This Young Entrepreneur is Bleeding Money – Can We Fix It?

Hey, everyone, it's Mike Andes. I'm the founder of Augusta Lawn Care. We have over 150 locations around the world. But today I'm traveling out to co Crew pools out in California to help them turn around their business.

I don't know. I'm always worried.

The biggest problem right now is that the owner is paying for every single pool and buying these pool routes from other competitors. Right now, we're at the mercy of buying clients, so we've really got to nail down what's our customer acquisition strategy so he doesn't have to keep paying hundreds and. And, yes, even thousands of dollars per customer. These buying from these pool routes. Let's go ahead and roll the coaching tape. If you look at this, there's some days where you're crossing the same street four days a week.

Stupid.

Like right there, that one street you're crossing 1, 2, 3, 4 different times in the week. It's the same street.

Okay, so then how do you go about once you max out a route and, like, there's like, an awful one, you know, and you have no room to put it where it makes sense, you know?

Well, how do you pay your crew right now? Is it a percentage of revenue?

Pretty much, yeah. It's like 30%. But I just pay them, like, per stop, so it's easy. And the app does that for you? Yeah, yeah, it calculates it.

Yeah. Because most of the time, if they have a job that's like, right next to another one, they'd rather work the extra 15, 20 minutes, because that money, that's like money in the bank.

Yeah.

And they'll go above capacity if needed just to get that job since it's so route dense. But then you come to the point where eventually they do overflow.

And do you guys move around customers just all the time?

Like, so we do plus or negative one day. So when we set them up, we'll say, okay, you're gonna be placed on the schedule Tuesday plus or negative one day.

Wow.

Based upon the schedule, based on the weather, based upon whatever.

That's crazy.

Then it gives us flexibility. Like, if I say Tuesday plus or negative one day.

Yeah.

It gives me Monday through Wednesday.

That doesn't. That doesn't make a ton of trouble with the customers. My customers, like, hound me for a time.

Really?

Yeah. Time of day, and that's, like, so hard.

So why. Why are they ask. Locked gates.

Is it they want gates, Dogs? Yeah. Like, they don't want people, I don't know, too late or too early or. Or they want to see them there. Maybe, you know, I don't know, because it's pretty fast. Like, a stop's 15 minutes, you know, Matt.

Right.

Usually. So a lot of customers kind of think, maybe not a lot, but some customers think, you know, what are we paying for? You know, you're only paying for 15.

Minutes, and you're doing that once a month, usually. Or is it once a week?

Once a week, yeah, Once a week.

Yeah. Because, like, I think, like, one thing that I thought about if I ever do pool service was to do a video at the end of each visit because you guys aren't going to get dirty. You're like, where? Like, I've thought about this for lawn care, too, but the challenging part is, like, guys are pouring sweat, there's dirt everywhere. And, like, that's the trouble.

Yeah, it's probably as dirty as I get.

Let's go. Hey, you're around.

I felt dirty. I felt dirty.

So, like, you know, even if you made a video for them each time that you came, and, like, a selfie style, like, yeah, like, hey, it's Joe over here at your property. Got this done today. Added a little more. Laureen did a little bit more of the boring. Da, da da da. Like, that sort of a video proves that you were there and then puts less emphasis on them having to be on site when you're there.

Right. It's not a bad idea because you.

Do not want them dictating time.

Yeah, time's rough. And I do have some customers like that, but I don't know, a lot of customers text, too. Do you guys text a lot of customers? Yeah, we do. Yeah. That's, I guess, just the way it is.

Yeah, like. Like, the big thing is ultimately right now, we're at the mercy of buying clients. That's what stinks.

Pretty cool. I mean, just to speed it up. Yeah, it helps speed it up for sure.

But we have 150 clients. Yeah, that's just out of those 150. We bought 50 of them.

Mmm. Probably close. Yeah, probably close to 50. Yeah.

Okay. But on those 50, we've spent how much?

Probably probably a little bit over 30 grand. Yeah.

Okay. So my question is if we paid $30,000 in marketing so bad.

That's what I always think, but then I start to do it, and it just doesn't seem to return like that.

Okay. Do we have the website up and stuff?

Yeah, yeah, website's up.

Okay.

Maybe I can show you that.

Cool. And like, right now, in terms of ads, do you have Google Running or anything like that.

I think I got Google Ads. But here's something that maybe I want to ask you off camera, but.

Is the contractor's license.

Yep.

Do you guys run into that problem for the.

That and anything over $500? Yeah. So, like, on your big projects.

Yep.

When you're getting started, did you.

Yeah. So we have franchisees in California, so California, basically, anything over 500, you could have a contractor's license. So you've just skated around that basically by doing the smaller stuff only, I'm assuming. So you do occasionally the larger ones kind of thing, which, like, literally every occasional California does.

Okay. I'm working on it right now. I paid for the school. I'm going through it. What was I gonna show you?

Google or like, even your website.

Okay, I'll show you the website.

That makes me feel better. I didn't know if you would go like, hey, bro, you should definitely not do that. Or.

No, I think it's really good. Because the good thing about having with Google, local services, the more barriers they have to get in, the less competition. So, like, most people in pool service down here are not going to get their contractor's license.

Right.

And so, you know, from. From your perspective, what's the extra cost? Just, like, getting the license.

Yeah. Bond and stuff. Like a couple of grand a year.

Right?

Yeah. But for.

That's cool. Let's go.

I mean, I don't know. I. I've been watching your videos and stuff where you talk about getting pictures of your guys. I definitely need to do that.

Yeah.

Like, maybe a picture of the truck.

Right.

Here's the thing, though. I was thinking about rebranding because I don't really like that it's my last name. Yeah.

It's hard to say, too.

Yeah. Honestly, it's super Tongue twister.

It's. Yeah.

So that's what I don't like. I have a little bit of a lisp, too.

Yeah.

When I say, like, co crew, like, yeah, co crew. Pools people. People don't.

Dude, it took our guy in the media team.

Are you serious?

Like, five tries to say the name.

Yeah.

He's like, co, co crew. That's how it was going.

So, like, when do you know, though? Like, there's no way. You just picked a gusa and you're like, all right, this is it. This is the best name. No second thoughts.

Well, it's not about the name in terms of the branding. Like, the word Nike is basically a Greek God. Like, it doesn't have a whole lot of reference like, no one cares, but KO Crew is just hard to say. And so if it's. If it's hard to say, people will not remember it. Yeah, they're right. Was it co. Yeah. Was it cru?

They're like Joe Pools.

Yeah, exactly like Joe Pools would crush. It's easier to remember.

Yeah.

Right. And everyone just thinks their pool guy's name is Joe.

Yeah. I mean, I don't know. I. I don't think they. Yeah. Yeah, probably something. I'll. Probably.

Anything else. Anything else. Like, you could just make up anything just to make it where it's easier.

To say, oh, man. Oh, yeah.

But yeah, in terms of, like the site, like, you know, some of these pictures could be you guys uniformed up in front of a truck. The one that's decal would be ideal.

Right.

Just to kind of separate yourself from the other 50, gazillion guys I know running around here doing pool cleaning.

There's 50 million.

Oh, I know. I'm very aware. Same thing with lawn care down here.

Really?

Oh, yeah. There's a ton of people running around without their contractor's license doing it under the table, cheap, et cetera. So how many leads does this usually generate?

Maybe one or two a month.

Really?

Maybe, yeah. Okay. And I pay for. No, I just pay for hosting, actually. But yeah, I'll probably rebrand, so no more money into the wraps if I'm gonna rebrand.

Right, Obviously, if you're going to rebrand. Yeah. I wouldn't do that.

Well, I was thinking about paying. Have you heard of Dan? Dan, he works with. Have you heard of Tommy Miller? Yeah, yeah, Dan.

Marketing.

Yeah, I was thinking about paying for that, but it's like 30 grand or something.

Yeah, No, I wouldn't do that.

No.

If you spent 30 grand, if you spent $500 on a logo and some rebranding for someone off of upwork, and then you put that 30 grand towards marketing. Like, I know the customer acquisition cost in this industry. You do not need to pay $1,000 or $2,000 per customer.

What have you been hearing for acquisition costs?

You can get under $300.

Okay. Yeah, yeah.

It's simply a matter of dialing your Google Ads.

Yeah.

Like, you're just people that are looking for pool service.

We were doing some door hangers too. I probably. We've probably done like a thousand recently. And. Yeah, not too much. Yeah, not too much going back, which is weird. I put like a free first. First month free, too, which.

How many out of that? You get any calls at all?

Not yet. No.

Right.

I don't think so. I actually, I think I got one so far. I gotta be better about asking, but usually they mention the free month.

Yeah. Because the thing is this, even on a thousand door hangers, if you get one response.

Yeah.

Your. Your customer acquisition cost is still gonna be less than $2,000 what you're paying to buy them.

Yeah. I think it was more. I was like chasing, like just faster, fast, fast, fast. And I was like, this is just so simple, so easy. Throw money at it.

Right.

I had the money. I was like, well, I could, I could. I have money to put money in marketing and buy pools. So I'll just do that, you know.

But like, growth at all costs.

Yeah.

Okay.

I don't know.

And so, so right now, really, all the, the current customers, the new ones are basically coming from the. You're buying them. Like, there's not a lot of growth quickly, you're saying on the.

I mean, right now it's a little busier. Like I probably get two a week, like from either Angie or Yelp or just like referrals or something, you know, Usually like two a week.

Yeah.

Recently. Which isn't bad, but I'd like it to be faster.

Right, yeah. Because even like here on your website.

Yeah.

It's like right here, there's really no place for them to get a quote. Like, it says get a quote, but it takes you into the Contact Us page.

Right.

And then like the. This says inquire, like if. Right from the get go.

Yeah.

Oh, there you go.

If you had the S request form right here, like immediately they know what to do. Fill out the form, get a quote.

So get you instead of contact, you probably get a quote because like that.

Button requires them to go different page. You're going to drop off.

Right, right, right.

Like, I basically want that. What that is the inquire thing. I want that right on the homepage. Like, right, right there. This gets moved over to the left side. SM request form on the right. Because people are gonna come to this site wanting a quote.

And I think we got like. I don't know, I could check the traffic, but I think it was like over, like 200 people visited. And like, no. No leads.

No leads. Yeah.

Like, seems. I don't know, maybe that's normal.

Well, the bottom line is like people are coming to a full service site to get a quote.

Right.

We want to make that as easy as possible. And that is get a quote above the fold on the homepage, not where you have to click a contact Contacts page or a get a quote page and switch to a different URL immediately. You're going to have some sort of drop off.

First page.

First page. I like the fact this is your premium pool service in Oceanside, California. It says pool care and repair. That's great. But like having that right on the homepage will immediately drive more conversions than just contact us or get a quote. And the Get a quote is not get a quote. This is contact us page. I'm going to go on a limb and guess these go the same place they do pain. Pain. So. Okay, that does work. Very good.

Done. I'll do that. That's a good change.

What is that? Whoa, whoa. I switched.

There's nothing on there. What do you want?

No, you're good. I just accidentally switched out of Chrome.

You're good. Might not load, but here's. Here's the 30 that I bought recently.

Okay.

You can see the rates are super low. Even those are per month landscaping. Yeah.

And you paid about how much for this?

I. This one I paid like 6.6x. So like 6 months.

6 months revenue.

Yeah. But then in the contract though, there was. There, there is a set amount to raise to. So like all these, she said I could raise them like pretty much like 30 bucks a month and if anyone left should replace them. So I'm fighting her over that right now, but she doesn't want to replace them.

Six months of revenue. That means we gotta do these, these probably for 18 months to break even.

30, 40% profit margin business.

Yeah.

We have to basically do them for a year and a half to break even. Which means if they leave in a year and a half.

Ouch.

We lose money on them.

Yeah.

And which means that let's just say a third of them do just because of natural attrition.

Yeah.

Then all that extra burden cost will go to the remaining ones. Or I mean, it could be two and a half years before you actually make money on these.

So deceiving. So deceiving. Because it seems like you're making money. You know, cash flow.

Yeah. But even 30, 40% profit is really good.

Yeah. Which I think I'm at. We'll see.

Yeah. Which is kind of like the. On your piano, it looks like that.

It does.

Okay. So right now on your. On the piano, there's not really like a labor burden. Are you doing 1099 to the guys that are currently just taking their own vehicles and doing the pools then?

No, I'm W2, but I can show you. But one guy. There's this Whole thing. So he pretty much can only show half his income. So I pay him under the table half, and then I pay him W2 the other half, and the other guy's full time. W2.

Really?

So.

Okay. I didn't see it on the P and L. Really? I might have just missed it. Maybe it was just payroll tax was coming through there.

Yeah. I don't know. I mean, hopefully it's on there. That would be bad.

No, you're good.

But it was just recently. I mean, I. I hired my first guy, like, sick, probably less than six months ago.

Okay, cool. So last year is basically ourself.

Yeah, she.

Like, $150,000 last year, basically. By yourself?

Yeah. Yeah, I think. I mean, if that's what it says. Yeah.

And so your. Your big challenge now is, like, switching from the labor, doing the work to now, like, managing the cruise. Right, Got it.

Yeah. And especially since I'm young, like, my. My. Yeah, both my guys are, like, 40. They're super cool, but I don't know. And it doesn't seem to be a problem, but there's still a little thought in the back of my head, like, you know, these guys could be my dad.

Yeah, yeah. No, I get it. I remember I was 18, hiring, like 30 and 40 year olds.

Really?

Yeah. How old are you?

21. I just turned 21.

Cool.

Yeah, very cool.

And so how did you find those guys? And how do you manage them on, like a daily basis?

Yeah, so I found him on. Indeed. And then.

And then I. Yeah. Just went through interviews and ride along, trained him for two weeks. I don't know if that's enough or not, but.

And then, yeah, we just sent him out. The app makes it easy because, I mean, the video is a good idea, but at least right now we send pictures and, like, got it readings. So you can see, like, Terry's done one today, so you can see, like, all the previous, like, chemistry readings, what he added. There's like a little checklist and then. And then it sends him a picture. Very cool.

That's pretty cool.

So it's kind of easy to track a little bit.

Yep.

I can kind of watch over them, make sure the pool's at least not green, you know?

But you're saying, like, you don't mean to generalize the area in the morning and then, like, when do you meet at all?

No, no, I mean, when was the.

Last time you saw them?

I saw what my other guy, like, last week on accident, just at the supplier.

Really?

Yeah. Like, we were doing training with the other guy.

And so what prevents them from doing other jobs?

Like, that's a good question. Trust, I guess. Okay, trust. And what do you. What do you mean by that?

Like, the neighbors, like, hey, dude, can you come over here and do mine?

That's always my fear. But.

I don't know. I don't know how I would stop them. So I guess I thought about I could just reward them for giving them to me. So I told him I give him 50 bucks for a referral. I mean, it's not much, but maybe some incentive not to take them, you know, and then. Yeah, I don't know. I think they're pretty trustworthy. Yeah, I do trust them.

And how much can they make, like, in a day usually? So they get 30% of revenue.

Yeah. So, I mean, typically they make like 12 bucks a stop. So, I mean, around like 250 probably. All right, cool. On average.

And they're happy. Like, they're just happy with that.

One guy's not. And then one guy is. He's like, I don't even care what I get paid. He's just like, I just want to stay busy, you know?

So one guy's totally cool, and then one guy's like, I want to work, like as many hours as you can. Like, this is not enough. You're not giving me enough. You know, which is fair because he doesn't even have 40 hours yet. But I've tried to, like, supplement him because I'm trying to build up his route.

By just like, I told him I pay him hourly to pass out flyers, like, to make up the hours, or told him if he. If he cold called or door knocked, I'd give him like 200 bucks commission on it, which I think are decent. But.

So, like, right now, operation, like, what. What do you feel is the bottleneck for growth?

Probably honestly leads and just kind of like a plan, I think. You know, because I think so far, so good. I had to fire one guy previously. Didn't work out. And then so far, these guys seem good.

Is it mostly like just low quality work that is the reason for firing them?

No, that guy was like, drinking and.

Yeah.

And then. Yeah, low quality work. Like, I kept getting calls. I was getting. I had magnets on his truck and I was getting calls from random people. Like, I was driving my wrapped truck fully wrapped for two years and never got a call. Like, I don't drive perfect and I've never got a call. He was driving for a week and got a call, and he was like, you Guys falling asleep. Some random guy. You're falling asleep at the stoplight. Like, one of your guys, you know, is. Is out, and he's like, I don't even remember what happened. Like, yeah, and I gave him another chance after that day, too, and then he just screwed up again, so.

So the one guy takes your truck home, though, and, like, uses that from his house, just, like, driving from there.

Right. And I have a tracker on it, but I don't know. I think I. I don't. I trust him. I mean, he asked me if he wants to use it for, like, personal.

Right.

Sometimes. And I pretty much tell him yes, just because I don't know.

Okay. And so really, like, the bottleneck is getting more leads.

Leads, and. Yeah, just a good plan and kind of like. Yeah, like, what I should be doing. Like, you know, because I feel like I'm kind of all over the place a little bit, like, with what I'm doing, and I feel like I just kind of, like, pick, you know, what I want. Like, do I want to go get some repairs or do I want to go get more pools, or do I just want to, like, be lazy? You know, that, like, these past couple weeks since I hired the last guy, I've just been in, like, a slump. Like, not really feeling, like working. Like, I have money. I have. Like, I don't really have to work. And it's like, I know it's not gonna last, but I just do nothing, you know?

What do you want the business to do? Do you want to make $300,000 a year and you make 100 grand passively? Do you want to get to a million?

Exactly.

So why.

Yeah, no, I really want to get to a million, because that'll be the point where. I mean, at least what I've heard is where you can hire a manager.

And, I mean, hopefully I can hire my mom. Real estate's not doing good, so she's always wanted a job, so that'd be cool. And then also, like, I think anything under for 1 million to it, if I ever wanted to sell it would be, like, a decent payday, like, maybe even close to retirement worthy, maybe.

Yeah.

So there's that benefit of growing it, and then also, yeah, just not staying in the field. I mean, working all the time. Like, I don't. I don't want to have to. Like, I'm very active, too, and I'm always getting hurt and stuff, and it's just not ideal to have that be your only option. I know. I've watched your videos, too. And you said like, you know, that's when you switch, when you got injured by that, like chipper or something. Right. You got cut up, you're like, all right, I gotta start not doing this myself.

Yeah. So your goal, like build 10 million, hire your mom or some sort of manager.

Probably not my mom to manage it, but it would be nice to have jobs, you know, maybe, you know, whatever, admin or something, you know.

Okay. And then you would then do what?

I kind of like working in the field. Honestly, like, computer work is not really my favorite thing.

Yeah.

So that's what's kind of also weird. But I don't like cleaning pools that much.

I like the process if you're in the field.

I like the projects.

Oh, the projects. Like cleaning out, like old messed up ones or installing or.

Yeah, yeah, yeah. Pretty much, yeah. All that. Yeah. New equipment. Yeah. New pools. And that's my end goal too, is to get up to the service to a point where it can kind of fund building pools. Because that would be the end goal.

That's a whole new level.

I know that would be cool. Cuz I know everyone chases the high ticket and I know why, but. So I think I'm gonna chase it too.

Okay.

I think I feel like building pools is like kind of, I don't know, like under the radar a little bit. Yeah. Everyone's chasing H vac and stuff, but pools are like minimum, usually like hundred grand.

They're very hard.

Are they?

Oh, yeah. If you do them right. So much liability.

You guys probably built some, right?

Well, I've never built any, but I know.