Why 80% of Home Service Businesses LOSE MONEY

Hey everyone, it's Mike Andes. I'm the founder of Augusta Lawn Care. We have over 200 locations around the world. Today, though I am talking about what keeps I, you and every other entrepreneur many times broke. And that is that we focus on new shiny things instead of just doing more and better when it comes to what we're already doing. And so I've actually written this down on my iPad and I want to show it to you on the screen today because I was really trying to get grapple with the fact that why is this true? Why is it that hardworking people that simply are trying to make their business more successful get allured into doing new things, new services, new initiatives, get new equipment, get a new truck bed, get a new trailer set up, get a new tool, get a new software like it goes all over the place. And because of that, it keeps us poor. And I say us because I have been guilty of this in the past. So let's go ahead and jump right into the iPad. I want to walk you through this. Now how I like to think of this is by doing something new. It gets you 90% of the way there. So you get 90% of the sort of visible results and the progress when you do something new. When you start a business within a matter of just a matter of a few weeks or months, you can get an LLC set up, wrap your trucks, get insurance, get a website set up, add a new landing page, start running ads. That doesn't, does not take very long at all. However, the last 20% of execution, last 20% of becoming an expert in your field comes from more and better, that is doing higher volume and more reps of what's already you're already doing and then refining it, improving it and making sure it's optimized. Now here's the thing. When it comes to the time it takes to do something new, let's just call it five weeks. Five weeks is enough to start a new initiative. Rewrap trucks, rebrand your business, start a new website, start a new software, get a bunch of new tools, get a bunch of new mowers, get a new piece of equipment, go in some tangent of some new idea. You're going to add new service, how you're going to do upsells, et cetera. Great. The problem is when it comes to doing things more and better, this could take five years. Now an example of this is at Augusta Lawn Care. We started doing door hangers years ago. Now when I look back at those designs, I almost cringe at what they look like and their response rate was like 0.2% on average, which means two out of a thousand people might actually respond back and become a lead. Now that that has gone up to about 1% as a blended average. And the question becomes, should we switch to Facebook ads? Should we switch to Google Ads or should we just keep doing what we're already doing but make it better as time goes on? And the reason I say that is because it has been five years of making the door hanger better, designing it better, making sure that we have a QR code instead of them having to write out their email, making sure that the email is on there in case people do want to email or they do want to call us. Using a QR code though allows us to be able to pre fill a lot of their information instead of them having to write it out and take a lot of their time and, and I don't have to try to read their handwriting if they write on the door hanger. Also, if we don't just include the price, but we write it with a Sharpie written by hand, increases the conversion because they know that you're actually personalizing the price for their property. And then we found out if we cross that price out and put a lower price, it actually increases the conversion even more. And if you use a red Sharpie, it even helps more like all these little things came as a result of doing more and better before trying to do something new. And so many of us never actually get to this last 20% over here simply because we are constantly going back to the starting line and starting new things. New Facebook ads, new Google Ads. Now I'm going to do yard signs. Oh, now I'm going to do every door direct mail. And you're constantly just trying new agendas, new different initiatives inside the business instead of just executing time and time and time again on the same thing and iterating and making 1 2% incremental changes over and over and over and again. And instead you're looking for this 80% win instead of just the 1, 2, 3% little incremental changes that are made after the first five weeks of just getting the business off the ground. When we talk about doing more and better before new. This is a great example. Yes, a bunch of dots on the wall. There are 30 dots on the wall. These are clicks coming to your website. Now let's assume that one of them actually submits an SM request form, gives you a call and becomes a lead for your business. That would be 1 out of 30 about 3% conversion rate. The fastest way to grow your business is just do more and better instead of trying to do new things. So instead of doing Facebook ads and Google Ads, just look at your website and be like, how could I, instead of just getting one person to convert, I could get two people to convert. Because this would be the fastest way to, to be able to grow your business by twice as many leads. Not going out and getting more Facebook ads, not more Google Ads, not getting more door hangers or yard signs. Simply converting more people on your website. And that's why we spend so much time at home service web design, to be able to make sure we increase this conversion rate. Making sure that your website looks good on a mobile device, your S request form is at the top. That the brand of your trucks and your uniforms is clearly displayed at the very top of your website. Go check out some of our work on our page and if you need our help to make sure that this happens for your business, go to homeservice web design.com call and book a free 15 minute consultation. What I started to realize though is that getting to 80% basically gets you to start the business being in business, but the actual profits are all made on the other side of the 80%. It's all made by the top 20% in the industry. And so just getting started, starting a new service. I'm going to start tree service because I do landscaping. But tree service is where the money's at. Okay, I can get a chipper, I can get a boom truck, I can do run a marketing campaign, do a website. And all of a sudden, five weeks later, I'm in business and I look legit. I am 80% of what my competition looks like in terms of the experts in the field, however, they make all of the profit. Well, I make nothing because within a matter of five weeks I was able to get 80% of what they look like. But it's in that last 20% where all of the profits are made. But this is still like, okay, that's pretty obvious. We've talked about the shiny object syndrome, talked about the woman in the red dress, we've talked about the shiny service syndrome. People always thinking the next service is going to somehow fix their business. But here's the thing. When you look at the 80% progress here at the top and you divide that by five weeks, that's 14% per week progress. It feels like you're getting a lot done. It feels like you're being efficient, it feels like you're being productive. And because so many of us optimize to be efficient, manage our time well, be very productive, cut out waste. We feel really good when we're making 14% of a expert's business every single week. Here's the thing, if you take the next 20% over the next five years and, and you divide that by 260 weeks, you're coming at like 0.08% per week. So this rapid adoption of new skills training, getting up to speed, learning about YouTube video, watching YouTube videos, and getting your business set up, and getting introduced to the new service, getting introduced to the new way of advertising, you get to 80%, there's no money being made. But as you enter this next part, it feels slow. It feels like you're not making as much progress. Because when you first started the business, when you first got in, you were learning, everything was new. You were every single week adding something new based upon feedback. A video you saw, a podcast you watched, a conference you went to. And that rate of progress can absolutely lead you in the wrong direction when it comes to the fact that all the profits are made doing things more and better. Because we realized that door hangers at 0.2% response rate, not great, but we realized that over the course of five years, as it went from 0.2 to 0.4 to 0.8 to 0.9 to 1% response rate to our door hangers, that was simply a function of doing hundreds of thousands of door hangers at Augusta, we consider a test 5,000 door hangers. And so by doing hundreds of thousands of them, not over the course of a couple of weeks, over the course of a couple months, because that could absolutely be skewed by seasonality, over the course of five years, we able to figure out what works best in our market. And this.08%, this rate of progress that everyone feels is so slow is why so many people keep going back to starting new things. And so as much as the shiny service syndrome and always adding new services, it seems like the grass is always green. The other side. What's always so alarming and what is always so deceitful and confusing to myself and many entrepreneurs is that you feel more productive and you feel like you're gaining more ground doing this. You feel like when you're starting something new, that you're actually getting more accomplished because your rate of learning and change is so much faster versus just locking in on one thing and fine tuning it little by Little. Comparing March 2023 to March 2024 to March 25 on the same marketing channel, in the same ad platform, using the same logo. Because if you constantly are changing variables, it's very hard to actually test. It's very hard to have clean data. If I keep changing so many different variables, I can't actually compare my close rate from this year to last year. If I'm constantly changing my pricing, then I'm constantly changing my brand that I'm changing my upsell strategy that I'm changing. If you're constantly changing, you can't actually refine and know whether or not you you're doing better. So I'm able to get to doing better because I do more of what I'm already doing. So hopefully that helps. And next time, when you think about switching services, when you think about getting into a new industry, when you think about going into your office and telling everyone we're doing things differently this year, we're doing things differently this week, you think about the fact that this might just be the fact that you're scratching the itch of feeling like there's constant change and you're gaining skills. But in the first 80% of what looks like to be a good business, there are no profits made. That's where there's churn. That's where people fail after two or three years because they never actually reach mastery. They never get to the last 10, 15, 20% of the industry where all of the profits are made. And so this is only thing that this should do is be a reminder to stick with your currently doing simply do more of what you're doing. And by doing more and having the reps and then simply opening your eyes and opening your ears to the data, you'll be able to do it better. What in the past might have looked like a bad advertising campaign or an inefficient crew, or a bad unprofitable service, or an unprofitable area of town all of a sudden becomes profitable after you just simply kept doing the reps and got better doing them. My name is Mike Andes, home service millionaire. In the comments below, let me know what resonated and we'll address it on the next show.