When to Hire an Office Employee (Mike Andes Q&A)

In a recent YouTube video, you explained why someone should build an $800,000 business then stop growing so they don't have to add additional overhead. In this scenario of doing only one location, 800,000 rent in revenue, how much money would you allocate for admin or office manager? I've heard you say roughly 10%. However, essentially at the size you would need two strictly overhead people, right? The GM and office manager. So I'm assuming $52,000 salary for each. With profit sharing 800,000 and revenue, this would put us at 13%. And this doesn't even include shop rent software as their admin tools. This accurate or would I be overextending myself paying non producing employees too much? Yeah, so I'm not actually a huge fan of growing like staying in growth mode all the way till $800,000 in annual revenue. I actually believe that the profitable way to do this to to not have to have a full time year round office person is going to be to grow to 500,000 and then raise prices and optimize in profit mod you hit 800,000. So I'm going to go into a ton of depth in this at Blue Collar Summit and break this down a lot more. But I have looked at not just all the locations at Augusta, but probably 150 plus other businesses and their P Ls and I've compared across different industries, not just lawn care and landscaping of the sizes of the businesses, which businesses, which business owners get to eventually become absentee and really broke this down a lot. So excuse me, I'm going to show a lot of that at conference. But I will say if you're going to be in growth mode past 800,000 and then try to stop growing, I actually think that to your point, you would need a full time year round office person at least and then also a general manager. I think that this is going to be avoided though. If you have four to five trucks, five to six employees, maybe seven employees max, but you stop growing at 500,000 in revenue, you really focus on your recurring services during the winter in the off season. So that way you have a lower amount of spike. So for example, I've seen businesses that do 800,000 and they have $150,000 in monthly revenue during the spring rush, but then they go down to 10, 15, 20,000 during the winter. I would much rather have half as many trucks and and throughout the year they do. We only do 60,000 because I don't have to staff up or get trucks and equipment required for 110, 120, $150,000. I can rather keep it much more consistent. So by doing the consistent route, I am going to have optimized pricing. I'm going to have very much recurring services. I'm going to have very simple services, a lot of which I will not need admin because it could be done.

Sold instantly on my website. So that's really my focus is. And to try to eliminate the need for an admin like admin is just going to suck your profits out. It's an overhead expense. And for a good person in admin you are going to pay, let's just call it 55, $60,000. If they're going to have them run everything plus taxes, plus benefits, plus you have an office staff now inside of an office building. So like it gets very expensive. I want to prevent that. And I do believe a general manager can run for four, five employees. However, you're gonna have to stop growing usually around that 500,000 level, and then optimize for profit, I. E. Raise your prices two or three times to get to that 800,000 level. I'll be talking about this at length at conference. So Will Clay has another question. We are in the process of setting up Pure clean holding company and having subsidiaries, LLCs underneath it, which includes multiple LLCs for our lawn business, media business and real estate. Should I create the holding company and LLCs in a state like Wyoming or Nevada have better privacy and protection or just open up in my home state of Texas where my info would be more public? I sought legal advice and the accountant basically said they didn't see a big need unless I had something major. Personally, I was trying to keep private. What do you do and how do you recommend? Yeah, like, you know, do I do this? Yes. The reason I mostly do this is because usually if you're going to get tagged in a lawsuit, they're just going to search your name and on in public databases and then throw every one of your entities onto a.

Onto a lawsuit. And so specifically with the real estate, I have different LLC for every property. It is in a shell company in a different state. You cannot find it is not named anything with me, nothing that you will never come up with why I need it the way I did. Because it's random. And so that's helpful if you're gonna really skill the media side, I'd probably recommend it. But for me, there's so many people connected to me in terms of owners inside of Augusta. If any of them get sued, I always get put on the. On the lawsuit. And so then I have to defend myself. Even though it's. They're just trying to throw stuff at me in terms of the. The. The attorneys I still have to defend myself. And it's very expensive. So that's usually why I do that. It's harder to find. But I don't think like I said, I like your attorneys. If they're saying that I would agree with them probably you can always come back down the road and throw your LLCs into a different shell company in a different state. So you can always come back to that. Kevin Lupardo from Lawn Domination been taking. Been talking about merging with another lawn care company and would like to know what the best way of doing things current my business around 150,000 a year and other companies around 450,000 each year. We're not sure how to split the assets and all that goes on with it. We want to keep our businesses business names. So we were thinking about starting another LLC and then making both business a dba. Under that new company I would take on the mowing and fertilization side and this company would do more projects and landscaping. Is this something this is able is doable or is it better to have just one business? Thanks. First off, I'd kind of question the need for this because if you're going to keep the business's name separate, it means you lose a lot of the advantages of savings by having it all under one. And so then it becomes why just refer each other work? Because that's really what this sounds like. It doesn't seem like a merger like this is gonna be. It's gonna be confusing for your team. If you're trying to balance people between the two, you're gonna have different. Oh, I see. You would try to still do one editor. I'll see. I just think it's very. I've seen this a few times. I've never seen this work out well in the long term to be honest. It gets very, very messy. If one of the businesses starts growing more than the other, the person gets resentful. You if one person starts to work harder like at the 450,000 versus 150 technically that they should own 75% of the new entity. People can start hiding money a little bit. It's very easy to hide money if you keep them separated in terms of LLCs because you can have different bank accounts, you have different ein numbers that could get very very hairy. So I either say you're not a merger at this point, just FYI, you are doing a.

You'Re doing a JV together on the side. That's what's happening here. But from a legal perspective, this is not a merger. If you actually collapse the other two businesses into One LLC. You had one P&L, you had an LLC that you both had equity split on, then it'd be a merger and then you'd figure out what split of equity, what the, how you're gonna do distributions, etc. But this is more a, a referral program between two companies that probably share like a shop space. But when you start keeping the brand separate, I have rarely ever seen that work out well because it just, it gets so complicated with team members. How money gets split, the different rates of growth between the companies, which ones are profitable at different times of year versus just being like it's all together. So I personally don't recommend doing that. I would either go merger, actually bring everything together. I would keep everything separate and then we refer each other work that we can't do. Caleb Williams we are doing 6.5 million and 2/3 of revenue in reoccurring services. We want to continue growing reoccurring that part of the business. My time is often consumed by operations and projects. This spring we want to add a part of part time marketing position to a field technician wanting to grow in position to do email campaigns, ads, follow up and help with estimating workload. Should we commission on per unit over our last year's customer list, percentage of revenue of new growth or goal markers with payout like every 10 new customers get a bonus. It feels hard to get commission involved on total sales because I have two other people able to process over the phone estimates that will, that will, that he has no control over but will add to his commission. Yeah, this is challenging because a lot of OTP can, can skew growth. Especially if you have two office people, you have this other. Like I would probably do something very very granular like for example this person is not responsible for all this stuff. They are responsible for upsells. So if they can bring in any additional revenue based upon the campaigns they send out, based upon the follow up calls they send out and they follow up on those people, that would be what I would commission them on. Not on incoming calls, not on total revenue growth of the business, especially in the size of business. I am not going to do it based on revenue growth because there's too many other components parts leading to the revenue growth. For example, if you raise Your prices by 10% the amount of new revenue is so massive and if you're giving him a chunk of that, he didn't do anything. So I would really do this based upon. So for example we have a sales position we're creating on the media side and it's going to be based on to get your base pay you need to do X amount of contacts and they'll also be documented like how many people reach out. So basically called cold reach outs to our existing database. So I wouldn't say it's cold, I would say it is trying to upsell. That's really what it is. So a certain amount of contacts per week to get their base pay and then their commission is based on any sale that comes from those contacts and in order to get the commission they have to put in the CRM, the contact and the upsell like with the customer. So that would be my recommendation is make sure their commission, et cetera, their compensation is based upon their actual performance and what they're bringing to the table and and not just total business. Especially when you have this size of organization, you know that many admin people already and a small price and change could literally bring in hundreds of thousands of dollars. Cameron from Bloomington, Mo and Snow. I noticed you guys use instant quoting on your website where the customers select small, medium or large lawn. There are softwares out there like Deep Lawn that allow customers to get precise auto measurements and sign up right on your website. Is there a reason you guys do it your way versus using AI measurement tools like Deep Line? Yeah, there's a bunch of reasons. I don't really like to speak negatively about other softwares. The main.

The biggest challenge we have with this is if I am going to increase the number of people. Let's just say I get an extra job a day. Great. That assumes that I have the same amount of traffic to my website and I have the same conversion ratio on my website.

Plugins like this we have seen to dramatically impact our SEO and speed of the load time of the website. I would rather focus on doubling the amount of people that get to my site instead of improving my close ratio by 5 or 10 or 15%. Does it improve? Yes, it absolutely improves it. The amount of people that will sign up, it improves 100%. But these plugins are heavy. The amount of it's just heavy. It just is. And so regardless of what people say, we have split test this. We have looked at this and.

We have found that A is slower. It slows our site down somewhat enough for us to be very noticeable. And then secondly is we do not see customers wanting to have to do the legwork of measuring a property. So if you're going to use AI, it better be pretty accurate. And we have seen enough AI deficiencies in terms of accuracy that actually make us lose jobs. Because if I tell a customer property value and it's way high because there's something wrong with the AI.

And the scan, which by the way, we're not talking about cost here. Like the costs are very significant.

If I'm way, way high, I lose the customer and I never get to like try to salvage them.

Versus I want the customer to either have a very accurate price or they determine the price. And that's really what we lean into now. I don't want them to determine the price based on them having to measure it because also we see a lot of friction with people actually going through all the steps required and you know, 6, 7, 8, 9 page different pages to actually get to an accepted estimate. So you'll see some stuff coming out next year that we're doing around this. But currently I, we constantly are testing these and I don't see this as the friction required is greater than the impact caused. My close ratio because my conversion ratio drops. There's two different ratios on our website. We're looking at, we're looking at conversion ratio and we're looking at close ratio. The close ratio is how many people do I actually sign up for as a customer, but I have to first get them as a lead. And that part, if it's affected too much, will offset the gains of the close ratio. And so it's just an important thing to measure. Marco Garcia Estrella Lawns I had an idea pop up my head. Here in Washington. There are lots of people who let their yard go since they aren't in an hoa, leaves on the ground, bush, overgrown grass needs cut, et cetera. These people will typically do it themselves and don't have a service during the slow season. We could create an instant quote door hanger pitching winter services and how we come up come on a bi weekly basis to perform property maintenance with the allotted time. Clearly stating that we would gradually clean up their yard throughout the winter and also adding in how it would help them avoid a costly one time spring cleanup. I felt like since we will be giving biweekly pricing, the value given with the biweekly rate could appear high to them. That might that type of person since they don't need to worry about a costly spring clamp or have to do a massive clamp themselves. My question to you is, have you ever thought about doing this type of instant quote door hanger and have you tried doing something similar to this? What are your thoughts on this as well? Do you feel like it would work? Yeah. So we're doing a bunch of this right now. I will wait till the end of the winter to actually be able to report back as to whether or not it is working. Because you want to see the entire winter based upon the amount of people that cancel winter services as the winter progresses. So as much as I want to say it's a big win right now, I need to see more into terms of into January before people because people can always cancel winter services. So yes, we are doing this now. I don't know. Let me check. Let me just check real quick. We might already have these door hangers on lawn care media.com One second. Lawn caremedia.com Let me check. Give me one second. I know we have instant price door hangers. I'm just trying to see if we have them for winter services. Give me one second. All right, winter. Whoops. Winter service. See here. Winter services door hanger template. Yeah, we already have these on Lawn Care Media if you wanted to look at that one, feel free.

So we have them. We are testing them. I'm seeing kind of sporadic results in terms of where it works and where it doesn't in terms of markets. But as a whole, what we're doing with winter services this year, like so far we have seen more than a doubling of our conversion. So when we talk a lot, a lot about that conference too. Marco Garcia has another question from Estrella Lawns. When starting off a new location, is there a gap of time where you're struggling with your team members being able to hit P4P, especially during the spring rush. So at the very start you have no route density and the window time is at an all time high, causing their efficiency score to be low and typically hourly rates are lower. Since you're new and in growth mode. If this struggle does happen, how much weeks or months have you seen it last on average before your team members actually see good P4P and get incentivized more and get more dense routes to reduce windshield time. Yeah, we typically see this in the first year obviously. Depends on how fast you're growing and more importantly how big your service area is. The smaller the service area, the shorter this time is. If you're expanding out and driving 30, 40, 50 minutes away from your shop, this could last two, three years before P4P starts to make sense for them. That being said, I would recommend if you know you're growing, you know that you're getting there eventually is give a higher percentage of the labor revenue to the employees. So you could start at 40% and then as you raise prices, as you expand, get more dense, bring that down to 35, then 33, then 30, then 25%. And like my location is at 25% for example, because we've raised prices enough over the course of time. So that would be my recommendation. Just over the course of time you can bring that percentage down. But at the beginning, regardless of you've a lot of windshield time, et cetera, you want to take the hit the blow there so that P4P is still obtainable for them. And so to make that happen, you're going to give 40% or more, sometimes like 42, maybe 45. But that's really, really pushing it to be able to make sure that they can still obtain P4P and then just be really clear with the crew, like hey guys, usually we won't. We want to be hitting for 25 or 30% on P4P. We're going to go ahead and bump that to 40% and then over the next three years it's going to go to 30, 33 and 30%, for example. And the reason that's going to happen is because we want to make sure that you can still make above base pay. Even though we are just growing, we're getting started, we don't have a lot of route density, etc. I want them to be able to make above base pay. That's the ultimate thing if they're not making above base pay. P4P is inconsequential, does not move the needle for the crew. Mark Garcia again from Estrella Lawns. Christmas lights hangs go all the way to December and the takedowns are in January, possibly mid January. Unless you're doing multiple hundreds of installs, I feel like it would only take a week to fully take down let's say 50 to 100 houses. After that you still have half of January and all of February. Slow winter season. We talk specific that February, mid January, after you've taken all the lights topic in blue collar Summit. I'm not going to talk about this one specifically.

Dive deep along with services like my winter services paired with the Christmas lights is really the goal. Christmas lights is going to like push everyone overtime. Everyone's in a massive overdrive. We're just like going from one lead, one customer. You're Just working around the clock, like on weekends, etc. And so you're almost looking for a little bit of a break after you take the lights down in January and really February, you're starting to gear up for March. And so usually what we're trying to do is we're trying to pull demand forward. So we're offering discounts for our existing customers if they book their job in that window of time. So all those spring cleanups that come pouring in, great. I want those for new customers, but I want my existing customers to get a either a discount or just say like, hey, save your spot because we book out like crazy once we hit March or April. So get your job done now before the spring rush starts. Marco, how do you deal with the winter service transition from lawn mowing service when you also do bed maintenance or weed pulling? What if you have a separate line item every week for weed pulling or garden bed maintenance since you'll be including those services with the winter services, you just delete the weeding. Bed maintenance cost the customer during the winter and only charge the winter service? Yes, we do. For example, say you charge $50 for mowing and an extra $25 for a weekly weed pulling. When transitioning to winter service, do you remove the $25 and only charge the winter service cost to the client? Yes, we do. The reason for that is because they don't need the weekly weed pulling most of the time after your first one or two winter services, assuming they don't have an overgrown flower bed, the weeds are taken care of. Like the weeds aren't growing much in the winter. We're mostly like blowing things off, picking up any leaves after a windstorm. Branches. We're checking the gutters, we're trimming trees off of the house, we're checking for damage around the house, especially after storms. And so there's I am going to go over this how to advertise winter services a little bit at Blue Collar Summit because I think it's super valuable to determine when to market winter services. There's two specific ways, whether you're in a snow market or in a non snow market, how to pitch winter services and get a lot of people to join. So we'll be talking about that at conference. Does the 10K? Oh, this is for the MVP award. Does this 10K have to always spend on the trip to Italy? What if is not all spent? By the way, I'm going to keep putting the star until you say Estrella Lawn cares and not Strella. Estrella. Oh, it's Estrella. Estrella. Estrel. Yeah. Australia. Australia. Okay. It's like almost like Australia. Okay. Australia. I probably will not say that correctly. No. So what he's talking about here is the MVP award. If you haven't seen it, go to copilotcm.com MVP. Essentially you are able to win a trip, $10,000 to Italy. Now does all of any spend in Italy? No, but it is designated for that. I would love to be oc you take your family and go over there, get plane tickets or a cruise or whatever you want. Ideally is spent though. Yeah. On the, on the trip. However, yes, if you spend 8,000 on the trip, you can, can keep the other 2,000. It's going to literally be a check we give you. So. But yes, you can spend it going to Italy. Basically the $10,000 is going to go to the person that gets voted on the best video submission. And it's basically just a transformation in 2024. So personal transformation, business transformation, and then there's some points on the, the grading rubric for just quality of the video. So highly recommend doing this. I don't think this year there's gonna be a lot of submissions to be honest with you, because a lot of people joined in 2024 into CO and so I'm going to guess there's only going to be like 10 submissions, maybe 12. So I would recommend, you know, this is the other thing. If you get a videographer or a photographer to come out.

You can use all of their footage for your website and then just have them record a couple videos of you talking about your business and then overlay the other videos they have for your marketing onto a nice video. So I would personally do, if I was trying to go big with this, I would probably go get a local videographer, say, hey, I want three hours of your time videoing and then I want all the raw footage so I can cut that up for marketing. They'll have pictures, videos, et cetera. And then I want you to make a four minute clip for me and I just want you to overlay like the best clips and videos into a story about what 2024 has kind of done for my business personally. So if you've lost a bunch of weight, if you have reduce the size of your business to make it more profitable, if you've been able to spend time with your family more, create more work, life balance, if you're gonna pay off a big debt, those are the type of things, including the video. I am not determining who wins. This is a Matter of At Blue Collar Summit, everyone's going to vote on the best transformation for 2024 and that person will get the MVP award. And part of that prize is the $10,000 earmarked for going to Italy. So again, go to copilotcrum.com MVP and there's a video on there explains how it's going to be graded the whole nine yards. You got about a month left to be able to submit that. So I would highly recommend giving a shot because I do believe you probably have a 10% chance if you just submit anything. But I also believe if you, if you put $1,000 towards getting the videographer out there, think of it more as like a marketing thing. But then take what clips they get and then just like throw in imovie, put a nice clip of you talking against a wall, that clip, and then just overlay it with good footage of your crew, of your trucks, of your shop, you talking in the morning. All the clips that they get for you that you're going to use for marketing, just overlay that onto your.

Onto your. Like your testimonial of what happened in 2024 to transform your business. When you say you have to delegate and focus on sales. 1 in 700, 800,000. What have you seen? The person focusing on sales does most of the day door hangers percentage a day in person estimates percent of the day follow up calls percent of the day. They typically have time to do door hangers or is there enough lead flow from Google listing website leads etc. So they don't really need to do door hangers much and rather do in person estimates all day and follow up calls. So this is going to be determined and ebb and flow based upon natural demand of the market. Because during spring rush for example, most of the day is going to probably be spent on like in person estimates. They're not going to have a lot of time to do a hangers because leads are pouring in follow up calls. They will have less of their time spent on that too because they are so booked out they can't even get to it. So during times when things slow down, the more more of their time is going to be probably spent actually prospecting I. E. During doing door hangers and doing follow up calls to try to fill a schedule. So that's very natural. You're basically the supply and demand curve. You're doing the opposite when it comes to prospecting versus follow up and prospecting versus sending out estimates. So the number of leads that you inbound come in without you having to do prospecting or marketing or advertising is going to determine that percentage. Stan o' Donnell from the Lawn or the Garden Barber. Hi Mike. We are located in Brisbane, Australia. The Garden Barber is primarily a horticultural maintenance business specializing high end garden maintenance. We do mowing. However this is only a part small part of the business. Our revenue for 2023 to 2024 financial year was 22,000 down from $3,350,000 in 2022 to 2023 and year to date June to December is only 85,000. Okay, so you're basically scaling back. The business went from 3 3, 350,000 220,000 to 85,000. Got it. We are trying to grow. The biggest bottleneck we have at the moment is finding good employees. Our goal is to have three locations within the next five years with each location being run by a working GM and producing 8,100,000 to a million dollars in yearly revenue. We target the high end residential market with house values in excess. Give me a second. Okay. All right. I'm just making sure I got the fact that we are actually declining in size. Okay there. Therefore, our employees need to provide high quality service and have a good eye for finer details. We're using both PVP and Copilot in our business which we've been using for quite a long time. P4P since April 2022 and copilot we signed up for as soon as it came out and have been a paid member since June of 2023. We currently only have one employee who's been with us for only three months before we had a couple of long term employees who only left as they moved interstate for family matters. We are currently paying our employees 30 plus dollars per hour plus P4P and our charge out rate to clients is $120 per hour following your rule of rule of 25%. Of course the clients don't know our hourly rate as we charge him a flat job rate and most pay periods. Our employees will make 150 to $200 P4P per fortnight. The quality of work we do he does is good but he could could be improved. The issues we are having. Oh, this is a long wait. The issues we are having. Our employee is not really happy with the base pay rate. We can't really afford to lose him as that would put me back in the field full time and stop growth plans. 2 We've been advertising for approximately two months for new team members and getting very little response and the applicants do apply are fairly low quality, not even worth interviewing. I'm currently in the field. However, I'm trying to reduce my hours in the field to concentrate on the business growth. After looking at the labor market here in Australia. To attract and retain a players we are going to need to set our base pay a minimum of at least $40 per hour. This means we just for everyone listening, cost of living is so different there. Just just keep you in mind. This means we would have to charge a rate charge have a charge out rate to cut clients of $160 per. This seems like a big jump. Even though we aren't quite at capacity at the moment, we are starting to raise prices. However I feel a 40 per hour jump would be a big. Would be. Would be too big of a jump for a lot of our current clients. Some clients we can tweak the budget hours, increase price to get close to 160 per hour. For a lot of our clients, raising prices by $4 per hour is going to be too much I think. So my questions are what should the strategy be when raising prices in our current clients? So again you raise prices when you hit capacity. So I think you need to raise. I would recommend moving to capacity as quickly as possible and then you have an actual problem right now you can't. The reason you're stuck in a hard place and you don't know which way if you should raise prices and you're concerned about it is because you're not at capacity. So this is actually a leads problem in my opinion. Getting as many leads as possible, filling your schedule to capacity and then at that point you are actually forced to raise prices or go out and hire more people. However, if you can't find more people, you should stay in profit mode and you should keep raising prices and be able to then afford the higher wage to your employee. Should we set our base rate for employees at 40? Should our employees be earning more on P4P? What are some strategies for finding and retaining eight players? Do you think that our growth strategy is feasible? How could we improve it or modify it? I always want to do a turnaround with you Mike. However, being Australia, it might be a little far away. Turnaround done under thanks for your help Stan. Yeah, so I think all of this gets answered when you hit capacity and then you figure this out. So I would focus 100% of my time on filling the capacity. So even if that's say 20% more customers, I would do that as fast as possible. Once you hit that, you could then raise prices and afford the $40 higher base pay by raising the prices, you are essentially giving your guys a raise on P4P. So that fixes number three in terms of number four, if you have a $40 base pay instead of 30, I happen to believe a 33% base pay bump will attract better people. So all of this comes down to being able to raise your prices, be able to hit the rule of 24% at a base pay high enough to attract good talent. The number one way to make sure that we raise prices and you have the confidence to do so is hit capacity. And so the reason that people are always wondering and questioning whether or not they should raise prices is because they are not at capacity. So hit capacity and then address this problem. That'd be my recommendation. I'm going to mess this up. I'm going to say Jay's Lawn Service. All right, Jay's Lawn Service. We will end the year at just below 250,000 in revenue. Currently we are almost $150,000 in debt. Should we take a year off to try grow and focus on paying off debt or should we try to continue to grow? Thanks. So this one, it kind of depends on like did you start this year and you hit 250,000, which would be pretty good because you mean you probably hit 40,000amonth in revenue by the end of the year. Or have you been in business for several years and last year did 200, this year did 250. And you have a hundred thousand dollars, $150,000 in debt. That debt will keep you from being profitable simply due to the fact that the interest and the just even just principal payments on that are going to be high enough to suck out all the profits from the business. So financially I don't think you're in a place to grow unless you have a lot of cash sitting around. Cause I don't see your balance sheets. I don't know how much cash you have. But I would assume, I would venture to believe I'd be going on a full out trying to get to capacity and raise prices and tackle some of this debt or stack cash because that's a lot of debt for that size of business. So if your debt service is say 35, $40,000 a year, that's going to be a big chunk of your profits. And so that's going to be very difficult to grow with that kind of cash constraint. And so I'm assuming maybe there might some mistakes. In the past you didn't have enough high prices. You got a Lot of equipment debt, but there's a lot of debt for that size of business. Unless you just started this year, you spent $150,000 on a loan, and you're about 40, 50,000amonth in revenue. And it just took a while to get to that over the course of 2024. But if you're not growing by more than 50%, so like last year, you did less. You did less than 125,000. That is a lot of debt for that size of business, unless you're growing extremely quickly, like doubling year over year.

So I also don't know how much cash you have. If you also have $80,000 of cash in the bank, then I would say, okay, you're probably fine. You have a huge amount of Runway. You could pay the debt for the next year and a half out of just your cash reserves. And in that time, if you can grow to 5 or 600,000, we can outgrow the debt. This is essentially what right now the government's trying to do with their debt is like, hey, if we just run things hot, cut regulation and just let this thing roll and grow the. Expand the economy, that is grow going into growth mode, then we can outgrow the debt. So that's probably going to be your strategy. I'm going to assume the. The opposite of that is go into profit mode. You actually cut back. The government will never be able to cut back enough, and so they have to grow. But in your small business with your control, you can, you know, use austerity to basically have financial discipline, raise prices, cut expenses, sell unused assets, get to capacity. That'd be my recommendation. Jason, another question. We recently took a loan from Paraffin through Service Autopilot. Oh, no. Do you know if I'll be able to use Copilot effectively while I still process payments through Clearant?

So you could. Yes, you can do this. Because technically what you could do inside of your email templates and text templates is you could just link all your payment links could go over to Clearance, for example. But it's difficult because from the actual invoice or estimate, they can't pay directly into those platforms. You can't do that. So it's gonna be difficult. If you like, want to do like recurring and like you charge manually inside of clearance, that's fine. But it's not going to integrate into Copilot. So, yeah, man, Paraffin and Clearance, just say those words. My blood just boils. So sorry, Mercy. That's gonna be tough. Cause they have your. So basically These companies will offer you these loans cause they know they have credit card processing and you're chained to them now. And the amount of interest on that, like on the 150,000, if a big chunk of that or even like small chunk of that is from a credit card processing company, you're probably paying 15 to 20% interest, I assume. And they're probably siphoning off your credit card processing. So that would give me a little more information as to the type of debt you have. I would highly recommend going to profit mode based upon that. What you just said there. When switching from profit mode to growth mode, do I lower prices when quoting potential customers? I'm not, I'm not a huge fan of lowering prices. The only reason I would ever do this is because I'm so far below capacity. I have to get tons of customers fast and I need to get my close ratio over 70%. If your close ratio is at 20, 30%, it's gonna be very difficult to be in growth mode because the amount of money on customer acquisition cost you will have to spend in order to get actual paying customer is so high. And it's not a matter of the lead cost, it is a matter of your conversion or your close ratio. So low, even if you get a lead for 80 bucks, that's fine. Cool. But if I wanted a 5 close, now I'm paying 400 customer acquisition cost. I can flip that very quickly. And if I close 70, 80% of them, I'm only paying $100 customer acquisition cost. Now all of a sudden you can scale. So.

Yeah, I'm not a huge fan of low inc. Prices. The only reason you would lower prices, if you raise prices at capacity and all of a sudden like tons of people left and you have to get back to capacity as soon as possible. But I'm never going to raise my prices and lose more than 10% of my customers. I'm going to make sure that I don't lose. I test on some of my customers. Okay, 5% left. Great. I'm going to roll it out across the whole company. It's rare that I'm ever going to lose raise prices enough to lose more than 10% at capacity. Again, this is all about hit capacity. That's when you raise prices. There should really never be a question when to raise prices. Everyone's trying to time it and I see videos. It's like, oh, do it in the spring rush. Do it, you know, you know in the off season you'll give people a month. Like it doesn't matter if you are at capacity, you need to raise your prices just to make room for new paying customers. Otherwise you have to turn off leads. And I think it's asinine to turn off leads because you are literally turning away people that are willing to pay top dollar to join the company. So why would I not constantly be grooming my lowest profitable customers? Or the people cause a ton of headache or services I don't really want to offer and replace them with high paying perfect ideal customers in my market that I've whittled down to the services I want. Jay's Lawn Service. We are currently at $250,000 a year and we like to add weed control and fertilizer to our services. What stage of growth would be best to do this now? 500,000 or 800,000? Thanks, Mike. I don't think it's a matter of size of business. It's about what kind of business do you want to build by adding weed control and fertilizer. You're going to require certifications for people doing it. You're going to have to get certified. It's going to increase or impact your insurance. You're likely have to buy more trucks and equipment to be able to do this effectively. You're also gonna dilute your marketing on the services, your core services. And so just be careful. At $250,000 business, you probably offer five or six services now. Just be careful you don't add more services. And all of the services you're doing 50 to $100,000 a year. And then you get to an $800,000 business and you have 15, 20 different services. That is 15, 20 different businesses inside of one entity. Be careful about that because I think most people would actually grow a bigger business if they just didn't dilute their marketing and their upsell opportunities and just focused on several services. They'd actually make just as much revenue because the lowest hanging fruit in terms of growth is service expansion and service area expansion. And there's also usually the least profitable and the thing that makes the business owner the most attached to the business. So that's why a lot of people grow, grow, grow, grow. And they have to actually peel the size of the business back because they realized certain services were added that are, we're great for growing revenue, great for, you know, getting more trucks and hiring more people, but not great for actually running the business from where they don't have to be there. And the amount of talent required, the amount of certifications required, the amount of insurance required actually ties into the business in perpetuity because they can't find anyone that knows all of those things. And if they do find someone, they're so expensive to actually be able to hire. So. All right, everyone, I hope that was a good Copilot mastermind for everyone. Thank you for all the questions. Those were fantastic. If you ever have a question down in the description, there is a link. Drop it in there throughout the week and I will answer it here on the Copilot Mastermind.