URGENT! This $860K Lawn Care Business MUST Raise Prices NOW!

Probably 100% increase in profits. Today we're in Carlisle, Pennsylvania with Justin Beecher from a brand new leaf landscaping and design. The business has around $200,000 in equipment debt, but it's remained profitable nonetheless.

I don't feel like I'm doing bad, but also if I can be doing better, you know I want to be.

However, the company's revenue growth has stalled over the past couple years. Oh, Justin, we can improve. We can improve. There's this new thing called technology.

I don't really care how much money I make.

Oh, man. Yeah, we gotta fix that. That's not good. Our goal is to give Justin a strategy to be able to double his profits in just the next six weeks. My name is Mike Andes. I'm the founder of Augusta Lawn Care. We have over 170 locations around the world, and I travel the country helping home service businesses get to the next level. Tomorrow we can double the profits.

Punch yourself in the face. Why am I not doing that?

All right, Justin, here we come. Dude. Oh, we got a sign out front. We got a big old trailer. Ooh, nice designs. Hey, Justin, how's it going?

Great. How are you?

You brought us balmy weather with us.

Yeah, I know.

Oh, man, great shop space you have.

Thank you. I appreciate it. Nice to meet you.

Absolutely. It's been a few weeks since we saw each other.

Yeah. Yeah. That's awesome. Yeah.

This is a great spot. This is like 10 acres.

It's 17.

Oh, wow. Nice, man. So this time of year, do the guys still come in?

They do not, no, no, Just my. My mechanic comes in and my full time landscape lead comes in. The rest of the guys are laid off.

Awesome, man.

Cool.

Well, show us around a little bit.

I'll show you. So I'm going to have two businesses. Essentially, this mobile small engine repair is going to be a separate business. This is going to be a brand new engine instead of a brand new leaf on this truck.

Okay.

Mobile small engine repair truck. He goes out and does services on people's lawnmowers and all of that stuff with this trailer.

Ah, okay.

Yeah. So there's a little lift in there that he, you know, pull the mowers up in here, use the lift, has all the tools. There's a generator in the truck that he uses, all the basic parts. There's some stuff that has to come back here to work on.

Yeah.

But I mean, unless it's like something crazy, most of it gets done like on site. Like, the goal is this to be all service. Not really, like the repair stuff. Right, but repairs are blade. Yeah, yeah.

Do you run that through the current?

Yeah, that runs through the landscape. Okay.

Yeah. But your goal is probably just like pay for him essentially. Like that was the main goal.

Yes, yeah, yeah, yeah. My goal was like, you know. Well, he. So he worked for John Deere. He's actually my stepdad.

Okay, cool.

And he has been a mechanic for 25 years. He worked for Bobcat and John Deere for years. And I've been like asking him to come on and finally he's like, I'll come on. And I was like, well, let's make it, you know, make it work. And it's been, it's been great.

What'd that do in revenue last year?

I believe it was like rated 85,000. I'm not quite positive on that. Like, like. Well, we use yard books and it's kind of not really that organized up. So this is our. This is like a really cool truck. So this folds back a little bit and then the mulch conveys out over the back of it. And also it's like landscape is kind.

Of like the mulch mate kind of thing.

Yeah, it is. Yeah. But the, this, this was 15,000. The mulchmate's like 40 or something stupid. Yeah, it folds out of the way.

And then you get like 8 yards in there.

10 or 11. If we jam it full, we get 10 or 11. So whenever I was a teenager I worked for my great uncle who was a local landscaper. Worked for him for seven or eight years. He got out of the business. He just aged out. I had built up some of the customers from his business so whenever he was getting out of the business I was like, I'm just going to go and just get a mower and just start doing my own thing. And that was in 2012. Started the business in 2013. Started. So from 2013 through 2019 it was just me and a couple part time guys kind of here and there. And then in 2019 I was like, it's time to double down and go after it if I'm gonna go after it. I had no ambitions into going to college. The company I was working for offered me a lot of promotions and going into the management side of that. But I decided that wasn't what I wanted to do. So I doubled down on this and here we are.

Morning guys. Sorry about the cameras.

Been in business for 12 years. We got 860 in revenue, $150,000 in profit. You're really almost like a 20% profit. Margin business.

Yeah.

So like, what is the goal now? Like, what's the bottleneck? Are we trying to grow to two? Are we trying to just make what's currently this size really profitable? Are you trying to get out of the business? What's like the current constraint in your mind?

Want to make it profitable, get it more systematized?

Yeah.

And then decide if I want to make a leap or I really want to pay my employees more. I just lost a guy who's been with me for seven years. He got a job at a local warehouse to make 30 bucks an hour. I can't compete. I want to be able to compete. That guy loved working here. No reason to leave other than he needed money. Like, I want to be able to like raise my rates so that most of them don't have a reason or don't feel that they need to leave. Because of money? Yeah, because of money. All of my guys have been here for forever. Like, I really don't have turnover. I'll maybe bring in one part time guy in the spring and he won't last. But like, for the most part, most of my guys are steady. They've been here for a long time. Like, we have a really good morale. I mean, we're all a very close knit group of guys. Like outside of work, you know, we always do stuff together and Jode's a great guy to work for. He always takes care of us. They get so bored and get, you know, annoyed that they're not doing anything through the winter. Sometimes we'll just come here and hang out. Like Kyle and Kurt are on full time. Sometimes we'll just come here and hang out with them, you know what I mean? Just kind of like do whatever, you know, we just kind of screw around the shop, do little odd jobs and stuff like that. I'm not concerned about myself, you know, I mean, like I said, like, I'm doing a lot of things. Like I don't care about making a ton of money for myself. Yeah. But like, if I can do more for them and not, you know, like, and keep enough money and make it all work, then that's kind of one of the goals I'm trying to figure out and make that, make that better. I never really cared how much I grew. I never really had that like, you know, grow to this, this big number. I cared about the people, I cared about the guys. Like, like it'd be like someone would ask me for a job and I'd talk to them, be like, you know, you, like you're you know, a good fit. Like, we'll see what happens. And then I try to, like, build up to add that person into our business. So that was kind of how, like, I ran it. You know, it was just kind of like, well, someone. Someone fit into how my crew was, how the guys act, you know, all of that stuff. And it just kind of built, like, organically from that. So it was mostly like a trust thing and all that. So it wasn't really like, oh, let's, you know, hire 50 people and make a mess and get yelled at every day and, you know, cause a bunch of problems. I mean, I think it's good because a lot of us just have common sense of how to handle. Like, we all have experience from prior to even working here of doing this kind of stuff. So a lot of it just comes down to common sense. We haven't had much problems with people just making stupid decisions. You know, that's the big thing. So it was, like, a huge transition. A lot of trust in who was working for me, which is still. I mean, it's always super hard. Like, you know, they're driving a $100,000 truck, a $50,000. You know, they have a ton of money out every time they leave the place, and it's your business on the line when they. When they leave. I think at the end of the day, we know this is our job, and if we total a truck or break equipment, like, end of the day, it's our paychecks, too. So, you know, a lot of people that do this type of work, you know, they don't care. But I feel like we all care, and, like, we want our jobs. We don't want to lose them. So we all goof off and mess stuff up sometimes. But at the end of the day, we don't want to, you know, hurt our incomes and hurt a business that's paying for our livelihood.

So I truly believe that the secret weapon that Justin actually has in the business is he has a phenomenal team. They've been with him for a very long time. They trust him. They show up on time, they work hard. He's able to pay them pretty good wages. And now the question is, like, how can we retain them? Because after five, six, seven years doing this type of manual labor, sometimes people will move on to other jobs. So how can we actually provide a workplace using pay for performance, where you can pay 5 or $10 more per hour? And in terms of, like, pay for performance, have you thought about that at all for them?

Almost all of my Work is the customers say, come and do this. Right. They'll say, hey, come and mulch.

Yeah.

And then when you're here, do this and this.

And I remember your call.

Yes.

What's on the breakdown of like, projects versus recurring.

Almost everything we do is like recurring work. Mulching, shrub trimming, spring cleanup, fall cleanup. That's most of our service.

Are Those like on 12 month contracts with customers?

Those are. I have nothing, I have no contracts.

So those are, they're recurring. They're calling in, hey, I want for four of these a year.

Yes, got it. Okay. Yeah. It's a matter of how to make the budgeted hours work. Like if we're just going to mulch, I could say the budgeted hours are going to be this much money. Right. If I knew that that's what we're going to be doing. Because I know how much mulch they use, you know, so I can kind of have a good, I have a good grasp on that. But whenever those guys go to the job site and they're like, well, we want you to do, you know, pull out this shrub or cut this shrub back or whatever, you know, they start adding on different things. Well, that changes the whole game and what to charge. How do you add a budgeted hour to a job? Whenever they're bringing back a worksheet saying that they mo mulched and they trimmed these four shrubs and did this, you're.

Saying like right now, when they go to a job site, they are basically on call. Essentially. Like, say, we're gonna do a property cleanup. When you get, they get there, all of a sudden they're like, hey, I also want you to do some mulching. I want you to do some this, some of this that. How are you currently adding that then to the bill?

Like whatever their time is, I just add that into the time of what? So like I know what the mulch price is because we do it every, you know, every year for the most part. So you just kind of add it on to whatever, you know, the, the hourly rate times, whatever. Well, if they do it slow, they're.

Going to pay more.

They're going to get, they're going to get paid more. And if they do it fast, I'm going to charge the customer less money.

Right?

Yeah. Right. Yeah.

Is there any rate that you're currently or like price that you're giving them when they go that the customer already ballparks the first bush trimming or like the first mulch install? Is that part agreed on or not? Really?

Not really.

Oh, really?

Yeah.

So you are really just looking like the timesheet. How long do they spend there? What materials did you spend? They write it down on a piece of paper and then you're doing the billing. Yep. Yeah, it's tough. What's your rate when you. When you charge them by the hour like that?

85.

Yeah, see, that's solid. That's fine. Because see, what would happen is you would actually end up like their prices would stay the same if not go down. Because you're gonna go there like, okay, this is gonna take 12 budget hours. The guys are gonna knock out an eight.

Yeah. Right.

But you charge the 12.

Yeah.

But then now the delta, the difference goes to the crew. That's the objective of P4P here, is that you go to the job site knowing last year this took 12.

Yeah.

You see that?

You. Okay.

I think it's gonna take about the same amount of time. Twelve.

Yeah.

But now you give it to the crew, and because they have the incentive to go faster, they get done eight but get paid for 12.

Okay. Okay.

That's where you're giving the money to the crew.

When you do P4P, you still incentivize them getting work done efficiently by not having gaps between jobs and getting to the job site fast.

Okay. Okay.

So there's still actually an element that even if you kept billing the way you do.

Yeah.

It's just. It's only going to make. Move their paycheck by a couple bucks an hour.

They're making more money per hour. Correct. They're still making the same amount of dollars.

Yes. But what happens over time is you start to realize they're going to get done sooner and you start to put more jobs in the schedule.

Okay, okay.

But one off times where they just crush budget hours, I'm usually not scrambling trying to get jobs on their. In their afternoon. And they're not complaining. The fact they get eight hours worth of work and they work half a day.

Yeah, yeah. Okay, that makes sense.

Now you'll have some guys who are like, I want more jobs. Well, I just threw on a mowing crew.

Okay.

Okay, great. Yeah. Here, hop on the mowing truck when you get back and go do three or four jobs before the end of the day. That's fine.

Okay.

Other guys are like, great, I'm off at 1 o' clock and I'm done.

Yeah.

So you kind of have different personalities there. The thing is, with PvP, it's like a big domino, which when you change that so many things Below it, it's gonna change.

Like most of those guys just wanna come to work, have fun and go home. You know what I mean? Like, that's just like what they're looking for in their life. And that's like. I don't get it.

I'm guessing approximately on all your mowing, you're looking at around 40 to 42% of labor revenue going to the employees. That's high.

Okay.

If you get that in on a 30%, you'll make a lot more profit.

Okay.

Now the thing is, on P4P, I fix that amount. Because see how we're calculating, it's like 1041,142. I mean there's some days it's like 58 because they had a bad day. Other days they crush it. It's like 24% because they just absolutely obliterated it. And so the goal with P4P is fix that amount.

Okay.

So just always the same. And it's up to them. Okay, how, how much do you get done? You get a percentage of it.

Got it, Got it. Okay, that makes sense.

If you actually try to go P4P's route, that's what this takes out is the variability of like, is someone good? Are they efficient? Are they not? It's like from your perspective, you paid them the same percent no matter what.

Obviously I did all this stuff right. I can go out and zip around a yard and I'm going to kill these.

Yeah. The reason that you do is because you have two things you have. You're compensated. Like an owner.

Yeah.

I. E. The faster the jobs get done, the more money you make. And also you have the information of an owner. You know how much you're making per hour, you know the cost of the fuel, you know the cost of the truck insurance. It's like that. This is where it comes down to like, if you want someone to do your extra 30%, they need the information and the compensation of an owner. Information being open book management.

Yeah.

And compensation being paid for performance where they know the faster they work, the more money they'll make.

What should this number be? Are you saying, did you say in.

The 30s, if you get this under 40, you'll be better. So we shoot for 33%. This is what I would probably do in your case because you have. Guys have been here forever.

Yeah.

I say you either you have two options, make what you're currently making and pay the 20 bucks an hour.

Yep. Boom.

Or you get a third of labor revenue. Whichever one is higher, I will Give you. So now there's no downside to him feeling like you're trying to gift him.

Right, Right.

If he does move faster and he does hustle and now all of a sudden this 491 becomes 700. Because he hustled all day long, he'll make an extra 50 bucks because they're doing more yards in the same amount of time.

Yeah, yeah. My mowing guys mow Monday through Thursday, 10 hour days. They mow same properties Monday, same properties Tuesday, same properties Wednesday, same properties Thursday. So I would just have to add on to them. Like.

Because they get done faster.

Yeah.

If they got done fast, you now increased your capacity for your business without having to buy any more trucks or hire more people. Because now all of a sudden, Instead of doing 50 lawns in a week, they can do 60 and the extra 10 goes into their pocket. So you increase capacity because right now you say, hey, I can't really take a whole lot more customers on. Yeah, now you can, because they get done so much faster. I would be careful implementing P4P though, and then still charging your customers by the hour because you are basically shooting yourself in your foot if you're like, hey guys, we're going to be way more efficient.

Yeah.

And then they get more efficient.

So I need to put the number and then ignore the rate.

Yeah.

So whatever the number is, it is. And whatever. Yeah.

And then you fix up certain amount of budget hours. So for example, without raising your rates. You could raise your rates. What I mean by that is. Okay, last time it was $400 for Mr. Bill. 424 60, 390. Okay, we're just gonna say it's 400 for his property cleanup. I'm gonna divide that down by $100 an hour.

Yeah.

Guys, you have four budget hours on the schedule.

So you're getting. You're raising your rate without the customer's price going up. Yeah.

Now you give them a target to be and all of a sudden it will get done in three hours. Because you know, you could do it that way. The reason that you can is because you have the compensation and the information.

Of an owner seems so easy.

It's the big domino. They're like, honestly, everything else we talk about is cool, but like, this is the thing that makes them more allows you to increase the rates, increase your margins, and fix the percentage that you're.

That's going out to.

The thing that kills you in our industry is that your wages is variable up and down. Sometimes it's 40%, 50%?

Yeah.

20%.

Yeah.

I'd rather just like give me a flat number that always know that you're gonna.

You're gonna make $100 a day for mowing.

And before the day starts, you know what project's gonna cost.

Yeah.

Because the wages is actually a fixed dollar amount. Like if it's a $600 cleanup, I know $200 is going to my crew, period.

Okay.

Doesn't matter if it takes them 10 hours or takes them four hours.

Okay.

It's tough, though. It is a. It is a whole transition of the way your mindset from a scheduling perspective, from an estimating perspective, but I think from a customer perspective, they don't need to know anything. Their prices are basically gonna stay the same. You're just now gonna have budget hours in the background so that they can beat them.

One of the biggest areas of improvement that I see in the business is that there's a lot of key man risk when it comes to the small engine repair business that he's building out. It's all built around one employee. If that person leaves, we could be in a world of hurt. Also, we bought trucks and equipment to really facilitate that and put all of our Google reviews behind the engine repair side of the business. It's not just a function of how do we pay the guys more. It's also a function of how do we make this business that if you got hit by a bus tomorrow and we're out for a week, that they could still get the jobs done. That would be valuable from a ops perspective, even if without the part of, like, being able to pay them more.

Right, Right. Okay. I don't put in enough hours myself to put that person in that. In that place. I'm sure, you know, I should be more organized. I should. Do you know what I mean? And they're gonna do things better than me because that's what, you know, know I'm not the sit at the office desk person. How would you ever need two office people at a million dollar business? What do you need that for? Like, what do they do in eight hours a day? Yeah.

Usually it's inefficient scheduling. Like there's juggling throughout the day, inefficient labor. The guys are running around from job to job. There's no P4P. Then you need a bunch of operations.

Yeah.

To keep you on track, on schedule. You're tracking their trucks, et cetera. Like, I'm assuming you don't track trucks and like monitor guys like that. You trust them. They Work hard. And so the reason that right now the scheduling works is have it all in your head. My concern with that is that it could very easily bloat without you around. Like, if you weren't scheduling, like, oh, yeah, I kind of know how long that job that takes. If you don't have that right now, scheduling could be all over the place.

Yeah. Yeah, it would be. Yeah. And it still is. And I do know. But it's just like, you know, like I said, sometimes you run into stuff, and that job takes two days because you get there and they start asking for, you know, more stuff.

I think if you had an admin person, assuming a lot of your customers have been with you for several years, you have a track record you can just look through, okay, the last 10 cleanups, what would it. And if there's a good range, Adam's like, great. On average, it's six budgeted hours. And put that on the schedule.

Okay.

And then now you go to your crew. Like, it's going to take six budget hours. Now, from a scheduling perspective, you can do a much more efficient job of getting jobs incorrectly in the right order.

Yeah.

And one off, they're going to go way, way longer.

Yeah.

And they will add more stuff, but there will also be jobs that the guy will crush now, and they'll take.

You down and go back into that other schedule.

And now you're not, like, worried about that. Cause you're getting paid the same amount no matter what.

I do all of the admin stuff. And I don't kill myself. You know what I mean? I'm not overworked by doing it. Most of it. It's so systematized. And even though I'm not. It's enough that it's not that difficult that they're paying a couple hundred thousand dollars out to people to do this stuff. What do they need that for?

The other key mannerism in the form of Justin. He's the one holding all the information on scheduling, invoicing and all this paper that's being handled around right now. There's no system for how these things if Justin's not here. And so that's why he can't go on a vacation. He can't spend time away from the business, because all the systems depend on him being there. And he is the software, he is the brains, he is the system. And that becomes a bottleneck for a business that's trying to grow. They have their own devices now or just do paper.

They just do paper. Everything's on paper.

Oh, Man. Yeah, we gotta fix that. That's not good.

Yeah.

So you're getting a bunch of seats at the end of the day of, like, what would I do?

So the mowing guys give me one paper at the end of the month that I put into. You know what I mean? That I put in. And that's how I bill from. For mowing the landscape guys just get a landscape job sheet.

What? So wait. Sorry, sorry. So those sheets are every day, they do the route, they stack them somewhere. End of the month, you take them all out and do billing for them.

Yes. Yeah. So they're. It's literally they'll have a clipboard of.

Paper.

Let's go.

Whoa. So this is one cruise.

Oh, I see.

Like, that's one cruise month.

So what happens if you add a newer person in?

I'll either, like, they'll either add it to the bottom or, like, I'll just throw it in, you know, Or I may reprint them or whatever, but most of the time it's like one person. So, like, they'll just add it to the bottom of the sheet.

Oh, Justin, we can improve. We can improve. Here's this new thing called technology. Paper forms. It's 20, 25, and we're using paper forms. These are stapled together pieces of paper that are supposed to last the entire month inside of a mowing truck so I can build them within them.

I grew up on a farm. I've always, like, worked super hard. Like, to me, like, I don't like the office side. Like, this is not who I am. I'm the person to get out in the trenches and put the mulch down and mow the yards and do all that stuff. Like, that's what I like to do. But also, I know that this is what I like. This is what I have to do.

This is tough.

Oh, yeah, it's fun.

Like, this is tough, man.

It's like, is that a check or a fax?

Because, like, adding in new customers, adding new customers is pain. If someone leaves, you're X' ing them off. Just paper, manual.

Most of those X's are like, these are marked off after, like, I put their information into the system.

Got it, Got it.

So almost everything that has, like a line through it or whatever is like a new person or inputted their information or whatever.

Got it. I see you're saying, man, my concern is, what happens if we increase the amount of customers? Like, you're gonna have to add on to this.

Right, right.

Like, that's gonna get painful. Yeah, like, that's what this is. Right. I'm gonna say, oh, no, I don't.

Know what that other.

So if someone gets added, where do you put them?

On the same. So I'll just, like, fold it, like, if they're gonna be on the Thursday route. And, like, I can fit. Like, if we have the time to fit them in, I'll just shorten this up and then put them on the same sheet.

Because from a routing perspective, you would just have to fit them in.

Yeah, just fit them into wherever.

So what happens if a new customer joins here, though?

Yeah, they would just go in between those two.

How would you fit it, though?

They would. I'd raise this one up and put that one.

Oh, you can print a new sheet off.

Yeah, And I'd print a new sheet. Oh, yeah. Or else they would just put it on the bottom and then know that on the next month, I'd put them in that spot. Whoa.

That's crazy.

You sound like I'm ancient. Oh, yeah. That's crazy. That's crazy.

Oh, man. That's awesome. I haven't seen paper routes a while. Sorry. I'm just. I'm just over here nerding out. Let's go.

Okay.

Yeah. Like, I have no clue what that.

Other stuff is on the back that you're looking at.

I don't care who you switch to, but get on. Get on digital.

Yeah.

Switch to anybody. I don't care.

Respect that. Oh, my switch. I'm gonna go to you, obviously. You just showed up at my house anywhere.

Like, what happens if the dog literally eats the paperwork? The dog we just saw? Yes, that one. If it eats the sinking route sheet, how am I gonna bill my customers at the end of the month? Because, like, this. This gets me scared. Justin, you have a really good business is if you get hit by a bus, we don't know where to put the jobs because, like, we don't really know how the job goes. Most of the crew would actually probably. You could probably figure it out.

Yeah.

Because a lot of them have been here for a long time.

Yeah. Yeah. We'll just keep the same sheet and just keep using it over and over.

Yeah. But it can mean it locks you to the business.

Yeah.

Right. Like, you really can't go for a few weeks because, like, you do the billing.

Yeah.

And, like, you have to be here to understand this.

Yeah. Well, that's another issue, is that I don't bill often enough, like, weekly.

Because the reason you can't do weekly is because of this.

Yeah.

If you. If you did on, on any digital platform, you could just do weekly billing, something.

On other stuff.

I don't really care. It's like, I just wanted to see this go away. I don't like to see paper files, man.

Yeah, the software thing.

I feel like most people know what they need to do, but just need to do it. You know what I mean? Like, it's just like, I knew I needed to go to a better software so that they could do stuff online. Like, you know, most of it's just like, you just need to do it.

I know that would be a learning curve, but like, I see that as like after pay for performance. I'd say software is like, you're gonna.

Need to need to do it.

Especially if you ever want to get away from the business. Yeah, especially as, like, you know, as your kids age, you get older, you want to take some time off. Like, you don't want to be like, every the first of the month, I must be home.

Right.

I am the only one that can read this sheet.

Yeah.

And then even, like, even like Monday mornings, it's like, okay, how do I schedule the week out? If we can create budget hours, we know how many employees we need that week. We know for overstaffed, we know for understaffed, we know when to hire based upon budgeted hours.

Yeah.

Yeah, right?

Yeah, that makes a lot of sense.

This is a bottleneck that Justin's gotta fix if he's ever gonna be able to have the business run without him. In daily operations, when you're self employed.

You have no one who tells you what to do. You can do whatever you want. You know what I mean? Like, I get, like, I can do whatever. And it's like, well, things are fine. Why am I changing? You know, I mean, like, why am I changing something? That's fine. But also after this, it's like, punch yourself in the face. Why am I doing. Why am I not doing that? Like, why am I not doing those better things?

So, man, that's crazy. I literally haven't seen any paper routes since I used them way back in the day.

Here.

I don't want to mess you up.

No, you're good. It could just go anywhere.

So how I kind of see it is like, okay, so we look at the 4L framework and we got liquidity up top. What is the constraint in that side of the business right now is we just need to raise prices.

Yep.

Like, you have tons of customers. They've been through a super long time. They accept all of your estimates. So IE your close ratio is probably like 90%. It's also a matter of, like, even if we talk about P4P or the software or whatever, you can all of that. Because those are all marginal improvements.

Yeah.

20, 30, 40%.

Right.

But liquidity, raising prices, probably 100% increase in profits. Is it just a matter of, like, you're afraid of the customers will say, yeah, yeah, yeah. But you haven't raised prices for how long?

Like, I try to raise them, but I don't know who, what, where, when, and how.

We're going to tear the band aid off, double our profits, and increase everyone across the board by 15%. Now, 15% is not bad on a $70 mo.

Yeah.

You're raising prices to 80.

Yeah. Yeah.

That's not bad.

Right.

And you're at capacity. It's not like you can take a.

Bunch of more customers. Yeah, yeah.

So, like, that's like, probably number one.

Okay. Right.

Then it's like, okay, if we look at the next part of the 4L framework, we got leads. And as much as like, well, we're at capacity. We don't really need more landscaping customers. Well, if we're going to do winter services and take a lot of our demand from spring and push it forward and take a lot of our demand as a fall and push it back more. Yeah, we now can take more customers. Another thing from a liquidity perspective is can we actually bill weekly and can we get credit cards on file?

Yep. Right.

These are. These are marginal things now. Right. This is helping cash flow by getting weekly billing so we don't have a big bunch of people owing us money. Credit cards also help cash flow. It's not necessarily increasing our profit margins. That's why, like, number one, raise prices like, it is something that tomorrow. There's no doubt in my mind, if you raise price by 15%, you'll lose three customers, and one of them move really mad and you'll have a bad day.

Right.

But then we double the profits. And then literally, if you didn't do any budget, didn't do any software, you go hand more money to your crew.

Okay. Okay.

That's awesome. That's highest leverage. 100%.

Yeah.

Leads. I think it's like, as much as we want to say we don't need more customers.

Yeah.

By having more customers than you can serve, that gives you the confidence to raise prices. It's easy to get fixated on something small in the business that seems like a big deal, but just a fire that's burning. This could be a truck that's down a piece of equipment you're trying to buy. Employee issues inside the business when reality. There's one massive lever that's obvious that we know. If we just change that one thing, it have a huge cascading effect, a rippling effect throughout the entire business. And in this case, if Justin just raised his prices, the impact it would have to the business would be tremendous. He'd be able to pay his employees more. He'd be able to pay them through the off season. He'd be able to afford an admin. He'd be able to go on vacation if he just raised his prices. So when you know that one lever, when you know that one thing, if you just did it in the business, it changed everything. Just do it.

It's funny because through spray, I just turn people away every day.

That is crazy.

Like, ridiculous amount.

Do not turn people away. Like, do not service. No bueno. Like, we've got to get it to where we able to take those customers on and be like, well, I have way too many. That's when we raise prices again.

Okay, okay.

I know it's scary, but you can raise prices more than once a year. If the goal of the company is to make money.

Yeah. You just gotta make it.

Yeah, yeah. Let's raise prices. Whenever you're like, I gotta turn leads off. Let's not. And we're gonna be able to get to them now because we do push services off of spring and off of fall. Okay, well, I'm making less money per customer. Yes. But now I can take more customers on, and it's more recurring throughout the off season.

Yep, yep.

Right. So winter services, we're not gonna tell people we don't service them. We're gonna take all new leads, and when we hit capacity, we're gonna raise prices.

Okay.

If I. If it was me, I would do more than 15% raise price because you're gonna need to make some room for spring rush.

How much is that?

Like, I would personally.

So we.

At my. My. My shop this year, we raised price by 27 to 28%.

What? Did you raise them last year?

We didn't raise. We haven't raised them for two years. Okay, so two years we hadn't raised prices. We raised prices by 27 to 28.

Like, what's the average hourly rate?

Or like, for, like, 90 to 100.

90 to 100. Okay.

Okay. So. But we got off of 80.

80.

We were stuck there for a long time. And then you just getting enough leads without spending money on marketing. To like, actually get up to capacity.

Yeah.

Well, yeah, now we are. So it's like, okay, great, we're gonna raise prices. We lost 10% of our customers. We increased prices by 27, 28%. Like that more than double the profits.

Yeah.

So, like, that's what I'm saying. Like, I think you're going to need to raise prices so that you make way for leads so you don't never turn people away.

Okay.

Whenever you turn leads off or like. Sorry, we just don't. Sir, just know you are turning profits away.

Yeah.

Because that's a customer's willing to pay a premium price because it's in the middle of the rush and they can't get anyone else to come service their property.

Yep.

You're doing that in exchange for the person that is your lowest price on your job. The only reason you turn away new customers that want to join your business and are willing to give you money is if you hate money. Because every time you turn away a new customer that's wanting to give you money, you're essentially saying, I'm willing to keep my worst customer, my lowest paying customer, the one that calls me every single time and complains every single week. I'm willing to keep them over a potentially new customer that's willing to pay top dollar. Only do this if you hate making money. Dude, I think we can squeeze out 10, 30, like 10 to 15 grand extra a month just by one simple email. If we lose 10% of customers, we will replace them all this spring with simply the fact that you will have now capacity to get more customers and you won't turn people away.

Yeah.

I need to figure out how to put work into the fall and winter, but other than that, like, we're super busy. Like, I need to transition work over to those spaces. Right.

I know you went to Blue Collar Summit, so what are you going to.

I really like the land or the winter. Winter services. I just need to figure out how to get that to the customer. You know, how to, how to push that onto them. I just think that's a great, a great option if you can sell. You know, if you, if you can sell.

Well, you do a lot of fall cleanups and spring cleanups, right?

Yeah.

Then just a price. It's like, hey, here's your prices for, for fall cleanups and sprinklings versus if we do this winter service thing for you.

That's kind of what I kind of have a hard time understanding. How does that play out between the two versus just doing a spring Cleanup and a fall cleanup. Just because it's longer term, like, longer term revenue. Like you're just getting it over a longer period of time.

Well, yes, you make less quote, unquote money, so that's why everyone avoids it. But the thing is, you're able to spread the money out, and therefore, you don't have this big jump in fall clamps and this big jump in spring clamps. And rather, you can actually just grow the number of customers you have overall.

Okay.

Right now, I would assume during fall cleanup season, you're basically booked.

Yeah.

Like, you can't get any more in.

Right.

So the goal is like, how do I take those ones, make them all level billing. And then when the leads pour in during those two times, I can do one time projects for the new customers.

Okay.

You can absorb the new customers, get.

Them in the spring cleanup time.

And what people misunderstand is like, hey, if someone calls you and they're brand new for a fall cleanup, I'm doing the fall cleanup, then pitching them winter services to keep it looking good.

Okay.

So everyone's like, oh, you're gonna lose money. No, I'm still gonna get the fall cleanup.

Yeah.

I'm just gonna upsell them into, hey, now every two weeks, I'm gonna show up for 50 bucks or whatever it is.

Yeah. Okay.

And so it's more a matter of like, how do you get those big spikes in demand evened out and then be able to take on new customers? Because most time you don't.

Yeah.

Sorry, we're busy. We're booked out.

Right, right.

This is a valid question that Justin's bringing up. Why would I want to take a Customer, pay me $2,000 a year for a fall cleanup, a spring cleanup, and snow plowing? Why would I want to sell them a package like winter services, where I come every couple weeks, but they only pay me like $1,200 to the exact same thing? Here's why. Because during the spring rush, you get this massive influx of new customers. But right now, he's turning leads away. Same thing during the fall rush, during the time when all the leaves are falling and everyone needs a cleanup, he's turning away new customers. Here's what we want to do. So Justin's business is looking like this right now. We have all these jobs in the spring rush, and then in the fall, also a lot of pickup. He's saying that in the middle of the year, there's not a lot of work, and he's laying off his crew during the off season. From November all the way through February. What we're trying to do is take some of these otherwise be spring cleanups and put them in the off season by selling them winter services. And the same thing is true when it comes to fall cleanups. Now we have excess capacity to be able to take new customers when they all come pouring in during the spring and during the fall. And best of all, we can keep his crew busy during the off season instead of laying them off.

I think this business can be 1.1, 1.2 million as it's currently ran with just price increases and P4P increase reasons without buying any more trucks, hiring any more people.

Okay.

You just ran this very special business. Most people can't run 1.2, which is.

Just like, it's funny because you're like, oh, yes, stop at 800. You know, I mean like you're like.

13 years of building this extraordinary business that most people never will.

Yeah.

From a leadership perspective, I see as like the opportunity. You've done it for 13 years now.

Yeah.

You're already investing other stuff. You want to give them more opportunity.

Yeah.

If you are the bottleneck for all these things, things like billing on paper.

Yeah.

It's so difficult to actually confidently say, like, I'm a good steward of like their positions. The next stage of of brand new Leaf is like, it needs to be able to run without you. If you're thinking about the crew, it's like, it's not great for them and like them being able to have a secure job.

Yeah.

So like, I think whether it be software, having an admin person I would give the go ahead on especially like, well, I don't know if I can afford it. If you raise prices by 15, 20% and double your profits, you can afford it.

Yeah.

And having the admin person going to force you, like, literally force you to have every single visit where they're tracking the time, organize, have all the job notes inside there, have invoicing their credit cards on file like it's going to force you to do it.

Okay. Right.

But I also think by having an admin person at this size, it'll get you to 1.2, 1.3, and have more time with the family.

It would take another eight people to build another meeting to make that happen. And that's like the hard part about it is like it takes a lot to make another step of someone who's worth 150 bucks an hour. Like Mike was saying, you know what I mean? Like, it's really hard to get someone where they can get to that point.

Just by raising his prices. 15 to 18% is going to double the profits. What's so cool, Justin, is you build a good business without any of this. What allows you to literally probably grow the business by 50% without adding a huge amount of operational spend, buying more trucks, etc. Is like relatively low things like implement software, raise your prices, add winter services. Like these are all things that have trickle down effects that have huge impact on the business.

Yeah.

Like there's so much low hanging fruit on a business. Already does good.

Right? Right. Yeah.

And it's awesome. Tomorrow we could double the profits.

Okay.

The next day we could pay the guys more.

Right.

Performance the day after that. Like we sell winter services next fall and we can immediately be able to keep them busy all year round.

Yep. Right.

We have software that we implement over the course of the year. It's like we can get you to where someone else could do the billing, someone else could do the scheduling.

Yep.

And that's like where I see the value. What do we do in the next six weeks?

Yeah.

If you just raise your prices like that. Send it all to all your customers.

Yeah.

I guarantee you less than 10% will leave, which is perfect. We need people to leave so you don't turn off leads during the, during the spring.

Yep.

We need to be happy. Like honestly, I would love to have you an admin person right now because you need someone that doesn't know these customers names.

They could just send this thing out. Yeah.

Like we should pull in one of the guys from the text. Okay. I just want you to do this on every single customer property. Here's the email. Change these numbers out and send.

Send it. Yeah.

Like you need no emotion.

Yeah.

Because this is the highest leverage thing. I genuinely believe software probably improves 10, 20%.

Yeah.

P4P 40%. Increase your profit margin. Adding window services, probably 10%. But ideally keeping the crew busy during the off season.

Tick, tick, tick, tick.

But this is the 100%. Just raise the sleeping prices. And then from a cash flow perspective, like if you got the software, then it allows you to do weekly billing, allows you to have the car and files.

Yeah.

Which is nice. But like this. In the next six weeks, I only have one task. The last guy had like five things.

Yeah.

You just raise your prices.

Okay.

You have a great business. 100%. You're going to double your profits if you just do that.

Okay.

And then we'll figure all this other stuff.

I have this thing about doing better, you know, just always want to do better, whatever that may be. That could be something. You know what I mean? Like, that's what it. That's what it was. I'm like, well, like, this guy has 170 locations. What can. Like, what can I gain from. From him? You know? Like, I knew some of the budgeted hours thing, you know, I mean, some of those things are like, things that I was not doing that I should. That I should be doing the P4P. It's a matter of figuring that out and, like, implementing some of that stuff, but, like, you know, just increasing myself and making myself better. I was planning on doing that. Like, that was. I knew whenever I looked at this didn't look good enough, you know, I mean, didn't look like where it should be for the. For the mowing. That was a huge.

Always make more money.

Let's.

God forbid.

Yeah.

Good stuff, man. I love it. We talked about so many different things that Justin can do to really improve the business and make it more profitable. I truly believe in the next six weeks, he can double the profits of this business.