In this segment of his turnaround‑style show, Mike Andes discusses how consistently low pricing forces small service businesses to hire cheap, often cash‑only labor, which in turn caps wages, limits training, and erodes leadership quality. He illustrates the problem with the case of Matt, owner of Courtney’s Lawn Care, who paid employees under the table, charged customers only $30‑$35 per hour, and consequently faced massive turnover, logistical headaches (picking up and dropping off unlicensed crew members), and an inability to attract competent workers. Andes explains that the root cause is not a bad labor market but the business’s underpricing: without sufficient profit margin, owners cannot pay competitive wages (e.g., $27‑$28 per hour) and therefore settle for low‑quality candidates. He argues that proper pricing—tracking costs, setting rates at $80‑$90 per hour or at least $45‑$50 for regional competitors—creates the cash needed to hire better talent, implement systems, and break the cycle of churn.
Chapters
Cheap prices force you to hire cheap solutions. Low prices don't just affect customers. They cap wages, training, and leadership quality. You don't lose A-players on your team because of culture. You lose them because the math never allowed for excellence. This reminds me of a story of Matt from Courtney's Lawn Care that we visited a couple of years ago for a turnaround show. And at the time we went for the turnaround show, Matt was paying his employees cash under the table and not reporting them as W-2.
Me and Brandon is the only one on payroll. Everyone else wants cash and I want it now.
Can't find really any good employees. None of the Americans want to work. We always have bad luck. I don't know. Do you have an employee that you're like, oh, we totally trust them to be on a job site all day long?
Debbie, my ex-wife. The guys cannot stand her.
That might be why, though, you had 8 people join and within a week they all left. He could not find good employees. He was so frustrated by the fact he couldn't find anyone. There's a huge turnover and churn of employees coming to the business. None of them had driver's licenses. So he and his ex-wife would have to pick them up from their house in the morning and then drop them off at the end of the day.
Two of my employees can drive, so we have to pick them up, drop them off. I mean, it's, it's, you know, crazy.
News alert. If you have to drive 30 minutes to pick up your crew, 30 minutes back to your shop, and then do the same thing at the end of the day, that's 2 hours of drive time wasted every single day if you have to go pick them up. So it's no mystery that there was high churn, there was low wages. It was cash underneath the table. There was no systems in place. And so by not having the profit in the business, because he was so underpriced, like literally $30 to $35 per hour is what he was charging customers on some projects.
I hear you talk about $80, $90 an hour. We are on the high side at $45. I mean, very high. I got one regional company that is at $35 an hour. Everyone we've bid on, we've been 45% higher than them.
Because he didn't know his pricing. He hadn't tracked anything inside of his software. And so that trickled down to eventually where he couldn't afford to pay employees well. And because he couldn't afford to pay them well, he ended up getting the lowest quality candidates. I ask people all the time when they say, "I can't find anyone to work for me. The labor market's bad. This generation doesn't want to work." I say, "OK, wait a sec. If you were able to offer $8 more or $10 more per hour to applicants and people that were looking for jobs in your area, do you think you would get a better candidate? And a lot of times I say, well, yeah, if I raise my base pay from $18 an hour to $27 an hour or $28 an hour, I would probably immediately have a lot of applicants from my competition. The best people in my market, they'd probably want to come work for me. Realistically, it's not the labor market. It's the fact that you can't afford to pay them $27 or $28 an hour.
