Why Your “Vacation” DOESN'T Fix Burnout

Everyone, it's Mike Candies and you're listening to the Home Service Millionaire podcast. Today we're talking about burnout. It happens at the $3 million plateau. Why? Many business owners can't get past 3 million. A lot of times they stall out on 1 million, 1.5 million, and they just burn out. And this could also apply if you're a smaller business when it comes to burnout in general. I'm going to talk specifically about that 1 million to $3 million wilderness that a lot of people venture into and then burn out. So we got five topics on the docket today. Let's jump right in. Are you actually burnt out or just addicted to chaos and can't handle smooth operations? So this can happen if you're really profitable, around a million dollars in revenue. Usually I see this as one operator, usually the owner, running everything in the business and out of daily operations in terms of the doing of the work. But doing sales, managing the office usually has like a virtual admin managing the office or someone that's actually paid full time salary. They don't have a big fancy office space. They're running very lean. They're doing 800,000 to a million dollars in revenue. That's really where I see a very profitable operation. And then someone comes along with the idea that, hey, things are really smooth. I'm going to try to go to 3 million. And then the first thing they do is go hire a full time salesperson, straight overhead. Then they go hire a really experienced operations person out in the field to be able to do big projects. And then they hire one or two office people, all straight overhead. Now we got to go get a bigger office space because the expense, you know, that we were paying now only a thousand or two thousand dollars a month isn't enough. We need an actual office that is zoned for a office. And it also has a restaurant, a restroom, it has utilities and an Internet connection. It looks good. It's also central in our market because we got to, we don't want to be driving 20 minutes outside of our service area. And so all of a sudden their rent goes to 5 or $6,000 a month. All of a sudden they have a $5,000 per month salary for the office person. They need an assistant, so another four or five grand for them. Plus we've also got to have the salesperson. The salesperson's gotta be really good because we're trying to go 3 million, okay, that's another $8,000 a month. And then we got overhead, more of an operations person that doesn't wanna do the actual work. Cause they get a little older, they have a lot of experience doing projects. They wanna be doing big commercial projects or massive design installs and complicated. And they're going to be driving in a truck all day long. They're straight overhead. They're going to be easily 8, $9,000 a month again, assuming once we pay taxes and workers comp and everything. And for their truck to roll around, oh yes, we're going to need a couple extra trucks because the salesperson and the operations person. So all of a sudden all this extra overhead totaling tens of thousands of dollars a month is added to the business. And then we wonder why we don't make any more profit while we're going from a million to 1.2 to 1.4 million dollars. There's not a lot more profit made because we added all this ext head. And so a lot of times we are addicted to chaos. We constantly are used of growing and growing and all of a sudden we get into profit mode and we're like, okay, this is too easy. I like problems, I like having fires to fight. I have no reason now to get up every morning because I'm basically bored of this business that is six to seven employees. I'm running it out of a very small shop space. It's profitable, Okay, I want to grow. And you get this kind of all of a sudden this vision of the $3 million business. And the first thing we do is go spend a ton of money in overhead. And, and by spending that much money on overhead, unless you grow the business by 50 to 60% minimum, you don't even make a dollar more in profit. And a lot of times to go get the trucks and equipment to get that 50% extra revenue, we've got to go get trucks, equipment, and get more debt. And now even saddle the business with more fixed expenses. And so now our off season, we have a huge problem with our off season because we have these salaried employees. We have a really expensive lease or rent payment or mortgage. If you go out and buy land, you sink all your cash into it. All of a sudden the business goes from very hundred thousand $1 million in annual revenue to trying to get to 3 million. And it's unprofitable, it's chaotic, very low margins, and it's saddled with debt. And so be very careful, in my opinion, when you're trying to go from a million to 3, because a lot of times from that 1 million, 1 million marker, even 800,000 to about 1.5. There's not a lot more profit there. Which means if I'm doing $800,000 in any revenue, I have five, six employees being really profitable, don't have an office space, very, very lean. If I'm going to try to get, if I'm going to try to grow and I'm going to get managers in place, the whole iron yards, I will have to double the revenue of the business before I see an extra dollar in profit. I will have to double the revenue, 1.5, 1.6 million in revenue before I see an extra dollar of profit. So be careful that smooth operations don't cause you to just want to jump into the fire again. And I understand, like the first few years of business you're going to have to be working 14 hour days and there's fires and chaos. That happens all the time. And that creates somewhat of a clarifying of what you're supposed to be focused on next. And so when things going smooth, it can be like, well, what am I supposed to focus on next? And you don't know. And so what do you do? You grow the business more and create more chaos. Just be careful of jumping into that and know that you should have enough cash on hand to get through that period of time where you're not going to be as profitable when you go back into growth mode. All right, second thing on the docket, we got why your vacation doesn't fix burnout. It just delays the breakdown you refuse to face. Wow. Okay. So recently I was on a turnaround and I suggested that this person actually go on a vacation or plan it, I should say, for six months from now because their relationship needed the vacation, they actually had moved away from it. Like split up for a moment of several weeks simply just to get away from each other as husband and wife. And so they just kind of broke things off just to get some space. And so the immediate thought process from like a therapist, you all need a vacation, get back together, have some time. It's like, wait a second, what's the root cause of this? Is that the business doesn't make any money and there's a huge amount of stress and tension in the relationship caused by having an unprofitable business. And so I would ask myself first, are you actually burnt out or are you just stressed out of your mind because the business isn't profitable? Because if it's the first, which is the business is not profitable and you're just trying to run away from it by having a vacation you're gonna come back and it's just going to be worse. If you have a bunch of chaos and an unprofitable business and no cash in the bank, going on a one or two week vacation is not going to solve anything. And if I would have told this couple to go on a vacation for a week, they would have enjoyed it. Maybe it would have been good temporarily for the relationship, but it would have been a band aid on a gaping wound, which is the business that's hemorrhaging money. And so if the business is not making profit, if it's unprofitable, it'll cause huge amounts of stress that then we label as burnout. When in reality it's because the business doesn't make money. And so I harp on this and I know people will misunderstand me and say that I'm insensitive and I don't think about mental health and all the rest of it. I think many mental health issues, depression, anxiety and stress is caused from an unprofitable business, is all of it. No, there are certainly times where chemical imbalances, things that go on in the body, medications, people have trauma, things that they've gone through that absolutely have an impact on them. But many times the burnout I see classified on the entrepreneurial community is simply the stress caused by an unprofitable business. And no vacation, no vacation will solve that. It'll take you taking the time to create systems and procedures and doing the hard work as an architect on the business to step back and see why is there failure? Why is there unprofitable work happening? Why is there inefficiencies out in the field? Why is it taking me four days to get to do estimates? Those sort of hard conversations and systems building is what people are avoiding. And snapping the label of burnout so that they can go on a vacation. And when they go on the vacation, they come back to more chaos, more stress and less money. And it's a vicious cycle. People get in cause they think that the vacation's gonna solve it, when in reality they've bitten too much off, they can't chew it, they've grown too fast, they've stayed in growth mode too long, they've started too many locations, they've expanded too quickly into new services, they've gone to new service areas far too quickly. And so fix the model, focus on going back into profit mode, raise prices. And you're like, I've never even known what profit mode is. You're gonna have a ton of stress. There's gonna be chaos all around you. It's gonna be very difficult to retain employees when you're constantly in this mode of grow, grow, grow, grow, grow and expand. And I'm gonna go across the state and across the country. I'm gonna get more general managers, and I'm gonna. I'm gonna figure out all these new processes and add new services. Oh, we're gonna do this new brand here that is going to create chaos. And that chaos is what's causing the burnout. And so to think that a vacation is somehow going to solve that is completely naive. And if you talk to your best friend or your family member or your therapist, they'll recommend the vacation. But it's simply a band aid on the problem, which is the business is bleeding and it needs more money, it needs more cash. And to do that, you will need to go into profit mode. And so many times I have recommended companies stop growing, stop hiring more people, stop marketing, stop buying more trucks and more equipment, and go into profit mode. Not because the business needs the money, but because the business owner is constantly in a state of burnout simply because they have adopted this mindset that I gotta keep growing and I've gotta keep expanding. And they spent 10, 15, 20 years doing that. When reality, a location, a business should spend five, maybe 10 years in that growth process, but then raise prices, be in profit mode, and have much more sustainable profits that thereby solve the burnout problem. How does it solve burnout? Because by having more capital, I can pay my general managers more, I can pay my team more, I can facilitate much better equipment, I can allow for better safety meetings. I have the bandwidth financially to make those things happen. And then when I go on the vacation, I can actually focus on my family, because there's nothing more stressful than going on vacation with your spouse or with your family thinking that, oh, I'm gonna recover from burnout, only to know that there's just so much chaos you're gonna be going back to, and you don't even get to enjoy the time you have with the people that you love because you know what's happening back home, and that is the business has no systems, has no leadership. And without your constant presence and constant supervision, it continues to lose money. That is extremely stressful. All right. Third, on the docket, burnout isn't from working too much. It's from working on the wrong things. Wow. All right. The producer's getting a little spicy. It is very difficult to stand on the high horse and say that you are Working on the wrong things. When I am asked why many home service businesses and small businesses fail, I in turn say the reason is they work on the wrong things. Last year at Augusta Lawn Care, the average location grew revenue by more than 27% and we're on track to beat that this year. Year. If you want to see why, go to augustalawncareservices.com franchise and watch over 50 videos and case studies of different owners that took their independent lawn care business and turned it into Augusta Lawn Care. We think we need more leads. In reality we need to focus on upselling the leads that we do have and increasing the close ratio and thereby doubling or tripling the business. We are working on the wrong things. We think that the constraint is leads and getting more advertising and figuring out Facebook ads and figuring out door hangers. When in reality we just need to close more of the leads that come in. And once they close we need to sell more stuff to them. And if we did that, we double or triple without getting any more leads. And so we're working on the wrong thing. We're optimizing our Facebook page, we're optimizing the ad and we're doing the click, we're doing the funnel and we gonna make sure we have automations all set up. It's like whoa. Just sell more to the people that you literally have their credit card information inside of your software. Sell more stuff to them. And when a lead does come in, make sure you close it and make sure you call them, you text them, you email them, you have offers in hand ready to go to make sure they convert. If you do that and you focus on that, you will grow the business. And so I do agree that working on the wrong things is the huge reason why most home service businesses do not grow. It's the reason why many of them fail. And when I think about the constraints of the 4L framework. Liquidity, labor, sorry, liquidity, leads, labor and leadership, they're really the two that drive the whole thing. You need money and you need good leadership. Everyone goes after these other ones cause they're the most tangible. I need leads, customers and I need employees labor to do the work. But in reality, if I have enough capital in the bank, I can make good decisions from a leadership perspective. And if I have great leadership, I will attract great talent and good customers will want to come and be my customer because I produce a great product. And so I truly believe that assuming the liquidity is solved, looking inwardly and solving the problems around us, being better leaders is Usually the best use of our time, it is the best, is the actual constraint. And working on ourselves instead of working, quote on the business is actually the constraint that needs to be solved. And so I understand and I agree with like hey, we should not work on the business or in the business. We should work on the business. I agree. Some of us hit a constraint in the business because we don't work on ourselves as leaders, as communicators, as family members. Because a lot of times those personal problems bleed over into the business that prevent us from being a good leader in the business. Being a good manager in the business is because there's personal problems going on. And so I would say in addition to yes, you should work on your business, not in it as much, especially over a million dollars in revenue. I would also say we should work on ourselves as human beings, our health, our spirituality, our relationships, because those things affect our ability to work on the business. All right, number four, the silent burnout of general managers. Why they cap out at 18 months before they walk or implode. Okay, so great general managers, I'm always afraid of losing them. The average general manager or low performing general manager, I don't really care if they walk. So let me just be clear. My main goal is to retain great general managers. To do that, I'm going to do two major things. Number one, I'm going to give them a path to progress, which means even if they're with me for two, three, four years, they still see progress in their compensation. So I give them a higher percentage of profit sharing as they stay with the business. Also from a stage perspective, can they unlock certain stages, whether we with monetary benefit or not, can they unlock the next stage of their career by doing certain things? Growing certain divisions, increasing margins, having predictability or consistency of profits throughout the year. These are stages of their general management that they can actually learn and grow into. The other thing I'm going to make sure I do is that through all three stages of management, I allow them to be able to take control. What I mean by that is in my opinion, there is. I identify a problem, I identify a solution and then I execute. Those are three, three aspects of getting things done in a business is I've got a, oh, there's a problem, oh there's a solution, and now I can execute and go do what I think the solution should be. My main objective for that general manager, to make sure they don't get bored, that they don't cap out, that they don't burn out at that 18 month mark is to allow full autonomy in that complete system. A lot of times I see general managers burnout not because they're burned out in terms of working too much. A lot of times it's because the owner keeps putting themselves somewhere in between that system of oh, identify a problem, I come up with a solution, I go execute. And then there's, that's me, the general manager. And now this owner comes along like, oh, no, no, no, you gotta run everything by me. I wanna know. You tell me about the problems and I'll come up with a solution. Cause I'm the guru, I'm the smarty pants here. And you're not gonna go execute without running all of your ideas by me. And so I would highly recommend, if you wanna retain a great general manager, allow that full system of problem solution and execution to go without you inserting yourself. Allow them to set their own schedule, Allow them again, as the person outside the business, I only care about the numbers. So as long as we're profitable, as long as these couple KPIs for sales operations admins are being hit, you do you, I allow you to figure out your own problem in the business, create the solution and go execute on it. As long as these KPIs that have nothing to do with me inserting myself into the equation and me knowing everything in the business and being the bottleneck and then causing frustration for that general manager because they feel like they can't do their job. That's why most general managers do quit. That is why most general managers don't last 18 months. Because after 18 months you figured out how to do everything in the business. But if the owner keeps inserting themselves every time you want to optimize something, every single time you want to adjust, make a test or even just try something to see if it works better and makes the KPIs that you know you're responsible for better, if the owner doesn't allow you to do that, you will quit. If you're a high performer, if you get a B player, a C player general manager, they want to be told what to do. They can't identify problems, they can't identify solutions, and they might even struggle with execution. And so those people, they can go walk, but the person that is really good, the A player, they will also walk if you don't allow them to take full ownership of identifying the problem, identifying the solution and then going and taking action and realizing that by you not inserting yourself in that equation, they will make some mistakes on your dollar and that's okay, because I want to retain them for the long term. All right, fifth and final on the docket when it comes to burnout, is. Is your exhaustion a leadership problem, or is it really a profitability problem in disguise? So I certainly agree. We've already talked about the fact that having low profits causes a huge amount of stress. How do I know this? Because I have not been able to make payroll in the past, and I had to scrounge things together. I have charged my personal credit card on the account of. I'm probably, like, outing myself is like, probably some sort of. Like, this is probably not allowed. I charge my own credit card inside of my CRM, so the money would go to my bank account, and I really would just need to basically take a loan against my credit card. And you could also do a cash draw. I just didn't even know I was doing. I was like, look, I need money within the next 24 hours. I'm going to charge my card. Because back in the day, I was using Amazon payments. It doesn't exist anymore. Then I used Square also wasn't really. Don't really recommend doing that. However, I was literally swiping my card to be able to get the funds required to make payroll. Is that stressful? Yes. Does that cause burnout? Yes. Am I happier when I know that payroll will be made this week? Yes. And so I would first focus on building a profitable business before I start trying to. Caught Trying to fix the problem of burnout and psychological damage and the trauma I've been through, because I promise you one thing, you will have less stress, less. You have less chance of burnout psychologically if you have a profitable business that can run without you. But right now, the business is unprofitable and barely gets along, barely breaks even, and barely pays the bills, even with you. Working 14 hours a day. That is stressful is like beating your head up against a wall, a brick wall that you can't move. It is extremely taxing on your physical, mental health, your physical health. Every aspect of your emotional intelligence gets drained when you don't have money in the bank. And everyone. This is, like, so obvious. And yet everyone begs on it when I say money solves everything. But it does, because if you have money, it gives you the ability to think clearly. You no longer are you trying to think in terms of making payroll tomorrow, but you can actually step back and be, okay, let me let. Let me let my team make a mistake or two and figure things out on their own. Let me let my general Manager, identify a problem, make the solution, and then fail on execution. When I know it would fail in execution, I could have just told them. But now, because financially I can allow that to happen in the business, I'm going to step back and allow them to do it. That's what allows you to keep great people. And the only way to keep those great people is to have the money sufficient enough for them to make that L without you jumping in. And so I always go back to solving the profitability problem first. And the reason I talk about growth mode and profit mode is because the vast majority of home service businesses, if they would just stop thinking about growth and the amount of turnarounds I go to there, they grow a 40% last year, 50%. I'm thinking about growing, expanding that by a million dollars next year is insane. While at the same time there's no money in the bank account. They're stressed financially, their relationships are stressed, their spouses are strangers to them. Fix the profitability problem. Spend a year or two not growing, not hiring more people, not buying more trucks, not growing revenue, just grow profits for a year or two. Get your feet underneath. You don't experience burnout for a solid season. And then think about going to growth mode if you really need to, if you really know after that year that it meets your goals. I consistently this year more than ever, I have told people to stop growing, don't start another location, let this location just become really profitable and pay a bunch of taxes this year, that's okay. But by doing that, I then set up this cash cow, this cushion of cash that when I go back into growth mode, I don't have to be as reactive. I don't have to hire people and get mad at them because they're slacking off for a day or because, you know, all of a sudden I cannot hire people and I can't run indeed ads. I have no cash in the bank, I can't make payroll. That level of stress is a recipe for disaster, and I'm going to avoid it at all cost by making sure I have money in the bank. This is why I beat the drum of going into profit mode, is because if you went into profit mode for a year or two, yes, you wouldn't grow as fast, but you'd wake up in a year or two with more cash in your bank. And when you went back into growth mode, you'd be able to do it with a level head without burnout and be able to make solid decisions as a leader that would allow you to get to that 3 million dollar marker. My name is Mike Andes. This has been the Home Service Millionaire channel. If you enjoy this type of content, comment below. Also, what other topics would you like me to cover? Put that in the comments as well and we'll see you on the next episode.