a CRM instead of just putting cash underneath the front mat. These are things that matter. I'm begging you, please do it now. If you want more information, if you want to watch another video, this one's a good one to keep going down the rabbit trail. And hopefully it's helpful, but this is really concerning, so please heed the warning.