Why Most $1M Lawn Care Businesses Never Reach $3M

In this video, we will visit 4 lawn care and landscaping businesses. They're all making over $1 million in revenue and trying to get to over $3 million in annual revenue. Now, this time between $1 million and $3 million is a very difficult time for a lot of businesses, and most businesses stall at this size.

You got to figure out management.

Every home service business stops growing for 4 reasons: either a lack of liquidity, a lack of leads, a lack of labor, or a lack of leadership. I call this the 4L framework. We will use this framework today as we visit these 4 businesses and fix exactly the problem that they're facing so they can scale up past $3 million in annual revenue. Now, I like to think of the 4L framework like this: to grow a business, I take liquidity so I can advertise and get more leads and therefore get more customers. And then once I get a bunch of customers, I need to get more laborers so I can perform on the work that I've actually sold. And then once I get a bunch of laborers, I need more management and leadership to be able to run the business.

But when I get leaders and I get managers in place, they're overhead, and that causes more liquidity problems.

And this is why the cycle of the 4L framework just keeps going as you begin to grow the business. Because once I get managers, I now need to raise my prices.

So I have a liquidity crunch. And once I get that solved, I've got to get more customers. And this is how you grow a business.

Now, each of the 4 businesses we will visit today struggles with one of the 4 L's in the framework. So we're going to start with going to Green Earth Landscaping. They do $1.2 million in annual revenue and they struggle with the first L in the 4L framework, liquidity. They only have $11,000 of cash in the bank. Let's see if we can turn this thing around.

My name is Mike Andes. I'm the founder of Augusta Lawn Care, where we have over 150 locations around the world. but we travel around the country turning around small businesses just like this one.

Today we're in Arizona to turn around this $1.2 million landscaping business.

The last thing you want a salesperson to be hearing is negativity.

They've had as little as $11,000 in the bank.

There's always a couple of pretty large invoices outstanding.

With over $170,000 in accounts receivable. They have 22 employees and the business owner is working 7 days a week.

And what happened to that one? Somebody fall?

No idea what happened to that one. Let's see if we can turn this thing around. Hey, good morning.

Paul.

How are you?

It's good to meet you. How you been?

I've been pretty good. We've been coming to this place for years and we love this place, and this is the place we eventually wanted to go. So we had a 5-year plan to come here, and when COVID hit, my job as an outside sales guy kind of, you know, it didn't dry up, but it just became real boring. And so we kind of accelerated our plan to be here. And when I got here, Dave Grondin, who had the business before me, was selling it. And we talked and I ended up buying it. Over the past couple years, my Google rating has gone from 1.8 to 4.5.

I heard because you acquired it originally and it was kind of a mess.

Yeah, it kind of was a mess.

What year was that? 2020.

Oh, wow.

Oh, so it's been like 5, less than 5 years.

Yeah, less than 5 years.

Yeah.

The guy who owned it before had owned it since '79. He started the company in '79, so he had it for a long time.

Yeah.

And this place wasn't near as big as it was, so he had good word of mouth and everything. I mean, you know, this is a small town place and everything like that, but his focus was on construction. He really liked doing the construction stuff and he's very, very good at it.

Yeah.

I needed cash flow when I first took over the business, you know, and I needed to build up the maintenance side to have that monthly income coming in. I mean, that's just what had to happen. And no, not to badmouth him or anything like that, but I mean, he just had a different sort of focus on it and everything.

So, well, he had been in business, what, 30, almost 40 years?

42 years.

I want to keep increasing our maintenance type of thing. I mean, we've been steadily growing the maintenance thing, like I said, from that $35,000 a month to now $75,000 a month and everything like that. I would like to keep going and get that up to $100,000 a month. Uh, the only way I'm going to do that is HOAs. I can, you know, if I tried to do I couldn't fill them. We're filled in the parking lot as it is right now. I wouldn't have enough space to put the people. You know, my goal has always been to add 2 HOAs a year, and that's usually adding a truck. We went and bought crew cabs last year or whatever, so we could instead of adding trucks, because that used to be the thing too. I would add a truck and then everything would kind of fall apart. So instead of adding the truck, now I just, you know, try to stuff more people in the truck. We do a clown car kind of thing. If I could get 3 decent commercial jobs a year, that would really be what I am. And my goal from the very beginning was that the maintenance side was going to be the foundation of the company. They were going to pay the bills, they were going to pay the overhead, they were going to pay the salaries and everything like that, and that the profit was going to come from the construction side. Like I said, to me at the time, the maintenance was, uh, that he was doing was more like, you know, like when the people that build pools, they always provide a maintenance package after, right? And it's more— they don't really like doing it, they hate doing it probably, but they feel like they have to do it so they keep their customers.

And I—

that was kind of the way I saw I saw what was going on here. Dave would do a construction project like the Verizon or something like that, and then he'd get the maintenance for it when the construction project was done. And we've done that too, but I was in need of cash.

So say we get a couple more commercial projects, we get more maintenance. Is that going to increase the headcount or do you think you're going to be raising prices to achieve that? Because like, I'm concerned that we have 22 people already.

Yeah.

And let's say we're trying to get to 1.6, 1.7, which I see a lot of times like a wilderness of profitability between $800,000 and $1.5 million in terms of just you usually need that second overhead person, an operations manager or a salesperson. And so to get there, are we gonna have to hire more people or raise prices? Because my concern is you're still juggling all the balls and we have 30 people in the crew and now it becomes unsustainable. So you're good. What's up?

Is the battery dead? You don't know. You haven't seen any jumper cables around, have you? Let me see if I can find some.

That's a lot. Like, I didn't know even at 15, like, most of my general managers were starting to break down.

There's my grease gun.

Oh, he's— and then just like the amount of volume of just every day is just stuff happening.

Yeah, well, it, uh, it keeps you up during the day, keeps you awake, and it keeps you up at night. Yeah, you know, if I could concentrate on the, on the sales part of the thing and on the company promotion and the sales and everything like that, I really feel that's where I'm best suited. That's where my background has been in before and everything like that. And what happened to that one? Somebody fall?

I have no idea what happened to that one.

Somebody fall? Because I know—

Hey, Jordan!

It's hard to do both, you know, so— and it's hard to find somebody. I'm not sure that just somebody who's a crew leader fits into that role. Yeah, because I rebuilt 3 of them this weekend. My feeling is this 1.2, we're right at that absorption level, right? And we're so— we're absorbing our costs well and we're doing okay. If we can just get past, that's when the profit starts coming in and we can start doing a little bit more with what we do. I think the construction side may be a little over right now, to be honest. We had the 3 projects we were running at the same time, so I went ahead and got the extra people that I need. And they're good people. I don't want to let them go. I'm afraid if I let them go, I won't be able to find them if I need them again type of thing.

Right.

So the business is struggling to make profit because the project income is up and down and extremely unreliable. Now, I understand Paul's inclination to not want to let go of any of his team, the crews that are working on the construction side of the business. But I do believe there is an emotional connection that is starting to form between Paul and the construction side of the business. And I'm all for enjoying the services that we perform for our customers and loving the work that we do and loving the people that install those projects. But ultimately, if the business isn't going to be successful and if it doesn't make money, we've got to make these hard decisions. Now, on the other hand, when I look at the maintenance side of the business, it's been growing very quickly and customers are accepting these bids like crazy. So why not focus more of our attention on that side of the company?

What's usually your close ratio? Like, if you said as a general average, are you closing pretty much most that comes in?

On the maintenance side, we close everything that comes in pretty much. Uh, and, uh, but on the construction side, I would say we're about 60% closed. You know, there are some that we lose. Um, and then, you know, we also— because, I mean, I actually got this place, I was kind of lucky the timing was right, right? Because this place exploded during and after COVID, right? Everybody was coming here because, I mean, Arizona's kind of lax on the masking and everything like that to begin with. And then, uh, so you had people from California and stuff like that moving here, but you also had a lot of people from Phoenix and stuff moving up here too. This place just blew. Yeah, I think, you know, the people up here are starting to get a little, uh, under pressure because the population growth— home prices haven't dipped here at all. And we have a couple rental properties, and if we've gone 2 weeks, you know, once somebody decides to leave or go somewhere else or something like that, I mean, if we spent, what, 2 weeks, Reed? Between, you know, we'll have a list of 7 other people that want to move in. So, and I've hired people that were literally living in tents out in the desert because they couldn't find a place to live. And that continues still. So there's— you'll drive around, you'll see lots of construction, housing construction and stuff like that go on. But, um, as far as the commercial stuff, I mean, we just got the Burger King in town. We're doing a Blue Ocean, um, thing up in Flagstaff. We're pretty much at capacity, right?

We are.

We'll need 2 more people because all the accounts—

Home Depot's kicked back in and things like that.

I need to meet you. Come on.

Yeah.

What was your name? Rhi.

Rhi?

Good to meet you. Absolutely.

Yes.

You handle all the admin side then, like phone calls and as well as all the maintenance. Is that right?

Yeah.

Okay.

And payroll and that part of it.

She— we talked about it that I realized that we had people coming and going and everything like that. I really wanted to keep them, man, you're gonna have to offer $18, $19, $20 an hour to do that. And that was higher than what a lot of people were offering out there. And so we raised, raised up to the— because we were at $35 when I first started. Now we're up at $45.

And we're still closing 100% almost to maintenance.

Yeah, in this area, definitely.

Now Paul keeps mentioning hiring more people and extending the amount of work that the company can do for customers. But ultimately, when their prices are this low, they need to raise prices and make profit. And I know without even looking deep into the numbers that there's a huge amount of profit that could be had by just raising the price. If you look at all your potential customers, they're gonna have different levels of perceived value with your services. Some are going to think it's basically worthless and others are going to think it's worth a lot. Now when you set your price, anyone that doesn't have the perceived value high enough, you will not get them to accept the job. Now everyone above that line will accept the job because value is higher than price. Now when I raise prices, yes, I will lose some customers because they do not perceive the value to be higher than the new price. but also I will gain all the extra profit that's associated with everyone else that had a huge amount of value discrepancy between what I was charging. So in essence, you're going to do less work and make more money. Sounds like a good deal to me.

If 90% of— close to 90% of people are accepting, like we can move that price and that's like an instant fix for the business because like if we raise prices on $70,000 and we raise it by 10%, that's $7,000. There's your operations manager.

Yeah.

So the next question is, well, how do I improve the perceived value to my customers so I can charge more. And one of the first things you can do is have a great website. That's why we have Home Service Web Design. The next thing is when you send your estimate, your first correspondence with the customer, I'm not gonna write it down on a scrap piece of paper and put it underneath their mat. I'm not gonna send them a text. I'm not going to just tell them verbally the price. I'm gonna send them from my CRM software a link that has a dashboard for them to be able to see all of their invoices, all their payments, all their estimates. They can request changes to the quote, they can accept the quote, they can put a card on file. These are all the little things that improve the perceived value to customers. So if you're wondering why they aren't accepting or why they don't accept price increases, look at the software touches that you're making both from your website as well as when you're first sending the quote. And that's why at HomeWorks, being able to see when they open up the email, when they open up the estimate and be able to use all this information shows you as a professional vendor that is going to be able to charge a premium price. Right. And that's what I'm looking at as like the unlock to the next stage of growth is you focusing on sales, having an operations person that the 8, 10 fires that happen throughout the day goes to them. The angry customers go to them because like the last thing you want a salesperson to be hearing is negative.

We have to grow a little bit more, I think. You know, I want to be a company. I don't want to be a family-owned business type of thing. You know, I wanted to be a company, and it's a point of pride to be able to succeed at something like that. And I feel like we're at that thing that if we could just get past the hump, you know, this one little hump or whatever, that this thing would, you know, would be exactly what I thought it could be.

Like, I know the amount of work that goes in this location because it's the exact same size as mine was before I implemented Paper Performance. Okay. And I know, like, the amount of, like, work and effort and all the fires every morning. Like, it It kills me to see that much at the bottom line and the amount of effort that goes into it.

You know, we didn't come out here from New York working 15-hour days, 7 days a week to come here and work 14-hour days. Right.

The margins are super, super tight on just about everything. And what you're seeing too, on the maintenance side, like I said, we do pretty well. The construction side tends to take away from it over the year because of the way the pay thing works, right? I mean, you know, that I can't— invoice until this period. And, you know, I would spend a lot of money on the materials and everything like that up ahead of time.

There are a couple of like very large invoices outstanding.

Oh yeah, yeah, yeah. There's always a couple of pretty large invoices outstanding. Uh, the whole Chipotle project was outstanding. We finished Chipotle in, uh, September or whatever. And so they just finally paid off and that was $60 grand right there.

Wow.

So again, that's why we— I pushed really, really hard to increase the maintenance side.

I mean, I think the maintenance part this year, the maintenance side, has really taken us to the next level. I mean, this is— I mean, we've done really well employee-wise, account-wise. We've put on a bunch of accounts this year, HOAs and stuff.

You don't have outstanding massive bills because people pay every month.

Yeah, correct.

Yeah. Do you think moving more towards maintenance and like letting go of the projects, that's what We've been really discussing that, right?

Because right now, if you looked at P&L, the, the maintenance side would show that we're profiting $200 grand a year, right? And it's the other side that's taking it down. We've probably lost $80.

Yeah, why don't we cut it?

I love my people. People, and I'd have to let some of them go if we did that, right? And, you know, Bobby's been here 5, 6 years, you know, Junior and them. I love working with those guys. I do like the project stuff. I like being able to go and see what it looked like before and after and everything like that. I understand though, yeah, that— I mean, and we've been talking about it for the last couple years, that man, you know, can, can we be just a maintenance company? We've got a really, really good crew, you know, and we consider these people part of our family and everything, and we just want to be able to provide, you know, like anybody does, you know, you want to be able to provide for your family, you want to be able to give them a better life than you had type of thing, right? So that's what we're, that's what we're about now. We just want to grow the business so we can all make, you know, more money and be comfortable in what we do. You know, everybody knows that landscape's cyclical, you know, it can go up and down and everything like that, but these people People are really committed to it. And, you know, we want to pay back that commitment by being able to, you know, make their lives more comfortable if we can.

What if you brought your team together and said, hey, like, just being honest, they know how hard you work. Like, they do understand that. And I think you'd actually get a lot of respect from them by saying, it's not sustainable for me to do this anymore. And like, the business doesn't make a lot of money on the project side, But I am going to— I want to keep you all busy and I'm not going to cut the business. I'm not going to be like, all right, tomorrow, no projects. Yeah, but we are going to start moving the focus of the business towards maintenance to ensure that if there are times when there's not projects, I have work for you.

Yes.

And then, then it's a matter of like, we don't go chasing big projects. We have a little higher prices to make sure we actually make some money on them, which means we'll have less of them close. Yeah. But then that will give you more time to focus on the maintenance side. My concern is that the recipe to growth is 4 or 5 more big projects. And that to me is like more accounts receivable. It is more of your time on the project side. It's our lower margin service. If all of that time and energy was just focused on, okay, can we reach out to property management companies locally? Can we reach out to— Yeah, they do these more recurring stuff. Like I think we— I think even upselling our residential customers, like Can we sell them a different service that isn't hourly, that is something else? Projects, we are getting massive accounts receivable. It's causing cash swings. Yeah, it's taking all of our time. We aren't making money on it. Maintenance, we have increased by 50% or no, we've more than doubled the maintenance over the past few years. We're profitable on it even at what I consider a very low cost price. But somehow that's the profitable side of the business and it doesn't require But probably what, 20% of your time?

Yeah. Yeah. I mean, that's probably true.

I think it's becoming clear that the business needs to focus less on the project side of the business and more on the maintenance side of the company that actually produces the profits. And I understand Paul doesn't want to let go the crew members that have been with him for a long time on the construction side, but it's not making money. And this side is the maintenance side. And it's not easy switching from one-time jobs to recurring revenue. One-time jobs, I might get $10,000, $15,000, $20,000 on one job, whereas for maintenance, I might make $100 or $200. But over here, the recurring revenue is much more stable. It's not as up and down. And better yet, we don't have $170,000 of overdue invoices from these massive projects.

There would be 6 people right now that I would be like, man, what do I do with them?

But what if we raise the prices on our projects? And then we basically told them, this is what's happening. We're going to be increasing the maintenance side because if we need 2 people come March, I feel like that's a perfect time to start making the transition, knowing that if we don't get the project sold at the higher rate, we now can move a couple of people over to the maintenance because we need them in March.

Switching from this revenue model, it gets a bunch of revenue up front to more of a recurring business model is difficult, but it can be done over the course of time without tearing the Band-Aid off immediately.

I think being honest with the crew, like, I didn't— like, no one's losing their job. I will do whatever it takes. If I have to go do pavers at my house, no one's losing their job. Yeah, but we, we need to move the business in this direction because it's more sustainable. And like, everything can't depend on me being here 12 hours a day, 7 days a week.

Yeah.

You know, the construction business has been here for 40-something years. You know, I think that that's his baby, even though you know, psychologically he sees the right way to go and we've talked about it to the maintenance. I think that that's his, that's his part of the company.

That's—

is it a failure by letting it go? I mean, this— I'm an outsider, let's say, looking in right now, you know, that this company's been here for so long, the construction. I think he also does like that. I think he likes the big projects, not so much the backyard, but definitely the big projects. But I think, you know, he's a very logical, sensible person when it comes to the business that sees that, you know, and he's been talking about it probably the last— probably within what, 2 years?

At least 2 years.

That this is really the way to go.

I think we just take away the projects that are causing pain in the head right now on the project side, which it sounds like to me, backyards, no one likes. So why don't we nix that and instead say we do commercial maintenance and we crush Brightview? And on that brochure, it's like Brightview versus us. Here's what they do and here's what we do.

Bingo! That's what I would love to have. I mean, like, and I told Zach, I mean, that was the first thing I think I told him.

That was number one on the list.

There's like 3 major keys. It's like kill Brightview. Okay, great.

2, take care of the people.

And 3, like, you're extremely involved in the community, and that's what you love.

Yeah, because I, you know, I just think that the place, this area, is very unique, right? You can't grow the stuff in Phoenix, you know, everything, it's unique. And so having somebody, a national company, come in, I don't think they serve the people right. Again, and I think also that if somebody's unhappy with the service with Brightview, who are they calling? They're calling some guy in Phoenix, or they're calling, you know, whatever they may be, or, you know, if they're calling anybody at all. But if they're unhappy with us here I mean, how many times have we gone out on a Sunday morning or something like that because, you know, somebody squawked about an irrigation issue maybe going on or something like that? We're here. Yeah, 24/7 we're here. And to me, if these guys know that, you know, especially the resorts or anything like that, something happens on a Sunday morning, I can be there. You know, the thing about concentrating on the maintenance, you know, concentrating on providing a service that we do very, very well. And that people recognize us for and concentrating on that. You know, to me, that's the main thing that he brings us and the one thing that we're probably going to take from this and go. And, you know, we had considered that, we thought about it because the construction part is hard, man. It's up and down and everything like that. And, you know, we saw it. It's just hard to, you know, you don't know if you're going to make a mistake by doing it. It helps big time to have somebody who's done it before come in and tell you, yeah, you're probably, you know, that's the way to go.

So you see if you can convince him to let some of the project stuff go there.

I mean, he's been talking about that. Yeah, like I said, and more so recently. Yeah, you know, he's always wanted to go to the maintenance side. Like I said, I think it's more, it's been here for so long. Yeah, you know, I think it's more of a pride thing too. I could be wrong. Yeah, yeah, but you You know, and he's good.

I mean, the big projects are great, but like the backyard projects.

Not great, yeah. Well, even over the past like 5 years, really you fixed the company culture internally and like the company brand. If the next 5 years, let's actually fix the service mix, the financials, like that aspect. In 5 years of business that is A, you could pass on and sell if needs be. And that's what I'm concerned, not concerned, but like thinking about too is like, okay, like there is a time where it's like you won't want to work 12 hours a day, 7 days a week.

You want to do it some of your life.

Yeah.

6 weeks after we went and visited Paul from Green Earth Landscaping, we called him up to see if he'd made the changes in the business and if he was able to turn things around. But before we catch up with Paul, let me tell you about 2 resources you can use to turn around your business.

If you go to MikeAndes.com, I've created free courses and all my information is free. But there's two courses I want to point out. The Total Business Turnaround walks you through exactly how to turn around your own business using the 13 principles that I use when I go and fly out to these companies and do an actual turnaround. So you can go get the free workshop, the free course, right on my website, MikeAndes.com. Also, there's another course to solve your off-season so that during the off-season, whether it be the winter or whether it be a 3-month period of the year where things— leads just drop off a cliff, you can fix that. And using the Off-Season book and the workshop that's free on MikeAndes.com, you'll be able to come up with 5 solutions for your off-season to make sure you don't have any quarter of the year where you lose money.

Yeah, so we, we just got these in the other day, and these are brochures specifically dedicated to doing contract, uh, commercial maintenance and everything like that. So it— they didn't cost a lot of money. It was like $85 for 50 of them or something like that. So we're going to start doing that next week to give us a start of the year boost for the commercial maintenance business, which I get, you know, is where we want to concentrate our efforts and where Mike said we should concentrate our efforts. I also think since, since you guys were here, we signed up 3 new contracts. And then today we got a call from Sunridge Hotel Group that we do the Marriotts for. They just got past the 60-day maintenance period on their new Hampton Inn in town. And so they've given us that account too. Yeah. So, you know, just in the past 2 weeks we've signed up 4 accounts and it's December. The person I consider to be my project manager or whatever, we've had a couple bad projects that just are not ending well at all. And so I've kind of removed her from that position or whatever, but also told her when I was doing it that, you know, we think that this project thing that we've been basing— that a lot of her time was spent on is going away anyway. Well, we want to hope to stay in touch. And like I said, it's just been a great experience and we really appreciate it.

All right. So Green Earth Landscaping struggled with liquidity, the first L in the 4L framework. But you might be saying, hey, I have money, I need leads. That's the next constraint in the 4L framework. You need enough customers to actually grow your revenue from $1 million all the way up to $3 million in annual revenue. So let's go visit TLC Lawn Care, where their constraint in the 4L framework is leads. It's not because they don't get enough new customers. It's not because of a lack of interest, but rather they have a leaky sales process because just getting new leads doesn't mean they become a paying customer. And in order to get to the next stage of the 4L framework, I've got to get more customers. And so sometimes people actually get more leads, but they have a bad sales process. And we're going to see with TLC Lawn Care that they're literally putting up estimates on the wall. And it's just a matter of like if they're busy or not as to whether or not they follow up with customers. So let's see if we can turn TLC Lawn Care around. He doesn't have a plan or a goal for the business.

I don't know if he wants to grow bigger or not.

I understand. I don't have a clear role, but I also have never had this role. I've been doing it, but it's all in my head, so I'm trying to get it in here.

Yet again, my profit and loss statement I received today is an Excel spreadsheet.

I got my degree in accounting, but I hate math. But I can do— if I get a formula, I'm okay.

I can work with that.

She's the one talking to the customer.

Freak out over it. Oh yeah, and probably cancel jobs. Yeah. According to the Excel spreadsheet, we made $1.1 million in revenue, $789,000 in profit. There are no expenses listed on the P&L.

Today we're visiting Trent from TLC Landscape Management. He's on pace to do $2 million in revenue this year, but he doesn't know any of his numbers.

We have so many jobs lined up right now And like my mind just kind of like, oh, there's so much manual entry here right now.

Oh God.

This is my CRM. These are my notes for phone calls.

So leads are pouring in, but he has no systems to sell or schedule the work.

So when am I on the schedule?

We say we get back to you.

When do you get back to them?

When we remember.

You know, we're not really looking at the big picture right now. We're just in the muck, right?

Sometimes I'm like, if I just maybe pull an all-nighter, I can probably get all these quotes sent out, at least the majority of them.

In the, in the short term, what's comfortable can actually be the most effective thing for the business, but in the long term, it breaks or bottlenecks the business.

He can't fit any more estimate sheets on the wall.

If Trent can solve this one thing, the business can grow to $5 million. This is the Business Turnaround Show. My name is Mike Andes. I'm the founder of Augusta Lawn Care.

We have over 175 locations around the world, and I travel the country fixing struggling businesses.

Our goal is to give Trent a strategy to turn around the company in the next 6 weeks and get the business back on track.

What's up, dude? How you doing, man?

Good, man.

Good to see all the guys are rolling out this morning.

It's always a good feeling, especially on a Friday.

Uh, how long you been at this spot then?

Uh, probably like close to 3 years now. We started out of my house and we pretty much ran it to where I— we had no more rooms. So I found this. We— there was a contractor here, they offered it to us, and like, I'm like, yeah, we'll take it, take the whole thing.

What do you have to pay for this? Is it all renting?

Yeah.

What's the cost for this?

$1,600.

That's not bad.

It's really not.

But it's pretty central, like in your area too. It's like right downtown.

It's like 3 minutes from the house. Uh, that's like our parts areas, but we do over there.

There's the least amount of parts and equipment I've ever seen in a $1 million business.

Really?

Oh yeah, 100%. I love it, I love it. You go in, it's like stuff is everywhere.

Oh God, well, there is stuff everywhere.

Yeah, but still, but that shop space looks good. You can tell everything's labeled, everything's organized.

There's tape on the, on the floor for where the mowers are supposed to be at. Like, it's dialed in.

And that then carries over into the trucks, carries into the equipment, and then the crews themselves are usually more organized on the job site. What were you doing What did you do before you started the lawn care business then?

I played football in college. I was working at a local concrete place here, and then I was mowing lawns on weekends and nights. I was known to have a lawn mower in the back of my truck when I'd show up to class, and sometimes I'd come in early for practice, and my coach would let me mow the front lawn. And it was just, you know, something I just loved to do. I was making more money mowing lawns on nights and weekends then. So that's when I kind of started it.

Let's go.

Yeah.

Like, what was the progression those first few years in terms of revenue?

I think the first year I did like $13,000. We had one big leap from '22 to '23, a half a million to like $980,000. We like doubled that year.

So basically like $13,000, $500,000, $980,000.

Yeah.

Got it.

Yeah.

See you, let's eat.

And then this year, what do you think you're doing?

For 2025, we're going to shoot for $2 million.

Cool, let's go, dude.

We'll see, we'll see. That's the goal at least. Catherine, this is, this is Mike.

Mike, good to meet you.

I got my degree in accounting, but I hate math. But I can do— if I get a formula, I'm okay.

I can work with that. The big jump right now, you got her starting full-time? Yes, admin. And is that just this year she started?

Last year we had a part-time lady. She was just working from 9 to 1, pretty much answering phone calls. I still was struggling to get invoices out, like probably $30,000, $40,000, $50,000 in missed invoices. I'm like, we need someone full-time. So we hired her back in September, October-ish. She's been great so far.

I'm really excited. I feel like just in the few months that I've been here, we've, we've created some processes. I mean, they're not perfect, but we're getting there.

So this is her office space.

Cool.

Got a little sitting area. Sitting area.

Cool.

Little kitchen back there. And then this is Ulysses, the one that was just leaving. Oh yeah. He's been kind of helping over with some of the taking over some of the operation stuff.

And how many guys are there total now on the field?

I wanna say around 12.

And these jobs that are, are estimates or?

These are estimates that need to be sent.

Got it.

All of these need to be sent out?

Yeah.

Wow.

Let's go. Yeah.

The 4L framework allows to identify the constraints in the business so we can continue to grow.

There's 4 different components. The first is liquidity.

Liquidity, or cash, is simply the money in the bank. I then take that liquidity and I turn it into leads.

I go spend money on advertising to get more customers.

When I get a bunch of customers, I have to get more laborers. And those laborers, once I get a bunch of those, I got to get more leadership, general managers, admin, etc. But once I hire all those leaders, I usually have less cash because all the extra overhead costs money.

Obviously we have a software that we send it through. They can view it, accept it, whatever. Yeah, but also just having the physical copy so when she's talking to someone she could write notes.

So if you're not tech-enabled, or like you're not— you don't like technology, you usually default to this very analog system, which is like, I'm gonna have paper, or I'm gonna like print off receipts, or I'm gonna like print off the estimates. And so are all these— these are residential and commercial?

Yeah, everything's mixed. So this is like All estimates like sod, irrigation monitoring, irrigation print and repair, complete landscape management, shrub removal.

And so it's like, this is more about if someone calls in, she can just come over here and look at it? Is that— No, she—

so she has a stack of these papers on her desk.

I take the phone call, I write up the estimate sheet.

She gets all their information, email, all that.

I either measure and get them whatever pricing has said, or give it over to Trent.

And depending on if it's like a mowing, we try to like measure it and send out that way.

It's a, it's basically a price sheet, kind of. It's just blank, and Trent would just need to fill it in. And it has the square footage, and then on the side it has like the blank spot where he would put the price in for square footage.

And then that would go from here over to here on the, on the scent wall.

Let's go.

I know.

Okay, so you already have it in the software?

Yeah.

Why don't you just keep it in the software though?

You just like the paper?

I guess.

I don't know. Oh man.

Okay. I just feel like with all our estimates, it's just like a huge list on FreshBooks. And then that's when I feel like I start to miss stuff.

And so these ones that are still waiting to be sent, are these like basically within the past week or so? Uh, or 2 weeks? Oh well.

Yeah.

Some within a few days, some of them a while.

In the short term, what's comfortable can actually be the most effective thing for the business, but in the long term it breaks or bottlenecks the business because he can't fit any more estimate sheets on the wall.

But some of these we try to put in there like urgent, like send out ASAP within a day or something.

Got it.

Like I have another pile here. This is like my other pile that I've been taking home and like working on.

You know, when there's chaos like he's having, he's like, I'm missing estimates. Great, I'm going to print them all off. I'm going to put them on the wall. Makes perfect sense.

So you have 50 of them that are like behind, you're behind on.

And so it doesn't scale. You all use Crew Control, right?

Right.

Does that not have estimating in there?

I mean, I haven't dove into it.

Is this connected in any way to FreshBooks though, that's invoicing them?

No.

Got it.

That's what's the pain. Luckily, A lot of our customers are on set on like a 12-month contract.

Okay, cool.

I think it links with QuickBooks, so Catherine's been working on switching all our stuff to QuickBooks, and then I think it will automatically, if you finish a job, it will create an invoice.

But then for the estimates, you're saying that's through FreshBooks though, right?

Yes, that's through FreshBooks. You can see these are, these are all our drafts.

Plenty of leads.

That was viewed, accepted, viewed, accepted, draft.

Accepted. There's more than 60 estimates have been accepted that have not been put on the schedule. We have plenty of leads. They're going to fill out a sheet. You're like, okay, great. These are the estimates I need to fill out. You're going to take that information, look them up on a map, do the pricing. You're going to create that in FreshBooks. Yeah. And then just move it to sent estimates.

Or she creates it in FreshBooks.

Got it. When does it move off of that side of things?

If they accept it, then we make sure that it's scheduled in CrewControl and then I shred it.

Got it.

And then if it's just pending, like, if it's pending, we'll check in, we'll check in, we'll check in, and then I'll eventually just shred it.

And that process of checking in, is that automated?

It's definitely not.

So they're just like walking in here like, okay, let's call—

it's honestly pretty much how much more work we can take on. Like, we had some landscape jobs I bid back in like February, March when we had like openings, and now we have no openings. And so I'm like, I don't want to reach out to these because they're going to say yes, and I'm like, okay, we can get it done in August. But yeah, there's no process to it, honestly. I figure the ones that have been there for over a month, they probably went with someone else or went another route. And so we usually check in one more time and then we shred it after that.

So if someone accepted a project today and they're like, so when am I on the schedule?

We say we get back to you.

Okay. And then, and then when, when do you get back to them?

When we remember.

Okay.

I have to stop here in the turnaround and just say This is a solvable problem. And inside of HomeWorks, you can set up automations to send out texts and emails to your customers to remind them of accepting of the estimate, asking if they have questions, giving them a proposal or an offer so they actually say yes to the estimate and you're not stuck in limbo just waiting for them. You can also automate emails or texts to your office to do follow-up phone calls to make sure the customer never goes cold and leaves you ghosted. Especially the first 7 days after I send a quote, I am following up religiously until they give me a yes or no. And that can all be automated inside of HomeWorks.

Literally, there are leads coming in and they forget about them. They never get back to them.

They don't follow up with them.

That's when Catherine's like, dude, I could help you with these sales. But, but she's like, I need to know what to charge. And I'm like, well, I don't really know. I'll look at it and be like, all right, this is going to take us 2 days to do this or 2 crews, 1 day. Whatever. And then all—

and you have like some sort of rate in your head that that number that comes out to be?

Usually $65 an hour plus a dump fee or something.

Okay, and then so when you're doing a 12-month contract, is it like, okay, we're coming like once a week for one day for a whole crew, and you just like multiply that out?

Yeah, so like for, for most of like the 12-month contracts, mowing 32 mows for the year, $200 a time startup.

Oh, that's good.

So that's how I do that because all they need to know is the monthly price, $985, and then the yearly price.

Yes. The only thing I would want to be adding in here is this. You're coming up with this number using— we want to add one more row and column, which is budget hours. So you're saying, okay, there's 32 visits at $200. Instead, I want to say there's 32 visits and that's going to take me 3.5 budgeted hours at $65 an hour, which equals $200.

Gotcha.

The reason is, and this is the part where I have to talk to Catherine, because this is the part where you're gonna— it's very difficult to track budget hours if you just make up numbers and then give the price to a customer. When it comes to today's job, he doesn't know his pricing, so it's been hard for him to hand things off to an admin because like, how do you do pricing over the phone when you like really don't have any sort of pricing?

So we have the estimated hours or estimated time, and then we have the actual time. So like you can see like this one, right? Estimated man hours and then how long it actually took. We had estimated 15, it took 18. So we do have that feature in CrewControl. It's not on there for every job.

So for example, like next week, can we see how many budget hours are on schedule?

No.

It's very common for a business owner to be able to juggle everything inside of the business, including all the pricing until a certain point, and then it becomes the bottleneck.

It was the first time I'm like, Hey, Catherine, someone calls in. I would be really careful on scheduling me out because I'm starting to do like a lot of estimates right now. I think we should start to be really careful on who we want as a customer at this point. I hate saying we'll be there next week, next week comes along and we're a little behind, and next thing, hey, sorry, we're not going to be there next week. That's so frustrating to me. I know it's with her.

TLC Landscape Management, this is Catherine. Well, I don't have a set date for you right now. We are working through our irrigation startups and repairs. So, um, I will give you a call next week and give you an idea of when we can get out there. Okay.

Well, I bet there's customers that freak out over it.

Oh yeah.

And probably cancel jobs.

Yeah, yeah, definitely.

What's easy to do when you come into a turnaround and we have an hour or two with everyone is like just attack the glaring problem with every business.

And sometimes that's not the right thing to do because the glaring problem is not the constraint of the business. And so it's not necessarily always the thing that looks the worst. I look at the website like, oh, we can immediately improve it, but who cares if we have 60 jobs that have been accepted and we haven't put them on the schedule? Like, we need to create better systems around admin.

It all comes down to a prioritization during the spring rush of like, what jobs do you even want?

Exactly.

Because like, when you're booked out and you have 66 unscheduled jobs, like, we should not be going after a huge project we know we're probably not going to do till August, right? Even if you just said— so like, if you take time-insensitive jobs like big projects and one-time jobs and say, hey, anyone that calls in, if they're not a recurring mowing customer, just tell them that we're 3 months booked out for now. So if they're like in a rush, it needs to get done next week, I don't go do an estimate. And then we just basically say, sorry, we can't help you. Time-insensitive jobs and one-time jobs are— I'm always booking out in my off-season. Then that allows you to take on the recurring customers during the spring rush because all the leads are coming in now. And even from like a, you know, from the crew perspective, being able to pay them more, being able to get them more efficient. Yeah, we want to pay for performance. We need budget hours. Budget hours is the crux of it all.

Once I got a lot of customers, I need laborers and they have 12+ laborers now.

However, I've got to make them more efficient.

And to do that, I've got to actually give them a benchmark of something to beat on every job. And that's budgeted hours.

How many mowing customers do you think you have?

Like 150, 200?

You get a great operator like Trent, you can manage them no problem.

But when you start getting above 12, That's when I consistently see people realizing, oh, I need a sales system.

I feel like if we had like a dialed in like a price sheet, she could just send a quote out instantly, measure it real quick.

I need a system for pricing. I can't just like make stuff up anymore. Something like that is easy. So for example, if you're like, well, I don't know really what I charge. One way to do it is to tell her, hey, take 100 of them, just random, or take all of them. Literally just do an Excel spreadsheet. Square footage, price, and you're going to just plot them all out. And what you're going to see is it actually follows a trend.

And then you're going to be—

you're just going to group them up and like, okay, we're going to have 6 different groupings of price. And if it's over this square footage, it starts to get really spread out. So then over here, I'm going to do anything above this. We do need to have an in-person estimate, probably your big commercial stuff, etc. But like 80% of them, she'll be able to handle over the phone.

Yeah.

And then she'll— you'll probably increase your close ratio simply to the fact that she will give the price on the phone while measuring the property and close the deal. Then we can remove half of these, right? Seriously, then it's a matter of, okay, well, what's the other half? Okay, if it starts to become like 12-month contract stuff, right, there's irrigation, etc., they can't do that. Then it starts to become a function of, okay, what's the bottleneck of the business? Because now we start to grow and get $3-4 million, and now you're filling your sheets up again. And so you start figuring out either A, do I remove those from the business and systematize, like just simplify, or do I standardize it in some way like I did with mowing, which is square foot versus pricing, to be able to hand off to them? I would probably push in the direction of budgeted hours.

And so that's why we see so often at times $1.2 million and around that 12-employee marker, I see where people start having problems around systems because all the juggling that allowed them to grow quickly and it was actually the most efficient for them to like get estimates out quickly for pricing doesn't work anymore. And it's right around that 12-employee marker and that $1.2 million revenue marker.

We see that over and over and over again. I'd be interested to see in FreshBooks like why we couldn't put it in there, because I just feel like this is a very analog system as you have an admin person. Like, who's doing scheduling right now?

Me and Catherine and a little bit of Ulysses.

Like, what's your POV on like the current setup? Just like software, where things are at.

I think we're using too many. We're using too many.

It'd be nice if everything was on one spot and you're all looking at the same thing all the time. Especially if you're gonna keep growing. It's like, okay, well, if you have a second and a third admin person, is everyone running into your office to pull these sheets off the wall? There needs to be a record of truth. And if you have to guess right now in terms of close ratio, what do you think that is? 50/50?

I mean, springtime, I feel like it's higher. 50. Okay, well, over winter it's like, yeah, it's low, you know.

Do you keep most crew busy all winter?

Yeah, we try.

Yeah, you can book out little landscape jobs on.

Yeah, and we have a lot of our— which is my— we've been doing a lot of commercial HOA work, and so they're on monthly recurring cleanups, which is— I mean, it's not full-time, but we've been able to keep like our core group.

Like, having printouts of estimates and like the estimate follow-up process being whoever calls us the most and is mad, we then schedule them.

Kind of amazing that someone built a 7-figure business, honestly. Like, you've surprised me. You do very good for the fact that you are so still so manual on stuff. Really? Like the paper and like all this stuff, like very surprising. And like the fact that you only have one admin person, kudos to you, dude. You're doing something right. When I look at the business, it's like you have sales, operations, and admin, right? I see your operation is extremely strong. From a, the crew going out there and doing a good job to them being trained correctly. I think that's the part that I'm guessing. You have people have been here for like a year, 2 years, 3 years. You have a good crew. I can just tell, like walking around here, you can tell that. I can tell by this. And the fact that you don't have 3 admin people means the operations are really, really solid. He's really good with the team.

He's really good at operations.

He has high quality work and he really cares and he works his brains out.

The question is, is that sustainable?

I would imagine she's pulling her hair out. So because the way it works is very, it's all over. It's the sales and the admin side where there just needs more systems, right? The sales operations right now leaning all on you. And then the admin side is like kind of in 5 different spots, everything from sheets on a wall to FreshBooks to crew control and like all that can just be brought in one spot. This is the part that I was really thinking about and that is like, what, what do you want the business to do? Like, do you want to do a $5 million business? Do you just want it to run without you? Like, what's the goal of the business?

Because the business has grown to over $1 million, Trent is going to have to work on his leadership skills. We can't just be like, oh, we're going to grow the business.

Why?

What's the purpose?

Why does TLC Landscape Management exist?

I mean, I would like to maybe go past $5 million, hit $10 million. You know, I feel like we got a great, great group of guys. I would like to be able to bring them up and, you know, able to make more money and all that stuff. I was a big Dave Ramsey fan. I started learning his stuff with like EntreLeadership and running a business. I had horror stories of buddies that started businesses that like they had a nice jacked up truck but then they couldn't make payroll, and I'm like, I'm never— I'd never want to get to that point. Like, our guys come first. Obviously I know we have to get this stuff dialed in in order to grow, and I think it's kind of a stop in our growth at this point.

You know, we're not really looking at the big picture right now. We're just in the muck, right, trying to get through the daily. So it's really cool to be able to hear kind of what his vision is for the future and see that come to fruition and how we can make things better.

Someone was commenting the other day, and one of the turnarounds, like, is every business you visit $1.2 million in revenue?

And I went back, it was like more than half of our turnarounds for the past like 15 or 20 were $1.2 million in revenue, like right around that. And it's a function of it exceeds the number of team members that one person can effectively manage.

And usually you can get past that 6 to 8 by just having a great operator. But once you get above 12, like, you need systems, not just personalities, to be able to manage that size of business. I would imagine some of these crews, based on what I'm quickly glancing through here, crush budget hours. Oh yeah, others are way behind.

100%.

That's just— that's a scoreboard. First we have to create the hash marks on the field. That's budgeted hours.

Are we close to the end zone? Are we way away from it?

Like, we need budget hours to determine that. Now when they come in, it's like, who's the top performing crew? Then you can tie incentives to it.

Do all the crews see that? Yeah, everyone sees it. Yeah, so they see—

do they do it?

Half of them care more about what everyone else thinks about them than their paycheck, and we pay them more if they just are higher on the leaderboard. Once we determine budget hours, then we can compensate people based upon the yards that they get, i.e., P4P.

Like, even if you didn't do P4P, like you didn't actually change their paycheck, if you just had a leaderboard and said like, yeah, crew 1 crushing it, 84% efficiency. Crew 4, 37% efficiency yesterday. And everyone just gets to see the scoreboard. You don't have to say anything.

Right.

And then when someone asks for a raise, you say, well, here's the— yeah, you're crew 4, right?

Right.

You're right. Crew 1's doing something different.

Well, that's a big sports background. So I'm like, I feel like right now what we're doing, we're playing a game without keeping score and I hate it, you know. So that's where I was like, we have to keep score and you have to know if you're winning or not. And that goes back to like, oh, I'm like, well, I'm not tracking budgeted hours right now.

And so anything about sports, like what kind of people do you attract if you don't have a scoreboard? People who want an 8th place trophy, right? Right, right. Everyone should be— we all I want to make more money.

It's like, wait, wait, wait one second.

Like, there are high performers and there are winners and losers in this game. So in football, like, to use the analogy, is like, you will get bonuses if you get 2,000 yards this year. You'll get bonuses if you get 14 touchdowns.

I need to be able to have a way first to measure budget hours, then I need to compensate people based upon those budget hours, pay for performance. And then once I do that, people are gonna start wondering, oh, so like, what are the stats for the team?

We have a leaderboard When they pull up their app, they see the top 3 paid employees.

Okay.

And the reason I do that is because when they're like, I'm not making enough money, I just pull up the leaderboard. I'm like, they made $40 an hour last paycheck. Oh, and the paycheck before that, they made $37 an hour. And so, you know what was different about them? This morning they showed up and they were out of here within 3 minutes. They packed a lunch. They didn't stop at the gas station because they filled up their truck on the way home last night. Like, these are the type of things you can start to teach them. but it's incentivizing them and they make more money if they do it instead of just telling them what to do.

And then I can do profit sharing based on— so they actually care about the open books that I am sharing.

We don't have a scoreboard right now because we don't have a way to keep track of the score. And so budget hours becomes a scoreboard for the crew out in the field. I feel like you could double the business and operationally you get the right people, you train them correctly, you have good systems with Ulysses, etc. I think your bottleneck is not at operations. It is sales and it's on the admin side. And Ulysses wants clarity in terms of what does this position become?

Right.

Can I make more money?

That's been our biggest issue right now is clarity on his role and all that stuff.

Have you talked to him about it or not really?

Yeah, we've tried. Like I tried to get him like a clear goal. Like I typed up like, these are the things we need each day.

He's still in the field, right?

He just started this week because we fired a guy this week. Got it.

So he basically stepped back in. Yeah. So is he considered operations manager?

What do you think? Supervisor, operations manager. And so I'm just like, I'm trying to figure out one, like, because we're—

I—

we reached agreement of $60,000 a year.

Without the salary thing, was he like a hard worker on the field kind of thing?

Yeah, but since then, it's like he hasn't been working.

Does he want to be doing operations?

Yeah.

The same way when it comes like budget hours and efficiency for the crew on the field, you got to create metrics for him to succeed in that role, right? Because in the past, he knew what to do, work hard, right? And he did it, and that's why you promoted him. But now he's in this new role where it's like I know, I, I don't have the answers.

Like, all this stuff's in my head. I'm trying to get it to— but I'm working as hard as I can to get you a clear role. But it would be nice on the back end to have you come in and like say, you know, oh, I can do this, this, and this too.

The ability for him to step in the field means that it's not clear, because like if there was an actual role, it'd mean like, oh no, like that's not even an option, we have to hire someone. And at the end, we gotta hire someone fast, that's fine. But like, there's no option of you hopping in the field because you need to do all these other tasks. Like, you're no longer in the field. That's not even an option, right? If we're overbooked, you're not in the field. And yes, I work crazy on the weekend and he wants to help and help the guys, go for it. That's awesome. You want someone like that, right? But you incentivize more like job completion on time, etc. Um, down the road, once you have this efficiency score, you would actually tie the entire efficiency of the team to him. I will incentivize based on that number, and I'm going to give you a sliding scale up to $80 grand. Like, that will get his attention.

Oh, heck yeah.

And then it's a matter of like, in order to get there, these are the things that need to get done, and then unlock revenue at each stage for him. So for example, $60 is where you're starting. Great, leave it. $65 is when you take off my plate. When people are calling in and out every day, you're taking the calls. But you, you unlock base and then you unlock incentives. So the base goes up based on them taking things off your plate. Incentives go up based upon performance. And like, the goal is that phone calls don't come to you from the crew. And when you can say that line, he gets a bit— he gets an increase of pay. When you can say to everyone, if you have something in terms of calling out for the day, you contact Ulysses. When you say that, he gets more money. And then on the back end, he gets more incentive based on performance, which is efficiency of the crew, profits, and revenue. So I have 3 metrics that he's being tracked on.

So you think where we're at, you think that job is—

yeah, your size, you can afford that. You also need it, right? I think that you can optimize your current role by 50%. Like, you can get twice as much done by simply getting rid of this, getting her on the phone doing sales. Like, you can really optimize your schedule. I would make it more clear-cut. And so I kind of see you as like right here, like you've just started getting an admin person, you got Ulysses, But now it's like that's going to put a crunch on the capital, right? Again, in terms of profit margins.

Right.

And so I like to go through this like where are the bottlenecks in the business and then like what are we going to try to actually fix? So from a liquidity perspective, I know like we don't have a solid P&L right now and I know she's pushing you to get into QuickBooks to do that. But like if you had to guess, like, is there a cash crunch really? Or is it like—

Katherine, what do you think?

Hey, the person that knows the numbers.

Perfect timing. Um, because like I know you're pushing him to get into QuickBooks kind of thing, right? Does FreshBooks do a P&L right now? Kind of, yeah, but we don't track our expenses in FreshBooks.

It's just our income.

So that was the Excel spreadsheet I got probably from— was from FreshBooks, which is income only. Yeah, got it. Okay, and then from your perspective, Catherine, like, because I see it like we've been I don't know if you overheard, like the bottleneck is simply systems on the admin and sales side. And like this situation doesn't really scale well.

Yeah, we're having some hiccups.

Yeah, we are. So, so like seeing this, to me, I know I would frustrate my admin people like crazy because they would be like, yes, Jen, I can't see you in my system, but I will go into the other office and pull your thing off the wall. Like what, where's the pain points for you?

I think right now it's the, the amount of work that Trent is doing between sales and estimates and leading the crews, that sometimes our estimates do fall to the wayside, you know, the non-emergent ones.

The person that's not yelling at you on the phone.

Right, right.

And she's the one that has to deal with them.

When they call back. So I think that's probably where our biggest hurdle is right now. Figuring out how we can get the estimates out a little bit quicker.

And I would say once the estimates are accepted, the problem is also the fact that you don't know when to put them on the schedule.

Right, we are working out the schedule and it's been a monster.

Right, I know, I bet. We have a problem of getting the estimates out and that's because of this situation and the fact that only he knows pricing. You can't do it over the phone. And then we have a problem with once the estimate is accepted, how do we get this on the schedule or tell the customer a reasonable reasonable timeframe in terms of when are you going to be on the schedule. Got it. Okay. And, and right now you can't do either of really those two things, like give pricing or tell them exactly when they're on the schedule?

In a roundabout way, but no, not exact pricing.

Okay. Technically, you should be able to answer someone that calls in and accepts a, you know, $50 budget hour job and say, yes, you will be on June 3rd, um, because you can just see like, hey, these are the budget hours, what our capacity is, we're booked out until this date. Same thing when it comes to pricing. Instead of asking what price should this be, say how many, how many budget hours is on this job? You say 10. She says, okay, great. That's $650.

Okay.

I want to have an, I want to have 10 budget hours, an estimate fee, and a dump fee. That language then means something to you because you just have a pricing sheet of budget hours, estimate fee costs this, and my dump fee costs this. And this is the challenging part. Even the timing of this, like you guys are going into the teeth of spring rush, right? So like, I almost am very cautious to be like, all right, let's just change software, like let's change budgeted hours. Like, I'm like, okay, we also just need to get through this spring rush. I was in the off-season, switch to any software, anything. Because right now, like, what you're doing in FreshBooks, what you're doing in QuickBooks, and what you're doing in Aspire, like between invoicing in one spot, dispatching another, sending out estimates in a different one, doing pricing in Excel, all it can be at one spot. And in the perfect world, like when someone calls in you make a call note, he then is literally be able to see that on his side as he's doing the pricing. It's all in one spot. The crew's able to see that, like we're all speaking on one language instead of, you know, notes on the board.

Makes sense.

What software are you referring to where we can have all that in one spot? I know QuickBooks, we can do our estimating, we can do billing, all of that stuff out of QuickBooks.

I would use it for like my profit and loss, my balance sheet, like my accountant likes Right, that, that's like the standard. And no CRM is going to do a good— as good a job as QuickBooks at like actually reconciling your books and having a solid P&L. But I can do that separately and have all my transactions coming in there and like categorization, etc. But in terms like field dispatch, estimating, invoice, that can all be done in one spot. So CRM is just customer relationship management.

Think of it as you are managing the relationship with a customer. So all all their calls, invoices, estimates, everything with their job notes, automations around their texts and emails.

Every single thing inside the business goes in one spot.

This is my CRM. These are my notes for phone calls. So it's, um, something with me.

You looked at other software systems besides CrewControl?

We got it at a quote from Aspire.

Okay, it was— it's expensive.

Freaking expensive. But we, I was like, thought about it. I'm like, maybe we should just invest in it.

There's 600,000 landscapers in the US. The difference between the ones that will make the majority of profits and the ones that will fail to scale are the ones that are using software. And today is a really good example of why. Look, I understand the apprehension to spend money on something like software. Like, man, $500, $1,000. I understand it seems expensive, but what we're going through right now with AI and software is likely going to be the thing that consolidates the home and home service industry because it's so fragmented right now. There's like 600,000 landscapers in the United States. I don't believe that in the next 10, 15 years there's going to be all the profits made by the small guys. It's going to be the biggest companies that adopt software. And so we can complain, we can say that's not fair, we can have all the excuses in the world as to why that should not be the case. However, technology consolidates industries, and the majority of profits in home services are going to go to the business owners that adopt this software and use this technology. And this is why a few years ago I started HomeWorks to make sure that we can build a software platform that isn't governed by private equity or venture capital, but that I myself know I need Augusta Lawn Care, and I need to know that all home service business owners need that isn't governed by a board and private equity that has no care in the world whatsoever about home services or about the business owners. And so if you want to check out kind of why we started the company and just how important software is going to be in the next 5 to 10 years, especially with the advent of AI robotics in the future, please go check out Home.works, home.works, see if it's a good fit for you. But I don't care what software you use, choose something, get organized, use systems, scale the business, and start creating repeatable processes not a workbook and pieces of paper and a marker and a pen on your desk. Like, honestly, it's a flip of the coin. I use— I do Copilot, so like, I'm completely biased. So whether you do Copilot or you do Java or you Service Autopilot, which are cheaper options compared to Aspire, all of these systems can be in one spot. Adding software, even if it seems expensive, a great move for the business. I think one thing that you could take off his plate and then also like kind of do whatever you want is figure out what software he should move into for the next winter.

Well, I'm kind of interested in this Copilot thing.

The systems he's already put in place has allowed him to get to $1.2 million. There'll be more systems required in order to get him to $3 and $5 million.

Budget hours become— and you guys really do lock it in, then I would say Copilot's the move because we revolve everything around budget hours.

Do all of these— all of them include invoicing, estimates, scheduling, dispatch, All of us.

And once more systems beget a larger size business, that is possible using the infrastructure of the business.

When I see on that wall with all his estimates and he's like, if they don't kind of respond, he's like, shred the paper. Like you can just create an automation, like to text and email them like day 1, day 2, day 3, day 5, day 7. And then eventually you delete the invoice or the estimate. But like the goal is to get a response. Even that, like the manual part of having to just click, like send it again. You just want to set an automation where it's okay, if someone hasn't responded to me after 1 day, I'm going to send it via text.

And then I don't have to track who hasn't received it either.

Right.

If I'm building a bridge and I am going to only have a 2-lane highway, I only need to put the pillars so far deep. But if I'm going to put a 4-lane highway or a 6-lane highway or a 16-lane highway as a bridge, I will have to dig deeper and make the pillars bigger.

Bigger.

And so if I wanted to build a bigger business and be able to scale, quote unquote, the business across the river of like whatever, I've got to dig deeper.

I've got to have bigger systems, better systems, more hierarchy. And that comes in the form of software. So in here, what we have is we have customer notes and we have call notes. So customer notes are things that are sticky, things like the person's hard of hearing. You need to see it every time you pick up the phone. Call notes is like if they ever call, I'm just going to pop it in there and save it. And then I can have it— and that— so that if you do that, once you create the call, it'll, it'll make it a to-do for you, like in 3 days, 5 days, etc. The notify user would be that if, for example, a customer calls in— I want a work order change, essentially— instead of you having to contact him, you click notify user and it just texts him and says, hey, this customer called and this is the call notes.

So this customer called and wants an update on when they're going to get their Exactly.

And then push it to him and just click notify user.

That's cool.

Here would be a searchable database of all the notes.

Oh, cool.

Then he can just go into someone's account and say, what have they been talking about? The back and the forth. And for us, we don't allow paper on our desks because I want every single note in here.

Okay.

So even if you get someone under you down the road, you want to be able to walk in if you start at 10 and they start at 8 and Don't want people to kind of know everything. There's like paper, just— yeah, it's hard to track, especially if like they're happy. Ulysses is jumping there from a job, like it's just one spot.

The immediate pain of getting inside the systems of software is why most people will not do it, because in the short term it does take more time.

It does take more time to dig the pillar deeper.

It costs more money. It takes more concrete, more infrastructure, more architecture, but allows for a bigger business.

It allows for a bigger bridge to be built. These are all the jobs. There's only 8 of them. Okay. But this is what is— it's maximized all the information you can see. You have like your notes, time track right there, the track time. As they would clock in, that number goes up, it goes red if it goes over the budget hours, which is right next to it. So there's your budget hours. Now see at the bottom, you have 7 budget hours. This is why it's easier from a budget hour perspective. Like if I want to determine their efficiency score at the end of the day. I'd say, okay, there's 7 budget hours they completed, great. They clocked 8 hours for the day. 7 divided by 8, that's like 82% efficiency, or whatever that is.

Everyone wants to have the end result, which is like a team where there's information flowing, everyone cares about the bottom line, everyone's coming up with ideas about the business, there's a great culture because everyone knows what's going on. But no one wants to like do the hard work of implement budget hours across every single job, then compensate people based upon that and create software and systems to be able to track budget hours and pay for performance.

From a liquidity perspective, I kind of see it as we just need to know our numbers. Like any sort of— we need a solid P&L, right? You've got to have— we're at the end of every month, you say, did we win?

Did we lose?

Like the same way we were talking about the team, your scoreboard is profit and loss statement.

In order to fly a plane, I've got to see metrics.

I'm going to see a dashboard. Of where I'm going and what I'm doing.

If you're going to run a business correctly, especially if it's a big business, I've got to know my numbers. And what is knowing our numbers? It's having a profit and loss statement. It's knowing the key performance indicators of the business. If we don't know those things, we're going to run the business into the ground.

You have no debt, right? Um, besides like some trucks or something, or what do you have?

Besides a mower.

One?

Yeah, we're not completely debt-free, but for the most For the most part, we have been. We owe one mower right now, which we had two breakdowns happen in a couple weeks and I had a panic attack and I wouldn't finance a mower.

Literally what you've done is phenomenal. Even at $65 an hour is phenomenal. The way that you built it and everything, no debt, awesome. But we are flying blind in terms of knowing our numbers.

For sure.

And so I would say know your numbers, having a solid P&L, Like the most important thing. We've identified some of the opportunities with the liquidity of the business and knowing our numbers.

But the next stage of the 4L framework is leads.

From a leads perspective, I'm not sure. I don't think there's a constraint in the business. Like you have tons of leads pouring in. One thing I would say on your website, talk to your web designer, move your estimate request form up above on the top instead of the bottom of the page or above the fold. In other words, When a customer gets to the website, they don't have to scroll down or go to a different page to actually enter the information and request a quote. If you move it just to the top, you'll increase conversion by 30%. Really? Yeah, because right now it's at the bottom and hardly anyone scrolls beyond the fold. And then there's a different page too for your estimate request. So they have to go to a different page. People go to your website and they're there for 5 seconds. And if you're not capturing what they want right there, you're losing a bunch.

If you want people to give you more money, Make it easy for them to give you money. Make it easy for them to find the estimate request form. Don't hide it on a different page. Don't put it at the bottom of your homepage. Make it very accessible above the fold on the homepage, off to the side.

That picture behind is just a random house. You guys have great trucks. I would get a nice crew shot out front here with like 4 or 5 of the trucks. That would be my back picture.

Okay.

See TLC all over the place. When people see your trucks and they come to your website right now, besides just the 3 letters, there's no recognition of brand. But if they see the truck and then they go to your website and it's like orange and, oh, I saw that trailer, and like, oh, the TLC thing is on every single truck, that's brand recognition. Okay. And, and, and a lot of times people probably like when they call in, they're like, oh yeah, I see, I see your trucks all over the place, right?

Right.

I need them to go to my website and be like, ah, same truck, and I fill out my estimate request form.

Not like guessing, like, oh, was this the company?

Well, it's a random house.

Like, that could be off of Google. Is it local? Is it your photo? I don't know. It could be.

It should be, hopefully.

So, so like, I would say like just those two things will increase conversion.

The next step in the 4L framework after leads is labor.

We've got to use budget hours. So this is the quick win, is budget hours on all recurring jobs, every single project. It's going to take you probably a week to get all the recurring done. Then it's probably going to take you a few weeks to kind of like As jobs come in, you're putting budget hours on everything, and then you just consistently know when to schedule. It just becomes a clear game. And then you really have a really good idea of like, okay, where can we put these big projects that we told them we're doing in June?

Okay, we can actually see we only have 200 budget hours of mowing on.

Oh, that means 100 budget hours can be projects.

This is how I'm able to schedule 3, 4, 5 months in the future, but be able to give the customer an exact date for when their service is going to begin.

Okay, we have a $300 budget hour job. Massive. It's gonna be a 3-week job, and we're now booked out from June 1st to June 21st.

Once I have the budget hours on every single visit and every single job, I can calculate my efficiency score.

My efficiency score is budgeted hours divided by clocked hours. In other words, how long should the job take versus how long did it actually take? You could literally not have to tell them about it. You just like one day they walk in, there's a leaderboard. And then what happens is we always try to get it done by like 11, 12 o'clock the next day. For the day prior. So what, what is happening? Cause like you're not going to wait for them all to finish their jobs, do all the math, do the scoreboard. Like it's, it's you, what's going to happen? You're going to come in the next morning. You're going to quickly run the numbers, put the efficiency score up. You're also probably going to fire 2 people within a matter of a few minutes. There are people that you are paying a dollar or 2 less per hour that is making half the amount of revenue. It's happening. We just don't know.

No.

I mean, yeah, I've got a good idea, but I know, but now you have the math right now. It's not a matter of like, I don't think they're really doing well. I see them on their phone all the time, or I see them at the gas station. It's like, oh, they literally completed half the amount of revenue as everyone else in the day.

Okay.

And their efficiency score is 36%, and other crews 94%.

And then they come in and say, oh, I gotta freaking step it up a little bit.

Yeah.

And that would be an easy win just from a cultural perspective.

Down the road, you incentivize it. You actually start paying.

I love that.

It's so cool.

Yeah, I love it.

If I know this number, I am able to calculate what percentage of my crew of the crew's day is spent actually producing revenue instead of drive time, load time, and wasted time.

Since the day we implemented P4P at my shops, we— I've never asked— had a single person ask me for a raise. Not a single person. And you give everyone a base.

Yeah, everyone's good.

Like, the, the— even if they have a bad job, will go bad sometimes, the weather gets bad. But when things go good, when they crush it, when they hustle, when they make sure the job gets done because they're an hour from here, they're like, I don't want to drive here tomorrow to up for 30 minutes, so I'm just gonna finish it tonight. The next constraint in the 4L framework is leadership.

We've had liquidity, we've turned that into a bunch of leads, we have a big business, we've got a bunch of laborers, but now Trent's got to focus on leadership if he wants to take the business to the next level. And that's really the one secret to how he's going to take TLC Landscape Management to a $5 million business.

The leadership side, this is the part that I think You could— you like would be super beneficial. And that's like the same way we talk about the guys actually having a plan now to make more money. Like, I would love it if you can get really crystal clear on this. Okay, because if you can, then as the leader of the organization, you have something to talk about.

He's gonna have to keep people like Ulysses in operations and Catherine in admin so he can focus on sales and grow the business. But to do that, he's gonna have to share his goals, the vision of the business, and why it exists.

Exists.

If he does that, $5 million is absolutely on the horizon for TLC Landscape Management. It's like, I didn't like— didn't really share my vision very much until like last year. I'm like, oh, I need to get people that are way ahead of me, have 20 years of experience in this industry. Software— they're not going to come around to someone's like, yeah, I'm like kind of figuring this thing out, right? Like, no, this is what we're doing. Here's the track record. Here's what we're going to be doing in the future. You have a great track record. Like, in 3, 4, 5 years, grown this business to $2 million. Awesome. When you stand up in front of them and say, we're going to go to $10 million and here's the roadmap for it. And by us doing that, you're going to make more money because here are now the positions that will be created. If we're going to have a $5 million business, I need an estimator. I need a couple more people in the office. I'm going to need an operations manager. I need a full-time mechanic. And I can pay these people more than what you guys are doing right now. And so if you're willing to grow with me and support the vision of the business, I would love to move you up into those positions. Positions. I'm not going to guarantee it. Just by being around here does not mean you're going to get a better position, not mean you're going to make more money. We're using pay for performance. You make more money the harder you work, right? But the hardest workers I'm going to promote, and I would love to do that. And if there's not anyone that can take that position, I'm going to go hire someone from outside the organization. But the reason I'm sharing this vision and this goal with you is that you have something that you know you can work towards, because I would rather hire from inside the company for sure.

100%.

Like, you would rather hire? Oh yeah, for 3, 4 years, put them into an operation manager role. Like, I don't have to go hire someone who has 10 years of experience in a different company and different cultures and all this other stuff. Just get them. And then once you do that 1 or 2 times, you keep all the other guys. They're like, oh, there is a future for me in this business. Like, for us, like, we, we are— our frontline guys can go start their own location and they don't have to pay a franchise fee. So like, we actually just have pictures of like all the people that have come here at the shop, worked here for 2 years, and gone starting their own business. That's awesome. And they start, oh, like, this is not a dead-end job. So retention goes up, culture goes up, they get paid based on how hard they work. And there's a roadmap to make money like the boss. Like, if a customer asks you, like, why should I choose TLC over another lawn care business locally?

Right?

What is it?

High quality, great guys work here. We care. We do the small things. I mean, all that stuff.

Yeah. And then, then it's a matter of like, if Ulysses is walking here today, he's like, why should I stay stay with you. That will give you clarity in the business's goals, the business vision, what makes you different than the other position he could go get, right? And then when someone walks in here like, boss, I need to, I'm going to go leave to another job. And then you find out they're not making any more money, but just with a company that has like a bigger org chart they can move up inside of, right? You don't want to lose those people.

No, heck no.

Like the reason we franchise is so that I could retain my top 2 or 3 people. I just knew they would not stick around with a one location shop that was at one $2 million. Like you, you'll have to have a big enough goal for their goals to fit inside of if you're going to keep them. And for high performers, their goals expand, right? You got to stay on the same page. And so whether you want the business to be that way, which is much more passive, or you want it to be where you're still involved in growing and you're still— they're not making 55% of the profits, doesn't matter. Either way, the business becomes more valuable and it's an easier business to run for your lifestyle.

Right.

Totally. Yeah, I get it. That's awesome.

From like a 6-week plan perspective, we simply need a solid P&L. Like, I need it to be where when they contact you back for May, you're like, yeah, May, here's my P&L. I know exactly what it looks like. In the next 6 weeks too, it can easily just change the website updates.

Okay.

Um, little stuff like picture estimate request form, moving that up top. That will improve leads. I, I'm hesitant to say even do that right now because you already have quite a few leads coming in. Literally just changing the picture in the estimate request form, up that top part, will increase conversion by 30%. So don't lose money on the ads when you wanna grow the business. Just fix that, you'll fix a lot of stuff. And then when you do spend money on ads, you'll be driving to a website that converts better. So I think in part of this 6-week plan, I would love to have a team meeting about the vision of the business. What that's gonna mean though is you getting clarity on what that is. Right? And ideally something to fight for. Do you want to be the best landscaping business in the Tri-Cities? Do you want to be the biggest? Do you want to be known for X, Y, and Z? Do you want to be able to run a survey of random people in this area and 50% of people know who TLC is? Like, what is the goal? And I would, I would recommend making that more than just making money. We've got to use budget hours. So this is the quick win, is budget hours on all jobs. Every single project. It's gonna take you probably a week to get all the recurring done. Yep, that's easy. Then it's probably gonna take you a few weeks to kind of like, as jobs come in, you're putting budget hours on everything, and then you just consistently know when to schedule. It just becomes like a clear game instead of literally Thursday and Friday, you're just hoping we get kind of finished, wrapped up. Do we need you guys to work on Saturday? Do we need you guys to work longer on Friday? It should never ever be that way. So budget hours on every job. You'll need a little bit of grace as you figure this out. And then what will happen is like in a year from now when you're determining like what are we doing with the business, you're going to look at the jobs that we go way over on budget hours, like, you know what, those are the jobs I always get called to, customers hate us, and I hate my life during those jobs. We're just going to cut that service out because it makes 5% of our revenue. True, so true. So the same way that like just simply getting her to be able to do pricing over the phone for Melanie is cutting out 50% of estimates, you can cut out 50% of your headache usually by removing like 5% of your revenue.

Love it.

Good stuff.

This is great stuff. It's been going pretty good. Um, I feel like 6 weeks didn't— it flew by. I was talking with Catherine, I'm like, She's like, was it really 6 weeks since they've been here? I'm like, I swear they were here like 2 weeks ago. Still spring rush, still busy as ever. Honestly, I feel like we've hit a like almost a plateau with possibly adding another crew. We almost expanded so much and added so many jobs that we're like, okay, do we add more people? Do we add another truck here soon? So that's been something we've been talking about recently. We went through all of our routes and we've been putting labor hours on every single job we've been doing, which has been helpful, very helpful. And we're still doing— we're trying to do a better job of tracking it. It's been one of those things where we're like, I don't know, like I haven't been going by every single job and looking at them, but for the most part, yeah, like I definitely look at it. Like we made announcement to our guys and say, hey guys, like just let you know, like we're trying to grow We're trying to expand, but we have to know our numbers. So we're going to be putting labor hours on every single job. We're going to be creating a leaderboard here soon. It's definitely been, uh, easier estimating now, um, and basing it off of jobs that we've been completing. And then we were doing this thing like Mike was talking about. He's like, hey, instead of calling every single job, like every landscape project, we've been pretty much been telling those people like, hey, we can come out and quote it but we're not going to get there until like summertime. So like, we'd still love to meet with you, and it's helped, like, saved a lot of my time going and meeting with every single person throughout where we live. And then we've been trying to send quotes like hourly or quoting stuff over the phone. Catherine's been sending more quotes like by square footage and stuff like that, just trying to get stuff out faster and without spending so much time checking out the property. Um, meeting with, meeting with the guys as far as just kind of going over the labor hours and all that, it went good. I honestly, I told them, we met, um, I said, hey, here's where we're at. Our goal is to, um, down the road, it's probably going to be a year from now, is to start building like a bonus But we have to start by tracking our numbers, and we're going to start by doing random crew of the week. Whoever killed their times that week is going to get, you know, whatever, $50 gift card, you know, a sweatshirt, some swag, something. And so they're all for that. I mean, they're all excited for, you know, down the road starting to do some kind of bonus, something like that, which we'd like to get to. But I'm like But first things first, we have to start getting our baseline. And so they were all understanding and they get it. There was, there was no one like, oh no, they're gonna look at my times now. Yeah, not going as good as I wanted to go. I feel like if it doesn't start going better now, then I'm gonna have some tough decisions to make. But I'm just trying to take it slow, uh, trying to give him as much information, as much help, guidance as I can before we have to do anything, you know, dramatic or anything like that. We still have a lot to fix, a lot, a lot more to improve, but I feel like we've definitely taken a better step in the better— in the direction we want to go.

TLC Lawn Care struggled with leads. That was the second L in the 4L framework, and they struggled converting them from leads into paying customers. But let's assume that you You have figured that out and you have lots of customers. In fact, you have so many new customers, you almost have to turn off the new leads because they're just pouring in. Well, now the constraint in the 4L framework moves to labor, getting more employees. Southern Property Lawn Maintenance is a great example of another business that is really struggling with getting labor. They have $1.2 million in revenue, but they only charge about $40 to $50 per hour because the state stiff competition in their market. And if I'm only getting $40 or $50 an hour from the customer, it's very difficult to pay even an extra couple of dollars above the average market rate when I'm hiring new employees. And so it might seem like I can't grow because I got more— need to get more customers and raise my prices. Might actually be a function of like, you can't even attract good talent because you're paying such low wages. You're attracting the least qualified technicians and the worst worst candidates in your market. Let's see if we can turn this thing around.

Is that legally compliant? I have no idea. I just know you will make more money.

Everybody wants to make more money.

But, you know, I'm looking at the OSHA violations. I'm looking at processes.

It can always be worse.

All the things that have come up in the past 24 months that literally could have sunk this.

Oh, you know, you need to shut the door.

I default to violence.

I've actually had a hard hat thrown at me.

We lost $8,000 a month property, so it's going to be hard to get past that. We are in business to make money.

Yeah, maybe nobody will see it, but you could have done better.

We really cut out some bad eggs.

They're bitching and complaining and moaning about everything.

They go back and say that I was violent to them.

Have you ever seen Fight Club?

If we had a gun to our head, we would do it.

That was bad. That was a bad day. I had to make them quit.

Get off the internet for the day and once again, welcome. All right, I'm mic'd up and I'm ready to roll. Good morning.

What's up?

How's it going, brother?

Good to see you. This is the show.

Get the show on the road.

My name is Adam Carter with Southern Landscapes Property Management. We have approximately a $1.5 million operation. We're kind of stuck at this level. Said a lot of your videos, growth sucks cash. That's kind of where we're at.

Yeah, we just had a morning meeting. Got them all on the road. So awesome. Yeah, this one looks good, man. So if everyone shows up right now, how many guys are there?

I think there's 24.

And then if like, is there usually 16 or so that show up? Is that kind of like the goal, 16, 18, like rolling right now?

I'll have to ask Derek. Okay, he's, uh, in charge of the operations. I got a board in here, see, it shows everybody on it so I can come in and then see who didn't show up.

Awesome.

Well, we can head inside.

There's a great shop space you got though.

It is, it's, it's Big. We only have the front part.

I love it.

This is Jody.

Jody.

Absolutely. Thanks for letting us.

My name is Jody. Jody Smith, and I'm the owner of Southern Landscapes Property Management. I don't want to be the smartest guy. I want people smarter than me. You know, we want as much help as we can get.

Hi, how you doing?

Hi, my name is Todd Anduzzi. I'm one of the members of this team to try to help with efficiency.

Kind of a business consultant we've got with—

Oh, awesome.

And you guys both work at the fire department, right?

Yeah, yeah, we worked yesterday. You know, we both been in the fire service for over 20 years. You get a good group of guys who work together, there's nothing better. And that's what— I mean, we have 4 or 5 firemen that work for us here. We try to carry over that culture of, you know, when it comes down to it, you have to do the work, but it's attitudes.

I hear 100 hours between the two, 240 hours, 240 hours every 2 weeks.

Well, that's there, and then plus—

wait, you do 240 there every 2 weeks, 120 hours a week over there each. Yeah, yeah, dude, are you married? Oh my word.

One of the benefits of starting a business as a side gig is that you still have your employment and your 9 to 5, and you can make money even if something bad happens to the business. However, as the business grows, many times you'll have to choose between one or the other to be able to focus on the business.

Oh man, we got a candle.

We had a camera!

That was for you.

Let's go!

We got a fancy schmancy setup. This place is clean. Is it always this clean? I'm good. Hey.

That's Wayne. He's our mechanic.

Hey Wayne, good to meet you, man.

Nice to meet you.

Great work out there. I love the one with the seat tied up.

That's Red. He's our sales side. Yeah, sales. Jody and I are in there.

Cool. Hockey?

Oh yeah.

You?

Oh, you!

Where are you from originally?

Well, I'm from Florida. It doesn't really make much sense, but this is really the boss's office, right?

This is my wife's office.

She handles office side of things.

Cool.

And then she has an assistant. Is that the second office person?

Ramona.

She's up here.

Okay. Oh wow, this is like the king's room.

Make the ladies happy.

And that's one of my main goals. I want to get my wife out a little bit more, right? Because there's weeks where she's like, you know, we're getting pretty light on the, you You know, the bills, the payroll. Once you add all that up, yeah, that's a lot of money. It would be great to have that, that nest egg of a big chunk of money sitting there where she doesn't know worries.

So let me get the two cents on this. So you had a previous business partner that split up a year ago and that, that ended poorly.

Yeah, not very good.

You felt like you need to just move on. And so you guys split assets, split customers, everything. So Ramona, How long has she been here?

She's been here, well, since we split.

So, yeah, February 1st is when we officially started this company.

Okay. And she come over with that? Like, was she from there? Okay.

But you had to get out.

Like, supposedly it was just kind of things that were being done that you didn't agree with.

The main reason for the split, you know, it was a partnership. But the other part, from my understanding, went out and bid jobs and took the down payment and never put it in the books. So after the split, there's these people that are like, hey, are y'all ever going to come do this work and blah, blah, blah? I've already paid a $100,000 down payment. There's no history. There's no anything showing it. Come to find out they had made the check out to that partner specifically. So, you know, there were good reasons for the split.

And you knew all of that stuff and then came in once you split off?

Well, no, I mean, I was with that other company too.

Oh wow.

Yeah.

Mercy goodness. You took the office person and— All right, all right. I'm tracking. And when you split it, was it based on service area or basically like maintenance and projects?

I would say maintenance and projects. Yeah.

Okay.

And then just the debt that I had to—

So basically it was really splitting debt and then splitting customers. And then did you get equipment with that kind of—

I would say more debt and equipment than customers.

So of the the debt that was there, did you guys split in half?

Well, it was 60/40. He was 60, I was 40. You know, I took the 40% of what debt we had and he took 60%.

And what was that 40%? It was $100,000 and something. Okay.

Thereabouts. Yeah, roughly, roughly $100,000.

Cool.

I've just been chipping it away.

So, yep.

Because I tell Adam, I tell everybody else, when you leave here in the afternoon, you don't have to think about this place. When I leave, she's telling me numbers at home, you know, so I want to be able to, hey, let's get on a plane, me and you, and let's just go somewhere for the weekend. That's what I want to get to.

Like, we have a pretty good thing going, and we've got a great group of guys. We've weeded out some of the bad apples we had, but I mean, we're working our little hearts out. We want to get everything on the right track, get things set up how it needs to be, and that's kind of how this year's been— separating from the old, starting new, having things set up so we can grow.

When you split off, were you already like in the wings ready to roll, or was it a matter of you split off and it was like, okay, I can't handle this, I need to bring an operations person in?

Yeah, I think we were already at the capacity that I needed help. Like, you know, even like getting Derek on board, because when we're at the fire station, you know, there's nobody— we have the office ladies, but got it, they're not managing the crews and all that. So that's when we brought Derek on to—

I like the fire department is very chain of command, and we're kind of set up like very military, very chain of command. They have an issue, they need to go straight to Derek, not come to him or me.

So like at the meeting this morning, who talked?

Derek.

Okay.

Because we're not— we're only here every— maybe every third day we're here.

Okay, so Derek really is the one holding the fort down, but I would assume usually you can rest over there.

You never know.

Some days we come in and you've had a good night's rest. Other, other days, yeah, yeah, you really haven't had any.

You work 24/48s through the fire department. The 24 hours that you're there, you You know, it's not like you're working, working for 24 hours. Yes, you are sometimes.

Sometimes you're not.

I think for me, just doing it so long, I'm just used to it because I've been doing the fire department for 27 years. So once you get older and more time, you got family, you got kids, you're going into a burning building, you've got those thoughts in your head of, I'm not young anymore.

How much longer do you both want to be doing that for the pension's sake?

I've got another 4 years.

Got it.

Okay.

I don't want to just throw that away.

Yeah, no, totally.

It's a great pension.

Yeah, but if you help us get this going, we're going to quit next year.

I would like to be the business owner but not, you know, doing the day-to-day operations and kind of going out and networking and all that stuff and basically not be tied down to two jobs and retire from the fire department. That's why I want to take it to the next level.

How does that look with Derek and then you? Because like Derek's operations of maintenance which is the vast majority of the revenue. But then you are also director of operations.

I mean, Jody and I kind of run everything together. My title is director of operations, but we kind of tag team pretty much everything.

It's a little bit concerning to me just how many people are at the top of this organization in terms of management. I understand a lot of them are part-timers, but it could potentially cause a lot of overlapping of roles and confusion of what exactly everyone's responsible for.

So from a sales perspective, perspective? Who's going out and seeing the projects, going out and seeing contracts, meeting property managers? Who's that? Is that mostly two more firemen?

One does our commercial maintenance sales, and we've got another guy that does our install projects.

And is that designer full-time or just like on a part-time basis when needed?

He's full-time, but he's like us, so he's like— he's at the fire station.

Okay, got it. Okay, man, it's tough for me to wrap my head around.

Okay, all right, actually, I don't know. I don't know if I want to say this or not, but it actually helps better because if I had to hire somebody full-time in that position, the pay would be—

Yeah, I mean, that's what a lot of these guys think is that we're all rich or Jody's rich. It was like, as we've grown, he's making less money than he was making.

Sometimes when you're growing really fast, it's a wise thing to stop for 6 or 12 months and just make it more efficient. That is, cut out waste and team members, customer services that are not making enough money.

So, I mean, we've talked about that before.

Before.

Like, we could probably drop down a couple crews, keep our most profitable properties, and he can make more money. But the goal is to grow it and increase revenue for everybody. This was a transition we did for a lot of different reasons, but we went from over 300 customers, majority residential, started adding the commercial properties, cut out all the residential. I don't know, it's just a lot easier to maintain warehouses versus a high-end property. And we went from over 300 properties to roughly 100 properties, and we're making more money. But it's— it is slower growth. I mean, we talk about it, we were talking about it yesterday.

You lose one of those, then it's a bigger chunk that you're losing.

You took your top 3 customers out of the $1.4 million, how much is that?

You'd have Mirror Lake, Fairfield—

half of it?

Yeah, I mean, one of them's $15,000 a month, another one's $10,000 a month, another one's $8,000 a month.

Okay, so, okay, all right, so more like 40%.

Okay, so they're big.

That's my bigger concern. That's, that's why I see what happened with commercial. So we just came from a place in Ontario. 67% of his business evaporated in one day, dropped about $500,000 in revenue.

No sense in having a million-dollar business if you spend $950,000 to get there. Like, to me, that's not a great business, not very sustainable.

So that, that's just something to be wary of in terms of just a liability perspective when it comes to commercial.

It happened in October. We lost $8,000 a month property.

And they ended up going with Brightview, and then, you know, right.

So you are competing with Brightview? Okay. All right.

So my biggest goal, which I have numerous, but I want to beat Brightview. I mean, it's a long shot, and we've taken a lot of properties from Brightview and all the big boys. So that's the goal. I'd like to stay commercial and, you know, compete with them. I know it's going to be hard, but it's hard, but it's not hard to do just this little bit much more better than what they do.

In terms of the commercial, since that's making 90% of the revenue, new. How many new leads are coming in every week, or is it like you're going out doing the networking and they come in occasionally, like once a week, once every 2 weeks? What's that flow look like?

It's not flowing pretty good, and I don't know if it's just that time of year or what, but normally this is when we get the commercial properties, is right January, February is when we try to make a big push to get those. I would say it's not like a regular weekly thing that we'd get a lead.

Let's just say an average of 1 a week, maybe?

Maybe. I mean, we're courting probably about 4 or 5 different people right now, but it's slow. And then right now there's— it's not pressing for them because they're like, yeah, you know, things aren't growing.

I haven't been seeing a lot of new properties come in, a few here and there. I don't see a lot of jumps forward between that and having the people to be able to run more trucks. So right now we have 6 maintenance crews crews. If we had 2 more trucks and 2 more drivers and crews, you know, I feel like we could get more work.

When leads come in, I know it's a different process commercial, but like what percentage of those do you typically end up closing?

Probably half. Yeah, probably half. I tell the companies, I say we're a large small business. We are. We're competing with them for a lot of these properties, but I mean, you can call and talk to Jody or myself You know, you call us for an emergency, we're going to handle it that day. We take over properties all the time from your big lawn care companies that are nationwide, and they, I mean, the first thing they tell us is, yeah, I mean, they're not responsive, they're not attentive to their small little needs. And there will always be some that we won't be able to get that are maybe just worried about the bottom line and want the cheap price, but some places do take a little more pride, and it's easy to get those properties. It's not hard to outshine the big guys as far as quality, responsiveness, just being good people.

You wouldn't happen to have a balance sheet, would you? Do you have one? If not, it's totally fine. I have a pretty good understanding of, like, the debt breakdown and stuff like that.

We worked on your 3-year strategic plan.

This is a language I can speak.

All right.

This is stressful. We have less than 2 weeks worth of cash flow on hand. Like this to me is a big, big problem. $50,000 in the bank on $1.8 million business. Since I literally have a location that does that, I just in my brain, I'm literally thinking about all the things that have come up in the past 24 months that literally could have sunk this. That is literally a matter of like payment processor not going through correctly. That is a matter of an insurance claim. That is a matter of insurance premium going up. There's one truck getting in an accident. When you actually bring the gravity as leaders to let the business get to a place that is that fragile at this size is not being a good steward of what we've been given as just leaders. Right. And if I was just talking to you one-on-one, that's how I would say we have a $1.8 million. Like that's something to be proud of. And there's something there.

Cash is like oxygen. Without it, the business is going to die. Ultimately, when you build a $1.8 million business and you have a family depending on you, your employees and their families depending on you, you can't be running the business so skinny on cash.

Do you have a line of credit though as a backstop?

We do not, no.

Okay, have you tried to look into get one?

We talked about it.

Yeah, I would highly recommend it. Would— like, as much as like I want to be like, don't need debt, go forward, at $54,000 in the bank and you're doing $1.8 million, it's just a matter of like, yes, we can cycle through it quickly, but that would be a huge stress reliever. It's just knowing that if something crazy happens, that suck $30,000, $40,000, which in a $1.8 million business can go tomorrow. Right now when you quote unquote don't need it is when you want to go with the line of credit.

We had already talked about that, and it's just hard being in business for not even a year. Like, this coming up February will be a year, so that makes it hard. I mean, when I've tried to go out and get a line of credit, that's the first thing they say, well, you haven't even been in business for a year.

Even if you had to collateralize some of the equipment that's paid off as a way to just secure it, but you don't— you're not going to use it. The goal is like open it up so that way in the event of something crazy happening, you have something to fall back on, because that is literally less than 2 weeks of, of revenue in the bank account. I have a very similar size location, so like I know that can just disappear like that.

Is that location you have, is that like majority, uh, residential properties that you do?

Probably 95%.

95%.

Yeah. Is this a debate you all have had about residential versus commercial?

Oh yeah, we're throwing around the idea of doing more residential, doing more residential.

When I first started Augusta Lawn Care and just had a few employees, I also tried to go after commercial jobs. However, the big boys, the big competitors, they were able to outwork me with better trucks, better equipment, and more employees. I didn't have the manpower to be able to effectively compete on price. And a lot of times those commercial customers were much more price sensitive. Potentially they can make more profit by focusing on residential customers instead of commercial.

Like, what's your target hourly rate right now for the commercial work, for maintenance specifically? You're talking about man hours, or when you're doing an estimate, what are you multiplying the hours on site by, like the dollar amount?

Well, $60 for hours, a man hour.

Okay, $60 is the target. You're probably— if we actually had took a blended average, you're probably thinking what, $55?

Probably, yeah, $55.

Okay, that's what I'm looking at. Okay, cool.

And that's our goal, is not to make price necessarily the the final determining factor. It's like they want somebody they can rely on, they can trust, and good people. That's who everybody wants to be around.

In terms of the debate on residential, when it comes to that, yes, there's more phone calls. Trust me, we do it a lot. But you usually have a less price-sensitive customer, and so therefore we charge at least $80.

$80 per man hour?

At least. And a lot of them go for more, $90, $100. $1,500 per hour for residential because they see the value of the communication more than the commercial client that will drop you and go try Brightview for a year or two because the cost. And like, that's just a game we're not going to win in terms of price. It's so difficult to be lowest bidder. And so many of these bids, especially the big ones, go to lowest bidder first. So even if you lose the contract and then they find out how bad they are, it could be 2 or 3 years before they come back to you. So I'm not pushing to say, hey, you must go residential. But if you feel like you can only close 50% of the jobs and you're only charging $60 per hour, and really what you're actually hitting is $50 to $55, which is more in line with what I'm thinking based on the numbers, that's a hard business to make sense of financially. So it's really a matter of like, which lever do you think right now we can pull? Is it the price one? Like, can we raise prices? Or is it—

It's going to be a pretty big one because I haven't increased prices in years. Okay. And some of these properties I've had, you know, since the '90s, you know, some of these commercial properties.

Merciful heavens.

So I'm going to go out on a limb.

I'm going to go out on a limb and say some of your jobs, your man-hour rate's probably getting down to $45. Yeah. And if you haven't raised prices in the past 3 years, I'd be telling you to raise prices. Single one of our locations has not raised prices in the past 3 years. Because like the past 3 years, your base pay, let's just call it 2015, was what, $11 an hour, $10 an hour? Somewhere around there. And what's your starting wage now?

$15, $16.

Okay, so we've had wage inflation of 60%, but we haven't raised prices. So right now, that 60% of what you currently have, let's just call it, let's call it 30% of $893,000, it's $200,000 that otherwise would have been profit 10, 15 years ago. And everything else has gone up too. Fuel and everything else, right? All the profit from the business has been sucked into wage inflation.

If more than 50% of your gross revenue goes out the door to direct labor, which is people out in the field doing the work, I've never seen anyone be profitable. Why is that happening? It's a matter of usually either two things. Pricing is too low or labor is just super inefficient. Inefficient and they're not getting the work done fast enough.

If you say by raising prices we are going to lose a bunch of contracts because you have competition with Brightview, that's when you probably need to go more residential. And if that's why you haven't raised prices for 20, 30 years is because of that, and their competition, they just keep going lower and lower in price on you, and then, then it's like, okay, let's get out of that market because that's a losing game. Like, we don't have public money like they do. They will go into a market, they will throw money and lose tons of cash because they need to be sure next quarter on Wall Street, they say they grew by 10%.

Some of the things that, uh, that Mike was saying, I agree with 100%, but I didn't want to overstep my boundaries. I definitely want to— didn't want to kick him off his, uh, his groove, so I kind of held back. But everything he said, I 100% agreed with. I would just add things.

We don't have that luxury. We have $54,000 in the bank. Like, right now, at 60%— 60% of revenue is going to direct labor. Then we have another almost 20% going to indirect labor, which is office, estimators, your wages, etc. That business will never make money. Like, if labor is literally sucking 70% of the revenue, there's no room for profit. Yeah, 57% was direct labor and then another $293,000 indirect labor. I think most people, if they just looked at those numbers, like, the $293,000 indirect labor is where we need to target first. I'm not so convinced of that. Based on seeing the operation, because you need the person in the shop with this much equipment. You kind of need them. You need the part-time salesperson because you guys are both not involved as much. You need the operations person because again, you need a backup to you guys. When, when 70% or more of the revenue is going out to just wages, right? That means we got to cover rent, insurance, fuel, new trucks. Everything has to be covered with 30% or less of the revenue. And any business I've walked into that the direct labor is more than 50%, I have never seen them be profitable.

I was very nervous about the whole thing. As far as, yes, every company is going to have issues, pros and cons, problems.

Well, that's what I like about Mike is that he's really— you can tell, and I was telling him in there, like, you can tell he cares. That's, that's the winning ticket.

That was the only thing that made me nervous was him going, oh, you know, you need to shut the door close it down. You know, that's what I was afraid of.

But when I see 57%, I either see A, prices are too low, or B, inefficient labor. And so this is like where you attack it from either A, do we go for trying to raise prices by going to residential, or we raise prices over time to our commercial jobs? That's one, one lever. Or second lever is, is there inefficiencies in our current crew that we can somehow weed out? Typically there's less of those on a commercial site because you have less stop and go. But at $1.8 million, if you can make the labor 10% more efficient, you'll get $180,000 in extra profit. How can we take our current 24 guys and instead of going out and hiring to 26 and 27, how do we go from 24 to 20 and let natural attrition get rid of some of them but still be able to produce as if there's 26 or 27 of them? Can I use the whiteboard?

Oh yeah.

Oh man, let's go. So I thought this would be the perfect spot to add a pitch?

Is there anything you want to pitch in this one?

Not really. I think I'd just say thank you and like tell them to go to the links in the description to support. Yeah, but I need you to record it. I got it now.

Hey everyone, thanks so much for watching. We really appreciate it, and we are able to go do these turnarounds all around the country due to your support. So if you'd like to support us going and helping these business owners, go to the links in the description. All sorts of different services and products that help you grow your business. Also, if you want to turn around and be on the show, go to mikeandes.com/turnaround. It's completely free.

We come out to your place and try to help you turn the business around. Worked perfect. All right, let's do it.

Now we're happy. Let's go.

Okay, so crew lead, there's 6 of those, and then I'm assuming 3 underneath each of them. And then we have ops, which is Derek, which they all kind of report to. And then I'm just going to call call it you guys up here. So these guys are on salary. I would assume right now if you say, okay, you guys got to get done in 8 hours, do you know how much revenue a crew makes per day? Probably $800, $1,000.

Oh yeah, at least. I mean, I would say between $1,000 and $1,500.

If you look at the math, you'd probably have $1,000 to $1,200. It's probably at $1,200, something like that. Okay. It really comes down to you guys though, because right now you're saying, hey, you got to get back within 8 hours. I don't think in the current model you're able to switch to an actual P4P model where everything is based on budget hours and they get a percentage of labor revenue because it doesn't sound like you've broken that down granularly enough on the contracts for them to actually show up to a job site and like, we're making $200 of labor revenue on this job. However, what you could do is really focus on what's the revenue per crew and then compensate bonuses based upon that because what you You want is tension in these crews. Right now you have no tension. They all are fully aligned to making these jobs go as long as possible. So the crew leader right now gets salary.

Yeah.

Do they have any incentives?

No.

Okay, that, that's huge.

What motivation does the crew actually have to work harder every single day? We as business owners work crazy amounts of hours in order for the incentive of making more money. So why not give incentives to your team members so they also want to get the jobs done as efficiently as possible and make more money too.

Because I, I think we can eliminate a fourth man. I think that these guys can all increase by 15 to 20% if you just have the incentives aligned correctly. You already have base pay installed at certain levels, I assume.

For a top crew leader, you're looking at per hour $22 an hour.

Okay, and then for the crew, for the team guys down here, what are they typically per hour?

It's anywhere from Say 15 to 18 per hour.

Yeah, so I would be trying to get at least 10% of their wages, at least, at least. More like 25 if you can get there eventually in incentives. And you can simply say this because this is what hardworking people want to hear: we want to make it here that the harder you work, the more money you make. And right now, that's not how it works. It's just based upon who asked for a raise. And just be honest, like, these are the things that they know And no one talks about whoever asked for a raise. If I needed employees, guess what? They got it. If we didn't really need employees, they didn't get it.

That's not fair.

We've done a lot of that this past year, is weeding out the people who are just bad eggs. I think watching a lot of Mike's content, you know, we're focused not on hiring people with no skill, but hiring people with a good attitude. That makes all the difference in the world.

We're basically helping develop teams. A lot of that is psychology. Hiring people, building teams, because you don't hire for the bottom people. You don't hire for the people that you have to let go. You hire for the people that are going to take the business to the next level.

I can guarantee it's not fair how you're paying your guys right now. There are guys making twice as much profit for you that are making a dollar more per hour, or worse yet, a dollar less per hour because they didn't ask for a raise or whatever.

Your most loyal, most profitable employees are—

could potentially be making as a crew leader $22 and on the field $18, $4 more per hour, and yet producing 2 to 3 to 4, 5 times as much profit for the business. That makes no sense.

We've had this problem lately where people come in for interviews and then they never show up, or a couple of weeks and they show up. They're just not cut out for the kind of work. So a lot of people can't handle it. You can apply that to anything in life, really. Like, so yeah, maybe nobody will see it, but you could have done better. You could always do better because they don't think it's fair either.

And guess what? Out of 24 guys, they know the 5 guys they want to cut tomorrow. And you're like, fantastic, I'm going to put an incentive based upon how many crew members are on your team. So if there's less crew members, now all of a sudden the benchmarks for how much revenue is produced just went down for you to hit your bonuses. I guarantee you, guarantee you, you have crew leaders saying Hey, I want this guy axed. And don't worry, we will get all the jobs done. And then just put it out there for them to chase. Like, there's nothing for them to chase right now besides clocking more hours.

Most of the guys want to be here, and— but there is that human nature of, you know, I'm getting paid an hourly wage, so I'm going to drag my feet a little bit.

I look at these— each of these individual businesses, right? When you have someone on salary and they're directly managing 3 to 4 people every single day, And it's not like a lottery of who's working with who. These guys are running their own operation. And if you can make these 6 guys like always think about profitability, efficiency, getting their crew in and out, you can make this 20% more efficient like that. If when we switch residential to P2P strictly model, we're looking at between 25% and 30% increase in efficiency. And so that's why I was like, if we can't pull the price lever and we're not going to switch industries to go get that, we have to go after the efficiency. Lover. And I think this is where it sits. Let's go ahead and figure out— like, this would be the hard part, and this is probably where I'd lean on you a lot to help them with— is like, figure out the revenue per crew. Because if you can figure that out, you can say, okay, this crew is making us $300,000 per year, this crew is making us $250K per year, right? And you could say, well, that's based upon the contracts. Yes, it's based upon the contracts, but like, we have to look at these as individual subunits of the business. When you have a crew that's so governed like that, you need to look at them individually because you could very well have someone doing $300,000 and someone else doing $150,000. And that crew is literally costing the business the equivalent of two other crews' profits being drained away from the business. And then it's a matter of like, well, do we need to go raise their prices? But now you have the crew leader vouching for that and they will actually tell you like, there's no way we're going to be able to hit these numbers. Why? Because these two properties I've been doing for the past 4 years are so underpriced, we will never hit that. And that's information you need to know because now they start thinking like the way that you would if you were on the properties.

That's where you kind of separate manager and leader, because managers manage people, leaders develop people.

That'd be great.

It'd show that you're literally invested in their success. Goes a long way.

And that's the only way to like get more efficiency out of these guys because like I assume Every single week with 24 guys, someone's asking for a raise. And so it's a matter of, oh, you want a raise? Fantastic. Here's the benchmarks you need to make an extra couple bucks an hour. Like, since we instituted P4P, I have never had one person ask for a raise. And we don't talk about overtime because no one wants overtime and they're all getting in and out. And they, they also know which customers we need to raise prices on. I just have to ask them in a team meeting if I wanted to be like, hey, who should we—

this person and this person—

because they know when they show up there, they're like, Oh, we're not gonna make money on this.

Yeah, I mean, I'm a little bit not worried, but I guess intimidated by figuring all that out and doing it right, but excited too, because I think absolutely if they're incentivized to do more and then make more money, but then it's gonna be good for everybody. So they see all the numbers for what's coming in for that property.

If you want to think like an owner on the job site and actually think this way, they need two things. They need to be compensated like an owner. That's the incentive program. And then secondly, they need the information of an owner, and that is open book management. Because if you all went on the— and did crew lead for one month, I guarantee you'd be 50% more efficient than these guys. The reason is because you have two things: you're paid like an owner, 100% commission, and then you're basically— you have all the information. You know there's only a week and a half worth of revenue in the bank. And yes, right now, if they saw $54,000 was sitting in in your bank account, they'd be like, "Wow, they have a lot of money." Okay, let's break that down. That goes out in payroll every single pay period, right? They don't have complete information. Like this to me is a big, big problem.

We want to show you what things are, how it can improve, how you can make more money, you know. So if that scares them as far as the lack of money we have in the bank or if we have too much money in the bank and they think, well, you should be paying me a lot more money. I mean, I guess it's just not a right fit because I think that is definitely the way to, to go is opening up the books.

You know, we've been talking about it. I mean, I think that's the only way that's gonna increase the efficiency and to be able to get more leads and to add more, you know, properties to each crew is they have to see the numbers and want to be able to make more money. They've got to see all the numbers.

I get the benefits of it. I think Jody gets the benefit of it. We'll take casualties as we go.

It's a game. If you, if you really want to break it down for the crew, like, they'll get so much more involved. It's a game. Every single day, walk in the office, they see a crew, like the 6 crews, and how much revenue they're producing per crew. And they just know that they're getting a bonus based on every hour they worked last month based upon how much revenue they produce. And secondly, whoever wins at the end of the month, you make a big deal of it. You can get like those big UFC belts, have a presentation at the next team meeting. Now listen, your team meetings turn into this big celebration.

I love the game aspect, getting that game, and, man, visually, and having those guys compete against each other. As long as it's fair across the board, which you've made it a point to do that, love it. Love friendly competition.

We have to, in my opinion, open the books to the team.

I got a question. Do you let every one of your members know everything about your numbers?

100%.

They understand.

I try to get them to understand understand it.

My degrees are in accounting. I have a degree in management, a degree in accounting, a master's in accounting, a degree in psychology, and I'm actually working on my master's in psychology.

So I break it down as simply as possible.

So when you say you open up your books to your guys, you're showing them everything, just the margins?

You're not saying here's the utility?

Oh, I show them the, the profit and loss statement. I show them the balance sheet. I show them everything, and I try to explain every single line to them.

Um, the old But profit and loss doesn't show cash.

It shows efficiency.

And I do agree with that, you know, at a certain point.

Yeah.

So when you're saying open up the books and put all that out there, I don't disagree with that, but they're not going to understand a lot of that. I mean, your bottom line guy knows everything about your company?

Yeah.

How many people do you have? So my first location only had about 20, 25 people, but then like all All my employees, I don't know, 150.

So 150 can pull out and know exactly the percentages?

Yeah, like even the media team, they can get the profit.

So just out of curiosity, what are the goal—

what are your goals of your company?

You're 100% owner of your company?

Yeah.

What is your goal of your company?

Maximize profit and make sure that every single person on that team is able to get forward in their career, whether it be internally or moving on to something else. Because if you can get a crew leader to actually think about cutting out waste, making things more efficient and increasing revenue and understanding numbers, they suddenly become much more valuable when they move on from this job. And if you actually want them to move ahead in their career, you actually are willing for that to happen. You are training them for the next position. You are training them to be a general manager at some other facility. If you're not constantly making new locations an opportunity inside the business, ideally looks like we're going to be adding a lot more size of business, 2.5 $28 million, there will be opportunities inside the business. But we are literally training them to get a better job. Because I don't want them at $15 bucks an hour for 5 years pushing a lawnmower.

Well, when you're building teams and you're getting, you know, emotional intelligence and you're really developing people and more of a coach and not a manager, it's all psychology. Building a team may not always necessarily mean monetary gain. It's not always about money. Not everybody is working for money. They could be working for vacation, or working for retirement, or working for something like that. As long as they make a certain amount of money, they'll be happy. And that's not necessarily saying they're one of the bottom links. That could just be an understanding between the leadership and the employees.

Look, they're coming here for money. Let's all break this down and like the be very, very simple about the fact that we want to make this business profitable and they are coming for a paycheck. How do we know this? If we didn't pay their paycheck this night, they'd be gone.

That's the root of everything. You want to break it down, everybody wants to make more money, right?

I would say number one is going to be money. When you give a crew a bonus or something, they're very, very happy for that.

It's the bottom line. I tell you right now, I love Jody, he's a great man, but I wouldn't be here if it wasn't for the paycheck. He respects it and Jody respects honor.

All right, before you start hating on the coach here, just keep in mind the business isn't actually paying him anything. He's from what's called the SBDC, and it's a great resource because it's paid by the government. It's completely free to you as a business owner. Small Business Development Center. Look them up in your local area and potentially get some help for your small business.

It took me a long time to be comfortable with the fact that like we are in business to make money and you all come to work to make money.

So it's like maximize that, right?

And yes, there's, purpose and we have mission in the business and all the rest of it. None of that matters if we go out of business.

None of that matters if we don't have profit.

I happen to think that we had $540,000 in the bank, you will be able to do a lot more for the community. I think there's probably foundations and charities you'd like to give to, whether it be the fire department or local communities. Like, I think there's a lot more good that happens when you become profitable. And so let's just focus on profit. And so everyone gets distracted, like, well, what about this? And like service mix and route density He's like, make more money. And if you get aligned with the team, it's like, that's why we have the scoreboard. It's all money.

It's liberating.

We are able to say that to the team because guess what? We're thinking about numbers all day long. Like, let's just be open, honest. Like, we are here to make money and your employees, they will be happy when they get an extra $250 on their paycheck. And one way to really simplify profit sharing is here's a bunch of cash. If it's not going into your pocket, the business owner, or your pocket, the employee, that's waste. And every single thing that we are doing in this business that is not putting money in the pocket of the owner or in the employee is waste. Until those blades are turning, revenue is not being made.

You being at the gas station 4 times a day, that's waste.

And that's what gets cut. Everyone's like, well, you're making your guys work so much harder. No, it's the waste that gets cut. And that's why I can afford the bonuses. That's why I can afford the profit sharing.

That's why I can afford a $5,000 $1,000 bonus if we get our debt paid off.

Well, we have some work cut out to do.

When it comes to all the changes too, like, I default to violence.

Do it harsh.

Like, do it. Like, there's a way to do this over the next 6 months, next year, or is like within the next 48 hours we're going to determine how much revenue for crew, we're going to determine how much revenue per employee, we're going to We're going to create a scoreboard. We're going to create an incentive program around this, and we're going to get it done. We're going to open up the books, and we're going to make some mistakes, but take violence. Like, default to violence. I really do believe in 48 hours this thing gets turned around. Like, I've never said that before. Like, I really do believe that.

Hey man, how are you? Our crew leaders, we've moved them all to salary in an effort to really help curtail the overtime, which works. So we'll see how it goes over the summer. But, and I know like Mike was saying when he was here, you know, in a way to incentivize the guys somehow so they're incentivized to work harder and not necessarily hourly. I guess the one thing I wish I could get more help from on is the nitty-gritty of implementing a profit sharing aside from P4P. That's what, that's what I'm working on.

So you guys end up setting like, uh, getting that line of credit set up?

It's in process. We've been a little bit slow with that, but it's pretty much almost all done. You know, if we need it, it's there. I mean, we're good right now, but yeah, if, if, if it— something arises, then we'll have it. We've added 2 small commercial clients, so not much, but we adjusted some other people's roles. We promoted a different guy to lead our maintenance operations. It took the guy who was leading maintenance operations, cut his salary for less than half of what it was and made him a commissioned salesperson pumping out a lot of proposals. So very promising as far as a lot of stuff looks like it's about to fall. It'll probably really start falling the next couple weeks, I imagine, as the grass starts to pop up and people are going, oh crap, yeah, we do need to get this cut now. We went back, adjusted prices on every client, picked out 90% of them we're gonna adjust or increase their prices. I was waiting, we're actually gonna send all those emails out next week. I wanted to send it to him when, when things are growing. My, my thought process behind that is I'm going to wait till things are growing, they know they need me, so they just can't fire me and be like, it's winter, nothing's growing. Yeah, we're excited about that. I mean, Mike had— he brought a lot of great insight.

Did you guys end up going through and like opening up the books to your team and kind of like sharing the numbers?

Not a, a little bit, but not complete transparency all the way, no. I'd say we're trying to do that more with our upper level management, probably down to about crew leader level, and letting them know what things are costing and how much money is coming in, but not on a complete 100% transparency level. Not that we haven't decided not to do it, we just want to open the door slowly, I guess.

Southern Property Lawn Maintenance struggled with getting more laborers and making sure they could actually communicate with the team, and that leads me into the fourth L of the 4L framework. We've talked about how at every single stage of business, as you grow, you're going to hit constraints, bottlenecks, reasons why you can't keep growing the business, either a lack of liquidity, a lack of leads, a lack of labor. But the last of the 4L framework is leadership and being able to get mid-level managers in place that stay on the team, support the vision of the company, and lead the technicians. So let's go to J&L Landscaping. They do $1.7 million in annual revenue, but they struggle with leadership. The owner himself is struggling to be a great leader. They don't have any good leaders that are sticking around in the business because they're all leaving and the culture has turned toxic. Let's see if we can turn it around.

All of it doesn't matter. It doesn't matter what I've been doing. None of it matters. None of it's making a difference. None of it's moving the needle. It's just getting worse.

Today we're in Ohio visiting Luke with J&L Landscape.

I've described what What I've been through the last 3 years is trying to change the tires on a car while it's driving down the road. Everyone who works here is either going to get fired or quit. This is where all landscapers come to die.

Luke made $1.7 million in revenue last year.

These guys have a clue what I'm dealing with. No matter how much effort or time and money I throw at it, I'm still running into the same brick walls constantly.

But right now has more credit card debt than he has money in the bank. I get the impression like you almost want to quit.

Oh yeah, yeah, just completely burned out. My wife wants me to quit.

My brother, he used to work with me, tells me I should quit, and employees are leaving.

I don't enjoy managing people.

Employees are stealing from him.

I'm just not sure if it's worth it anymore. We had a zero-turn stolen yesterday.

Honestly, he wants to give up, and his wife is kind of losing faith in him.

This is hard to watch. Luke, can you do something? Like, is this even worth it?

It's really started to feel like it's, it's never going to turn around.

We don't make money. I don't trust them. I hate my job.

I don't want to come up to work, and they don't want to show up either.

It's never fun being told you're the problem.

I know I'm the problem.

This is the Business Turnaround Show. My name is Mike Andes, the founder of Augusta Lawn Care, where we have over 175 locations around the world. And I travel the country fixing struggling businesses. Let's assume for a moment that you don't have bad intentions and you want what's best for them. Why would we not tell the truth?

I have told him this. This has been an ongoing conversation. You're the reason I got high blood pressure.

We need to stop the poison in its tracks.

Wait, what if I am the poison?

Our goal is to give Luca strategy to turn around the business They do $1.7 million in annual revenue, but they struggle with leadership. The owner himself is struggling to be a great leader. They don't have any good leaders that are sticking around in the business because they're all leaving and the culture has turned toxic. see if we can turn it around. All of it doesn't matter. It doesn't matter what I've been doing. None of it matters. None of it's making a difference. None of it's moving the needle.

It's just getting worse. Today we're in Ohio visiting Luke with J and L landscape.

I've described what Good stuff. This is a great shop.

Thank you. Work right next to where I live.

Yeah, yeah, there you go. Well, that's good. There's good and bad, right?

Yeah, but I like it. It works out good for me. My kids get to come over and bring me lunch.

And you have 9 kids, right?

I have 9 kids. Yeah, 10 is due next month.

Oh my goodness.

Hi, my name is Luke Dickerson. I'm from Dayton, Ohio. I run J&L Lawn and Landscape. We currently have— changes all the time, but I think we currently have about 12 employees in the field. I have an office manager and I have a part-time shop guy, but our annual revenue is hovering right around $1.7 million.

The issue that he's actually facing right now is the reason why I tell most business owners to grow an $800,000, maybe to a million dollar business, because you can run it, or one general manager with one person in the office.

We have, we have a lot of AR right now. It's over $100,000. So if we can start collecting on some of that, which is like, that's why I hired an office manager to do stuff like that. That was her job, and she just wasn't doing a very good job of it.

And right now 1.7, he's requiring a mechanic, an operations manager, him as a salesperson, an office manager, etc. And it's just a harder entity structure to sustain.

We're in a huge transition right now, so there's only, there's only 2 people here currently who were here last year, really, at the beginning of the year.

Yeah, really? Okay, so, so most of them are new this, as of this year? Yes. I'm not against it. He's obviously been successful, but it's a fact of he's burning being burnt out because the size of businesses he has built demands that he work 14 hours a day.

I don't enjoy my business anymore. I used to love what I do. I still, I still love the, the idea of what I'm trying to do, but I kind of just wake up every morning and I just hate my job.

I always think about from the owner's perspective when we show up. It's like, okay, he was very humble to allow us to come, and that, that's pretty amazing. Like, I really respect that, and I'll probably establish that that someone would be grown this size, very established and well-known and connected, and be willing to publicly talk about like their lowest moment, right? Like this.

What we have right now, we could make something good out of what we got. We have a serious people problem and we're trying to turn that around. It's just, I right now I'm paying our landscape operation to exist. It's not making me any money, so I don't know how to turn it around.

We're trying to then somehow think that I'm gonna come help them in like a couple hours. Like, I don't take that lightly. First off, egotistical to think I can change 25 years' worth of pain and like, and like just flip it around. Secondly is there has to be something dramatic change. Is there a lot of customers unhappy just because of customer communication drops?

It's, it's getting worse. Yeah.

Yeah.

A lot of unhappy customers. And that's some of my angst is like my business was built on good customer service and I'm really getting discouraged with the emails saying your prices are going up, your quality is getting worse. But I just, I hate that there's unhappy customers. It's just the worst thing ever.

I was thinking about this morning is like This is not just like, oh, like we can do a couple little things, little tweaks to the business. Something is dramatically wrong if you, for 25 years you've been growing a business and you cannot step away from it for a day. There's something really wrong with the company. How long you been here at this space?

We've been on this lot for 2 years. We've been in that office since last May.

Okay. Oh wow. So this is actually pretty recent.

It's actually pretty recent.

Yes. And for a while we were, that's my shop next door.

Okay, so you were up, up top there?

Yes, and we were on my driveway for years playing Tetris with trucks. I, I don't enjoy managing people. I don't enjoy dealing with issues constantly. We're not meeting our goals that I'm setting for the company. No matter how hard I work at it or how hard I try, we're just not able to meet our goals. I'm just not sure if it's worth it anymore. I'm kind of looking for someone to tell me that it is and how to fix these issues.

I get the impression like you almost want to quit. Oh yeah, I know what it feels like.

Last year was Last year was total burnout for me, and I made the decision last year that I was not going to have another 2024. I made— I promised myself if I had to go through that again, I'm definitely done. My wife and my kids are my number one, and if the business is taking from that, then something's got to give. I had— I had tried to hire 4 different production managers and I made off— I interviewed dozens of people. I was spending so much time. I was running hundreds of dollars worth of ads to try to attract the right guy, and I made offers to all of them.

Those two guys went back to the other company.

Yeah, and they were just taking my offers. Yeah, they were just taking my offers and going back to their companies to get a raise. I was just, I was done. I was so over it. I was like, I am buried under the load over here, and balls are being dropped everywhere, and I hate my life. I just hate where I'm at right now.

I hate it.

I want out so bad, but I can't quit. I come into work and I hate it. I'm just putting out fires all the time. This is what I want. This is isn't what I imagined myself doing.

And I don't want to be the downer to always be like, okay, just get out of it. But he's always complaining, and I'm like, okay, why are you doing this? Why do you want to do that? Yeah, you said you want to run a business, but this is what it is. It's all the stress, all this frustration, right? Really, do you really want to keep doing this?

And I've been telling myself for years it's going to change, you know, I'm going to get better people, we're going to get better staff, we're going to be more efficient, we're going to be more profitable. And I mean, no matter how much effort or time and money I throw at it, I'm still running into the same brick walls constantly.

We got a Ventrac loan, we got a US Bank loan, we got truck loan, we've got another truck loan, we got two more other truck loans, we got a mini excavator, we got a Honda Civic loan, we got a Cash Flow Manager US Bank loan. Whopping $332,758 with $52,000 worth of credit card debt. In the bank right now, cash total including savings and checking, $50,000. Whoa, one credit card, $52,000.

And I think our numbers are okay. We actually are turning a decent amount of profit. Last year especially, we had a 19% EBITDA. But I guess, uh, I guess the biggest personal issue that I'm dealing with is just I've got complete and total burnout.

But realistically, even though on his P&L there's a whole bunch of profit, you look at his balance sheet and we're in a bad spot. We have hundreds of thousands of dollars of debt. We have credit card more credit card debt than we do have cash in the bank, and we have substantial amounts of loan.

We just got the mulch mule last year. This is our first spring with it.

Okay, nice.

That's a frustrating story in and of itself.

Really?

Yeah, just how long it took to get it, and it was supposed to increase our productivity by 30%, but we're slower this year than we were last year without it.

Really?

Yeah, we gotta fix that.

Why do you think that is?

Personnel. And I seem to be constantly attracting people who don't care. They don't care that, you know, they left something out in the rain and it got soaked. They don't care that they didn't lock up their truck at the end of the night and things get stolen. I don't understand that. It's just I don't relate to these guys at all. And the lack of being able to relate is— yeah, I don't know how to solve that.

Like, there's always 100 different things inside of a business that are going wrong, things that could be improved. It doesn't take a rocket genius to point out areas that could be improved or changed inside of a business. Anyone can do that. It's identifying what's the one thing that if fixed which would solve the other 80 problems inside the business, or a big portion of them. You know, we usually talk about the 4L framework, and it's like, hey, liquidity, and then if we get money, we turn them into leads, and we go advertise, and if we get a bunch of leads, we need more laborers, and we get more employees. And then we talk about leadership. Once you get enough employees, you need leadership, and then once you get leadership and overhead and an admin person, then you need more liquidity. And we talk about the cycle, and that's the 4L framework. But identifying where's the current constraint in the business and deploying all energy towards is the only way to fix it. The mechanic gentleman, you have to let him go last year or last month.

Yeah. And then, and then we just let our office manager go Friday.

Really? So who's in the office now? Is there a production manager?

Brian. That's it.

So emails, phone calls, he's just handling that?

Mostly me.

Okay. Okay.

That's insane. Brian, where are you going? Um, and actually he worked here when he was younger.

Oh really?

6 years ago for a short while.

Brian, how's it going? How's it going? I'm Mike.

Brian, nice to meet you.

Good to meet you, man. Thanks for keeping everything afloat. Of course. Anyone could have showed up here today and be like, yes, the business owner doesn't want to show up.

Employees are leaving.

He's firing everybody.

No one wants to be here. So there's so many areas of like where we could point out problems.

Like, what's the one thing? It's leadership. That's the constraint to the business. Unless the leadership changes here, this business will not grow. The reason it has not grown for 3 years and it's stuck at $1.7 million and the business owner doesn't want to show up every single day is because there is a lack of leadership.

He's not here. Really? Is he not here on purpose? Well, let's put two and two of that together. We had a zero-turn stolen yesterday, and he left it at a job site and somehow didn't realize that he did.

When all these ears aren't around, I'll tell you what I think.

Okay.

It's been a very interesting couple of weeks.

You know one of your crew leads?

Yeah.

The situation on that, the guy, we weren't even going to fire him. He's not here today. He sent us a picture of truck wires that are trailer wires and said they got cut. It's just stuff like that. We're not even— we weren't even going to let him go.

He left it 2 days ago at the job site. Yesterday morning came out here and told us that they had left it in the hoop because it wasn't working. Well, I checked all my security cameras. They never put it in the hoop. So then I— we have dash cams in the trucks. I checked his dash cam. So he left it at a large commercial property. So they went back to look for it yesterday, another crew did, and of course it was gone. I don't believe that someone snipped wire story.

I don't know.

Those wires were trailer wires. I know wires when I see them. Those were not truck wires unless someone wired his truck with trailer wire. We called his bluff yesterday.

Oh yeah, yeah.

I mean, how do you leave them— that— he left one of those, the 36s. How do you leave one of those at a job site, come all the way back to the shop, unload your stuff at the end of the day, and then the next morning think you left it over there when you actually left it at the job site? That's either a serious, like, lack of intelligence, or I don't know. I don't know what you call that.

But what I try to tell him is they don't think like we do. They don't care that it's a legal matter.

They don't care.

It bothers me that they don't care.

They're not going to care. They're never going to. These, no matter— I think they're great guys, but no matter what, they're not going to see things how me and him see them.

And we have another crew leader who didn't show up today because he's in court.

His crew that would usually— they are good to go. Without him still?

No.

And the thing is, is he told me, said, I take full responsibility for it and I'll help, you know, I'll help you replace it, whatever I have to do. He just had that conversation with me yesterday and then he doesn't show up today. He said they're in the middle of trying to figure all that out right now.

They're juggling.

Yeah. This is part of my frustration, is like I'm trying to have a 15-minute from circle to rollout, right? And no matter how hard I try, it just never happens.

This is where I think when the 4L framework, most of this is a leadership problem. There's labor problem, but— and there's liquidity problem. But those are downstream effects of the leadership. And that's why, like, as the company grows, the role of the leader is much less seen in the finance. It's hard to see a good leader like, oh, I look at these financial statements, I see a good leader. That's hard to do that. But like, as a company scales, you have less and less leverage of doing more work. And so when I see someone working 17, 18 hours a day on manual tasks like answering the phone, doing emails, etc., and they're at this size, they've forgotten the fact that they have a higher leverage use of their time, which is work through other people.

And like I said, we have 2 guys who are still here who were here at the beginning of last year, and that's it. Yeah, everybody else is new. That's part of my stress is how do you train that many people that fast? I can't be watching bank accounts, running reports, managing dispatch, selling jobs, ordering product, looking at the numbers. I Like taking care of Mrs. Jones' gate that got left open and her dog got out, handling clients that are mad and upset and threatening to sue me and all kinds of stuff.

Are you doing sales and estimates at all?

Yeah, all of it.

At the size we are, I find myself constantly jumping back into that role because someone has to do it, and I can't expect one person to do 3 things, even though that's what I'm expecting of myself because it's what I've been doing, and that's why I'm so burned out. I'm just trying to do so much. I'm trying to be all things to all people. Things to all people and failing at all of it. I tried hiring a salesman, spent a lot of time with him, and he ended up taking an offer at another company that beat mine, and I was offering over $100 grand. So I just— yeah, everyone's offering a ton of money.

It's ridiculous because if he can do a good job, great, 100%, but if you can get everyone else to work from 80% to 90% and you have 12 people, that's 120% increase in output.

And in order from— in order for this group to— this business to grow, I have to grow. We've reached the limit of what I can do where I'm at.

And so you have to start focusing and thinking about how do I work through other people instead of how do I just do the work myself. And it's a very— it's a different mode to operate in from when you're going from a labor and grind hustle mode to now I need to be a leader. Very different. Like, your schedule should look different. The way that you approach people should look different in the business because you're thinking about how do I operate through the time of others.

So when he would address the crews, since I've known him, it's at this level. They don't comprehend this level. So when you go to the lower level of them, it's more like if he was to say it at a lower level, well, now he's calling them pretty much stupid.

I've been afraid to go to them and be like, hey guys, here's the problem, because I feel like they're not going to understand the problem. It's, it's above their pay grade, so to speak.

When I say it at a lower level, and this is why I've told him Luke, grow the business, I got this. Worry about that back there. Because since I've been here, and he's even said it and seen it, they take what I say a lot differently.

Yes, they respond to him way different than they do me. I have to create a layer between me and the crew because no matter what I do and what I say, there's a stigma that you're the boss. Like even if I'm gonna say something positive, just approaching them, you can tell they're like, oh crap, it's the boss. You know, it's like, I mean, Brian can attest this, I don't yell, I don't scream, I don't chew people out.

Like when you're smaller and you're a solo operator out in the field doing most of the work yourself, it's mostly physical stress. Then as you get employees, there's stress of being a manager. Now he's stepping into— as you grow a larger organization above a million, like you're looking at the stress of the psychological. 1.7 is the exact size my first location was at when like I decided to franchise. No. Well, We decided to franchise, but that's when I decided like everything had to change. Oh, I remember like, it's a very critical point. Yeah, just like same kind of breaking points in so many areas. Every single day there's something wrong happening. And so as you grow the business, the type of stress changes from physical stress to financial stress as you get employees and your margins get collapsed, and then eventually become psychological where what he's going through right now, you're working tons of hours every single day, there are employees walking off the job, unhappy customers, things are breaking down, and that can just get wearing down, especially after 25 years. The fact though that people close to him are telling him he wants to quit makes it really hard.

Yeah, just completely burned out. My wife wants me to quit. My brother who used to work with me tells me I should quit. I, I don't want to be a failure. I'm, I'm terrified of failure. I want, I want this to work. I know that it can. I just don't know how to reach that.

Yeah, well, the thing is, look, if you as the leader are broken and you don't want to be there every day, uh, your team knows that. And so if we can't fix that, why, like, why, why are we, why are we surprised when there's churn and we can't get anyone to work here that's really good to stay if the owner doesn't want to work there? Like, if the owner loses passion for the business, they should close up shop. I kind of get a lay of where, where everything's at. I understand it because I've had the mutiny. I've had the whole crew pull me into a meeting and say, uh, we're gonna— here are our list meet the demands, otherwise we're leaving. I had a general manager go start another business, pull the whole team with them. Like, I get it. So I get the problem. Now let's think about like, where are we going from here? If I was coming to you, Brian, and I was like, what needs to change? Your, your current thought is he kind of needs to step back from the team. Let me cook for a second. You need to pull in an admin person and a salesperson, your operations, and then he steps back from the frontline team. Is that your current thought process?

Yes.

Your thought process is that way because you feel anything he says to them will be taken incorrectly and wrong right now?

Yes, because it's been proven so far. Yes, but based off what I've been told and based off what I've seen.

And when did you move over here?

So I worked for him in like 2018, 2019.

Got it.

I said, man, you're making a lot of money. So I opened my own company. I scaled it to about $700,000 and then the big dog around there that buys all the little guys gave me an offer I couldn't pass up on. He's just a legit guy, and that's why I'm willing to swing for him.

Yeah. And I can attest to when I let Jason go last year, when the crew got here, I updated them on what happened. I didn't divulge into the reasons why. I just said, you know, Jason is no longer here. I don't need to get into details, but it's like it doesn't matter what I'm saying. They're not hearing me.

And assuming— let's assume for a moment that you don't have bad intentions and you want what's best for them, why would we not tell the truth? In order to keep the lies from spreading.

I guess it's because I feel like the truth is going to be misconstrued anyway.

It will be misconstrued if they don't trust you, and right now they don't trust you.

No, they don't.

If you don't have trust of the team, no matter what you do, pay for performance will not work. Open book management will not work. Hiring more people and a different office person, a different— will not work if they don't trust you. Yeah, you don't trust them, by the way. That's why the, that's why the cameras went in the trucks.

Well, I have told you that, that I, that trust is a big issue. Even like with some of the guys, I don't trust them to do this, this, and this. And I say, I have told him this, this has been an ongoing conversation. Yes, because I do. I will take— we have a guy that's been here 3 weeks, I promoted him today. He would not do that.

And we're— we have new working interviews coming in all the time. Um, the guy who's being promoted to crew leader, who's driving this truck today has only been with us for a week.

He's—

and he's already being promoted crew lead. So not because he's not good, but simply because we have no better option.

Somebody just called me, so I will call him.

Geo, I don't need my phone.

No, come here. I need you.

Where's landscapers? Geo is officially a foreman. Letting everybody know that Geo is a foreman today. I will take a swing on these guys. I will show them things. If they're showing me things, I will risk whatever. And until they prove me, like, wrong, like, hey, they're not to be trusted, I'm going to.

I think that in the short term, you getting away from the crew would be a really easy way to make things go better in the short term. Yeah, because Brian— they, they like Brian more. The reason is because they know he doesn't have equity in the business. In their mind, Brian will advocate for what's best for the employee. He's going to advocate what's best for the business. There's way, one way in my opinion, to break that, that thought process, and that is to prove them wrong. Brian is certainly a great yin to his yang. The challenging part is Brian has also been here for 2 weeks, and he has more credibility baked in because he's not the owner.

Any other employee, you are inherently on the same team when you join an organization where there's an adversarial relationship between owner and employee.

And so when you have open book management, profit sharing, P2P, these are things that are meant to get the owner and the employee on the same page.

You just, you create the notion that like, oh, it is all of us versus that guy in the back that doesn't know what he's talking about.

Yeah, 100%.

Right. That is one way to deal with it. And I think actually in the short term, if you disappeared for a second and let him just kind of cook, especially the next few weeks, it would be better.

But eventually he's going to move on.

He wants to move on. And then there's going to have to be a, there's going to be another leadership vacuum and we're going to have more problems. And it's like the leader has to be leading. And if there is no No trust going to the leader, no one will be led.

They have asked questions, like obviously, as you know, they've asked.

And I was, I was really hoping that the people I had here in the office, or Brian, or Brandon in the shop, I was really hoping that we were a team and that we were pulling for the same things, only to find out that in my absence it was totally different.

Hey everyone, I just want to interrupt.

It's Mike Andes here. I'm in the studio, and I just want to say a quick thank you to Luke for even allowing us to show up. I know there's gonna be a lot of people in the comments that will bash him, but the ability for a business owner like himself to allow us to come be vulnerable and share so that everyone here can learn. I just want to say a big thank you to him and to his team. Also, the whole problem of having team members not show up every spring and having a new team constantly churning through the business is extremely hard to build any successful business. And that's why actually I created this book called The Off Season. And if you don't want to buy on Amazon, which is totally fine, you can go to MikeAndes.com/workshop and get it completely free in video training format.

But one, one paragraph in here I want to read to you. It says, off-seasons will keep you poor.

The goal must be to fix the off-season, to get steady leads all winter long. By doing that, you'll keep your laborers through the winter.

When spring comes, they'll be ready, trained, and experienced, not newbies. These employees have prepared to handle the busy season.

And that's what J&L is struggling with.

This constant turnover every single spring will kill your business.

We're still in the process of organizing this. My recent fleet manager who works up at the shop, he's not there anymore. We fired him last month. Yeah, I really want it to feel like a team, not like it's me doing all the work and I'm dragging them along, you know. And they don't want to feel that way either. Nobody wants to be in a company like that. You find out a lot about people after they leave, and I found out after he left that there was things things he was saying to the crew, and it just wasn't a good culture fit anymore. Unfortunately, that's been our story for 3 years.

Same thing with the office person last week.

Yeah, Joy, our office manager, we would talk about doing things like we should probably get cameras in the trucks because we don't know what these guys are doing. Or we'll have clients that call up and say, my lawn never got cut, and yet it was recorded that it got cut. Did it or didn't it? How are we going to know, you know? So if we have cameras in the trucks, well, we'll just go back to that day and see, oh, there we are, we're parked right in front of Mrs. Jones' We did in fact cut her grass. Here's the proof. Yeah, I'm afraid of giving people information that could be not helpful. Like, sometimes giving people— arming people with information just allows them to wreak havoc, you know? So you have to be careful who you give information to because they, they could use it the wrong way. And she was all about it to me, but when the guys would come in and they were talking to her about it and I wasn't here, she's like, yeah, Luke's putting cameras in the trucks because he wants to spy on you. And it's like, no, I don't sit here in my office all day watching truck cams while drinking Kool-Aid. You know, like, that's not what I'm doing. And yet that's the image they have, is that Luke's sitting in here watching me all day to catch me doing something. I'm not trying to catch you doing something wrong. I just happen to notice someone's not wearing seat belts. You know, you kind of tend to not want to go back there. You know, you've been burned before and it's painful. You don't want to go back to where it's painful. It's our natural reaction, right?

We want to retreat from pain. Everybody's valued in a company, but as an office person, office manager, do office manager stuff. We found touch tons of stuff she was neglecting recently, the past 72 hours.

I needed to promote somebody and I wanted to promote organically from within, so I felt like my office manager's husband was the best bet for production manager, so I promoted him. But I ended up having to let him go May of last year, and it's my office manager's husband, so you can imagine that was, that was rough.

But her priority was to be out there and turn everybody against being a bug in their ear. And I told him from the jump of being here, when you fired her husband, that you should have never hired. When you fired her husband, she should have walked with him. You should not ever hire family. It just doesn't work. That's why my family that owns companies, I don't work for them.

I can't.

It just doesn't mesh.

And some of my best employees from a work— from a work perspective though have been family members. I'm one of 13 kids, so I have a ton of brothers.

Yes, and that's how he views things, and I tell him the same thing every day. They were good for certain parts. The guy that was in here, he's a culture destruction.

Is it just burnout or are there structural issues with the business? He's been doing it for 20+ years, like that's in and of itself exhausting, especially when you can't keep people and if you've been burned a bunch by managers. So I know all the feelings. I've built like the first location, I— it was at 1.7 the year I left, so I know exactly where he's at.

It feels like it's constantly a struggle between you either have guys who are excellent technicians but terrible for the culture or people who are great for the culture but terrible technicians. Can't find the unicorns that are both.

Here, I'll go prescriptive mode. I rarely do this in a turnaround. I'm usually most of the listening, I try to guide you. So this is my prescription. Okay. You stand up in front of them and have extreme ownership and say, the reason this business isn't doing good financially, here's the numbers and people aren't staying.

It's my fault.

It's my fault.

Yes, it is.

And empty your chambers. If you allow them to do that on you, you now have down the road after time has gone on, the ability to hold them accountable hold the standards that you, you anticipate for them to have. Like, the reason there's no extreme ownership of your team is because you're not taking extreme ownership of the business. Like, that's just facts. Like, extreme ownership of the leadership position is, why did I have an admin person that allowed— I allowed them to be a cancer? Why didn't I fire them sooner?

I should have.

These are the things we know as leaders. And the only reason they don't take extreme ownership of their, their actions out in the field is because we don't, as leaders, take actions at the top. They are simply a byproduct of the leadership that they have. And the reason people leave businesses is because of bad managers. It's not because the pay— your pay is decent, it's good. Yeah, it's comparable.

Yeah, we're very competitive.

Good trucks, good equipment, nice shop space, been around for a long time. There's, there's stability in the position. It is simply a function of they do not want to work for Luke.

Yeah, yeah.

So then it just becomes—

well, I've said, I've said from the beginning, there's something about me that they're reacting to, and I know, right?

So we can fix it. Leadership is a skill. I keep going back to that, but man, it's a tough one to learn, and it's It's an infinite game when it comes to leadership because I stink at certain elements. I'm just not good at leadership. And that's the constraint to many of our growth. And that's why so often at times when you look at the 4L framework, we talk about liquidity, we talk about getting more leads, we talk about getting more employees, but like ultimately, if you fix leadership, it has a reverse effect. Like your labors get more efficient. All of a sudden you do better marketing 'cause you have great leadership and like people want to work for you and there's lots of word of mouth. Leads come in fast.

Liquidity, you get better margins because people are more efficient out in the field.

So leadership is the stem of almost every single issue, whether you're one employee, whether you have no employees and you have a family. Like, if he can just get his wife on board, like, I can't even imagine like having someone that for 15 years doesn't really want you to be in the business. You're pouring yourself into it every single day, and the person that you love the most is actively wanting you to leave that place. And so I would say, this is my two cents, and you will have evidence to prove me wrong within a year if you did this. I would take the cameras out of the trucks.

If I knew I could count on my team, yes, I would not do it.

Right, so we have to take the first step in building a trusting relationship because they do not trust you and you don't trust them, and they have evidence.

So would you think I should just shut the whole camera thing down right now?

I would use that as a good faith measure to show that you trust them.

So how do we handle a situation when it arises? There's a traffic accident and we don't know what happened. And it's just their word versus the person who— the other person who's involved.

If you want them to trust you, you will have to trust them. And yes, there will be times there's an accident and you don't get it on camera. So my location has been in business for 11 years now. We had one accident, cost us $6,000. We don't have any dash cams on trucks. There's 15 trucks. And the reason for that is because they trust that I'm going to back them up. And if they make— if they damage something, I— they will tell me. And it's only— it That's always been the way that way it's been where there has been mutinies. And in that culture environment, we don't make money. I don't trust them. I hate my job.

I don't want to come to work and they don't want to show up either. And if you don't want to show up to work, they don't want to either.

Yeah.

Like if you don't love what you're doing and you lost the passion for J&L, you've lost it. The number one thing for a founder and entrepreneur to do is stay in love with the business, because if you're not in love with it, no one below you who's going to love it. No one else is gonna have the passion, and that purpose statement will not be fulfilled.

How do I stay in love with it when my wife hates it?

The same way that you get your employees to fall in love with it, and that is align the incentives of the business with theirs. It says 20% profit, but like, if you take out his wages, let's call it 12% profit margin business. When people start thinking about quitting, even when they're profitable like that, what they're comparing it against is, is this really worth working 70 hours a week for. You got a family of 10 people you're responsible for. You're not spending any time with them. You've been doing this for 25 years, so you feel very much like stuck. Like, if I haven't been able to figure out in 25 years, what's gonna change?

She has an idea in her mind about what an ideal life looks like.

Is it 9 to 5? Is it, hey, I just need to be able to text you and you respond?

She said before, she's like, I just wish you could come home at a somewhat reasonable time. Whether it's 5:30, whether it's 6:00. And when you're home, you're home. My problem is when I'm home, the wheels are still turning. That's, you know, every day I'm a professional firefighter. It's like, how do I solve this problem? How do I solve that problem? And I don't have bandwidth to be thinking about Michael's, you know, math problems. You know, I just, I need more bandwidth for that, you know.

I'm usually against whoever says to quit, because like, especially someone like your spouse or your brother or someone close to you, especially because his brother worked with him in the past. To tell you to quit is like a gut punch. You've been doing this for 25 years. This is all he knows. He's been doing it since he was 14. And you can tell them that, like, hey guys, the business struggling financially. Like, just say these words: we have more credit card debt than we do have money in the bank.

Yeah, I guess I've always been afraid if I expose stuff like that, that's going to make them feel like their job's at jeopardy.

It is.

Because if you quit, they are losing their job.

You like to be truthful. That's the truth.

That is the truth.

And you don't say it with spite. You don't say like, hey guys, I'm proving you're wrong.

Well, it's just a matter of like, I feel like they're like, if I tell them that, they're going to feel like it's their— like I'm telling them it's their fault because they're not getting enough.

No, that's why you start off with, this is all my fault. I've messed up. I've allowed things in my past, my family, past employees that burnt me to affect the way I lead. And I'm sorry. I don't think they've ever heard those words come out of your mouth?

No.

And this is the next part is like, once you've done that, then you go to your wife because you're not giving her what she wants, which is not the business. It is your time. And the reason you can't give her that time is because you don't trust anyone here to run it the way you would if you were here.

Well, it's because I had office managers literally stealing money.

Right. But if we take ownership of it, it's like we allowed that to happen. We create an environment where—

I didn't know it was happening, but yes, I allowed it to happen.

Unintentionally, we created an environment that it was in their best interest to do those things instead of support the business. Yeah, yeah.

I really don't want them to feel like this meeting's about, hey guys, we're going under, just wanted to give you a heads up.

Like, it's—

that's not what it is at all. It's, uh, I have a— I have a clear path in my head about how we can go up, but I'm the bottleneck and I need help and I'm asking for your help.

Every single negative thing that comes out, whether it's true or not, doesn't matter. You want to thank them. Everyone should be there. There should be No lines, there should be no walls. We're gonna open up the organization or communication flows freely and we don't have silos of poison happening where we don't trust that when they're out there, stuff's not going on. We don't know if they're not answering the phone because they're on lunch break, if they're at a job, we don't trust.

There's no trust. And so the only way to fix that is to do something radical and you will get one or two people that will need to leave.

I think you've actually gotten most of the cancers out, but the problem is even once a cancer is cut out, it can still spread throughout the body if it's got the bloodstream. And right now it's in the bloodstream. So you're just gonna create other cancers that are gonna pop up in the business because no one trusts you.

I'm so afraid that no matter what I say, it's gonna be taken wrong. And so then I'm afraid to say anything, and, and then my silence is taken as, he doesn't care about me, he doesn't notice my work, it doesn't matter if I do a good job, he doesn't care. It's like, it's literally because I'm afraid to say anything because I'm afraid however, whatever I, however I say it, it's gonna be taken wrong, and I don't know how to fix fix that?

I think most of the problem is between his ears, honestly. Um, so this one's gonna be fun.

You know, Francis, this is, this is, this is what I'm good at. You know, there's some people, it's like they're really good at sports.

I'm not great, you know, I'm small, not gonna work. Some people are good at music.

I can't, I'm not really that good, I can't really sing.

I, I think I could help him. And so like, this is, this is one of those cool things. Like, I woke up this morning all jazzed up and ready to go because it's like, this is what I was— I'm made for. And like, you know, maybe in 15 years that'll be different in my life, but like, currently, like, everything is optimized for helping people. Like, like, and like, I'm glad we have the money and the infrastructure to be able to make it happen. I'm glad we have the team to be able to capture it to help other people. But like, this is why I exist currently. And the radical thing that, in my opinion, needs to happen is you humble yourself, you take extreme ownership of the problems inside the business and you don't address them as the problem. They are not the problem. And the way that you phrase that meeting is extremely important. It's not like, hey, I want to fix the business. I think I'm the problem, guys. Unload it on me. Like, tell me what's up. It's not the way to do it.

That'll be an act.

They'll see the hard act from a mile away.

Yeah.

Yes.

We're going to be humble about it. We're going to thank them for their feedback. We're going to ask them that over the next week that you're going to create a plan based upon their feedback to make changes in the business. And the reason because we're going to align incentives. The reason we're doing this, I want a place where you guys want to come and work, that people don't come here and then leave after a couple weeks.

I don't want you guys have to deal with drama when you show up.

I want you guys to trust me. I, I don't blame you guys for not trusting me because I've been putting cameras in your trucks. I've been down your throat about a bunch of stuff.

I'm going to take the—

I'm going to take the cameras out. I trust you guys to do what's right. And that's just the first step, is the meeting. Then it's a week of you actually going through the feedback. I, I just can't stress this enough. If that meeting goes poorly, you lose your whole team. This is why no one does. It's a very high-risk move. Yes, very high risk. And so the way that meeting goes hinges on how you react to the feedback. How this meeting goes, it's either it's going to go horrible, like literally the entire team leaves. Like, it's such a high-risk move when you take off your belt, take off any facade that you've built up for years, and you let your team say whatever they want. You are massively vulnerable, and this whole team could be gone. In one week. It could also, in one week, be 50% more efficient, and a place where an admin person comes in and thrives. Any poison that's being injected from past employees completely gets repelled. Everyone wanting the entrepreneur and the business owner to win. Everyone wanting the entrepreneur to get home, be with his family, and support his wife. That's what you need in a team. The same way that he cares about making them win, he needs them to want him to win. And right now that is not happening.

That is a big factor in all of this because of what his beliefs are. Everybody here knows Luke's beliefs within him.

Touch on that, personal beliefs. Yeah, what are you referring to?

So, okay, the thing is that we know with Luke is it has been a persona that he brings them over here as far as who he hires, how they look, uh, how their hair is.

Okay, so let's just say it the way it is because I've been accused of the same thing. You— they think he discriminates 1,000%.

Like, I feel like I've already been so like cautious about what I what I say and do because I'm afraid I'm going to be misinterpreted or misunderstood or accused, whether it's true or not. And maybe that's some of my building the shell, building the defense.

Example, give me an example. Like, is it like, hey, should I do X, Y, and Z, or what?

No, so I'll give you a straight-up example. When I hired Gio, Gio is African American. There was a huge spiel by guys that if this was in Luke Luke's control, he would have never hired him, that it was based off his color. Even the guys when I got here, like day 2 or 3, they're like, Luke put you in a position of power with those tattoos.

And I was like, I mean, see, to me that's proving to them that it's like I have a preference about tattoos, you know, just like I have a preference that you don't let your hair, you know, look all like bed hair every morning, you know. I have a preference, but I'm not gonna micromanage that.

Yes, I grew up in the same way, in the same style, in the same place as these guys. He did not.

I've had to compromise a lot on what I think is— so I've been described as an obsessive idealist. I know I can't force people into my mold. I feel like there's constant battle lines being drawn where they just— but it goes back to the whole, they don't care about this company, they don't care about the image, so why would they care what they wear? You know, we wear uniform pants because guys were coming in with holes and they'd wear the same pair of pants for a week, they're stained, and I mean, I had one guy who was zip tying his pants together with zip ties and holding them up with a trimmer line belt. Like, it just— we looked like homeless guys.

I mean, but from my point of view, is at least the guy still— my point of view on a personal level, I'm never— we haven't discussed this part because I'm not going to bring my personal beliefs here because mine are not in line with his. And that's okay, he can believe what he wants, I'm gonna believe what I want. Some, some of the guys, they can't afford the same things that I can't. I'm not going to knock them. Some of these guys, I do— I'm against smelling like marijuana when you show up. I'm against smoking on job sites. I'm against smoking in trucks that are $100,000 that you— I mean, technically they're paying for because they're doing the work, but you get the gist of it.

But I'm—

they are never going to know in a negative notation that I think these things. I'm just going to say, hey, it's company policy to not do these things.

And but no matter how much I stress that, it's not moving the needle. They don't care. And it's easy for me to have the defense of like, that's the problem, they don't care. So my mode of operation has been to then put the pressure back on the guys because in my mind I know if we were hitting these times, I know we'd be profitable. And I know the profit that we're bringing in would more than offset the debts that we have from, you know, just finding ourselves in a spot where it's like, oh, it's payroll week and we don't have the money. So now we're going to have to dip into the line of credit just to make payroll, which is fine because we'll make it up next week. Well, next week we find ourselves back in the same boat again and again and again.

I need them to trust you and to love this brand. Everything we're talking about is a downstream effect of that cause. It's the only root problem. Right now we have a lot of gap. We're behind on work. How high are these people? If you get a team that's pulling in the same direction, you will double productivity. Double.

Yeah.

Especially because they're not on P4P now.

Like, you could double efficiency.

Lunch breaks get cut.

They immediately get on time. Like, There's so much juice to squeeze from just them trusting you. So I did this originally. My business was like $1.4, $1.6 at the time. We were still going up and we weren't making money. And so I had anonymous peer reviews. They all did peer reviews on each other and I was included on it. Who said they do that? We took all the reviews. I had a whole page of all the negative stuff and I spent 3 hours with my operations person going through every single one. And that was painful. I was crying. It was emotional. I knew there was a lot of things my past I was allowing to surface up from family, religion, etc. And ultimately, if that purpose statement doesn't, doesn't require someone to look a certain way, act a certain way, be a certain way, I don't care. It will take a level of humility that is currently not in the organization, and that starts at the top.

So I did one-on-one meetings with everybody here when I got here. I pulled everyone one-on-one and I gave them a few questions. I said, I want to know what your What you're not liking and what your problems are and how can I fix them? Every, pretty much every one of them said, one, Luke is not a man of his word.

And it's like, I hope I can fix it, you know, because I still kind of feel like, can I fix this? Like, is this something I can fix, you know, for my company, for my wife, people I work with, for my own sake? I do want to fix this bad, in a big way.

And they're also saying he micromanages. He tries to father Not like, hey, you know, you need to make better choices outside of work. To a sense, he does, but he tries to micromanage.

So as we're gonna discover today as we talk, so people skills are not my strong point. I'm not a people person, apparently, so I've been told.

Who told you that? Pretty much everybody.

Okay, okay. I've been described as the nicest dick boss they've ever worked for. So this is the current crew we have now. I mean, most of them I don't really know that well. They're new. We have Just since Brian's been here, we've let 4 people go.

What we've noticed, even in the morning meetings, if you saw the morning meeting with just me today and not him, it's a totally different mentality. The guys are more into it. The couple that I've done where he's in here, totally different mentality.

Just their body language, they were just like, this is a complete waste of time. Why are we doing this? This is stupid. And I had to call those guys out separately. I brought them in the office and I'm just like, you know, we're trying to make a team here. You know, and you're totally communicating that this is a complete waste of time. It's like, do you not want to be on the team? Because if so, just, you know, there's the door. I'm not making you be here, you know.

Even today I had to tell them, I don't know if you heard it, but as they were talking I said, shut up. Like, you guys are— and it's only when it's him. If I'm talking, they're like, okay, like they'll listen.

Yeah, they relate to him because he's not the boss. I guess Jonathan's not here today either, is he? Yeah, yeah, he's normally an exercise guy. Alright guys, get on circle. Alright, Chris, let's take it out. Say something you love about landscaping.

You can make a lot of money. Mowing sod. Buying stripes is nice.

Pretty much have to, if he is speaking, I have to go back through every person and and say, "Hey, he meant it this way." Or they're automatically, like if we sent him out today, tomorrow, and I didn't go out and he just talked, you can even probably tell their efficiency in the morning is going to be different because they're sitting there talking about what happened, they're contemplating choices and things of that nature.

I've been a believer in building trust over time. I give you this task, you succeed, I trust you with more. You succeed at that, I trust you with more. And then you take on more and more, and the more you're able to take on, the more I will trust you. And the longer we're at this, the more you've shown a pattern of faithfulness, then I'm going to continue to trust you. I don't know why they're so intimidated by me. I guess it's just because I'm the boss. It doesn't matter what I say. I can't approach them and them take it well. I've even done— I've done infield training with guys where I go with them, and it's from my perspective, it goes great. Like, we had fun, we joked, I, you know, I pointed out a couple things that could be better on the job sites, and at the end of the day, high five, you're doing great, keep up the good work. 2 weeks later they quit.

What did I do?

What did I say? You know, like, I don't—

I do believe that the leadership is the constraint of the company. We've identified that. Now we're going to fix it. And to do that, we need to be humble, listen to the team. We're going to have to actually apologize for cutting people off, actually apologize for coming across condescending because you do, like, a lot. I'll be honest.

Wow.

The way you talk to the guys comes across very condescending. Just when you're giving basic instruction.

Wow.

And it is in part just like you give your opinion before asking a question, you cut them off, you roll your eyes back a little bit like this, and it just— they just feel like less than.

Wow.

These are little things. Yeah.

I mean, I'm genuinely shocked.

What I tell you, what you do when you get to a job site, you never, you never say anything positive. It is always what is going wrong. Well, they do something good.

After you do that thumbs up, but they don't hear the good.

All they hear is criticism.

After you do that thumbs up, 10 minutes later, It's something that's going wrong. Hey, how fast did you do? Oh, that's not fast enough. And to a sense, some of the things that he says, not out of being malicious, who he is, they do come across wrong. Now, okay, and that's why I wanted, and we agree, that there should be the gate, because everything he says, I get what he's saying, and I do not think he's being malicious at all. I do not think he's doing it to be a bad person.

Like, there's so many little aspects that can make you feel, to your team, that you are disconnected from them. And whether it be saying a compliment and then putting "but" after it, like if I say, "Hey, you did a really great job on that edging, but..." As soon as I say "but," I just disqualified everything that was said before that.

I could just replace the word "but" with "and" and we'd be okay. Or just don't say the negative part.

Yeah, I know a big problem, and you, I don't know, tell me straight if you feel this way, but I know a big, going back to how I was raised, my dad was way quicker to jump on what we did wrong than what we did right. I didn't get the "attaboys" growing up. It was a "you have to perform or else." And I know, I know that because my dad's this way. When you say something condescending, that's not what you meant. I didn't mean it in a condescending way, but it's how I came across anyway, and I have to own that. And that's not fun because my intentions were right, my actions were communicating something else. And that's frustrating.

Okay, so I'm watching the turnaround with you, and this leadership problem that we're seeing inside the business is common with many home service businesses as they scale from $1 million to $3 million in annual revenue. And it's one of the 4 constraints that every home service business faces, which is leadership. And it's very easy to point fingers at the economy, our politicians, or your employees, or the labor market and all this, but ultimately every single business stops growing because the leader stops growing. And so if you need my help to come out to your business like I did here for J&L, I'd love to come out. It's completely free because of the support of the community at HomeWorks, Augusta Nation, as well as Home Service Web Design. I'm able to fly out completely free and help you in your business just like I am here with Luke. So go to MikeAndes.com/turnaround, go to the link links in the description and to be able to support this and get the message out. Our goal is to make home service business owners rich. All right, back to the episode.

I feel like if he did leave, he'd feel like forever, I'm just a failure and I didn't make it work. And his dad was very entrepreneurial, but he didn't— he's never complimented Luke on anything. He says his business has got his heart and it's bad.

And is that like from a religious side of things too?

Yeah, being poor is like somehow you're closer to God. So yeah, and I think a lot of it stems back from his past and his dad.

Okay.

Just thoughts, mindsets.

Two days ago on Monday, I told a guy, you're doing an awesome job. He said, I've been here two months and you're the first person to say that.

I've said it a lot, like, that number one there, to enrich lives through continuous improvement. Whether you're doing that here or doing somewhere else, I don't care. I just want everyone who comes here to be better off because they were here. Like, maybe your life's dream is to party in your basement playing video games for the rest of your life. I don't care. Whatever you want to do is fine. I just want you to be successful here.

Yeah, so that's what what you say in that meeting. What you just said there is what you say. I don't say the 'I don't care' part because to them that's their life. That is important to them.

Yeah, yeah. I say I don't care because I don't want them to think like I'm trying to make them live a certain way outside of work.

So instead of saying I don't care, I support that.

Well, there's certain lifestyles I don't support, and I'm not going to lie about that.

So that's where you cross personal and business.

Yes, but I would never tell them that, but I do believe that.

Here's my question: do you want them to hit their goals?

Yes. Okay, what if their goals is that they play more video games, then that's, that's their personal life choice.

Support them. Like, there's, there's people that like, they like music. I don't care about music, dude.

I don't know a single artist. I'm more on movies. Like, I want you to get your goals, and I'd love to know what those goals are.

But if them trusting me is me caring about what they have going on in their personal life, their personal goals, I'm sorry, I may have forgotten what your personal goals are.

It's not about knowing what they are. It's about them knowing that if they shared those with you, that I would care. You would care, and they can trust you enough to even tell you.

I struggle to communicate that to them, obviously, because they feel like I'm the guy who just shows up and wants to criticize. And it's like, deep down, I do believe my heart's motive is— my criticism is coming from a place of, I sincerely want you to grow in your skills. I want you— I want you to be good at this. I want that client to come out and tell you what a great job you're doing.

I think you're miss— like, understanding what is trying to be said. Can I say something that will help with this and help you understand? Peter has been here 5 years, right? I told him more about Peter after being here 2 weeks than I knew— than he knew about Peter in 5 years. Peter's been working here since the first time I was here before I even opened my company. I told him more about Peter with knowing Peter for a few hours compared to 5 years.

And I've asked these guys this question, but they don't give me a response because they don't trust you. They don't trust me.

It all reverts back to one thing.

All we're talking about, every single thing, there's no trust in the organization.

Yeah, and I guess it's because I hold myself to such a high standard that when someone does something right, I almost don't notice it because it's expected of you. Like, I expect guys to show up on time, but if they're late, it's like, this is becoming a problem, we need to address this. But I tend to not address them being on time because like, well, that's what's expected of you. And I don't even know how to address that without sounding cheesy or weird, like, hey, you're here today, man, you know. And I, because I feel like what they're going to hear when I say that is, I'm always here. You know, why are you praising me for being here? I'm always here. You know, I'm so afraid that no matter what I say, it's going to be taken wrong.

Your wife wants you to win.

She just doesn't.

She just has no evidence for the past several years.

Right.

She wants you to win. But she sees that the bottleneck is the way you raise your kids. Your dad and the way he raised— like, obviously there's been the way that he raised you caused some trouble. Trouble.

Yeah.

Like, my grandpa is probably very much like your dad, and it has trickled down through our family like crazy. And there's a very hardcore religious and bringing up ideologies. There's no way he could ever have a woman wear pants in front of him without calling her out and saying horrible things about her.

I have a feeling I know what that's— yeah, I, I grew up in that world.

And so, like, we can't allow that to impact the way we're leading.

I try not to. Like, obviously you can't deny your personal moral standings, but you can't impose those upon other people either. It's been a fine line to have to walk running a business, pulling people into the business who don't share your morals, don't share your beliefs, and yet all still have a cohesive team where everyone's pulling together for the same thing.

But when I look at the purpose statement, none of that statement aligns with personal values or morals. All of those things can be accomplished with people that are very different in than you, believe very differently than you. Like the way that you were managed as a kid, you're reflecting on them. Like the ability for someone to say like, good job, you crushed it. And like that trust factor and be proud of what you've built here, that stings. And like it's coming over in the team. Like in my opinion, you are Santa Claus to this business. You only talk positive things. You should be the one handing out bonuses at team meetings. The one giving promotions, he's the one that takes the scapegoat, he's the one that tells the crew this is not right, this is wrong, this is wrong.

They're all looking to use the negative because you keep dishing it out.

I've been the only one to dish it out. There is no one else.

Let him do it. So in my opinion, having him be the bad guy and you the good guy is very good.

Well, Brian's been so good for me in that way because he is super blunt and that's what I'm used to is blunt. So when he's blunt with me, he helps me to see— he's willing to say things to me that other people would never say. And when he says it, then I get it. Whereas someone might hear something, be offended at how I said it, and then walk out because I was offensive. He's just gonna look at me and be like, "Dude, did you hear what you just said?" You know, and I'm gonna be like, "Oh, did I say that?" Yeah, and I think a lot of it stems back from his past and his dad and just thoughts, mindsets that—

and we're so I don't know, we're so assuming good of people in general. Like, people come in, like, you know, I don't know, like, um, with a hangover, you know, they're throwing up on the Monday morning, and we're just like, huh, I wonder what's going on. Yeah, they're like, guys, he's having a hangover.

We're not used to—

like, we grew up conservative Christian, we're not used to thinking of people doing that kind of stuff, you know. So it's been a lot of people pulling things because they can. Yeah, because they know we're not going to catch it. Okay, so it's kind of good to have someone like Brian here to catch what these guys are doing. Yeah, we're not catching it.

From, from your perspective, you like Brian, but he's more skeptical. He's been here a little bit in the past.

Seems like he's a good opposite of what Luke is. Okay, he does seem like he's a good complementary, like, counterpart, which is good.

And I don't want people to come in here and walk on eggshells like, who, who's next? No, it's like, no, no, no, no, no, it's not who's next. Just, you know, don't do anything worth firing. And, and even— and I think there's a stigma, and I don't know how to fix this, but, um, I've even heard people say that, relay back to me me what an employee said in a situation like, oh, Luke is so gonna fire me. You obviously don't know me that well, you know. I don't, I don't just jump on you the minute you make a mistake and fire you, even though that's maybe, that's what I've communicated. We talked till 9 o'clock last night about this, about the guy who lost the mower. It's like, I'm not gonna just fire him.

He naturally quit on his own. I just gave him the opportunity 2 hours ago for me to pick him up. He was supposed to send me his address right when we got off the phone, he blocked my number because my messages are no longer going through. So there's your answer on that one.

Yeah, it's, it's, it's, you know, it's that times 100. And I, I don't, I don't know. I, it's really started to feel like it's, it's never going to turn around. And I'm not going to not trust you the moment you make a mistake, even though somehow that's what I've communicated. As soon as they screw up, like, like this issue with the stolen mower— this isn't the first mistake he's made, but it's like, I I wasn't ready to axe him over it. I wanted to work through it with him. I wanted this to be a growing process for him, however we were gonna approach it. You know, but instead he chose to quit, which is really discouraging. What do you think, Bryan? Why do you think he quit?

Why do I think he quit? Because he doesn't wanna be accountable for a $5,000 bill. First off, we'll start with that.

But we never even told him that he was gonna be responsible for it.

But these guys know you and they know what's gonna come out of that. He already knows. I don't even have to be in my position.

That's literally never happened in the history of this company. Why do they feel that way? I've never, I've never made anybody pay for a wrecked truck. I've never made anybody pay for a stolen blower. I've never done that. And the only time I have is when they voluntarily came to me and said, um, I dumped two brand new wheelbarrows.

What you just said is why they don't trust you. He brought up a point and you immediately defended it.

What did I just tell you the past week? Stop explaining yourself to me. Stop trying to defend. I've told him this all— haven't I said it the past 2 weeks?

I guess I'm just trying to understand.

I tell him—

I'm trying to understand why they feel that way when it's— where's that coming from?

So say that instead of defending. So instead of saying, "That's never happened before," but say, "Hey, okay, why do you feel like that? Like, I'm curious as to why you feel like that." We had a guy wreck a truck this past winter.

He drove it— we think he fell asleep at the wheel. We don't know. I never even had a chance to address it with the employee. Before I could even walk through how we're gonna bring this up or talk to him about it or anything, he quit. I wasn't prepared to fire him. I wanted to work with him.

But the inclination is, anything negative is brought up to you, you defend and you go against. That's why they don't feel like you're on the same team, because you go against immediately instead of being curious, listening, wondering, okay, how do you see it that way? Like, and if it's from him who's on your team and is fully supportive supportive of you. When he gives feedback, I'm not— I don't need to defend. I'm curious as to why they feel that way, and I need to make changes.

Well, it's like I'm confused because my MO in the past is I haven't fired people fast enough.

So if you're confused, the only way to understand that is to ask.

That's what I was just doing.

No, no, you were defending. You're saying this has never happened before in the history of the company.

You're defending everything. You do it all. You do that all the time. Me and you've talked about this. Without this around, we have had the same conversation.

Conversation.

That every time I say something, you— Lazarus, whatever— you defend what was done at that time. Or the guys do this, you defend about something like, well, uh, for the past 7 years I've done this, this, and it's been correct, or whatever. It's always like a blowback.

It's always Luke's right there.

Both of you are having two guns shoot at the same time and smack in the middle. I know that he wants to help, but some of the stuff that you've said, I know that he's been told for 10, 15 years, right? And maybe just hearing it from somebody that's a different caliber, you know, opens the— yeah, opens the eyeballs and things of that nature. And I just hope he follows along.

Well, he's gonna have to. Yeah, yeah, because, uh, everybody's been trying to tell him that, right?

You know, there's no reason that me and him are here till 10 o'clock every single night talking about the same stuff. Yeah, like, you got to do something. Yeah. You can't just run in circles every day.

I would say this first off. It feels like I'm like, we're both like shooting at you. That's not the objective. We want to win. And we are Team Luke. So one thing I would recommend is when someone even has a problem, instead of giving them a solution, ask a question. Instead of telling him what to do at the job, say, what do you think's next to happen at the job?

How would he even know?

So then he would ask you, he'd say, so what should I do next? What should be the— Tell him. "Right." Instead of you just jumping in and immediately saying your thoughts and opinions and coming across as someone who just breathes down their neck and tells them what to do. Versus, "I asked my boss what his opinion is and he gave it to me." Now you're a resource. You're not a dictator. I would say like, you want people to come to their own conclusions. You don't wanna have to tell them what to do. So when he says, "Hey, X, Y, and Z," and the immediate, "Well, this has not happened in the past. We've never done that before." Like, you're defending. Instead of question, why do you feel that way? Oh, they feel that way because of X, Y, and Z. Then we get to the X, Y, and Z that we can solve.

Ooh, this is like so much like rethinking through how I say everything.

They're capable. They can do their job. Let's assume for a moment, suspend reality and think that they actually know what they're doing out there and they know how to do landscaping, know how to do lawn care. I want them to come to the conclusion that I already know in my head is correct. So I'm just going to guide them to that conclusion. I'm going to ask certain questions to get them to exactly say the exact same thing I want them to say. Then at 5 o'clock when the job's going over, they know what to do. 'Cause you reinforce the fact that they think with their thought, they have original thought, they run it by you or they ask for feedback. You're like, yes, that's good. And they say, eventually they'll be like, well, how could it be better? And then you can give your opinion.

But until then, like you have not been asked.

Like it's very difficult and it is a tough pill to swallow when you realize the lack that you have has caused problems for the business, for your family, for your employees. That is humbling. But then it's a matter of what do you do about it? Like, are we going to keep staying at the size of this? Are we keep beating our head against the wall? Are you keep working 80 hours a week? Like, it's not sustainable. You're going to lose your marriage. You're going to lose your family.

You're going to lose team members. You're going to lose a lot.

And recognizing the issue is only the first step. Then it's like, what actions are you going to take? Are you going to be humble enough? Are you going to listen? Are you going to change your behavior. And that is not easy after you've done something for 25 years the same way. You come across fabricated. And that's why, like, when you take— when you get the bullet, you take the vest off and you let the bullets hit. And like, it's not a bad thing to cry in front of your team. It's not like it's okay that the fact that you have all these stresses and it's overloading you, because guess what? They feel the same way in their own life. And maybe they don't have the magnitude of all the stresses and people that they have to take. But to them, they also feel overwhelmed and they have to show up because they're also flawed human beings. And so this is the time, the way you talk to a team member to gain their trust. It's not the fact that like, I think everyone here wants to get better. I think everyone here wants to get to the next level in their career. Like, that doesn't matter.

Like, everyone has stuff in your life. And I want when you show up to this workplace, you feel supported. And when you show up here, there's not more drama to add to your day. And when you leave here, you don't have to hear a bunch of drama and gossip, but you actually care about the business. I care about you.

You care about your team members.

That's what I want.

And it's not happening happening right now.

And so what do I do to fix that?

It's going to start with me. And I've made a bunch of mistakes. And it's because of the way I was raised, is because all these stresses in my life. And I'm sorry, I messed up. And I need to hear from you all what I can do better to be a better leader. I genuinely believe you have so much good intention and like passion for the business, passion for your family, passion for the team. I believe all of that. There's just characteristics you picked up as a leader that are pushing and repelling your team away.

Oh, yeah.

And the reason that you look to family as people that trust you and that you can— are great workers, it's because they know what those look like and they've seen them and they can whitewash them. They can put away with it.

Yeah, because they know where it comes from.

Exactly.

Yeah. And it's the reason I tolerate my brother's shortcomings too, is because I know where they come from.

Exactly. You're like, I'll give them some more grace. So what we're going to ask from the team is a little bit of grace while we figure this out. Yeah, because we're a flawed human being that's trying to figure out life.

I see it in my brothers. So if I see it in them, for sure it's in me too. We're all cut from the same cloth, all fell from the same tree. So if I see it in them, I know I got it in myself. I would have liked to think that I've taken steps to mitigate those negative character traits of self-defense and putting up the wall and interrupting. I guess I still didn't realize how much I was doing that either. I didn't even know. I don't even know I'm doing it. It's one of the biggest reasons, honestly, that I don't want to quit, because I know if I quit, I'm giving up up on the very opportunity for the very— the best thing to bring out my character deficiencies is my company.

Hey, entrepreneurship is the best self-improvement plan you'll ever have.

And that's why I want to keep going with this, because I want— I want continuous improvement. Yeah, I want to improve.

And the fact that you've hit 1.7 and stalled there for 3 years says there's a constraint, and that constraint is you. What's cool is you can fix it. So like, I'm giving you literally 2 things to do: meeting with the team.

Yep, which I'm all about.

One week of listening, absorbing, thanking people for their criticisms, and trying to take action on it.

So I have one maybe stupid question.

Yeah.

What if none of them say anything because it's already been driven enough?

Great. So we have already some bullets in the chamber that we know exist.

So then he would address those publicly?

You unleash them.

Okay.

Say, well, in the one-on-ones, here's a couple of things that were brought up. And you, you You do it as if you were one of them.

Yeah.

Would it be helpful for me to present it as like a, hey guys, I know things are said all the time.

No, no, no. That's—

I just did what he said not to do.

I don't trust you when you go out these doors. And it's like, usually when we leave here, I'm like, hey, these things on your website, do these things inside your team, your compensation model, do these things from a loan and debt perspective. That's not what we're talking about. We're talking about like very nebulous soft skills. It will take years to figure out. I think if you did that really purposely for a week and you ask people, hey, if I cut you off, I actually want you to tell me shut up. So one of the guys in August Nation, he had this problem. He walked around $10 bills in his pocket. He said, every time I cut you off, I need you to tell me, I'm gonna give you $10. He said the first day he lost $200.

Wow.

Yo, real quick.

Oh, yo. Real quick figure it out.

Do that in your meeting.

Hey guys, one of the things I'm working on this week—

that's a great idea.

I'm trying to remember that. I'm gonna be rich, I'm telling you, I'm telling you. So that's like one thing, and then you ask for another. Like, hey, what did you notice this week? Like, it's something I can improve. But I guess it's very good. But like, those are the little things that like— it's not easy, it's not tangible numbers and digits. You're not gonna go to a training or mastermind and learn this stuff, but your team will tell you if you listen.

I did the follow-up call with Luke, and things are the same if not worse.

So I tried doing the meeting that Mike suggested. It went about like I expected it would. I got zero feedback, like none. It was just— we're just running into the same old, same old nonsense. Guys are coming in every day asking for pay advances because they're broke and can't afford anything and they got bills to pay. And so I'm trying to handle these advances and trying to learn payroll and I got behind on some truck payments. So I'm paying— it's like I'm trying to— I haven't touched my company's record, like financials, in over a month because I just— I haven't had any bandwidth for inputting receipts or running P&Ls or anything. So I have no idea where we're at with all that. Our company efficiency is pretty awful right now. And Brian just found out Sunday that he's got stage 3 cancer.

Really?

Yeah. He just starts chemo next week.

Man, I wish the best for him. That's horrible.

Yeah, that's rough. So he's out of the picture. So I am— I'm managing everything by myself right now. Brian was doing a really good job with, like, rallying the crews and gaining their respect and, you know, telling them what to do and where to go in terms of, like, You know, have we turned things around? No. It's all the same stuff that I'm dealing with day after day. Burnout. I'm burned out. So I made sure that I was very open with them. I said, hey, you know, I'm human. I'm not perfect. I know there's things I do. I know there's things I say that rub you guys the wrong way or you wish was different about me. I want you guys— I want your constructive feedback. I won't defend myself. But it was just silence.

Nobody said anything.

It was kind of an awkward silence, honestly. And so I was like, really? Nobody has any way I can improve? Like, there's nothing I can do that's, you know, gonna, you know, no suggestions about how I can improve? And then one of the crew leads said, it'd be nice if you were more reachable when we need to get ahold of you. And I told him, I said, you know, as you know, it's spring and we just hired, or we just let our office manager go. So there's, you know, I am on the phone a lot and I apologize. I'll do what I can though. You know, that afternoon Brian had like every single person texting him saying like, what the heck is going on? Is J&L going out of business? You know, like they're not, they're not going to talk to me.

So most of them had their connection with Brian. So him leaving kind of probably— did they leave or what? Yeah. Yeah.

A lot, a lot left. So he lost an entire landscaping crew. Multiple team members, like 3 to 5 people. And sounds like a handful of like maintenance employees, like also either left or were fired.

Yeah.

Okay.

So what's he going to do?

Work his way out of it? Slowly hire? Like, I asked him, like, what's the plan here? And his plan, I think, is just to work harder.

Yeah, I'm doing all the billing, all the email. I'm answering and responding to 3 different company emails right now. Answering all the phone calls, doing all the sales, doing all the production management, daily dispatch. I'm working till 10, 11 o'clock every single night. I'm exhausted. It's not delivering measurable results. So it's like, what do I do now? Like, I'm just like, something's got to give because I can't. I just have my, my 10th child was just born 2 weeks ago. He's 2 weeks old today.

Congratulations.

I like, I've been trying to take home, take time to be home because my wife is, you know, she's not sleeping well at night because the baby keeps getting up all night. And I'm trying to be a dad and be a business owner, but I'm literally like getting up in the morning, eating breakfast, going to work, working till 9, 10, 11 o'clock at night, going home. Like, I'm not even seeing my kids, and my wife's just managing the home without me. And it sucks, and I want to fix it, but it's like, there's like, there's so— there's a minimal amount of stuff that has to happen at this company or it's not going to work. Money has to get in the bank. We have to make payroll. We have to get our jobs done.

Yeah, yeah, because it's like, how, how do you convince somebody to join the team when it's, when it's this level of stress? You need someone that's like an A-player like Brian, right, who's like willing to jump into the fire and like put it out with you.

Yeah, and Brian's now out of the picture, and so I'm back to the drawing board with that one. I'm supposed to have my brother— he's supposed to onboard next week. Um, he was a, he was a 2 years ago, he was one of our landscape crew leads. He was supposed to train directly under Brian, but now Brian's out of the picture. So I don't know how comfortable he's gonna be working under me directly because he is my brother and it gets funny with family. Yeah, but he's going to be well paid. He knows the, he knows the, the, he knows the quality expectations. He's like, he's an excellent landscaper, so that'll help. But he had— he suffers with people skills, so I don't know how good he's going to be at gaining the respect of the crews. We'll see. That was one area where Brian was doing really well. They respected him. And when he said jump, they jumped. So, um, I don't know. I guess we'll just see what happens.

Man, that's brutal. That's brutal. Like, obviously we just want the best for you. So, um, I'm trying to think. Yeah. Like, cause like, obviously it's like getting that company vision is like important even in, in times like this. Right.

Cause it's like, I know, but like, I've, I'll just be straight up honest. I've abandoned the whole company vision, mission, all that stuff because I— that's what— that's where I've been for the last 3 years, and pushing for that is not getting us anywhere because we're not achieving any of those goals. So time for a new vision. What is that vision? My vision was create— build a better team. Well, the building a better team thing is not gaining any traction either. I humbled myself before my crew. I opened myself up for criticism and got none.

Why?

Yeah. And did Brian open it up with like some—

Brian wasn't there. Brian was supposed to be there, but we kept— the only morning that week that Brian was even here for the morning meeting was a day that we already had a meeting set up with the Ohio Bureau of Workers' Comp to do a safety intervention meeting or whatever. So we had no time that morning to get it. And then I was supposed to do it the next day with him, and he wasn't here because of his his medical, whatever, health issues. And so by Friday, last Friday, I just decided I'm doing this with or without him. Like, I can't just keep prolonging this meeting waiting for him to be here for it. So I just went ahead and did it.

Yeah, yeah. So we, we just didn't have anyone to, like, open the floodgates, it sounds like. Brian wasn't there for the meeting and it fell flat. So yeah, when I asked him, I was like, so did anyone, like, did anyone bring anything up? One thing was brought up and it was just like He did a great job taking it in and then just still provided a reason for why that wasn't being met, that expectation wasn't being met.

I did have one of my employees who's my— he's my new fleet guy. I did have him in here yesterday and I brought the thing up again about last Friday's meeting and I said, you know, now that it's just you, you're here, you were part of that meeting. He said, yeah. I said, is there not anything that you can give me, like something I can work on, something I can improve? Said, well, you were raised really different than the rest of us. You— your upbringing was, was so different than what most of these guys relate to that you just don't relate to them and they don't relate to you. I said, okay. And he said, that makes it hard for them to— that makes it hard for them to respect you because they feel like you don't relate to them. How can I, how can I help that? What can I do to fix that? And he said, I don't know. I said, well, I appreciate the feedback, but what— how can I take action on that? He said, I don't know, maybe just, maybe just try to be more understanding about what they're going through. Like, these guys are broke every single paycheck, every single payday. They're flat busted broke. They're, they're worried that their rent's— their landlord's going to shut them out, or that their electric's going to get turned off, or that they won't be able to pay their bill, or they won't have gas to put in their car to get into work, or whatever. Um, and, you know, I don't know. We did a drug test, we did a random drug test, uh, a little over a week ago, and only 2, 2 guys passed without some kind of drugs in their system. You know, what do you do, fire everybody because they got THC in their system? You know, it's not illegal in Ohio anymore, but it's like, I don't know, it just seems like these guys don't know how to not bring their problems to work. They've got so many problems in their life, and it's like, I don't, I don't relate to that because I don't make those kind of choices. And I wish that they would make better choices for their life. And I don't know how to care for them more than I already do. But apparently they feel like I don't care. I think it's because I don't relate to them. And I've got this new sales guy that we onboarded that I'm trying to train, and I've had no time to train him. He literally sits in the office on his phone half the day. Because I'm doing all kinds of stuff that have nothing to do with sales at all and have nothing to do with his role. And I feel bad because I want to keep him productive, but he has— he's never done landscaping in his life and he doesn't know how our system works. So he's just like waiting to shadow me and I've had no time to train him at all. And it's like, I don't even know how to handle that one, honestly. And in the meantime, we're just hemorrhaging payroll and we're, we're, we're— yeah, we're not even breaking even as a company because Yeah, it's—

yeah, just trying to get— trying to get back up on your feet, essentially.

I'm just trying to— right now I just feel like I'm plugging the holes in the ship, like, and there's no— there's no, like, company vision right now. There's no, like, everyone knows where we're going because I don't even know where we're going. I'm just trying to stay afloat.

Yeah, that's so intense. I'm sorry you're going through all that. Like, obviously that's brutal.

Yeah, I can't keep this up forever. I'm gonna crack. I think I actually have to a point, like, I'm to the point where I just, I don't like my job. I don't, I, this, this business, I used to love it and now I just feel like it's a giant parasite.

Yeah, it almost sounds like you just gotta bring it back down to the, to the basics, which is like what you're saying to me right now even. It's just like, get somebody, literally anybody, an admin. Get somebody, literally like your brother will be great, just to have a body in operations so that way you can like take a step back and be like, okay, how do we, how do we fix this up?

Yeah.

I've had, I've had zero bandwidth to even strategize or plan. 'Cause every day it's just bust out tasks, bust out tasks, bust out tasks. And it's all stuff that's like, I can't just let fires burn because you can't, you just, you know, you're gonna have guys quit all over the place. You're gonna have clients dropping you or, you know, they'll have lawsuits or something. I don't know. It's just, you just can't let all the fires burn. And you can't just pull someone in the office, hand them a list of, hey, get these things done. They'll have no clue where— where's the password? Where's the login? Where's the— you know, where's all that stuff? And it's just— that's not going to work.

Yeah. This is a question and not advice, but you'll understand why I purpose it like that. But have you considered, um, you know, like doing another price raise, like another 20% price raise, and like selling off equipment like just to match whatever the loss of customers is, you know, because even if you lost half your customers but you raised your prices by like 20% or so, you'd be making way more money on those guys doing less work.

And then you would liquidate— there's no room in our market to raise prices 20%.

Um, you think you would just lose 100% of customers?

I think we would lose too many. Yeah.

Yeah.

To do.

Yeah, um, yeah, I think we're, we're already at the max end of what we can be— I mean, there may be room for a marginal price increase, but we've already, we already sent out an email at the beginning of the year informing all of our clients that there would be no price increase this year.

So what would you tell them to do? Something different?

I mean, like, I told them you should scale down, but I was like, yeah, sell, sell your equipment and like raise your prices, try to get like more work, make more money, do less work, sell your trucks, like get some like liquidity so you can have some breathing room.

What would you tell him? Well, as soon as you go over $1 million in revenue, like, you need supporting management, you need admin, sales, or ops, like, you need those covered. And so, you know, that's why they're at $1.7 last year, whatever. So like, to maintain that business so he's not working 15 hours a day, because what he's essentially doing is he is working the equivalent of an admin person and an ops person. And hopefully a salesperson is doing something. But like, that's why he's working 15 hours a day. In the perfect world, you'd have those roles filled. Um, he's been doing this for so long, like 25, 27 years, 23 years, 23 years. Like what I would like him to do versus what I think he should do is actually different. Like what I would like him to do is what we talked about. And that is like change the way you lead. Um, What I think he should do to preserve his family is scale the business back.

Can he? Like, he has so much overhead with the whole shop space and stuff.

The shop space paid off. It's all part of their land on their property. Like, I would scale it back to the fact that if you as one person can manage maybe 6 to 8 people solid, raise your prices, be super high-end on the market, be able to pay people well, probably there's probably 8 good team members there out of the 12 or 14 that he currently has working for him. He could probably keep 6 to 8 of them, make them super profitable, whether it be on maintenance and recurring stuff. And then you don't need a salesperson like that immediately. Having a salesperson like that's a huge amount of overhead. Like I can almost guarantee you in 3 months that salesperson won't be there because he can't even train them correctly. He's trying to do admin and ops and there's an ops person jumping in is going to also need a huge amount of training. So like, it'd be different if this was a 5-year-old business and he's scaling very quickly. These are, these are skills that can be learned. But my question is, can Luke actually change?

I only ask because like, you know, having, having some cash, less customers, and like a smaller scale always helps. Like, I'm sure like when you were starting the company, you felt like a lot of things are easier because there's less pieces, you know. So I just, I always ask because looks like? Well, I mean, simplification in that, in that aspect, you'd put more cash in your pocket, less, less daily headaches, less breathing room.

The money's not the problem. It's not that we're not charging enough. It's not that, um, yeah, our financials last year were healthy. The problem is the staff, the, the team. The team is, the team is not where it needs to be at all. And And I don't know how to get it there. And I'm so tired of hoping and trusting that people that I hire and put in the right place are going to stay there. And it really sucks when you have people sabotaging you behind your back, people that you cared about, people that you worked hard with and worked hard to make sure that they had a good job and, and were well set up for success, and then they turn on you. Um, it's just, that's, that hurts.

Makes it hard to trust anybody else to take on that position.

It really does. I mean, every time I hire somebody, they put them in the seat. It's like, you know, like this new sales guy I got now, it's like he's on a salary and for the first, you know, 2 months he's not going to be producing anything for this company. You know, in the meantime, I'm paying him every week and it's like, that's, you know, and I just have to hope that he works out, you know?

Yeah.

And, and I won't know if he's going to work out until he has a chance to show me what he's made of, you know? I just, I I just feel like it's going to be the same thing with the next guy and the guy after that. And I'm, I'm just really afraid at this point, like, if I am the problem, I'm going to ruin every single person I hire into this company. Like, if, if, if what's going on is a me problem, if I don't know how to fix me, then every single person I hire is at some point going to react to me and I'm going to ruin them. And I don't even— and I won't even know I'm doing it. Somehow, some way, I'm doing something wrong. I'm saying something wrong. We can't sustain where we're at forever. We're, we're in the hole this year so far, and we have to get out of the hole.

Yeah. Luke, it's gonna kick us off this call. It only has 40 minutes. I'm sorry. But it'll end here in a few seconds. But, you know, thanks for jumping on the call. I'm sorry, I don't have a silver bullet to help you out. Oh, There never is one, you know, but we obviously wish the best for you. And like you said, like you've been in business for 23 years. I'm sure, I'm sure you'll get this figured out. And, you know, I'll reach out to Mike and see if, you know, there's any other advice that he has, especially after, like, you know, these updates, if there's any, any direction or even priority they can help you with. I'll make sure he gets that over to you.

Yeah, please, please. Please update them on where I'm at because I'm open for any advice I can get right now.

Realistically, he should, he should be, he should be a general manager that does sales, operations, admin for 6 to 8 employees, runs a $900,000 to $1,000,000 business, extremely profitable, but he goes home at 5 o'clock. I believe that is a shorter path to success and like work-life balance. Compared to trying to find an admin person, training them up, getting a salesperson, training them, getting an operations person, training them up. I don't see any evidence that he has the skill to do that. And I would say that to his face. And it stinks because like, it's a huge— like, we're supposed to turn these businesses around. It's like, this is an L for us. I'd say like 4 out of 5 businesses when we leave and 6 weeks later, like they are on a trajectory of turning around the business. This is a big L and it stinks because like, this is not why the Turnaround Show exists. But like, I don't want to be like the Turnaround Show to be where it's like I go to business like, yeah, everyone just scale back.

But in this case, are we trying to optimize even for growth and having high revenues?

Or like, it's kind of a problem when you have a new kid and you haven't spent any time with her and your wife wants you to quit. Like, these are elements that like will cause fatal error, like fatal issues in life, business, etc. Like I would fix that. And I think the fast way to do that is raise prices by 30%, lose a bunch of your customers, cut out your crews and services that don't make money. All the news, the new— he has a bunch of good guys that have been with him for a long time. Go back to those, be profitable on them, be a general manager that can manage 6 to 8 people. But when you have 12, 14, 15 people out in the field, you need an infrastructure of management. He can't afford that right now. And so as much as he wants to think it's not about the money, it's a function of like, well, then why are you working 15 hours a day?

What's the first thing he has to focus on? Like how?

Like, well, you have to purge the customer base because you have so many leads and new work. So you just raise prices? You raise prices. And yes, you'll get a lot of people mad at him. 20 or 30% of people will need to leave.

And to make that happen, you will probably have to raise prices by 20 or 30%.

But if he did that, it'll be profitable enough for him to scale back, get through that pain, and then run a profitable business that he can manage himself. And like, that's not fun. And this is the funny thing. Everyone under the guise of I don't want to have key man risk or I want to be able to— I want the business to be able to operate without me being there daily, in daily ops. Under that guise, they grow the business. And now we have— we have for 23 years been growing the business and we have not attained the goal. So something is fundamentally wrong with our strategy. And there's something fundamentally wrong with the skill of the leader to be able to attract talent.

And so do I try to change that or do I just go to the straight root of the problem that can be fixed in 3 weeks?

And that is raise prices, get rid of customers, and then let the chips fall with the team till you have 6 to 8 people that you can manage every day and then spend time with your family and make more money. If the goal of the business is to make money and the goal of his life is to spend time with his family and support them, those— both of those things can be achieved with radical violence.

Well, that is the entire marathon of 4 different businesses across the entire country, and we visited every single one and tried to turn the business around. And we visited every stage of the 4L framework. We talked about a lack of liquidity, a lack of leads, a lack of labor, and a lack of leadership. And at every single one of these businesses, we tried to make sure we found that constraint and solved solves the problem. Now I made a full course on how to solve the off-season problem because you might have solved all of these problems but still have a cash flow problem in the middle of your off-season because leads drop off a cliff. So watch this video here for a full 3-hour breakdown of exactly how to solve this in your business.