Mike Andes, founder of Augusta Lawn Care with 150 locations, breaks down three ways to grow: do more (upsell existing customers), do better (raise prices through quality), or do new (add services). Raising price from $50/hr to $60/hr triples profit per hour from $5 to $15. Most businesses skip the first two and chase complexity instead.
There are really just three ways to grow your business. Whether you're trying to grow your profits or your revenue, there's really just three ways. I'm Mike Andes, founder of Augusta lawn care, over 150 locations around the world. And today we're talking about growing your business. Now, one of my mentors said something very interesting to me. To grow a business, you can do things more, you can do things better, or you can do things that are new. And this is actually how I like to think about it. When it comes to upsells, you are doing what you are selling people more stuff. If I'm selling lawn care, I'm also going to sell them installing their mul. Upsell them into pressure, washing their driveway. I'm going to upsell them and do trimming their bushes. I'm going to sell them all these other services. I'm going to do more to the same customers. And selling more to more people is going to allow you to grow the business. The other thing I can do is better, in order to raise my price, I'm going to need to do a better job. Otherwise all my customers will leave. So I can do a better job of quality, a better job of communication, a better job of answering the phone, a better job of communicating quickly with customers, a better job on the job, doing a better quality service for the customer. If you do that, you'll be able to charge a higher price. And then the last thing is new. And really what my mentor was really saying is whenever he looks at a business to grow it, there's three ways you can do it. You can do more of what you're doing, you can do what you're currently doing better, or you can get new customers, new products, et cetera. Everyone wants to go after the new. We all want to add a new service, get new customers. But in reality, we ignore the two other ways to be able to grow your business. And that is how do you upsell your customers, customers more of what you're selling. So instead of selling them five services a year, you sell them 10. Instead of selling them 10 services, now sell them a complimentary service that kind of is alongside of it and add four more services. Now you sell 14. Instead of just doing service for six months of the year, can I offer another service that's going to be able to get those same customers more services throughout the other six months of the year so I don't have an off season? The other thing is better. Like we all so much focus on getting new leads, new customers, advertising, marketing, what's your strategy for growth? More customers. And we're counting our customers and how many budget hours we have on the schedule. And those things are fine and good. But honestly, if we just did a better job, if we just answered our phone more often, if we just were able to charge a higher price, we'd probably make more money. If you have a 10% profit margin business and we're charging the customer $50 an hour, that means we're making $5 per hour in profit, which means if I go from $50 per hour to $60 per hour now, I'm going to be making $15 of profit because I just raised my price. I did a better job. I did good enough a job to be able to raise my prices by $10 per hour. And by doing that, now I'm no longer making $5. I'm making $15 an hour. I tripled. Tripled my profits by doing a better job and being able to charge for it. Instead of trying to go after more growth, I could have tripled the size of my business, still retained that 10% profit margin, and guess what? I would have been better off just raising my prices by $10 per hour and making more profit that way. And instead, we always get drawn into thinking we need more customers, we need to go into new service areas, we add completely different departments, and all of a sudden someone's mowing grass. Oh, I'm gonna do, like, arborist work, or I'm gonna do excavation. I'm doing more so I can fill in my gaps. No, those are, like, way separate. I'm gonna do a cleaning business. Why? Because I'm doing lawn care. Or I've been doing this great asphalting business. So I figured we'd go build houses. Now. It's not the same thing. You're not doing more, you're doing new. A completely new business. And sometimes we, under the guise of I need to sell more to my existing customers, we will. And really what we're doing is adding way too many new services, adding complexity to our business. Too much overhead, more equipment, more trucks, more training for our crew, more liability, more insurance. And all of a sudden, we've now gone down a very slippery slope. Hard to systematize, very complex, because we keep adding new stuff to our business. And so if you're looking at the next initiative and you're trying to think about growing your business, ask yourself, can we just do more of what we're currently doing, or can we do it better? Because if we can do those, we'll probably make more profits.
