Why You Should (*NOT*) Grow Your Business - Ep.35

Hey, everyone, this is Mike Andes. You're listening to landscapebusinesscourse.com podcast. Today is episode three, 5:35 of the podcast, and it's gonna be a good one. It's gonna go against a lot of what some people think that I usually talk about on this podcast and what my general business ethos is. Some people think I'm all about growing super, super fast. And it's all about like, you know, put the money back in the company, grow it fast, don't worry about ever making a salary for the first three, four years. So it's gonna go against that kind of general trend. And I'm essentially gonna be telling this young entrepreneur, this business owner, landscape business owner, to essentially just not get his first hire and telling him not to get another truck. And so I think it's gonna be interesting and it's gonna bring a perspective and a balance to what I talk about a lot of times about growing very fast and skill scaling quickly here on the podcast. So before I do that, though, a big announcement, and that is we're gonna have another live webinar for everyone public. So we haven't done it for, I think, three months now. We've only been doing live calls, and that's been really great. Been able to record those. And like today's with Tyler where essentially I've been doing one on one calls. And so we're gonna go back to that. But for now, for the next week and a half, we are opening it up for a live webinar. It's gonna be a live webinar where you can come on and we're gonna do Q and A right from the webinar. So if you haven't been on one of the live webinars before, essentially you can see me live in the video form and then I can be in the chat box talking to you guys. I can actually open up the video to you if I want you to, you know, you be seen by everyone. And so it's gonna be great. And so I think what we'll do is probably limit it to 20 or 25 people and we'll do live Q and A for most of it. I'm kind of guessing it's gonna be an hour long. The first 20 minutes. I'm gonna be sharing some stuff about marketing for 2017. A lot of people are just starting into the spring, and so we're gonna be talking a lot about marketing for the first 20 minutes. I'll kind of be giving kind of the platform for that the next 40 minutes, I'm opening up for Q and A and I'll do anything from look at people's websites live, right? And I'll screen share it so everyone can see what I'm talking about and, and give suggestions. I can answer questions about marketing or anything to do with your business. We are focusing on the marketing aspect because it is spring and it's something that I think is super important this time of year. But also things like hiring people, scaling the business. If you have any questions about that, you're definitely gonna wanna check out the webinar. It's totally free. And so just go to landscapebusinesscourse.com and click the big orange button that says register for the live webinar. And that's gonna be April 4th. So today I'm recording this Monday evening. So it's eight days from now on a Tuesday morning my time, 9am Pacific time. So that's 12 Eastern time, noon on Tuesday of next week. So eight days from the day April 4th, 2017. So you're definitely going to want to check that out. So today, as I mentioned in the intro there, first of all, sorry about my voice, it's a little bit scratchy because I lost it a few days ago. But anyways, I've been really, really busy with Augusta Lawn Care Services and working on getting that franchise and all that good stuff. And so if you haven't heard the franchise announcement, listen, a couple episodes ago I talked about what I'm doing and franchising out Augusta Lawncare. Lots of fun. Gonna be a lot of good stuff I think is gonna come out of it for everyone on the podcast. Just as I go through that process of really nailing down the systems in our business and really making sure that it's, it's all on paper, creating those systems. And so I think the course has helped me do that a lot and now kind of the next chapter, taking it to the big leagues. And so it's gonna be a lot of fun. But today we are talking to Tyler. Tyler is in Nova Scotia, Canada, and he is a young entrepreneur. He's been in business for a couple years. But I'm actually gonna tell him something that you haven't heard very much on the podcast, and that is stay small for another year, increase your prices, increase your net margin before you go out and get another employee, another truck, more equipment, more overhead. And I'm going to actually give a hard line number that I think people can actually reach before they need to hire their first employee. So without any further delay, let's get Tyler on the call. Here we go.

Yeah. So I started up kind of part time in high school, just kind of making a little bit of cash here and there and kind of turned into. Slowly turned into business, I guess you could say. I just started taking it seriously, really, last year, because I really had no idea what I wanted to do coming out of high school. We wanted to always run a business here to work for somebody else. Yeah, just. I just can't stay focused on a particular task for a long period of time, so I just get super bored. So I knew I had to wait for myself. And I guess mowing lawns was really the only thing that I knew. So that's kind of what I decided to do. And, yeah, it's turned out really good so far. So.

Last year, 2016, we did 35,000 in sales. This year, I'm hoping to scale it up to 100. So it's a big jump. But.

You know, with the growth that I saw last year, I think I can definitely do 100 this year, so.

Cool. So were you full time last year?

Yeah, just started full time there last year. Our season kind of works. We start up usually. Last year wasn't until the end of April because of just the way the weather turned out. And then it goes until about the end of October. November, we do fall cleanups, and then December, we don't usually get any snow, but it's too cold for anything to really happen.

And then we usually get snow until the end of March.

Cool. So are you gonna do plowing, you think?

Yeah, we did snow removal for the first time this year. It actually really went really, really well. We did about. So far, since December, we've done about 12,000. So, I mean, not bad for my first year.

Yeah, really good. First from the summer, so January, February, March, essentially.

Yeah.

Cool. Very good.

Yeah. Yeah.

Cool. So. So kind of, like, what's kind of the main thing you want to talk about? Or, like, what I can kind of, you know, offer to you in the next 30 minutes or so?

Scaling up clients. I need to figure out how I can get from that 35 to 100.

You know, we've done a little bit of Facebook advertising in the past. Not real good results, but, I mean, it got us a few clients. Yeah. So it wasn't a fail. We haven't done a whole lot of print marketing. We did some flyers a couple years. A couple years ago when I wasn't really taking it seriously. So I can't really. I wouldn't really consider that anything we've tried. Yeah.

So I'm not entirely sure how that would work, whether we should do a bunch of fires, spend more time on Facebook advertising, or. You know, I'm just trying to figure out what's gonna be the best way for me to get to 100.

Yeah, like, like you've probably heard me say it before if you listen to podcast. But like every single market is a little bit different. So it's good that you've tested. You're kind of testing everything.

And the thing too is like one postcard versus another postcard sent to the exact same person will elicit an amazing response, or you'll get one call after sending 2000. Right. And so it's also done based upon how good is the copy, how good is the ad, how good is the picture, the video, or whatever you're trying to do in your marketing. And so it's the first few years you're kind of testing your market really, in my opinion, you're kind of seeing what works. Where is some white space? Like so look at your competitors, see what they're doing. And then some people are like, oh, they're doing it, being there, they look successful and I should do it. Well, yes, in some regard. But if they've been successful at it, that means they've probably targeted all the people that are gonna buy from that certain channel or at least they are full. They're in the front mind, front of the minds of those people that would get their mailer or get this certain medium of advertising. And so I would just try to look at where is the white space in your market. So sometimes that might be like a trade show, like a home and garden show. And I know people who none of their competitors really take those seriously. And they do. And they essentially book out six months worth of landscaping jobs based upon a three day event where they just get contact information and then they follow up with them afterwards and get a whole bunch of jobs and book their whole year out. And I know other people who do the same thing and literally get all the same contact information, but they don't book hardly anything at all. And so it all depends. Test everything out, look for the white space, look for where your competitors are not marketing.

And then also realize that for some things it's gonna take a little bit of practice. And for instance, Facebook ads, it'll work really great if you have the right creative or ad in certain markets or video, or have you have the right creative or the right header, or you're targeting the right People. And then the same ad, if it's not targeted correctly, is gonna work horribly. And you're gonna pay money for a four year old clicking on your ad, which doesn't help you a whole lot. And so, and some four year old in Japan, they can't even buy from you anyways. So like, like, so so definitely there's two, two sides of it. One, look for the white space, look for when no one's advertising or is doing poorly at it. And then once you find that thing, you just kind of go all in on it, right? So like we've tried a whole bunch of stuff and you've heard me probably say it in the past. Like we tried the trade shows, we did cold mark, cold calling. We've done everything and we've done postcards and door hangers and all of that. And so we've just found in our market and for how we do our marketing that Facebook ads is the lowest customer acquisition cost. And so as long as you're tracking your customer acquisition cost, if you spend 2,000 on flyers and you know you got five clients, customer acquisition costs 400 bucks. Then you also want to look at things. You know, if you really want to get detailed, this will be like later on in your business cycle, you'll start looking at things like, okay, what's the lifetime value of those five customers? Right? Because if those five customers came from Facebook and they were $400 customer acquisition costs, but it was all for a $10 mo every week, like that's not as valuable as one lead that came from another source, for instance. But that was a $10,000 landscaping job. So there's always trade offs. And it's all about tracking it your first couple years. So my first, second and third year for the spring, like so first of all, you probably heard me say this before too. Like you have about five to six weeks in that spring period where you kind of want to do your marketing blitz as far as like, that's when you really got to focus on getting new clients. And so during that time, like when I say three years, like I've kind of had three springs, this is our fourth one, but like I've had three where we did a whole bunch of different stuff every year. Different stuff. Tracking how much time, effort and money it takes to like do a trade show, like setting up all the banners, buying all that stuff, like, you know, staffing it. And then same thing with like door hangers hiring. Got like some kids to go hang those on doors. And you know, we try all that stuff. Right. And for us, you know, now Facebook ads is the lowest customer acquisition cost. It probably won't be like that for more than a year or two. We'll have to find something else. And then right behind that for us is cold calling. And so we've just, this year, our fourth year, just gotten 100% committed to Facebook ads. But like I said, next year, it very well may be that those are too highly priced because too many people get into the market, and then we've got to figure something else out. And.

If going back to yellow pages is the best customer acquisition cost, that's what we should do. I'm not romantic about any sort of marketing method. It's which one works the best? And then just go 100% committed to it. And so, yeah, as far as going from 30 to 100, too. Like.

How many regular mowing clients do you have right now?

Last year, this is another tough thing that I've struggled with, is committing them to either a weekly or bi weekly. Yep. Because a lot of my clients in the past have kind of called me when they want it done.

And just last year, I just started, you know, kind of schedule scheduling it down weekly and bi weekly.

Yep.

And trying to get some. Trying to get all my customers to commit to either one. So last year we had about 15 weekly and an extra 30 bi weekly.

Okay.

And then.

So, yeah, that's what we'll be starting off this year with.

Starting off last year, though, it was like maybe a couple of each.

Okay.

So.

Last year we had a huge jump. So.

Right. So, like, the. What I'm gonna say now is kind of what I said, I think, about two episodes ago to about Upset. Like, with 45 regular mowing clients, you could easily go. You could easily go from 35 to like 60 just in upselling.

Yeah.

And so, But. But part of that is if you listen to episode like is like you. Do you have a website right now?

I do, yeah. We actually. I had got one last year. My uncle did it for free and it was very easy to customize or go in and edit, add pictures or anything.

Yeah.

So I got a new one this year. There's a guy building it right now still being designed. But it's. We've got a video on the homepage with an email and name opt in on the side. So I go, I had a video of myself just explaining, like, what we do and giving them an offer.

And then.

Where am I going with that?

That's fine. I'd ask about the website, like What? What? Do you have the URL right now or is it not even live?

Yep, I could give it to you. Just one sec. Let me up here. Lawn dev.ed dv-tz t z.com lawn.edz edv.

Lawn d e v. Oh, d e oh.dev gotcha.

Right?

Okay, good.

Yeah.

Cool. All right.

Loading up.

Okay, cool. Oh, wow, that's nice. Okay. Yeah, it looks good. Tyler's Lawn Care. Oh, there you are. Cool video. Hey, I like this. Okay.

And you had someone else design this or did you design it?

This is kind. Yes, somebody else designed it. It's still in progress.

Looks good.

You can kind of see some of it's not all working.

It looks good though. Okay.

I'm just looking for a few things.

Cool. Cool.

Yes.

Yeah. So first of all, like the big thing is that you have a good looking website. And when you're just starting out, that means a lot. When you get bigger and you're more worried about SEO, I worry less about design. But when you're just starting out, like where you're at right now.

Did you do this over the winter that you changed it, like, made it look good?

Yeah.

So this, this will be the biggest.

Project for the past couple weeks.

Okay. Yeah. Like, this will be the biggest driver of your growth in 2017 is the fact that when someone looks you up, there's something reputable that they can, you know, fall back on. Because right now the reason that you have people that want to call you when they, when you to do their lawn and they want it on like an on call basis is they don't, they still don't see you as a business. They still see you as like, you know, a kid pushing a lot more around. And so you want to make that change. And having a good website is a big part of it. And so.

Here, I'm just looking. Yeah, that's linked.

Yeah. And I agree with you 100%. That's been a big struggle trying to transition, you know, trying to, you know, not really explain to my clients, but show my clients that, you know, I'm not that kid in high school just pushing a lawnmower anymore. You know, like, I'm a business now. I've got bills to pay. You know, I can't do your lawn for 20 bucks or whatever.

Right.

Anymore, you know, whatever you want it done.

Yeah. And as far people understand the weekly, bi weekly thing, and they also understand if you give them a price difference between weekly and bi weekly, and then I like, then, then you just say hey, like you pick when you. If you want us to mow your lawn, that's fine. Give us 24 hours notice and we won't mow it if it doesn't need it or something like that. Right. Or if they're busy or whatever it is. But they have to be on a schedule. So like we always tell our customers you're not in a contract, you can cancel anytime, you can pause your service anytime, but we require to be on a schedule. And so they get it. Like, they just understand the fact that hey, we have routes. And the thing is, if you don't implement that now and it's just one or two people, it's really, really difficult when you have five or 10 and you got 120, 150 clients trying to do on call.

Yeah, exactly. Yeah, for sure.

So like I would say that like yes, you want to get new, new accounts, but like right now you're generating less than a thousand in revenue per client. I know last year is probably different. So you're probably more like 1500. You're like 1500 per client. You want to get that number up. And this is something I haven't talked about on the podcast and that is calculating what your annual take average annual intake from like a customer's annual revenue from each. Right. Per customer. And that's a number that's important because, and I don't mean like counting landscaping jobs like one time clients. I'm talking about looking at just the people who are on schedule because obviously if they have weekly versus bi weekly, they're going to be more. Obviously if they have a bigger lawn, they're going to be more. But what you want to do is track that number over time and see if, if you're adding things like cleanups, pressure washing, gutter cleanouts, adding mulch, adding plants, like there's so much you can do that doesn't take a whole lot of skills as far as training for your people and for yourself that literally you can double that number to 3,000 a year easily.

But the part of it too is now you have the website to back it up because your clients right now, those 35, 45 people, they are getting those other services from someone else because they don't know, number one, they don't know you offer those services or number two, they don't feel like you're capable of doing it. And so having the website having videos of you doing pressure washing and doing these cleanups and doing mulch installs and showing videos doing snow removal really Proved to them that you actually can do it. And so that's what the website should be, a place where you send people for credibility so that when they talk to you, they don't think they're talking to some 20 year old kid. But they, hey, this is a business. They've done this before on so and so's address across the street or my neighbor or whatever. They've seen you out there doing it and you get a lot of credibility from that. So like the website's gonna be a huge driver of your success. Maybe not from the SEO standpoint. Like you're probably not gonna get on first page of Google right away. Like you can do it by adding some stuff on here, but like, like it might not be right away but like it's gonna be the biggest driver your growth because people need the website to fall back on and look for some credibility. And, and, and then like the upsell portion too. It'll back that up.

Yeah, okay, I see what you're saying for sure. Okay, cool. Yeah. Because another thing that we do, like I'm trying to focus on.

Know, being the go to residential lawn care store business in, in our area here. So we're offering lawn mowing, snow and then we do lawn care, weed control. Yeah. So I got my pesticide license this past winter.

And been doing a lot of research and whatnot on it and reading and everything. So I'm very familiar with all that and everything now and I've got a mentor. It was helping me quite a bit with it as well. So that's a big part of my income as well. But trying to, you know, make all of our clients understand that we do all three services and not just one and trying to incorporate so that we have, you know, 35 clients but we serve them year round for every, every service. And that's, that's a big thing too.

Yeah, for sure. Like right, like right now do you, when you're estimating except for jobs like do you chart, do you have an hourly rate you base that on or like when you look at a lawn, like how are you doing your estimating right now.

For a lawn mowing? I just, in the past I've just looked at it, you know, try to figure out, okay, what, how long it's going to take us. But this year I'm trying to.

You know, break it down. So this is how much we charge for 2000 square foot lawn or 8000 square feet. This is how much our charges, but you know, it all depends on the terrain as well. If it's just a square, it's going to be a lot easier than something that's, you know, down a hill to a lake or something.

Well, like, to be honest with you, I don't know how much of the podcast you listen to, but like I would say, actually the method you've been using is actually the right method. Some people think that if you use the square footage method and all that stuff and use numbers, it's gonna be more accurate. The problem is there's so many variables that go into the how long it takes to do a lawn that you could spend an hour measuring the square footage. Then you got like, okay, how much edging are you going to do? How much weed whacking are you going to do? How much blowing off are you going to do? Are you going to use a stick edge? Are you going to use the line trimmer? Like, there's so many variables that if you really want, like, you could spend an hour doing a $20 per mo job and then not even get the estimate right. And when we're talking about scaling a business and you're doing 15 of those estimates in a day, it does not even like, economically wise to be spending an hour doing a bunch of calculations when literally you can walk up to the lawn and have a, like, you'll, you're probably close to this now. Like, I can go up to a lawn, say within five minutes of air, know how long that, how, how, how long it would take to mow that lawn on a regular basis. Right? And so, yeah, for sure. So, like, what I would do is, you know, the big thing is, are you just making up the number or do you have like an hourly rate? Right? So, like, if you, if you know how long it's going to take, that's one thing. And that's good because that's something at least pretty solid in my opinion. It's actually more accurate, in my opinion, than trying to make up some algorithm or like, cost per, like pennies per edged foot, right? Like, it doesn't even make sense. And especially like, what are you going to do, charge someone $36.41 per mo? Come on. So, like, there's always obviously gonna be a little bit of room for error. But the thing is, if you can look at a lawn and say, okay, that's gonna take me. Take 60 man hours or 60 minutes. So, like one man hour, like, do you have, when you look at that and you think time, like, okay, that's gonna take an hour, do you think, how are you Coming up with the cost, then going from time to cost.

Well, hourly rate, I charge out $80 an hour for two people. Any additional is about $25 an hour extra on top.

Okay.

And the reason I've got that price is I've just kind of worked out how much on average, it costs for us to operate.

And for me to make a profit and everything as well.

Yeah.

So. So when I come up with that hourly price.

Okay, so you're saying it's. It's $80 for the first hour for two guys, and then after that it's $25 per man hour. After that, kind of how you're additional. Okay. Are you telling them that $25 number, or is that just what you used estimate?

No, I. When I do my estimates, I just give them a fixed price. I don't do hourly.

Good. Yeah. So the first thing I would say is that your prices are too low. And.

The reason I say that is not because, like, when you're looking at it, your prices are perfect. And that's because you're trying to grow the business. And so to say, oh, just raise your prices. Like, I don't think everyone can just, like, raise their prices, make more money and be more successful. Like, some people would fail if they raise their prices. But what you have to make sure you do is raise the prices with the value that you're offering. So, like, you're becoming more professional. Your logo's changing, your website changing your. You might get graphics on a truck. You might get employees. Like, yes, your costs are going up. So, no, you shouldn't just, like, raise your prices because your costs are going up, but your value, your customer, is also going up. You're becoming more professional. You might have.

An online service that now they can pay with credit card. They might get their. All those things on your software package. So the reason, too, is as you add more value, you've got to raise prices. But then also, when your prices are higher, the perceived value from the customer is greater as well. Because if they're paying $10 per mo, they expect a $10 mo. And this is the thing that a lot of people don't quite get until they do it. And that is you're gonna get just as many callbacks and just as many complaints on a $10 mo as if you charge them $20amo. It's not like people don't get more picky. They just want the job done correctly. So if you're doing that, charge more. And the reason I say that is because $25 is below what, in my opinion, the threshold of 30. Anything under 30 is unscalable in my opinion. You know, I'm sure there's anomalies, but like under $30 an hour per man hour isn't scalable. And so like you'll make money as long as it's you and one other guy. Because at $80 per hour for two and you pay him 20, now really it's like six. You personally are making like $60 per working hour.

But until that's not scalable and cause like if you get two now if you hire someone else and there's two people in the crew and they're both, you know, say $20 an hour with taxes and all that stuff, then you got like insurance, overhead, you know, gotta fix up the truck, you got equipment, you got gas. Like so, like there's eventually there's no margin there, right? And so now, that being said, your $40 an hour is where you kind of want to. I think you should be shooting for. So like my first year I was shooting for 40, and then as my value grew, I went up to 50. As the company value began to grow, like we went to 60. Like this year we're between 60 and $80 per hour on the mowing crew. And that's only because we've moved it up slowly, right? And obviously too, you get more efficient with better equipment and you route better. You create more tight routes, like all that stuff too.

But in essence, if you're charging less in your mind when you're making these estimates and you're using these numbers, if you're charging less than 30, it's not scalable. It'll work as long as you're working in the field. So if you want to ever get out of the field, you've got to slowly increase the value of your company and the value that you're offering so that you can charge more. And so don't stay at a fixed number for more than a year or so. When you're in this, like, early stages of business, if you're hyper growth and you're wanting to grow this thing fast and you are getting lots of business, don't be afraid to move the price up. Like, we don't get any complaints over our prices. And like, the thing is, like when I say we don't get complaints, we don't get complaints. Obviously we're losing some business, but the business that we're losing I don't want anyways. They're going to be people that usually are Looking for the cheapest deal. They aren't gonna stick with us for a very long time. I'm wanting the people that are willing to pay a premium price for a premium product, which is our services, and that they're gonna stick around with us for five, 10 years. Right. And so just by raising your prices, a lot of times it raises up your game. Cause you're now, you know that they're paying you more. So it raises your game. It raises their game. Because now they're not the price shopper type of customer. The people that are going to stick with you, they're going to be the ones who get out on schedule. And aren't the people that want to call you up every time when you raise the prices? That's the type of people you're going to get. The professional that doesn't want to worry about their lawn doesn't have to call you. They want to be more hands off. And they're the clients that you want. And they're also the people who just say, hey, take care of the pressure washing, take care of the gutters, take care of the trees. Like they're the full service clients, the ones that you charge more.

Yeah, yeah, I see what you're saying.

Like literally, if you, like literally, if you just start like changed your pricing model, just that alone, you'll get better, better weekly and bi weekly customers. Not only will you get them like better as far as better paying, but you'll also get the ones that are going to spend 4,000 a year instead of 1,500 a year because they'll do all the other services.

Yeah, yeah, makes sense for sure. Okay. Yeah. Because you know, we've had a lot of my clients last year.

You know, hate to say it, a lot of foreigners.

And some of them tend to be very, very, very cheap.

Yep.

And that's been a huge issue, you know, like trying to beat us down. And then we'll come back and it's like, oh, can you clean this out or can you, can you do this now? And it's like, oh, well, you're right here, you might as well do it for me. And it's, that made a huge impact on us because it cuts down how much money you're, you're making per customer.

Yeah. So but you're only competing with the foreigners and the other people in. If you have the same value as them, if you don't have, if their trucks and your trucks look the same, if you have the same professionalism as them, if that's all the same. If they have the same website as you, then you're competing on price and that's a big problem. But I would dare to imagine they don't have a website. They answer phone from their truck or they don't have a good answering machine, they don't return calls, they don't have a software system that people can use and get their invoices online or pay with credit card. They don't have videos of their company, they don't have reviews. Like they don't have all that stuff. And that's worth something. And so I think if you raise your prices just by raising your prices, sometimes you'll eliminate competition just by raising your prices. You are telling the customer, we're different than these guys. Even if you have the exact same equipment as you do yesterday, but if tomorrow you change your prices, in the customer's mind they're thinking, okay, these guys are better than these foreigners. And in their mind they figure it out. They okay, these guys are obviously maybe not licensed, not bonded, not insured. And maybe I want to go with this higher priced person because I value those things. And you're going to get those people instead of the person that wants to weasel you down from 20 bucks to 15 because Joe Blow is offering them it for $12. And so I think just by raising your prices is going to up your game and you're going to get better clients that A, stay with you longer, B, allow you do all the services on their property and you're going to just in that alone, you'll triple the amount you get from someone. They're going to have you do the weed, the spraying, they're going to have you do everything. And so that's where you can like with 45 clients, you should be really more at the 60 to 60, 60 to $70,000 marker with that many clients.

And it's just a matter of building up the professionalism and where they trust you to do those things and you get the right type of clientele that wants you to do everything on their property and they're worried less about price.

Yeah, yeah, makes sense. Okay, cool.

Anything else I can kind of help you with though? Anything that besides obviously like growth kind of growth kind of fixes all the problems. I know how that works. If you get enough money and enough people. It's gonna fix though.

So trying like I've got a guy with me who worked with me last year full time.

Yep.

He's kind of a friend. Yeah.

Sorry, is it Shane?

Yeah.

Okay. I'm looking at your website. Cool. Okay.

Yeah. So I mean he's always there for me. He's a work for me whenever, like he'll like if, you know, if it snows tonight at two o' clock in the morning and we need to go out at 4am, I can keep calling him, he'll wake up, he'll come out and work for me. You know, he's that type of guy. But.

In the summer when we're out working, I can't really leave him at the job site alone. I can't like, I don't feel like I can put the trust in him because I don't feel like he knows really what to be doing, but trying to teach him to know what to be doing. Yeah, yeah. Just doesn't seem to get through to him. And I don't know if it's because of, it's the way that I'm doing it or if it's actually, you know, if it's just him and he's unteachable.

You know, and it's, it's trying to figure out whether I should look for somebody else or if I should just stick with, you know, trying to train him.

Yeah.

And because it's, I'm growing, I need, I'm going to, by the end of the year I'm going to need somebody who's going to be able to manage a crew, you know, next summer I'm, you know, I'm not planning to be working in the field because I'm hoping to have, you know, a couple crews out there and you know, to achieve that growth, I can't have somebody who I can't trust working for me.

So I have two things to say before I do that.

When you say you don't trust him, is it a matter of you don't trust him morally or is you don't trust him to do correct work like the work at the standards you want?

No, he's definitely like, he wouldn't hurt fly, wouldn't steal anything from anybody. Morally he's great. But you know, work wise, whether he's gonna do the right thing or whether he's gonna get carried away with something and just get distracted.

You know.

But is it one like, is it the fact that he's gonna get distracted and not work hard or is it that he's going to work but not do the right thing?

Probably get distracted, not not work.

Okay, then that's a problem with the person. So like I was gonna say, you know, as a business owner, everything's your fault. Because if they're doing something wrong, it's because you trained them wrong. Or if they don't, you know, if they mess something up, it's because you didn't tell them or they didn't have the, you know, the work order wasn't specific enough or like that's always your fault. Now if you don't trust someone to work hard or like they don't have the work ethic, like that's when you just fire them. And whether that you, whether or not you call it firing, like that's, you know, you know Shane and your relationship and everything. But like that's the first thing I would say is like everything though, really, I lean more in this direction. That is everything as the business owner is your fault. So if they don't do the correct work, if they are even slacking off even sometimes, maybe it's because you haven't created systems in place or you haven't like involved them enough to make it worthwhile for them to do it or you haven't brought them on board in the mission of the team. To know why it's good to have efficiency. For instance, let me divert one second, I'll get to the second thing I want to say. Like the other day, for instance, we had.

A big gravel job and let me think here. 1, 2, 3, 4. There was five guys on it and two of them were new, two of them are brand new guys and we had one of those stand up skid steers like the mini skid steers because we had to go through this little like narrow gate. And, and so at the end of the day I talked to two of the guys which are new names, Charlie and Fenton. And I was like, hey guys, did you guys get a chance to drive the mini skid steer? Because I know it's kind of fun to do that and learn and stuff. And the thing that kind of what they said is kind of shocked me and I expected them to want to and to hop on and want to learn. And the thing that came back to me, number one, confirmed what I've, I try to build in the team all the time. And it really shocked me. And that was, Fenton said it and then Charlie agreed with him. He said, yeah, it would have been fun. But Max, who was driving it the whole day, who is a little more experienced, he said, yeah, but Max figured it out and we figured it'd be more efficient if we just let him do it all day instead of us trying to learn, you know, throughout the day. And so that shocked Me, like in the fact that, like, they bought in so much the idea of efficiency and, and they get it. And so you've got to kind of create that in your employees. And it comes back to the fact that everything, as a business owner, everything is your fault. So if people are slacking off, like, it's your fault. At the end of the day, everything's your fault. If you go bankrupt, it's your fault. If you get more clients and the good things happen, it's all your fault. Like, you get the glory. So everything's your fault. And you've got to figure out how to create the system so that the people underneath you will succeed. And if you trust him morally, there's, there's usually something to work with there. You just got to create the systems in place. You got to create the culture, which is tough when you have one person, but you got to create the culture and the friend, the relationship with that person to where they are working in A, your best interest, which is B, the business's interest, and that is efficiency, quality, etc. The second thing I would say is even if you make a hundred grand this year.

You theoretically don't need employees. The reason I say that is, I say theoretically because if you're charging what you're worth, you could easily make a hundred grand being a solo printer, like, just mowing yourself.

And that means, like, the reason I can say that is because my first year I was part time. We did, I did 28,000. Second year I worked half the year by myself, and then the second part of that year I hired someone full time and we made 200 grand that year. Right. So, like, I really believe that. I really believe that you can make a hundred grand by yourself. Yeah, Obviously you have to get people to scale because like, the year after that, when we had five people, then we go to 5, 5, 50 the year after that. Now we're like at nine people, I think yesterday. And like now we're gonna be a million. So, like, you're gonna scale with people, but at $35,000 last year, you really shouldn't be thinking about the people. You should be about raising a, your revenue, like just gross revenue, but then also raising your prices to the point where you can afford to pay someone, you know, because this is the other part of it. Like, if you're hiring people that are really low wage, like, you really. I don't feel employees should really expect a whole lot if you're charging someone minimum wage, if you're charging, if you're Giving them minimum wage, you should expect minimum results. And so I really feel like right now what you should be doing is, yes, get deal flow, but then siphon the deal flow off by raising your prices. So raise your prices to the point where it keeps you busy, like eight, ten hours a day, working out in the field. And then, yes, you're gonna work three or four hours at home, doing emails, doing estimates, grinding hard. It's gonna be super hard, a lot of work. But you'll raise your prices to the point. Because now you're not worried about keeping someone else busy, watching after someone else, paying someone else. And you can focus on, okay, I need to raise my prices to the point where I can take out another $30 an hour and still make money. Because that's what it's gonna cost by the time you take someone's salary, their taxes, the time they're driving around not making any money, the time they waste. Cause they're not gonna be as efficient as you. Cause you're always thinking about that. So if you can't take $30 an hour out of what you're doing now and make money, then you shouldn't be hiring someone. And so what I'd focus on if I was you is like getting your prices to the point. Like this year you're gonna get lots of business, you're gonna get lots of people calling you, lots of new customers. That's a given with the website. And you already have 45 people. So it's gonna be word of mouth and referrals. You're gonna get that. But if you use the same pricing, if you use the same pricing strategy, what's gonna happen is in May and June, you're gonna be trying to hire someone because you're super busy, you're slammed, and you're gonna try to hire someone. But the problem is you're gonna hire them and start losing money because your prices aren't high enough to sustain the employee. So what I'd focus on this year is, yes, get the deal flow. Like you're gonna go out market, get people. Yes, obviously. But with that deal flow, cut the amount of people you would usually get on jobs. Cut them in half by raising your prices by like 20%, 25%.

And that sounds crazy. It sounds crazy. Yeah, exactly. Increase. I'd focus this year really on focusing on increasing your margin. Keep Shane on board, kind of like on part time or like on call sort of thing. So if you get a massive job, you have someone there, or if you gotta go, do like, do an estimate you have someone on the job still. Like, I wouldn't break that or even find someone else that could be on call or on weekends so you can schedule big jobs. But I would focus more on raising your prices and increasing your net margin so that you can afford to hire someone. Because I really don't. Personally, I don't feel so much. You should really hire anyone until you're over 100k in revenue. And that might not mean next year. It might mean you're at the monthly amount of say nine grand or like eight grand or six grand. Like if you hit six, six or seven grand a month, that's when you should start thinking about hiring someone. So like if that's June of this year, when you're consistently over six, seven grand, then start thinking about hiring someone. Like I was able to get up to almost ten grand by myself in monthly revenue before I hired someone full time. And then there's that transition in between where you have someone on call or part time, full time for the big jobs. So that's what I'd focus on if I was you. Really focus on increasing the prices? Yes. Maybe you won't get to 80 mowing clients this year. Maybe you'll only get to 60. But those, the next 15 that you're going to get on board are going to be priced correctly and they're going to be the ones that you can really begin to build the business on next year. When you're at 120 grand or so, you're actually taking money home and you can afford to pay someone. So that next year, because your prices are right now, you can get someone else out in the field, pay them a good wage and then you focus more on the sales. And now when those sales come in, they're priced correctly to for a business that's gonna scale.

And put and then the thing is like when as long as you're working, it's only you youu're gonna make a lot of money. Like you're gonna like if you have pricing correctly and you're working, doing all the work yourself, you don't have the overhead of another employee. Like you're going to have a lot of money. So save that money like crazy. So that next spring, like it's not often you hear me telling people on the podcast like, kind of like put things on hold for a year. But what I'm kind of saying is like put hold, put on hold the employee and the hiring and scaling thing until next year once you figured out the pricing and you Figured out that you gotta charge a lot more and you get kinda comfortable with that. And then in the next year, I know it's kinda counterintuitive to tell you to kind of put brakes on some of this, but I think you can easily still do it 100 grand by using the right pricing method while you working by yourself and using Shane, maybe on Saturdays, like literally you can get to 100 grand doing that if you price it correctly. And what will happen is by the end of this year you'll have 40k or, or 30k to where next spring you can invest that into new equipment, getting an employee and marketing now to the people that you're gonna price correctly and make money as you grow.

Yeah, yeah. Okay.

Does that make sense?

Yeah, for sure, definitely.

Like, I know it's kind of a downer. I kind of hear it in your voice. Like you kind of wanted to hire people here and kind of do the whole crew thing. But like, I think a lot of ego is tied up in like number of trucks, number of employees, and, and really it all comes down to like how much money are you making, bottom line? Right. And to run.

Yeah, yeah.

And you want your business to be a business that's 20 plus percent margin and like the amount of like less than 20% of businesses in our industry have a margin over 20%. Like gross. Right. I mean net profit. Right. That's what you want to be in. That's the game you want to be in. Because when a recession comes or when you lose a big client, it. Okay, if you're making a high, like if you have a high profit margin business, it's not okay if you're running on a 5 and 10% margin business and the economy falls apart. That's all the people who lost in 2007 and 2008 is all the people who had the low margin business and it's all the foreigners that you're competing with right now that will lose when times get a little tougher.

Yeah.

Yeah, for sure. Okay.

So I know, I know it, I know it's kind of counterintuitive and it seems like you're taking a step back this year by saying, okay, let's not get more trucks, let not, let's not get a crew and have Shane, you know, manage them. It seems like a step back, but I promise you, if you focus on raising the prices and getting the right customers and upselling, you'll still get to a hundred thousand. Even though right now it seems like a big leap even for getting with a Crew you, you can get there with by yourself and one guy on the weekend. Like you can do it if you're willing to work eight or ten hours a day and do a couple hours of office work and answering calls and really grind this year. I guarantee by the end of this year you'll have 30 grand to invest next spring into a model that's now going to actually make you money.

Yeah. Yeah.

And it might even seem like a.

Little bit of sense.

Yeah. And if you talk to Christian, it might even seem like some of the advice I told him is a little bit like almost different. But it's also because just in the pricing, like there's all these little things that are different and.

But I think you're gonna have a huge year this year. Like I'll say that because your, your website's really good and I don't know if that's your URL or not. Is it?

No, it's. That's just the one that's being added.

Okay, good, good, good, good. Okay, good. Alright. Yeah, but like the website's gonna be huge for you. It's gonna have all the credibility that you need to charge the higher prices. And it's something you put on your trucks, on your business card, get people to the website and create the brand equity there. Create the videos, have the pictures, have the behind the scenes, have the before and after pictures. All that stuff creates the value so that you can validate the higher prices and separate yourself from the foreigners, competition, whatever you want to call them, and start charging those prices where you're making 40 plus an hour.

Right. Yeah. Makes sense. Okay. For sure.

Okay, cool.

Okay, well like let's stay in touch. And then like I said, like, I know it seems like a little bit of a step backwards in kind of the advice, but I think, I really think if you, you focus on some of those things this year, that next year you'll be in a better spot to hire the people. And I just hate, I'd hate to see you get to 100 grand but have three employees and your payroll is 50% of what you made, you know?

Yeah, yeah. Makes sense. Yeah, no, I, yeah, I totally understand what you're saying.

Yeah, for sure. I just focus. Like, I think it's easy to get sucked up. Especially this spring, it's going to be hard for you to do this because it's easy to get sucked up into the volume game and that is lots of calls, lots of estimates, lots of potential business and it's easy to get sucked up into that when you got to realize, like, for us, if 50%, more than 50% of our estimates are getting accepted, I start getting worried. Like, I start raising our prices because I don't want to get sucked up in the volume growth, super fast game when I can be focusing on, you know, let's work with what we got, raise our prices and make just as much money if we would have doubled the amount of clients we got this year, you know?

Yeah, yeah.

So. So it's not. It's not an ego game. It's not the thing that's gonna make, you know, you proud because you have a bunch of employees and a bunch of trucks, but it is gonna be the thing that creates a solid business foundation that allows you to scale fast in the future. Like, my first couple years, I first two years, I went from zero employees to one and a half, essentially. From the two years after that, we went up to nine people. So if you get the foundation right and get that really solid financially, it'll put you in a place to where you can hire the right people, get the right equipment, and really scale fast.