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If you've ever thought about building a home service empire, a regional chain across your state or your entire country, this is the video for you.
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I'm going to show you the playbook I used to build a $50 million lawn care business using these three steps.
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And this video will be chunked into these three operations.
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Number one, we're going to talk about your business plan.
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You've got to nail it with the exact steps for the business model that you can copy and paste like repeatable units over and over again.
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That's the first section of the video.
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Then we're gonna talk about the mindset required to be able to grow quickly.
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And last but not least, we're gonna talk about what you need to do to be able to attract and retain great employees.
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Because as you begin to scale past 10, 50, 100 employees, most of your ability to scale comes down to your ability to retain great talent.
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So let's get started with these three video sections that make up the masterclass of how you can scale your home service business.
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These are the seven stages of success.
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The first stage is growing your revenue past $500,000 in annual revenue.
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Now, if you have a business that has a whole bunch of materials, a bunch of subcontractors, then you are likely not going to have 500,000 in revenue.
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You're likely gonna have a lot more, but you're going to have material costs, contractors, and other cost of goods that are baked in.
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I'm talking about $500,000 of labor revenue, okay, annually.
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Now, once I pass that, I'm gonna go move on to stage two.
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which is I'm going to enter profit mode and raise my prices.
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I, when I hit capacity, as we talk about inside the book, when I hit capacity is when I raise prices and I have the opportunity to move into profit mode.
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That's stage two.
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And then stage three is I'm going to simplify and focus on recurring revenue.
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So you're like, well, I don't do, I don't, I only do projects.
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Okay.
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That's fine.
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But I'm trying to get the business to be more stable where it's not as lumpy of revenue.
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And if I do projects on every project you sell, you can sell a warranty.
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You can sell a maintenance package.
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You can sell ongoing repairs and fixes to the system that you've installed.
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These are all things that you can bake recurring revenue.
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It doesn't have to be recurring jobs.
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It can be recurring revenue.
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And insurance is the best form of something that is one-time.
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But they sell recurring revenue.
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Every single month you pay on your house.
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And maybe once every 30 to 50 years, that policy is issued.
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And they actually have a claim.
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You'd say, that's a one-time job.
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No, it's a recurring revenue.
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They just spread it across all your monthly payments.
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And so this is recurring revenue.
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Any business can install recurring revenue inside of my other book, which is the off-season.
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I talk about in Cure 4, the ways to be able to create more recurring revenue, not just during your off-season, but throughout all of your business and why it's so important to enterprise value and handing the business off.
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Because lumpy revenue is not systematized.
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What is systematized?
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It is simplified and standardized.
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And so recurring revenue is the closest thing to be able to have a system in the business because it predictably creates revenue.
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And a system is where I take predictable inputs and have a predictable outcome.
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And the inputs are, I sell more recurring work.
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On the other side, I have a very predictable amount of revenue that I make every single month, every single quarter.
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And I don't have months where I make 100,000 and then months where I make 10,000.
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I never want to make less than 50% of my best month's revenue
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any other month of the year.
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So if I make $100,000 in monthly revenue, I never want a month to be under $50,000 in monthly revenue.
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That is, if that's happening in your business, we call what we call seasonitis.
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And that's the disease that affects many home service businesses.
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The number one way to solve it is to use recurring revenue.
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The same way that insurance companies make sure they don't have massive spikes in payments, they just...
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Make it recurring.
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They spread it out over the course of a whole bunch of payments.
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So you can do this for any home service business.
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Even if you only sell, I install HVAC systems.
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You can sell recurring revenue.
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Like, oh no, like only like 10 or 15% of people accept.
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Okay, give them a discount on the install to where you're basically giving away a year's worth of warranty or a year's worth of fixes, maintenance, and repairs.
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But then you know that 80% of people convert into year two, three, and beyond.
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And every single time you come back to that customer is another opportunity to sell them another job.
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Recurring revenue allows me to upsell one-time jobs every single time I come back to the property.
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If you're using Copilot, soon to be HomeWorks, take a stinking video and attach it to the visit of jobs that can be upsold every single time you show up at the property.
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You teach your team to do that.
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You create an incentive program.
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Recurring revenue allows me to create one-time revenue.
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You're like, I make all my profit in one-time jobs.
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Great.
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Create the recurring revenue to keep your crew busy year-round.
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Never have a month where you lose money.
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Regardless of your overhead, it's covered.
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Focus on that first.
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That's number three.
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Simplify and focus on recurring revenue because there's no way this business is going to be high enterprise value, run without you as the owner, and not create huge amounts of stress during the off season if you have months where you lose money.
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You never want a month where you lose money.
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If you solve that problem in home services in a seasonal, quote unquote, seasonal business, which by the way, it is a feature, not a bug of home services.
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You're going to have seasonal work.
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There are going to be times when there are more people calling than others.
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The goal is, how do I figure out how to weed out the schedule to where I push one-time jobs off?
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I push time-insensitive jobs, I push them off.
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And I also pull demand forward when it's slow.
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I give discounts, I give offers to pull demand forward when otherwise people start in April.
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Well, great, I'm going to give them a discount in February and March to pull that demand forward so that I can get more new customers during the actual rush.
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Simplify and focus on recurring revenue.
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That's stage number three.
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Stage number four is you're going to start growing.
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This is scale.
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This happens organically over the course of two to three years if you stay in profit mode.
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Because remember, every single time I hit capacity, I'm raising prices by a minimum of 15%.
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And if you do that a few times, i.e.
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a few years during your spring rush, you're going to get above $800,000 annual revenue.
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So my one location this year will probably do like $1.1, $1.2 million in annual revenue.
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They're in profit mode.
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They're not buying more trucks.
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They're not hiring more people.
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They're going to stay between six and eight employees with one working GM.
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And that's it.
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But because they've been in profit mode for several years, they get well above $800,000 and they're still inside this system.
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Number five.
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Now, this is the most conservative approach that I'm outlining here.
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If you want to accelerate and go faster, because this is going to take five plus years to get here.
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If you want to accelerate and go faster, you can.
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It's just not going to be as conservative and you're not going to be as profitable.
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And you're going to have a little more stress because growth sucks cash and cash creates cushion.
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So you don't have stress.
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So step stage number five, get a general manager, hire a general manager that gets you out of daily operations.
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Out of daily operations means when you leave sales, operations and admin are all taken care of, meaning the work gets sold, the work gets done and the work gets paid for without you being there.
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Now, the easiest way to make this happen is make sure that your admin is completely systematized.
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And ideally, admin takes phone calls to sell jobs because it makes the sales position much easier to get rid of.
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If every single job is custom, if every single project requires an estimate that has a whole bunch of experience, it's very difficult to get out of daily operations.
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And so this is why systems in stage three are so required and getting on recurring and simplifying the services so that when I hire GM, the level of skill and the compensation I have to pay them is as low as possible.
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If I'm trying to find a unicorn that has 10 years of excavation experience, has years of horticulture, has years of hardscaping and concrete and fixing fences and doing decks.
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If I require all of these services, the likelihood of me to do number five is so low.
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And this is why people have 1.5, $2 million businesses, and they burn out making good money, but they can never hand off in stage five.
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They can never hand the business off because nobody has their skill level without getting paid an exorbitant amount of money.
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And if they had all those skills, they'd just go start their own business.
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Stage number six is repeat.
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It has copy and paste multiple locations.
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That is where I believe, instead of trying to figure out the next level of business, which is get mid-level managers, create regional managers inside of the company, division leaders, multiple assistants in the office, multiple sales and estimators, I just want to copy and paste this model over and over again.
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They did not have to reinvent the wheel to make Panda Express go from 10 locations to 2,500.
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They just did the same exact thing for 40 years.
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Same exact thing.
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Chicken, rice, sauce.
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They didn't reinvent anything.
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They didn't change anything.
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They're like, we're changing the game.
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We're moving to AI.
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And we're going to keep this app.
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No, it's just really simple.
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And so we get fancy.
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And so many times we build a million dollar, two million dollar business and home services.
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And the next, we somehow think that we got to move on to the next thing.
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When if you just take what you're done and just copy and paste it over and over again.
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And now this just becomes a leadership game of finding great general managers and finding great people.
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That becomes the obstacle, which is by the way, not easy.
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That's why in the book, I talk about the whole constraint of the copy and paste method, i.e.
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stage number six.
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is finding great general managers.
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In other words, becoming a better leader.
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Hard skill.
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Easier, in my opinion, than reinventing the business model that you've already built.
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If you've got through stage five and you have a million dollar business pumping out $200,000 in profits, why would I go try to reinvent the wheel and have to create brand new systems for whole new departments when I can just take that model and copy and paste it over and over again?
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And in doing so, I will have to gain the skill of leadership.
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and managing managers, and that can take three to four years.
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But I believe that is a more scalable thing once you figure out that leadership hack.
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Like once you figure out that skill and you gain that, and it can take a few years, and you will turn through a few general managers, and it only takes reps many times to actually solve the obstacle of not having that skill.
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But once you have it, you should be able to copy and paste this much faster.
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And only then, after stage six, when you have so much distributable cash, you can't copy and paste fast enough
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That is when I would invest into things outside of the industry.
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Diversifying the stocks, real estate, and other businesses.
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What's crazy is a lot of us jump from number four to number seven.
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And then we wonder, like, oh, man, stocks, like, making 8%, 9%.
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Great.
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Your business can annihilate that.
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If you can put $200,000 into a new location, and in a matter of three to five years, it's giving $150,000 in distributions, $150,000.
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There's no stock market or real estate market that's going to compete with that.
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And what's crazy, if you've done it once, the likelihood of doing it again, much higher.
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Also, why in the world, why in the world would I get into another industry like the stock market or real estate where everyone else is competing in that market?
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You are at best average in that industry.
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Why would you not use that advantage to just copy and paste it?
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Here's why.
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Leadership is very, very difficult.
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And we hit up against this leadership problem when we start having to go to number six.
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And it is finding more general managers, finding and attracting great talent, keeping them, compensating them, motivating them, inspiring them.
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That is a hard skill.
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It is not easy.
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But many times we hit up against it and then we just think, I've got to go different industry.
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I've got to go add more services.
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I've got to go to a new, I've got to add more something.
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I've got to, this real estate thing is so much better.
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Like, ah, eventually, you know, it's not McDonald's.
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They're selling burgers.
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They're doing real estate.
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And we get all the we give all the reasons as to why another industry or another service is going to somehow be the next leg in our entrepreneurial journey.
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When reality, we have simply hit up against the obstacle of leadership.
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And for the person that is doing two, three million dollars, many times it's actually a function of they failed to solve the leadership problem.
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So they stayed in operations.
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Until an owner can leave operations and sales operations and admin be fully handled without them being showing up for a week or two and things go well, jobs get sold, jobs get done and jobs get paid for without them being there until that time, they have not solved the constraint of leadership.
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And so a lot of people do, they just give up on ever trying to have the business run without them ever having the leadership skills because it's hard.
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It's very difficult to gain that skill.
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They give up on it and they just stay in daily operations and run a two to three million dollar business working crazy amounts of hours, hoping and praying that their operations manager sticks on board, hoping and praying that nothing happens to them physically because they are working crazy amounts of hours juggling admin operations and sales when people don't show up.
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Last weekend, we actually had our Augusta Lawn Care annual conference with all the owners of Augusta Lawn Care.
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And we launched a brand new thing called Augusta Leads where they actually have a guaranteed 100 recurring customers when they start a new location.
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It's all part of the program.
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We actually run their ads for them and make sure they are able to get above break even when they're starting more locations.
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This allows you to be able to copy and paste and do multiple locations much, much easier.
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If you're interested in joining Augusta Lawn Care,
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Before the spring rush starts, go to AugustaLawnCareServices.com slash franchise.
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Book a call with Lee and his team to see if joining Augusta Lawn Care is the right fit for you.
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All right, so we've talked about the seven stages to be able to get a location to where it is copy and paste, and you're able to start building a chain out, an empire for your home service business.
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Now, let's talk about the mindset that is required to make that happen.
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Because you can have the steps, like, oh, that's seven steps, that's easy.
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Yeah, I agree.
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But if you have the wrong mindset, you'll never get past stage one.
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I was thinking a lot about the difference between those that are ultra successful in this thing called business and monetary success because we could have a whole different discussion about success personally, physically, et cetera, in someone's relationship.
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But I started to peel it back because like –
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many of us, we are trying to be students of those that have been successful, and we try to replicate the things that they have done that have made them successful.
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And I started peeling back, really, what is it that makes the ultra successful successful at business?
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And it reminded me of an interview that Michael Jordan did when an interview asked, like, they wanted their kid to be really good at basketball.
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He said, what do I do?
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What's the tactic?
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What's the thing I'm supposed to do in order to get my kid to be a great basketball player?
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And the answer that Michael Jordan gave is something that I thought a lot about.
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And he said, you've got to do whatever you got to do to make sure they love the game.
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And...
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There's several things that I think are so important about that.
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Number one, it's very difficult to manufacture love, especially when you are trying to impose on someone else.
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And so for like a mom or dad that wants their kid to do well at basketball, how do you get them to love the game?
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It's probably not going to be super rigid, structured rules.
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They're going to allow your kid to fall in love with the game.
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Now, the rigid structured rules might give conformity and in the short term increase metrics or increase the performance of the child's ability to play basketball.
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But the actual unlock long term is that they love the game because if they love the game, the results will become a byproduct of them applying themselves to it so much that they simply become good at it.
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And so I think the same thing is true with business, and I could be wrong.
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It's just that when I look at the people who are the best at business, they just love the game.
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They just love doing it.
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And they're not necessarily the most skilled.
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They're not the most articulate, but they simply love the game.
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And one thing about love is that if it's super structured and it's super tactical, it's very difficult to actually manufacture.
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So, for example, I love my wife.
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But it would be very weird if...
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Everything about our relationship was structured.
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It's like, you must be at home at this minute.
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And before I give you a kiss, you must take off your shoes.
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And then after you take a kiss, you must change your clothes before we then have dinner.
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And then once we have dinner at exactly 6.33 p.m., we will then... Like, that rigidity in the short term might...
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Have the conformity of creating more space or more time or having more quality time together.
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But in the long term, you lose the love.
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And the love is the thing that actually keeps the couple together.
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Because there are plenty of people that make rules, but they fall out of love.
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And so falling out of love is the ultimate sin, in my opinion, if you are trying to apply yourself to something in the long term, whether it be a relationship, whether it be the gym, whether it be business, whether it be making money.
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If you fall in love with the game, you will keep doing it over and over and over again.
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And it's not a function of conformity is a function of desire and.
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This was apparent to me a couple years ago when I started realizing, okay, I am starting to need to find a life partner and a wife.
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And when I met Brianna on our second date, Brianna's my wife, if you didn't know, um...
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I told her, I said, there's something I want to be very upfront with you.
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And she didn't know when we originally met about the businesses and everything I did online.
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Nothing.
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Like, literally on our third date, it was like, what's this Augusta thing and co-pilot?
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So she didn't know those things and didn't come into meeting me knowing about the businesses.
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But on our second date, I said, look, I need to be upfront and honest about something.
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And that is, if this is going to go anywhere, I want to be very clear that, like, I love business.
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And it's not that I love the result of business, which is maybe making money or having a big office or employing a lot of people.
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But like I love business.
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And I said I would rather die than to lose that.
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And it wasn't being...
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hyperbolic, I wasn't trying to be dramatic.
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I was being honest after realizing after years that like that was going to be a requirement for me just to survive in life.
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And that if I did not have that, it would make me unsatisfied, but more importantly, I would resent whoever took it away from me.
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I truly believe that that is what separates the people that I look up to from a business perspective.
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They love the game.
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And if you look at their browser history,
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If you look up their YouTube videos, if you were to look at what they're looking at on their apps, it is just business.
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It is they want to learn and understand the game of business.
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And they will beat the person that has the 5 a.m. routine in the morning.
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The person that's looking for the next biohack.
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The person that's looking for the next productivity, you know, hot thing.
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Jumping from dropshipping to...
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cryptocurrency to flipping real estate to amazon fulfillment like from thing to thing to thing they just love the game of business and they don't mind applying themselves their entire life to it the same way that loving a partner and just applying yourself and being committed to them for your entire life usually nets out in a pretty positive relationship
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I would also say that if you understand that and you believe that it's actually very difficult to manufacture, it's very difficult to be like, Oh yes, I agree with that.
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Now I will go try to fall in love with the game.
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I would just say, go look at your browser history, go look at the YouTube videos you're watching and maybe start there because that's probably the thing you love most.
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The thing that you're spending your time, the thing, look at your bank balance, look at your credit card statement, where are you spending your money?
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Because those are votes every single moment, every single hour of every single day as to where, what you do actually love.
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Yeah.
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Because you spend your discretionary effort on it.
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The time you spend on the toilet, the time that you spend on the couch while there's ads playing, while you're brushing your teeth, whatever you're spending your time on there is probably the thing that you love.
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If you fall in love with the game, whatever that game for you is, I think you'll be in the top one or 2%.
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And if you fell out of love with the game, the same way you can fall out of love in a partnership or in a relationship, there are ways to be able to re-inspire that.
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Looking at your calendar, be like, okay, out of the 100 things I do in the day, what are the two or three things I actually do love?
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Let's do more of that and delegate these other things.
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Like, I don't have the money.
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No, if you spent all of your time on the 10 or 15% of your day that really lit you up, that you loved, you'd probably do more of it.
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And so people that look at other individuals and say, how do they work so long?
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How do they work so early?
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How do they work on the weekends?
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How do they come up with ideas in the middle of the night?
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It's the fact that they love the game.
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They love it.
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And so the more time you can put towards the things that you love and delegate everything else that is required to start the business, the sooner you can get there.
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And it's not right away.
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And there are years of grinding and doing the things that you absolutely despise doing because it's simply required to be able to get the business off the ground.
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There is a season for that.
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But as you pass that stage, $500,000, $1 million, $2 million in annual revenue, the next year
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Mountain is what do I love?
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What turns me on?
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Because that I will be able to deploy 200 to 300 percent more discretionary effort towards discretionary effort is effort that is not required, but I voluntarily give it out of my own goodwill.
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So when time in the shower, time that I'm sitting there looking out the window, what am I thinking about?
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That's discretionary effort.
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And many times when you love something, it pulls the discretionary effort towards that thing.
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All right, so in this masterclass, we've already talked about the seven stages to be able to scale your model across the country.
295
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Then we talked about the mindset required to make sure it happens.
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But the major component of all of this is finding the right people.
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Not finding them, not hiring them, but actually retaining them.
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And so one of the biggest tools that we've used for retention is anonymous peer reviews.
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The ability to be able to give feedback to other people inside the company and to where all the negative criticisms are not coming from you as the manager.
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So this is actually a question that was submitted from a million dollar operator in the lawn care landscape industry.
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But if you use this, you can take it from a million to 10 million by finding the right people and then using peer reviews, make their talent more refined and be able to improve their skill set.
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Hey, Mike and team.
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Hope you guys are doing well.
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This is Zach Beyer, Westfield, Indiana.
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Name of my business is Beyer Lawn and Landscape.
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We're going to do just under $1.1 million this year in 2025 and have...
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eight full-time field guys, one part-time field guy, and an office administrator, so-called 10 employees.
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My question for Mike is in regards to end-of-the-year employee reviews.
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I know you've talked about it before, how you do basically anonymously.
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Yeah.
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reviews amongst employees to one another, but also feedback, you know, towards me and my leadership and feedback towards the company in general, I would just love maybe an in depth answer of how exactly you go about that.
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Again, I know you've talked about it before, but just don't know exactly how you like to go about it.
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You know, how do you keep the anonymous?
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How do you talk about it?
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You know, with the guys, you know, we have a Christmas party coming up.
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how exactly do we bring all that stuff up?
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So any help and any feedback in terms of the employee reviews would be awesome.
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Yeah, first off, when it comes to employee reviews and peer reviews, I think it's one of the most underrated tools once you get above five employees.
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When you're below five employees, you can't really do anonymous reviews because everyone knows who's talking about who.
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It's very hard to figure it out.
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But once you get 10, 15 employees, Zach doing now 10 employees, you can absolutely do anonymous reviews.
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How we did this, we started off very manual, which was paper.
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And they got a sheet of paper.
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It had everyone's name and said what they're good at and what they can improve at.
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And they just fill it all in.
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We then had those submitted back to us.
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No one had to put their name at the top.
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So we didn't know who the feedback was coming from, but we know who it was directed at.
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And then what we did is we just combine all the feedback of what they are good at and what they could improve at for each person.
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And then after our end-of-year party, or it wasn't a year party, it was kind of like a 15, 20-minute thing about business.
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And then it was more or less like let's just have dinner, et cetera, chill out, have fun.
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Sometimes kind of going off-site is nice.
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So we would do that.
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At the end –
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Don't do it before.
336
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At the end, we would give them their sheet.
337
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You don't do it before because people get in their head about negative feedback.
338
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So at the end, you say, hey, in an envelope, everyone's got their name on it.
339
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We don't know who submitted the feedback.
340
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But inside of that is all the pure feedback from everyone inside this room about you.
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I always frame it as a really positive thing because there's no way, like, no one's family is doing this.
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None of their friends are going to tell them, like, where they can improve at and give them criticisms that are in a constructive manner.
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Usually it's going to be like emotion and they're mad.
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So this is like the one very unique opportunity for a human being to get constructive criticism that makes them better.
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And so I always framed it as a really positive thing.
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And then usually a couple weeks prior to that, I would read my...
347
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pros and cons, or like my good at and what I can prove at, from the year prior, in front of the team, so they kind of just got disarmed.
348
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And people would laugh about it.
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They would kind of chuckle.
350
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I would say some funny jokes about myself, just to get everyone relaxed about giving peer feedback, because a lot of people, it doesn't come naturally.
351
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It feels like...
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they feel like they might get judged for it.
353
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They feel like if I say something that's a little bit too harsh or if I say something that I really want to say, but they might get their feelings hurt, I try to disarm them by saying, hey, use me.
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All the bullets, put them here.
355
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And so I believe that by doing that, you disarm everyone.
356
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Okay, it's okay to give harsh feedback.
357
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It's okay to be able to say what we're actually thinking.
358
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And Mike literally stood up in front of us and told all of what was said on his last year.
359
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And then hopefully at the end of that, I can say, hey, based upon this feedback, I was able to make one or two changes in the business or in my personal life or in my leadership style or whatever based upon this feedback.
360
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And so then they also realize, again, you're trying to reinforce them for giving good constructive feedback.
361
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They're starting to realize that you actually take action on the criticism that were given to you.
362
00:27:00.535 --> 00:27:10.778
And without saying it, what you're really saying is I expect you all that when you get criticisms that are going to hit hard in your stomach, you will also make changes based upon that feedback from the team.
363
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And I will tell them that a couple weeks prior.
364
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I'll be like, hey, that one hurt.
365
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Like that was a gut punch.
366
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Man, that hurt.
367
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It took me a couple days.
368
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And there's been times when it comes to peer reviews that –
369
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the feedback that I got took me a couple days to really process, get over the emotion of being mad.
370
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And then I think about it and like, okay, what changes could I make?
371
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And like, okay, that makes actual sense.
372
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And so I try to give them all of that upfront information two weeks in advance when they're getting the peer reviews prior to them actually filling them out.
373
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Then like Jack was mentioning at the offsite, I'm going to, at the end, give them each an envelope with theirs inside.
374
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I'm going to say all of the same stuff again.
375
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I'm going to repeat how valuable it is, how how lucky we are that we get to have this and that I expect you all to have a punch in the gut when you get some of this feedback.
376
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And we're doing at the end of this party because I didn't want to ruin it for you.
377
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I didn't want to ruin dinner.
378
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So you've got to be like light.
379
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Keep it light because when they get the feedback, it's going to be hard.
380
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It's hard to hear.
381
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And so you're you're kind of like softening that blow.
382
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And everyone also was able to give you a lot of feedback.
383
00:28:13.760 --> 00:28:27.570
Now, keep in mind, and I also say this when they're getting their envelopes, as humans, we will look to all the negative things first, and we will miss the fact that almost every single person I've ever done a peer review for had a positive section that was larger than the negative section.
384
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Or, like, things they're good at was larger than the things that they needed improvement at.
385
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But immediately, and I'm the same way, like, I'm like, okay, great.
386
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Who cares about the stuff I'm good at?
387
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What did people say about my bad stuff?
388
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And so I prep them with that.
389
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prior to them getting their own feedback because it is hard and they many times will glance over things that people really love them for some of the feedback that i've got from employees about the peer review process is they never knew that what they were doing people loved
390
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And so they would get five, six, seven people saying the exact same thing.
391
00:29:02.669 --> 00:29:04.891
Like, wow, I didn't even think about that.
392
00:29:04.951 --> 00:29:14.359
And yet so many people noticed and really appreciate that I do something extra in the business or I show up early or make sure the coffee's on for everyone in the morning or wipe out everyone's truck at the end of the day.
393
00:29:14.399 --> 00:29:16.661
Like little stuff like that comes in the peer reviews.
394
00:29:16.781 --> 00:29:22.386
They also start to realize that there are things they're doing that they don't have any idea.
395
00:29:23.208 --> 00:29:25.976
is knowing people, causing them to get frustrated, et cetera.
396
00:29:26.357 --> 00:29:30.330
And so there was one time where one of the team members said, hey, look –
397
00:29:32.370 --> 00:29:41.817
My negative feedback was basically that I am always joking around people, but I cross the line, and that I am mocking them or teasing them too much, and after a long day, it gets to them.
398
00:29:42.178 --> 00:29:44.379
And he's like, three or four people said the same thing.
399
00:29:44.459 --> 00:29:45.000
I never knew that.
400
00:29:45.020 --> 00:29:45.981
I was just trying to be joking.
401
00:29:46.001 --> 00:29:46.761
I was just trying to be fun.
402
00:29:47.121 --> 00:29:48.843
And so he's like, okay, I'll dial that back.
403
00:29:49.063 --> 00:29:57.390
Now, this is the 2.0 version I learned after a few years is have one-on-one meetings within 48 hours of them getting the feedback.
404
00:29:58.257 --> 00:29:59.879
And then you, it's so easy.
405
00:30:00.299 --> 00:30:03.722
The one-on-one just becomes, let's review your feedback together.
406
00:30:04.503 --> 00:30:06.645
And you always start with the positives.
407
00:30:07.065 --> 00:30:08.226
You go over there in the one-on-ones.
408
00:30:08.246 --> 00:30:09.467
It's like, well, let's go for the negative first.
409
00:30:09.487 --> 00:30:10.969
And I'll try to, this is a one-on-one.
410
00:30:11.009 --> 00:30:15.953
No, like really reinforce and back up what the team appreciates about that team member.
411
00:30:16.774 --> 00:30:18.276
And go over all the things that are positive.
412
00:30:18.296 --> 00:30:20.638
And then add your own ab lib to it.
413
00:30:20.938 --> 00:30:22.240
Like, reinforce them.
414
00:30:22.300 --> 00:30:23.160
Oh, they said the same thing.
415
00:30:23.180 --> 00:30:23.601
Let's go.
416
00:30:23.941 --> 00:30:24.342
Pound it.
417
00:30:24.362 --> 00:30:25.102
Like, give a high five.
418
00:30:25.122 --> 00:30:35.392
Like, keep the energy high because you need that social credibility that when you go to the negative side and there are things that are going to be tough to talk about, that they're, like, open and receiving.
419
00:30:35.413 --> 00:30:35.693
Okay.
420
00:30:35.973 --> 00:30:38.235
So then you're going to go through the negative feedback.
421
00:30:38.855 --> 00:30:47.081
And what's really nice about peer reviews once you get above 10 employees is employees will say almost everything you want to say to your team, but you can't.
422
00:30:47.901 --> 00:30:54.646
For example, when we were working in doubles in the cruise, there were some people who would not shower or they'd come to work and they just reeked.
423
00:30:55.386 --> 00:30:59.069
I can't say that, but the team certainly can in an anonymous peer review.
424
00:30:59.269 --> 00:31:03.252
And when five people say you need to shower more often and you stink at work –
425
00:31:04.255 --> 00:31:06.917
People start to listen to their team members, and it means a lot to them.
426
00:31:06.957 --> 00:31:10.019
Like, it's very infrequent in life.
427
00:31:10.039 --> 00:31:11.059
You get this kind of feedback.
428
00:31:11.720 --> 00:31:12.901
And so it can mean a lot.
429
00:31:12.921 --> 00:31:15.322
It can also really crush them, and they can get a little agitated.
430
00:31:15.642 --> 00:31:22.687
They can be a little frustrated by the fact that people see them a certain way, and they don't mean it to be that way, or that everyone is saying they should work harder, and they feel like they're working hard.
431
00:31:23.027 --> 00:31:31.373
And so you use the one-on-one as a way to validate their positives, validate the things they do need to work on, and then give them a roadmap to improve on them.
432
00:31:31.873 --> 00:31:34.914
Because that's a lot of times the gap that the team member doesn't know how to fill in.
433
00:31:35.354 --> 00:31:36.954
It's like, okay, I got this feedback.
434
00:31:37.174 --> 00:31:37.634
Okay, cool.
435
00:31:38.454 --> 00:31:39.294
What am I supposed to do with this?
436
00:31:39.894 --> 00:31:42.155
Okay, how can we lean into some more of your strengths?
437
00:31:42.375 --> 00:31:43.955
People really appreciate these things about you.
438
00:31:44.175 --> 00:31:45.135
How can we lean more into that?
439
00:31:45.396 --> 00:31:47.196
Okay, these things I think you can work on.
440
00:31:47.576 --> 00:31:48.816
What can we do to make that happen?
441
00:31:49.116 --> 00:31:51.877
Can I support you in any way to make sure I can help you?
442
00:31:52.197 --> 00:31:55.917
Like, you're like, everyone's saying I'm slow on jobs, but I'm working as hard as I can.
443
00:31:56.278 --> 00:31:58.158
Okay, what could I do as your manager
444
00:31:58.818 --> 00:32:01.959
to make sure that you have the training required.
445
00:32:02.539 --> 00:32:04.740
What can I do to support you working quicker on the jobs?
446
00:32:04.800 --> 00:32:06.220
It sounds like people are frustrated by it.
447
00:32:06.781 --> 00:32:07.801
I love you as part of this team.
448
00:32:07.821 --> 00:32:09.381
They've said so many good things about you.
449
00:32:09.802 --> 00:32:11.142
Let's try to work on these things.
450
00:32:11.442 --> 00:32:12.722
Let's create a plan together.
451
00:32:13.263 --> 00:32:20.625
And so now your one-on-one actually becomes a coaching session of you figuring out how to solve the problems that everyone else has identified inside of the team.
452
00:32:22.150 --> 00:32:27.192
And what most managers will do is they'll do exactly that same thing, but without the peer review.
453
00:32:27.532 --> 00:32:30.933
And they'll just give all the negative feedback from manager to team member.
454
00:32:31.313 --> 00:32:38.775
And it comes across very different when your manager is telling you the five things you need to improve at versus getting feedback from all of your team.
455
00:32:38.795 --> 00:32:40.956
Which, by the way, says the exact same thing.
456
00:32:41.816 --> 00:32:46.901
Like as a manager, as an owner, everything you're thinking about a team member will come out in those peer reviews.
457
00:32:47.101 --> 00:32:48.143
Almost can guarantee it.
458
00:32:48.163 --> 00:32:53.868
I used to actually give feedback in the peer reviews, but I stopped doing it because people would always try to decipher which one's Mike.
459
00:32:54.169 --> 00:32:55.710
And a lot of times I would put a lot of time into it.
460
00:32:55.730 --> 00:32:56.651
So like I'd be longer.
461
00:32:56.811 --> 00:32:58.934
So I would like, hey, I will remove my feedback.
462
00:32:58.994 --> 00:33:01.656
And I did it because almost every single time,
463
00:33:02.457 --> 00:33:05.421
What I wanted to say would come out in the other peer reviews.
464
00:33:05.461 --> 00:33:07.884
If you have 10 or more people, it will come out.
465
00:33:08.245 --> 00:33:15.134
The fact that they're slow, they get to work late, or a minute right before time is late, and that annoys the crew.
466
00:33:15.434 --> 00:33:17.237
I don't need to beg them about being late.
467
00:33:17.437 --> 00:33:18.619
Their crew will do it for me.
468
00:33:19.059 --> 00:33:25.981
That's why having like P4P, open book management, profit sharing is so important because they start to think in this way of like, no, we need to do what's right for the business so we all make more money here.
469
00:33:26.321 --> 00:33:28.842
And on P4P, on profit sharing, the books are open.
470
00:33:28.862 --> 00:33:31.282
We can see how much your damage case costs the business.
471
00:33:31.462 --> 00:33:40.345
So they will do the work of ragging on them about low quality work, not talking to customers, not doing walkthroughs, driving erratically, all the things that you want to say.
472
00:33:40.605 --> 00:33:41.465
But if you did it,
473
00:33:41.845 --> 00:33:43.967
would come across as like you're nagging on them.
474
00:33:44.347 --> 00:33:45.769
That is what comes out in a peer review.
475
00:33:45.949 --> 00:33:47.350
And then you are now the coach.
476
00:33:47.651 --> 00:33:52.255
You are the third party and trying to work on a road map and a plan for them to improve.
477
00:33:52.515 --> 00:33:56.379
This is better for the team member because their compliance to improvement is much better.
478
00:33:56.759 --> 00:34:06.188
It is better for the team out that they are working with because they can actually get the things that are rubbing them the wrong way solved and people actually improve.
479
00:34:06.849 --> 00:34:12.858
And then it's better for you because everything you want to say is said in a way that is not going to be taken as you're the bad guy.
480
00:34:13.758 --> 00:34:14.899
So it's a big win-win.
481
00:34:15.099 --> 00:34:17.622
That's how we do peer reviews.
482
00:34:19.123 --> 00:34:24.688
We start off with the very manual version, which is the paper, and we just cut it, and then we spend time organizing it.
483
00:34:24.828 --> 00:34:26.330
You can do this in SurveyMonkey, et cetera.
484
00:34:26.630 --> 00:34:29.413
The more anonymous you can get it, the more honest the feedback.
485
00:34:29.493 --> 00:34:36.520
There's only been a couple times where I have had feedback in an anonymous, like purely anonymous route where I actually said, I need to know who said this.
486
00:34:37.160 --> 00:34:44.325
And most of the time it was around things that, like, if someone felt endangered or they were feeling threatened.
487
00:34:44.646 --> 00:34:47.988
I'm like, hey, I need to know who wrote this, and I need to know now.
488
00:34:48.528 --> 00:34:49.609
And so that's happened a couple times.
489
00:34:49.829 --> 00:34:52.551
But I need to do that because there's an actual systemic problem.
490
00:34:52.571 --> 00:34:55.373
And if someone's feeling a certain way, I need to know about it.
491
00:34:55.513 --> 00:34:57.175
Or if there's been feedback about me where I, like –
492
00:34:57.835 --> 00:34:59.916
I needed more clarity because I saw their point.
493
00:34:59.957 --> 00:35:00.517
Usually I was mad.
494
00:35:00.797 --> 00:35:01.397
I would get mad.
495
00:35:01.618 --> 00:35:05.880
Then a couple days go by, and you're like, okay, I get where they're coming from, but I think I'm just missing clarity.
496
00:35:06.101 --> 00:35:08.782
And I would again ask the team, like, hey, no one's obligated.
497
00:35:09.083 --> 00:35:12.945
I just want more clarity on some of the feedback that was given to me, and this is what it is.
498
00:35:13.285 --> 00:35:16.047
If you want to come forward and give me more information, fine.
499
00:35:16.127 --> 00:35:17.588
If you don't, that's totally fine too.
500
00:35:17.828 --> 00:35:21.191
But I think I can improve better if I had some more clarity around these couple points.
501
00:35:21.831 --> 00:35:32.206
And so those are the couple times that I have actually stepped into an anonymous peer review where we don't ask for their names and actually requested for that person to step forward, not in public.
502
00:35:32.366 --> 00:35:34.048
Like, hey, talk to me after work today.
503
00:35:34.409 --> 00:35:36.973
Make sure you drop by my desk and let's talk about these things.
504
00:35:37.253 --> 00:35:42.715
So that has happened a couple times, and in both cases, we were able to resolve the issue, and that person felt very validated.
505
00:35:42.915 --> 00:35:48.257
But you can only do this in a culture of trust and where people actually know that you're not going to rat them out.
506
00:35:48.457 --> 00:35:50.477
You know you're not going to pit people against each other.
507
00:35:50.737 --> 00:35:51.778
You know you're not going to take Bob's –
508
00:35:52.858 --> 00:35:57.228
of handwriting and then know that Tim and then tell Susie that he said about that about her.
509
00:35:57.248 --> 00:36:00.114
Like if you start doing that, you create so much drama so fast.
510
00:36:00.314 --> 00:36:03.241
And that's why most people avoid peer reviews because it creates drama.
511
00:36:03.561 --> 00:36:09.895
It can diffuse so much drama and create way more alignment and a much more positive culture if done correctly.
512
00:36:09.995 --> 00:36:10.637
And that's how we did it.
1
00:00:00.231 --> 00:00:09.421
If you've ever thought about building a home service empire, a regional chain across your state or your entire country, this is the video for you.
2
00:00:09.762 --> 00:00:15.708
I'm going to show you the playbook I used to build a $50 million lawn care business using these three steps.
3
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And this video will be chunked into these three operations.
4
00:00:19.312 --> 00:00:21.555
Number one, we're going to talk about your business plan.
5
00:00:22.296 --> 00:00:28.703
You've got to nail it with the exact steps for the business model that you can copy and paste like repeatable units over and over again.
6
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That's the first section of the video.
7
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Then we're gonna talk about the mindset required to be able to grow quickly.
8
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And last but not least, we're gonna talk about what you need to do to be able to attract and retain great employees.
9
00:00:41.037 --> 00:00:50.850
Because as you begin to scale past 10, 50, 100 employees, most of your ability to scale comes down to your ability to retain great talent.
10
00:00:50.990 --> 00:00:56.718
So let's get started with these three video sections that make up the masterclass of how you can scale your home service business.
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These are the seven stages of success.
12
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The first stage is growing your revenue past $500,000 in annual revenue.
13
00:01:03.571 --> 00:01:11.375
Now, if you have a business that has a whole bunch of materials, a bunch of subcontractors, then you are likely not going to have 500,000 in revenue.
14
00:01:11.395 --> 00:01:18.378
You're likely gonna have a lot more, but you're going to have material costs, contractors, and other cost of goods that are baked in.
15
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I'm talking about $500,000 of labor revenue, okay, annually.
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Now, once I pass that, I'm gonna go move on to stage two.
17
00:01:27.177 --> 00:01:30.262
which is I'm going to enter profit mode and raise my prices.
18
00:01:31.688 --> 00:01:38.872
I, when I hit capacity, as we talk about inside the book, when I hit capacity is when I raise prices and I have the opportunity to move into profit mode.
19
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That's stage two.
20
00:01:40.113 --> 00:01:44.256
And then stage three is I'm going to simplify and focus on recurring revenue.
21
00:01:44.876 --> 00:01:47.297
So you're like, well, I don't do, I don't, I only do projects.
22
00:01:47.618 --> 00:01:47.858
Okay.
23
00:01:47.878 --> 00:01:48.418
That's fine.
24
00:01:49.138 --> 00:01:52.861
But I'm trying to get the business to be more stable where it's not as lumpy of revenue.
25
00:01:53.181 --> 00:01:56.643
And if I do projects on every project you sell, you can sell a warranty.
26
00:01:56.783 --> 00:01:57.944
You can sell a maintenance package.
27
00:01:58.684 --> 00:02:04.132
You can sell ongoing repairs and fixes to the system that you've installed.
28
00:02:04.713 --> 00:02:06.635
These are all things that you can bake recurring revenue.
29
00:02:06.655 --> 00:02:08.077
It doesn't have to be recurring jobs.
30
00:02:08.498 --> 00:02:09.880
It can be recurring revenue.
31
00:02:10.401 --> 00:02:14.106
And insurance is the best form of something that is one-time.
32
00:02:15.047 --> 00:02:16.949
But they sell recurring revenue.
33
00:02:17.190 --> 00:02:18.712
Every single month you pay on your house.
34
00:02:19.112 --> 00:02:22.717
And maybe once every 30 to 50 years, that policy is issued.
35
00:02:23.377 --> 00:02:24.338
And they actually have a claim.
36
00:02:25.059 --> 00:02:26.221
You'd say, that's a one-time job.
37
00:02:26.341 --> 00:02:27.602
No, it's a recurring revenue.
38
00:02:27.623 --> 00:02:31.587
They just spread it across all your monthly payments.
39
00:02:32.337 --> 00:02:34.159
And so this is recurring revenue.
40
00:02:34.299 --> 00:02:38.083
Any business can install recurring revenue inside of my other book, which is the off-season.
41
00:02:38.363 --> 00:02:49.154
I talk about in Cure 4, the ways to be able to create more recurring revenue, not just during your off-season, but throughout all of your business and why it's so important to enterprise value and handing the business off.
42
00:02:49.394 --> 00:02:53.158
Because lumpy revenue is not systematized.
43
00:02:54.049 --> 00:02:54.889
What is systematized?
44
00:02:55.209 --> 00:02:57.630
It is simplified and standardized.
45
00:02:58.410 --> 00:03:03.451
And so recurring revenue is the closest thing to be able to have a system in the business because it predictably creates revenue.
46
00:03:04.231 --> 00:03:08.452
And a system is where I take predictable inputs and have a predictable outcome.
47
00:03:08.832 --> 00:03:11.533
And the inputs are, I sell more recurring work.
48
00:03:11.613 --> 00:03:15.934
On the other side, I have a very predictable amount of revenue that I make every single month, every single quarter.
49
00:03:16.154 --> 00:03:19.715
And I don't have months where I make 100,000 and then months where I make 10,000.
50
00:03:20.135 --> 00:03:23.776
I never want to make less than 50% of my best month's revenue
51
00:03:24.696 --> 00:03:25.617
any other month of the year.
52
00:03:26.497 --> 00:03:33.159
So if I make $100,000 in monthly revenue, I never want a month to be under $50,000 in monthly revenue.
53
00:03:33.880 --> 00:03:38.021
That is, if that's happening in your business, we call what we call seasonitis.
54
00:03:38.682 --> 00:03:43.903
And that's the disease that affects many home service businesses.
55
00:03:44.284 --> 00:03:47.805
The number one way to solve it is to use recurring revenue.
56
00:03:48.385 --> 00:03:52.707
The same way that insurance companies make sure they don't have massive spikes in payments, they just...
57
00:03:53.427 --> 00:03:54.107
Make it recurring.
58
00:03:54.487 --> 00:03:56.668
They spread it out over the course of a whole bunch of payments.
59
00:03:57.048 --> 00:03:58.968
So you can do this for any home service business.
60
00:03:59.448 --> 00:04:02.529
Even if you only sell, I install HVAC systems.
61
00:04:03.289 --> 00:04:04.509
You can sell recurring revenue.
62
00:04:04.709 --> 00:04:06.930
Like, oh no, like only like 10 or 15% of people accept.
63
00:04:07.130 --> 00:04:15.371
Okay, give them a discount on the install to where you're basically giving away a year's worth of warranty or a year's worth of fixes, maintenance, and repairs.
64
00:04:15.611 --> 00:04:18.852
But then you know that 80% of people convert into year two, three, and beyond.
65
00:04:19.172 --> 00:04:23.097
And every single time you come back to that customer is another opportunity to sell them another job.
66
00:04:23.337 --> 00:04:28.262
Recurring revenue allows me to upsell one-time jobs every single time I come back to the property.
67
00:04:28.583 --> 00:04:37.693
If you're using Copilot, soon to be HomeWorks, take a stinking video and attach it to the visit of jobs that can be upsold every single time you show up at the property.
68
00:04:38.113 --> 00:04:39.135
You teach your team to do that.
69
00:04:39.155 --> 00:04:40.276
You create an incentive program.
70
00:04:40.557 --> 00:04:43.781
Recurring revenue allows me to create one-time revenue.
71
00:04:43.801 --> 00:04:45.424
You're like, I make all my profit in one-time jobs.
72
00:04:45.684 --> 00:04:45.924
Great.
73
00:04:46.265 --> 00:04:48.929
Create the recurring revenue to keep your crew busy year-round.
74
00:04:49.289 --> 00:04:51.272
Never have a month where you lose money.
75
00:04:51.673 --> 00:04:53.195
Regardless of your overhead, it's covered.
76
00:04:53.395 --> 00:04:54.215
Focus on that first.
77
00:04:54.275 --> 00:04:55.036
That's number three.
78
00:04:55.136 --> 00:05:07.380
Simplify and focus on recurring revenue because there's no way this business is going to be high enterprise value, run without you as the owner, and not create huge amounts of stress during the off season if you have months where you lose money.
79
00:05:07.700 --> 00:05:09.481
You never want a month where you lose money.
80
00:05:10.041 --> 00:05:17.464
If you solve that problem in home services in a seasonal, quote unquote, seasonal business, which by the way, it is a feature, not a bug of home services.
81
00:05:17.784 --> 00:05:19.585
You're going to have seasonal work.
82
00:05:20.145 --> 00:05:22.206
There are going to be times when there are more people calling than others.
83
00:05:22.846 --> 00:05:29.369
The goal is, how do I figure out how to weed out the schedule to where I push one-time jobs off?
84
00:05:30.249 --> 00:05:33.110
I push time-insensitive jobs, I push them off.
85
00:05:33.910 --> 00:05:36.211
And I also pull demand forward when it's slow.
86
00:05:36.531 --> 00:05:41.013
I give discounts, I give offers to pull demand forward when otherwise people start in April.
87
00:05:41.033 --> 00:05:48.036
Well, great, I'm going to give them a discount in February and March to pull that demand forward so that I can get more new customers during the actual rush.
88
00:05:49.130 --> 00:05:50.551
Simplify and focus on recurring revenue.
89
00:05:50.671 --> 00:05:51.611
That's stage number three.
90
00:05:51.991 --> 00:05:53.732
Stage number four is you're going to start growing.
91
00:05:53.752 --> 00:05:54.372
This is scale.
92
00:05:54.632 --> 00:05:58.953
This happens organically over the course of two to three years if you stay in profit mode.
93
00:05:59.214 --> 00:06:02.995
Because remember, every single time I hit capacity, I'm raising prices by a minimum of 15%.
94
00:06:03.155 --> 00:06:05.376
And if you do that a few times, i.e.
95
00:06:05.496 --> 00:06:09.677
a few years during your spring rush, you're going to get above $800,000 annual revenue.
96
00:06:10.177 --> 00:06:12.698
So my one location this year will probably do like $1.1, $1.2 million in annual revenue.
97
00:06:14.739 --> 00:06:15.479
They're in profit mode.
98
00:06:15.499 --> 00:06:16.339
They're not buying more trucks.
99
00:06:16.359 --> 00:06:17.180
They're not hiring more people.
100
00:06:17.200 --> 00:06:20.460
They're going to stay between six and eight employees with one working GM.
101
00:06:20.800 --> 00:06:21.221
And that's it.
102
00:06:21.461 --> 00:06:27.402
But because they've been in profit mode for several years, they get well above $800,000 and they're still inside this system.
103
00:06:27.942 --> 00:06:28.462
Number five.
104
00:06:28.942 --> 00:06:31.643
Now, this is the most conservative approach that I'm outlining here.
105
00:06:31.683 --> 00:06:36.584
If you want to accelerate and go faster, because this is going to take five plus years to get here.
106
00:06:37.764 --> 00:06:39.565
If you want to accelerate and go faster, you can.
107
00:06:40.788 --> 00:06:44.152
It's just not going to be as conservative and you're not going to be as profitable.
108
00:06:44.172 --> 00:06:49.177
And you're going to have a little more stress because growth sucks cash and cash creates cushion.
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So you don't have stress.
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So step stage number five, get a general manager, hire a general manager that gets you out of daily operations.
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Out of daily operations means when you leave sales, operations and admin are all taken care of, meaning the work gets sold, the work gets done and the work gets paid for without you being there.
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Now, the easiest way to make this happen is make sure that your admin is completely systematized.
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And ideally, admin takes phone calls to sell jobs because it makes the sales position much easier to get rid of.
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If every single job is custom, if every single project requires an estimate that has a whole bunch of experience, it's very difficult to get out of daily operations.
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And so this is why systems in stage three are so required and getting on recurring and simplifying the services so that when I hire GM, the level of skill and the compensation I have to pay them is as low as possible.
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If I'm trying to find a unicorn that has 10 years of excavation experience, has years of horticulture, has years of hardscaping and concrete and fixing fences and doing decks.
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If I require all of these services, the likelihood of me to do number five is so low.
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And this is why people have 1.5, $2 million businesses, and they burn out making good money, but they can never hand off in stage five.
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They can never hand the business off because nobody has their skill level without getting paid an exorbitant amount of money.
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And if they had all those skills, they'd just go start their own business.
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Stage number six is repeat.
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It has copy and paste multiple locations.
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That is where I believe, instead of trying to figure out the next level of business, which is get mid-level managers, create regional managers inside of the company, division leaders, multiple assistants in the office, multiple sales and estimators, I just want to copy and paste this model over and over again.
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They did not have to reinvent the wheel to make Panda Express go from 10 locations to 2,500.
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They just did the same exact thing for 40 years.
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Same exact thing.
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Chicken, rice, sauce.
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They didn't reinvent anything.
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They didn't change anything.
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They're like, we're changing the game.
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We're moving to AI.
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And we're going to keep this app.
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No, it's just really simple.
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And so we get fancy.
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And so many times we build a million dollar, two million dollar business and home services.
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And the next, we somehow think that we got to move on to the next thing.
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When if you just take what you're done and just copy and paste it over and over again.
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And now this just becomes a leadership game of finding great general managers and finding great people.
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That becomes the obstacle, which is by the way, not easy.
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That's why in the book, I talk about the whole constraint of the copy and paste method, i.e.
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stage number six.
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is finding great general managers.
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In other words, becoming a better leader.
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Hard skill.
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Easier, in my opinion, than reinventing the business model that you've already built.
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If you've got through stage five and you have a million dollar business pumping out $200,000 in profits, why would I go try to reinvent the wheel and have to create brand new systems for whole new departments when I can just take that model and copy and paste it over and over again?
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And in doing so, I will have to gain the skill of leadership.
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and managing managers, and that can take three to four years.
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But I believe that is a more scalable thing once you figure out that leadership hack.
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Like once you figure out that skill and you gain that, and it can take a few years, and you will turn through a few general managers, and it only takes reps many times to actually solve the obstacle of not having that skill.
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But once you have it, you should be able to copy and paste this much faster.
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And only then, after stage six, when you have so much distributable cash, you can't copy and paste fast enough
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That is when I would invest into things outside of the industry.
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Diversifying the stocks, real estate, and other businesses.
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What's crazy is a lot of us jump from number four to number seven.
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And then we wonder, like, oh, man, stocks, like, making 8%, 9%.
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Great.
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Your business can annihilate that.
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If you can put $200,000 into a new location, and in a matter of three to five years, it's giving $150,000 in distributions, $150,000.
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There's no stock market or real estate market that's going to compete with that.
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And what's crazy, if you've done it once, the likelihood of doing it again, much higher.
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Also, why in the world, why in the world would I get into another industry like the stock market or real estate where everyone else is competing in that market?
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You are at best average in that industry.
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Why would you not use that advantage to just copy and paste it?
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Here's why.
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Leadership is very, very difficult.
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And we hit up against this leadership problem when we start having to go to number six.
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And it is finding more general managers, finding and attracting great talent, keeping them, compensating them, motivating them, inspiring them.
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That is a hard skill.
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It is not easy.
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But many times we hit up against it and then we just think, I've got to go different industry.
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I've got to go add more services.
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I've got to go to a new, I've got to add more something.
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I've got to, this real estate thing is so much better.
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Like, ah, eventually, you know, it's not McDonald's.
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They're selling burgers.
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They're doing real estate.
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And we get all the we give all the reasons as to why another industry or another service is going to somehow be the next leg in our entrepreneurial journey.
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When reality, we have simply hit up against the obstacle of leadership.
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And for the person that is doing two, three million dollars, many times it's actually a function of they failed to solve the leadership problem.
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So they stayed in operations.
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Until an owner can leave operations and sales operations and admin be fully handled without them being showing up for a week or two and things go well, jobs get sold, jobs get done and jobs get paid for without them being there until that time, they have not solved the constraint of leadership.
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And so a lot of people do, they just give up on ever trying to have the business run without them ever having the leadership skills because it's hard.
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It's very difficult to gain that skill.
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They give up on it and they just stay in daily operations and run a two to three million dollar business working crazy amounts of hours, hoping and praying that their operations manager sticks on board, hoping and praying that nothing happens to them physically because they are working crazy amounts of hours juggling admin operations and sales when people don't show up.
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Last weekend, we actually had our Augusta Lawn Care annual conference with all the owners of Augusta Lawn Care.
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And we launched a brand new thing called Augusta Leads where they actually have a guaranteed 100 recurring customers when they start a new location.
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It's all part of the program.
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We actually run their ads for them and make sure they are able to get above break even when they're starting more locations.
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This allows you to be able to copy and paste and do multiple locations much, much easier.
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If you're interested in joining Augusta Lawn Care,
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Before the spring rush starts, go to AugustaLawnCareServices.com slash franchise.
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Book a call with Lee and his team to see if joining Augusta Lawn Care is the right fit for you.
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All right, so we've talked about the seven stages to be able to get a location to where it is copy and paste, and you're able to start building a chain out, an empire for your home service business.
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Now, let's talk about the mindset that is required to make that happen.
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Because you can have the steps, like, oh, that's seven steps, that's easy.
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Yeah, I agree.
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But if you have the wrong mindset, you'll never get past stage one.
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I was thinking a lot about the difference between those that are ultra successful in this thing called business and monetary success because we could have a whole different discussion about success personally, physically, et cetera, in someone's relationship.
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But I started to peel it back because like –
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many of us, we are trying to be students of those that have been successful, and we try to replicate the things that they have done that have made them successful.
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And I started peeling back, really, what is it that makes the ultra successful successful at business?
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And it reminded me of an interview that Michael Jordan did when an interview asked, like, they wanted their kid to be really good at basketball.
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He said, what do I do?
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What's the tactic?
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What's the thing I'm supposed to do in order to get my kid to be a great basketball player?
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And the answer that Michael Jordan gave is something that I thought a lot about.
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And he said, you've got to do whatever you got to do to make sure they love the game.
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And...
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There's several things that I think are so important about that.
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Number one, it's very difficult to manufacture love, especially when you are trying to impose on someone else.
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And so for like a mom or dad that wants their kid to do well at basketball, how do you get them to love the game?
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It's probably not going to be super rigid, structured rules.
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They're going to allow your kid to fall in love with the game.
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Now, the rigid structured rules might give conformity and in the short term increase metrics or increase the performance of the child's ability to play basketball.
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But the actual unlock long term is that they love the game because if they love the game, the results will become a byproduct of them applying themselves to it so much that they simply become good at it.
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And so I think the same thing is true with business, and I could be wrong.
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It's just that when I look at the people who are the best at business, they just love the game.
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They just love doing it.
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And they're not necessarily the most skilled.
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They're not the most articulate, but they simply love the game.
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And one thing about love is that if it's super structured and it's super tactical, it's very difficult to actually manufacture.
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So, for example, I love my wife.
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But it would be very weird if...
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Everything about our relationship was structured.
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It's like, you must be at home at this minute.
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And before I give you a kiss, you must take off your shoes.
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And then after you take a kiss, you must change your clothes before we then have dinner.
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And then once we have dinner at exactly 6.33 p.m., we will then... Like, that rigidity in the short term might...
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Have the conformity of creating more space or more time or having more quality time together.
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But in the long term, you lose the love.
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And the love is the thing that actually keeps the couple together.
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Because there are plenty of people that make rules, but they fall out of love.
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And so falling out of love is the ultimate sin, in my opinion, if you are trying to apply yourself to something in the long term, whether it be a relationship, whether it be the gym, whether it be business, whether it be making money.
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If you fall in love with the game, you will keep doing it over and over and over again.
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And it's not a function of conformity is a function of desire and.
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This was apparent to me a couple years ago when I started realizing, okay, I am starting to need to find a life partner and a wife.
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And when I met Brianna on our second date, Brianna's my wife, if you didn't know, um...
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I told her, I said, there's something I want to be very upfront with you.
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And she didn't know when we originally met about the businesses and everything I did online.
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Nothing.
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Like, literally on our third date, it was like, what's this Augusta thing and co-pilot?
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So she didn't know those things and didn't come into meeting me knowing about the businesses.
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But on our second date, I said, look, I need to be upfront and honest about something.
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And that is, if this is going to go anywhere, I want to be very clear that, like, I love business.
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And it's not that I love the result of business, which is maybe making money or having a big office or employing a lot of people.
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But like I love business.
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And I said I would rather die than to lose that.
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And it wasn't being...
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hyperbolic, I wasn't trying to be dramatic.
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I was being honest after realizing after years that like that was going to be a requirement for me just to survive in life.
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And that if I did not have that, it would make me unsatisfied, but more importantly, I would resent whoever took it away from me.
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I truly believe that that is what separates the people that I look up to from a business perspective.
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They love the game.
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And if you look at their browser history,
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If you look up their YouTube videos, if you were to look at what they're looking at on their apps, it is just business.
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It is they want to learn and understand the game of business.
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And they will beat the person that has the 5 a.m. routine in the morning.
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The person that's looking for the next biohack.
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The person that's looking for the next productivity, you know, hot thing.
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Jumping from dropshipping to...
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cryptocurrency to flipping real estate to amazon fulfillment like from thing to thing to thing they just love the game of business and they don't mind applying themselves their entire life to it the same way that loving a partner and just applying yourself and being committed to them for your entire life usually nets out in a pretty positive relationship
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I would also say that if you understand that and you believe that it's actually very difficult to manufacture, it's very difficult to be like, Oh yes, I agree with that.
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Now I will go try to fall in love with the game.
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I would just say, go look at your browser history, go look at the YouTube videos you're watching and maybe start there because that's probably the thing you love most.
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The thing that you're spending your time, the thing, look at your bank balance, look at your credit card statement, where are you spending your money?
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Because those are votes every single moment, every single hour of every single day as to where, what you do actually love.
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Yeah.
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Because you spend your discretionary effort on it.
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The time you spend on the toilet, the time that you spend on the couch while there's ads playing, while you're brushing your teeth, whatever you're spending your time on there is probably the thing that you love.
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If you fall in love with the game, whatever that game for you is, I think you'll be in the top one or 2%.
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And if you fell out of love with the game, the same way you can fall out of love in a partnership or in a relationship, there are ways to be able to re-inspire that.
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Looking at your calendar, be like, okay, out of the 100 things I do in the day, what are the two or three things I actually do love?
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Let's do more of that and delegate these other things.
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Like, I don't have the money.
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No, if you spent all of your time on the 10 or 15% of your day that really lit you up, that you loved, you'd probably do more of it.
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And so people that look at other individuals and say, how do they work so long?
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How do they work so early?
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How do they work on the weekends?
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How do they come up with ideas in the middle of the night?
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It's the fact that they love the game.
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They love it.
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And so the more time you can put towards the things that you love and delegate everything else that is required to start the business, the sooner you can get there.
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And it's not right away.
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And there are years of grinding and doing the things that you absolutely despise doing because it's simply required to be able to get the business off the ground.
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There is a season for that.
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But as you pass that stage, $500,000, $1 million, $2 million in annual revenue, the next year
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Mountain is what do I love?
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What turns me on?
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Because that I will be able to deploy 200 to 300 percent more discretionary effort towards discretionary effort is effort that is not required, but I voluntarily give it out of my own goodwill.
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So when time in the shower, time that I'm sitting there looking out the window, what am I thinking about?
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That's discretionary effort.
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And many times when you love something, it pulls the discretionary effort towards that thing.
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All right, so in this masterclass, we've already talked about the seven stages to be able to scale your model across the country.
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Then we talked about the mindset required to make sure it happens.
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But the major component of all of this is finding the right people.
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Not finding them, not hiring them, but actually retaining them.
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And so one of the biggest tools that we've used for retention is anonymous peer reviews.
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The ability to be able to give feedback to other people inside the company and to where all the negative criticisms are not coming from you as the manager.
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So this is actually a question that was submitted from a million dollar operator in the lawn care landscape industry.
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But if you use this, you can take it from a million to 10 million by finding the right people and then using peer reviews, make their talent more refined and be able to improve their skill set.
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Hey, Mike and team.
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Hope you guys are doing well.
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This is Zach Beyer, Westfield, Indiana.
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Name of my business is Beyer Lawn and Landscape.
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00:22:57.528 --> 00:23:00.910
We're going to do just under $1.1 million this year in 2025 and have...
307
00:23:04.913 --> 00:23:12.182
eight full-time field guys, one part-time field guy, and an office administrator, so-called 10 employees.
308
00:23:12.882 --> 00:23:17.408
My question for Mike is in regards to end-of-the-year employee reviews.
309
00:23:17.488 --> 00:23:23.054
I know you've talked about it before, how you do basically anonymously.
310
00:23:23.074 --> 00:23:23.175
Yeah.
311
00:23:25.076 --> 00:23:36.699
reviews amongst employees to one another, but also feedback, you know, towards me and my leadership and feedback towards the company in general, I would just love maybe an in depth answer of how exactly you go about that.
312
00:23:38.399 --> 00:23:43.200
Again, I know you've talked about it before, but just don't know exactly how you like to go about it.
313
00:23:43.481 --> 00:23:45.361
You know, how do you keep the anonymous?
314
00:23:45.401 --> 00:23:46.421
How do you talk about it?
315
00:23:46.701 --> 00:23:48.982
You know, with the guys, you know, we have a Christmas party coming up.
316
00:23:50.103 --> 00:23:51.684
how exactly do we bring all that stuff up?
317
00:23:51.744 --> 00:23:56.388
So any help and any feedback in terms of the employee reviews would be awesome.
318
00:23:57.349 --> 00:24:05.756
Yeah, first off, when it comes to employee reviews and peer reviews, I think it's one of the most underrated tools once you get above five employees.
319
00:24:06.237 --> 00:24:12.242
When you're below five employees, you can't really do anonymous reviews because everyone knows who's talking about who.
320
00:24:12.302 --> 00:24:14.064
It's very hard to figure it out.
321
00:24:14.564 --> 00:24:20.167
But once you get 10, 15 employees, Zach doing now 10 employees, you can absolutely do anonymous reviews.
322
00:24:20.647 --> 00:24:24.430
How we did this, we started off very manual, which was paper.
323
00:24:24.590 --> 00:24:25.750
And they got a sheet of paper.
324
00:24:25.770 --> 00:24:30.133
It had everyone's name and said what they're good at and what they can improve at.
325
00:24:30.313 --> 00:24:31.493
And they just fill it all in.
326
00:24:31.894 --> 00:24:33.775
We then had those submitted back to us.
327
00:24:34.215 --> 00:24:35.796
No one had to put their name at the top.
328
00:24:35.956 --> 00:24:39.318
So we didn't know who the feedback was coming from, but we know who it was directed at.
329
00:24:39.778 --> 00:24:46.584
And then what we did is we just combine all the feedback of what they are good at and what they could improve at for each person.
330
00:24:46.844 --> 00:24:52.068
And then after our end-of-year party, or it wasn't a year party, it was kind of like a 15, 20-minute thing about business.
331
00:24:52.308 --> 00:24:56.151
And then it was more or less like let's just have dinner, et cetera, chill out, have fun.
332
00:24:56.531 --> 00:24:58.813
Sometimes kind of going off-site is nice.
333
00:24:59.334 --> 00:25:00.134
So we would do that.
334
00:25:01.235 --> 00:25:02.016
At the end –
335
00:25:02.196 --> 00:25:02.837
Don't do it before.
336
00:25:03.177 --> 00:25:05.158
At the end, we would give them their sheet.
337
00:25:05.279 --> 00:25:08.561
You don't do it before because people get in their head about negative feedback.
338
00:25:08.922 --> 00:25:13.125
So at the end, you say, hey, in an envelope, everyone's got their name on it.
339
00:25:13.145 --> 00:25:14.586
We don't know who submitted the feedback.
340
00:25:15.267 --> 00:25:19.770
But inside of that is all the pure feedback from everyone inside this room about you.
341
00:25:19.991 --> 00:25:24.935
I always frame it as a really positive thing because there's no way, like, no one's family is doing this.
342
00:25:24.955 --> 00:25:31.000
None of their friends are going to tell them, like, where they can improve at and give them criticisms that are in a constructive manner.
343
00:25:31.560 --> 00:25:33.322
Usually it's going to be like emotion and they're mad.
344
00:25:34.003 --> 00:25:41.653
So this is like the one very unique opportunity for a human being to get constructive criticism that makes them better.
345
00:25:42.053 --> 00:25:44.096
And so I always framed it as a really positive thing.
346
00:25:44.476 --> 00:25:48.921
And then usually a couple weeks prior to that, I would read my...
347
00:25:49.402 --> 00:25:55.329
pros and cons, or like my good at and what I can prove at, from the year prior, in front of the team, so they kind of just got disarmed.
348
00:25:55.809 --> 00:25:57.731
And people would laugh about it.
349
00:25:58.072 --> 00:25:59.053
They would kind of chuckle.
350
00:25:59.413 --> 00:26:06.181
I would say some funny jokes about myself, just to get everyone relaxed about giving peer feedback, because a lot of people, it doesn't come naturally.
351
00:26:06.201 --> 00:26:07.622
It feels like...
352
00:26:08.183 --> 00:26:10.344
they feel like they might get judged for it.
353
00:26:10.624 --> 00:26:21.366
They feel like if I say something that's a little bit too harsh or if I say something that I really want to say, but they might get their feelings hurt, I try to disarm them by saying, hey, use me.
354
00:26:21.806 --> 00:26:23.567
All the bullets, put them here.
355
00:26:24.007 --> 00:26:27.468
And so I believe that by doing that, you disarm everyone.
356
00:26:27.728 --> 00:26:29.548
Okay, it's okay to give harsh feedback.
357
00:26:29.888 --> 00:26:32.389
It's okay to be able to say what we're actually thinking.
358
00:26:32.929 --> 00:26:37.670
And Mike literally stood up in front of us and told all of what was said on his last year.
359
00:26:38.230 --> 00:26:49.233
And then hopefully at the end of that, I can say, hey, based upon this feedback, I was able to make one or two changes in the business or in my personal life or in my leadership style or whatever based upon this feedback.
360
00:26:49.573 --> 00:26:55.214
And so then they also realize, again, you're trying to reinforce them for giving good constructive feedback.
361
00:26:55.614 --> 00:26:59.795
They're starting to realize that you actually take action on the criticism that were given to you.
362
00:27:00.535 --> 00:27:10.778
And without saying it, what you're really saying is I expect you all that when you get criticisms that are going to hit hard in your stomach, you will also make changes based upon that feedback from the team.
363
00:27:11.338 --> 00:27:13.339
And I will tell them that a couple weeks prior.
364
00:27:13.359 --> 00:27:14.899
I'll be like, hey, that one hurt.
365
00:27:14.939 --> 00:27:15.780
Like that was a gut punch.
366
00:27:15.820 --> 00:27:16.360
Man, that hurt.
367
00:27:16.380 --> 00:27:17.120
It took me a couple days.
368
00:27:17.400 --> 00:27:20.001
And there's been times when it comes to peer reviews that –
369
00:27:20.341 --> 00:27:24.723
the feedback that I got took me a couple days to really process, get over the emotion of being mad.
370
00:27:25.003 --> 00:27:27.504
And then I think about it and like, okay, what changes could I make?
371
00:27:27.544 --> 00:27:28.945
And like, okay, that makes actual sense.
372
00:27:29.385 --> 00:27:37.408
And so I try to give them all of that upfront information two weeks in advance when they're getting the peer reviews prior to them actually filling them out.
373
00:27:38.088 --> 00:27:44.251
Then like Jack was mentioning at the offsite, I'm going to, at the end, give them each an envelope with theirs inside.
374
00:27:44.271 --> 00:27:45.992
I'm going to say all of the same stuff again.
375
00:27:46.677 --> 00:27:55.364
I'm going to repeat how valuable it is, how how lucky we are that we get to have this and that I expect you all to have a punch in the gut when you get some of this feedback.
376
00:27:55.605 --> 00:27:58.627
And we're doing at the end of this party because I didn't want to ruin it for you.
377
00:27:58.687 --> 00:27:59.668
I didn't want to ruin dinner.
378
00:27:59.888 --> 00:28:00.869
So you've got to be like light.
379
00:28:01.109 --> 00:28:03.992
Keep it light because when they get the feedback, it's going to be hard.
380
00:28:04.252 --> 00:28:05.273
It's hard to hear.
381
00:28:06.894 --> 00:28:09.757
And so you're you're kind of like softening that blow.
382
00:28:10.337 --> 00:28:13.160
And everyone also was able to give you a lot of feedback.
383
00:28:13.760 --> 00:28:27.570
Now, keep in mind, and I also say this when they're getting their envelopes, as humans, we will look to all the negative things first, and we will miss the fact that almost every single person I've ever done a peer review for had a positive section that was larger than the negative section.
384
00:28:27.770 --> 00:28:31.253
Or, like, things they're good at was larger than the things that they needed improvement at.
385
00:28:31.613 --> 00:28:34.495
But immediately, and I'm the same way, like, I'm like, okay, great.
386
00:28:34.615 --> 00:28:35.536
Who cares about the stuff I'm good at?
387
00:28:35.856 --> 00:28:37.097
What did people say about my bad stuff?
388
00:28:37.678 --> 00:28:40.280
And so I prep them with that.
389
00:28:41.200 --> 00:28:58.045
prior to them getting their own feedback because it is hard and they many times will glance over things that people really love them for some of the feedback that i've got from employees about the peer review process is they never knew that what they were doing people loved
390
00:28:58.785 --> 00:29:02.408
And so they would get five, six, seven people saying the exact same thing.
391
00:29:02.669 --> 00:29:04.891
Like, wow, I didn't even think about that.
392
00:29:04.951 --> 00:29:14.359
And yet so many people noticed and really appreciate that I do something extra in the business or I show up early or make sure the coffee's on for everyone in the morning or wipe out everyone's truck at the end of the day.
393
00:29:14.399 --> 00:29:16.661
Like little stuff like that comes in the peer reviews.
394
00:29:16.781 --> 00:29:22.386
They also start to realize that there are things they're doing that they don't have any idea.
395
00:29:23.208 --> 00:29:25.976
is knowing people, causing them to get frustrated, et cetera.
396
00:29:26.357 --> 00:29:30.330
And so there was one time where one of the team members said, hey, look –
397
00:29:32.370 --> 00:29:41.817
My negative feedback was basically that I am always joking around people, but I cross the line, and that I am mocking them or teasing them too much, and after a long day, it gets to them.
398
00:29:42.178 --> 00:29:44.379
And he's like, three or four people said the same thing.
399
00:29:44.459 --> 00:29:45.000
I never knew that.
400
00:29:45.020 --> 00:29:45.981
I was just trying to be joking.
401
00:29:46.001 --> 00:29:46.761
I was just trying to be fun.
402
00:29:47.121 --> 00:29:48.843
And so he's like, okay, I'll dial that back.
403
00:29:49.063 --> 00:29:57.390
Now, this is the 2.0 version I learned after a few years is have one-on-one meetings within 48 hours of them getting the feedback.
404
00:29:58.257 --> 00:29:59.879
And then you, it's so easy.
405
00:30:00.299 --> 00:30:03.722
The one-on-one just becomes, let's review your feedback together.
406
00:30:04.503 --> 00:30:06.645
And you always start with the positives.
407
00:30:07.065 --> 00:30:08.226
You go over there in the one-on-ones.
408
00:30:08.246 --> 00:30:09.467
It's like, well, let's go for the negative first.
409
00:30:09.487 --> 00:30:10.969
And I'll try to, this is a one-on-one.
410
00:30:11.009 --> 00:30:15.953
No, like really reinforce and back up what the team appreciates about that team member.
411
00:30:16.774 --> 00:30:18.276
And go over all the things that are positive.
412
00:30:18.296 --> 00:30:20.638
And then add your own ab lib to it.
413
00:30:20.938 --> 00:30:22.240
Like, reinforce them.
414
00:30:22.300 --> 00:30:23.160
Oh, they said the same thing.
415
00:30:23.180 --> 00:30:23.601
Let's go.
416
00:30:23.941 --> 00:30:24.342
Pound it.
417
00:30:24.362 --> 00:30:25.102
Like, give a high five.
418
00:30:25.122 --> 00:30:35.392
Like, keep the energy high because you need that social credibility that when you go to the negative side and there are things that are going to be tough to talk about, that they're, like, open and receiving.
419
00:30:35.413 --> 00:30:35.693
Okay.
420
00:30:35.973 --> 00:30:38.235
So then you're going to go through the negative feedback.
421
00:30:38.855 --> 00:30:47.081
And what's really nice about peer reviews once you get above 10 employees is employees will say almost everything you want to say to your team, but you can't.
422
00:30:47.901 --> 00:30:54.646
For example, when we were working in doubles in the cruise, there were some people who would not shower or they'd come to work and they just reeked.
423
00:30:55.386 --> 00:30:59.069
I can't say that, but the team certainly can in an anonymous peer review.
424
00:30:59.269 --> 00:31:03.252
And when five people say you need to shower more often and you stink at work –
425
00:31:04.255 --> 00:31:06.917
People start to listen to their team members, and it means a lot to them.
426
00:31:06.957 --> 00:31:10.019
Like, it's very infrequent in life.
427
00:31:10.039 --> 00:31:11.059
You get this kind of feedback.
428
00:31:11.720 --> 00:31:12.901
And so it can mean a lot.
429
00:31:12.921 --> 00:31:15.322
It can also really crush them, and they can get a little agitated.
430
00:31:15.642 --> 00:31:22.687
They can be a little frustrated by the fact that people see them a certain way, and they don't mean it to be that way, or that everyone is saying they should work harder, and they feel like they're working hard.
431
00:31:23.027 --> 00:31:31.373
And so you use the one-on-one as a way to validate their positives, validate the things they do need to work on, and then give them a roadmap to improve on them.
432
00:31:31.873 --> 00:31:34.914
Because that's a lot of times the gap that the team member doesn't know how to fill in.
433
00:31:35.354 --> 00:31:36.954
It's like, okay, I got this feedback.
434
00:31:37.174 --> 00:31:37.634
Okay, cool.
435
00:31:38.454 --> 00:31:39.294
What am I supposed to do with this?
436
00:31:39.894 --> 00:31:42.155
Okay, how can we lean into some more of your strengths?
437
00:31:42.375 --> 00:31:43.955
People really appreciate these things about you.
438
00:31:44.175 --> 00:31:45.135
How can we lean more into that?
439
00:31:45.396 --> 00:31:47.196
Okay, these things I think you can work on.
440
00:31:47.576 --> 00:31:48.816
What can we do to make that happen?
441
00:31:49.116 --> 00:31:51.877
Can I support you in any way to make sure I can help you?
442
00:31:52.197 --> 00:31:55.917
Like, you're like, everyone's saying I'm slow on jobs, but I'm working as hard as I can.
443
00:31:56.278 --> 00:31:58.158
Okay, what could I do as your manager
444
00:31:58.818 --> 00:32:01.959
to make sure that you have the training required.
445
00:32:02.539 --> 00:32:04.740
What can I do to support you working quicker on the jobs?
446
00:32:04.800 --> 00:32:06.220
It sounds like people are frustrated by it.
447
00:32:06.781 --> 00:32:07.801
I love you as part of this team.
448
00:32:07.821 --> 00:32:09.381
They've said so many good things about you.
449
00:32:09.802 --> 00:32:11.142
Let's try to work on these things.
450
00:32:11.442 --> 00:32:12.722
Let's create a plan together.
451
00:32:13.263 --> 00:32:20.625
And so now your one-on-one actually becomes a coaching session of you figuring out how to solve the problems that everyone else has identified inside of the team.
452
00:32:22.150 --> 00:32:27.192
And what most managers will do is they'll do exactly that same thing, but without the peer review.
453
00:32:27.532 --> 00:32:30.933
And they'll just give all the negative feedback from manager to team member.
454
00:32:31.313 --> 00:32:38.775
And it comes across very different when your manager is telling you the five things you need to improve at versus getting feedback from all of your team.
455
00:32:38.795 --> 00:32:40.956
Which, by the way, says the exact same thing.
456
00:32:41.816 --> 00:32:46.901
Like as a manager, as an owner, everything you're thinking about a team member will come out in those peer reviews.
457
00:32:47.101 --> 00:32:48.143
Almost can guarantee it.
458
00:32:48.163 --> 00:32:53.868
I used to actually give feedback in the peer reviews, but I stopped doing it because people would always try to decipher which one's Mike.
459
00:32:54.169 --> 00:32:55.710
And a lot of times I would put a lot of time into it.
460
00:32:55.730 --> 00:32:56.651
So like I'd be longer.
461
00:32:56.811 --> 00:32:58.934
So I would like, hey, I will remove my feedback.
462
00:32:58.994 --> 00:33:01.656
And I did it because almost every single time,
463
00:33:02.457 --> 00:33:05.421
What I wanted to say would come out in the other peer reviews.
464
00:33:05.461 --> 00:33:07.884
If you have 10 or more people, it will come out.
465
00:33:08.245 --> 00:33:15.134
The fact that they're slow, they get to work late, or a minute right before time is late, and that annoys the crew.
466
00:33:15.434 --> 00:33:17.237
I don't need to beg them about being late.
467
00:33:17.437 --> 00:33:18.619
Their crew will do it for me.
468
00:33:19.059 --> 00:33:25.981
That's why having like P4P, open book management, profit sharing is so important because they start to think in this way of like, no, we need to do what's right for the business so we all make more money here.
469
00:33:26.321 --> 00:33:28.842
And on P4P, on profit sharing, the books are open.
470
00:33:28.862 --> 00:33:31.282
We can see how much your damage case costs the business.
471
00:33:31.462 --> 00:33:40.345
So they will do the work of ragging on them about low quality work, not talking to customers, not doing walkthroughs, driving erratically, all the things that you want to say.
472
00:33:40.605 --> 00:33:41.465
But if you did it,
473
00:33:41.845 --> 00:33:43.967
would come across as like you're nagging on them.
474
00:33:44.347 --> 00:33:45.769
That is what comes out in a peer review.
475
00:33:45.949 --> 00:33:47.350
And then you are now the coach.
476
00:33:47.651 --> 00:33:52.255
You are the third party and trying to work on a road map and a plan for them to improve.
477
00:33:52.515 --> 00:33:56.379
This is better for the team member because their compliance to improvement is much better.
478
00:33:56.759 --> 00:34:06.188
It is better for the team out that they are working with because they can actually get the things that are rubbing them the wrong way solved and people actually improve.
479
00:34:06.849 --> 00:34:12.858
And then it's better for you because everything you want to say is said in a way that is not going to be taken as you're the bad guy.
480
00:34:13.758 --> 00:34:14.899
So it's a big win-win.
481
00:34:15.099 --> 00:34:17.622
That's how we do peer reviews.
482
00:34:19.123 --> 00:34:24.688
We start off with the very manual version, which is the paper, and we just cut it, and then we spend time organizing it.
483
00:34:24.828 --> 00:34:26.330
You can do this in SurveyMonkey, et cetera.
484
00:34:26.630 --> 00:34:29.413
The more anonymous you can get it, the more honest the feedback.
485
00:34:29.493 --> 00:34:36.520
There's only been a couple times where I have had feedback in an anonymous, like purely anonymous route where I actually said, I need to know who said this.
486
00:34:37.160 --> 00:34:44.325
And most of the time it was around things that, like, if someone felt endangered or they were feeling threatened.
487
00:34:44.646 --> 00:34:47.988
I'm like, hey, I need to know who wrote this, and I need to know now.
488
00:34:48.528 --> 00:34:49.609
And so that's happened a couple times.
489
00:34:49.829 --> 00:34:52.551
But I need to do that because there's an actual systemic problem.
490
00:34:52.571 --> 00:34:55.373
And if someone's feeling a certain way, I need to know about it.
491
00:34:55.513 --> 00:34:57.175
Or if there's been feedback about me where I, like –
492
00:34:57.835 --> 00:34:59.916
I needed more clarity because I saw their point.
493
00:34:59.957 --> 00:35:00.517
Usually I was mad.
494
00:35:00.797 --> 00:35:01.397
I would get mad.
495
00:35:01.618 --> 00:35:05.880
Then a couple days go by, and you're like, okay, I get where they're coming from, but I think I'm just missing clarity.
496
00:35:06.101 --> 00:35:08.782
And I would again ask the team, like, hey, no one's obligated.
497
00:35:09.083 --> 00:35:12.945
I just want more clarity on some of the feedback that was given to me, and this is what it is.
498
00:35:13.285 --> 00:35:16.047
If you want to come forward and give me more information, fine.
499
00:35:16.127 --> 00:35:17.588
If you don't, that's totally fine too.
500
00:35:17.828 --> 00:35:21.191
But I think I can improve better if I had some more clarity around these couple points.
501
00:35:21.831 --> 00:35:32.206
And so those are the couple times that I have actually stepped into an anonymous peer review where we don't ask for their names and actually requested for that person to step forward, not in public.
502
00:35:32.366 --> 00:35:34.048
Like, hey, talk to me after work today.
503
00:35:34.409 --> 00:35:36.973
Make sure you drop by my desk and let's talk about these things.
504
00:35:37.253 --> 00:35:42.715
So that has happened a couple times, and in both cases, we were able to resolve the issue, and that person felt very validated.
505
00:35:42.915 --> 00:35:48.257
But you can only do this in a culture of trust and where people actually know that you're not going to rat them out.
506
00:35:48.457 --> 00:35:50.477
You know you're not going to pit people against each other.
507
00:35:50.737 --> 00:35:51.778
You know you're not going to take Bob's –
508
00:35:52.858 --> 00:35:57.228
of handwriting and then know that Tim and then tell Susie that he said about that about her.
509
00:35:57.248 --> 00:36:00.114
Like if you start doing that, you create so much drama so fast.
510
00:36:00.314 --> 00:36:03.241
And that's why most people avoid peer reviews because it creates drama.
511
00:36:03.561 --> 00:36:09.895
It can diffuse so much drama and create way more alignment and a much more positive culture if done correctly.
512
00:36:09.995 --> 00:36:10.637
And that's how we did it.
