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business will make $1 million in revenue this year.
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I need help with collecting on $57,000 in past due invoice.
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They're just trying to push off payment as long as possible because it's cheaper to get the money from you and you charge a tiny little bit of fees compared to going out and getting a line of credit.
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They promised a few times through the winter
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that they would make sure to get it paid, asked us to keep servicing them.
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They were going to make sure it was paid.
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I agreed to it mistakenly.
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The biggest mistake is someone having dumb money.
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So they have plenty of cash, but they don't have the leadership chops to actually turn the culture into what they want it to be.
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If you build a business around one person, you actually create more risk in the business because there's more key man risk when there's only one person running the whole operation.
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If you have a million dollar home service business and you're trying to get to $10 million in annual revenue, this video is for you.
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I'm talking to several entrepreneurs that are inside of Home Service Boardroom.
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They have a seven figure business and they're running up against the challenges of leadership, advertising and trying to get to the next level using pay for performance.
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We're going to be discussing what they can do to make sure they get past this constraint and continue to grow the business.
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Now, this is a recorded call and one of the coaching calls that we do inside of Home Service Boardroom.
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It's a private school community where we have 30-day challenges and we keep each other accountable to becoming the leaders that is required to grow to a $10 million organization.
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Let's go ahead and roll the coaching tape.
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Our long-term snowplown business will make $1 million in revenue this year.
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I need help with collecting on $57,000 in past due invoices.
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pay and 57k is that commercial or residential invoices mostly commercial some residential 20 000 of it is from one commercial account last year for snow two customers owe for ten thousand dollars one for snow last year one from the year before and then the rest is from you know smaller businesses or residential
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And do you have any sort of like, so we can talk about how to try to get this money now.
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Like to set, to prevent this in the future, do you have any sort of like overdue fees that accumulate on invoices?
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We do.
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Cool.
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And so on like the 20 grand one, for example, is there a bunch of fees also on top of that?
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There is.
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That 20,000 does include the fees.
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Got it.
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And...
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Commercials in general, they're slow and bad at paying, but like, have they been communicative with you?
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They have, they, they promised a few times through the winter that they would make sure to get it paid, asked us to keep, keep servicing them.
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They, they were gonna make sure it was paid and I agreed to it mistakenly.
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And, and have you threatened with like any sort of a lien on their property or anything like that?
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I have not yet.
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what, like, I would look at your state laws, like, just, this is a great use for AI, like, I'd put in all your email communication, the invoices, and say, hey, in this state, like, what should I be taking in terms of legal action?
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What can I do before actually trying to do, like, a lawsuit?
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I think it's probably going to fall into the category of some sort of a lien on the property.
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And are they, like, let's talk about the $20,000 one, for example, are they a tenant or do they own the land?
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They own the land.
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It's a,
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I suppose there's a whole bunch of apartments in there, and it's just a big area of
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plowing parking lots and drives and yeah yeah so sometimes like putting a lien on a property will immediately cause them to get their attention because if they go to try to pay like taxes if they try to sell the property there can be downstream effects for them but i would i would personally take all your communication correspondence with them i take their invoices i would dump into ai and be like hey i'm in this state in this city what could i be doing and when you make the emails
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I would start off with a much more friendly tone of like, Hey, we got to get paid.
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Like we're a small business in this area.
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In order to pay our employees, we have to get paid.
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If we don't, we'll have to go to these measures.
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And then you try to reference a specific RCW or code that is going to give you the permission to be able to put a lien on the property or some other way of taking legal action without taking legal action.
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Got it.
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And
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Is a lien a lot different than suing someone for individual invoices?
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I suppose to keep it from under like a $5,000 threshold or what have you.
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Yeah.
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Like if you're doing a lawsuit that, that, that is a much more aggressive approach compared to a lien.
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I think that if you position yourself much more like, Hey, we're a small business, we got to pay our employees.
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This has really been hurting our business.
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If we don't get paid by this date, we've got to put a lien on the property.
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That feels different than a lawsuit.
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Like a contractor's lien in most states, you can put this on.
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It just depends on your state specifically and what services were done.
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And did you have a signed agreement?
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All the rest of it.
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But I think it sounds like they're communicative.
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If they dropped off the map and just like did not talk to you, that's when you usually have to go a little more nuclear and start saying, hey, we're pressing legal action and sometimes just getting paying $500 to an attorney and say, hey, can you draft up this document and send it to them on my behalf?
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Then it shows you're really serious.
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And that will usually also get them to move faster.
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Okay.
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So like I would say in the short term, I would be dumping AI.
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I'd be trying to come up with an email that is, Hey, I'm a small business owner.
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I need your help here to try to make this work.
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Otherwise I've got to take this and then you cite the violation code or like the actual code in your state that gives you license to be able to do a contractor's lien or whatever remediation.
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And then the more nuclear option is pay a small retainer to a lawyer to just basically be the person that sends a much more legally, you know,
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legalese type of document to them that's going to be a little more threatening.
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And that would be more of like, hey, if this doesn't happen, we're going to we're going to suit the property and sue you.
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I don't think you'll have to go nuclear because they have been responsive with you.
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Usually people are responsive as long as you communicate well and you cite what's the law.
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They're just trying to push off payment as long as possible because it's cheaper to get the money from you.
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And you got you charge a tiny little bit of fees compared to going out and getting a line of credit.
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Got it.
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And with one of these customers, it wasn't from last winter snow.
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It was from the winters before.
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They were an EV charge in place.
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They opened up a second business.
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Then we started plowing both businesses.
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Their second business, we got paid for everything.
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From the EV one we had gotten paid the year before because we were formed the year before.
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And then since then, they've just ghosted us on that account.
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Yeah, that's the one where I'd probably be looking for an attorney and just be like, hey, this has happened.
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They have not been responsive.
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Can you please draft up a document that basically threatens them?
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90% of the time, when they get that document from a lawyer, all of a sudden they get responsive because they don't want a lawyer in their business.
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They've got to defend against that, and that'll cost them a whole lot more than just paying the invoice, especially at 10 or 20 grand.
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It's going to cost them more to get a lawyer under a retainer and defend themselves for
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And so I would I would do your due diligence and work with AI so that when you go to an attorney, they're not going to bloat this thing into a huge expense.
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But rather, like, hey, I just need this document.
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Here's approximately what I want said.
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And I want you to send it and I'm willing to pay your fee.
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And a lot of times a lawyer that is, you know, just a smaller claims type of situation, you might be looking at between five hundred to a thousand dollars for them to like just draft that document up, send it to the client and take a few customer emails back and forth.
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That cost is bearable.
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Got it.
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Now, we've been owed money plenty of times before.
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We have never sued anybody.
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Generally speaking, how long do you have to collect on something until it's just tough
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It depends on your state.
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I typically if I don't collect within a year, I just consider it bad debt.
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But if it's if I'm going to allow it to go to bad debt, it means that I have warranted it not enough of funds for me to go take this new more nuclear option, which is go get a lawyer involved.
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Once you do get a volume, a lawyer engaged with your business, it's usually assuming they are smaller and they're OK with working with you on an individual one off case basis.
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It can be like, hey, it's $500 per time I need to reach out to a client because they know just their letterhead and their email alone will usually get 90% compliance.
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I believe though, like to be clear, I have never had to sue somebody.
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I have always been able to deal with it without having to go all the way to a lawsuit, either A-
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if I'm going to settle B, if I am going to.
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So, for example, settle would look like, hey, we both disagree on the fact that maybe we did some we messed up a couple of things on the property.
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Now we're going to go back and forth.
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Okay.
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What about 17,000 instead of 20,000?
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Because that $3,000 covers the damages, for example.
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But if you're like completely in the right, usually
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you can either A, just cite the infractions or the codes that allow you to be able to get the money or put a lien on the property.
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Almost always, they'll respond to that.
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If not, then I usually get a lawyer involved.
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And I just have a lawyer on tap that basically is like,
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I could just use to threaten people.
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And it sounds horrible, but if they're not gonna communicate and be reasonable, then I'm gonna use that more nuclear option.
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And I have never had to go beyond that point, but I am willing to.
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I'm not willing to do it for over like 10 grand because it's gonna cost me more
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to just have the lawyer do the suit, go to court the whole nine yards.
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And so the 20 grand one starts to be coming where if you actually had to go all the way through with it, you know, the attorney would take you to court and try to sue them.
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But I have rarely ever had to do that.
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I've never had to do that, to be honest with you.
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I've got a pool service business that does about 1.3 million in sales a year, and I've
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I asked all the standard questions and gotten all the standard answers.
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So I'm looking for some girl math.
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Okay.
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If that applies here.
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Let's do it.
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So I was reading the copy and paste millionaire and maintaining good admin talent is good.
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Costs more to rehire, retrain, have turnover in that position.
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Okay.
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So I'm trying to not let my best people go over the winter, but I'm trying to justify the cost because they do contribute to sales.
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They do all the follow up on sales.
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I do all the sales myself, but they do all the follow up.
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They do all the regular admin stuff and do some of their own smaller sales for standardized things.
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So I'm just trying to see what is the quantifiable cost of.
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letting somebody go and offering them a return to work bonus that they don't take and they just go get another job and having to retrain that position every summer versus switching to a, you know, a VA service or something that's a little bit less.
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reliable than what we have with an in-person worker yeah totally so you know it saves money to have good admin costs money to retrain admin so then where is the threshold of like well just paying i know that you're not supposed to just pay them through the winter yeah but i'm looking for how do i just pay them through the winter yeah i got you all right well the way that you can convince yourself of your return to work bonus to like increase like what is the return to work bonus now that you've proposed
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I've never done it because I've never had enough admins and need to lay anybody off in the winter.
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This is the first winter where I'm like, I have to let somebody go.
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It's too expensive.
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I have two admins.
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Okay.
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Or I have to find another solution.
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Cool.
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So before we endeavor on this, which we will, I want to say I hate fighting ghosts, which means we don't know if this is a problem because we haven't gone through an off season where we lost admin.
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So I was just like, as a little disclaimer there, mostly because I thought this for so long and it cost me hundreds of thousands of dollars before I had to tear the bandaid off because I was forced to and everyone came back.
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So I would just put that as an asterisk next to this.
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so first off how many admin are there one or two two okay and are they both full-time right now yes okay um additional caveat yeah because it's pool service and we're in the south we only have about two and a half months off oh that's not bad like long care five months perfect perfect okay so full service um
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Okay, you can quickly usually calculate how long, how much it actually costs you to replace them by looking.
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Most will determine like their wages, but the biggest cost is going to be your time.
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And that's the part that I'm always most cautious of is the owner spending four or six weeks of their time vested fully in getting them up to speed.
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And let's hope and pray they actually work out.
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So I don't want to lose these people either.
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But if you actually do the math on replacing the admin person, usually for what I have seen,
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especially when there's only two of them in the office and they're generalists, meaning they have to do a bunch of different stuff.
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I'm going to go on a limb and say it takes them four to eight weeks to get really good at their job.
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I think that just shows the trash quality of our training because it's like six months before they're like, okay, that's fine.
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I think that's actually relative.
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I was being conservative.
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Um, but it's probably because they do a lot for you.
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I'm assuming they do, do they do like your QuickBooks and like payroll and everything?
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Pretty much everything, yeah.
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Okay.
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So there's two ways to fix this problem.
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One is you start piecing off some of the most complicated admin tasks and getting outside help.
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So, for example, like a bookkeeper would reduce their need for them to even know how to do bookkeeping or expense tracking, et cetera.
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Maybe that's not something we tackle, though.
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If it's six months to get them up to speed, let's just say it's four before they're decent and you don't have to micromanage them.
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I would go out and say it's costing between $8,000 and $10,000 to replace them by the time you factor in your time, their wages, and mistakes they will make in their first six months.
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And so I would keep that in your mind when it comes to how much do I pay them to come back to work.
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And so I see a lot of people do like, I'll get $500 return to work bonus.
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And it's like, well, compared to four to eight grand, maybe we should reconsider.
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Um, have you talked to them that you about this or is, or, or have they talked about, like asked you about what you're doing during the off season?
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Yeah.
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They, this came up a couple of weeks ago because they said, here, we cutting hours like we did last year.
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Cause the way I solved this last year was that it's cut one of them, the less tenured person down to three days a week and the other one down to four days a week.
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And that was like, maybe you were saving enough collectively that it, we don't have to let anybody go.
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And they were okay with that.
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They were annoyed, but.
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It was an okay solution.
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Yeah.
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The perfect situation is this.
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This is what we do with our admin.
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And that is we determine what months of the year we need certain amounts of hours of admin tasks.
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So, for example, for you, it might be like December, January, February, you basically need them for like 20 hours a week.
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But then during the peak season, you need them 40 plus hours a week.
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And there might even be a spot in between there where it's like you need them 30 to 35 hours a week.
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And just setting the expectation might be all that's required to take away this fear for them of what is to come.
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And just by knowing that, okay, starting this date, I'm going to be down to 20 hours or I'm going to be down to 30 hours.
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And then they've got to make the decision.
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Do they stick it out with a lower pay throughout the off season?
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Or do they go find another part job or something else to supplement the income?
200
00:15:47.943 --> 00:15:53.707
Or do they leave, come back to work two and a half months later after they go out and get a job someplace else?
201
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And then you have a big fat bonus attracting them to do so.
202
00:15:57.350 --> 00:15:59.692
And so I would just give them a couple options.
203
00:15:59.712 --> 00:16:02.374
Like, hey guys, one, we can do what we did last year.
204
00:16:02.454 --> 00:16:03.775
We've all got to trim our hours a bit.
205
00:16:04.447 --> 00:16:09.192
Two is one of you, if you want to leave, go get another job full time.
206
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When you come back, you'll get this big bonus.
207
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I think it's having the open conversation with them.
208
00:16:14.917 --> 00:16:15.998
You'll probably save them.
209
00:16:16.358 --> 00:16:20.923
I would then lock in though what your what your system is for this.
210
00:16:21.263 --> 00:16:23.985
So that way everyone just knows this is how the offseason rolls.
211
00:16:24.706 --> 00:16:29.551
Otherwise you have to have this awkward conversation every single fall with all your admin.
212
00:16:31.780 --> 00:16:56.483
so i think what i would probably do if i was used this year is say hey guys i don't like cutting your hours but in order to get by we have to so we can do one of two things either a we all cut our hours back to 25 to 30 hours a week or 20 to 30 or b if one of you want to leave go get another job and come back i will pay you a bonus and i'll maintain any of your benefits throughout the off season but when you come back you'll get a big fat check uh
213
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to make up for any loss of wages compared to a different job that you might have for just a short period of time the positive thing is that period of time is during the retail peak season and they can usually get a job really easily anywhere due with retail because christmas yep i guess that's where where i'm trying to do the girl math i'm like okay by letting one go and then giving them a three thousand dollar return bonus i'm saving
214
00:17:23.281 --> 00:17:40.825
20 000 but then giving back three versus just cutting both their hours in half is like 18 000 in savings and then it's just a hassle and they're annoyed it's better like one of them called out sick now all the admin is back on me for a month or a week or something it's just like
215
00:17:41.579 --> 00:17:43.800
I think we have one of them takes vacation every January.
216
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So that's like a whole week of like paid vacation that I'm paying that they're gone for that somebody has to cover.
217
00:17:49.942 --> 00:17:52.783
And then if I'm covering it, I'm like, great, now I'm back in the trenches again.
218
00:17:53.103 --> 00:17:53.963
So it just feels bad.
219
00:17:54.503 --> 00:17:54.744
Yeah.
220
00:17:54.964 --> 00:17:59.185
And I think when you're at two employees, no matter what you do, you're going to be at their mercy somewhat.
221
00:17:59.605 --> 00:18:04.447
And so this is where I lean heavily into having the conversation with them and giving they make the decision.
222
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Hey guys, these are the two options.
223
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It's up to you because you're fine with either option, either a one of them opting for the bonus.
224
00:18:12.281 --> 00:18:17.306
And you know that next spring rush, you're gonna have your two odd person be happy to keep scaling up and not worry about this.
225
00:18:17.967 --> 00:18:21.210
Or you're also happy if they both just decide to cut their hours.
226
00:18:21.630 --> 00:18:22.471
And they're like, Okay, that's fine.
227
00:18:22.491 --> 00:18:23.552
We'll both get part time jobs.
228
00:18:23.572 --> 00:18:29.038
We'll accommodate each other's schedules, make sure there's coverage, but then we'll have we'll both find something else on the side.
229
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But they make the decision so that you don't have this awkwardness and feeling like you're not a good boss and then they might leave.
230
00:18:35.626 --> 00:18:36.886
You don't want to feel that way.
231
00:18:36.906 --> 00:18:38.127
You want them to make the decision.
232
00:18:38.727 --> 00:18:39.127
Makes sense.
233
00:18:39.787 --> 00:18:39.987
Cool.
234
00:18:40.267 --> 00:18:40.868
You got this, brother.
235
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Good work.
236
00:18:42.788 --> 00:18:42.968
Thanks.
237
00:18:43.328 --> 00:18:43.669
You got it.
238
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Take care.
239
00:18:45.629 --> 00:18:46.409
Hi.
240
00:18:47.230 --> 00:18:49.811
This is my first time on the other side of this.
241
00:18:50.011 --> 00:18:50.291
Let's go.
242
00:18:50.311 --> 00:18:50.651
Let's go.
243
00:18:50.851 --> 00:18:52.031
I've listened to a lot of these.
244
00:18:52.391 --> 00:18:53.532
Yeah, this is really cool.
245
00:18:53.652 --> 00:18:54.472
Very interesting.
246
00:18:55.012 --> 00:18:56.113
How can I help, brother?
247
00:18:56.393 --> 00:18:56.673
Awesome.
248
00:18:57.990 --> 00:18:58.250
Great.
249
00:18:58.330 --> 00:18:59.852
No, I'm sure in a lot of ways, man.
250
00:18:59.932 --> 00:19:05.100
I think the biggest challenge is to focus in on, it's like don't know what you don't know.
251
00:19:05.160 --> 00:19:11.588
So focusing in on the question that's going to move the needle forward the most.
252
00:19:11.608 --> 00:19:14.853
And my wife and I, we have a landscaping business and we are,
253
00:19:15.702 --> 00:19:21.063
I've always been fascinated with pay for performance, especially in the lawn mowing world.
254
00:19:21.424 --> 00:19:22.864
We don't do any of that.
255
00:19:22.924 --> 00:19:26.225
We have a specialized type of maintenance that people do pay for a certain amount of time.
256
00:19:26.365 --> 00:19:27.965
So this isn't about the maintenance side.
257
00:19:28.005 --> 00:19:31.246
This is more about the landscape installation side of things.
258
00:19:31.586 --> 00:19:40.389
And I actually did a little test of it today, and we've done it before, where we're calling it efficiency pay, where essentially we have, we do four 10s.
259
00:19:41.369 --> 00:19:44.770
And if the crew has a job that we have budgeted, for example, today,
260
00:19:45.931 --> 00:19:50.333
We're in Florida, it's super hot, so it also incentivizes them to get out of the heat because it's just brutal right now.
261
00:19:50.393 --> 00:19:55.136
But we have them scheduled for the full day.
262
00:19:55.336 --> 00:19:59.978
I had two guys for a full day of cleanup, planting, mulching, you know, basic stuff.
263
00:20:00.699 --> 00:20:13.585
And I told them, you know, this morning after talking it over with my business partner, my wife, and saying, hey, you guys finish adequately all the things I talked about and all the little extra things the customer asked for.
264
00:20:14.290 --> 00:20:26.553
and the cleanup and get everything, you know, look in stick and stand when we leave and you get back to the shop, clean out the truck and clock out, we'll fill you in the hours for the rest of the day.
265
00:20:27.053 --> 00:20:33.515
So we're kind of starting with that because I think that's just the easiest way to move forward.
266
00:20:33.595 --> 00:20:37.616
And just from that, the reaction I had from the two guys was they were super grateful.
267
00:20:39.236 --> 00:20:41.317
And it's something I know you're always talking about.
268
00:20:41.798 --> 00:20:46.421
but it's taken me a while to actually implement it, but it really changes the whole incentive structure.
269
00:20:46.461 --> 00:21:02.533
So my question is what kind of problems that I'm thinking of that could possibly come about with that is that if maybe the customer thinks that they're getting a certain amount of time and they just want them to stay more and they find more stuff to do to them.
270
00:21:02.553 --> 00:21:09.999
If the crew thinks they got everything finished and they actually didn't, they don't do a good job and they have to come back out again.
271
00:21:10.019 --> 00:21:11.480
I know you guys do the yellow slips, so.
272
00:21:12.568 --> 00:21:25.143
It's not a straight, exact question on something specific, but more or less from that system, from what you understand, working in landscape installations, what problems do you foresee with that?
273
00:21:25.845 --> 00:21:31.588
Yeah, so the challenging part with day rate, that's essentially what you're doing, is it all is great.
274
00:21:31.668 --> 00:21:36.911
Like, it's the easiest way to do it until there's a callback or a mistake or damage case.
275
00:21:37.711 --> 00:21:46.736
And specifically, when it's like someone has a callback, then they leave for vacation, and someone else has to go back to the property and fix their mistake.
276
00:21:47.196 --> 00:21:48.717
So that's when it starts to get really murky.
277
00:21:48.737 --> 00:21:49.698
Yeah.
278
00:21:50.218 --> 00:21:54.780
And that's why the ultimate version is P4P, where everything's down to the budget hour.
279
00:21:55.220 --> 00:21:59.782
But we can absolutely make this work and at least get some positive results.
280
00:21:59.902 --> 00:22:02.543
The thing that you want to be careful of is a couple things.
281
00:22:02.583 --> 00:22:07.745
Number one, never giving the customer the estimated amount of time for the job.
282
00:22:08.710 --> 00:22:18.217
So if it's a 15 budget hour job, the customer cannot know that because if they do, that's when they'll start pulling the crew back in like, hey, it said 15 budget hours.
283
00:22:18.617 --> 00:22:19.638
You did it in 12.
284
00:22:19.918 --> 00:22:20.879
That means I got three more hours.
285
00:22:20.919 --> 00:22:21.099
Right.
286
00:22:21.319 --> 00:22:24.982
And then they put it puts the crew in a really awkward position.
287
00:22:25.803 --> 00:22:26.843
So that's the first thing.
288
00:22:27.264 --> 00:22:30.186
And the second thing is having clear parameters of what done means.
289
00:22:30.906 --> 00:22:31.186
And so.
290
00:22:32.282 --> 00:22:37.765
Like whether that be a walk for us, it's like a walkthrough with the client is considered done.
291
00:22:38.245 --> 00:22:42.448
You could also have like where they have to take a video of the property to prove that everything was completed.
292
00:22:43.268 --> 00:22:46.370
In addition to the customer doing a walkthrough with them.
293
00:22:47.365 --> 00:22:52.449
So the reason for that is because that's going to massively diminish the amount of callbacks you do have.
294
00:22:53.010 --> 00:23:04.299
And so even though the callbacks is going to be your kryptonite when it comes to day rate, you can massively reduce it if you just say, hey, in order to get day rate, you have to have the customer either sign off or do a walkthrough.
295
00:23:04.439 --> 00:23:08.382
And I need a video attached to the job showing everything was done on the estimate notes.
296
00:23:09.263 --> 00:23:10.183
Then you can get day rate.
297
00:23:10.764 --> 00:23:13.106
So doing those couple things will help a little bit.
298
00:23:13.659 --> 00:23:15.360
Yeah, that sounds great.
299
00:23:15.380 --> 00:23:16.941
And I really like the video idea.
300
00:23:17.021 --> 00:23:25.225
Just for example, today, I mean, it wasn't that big of a deal, but it was about a 15 minute drive there, and 15 minutes with the crew, 15 minutes back.
301
00:23:25.245 --> 00:23:28.207
You know, that takes up 45 minutes or even an hour of my time.
302
00:23:28.867 --> 00:23:30.528
And we have, we use Housecall Pro.
303
00:23:30.808 --> 00:23:34.210
You know, we've just gotten used to using that and they have a video attachment feature.
304
00:23:34.870 --> 00:23:36.011
I could have very easily asked
305
00:23:37.267 --> 00:23:41.269
The two guys that were out there to just send me a video of everything before they leave.
306
00:23:41.670 --> 00:23:45.151
You know, those are some small little finishing touches I wanted them to do.
307
00:23:45.171 --> 00:23:53.776
But I think I'm still going to put myself or possibly our operations manager out there to be the final say along with the customer because they're really the final say.
308
00:23:53.796 --> 00:23:56.157
If they say something is good, then it actually is good.
309
00:23:56.778 --> 00:23:59.199
But those pieces of advice really helped, Mike.
310
00:23:59.219 --> 00:23:59.599
Thanks, man.
311
00:23:59.939 --> 00:24:00.299
Absolutely.
312
00:24:00.360 --> 00:24:00.780
You got it.
313
00:24:02.005 --> 00:24:08.289
The thing to be careful of is like having an operations manager or someone else going at a straight overhead.
314
00:24:08.309 --> 00:24:29.460
You sometimes will wipe out 50 to 50% plus of your efficiencies gained from your crew by having an overhead person going out and trying to make sure they walk through the customer in order to get P for P. So like, if you're not already doing that, if you're just doing that in order to make sure that the job is completed correctly, that's where I'd be like, okay, you're going to start off saying a huge amount of your efficiency gains.
315
00:24:30.160 --> 00:24:34.504
by having that extra overhead person go out and visit the project.
316
00:24:34.924 --> 00:24:36.386
But it's still going to have some gains.
317
00:24:36.926 --> 00:24:43.232
And I think that would be the worst case scenario is you do have an overhead person or you yourself are going and checking the job, making sure it's completed.
318
00:24:44.794 --> 00:24:52.701
I became an arborist and some networking found out about a contract and we plant trees for the county where we're at.
319
00:24:53.101 --> 00:24:55.744
And the markup is
320
00:24:56.985 --> 00:25:01.108
The way we make money on it is we have to take the wholesale price of the tree and market up a certain percentage.
321
00:25:01.368 --> 00:25:09.452
And within that percentage has to contain a full year of warranty and tree watering, planting, lodge poles, mulch, everything.
322
00:25:09.553 --> 00:25:12.274
So usually we do 20, 30, 40 trees.
323
00:25:12.334 --> 00:25:18.698
So it's a big payout, but I have to I have pretty much almost a full time guy who just waters trees.
324
00:25:19.705 --> 00:25:23.608
He also does planting when we need him.
325
00:25:23.828 --> 00:25:30.753
I'm trying to train him to do herbicide, trying to add some more things to what he's doing because the watering definitely lowers in the wintertime.
326
00:25:31.653 --> 00:25:40.660
But with some sort of efficiency system like that, and this is a conclusion I came to is that we need to really track how long it takes us to plant these trees.
327
00:25:41.600 --> 00:25:47.685
We've now done it for a few years, so I know the average number of waterings is about 18.
328
00:25:48.690 --> 00:25:57.074
So at least 18 watering events that were going out, but it sometimes can be upwards of 30 or 40, you know, if it's in a very dry sandy spot.
329
00:25:57.094 --> 00:26:04.657
So that one's hard, but we came to the conclusion that a good number for two crew to plant in the day is about 12.
330
00:26:05.758 --> 00:26:08.919
But so I want to incentivize them.
331
00:26:09.039 --> 00:26:16.803
But if one of those trees dies, not even because of lack of watering, just because it happens, if, you know, whatever, something comes up,
332
00:26:18.055 --> 00:26:19.198
I still want to incentivize them.
333
00:26:19.238 --> 00:26:20.100
It's really hard work.
334
00:26:20.140 --> 00:26:21.804
Again, I want to keep doing it.
335
00:26:21.844 --> 00:26:25.734
We love the tree planting, but I don't know how to incentivize that.
336
00:26:26.295 --> 00:26:27.598
So that's a little more complicated.
337
00:26:28.147 --> 00:26:38.993
Yeah, we've always found any sort of warranties or guarantees that claw back from months before make it really, really difficult to actually get that money back from the technicians once it's given.
338
00:26:39.394 --> 00:26:49.380
And so personally, I would just be looking at, OK, what what what percentage of the initial amount do I need to set aside for repairs or damages that are inevitably going to come?
339
00:26:49.720 --> 00:26:50.901
And I'll have to pay my guys for them.
340
00:26:51.681 --> 00:26:52.722
So, for example, like I.
341
00:26:53.522 --> 00:26:57.467
on some of our work, we would do 30% of revenue, labor revenue goes to the employees.
342
00:26:57.968 --> 00:27:04.295
But when we started saying, OK, well, if we're going to guarantee this, for example, planting specifically, let's do 25% knowing that
343
00:27:06.932 --> 00:27:14.902
In six or eight months, there's going to be some percentage of these plants die or projects that go awry, and we're going to have to replace it for the cost.
344
00:27:15.303 --> 00:27:19.789
And we're going to have to cover that cost because there's no way you go back and take someone's pay from six months ago.
345
00:27:19.949 --> 00:27:20.650
Like they will leave.
346
00:27:21.191 --> 00:27:22.272
So that's the challenging part.
347
00:27:22.292 --> 00:27:22.392
Yeah.
348
00:27:24.174 --> 00:27:24.835
Yeah, it is.
349
00:27:25.055 --> 00:27:32.839
And I mean, because we got that one county contract, and this is something I'm learning from all these municipal contracts, the cities can do something called piggybacking.
350
00:27:32.979 --> 00:27:33.360
Yep.
351
00:27:33.540 --> 00:27:42.345
Where, you know, the county already went through all the work of putting this, you know, long, and this is pre-ChatGBT world, so I actually read through the whole contract.
352
00:27:42.905 --> 00:27:47.708
I didn't just throw it in and be like, chatGBT, tell me what I need to know, which is what I do with contracts now.
353
00:27:47.768 --> 00:27:51.430
But they were able to, we got two additional cities.
354
00:27:51.908 --> 00:27:58.574
The nice thing about the two additional cities is that their billing and invoicing process is a little bit easier and they pay faster.
355
00:27:59.574 --> 00:28:03.638
The county, for whatever reason, takes about like one and a half times the amount to pay.
356
00:28:03.898 --> 00:28:06.800
It's net 45, which is just forever.
357
00:28:06.841 --> 00:28:09.363
But what we do, we just had some hitter bank account.
358
00:28:09.383 --> 00:28:10.884
It's like, oh, that's nice.
359
00:28:11.144 --> 00:28:12.125
Like, okay, good.
360
00:28:12.707 --> 00:28:15.528
and pay off some of the wholesalers.
361
00:28:15.588 --> 00:28:18.808
But because we've gotten it with them, so maybe I can...
362
00:28:19.128 --> 00:28:37.452
I was thinking, going back to what I was saying before, that if we say, ideally, you guys, we want the two of you to plant, we came to the conclusion of about 12 to 15 30-gallon trees that's loaded up in the truck, planted, mulched, lodge-pulled, and staked, and inspected, so everything's looking good.
363
00:28:39.103 --> 00:28:42.844
And we already want them to do that in the full day if they finish it like today.
364
00:28:42.904 --> 00:28:45.825
They finished around 2.30.
365
00:28:46.145 --> 00:28:52.826
By the time they get back and unload, they'll probably have an extra hour and a half in their regular allotted day.
366
00:28:53.426 --> 00:28:55.087
So I kind of think I could still go through that.
367
00:28:55.107 --> 00:29:00.168
That's why I think that efficiency pay for just for what we do seems to work better.
368
00:29:00.648 --> 00:29:05.029
Does that same crew have to do all the watering and maintenance or just the installs?
369
00:29:05.702 --> 00:29:07.203
They're just doing the installs.
370
00:29:07.243 --> 00:29:09.064
They're sometimes they're not even loading up.
371
00:29:09.084 --> 00:29:14.926
That's something as a business owner, I it's taken me a while to claw myself away from popping up like I'll do it.
372
00:29:14.946 --> 00:29:15.327
I'll do it.
373
00:29:16.007 --> 00:29:26.572
Um, but I used to, uh, get there early and I would not agree for the back, but I would take like 30 gallon trees and muscle them up onto the back of the trailer and load them up for the crew and everything.
374
00:29:26.612 --> 00:29:27.492
But I'm like, wait a second.
375
00:29:27.512 --> 00:29:34.816
If I'm already trying to incentivize them to do this, the trees are already there, it's gotta be part of their day, you know, because I can't.
376
00:29:35.740 --> 00:29:37.481
Like I'm trying to take myself out of the equation.
377
00:29:37.661 --> 00:29:38.682
That's the, that's the big part.
378
00:29:38.702 --> 00:29:40.023
You know, I got three young kids at home.
379
00:29:40.863 --> 00:29:46.667
I, I'm trying not to inject myself into all these things because that just skews the whole system.
380
00:29:46.707 --> 00:29:49.509
Like you wouldn't be able to do what you're doing if you're like, I'll be there.
381
00:29:49.589 --> 00:29:50.369
I'll be at every job.
382
00:29:50.509 --> 00:29:51.270
I'll go check one.
383
00:29:51.610 --> 00:29:52.390
I'll check each one.
384
00:29:52.410 --> 00:29:53.931
Let me just hop in the plane real quick.
385
00:29:53.951 --> 00:29:54.832
Like it just doesn't work.
386
00:29:55.272 --> 00:29:57.414
So I'm really trying to pull myself away from that stuff.
387
00:29:57.454 --> 00:29:58.094
And there's that like.
388
00:29:58.635 --> 00:29:59.755
And now I'm going all over the place.
389
00:29:59.795 --> 00:30:03.116
But yeah, that's that owner mentality because we built it ourselves.
390
00:30:03.136 --> 00:30:05.437
You know, we have that quality control with that.
391
00:30:07.097 --> 00:30:08.058
I've gotten better with it.
392
00:30:08.118 --> 00:30:11.379
But yeah, that still is sometimes hard where I'm like, I want to do it.
393
00:30:11.439 --> 00:30:12.659
But hurting my back, that helps.
394
00:30:13.019 --> 00:30:13.779
I'm like, I can't.
395
00:30:13.959 --> 00:30:15.200
I physically cannot do it.
396
00:30:15.220 --> 00:30:15.480
Sorry.
397
00:30:15.987 --> 00:30:34.262
Yeah, I think there's always a identity shift of leading from the front and being a leader that is, you know, out with the front on the front lines, taking the bullets with the team and realizing that that actually does not serve the team at the highest level because it puts you in danger.
398
00:30:34.703 --> 00:30:41.408
And so a lot of times we will fantasize or lift up the generals that would be like on the front lines with their team.
399
00:30:41.428 --> 00:30:42.889
And there's certainly a time for that.
400
00:30:43.662 --> 00:30:52.246
But also that is potentially the worst thing for the team, because if that general goes down, the entire army is gonna be affected.
401
00:30:52.867 --> 00:30:59.870
And so you spending time out with the guys in the past has probably been the thing that allows you to generate and foster great culture.
402
00:31:00.210 --> 00:31:02.412
They like you, they want to work harder for you.
403
00:31:02.592 --> 00:31:08.135
That's all very good, but taking it to the extreme, you can't grow the business or be a strategist if you're in the front lines.
404
00:31:09.195 --> 00:31:16.341
you have to step back and be able to see where everything's happening and make good strategic calls that affects the entire team, not just the crew that you're working with.
405
00:31:16.841 --> 00:31:25.287
And so when you zero out to a large size business, almost no large business can the founder or the owner or the CEO
406
00:31:26.391 --> 00:31:29.193
know, hire or have a connection with every single team member.
407
00:31:29.633 --> 00:31:38.459
So if you look at like the large companies have hundreds of thousands of employees, there's no way the founders will stay in touch with all of them outside of like an all hands meeting or a video, but he does not know them individually.
408
00:31:38.719 --> 00:31:41.461
He or she cannot step in and actually do their job.
409
00:31:41.862 --> 00:31:43.283
And yet they still could be a great leader.
410
00:31:43.503 --> 00:31:46.164
They can still have great vision, have great camaraderie, great culture.
411
00:31:46.585 --> 00:31:48.886
And so it is certainly identity a shift.
412
00:31:48.966 --> 00:31:51.008
And I think the thing that you are in the middle of
413
00:31:51.608 --> 00:31:55.572
is creating the systems that still manage the labor when you're not there.
414
00:31:55.872 --> 00:32:01.777
So that when you are the strategist, that there's people out performing on the strategy, the way that you intend them to do.
415
00:32:02.197 --> 00:32:03.618
So you don't have to be there in person.
416
00:32:04.099 --> 00:32:08.783
And so things like efficiency pay, ironing out, okay, how many can they install per day?
417
00:32:09.263 --> 00:32:12.026
If they have to go back and install another one, do I hold that against them?
418
00:32:12.086 --> 00:32:15.268
Or do I just bundle that in with the number of plants per day?
419
00:32:15.649 --> 00:32:17.010
As like, okay, if you got to, you got to go with,
420
00:32:17.330 --> 00:32:21.352
you know, install three ones that died six months ago, but I will still pay for the three.
421
00:32:22.292 --> 00:32:27.794
What is their incentives like figuring out this is the hard part that no one does, and that's what keeps them out in the field.
422
00:32:28.095 --> 00:32:33.577
Having to be the leader by example instead of the leader by stepping away and the actually be a thing about strategy.
423
00:32:34.077 --> 00:32:40.242
And so I just encourage you like all these little like the nuances of the planting, the maintenance, how many do I take away from their pay?
424
00:32:40.643 --> 00:32:42.324
What percentage can I afford?
425
00:32:42.664 --> 00:32:48.129
All of those things are the unlock that allows you to not have to be the leader by example all the time.
426
00:32:48.669 --> 00:32:50.991
That is yeah, that really hits the nail on the head.
427
00:32:51.011 --> 00:32:59.078
And I think that is exactly my challenge because when there is a fire to be put out, a plant to be planted, a customer to assuage.
428
00:32:59.619 --> 00:33:00.540
I can run out and do it.
429
00:33:00.640 --> 00:33:01.300
No problem.
430
00:33:01.581 --> 00:33:01.761
Yeah.
431
00:33:01.881 --> 00:33:02.521
Flat tires.
432
00:33:02.561 --> 00:33:02.902
Boom.
433
00:33:03.102 --> 00:33:03.582
Oh, one.
434
00:33:03.622 --> 00:33:05.243
It's like, I knew you've mentioned it.
435
00:33:05.283 --> 00:33:06.204
Like I've listened to all your stuff.
436
00:33:06.264 --> 00:33:11.008
It's like a, it's almost like a little, uh, uh, jolt of, uh, adrenaline and energy, like, Oh, awesome.
437
00:33:11.028 --> 00:33:11.528
I did something.
438
00:33:11.548 --> 00:33:12.089
I fixed something.
439
00:33:12.109 --> 00:33:12.569
I'm helping.
440
00:33:12.589 --> 00:33:27.901
But, um, I, I, the reason I was avoiding sitting down on my computer, opening up our spreadsheets, looking at the efficiency and looking at the budgeted hours with our trees and developing these systems, obviously again, AI and tragedy, do you have made things much more.
441
00:33:28.388 --> 00:33:29.409
I'm efficient in that.
442
00:33:29.549 --> 00:33:30.770
You've still got to review things.
443
00:33:31.250 --> 00:33:32.991
So that's still my challenge.
444
00:33:33.011 --> 00:33:39.335
My wife is way better at it than me, so I'm really grateful that I have her to kind of nudge me and remind me, like, no, no, no, don't.
445
00:33:39.475 --> 00:33:40.996
You can't go and play with trees right now.
446
00:33:41.056 --> 00:33:41.756
You don't want to.
447
00:33:41.776 --> 00:33:44.838
Like, that's not how it's going to move the needle forward.
448
00:33:44.878 --> 00:33:47.900
So, yeah, that hit the nail on the head for me to really spend the time.
449
00:33:48.250 --> 00:33:49.791
Continue to spend the time with that.
450
00:33:49.851 --> 00:34:14.443
It's like I need to hear it a hundred times sometimes And the challenging part is the dopamine hits still come but they just way more time in between and so when you go out and fix a tree you immediately get this Joel like I fixed this problem The customers happy awesome and you can get ten of those in a day being out in the field with your crew Because okay you you got the gas can that they forgot you fix the problem like this fix it mentality is the thing that gives you the dopamine hit and
451
00:34:15.303 --> 00:34:19.346
when you start working on the systems or the strategy of the business, you still get dopamine hits.
452
00:34:19.546 --> 00:34:21.968
It just might be three to six months between dopamine hits.
453
00:34:22.629 --> 00:34:25.031
And so the one way to stay focused, that's a big one.
454
00:34:25.191 --> 00:34:25.451
Yeah.
455
00:34:25.952 --> 00:34:31.536
So so so the way to to hopefully help this is like you can do one of two things.
456
00:34:31.776 --> 00:34:31.896
One,
457
00:34:32.897 --> 00:34:34.999
Have these big chunked up goals that you're focused on.
458
00:34:35.259 --> 00:34:39.142
That's the first part is like six weeks sprints or like what am I focused on this quarter?
459
00:34:39.503 --> 00:34:40.584
What do I need to achieve?
460
00:34:40.684 --> 00:34:41.384
What do I need to achieve?
461
00:34:41.404 --> 00:34:45.608
That's a big domino in the business that if I achieve it, it kind of fixes all these other problems.
462
00:34:46.148 --> 00:34:53.515
And the second part of that is specifically if you like the if you know, the dopamine hits are what you're looking for is break that larger goal into smaller pieces.
463
00:34:53.795 --> 00:34:55.977
So you have something to celebrate all along the way.
464
00:34:56.417 --> 00:34:59.121
So if you're like, well, I've got to do efficiency pay for my whole crew.
465
00:34:59.421 --> 00:34:59.801
Okay, great.
466
00:35:00.162 --> 00:35:02.745
Can we figure out what it is for just the planting?
467
00:35:03.146 --> 00:35:05.489
Well, can we do it for just the maintenance person?
468
00:35:05.889 --> 00:35:12.297
Can we somehow figure out a way that we're, the person that's doing the watering wants to minimize how many waterings, but they also don't want to
469
00:35:12.958 --> 00:35:13.758
have trees die.
470
00:35:14.159 --> 00:35:17.360
Like, these are all the hard problems that we usually will skirt around.
471
00:35:17.740 --> 00:35:29.845
And we will go after the more urgent problems that are happening on the field, because we can immediately see progress versus the things that do take weeks or months to really wrap our head around test, iterate, try again, revise.
472
00:35:30.146 --> 00:35:36.528
And that's the part that me and all of us included as leaders have to forge into if we're ever going to scale.
473
00:35:36.988 --> 00:35:38.649
That's, that's a great example.
474
00:35:38.889 --> 00:35:42.591
I really well, yeah, I'll look at some of these bigger goals in the systems and
475
00:35:43.213 --> 00:35:55.045
you know, doing our employee reviews and everything and systemize it and look at something that I can do, chunk it up in a little bit smaller pieces instead of saying, wow, there's these like 20 things I want to do for our business.
476
00:35:55.405 --> 00:35:58.969
But actually breaking it down into a little bit more digestible pieces, I think it's a,
477
00:35:59.665 --> 00:36:26.227
great idea because right now i'm using i know i'm sure you've heard of the eisenhower square that helped me a lot at first but now i just have a daily goals list and a not urgent and the not urgent ones i don't even look at and then the daily goals like small little things but i need a bigger one um so that's that's really good advice i appreciate that man excellent anything else to help with oh awesome well i mean pretty much what i was going to say as well is uh and if anyone else is also dealing with this uh i
478
00:36:26.801 --> 00:36:28.902
Can I say that I'm also in that in the boardroom?
479
00:36:29.262 --> 00:36:31.183
Yeah, yeah, that's fine.
480
00:36:31.203 --> 00:36:31.383
Yeah.
481
00:36:31.843 --> 00:36:48.410
Um, so, so the one of the things that we're, we're working, working through and it's something that I kind of put to the side because, you know, I know a lot of guys out there have kids, they got family members, they got all these different, um, responsibilities and you kind of put aside.
482
00:36:48.430 --> 00:36:54.153
One of the first things you start putting aside is your sleep, you start sleeping less and then the health goes and then you start,
483
00:36:54.867 --> 00:36:57.969
Chugging coffee, which is kind of where I was at.
484
00:36:57.989 --> 00:37:08.255
And I have now trying to lean myself off of a probably, you know, four to six cups a day caffeine habit for many years.
485
00:37:08.615 --> 00:37:11.257
And it's not easy.
486
00:37:12.138 --> 00:37:18.301
But it's a big change in the way that I'm approaching problems.
487
00:37:18.862 --> 00:37:20.783
I think the coffee was great for the,
488
00:37:21.611 --> 00:37:27.696
broken tire, plant something real quick, go over there and help that employee, hop in the truck and run and grab some supplies, run around.
489
00:37:27.736 --> 00:37:32.499
It was great for that kind of more jittery, scattered type work.
490
00:37:32.980 --> 00:37:47.751
But now that I'm leaning off of it and I'm still tired and trying to figure out how my body's going to function without it, but I think it's opening up my mind to some of those more long problems.
491
00:37:47.791 --> 00:37:49.553
I need more like long thinking into them.
492
00:37:49.633 --> 00:37:49.873
So...
493
00:37:50.570 --> 00:37:53.277
That's a part of it and that's been a big help and a big amount.
494
00:37:53.297 --> 00:37:55.604
But I didn't really put the emphasis on it before.
495
00:37:55.624 --> 00:37:57.248
I was like, yeah, whatever, yeah, health is fine.
496
00:37:57.268 --> 00:37:58.191
You know, you got to sleep, sure.
497
00:37:58.874 --> 00:38:07.477
We always hear about that, but it is, it is such a big part of, of being a successful business owner is to be a successful body owner, I guess you could say that way.
498
00:38:07.757 --> 00:38:22.461
And a lot of times, whatever you do with your body, it's kind of, it almost reflects itself in the way you leadership, because if, if the leader is constantly trying to get the dopamine hit or like solve all the small problems instead of the big hairy problems, usually to your point, it's just the same thing in health.
499
00:38:22.521 --> 00:38:28.163
It's like, okay, I'll cram the caffeine or I'll, I'll take this high, you know, a bunch of sugar just to get me through the day.
500
00:38:28.983 --> 00:38:32.185
Instead of doing the much harder, longer task of like, okay, what do I need to work out?
501
00:38:32.205 --> 00:38:36.827
Do I change my schedule so I can sleep, change my diet, change the way I'm buying at the grocery store?
502
00:38:37.147 --> 00:38:38.847
And so I think it's very reflective.
503
00:38:39.188 --> 00:38:43.970
So what the caller is actually talking about is the first 30 day challenge inside of home service boardroom.
504
00:38:44.510 --> 00:38:48.852
And usually when people join a mastermind or a group of some sort, they're like, I want tactics.
505
00:38:49.452 --> 00:38:53.154
The thing that gets you from $1 million to $10 million is usually not tactics.
506
00:38:53.655 --> 00:38:57.437
It's not a marketing hack or this little website or use this URL.
507
00:38:57.977 --> 00:39:04.542
It's most of the time becoming the leader that other great talent wants to follow and great management wants to join your team.
508
00:39:05.222 --> 00:39:22.267
and to become that we have 30-day challenges inside of home service boardroom the first one like he's mentioning is all about health and it's all about your diet and your exercise and we do that and the second one is all about your marriage and we do those first as the foundation for everything else we talk about in the future in home service boardroom
509
00:39:22.807 --> 00:39:29.009
whether it be public speaking, communication styles, compensation models, that stuff has to come after getting the foundation right.
510
00:39:29.229 --> 00:39:30.289
And that starts with your health.
511
00:39:30.649 --> 00:39:36.291
If you'd like to join home service boardroom and you have a seven figure business, click the link down in the description and apply it today.
512
00:39:38.672 --> 00:39:40.913
This year we'll do about like 1.2.
513
00:39:41.153 --> 00:39:42.193
I started another location.
514
00:39:42.253 --> 00:39:48.335
I talked about you with that, um, this upcoming season, I guess a separate, um, point off of that is.
515
00:39:48.876 --> 00:39:50.637
Is this the right decision to do or should I not?
516
00:39:50.737 --> 00:39:56.701
And that is starting, it would be kind of a separate, I guess, business in a sense, but obviously like have some overlap.
517
00:39:56.721 --> 00:40:01.424
It would be stump grinding and it would be, because right now we're just subbing out all our stump grinding.
518
00:40:01.464 --> 00:40:05.547
And I mean, we don't have a general sum out, but we're obviously not trying to get stump grinding either.
519
00:40:05.967 --> 00:40:09.650
It's just kind of like, if it's part of the job, then we'll sub it out.
520
00:40:09.950 --> 00:40:12.192
This would be probably my dad just to do it.
521
00:40:12.232 --> 00:40:13.352
He's a teacher during the...
522
00:40:14.819 --> 00:40:19.326
school year, so he's off in the summers, and he just kind of be him like doing it like by himself on a one man job.
523
00:40:19.346 --> 00:40:24.655
So, I mean, besides buying equipment, I think I would kind of be like, not really in it at all.
524
00:40:25.236 --> 00:40:28.702
But I guess just from your point of view, starting in another location, obviously next year,
525
00:40:29.281 --> 00:40:30.302
I'm going to take a lot of my time.
526
00:40:31.263 --> 00:40:32.564
So is it a smart thing to do?
527
00:40:32.584 --> 00:40:36.467
Because in my head, it's just like I need to buy the equipment and, like, we're good and that's kind of it.
528
00:40:36.927 --> 00:40:42.752
But what are your thoughts on, like, should I do that or should you stay clear where you're kind of at with that?
529
00:40:43.112 --> 00:40:45.334
What's your primary or core service right now?
530
00:40:46.355 --> 00:40:50.078
Mainly maintenance, so mulling, cleanups, and then, I mean, small landscapes.
531
00:40:50.118 --> 00:40:52.580
So nothing, like, no hardscapes, but, I mean, grading.
532
00:40:52.600 --> 00:40:53.301
Yeah.
533
00:40:54.333 --> 00:41:17.062
plantings mulch stuff like that so i mean we don't do any tree work okay um but sometimes stumps are just like obviously kind of part of it like oh we'll move this stump plant the tree or whatever else um so again we're not trying like to get stumps but it just kind of happens with the job obviously if i did this i mean i'd probably just set up like another website and and just looking at the people in our area too i mean there's some companies but they're like you
534
00:41:17.590 --> 00:41:17.930
I don't know.
535
00:41:17.950 --> 00:41:22.733
I feel like I could crush it, like just getting a good website and Google reviews and whatever else.
536
00:41:23.354 --> 00:41:24.394
And like I said, just have...
537
00:41:24.934 --> 00:41:29.017
I'm just looking at it more for like, even if my dad's like in retirement, just like have him like do something.
538
00:41:29.057 --> 00:41:31.398
Obviously, if I'm physically demanding, just grinding stumps.
539
00:41:31.418 --> 00:41:34.640
So I'm kind of looking at it that way too, like get him doing something.
540
00:41:34.660 --> 00:41:36.622
And like it is just kind of a one-man show.
541
00:41:37.802 --> 00:41:41.284
So it's not like setting up a whole other thing that I need to be like managing every single day.
542
00:41:41.304 --> 00:41:42.165
Yeah.
543
00:41:43.008 --> 00:41:43.308
But yeah.
544
00:41:43.869 --> 00:41:48.233
Well, what percentage of revenue right now is constituted from sump grinding?
545
00:41:48.253 --> 00:41:50.055
I know you said you sub it out.
546
00:41:50.115 --> 00:41:51.116
Super low.
547
00:41:51.537 --> 00:41:51.817
Okay.
548
00:41:51.917 --> 00:41:53.098
Yeah.
549
00:41:54.239 --> 00:41:55.240
Yeah, I don't know.
550
00:41:55.321 --> 00:41:56.021
Like, I don't know.
551
00:41:56.041 --> 00:41:59.465
As far as jobs go, I mean, we probably give this guy like per year...
552
00:42:00.577 --> 00:42:02.438
30, 40, some kind of jobs.
553
00:42:02.618 --> 00:42:04.939
So over the course of a year, I mean, that's not obviously a lot.
554
00:42:05.759 --> 00:42:06.579
But that's another thing.
555
00:42:06.719 --> 00:42:10.141
If in the beginning, like, my dad was working one day a week, like, he wouldn't care.
556
00:42:10.161 --> 00:42:16.563
If I would have to, like, fill a schedule or anything, obviously, like, over time, like, I would want to, like, obviously get that working more.
557
00:42:17.264 --> 00:42:20.905
But it's not really like a rush where I need to, like, book someone out, otherwise they can't pay their bills.
558
00:42:20.925 --> 00:42:23.306
Like, it's just kind of like whenever he has time, like, he doesn't really care.
559
00:42:24.166 --> 00:42:30.291
Like right now, like right now you're giving him probably three to 4% of your revenue, the subcontractor.
560
00:42:30.892 --> 00:42:40.059
And so even if you spent time on this, did the website, put reviews, got your dad set up, get the business lentils, whatever bank accounts.
561
00:42:40.679 --> 00:42:47.845
If you tripled the amount of, of stump grinding, which would mean you'd have to go out and get reviews, you'd have to generate leads.
562
00:42:47.905 --> 00:42:49.646
You'd have to triple the amount that you're currently getting.
563
00:42:49.686 --> 00:42:49.866
Yeah.
564
00:42:50.306 --> 00:42:51.928
That would still be 10% of your revenue.
565
00:42:52.488 --> 00:42:56.153
And so I generally look at things like, okay, I got a crazy website.
566
00:42:56.173 --> 00:43:00.619
I'm gonna get new reviews, new accounts, or like setting up a bank account, whatever it might be.
567
00:43:01.340 --> 00:43:08.329
If you just put that towards your current business, I happen to think you take 1.2 and add a whole lot more than 10% of revenue.
568
00:43:08.829 --> 00:43:09.050
Hmm.
569
00:43:10.049 --> 00:43:11.751
No, I'm kind of thinking the same way.
570
00:43:11.771 --> 00:43:12.431
I don't know.
571
00:43:12.472 --> 00:43:13.673
That's why I just wanted to talk to you.
572
00:43:13.693 --> 00:43:14.734
You're good.
573
00:43:15.154 --> 00:43:17.537
If you look at it more from like the realistic version.
574
00:43:17.557 --> 00:43:18.978
But no, I see what you're saying for sure.
575
00:43:19.078 --> 00:43:22.602
The other part of it is if it goes great, right?
576
00:43:22.622 --> 00:43:27.066
And it 5Xs and now you're adding like 15% of revenue, for example, even if it goes great.
577
00:43:27.747 --> 00:43:47.600
if you build a business around one person and then they leave for whatever reason life happens now all of a sudden you've built a business around someone who leaves you have no systems you were out of day to day like it was kind of quote unquote running by itself and now all of a sudden you either have to cut it anyways or b you have to go out and find someone who has all the skills he has and can run the whole business himself
578
00:43:48.440 --> 00:43:50.421
And so you kind of pigeonhole yourself.
579
00:43:50.721 --> 00:43:57.366
If it goes really well, you actually create more risk in the business because there's more key man risk when there's only one person running the whole operation.
580
00:43:58.006 --> 00:43:59.667
Versus you have $1.2 million business.
581
00:43:59.907 --> 00:44:17.959
Can we just 50% increase that where you already have systems in place, labors, technicians, systems that are already firing, and just do more of that versus going out and doing this other thing, building around one person and creating, at best, a dependency in the business, and at worst, a huge distraction from the thing that's already working.
582
00:44:18.480 --> 00:44:22.122
Yeah, like even if you guys get like hurt or something too, like then like who's going to grind stumps?
583
00:44:22.162 --> 00:44:23.242
Like we need stumps to be grown.
584
00:44:23.282 --> 00:44:24.363
Yeah.
585
00:44:24.863 --> 00:44:29.785
No, but obviously you think like even if it wasn't my dad, like just a new employee, like same thing.
586
00:44:29.845 --> 00:44:43.331
I mean, obviously it's going to be one, like it doesn't need to, I'm not going to have a crew of stump grinders, so it's still going to be kind of one person unless, I do take it to a huge thing with like a couple of crews of stump grinding, but obviously that's a general, like that's a whole nother obviously business that I don't want to do.
587
00:44:43.371 --> 00:44:45.912
I kind of just wanted to have like a little add-on thing, but yeah.
588
00:44:46.552 --> 00:44:48.453
So you're thinking probably no, just stick to that.
589
00:44:48.753 --> 00:44:50.133
I would with great prejudice.
590
00:44:50.153 --> 00:44:50.953
I haven't done anything yet.
591
00:44:50.993 --> 00:44:52.093
I don't really care.
592
00:44:52.113 --> 00:44:53.054
But I just, yeah.
593
00:44:53.094 --> 00:44:56.274
I would encourage you heavily to just focus on what you're currently doing.
594
00:44:56.314 --> 00:44:56.854
It's working.
595
00:44:57.055 --> 00:44:57.935
You're at 1.2.
596
00:44:58.395 --> 00:45:09.097
All that discretionary effort that would go towards setting up the website, getting reviews, setting the business license, doing the stump grinder thing, figuring out the employee or your dad situation, all that attention just focused on this business will get you to 2 million.
597
00:45:09.417 --> 00:45:13.898
And a business at 1.2 million is in this weird spot where like, you can't really get managers and all the rest of it.
598
00:45:14.199 --> 00:45:15.739
If you can get us a 2, 3 million,
599
00:45:16.099 --> 00:45:19.708
this starts to look very interesting and be much more profitable.
600
00:45:19.748 --> 00:45:22.957
And more importantly, it'll have a business that doesn't depend on one person.
601
00:45:23.742 --> 00:45:26.864
And in a $1.2 million business, you have five other services.
602
00:45:26.884 --> 00:45:34.509
It just so happens that your dad does the sump grinding thing, but there's probably five other services that you also sell about, whether it be gutter cleaning, pressure washing, a bunch of other stuff.
603
00:45:34.929 --> 00:45:37.611
And those are all two, three, four, 5% of your revenue.
604
00:45:37.951 --> 00:45:41.333
But that doesn't mean I need to change the business or add a new business line.
605
00:45:41.634 --> 00:45:50.940
Otherwise, you will wake up with a $3 million business, but have 10 different entities, all with a huge amount of key man risk, and each and every one of them constantly having fires that you're just...
606
00:45:51.620 --> 00:46:16.717
hopping around to I'd just take the current thing deploy all your energy towards it and scale this to 3 million okay I mean right now the plan is actually do multi-locations but keep it actually smaller um which I know it's kind of like this I mean that's still better just to do keep everything like the current one is not playing the girl like at all like next year no more employees more crews um and then just kind of have like one GM kind of run like that one so kind of more separate locations rather than one big one
607
00:46:16.997 --> 00:46:18.698
Yeah.
608
00:46:18.839 --> 00:46:20.240
And that's different.
609
00:46:20.540 --> 00:46:23.262
That's more of like a copy and paste versus build new.
610
00:46:23.663 --> 00:46:23.803
Right.
611
00:46:23.843 --> 00:46:29.828
So I would rather have your dad if you're trying to make a role for him, just have him go replicate what you've already done in your market.
612
00:46:29.928 --> 00:46:30.408
Do it again.
613
00:46:31.009 --> 00:46:36.613
That way, if something happens to him, whatever, like you can just say, hey, we already know what good looks like.
614
00:46:36.633 --> 00:46:37.414
Here's location one.
615
00:46:37.434 --> 00:46:38.075
It's crushing it.
616
00:46:38.695 --> 00:47:03.673
do this and instead of being like oh we don't really have a recipe or a system for stump grinding and how to get customers we don't know what that demand curve looks like what our cost per lead is you already have figured out so many things you're already ahead of like 95 of people in landscaping let's just keep doing that and if you're going to go copy it again the likelihood of that second location succeeding is much higher because you've already done it one time right what do you think about off season just trying to like supplement that if
617
00:47:04.497 --> 00:47:09.499
I know sometimes you can sometimes on the ground, like we're in Wisconsin, so sometimes the ground's completely frozen, you can grind stones.
618
00:47:09.539 --> 00:47:12.740
But what do you think about like, if you're looking at it from that point of view?
619
00:47:12.760 --> 00:47:14.081
I mean, I'm probably not going to do it.
620
00:47:14.161 --> 00:47:20.243
I'm just kind of saying like, if you come at it from that way, they're kind of because we do snow, but obviously if it doesn't snow, like we're kind of
621
00:47:21.063 --> 00:47:46.463
doing much um so just looking at from off season point of view what do you see that as yeah would that be more of a smart way to go if you look at it from that way or no well ideally if i'm adding a service for off season it has an inverse demand curve from my core service meaning when i look at all the pnls i've ever seen from tree companies that do stump grinding they match very similarly to what you do with landscaping which is very busy spring to you know very consistent throughout
622
00:47:47.367 --> 00:47:50.508
the summer and fall slowly petering off and then an off season.
623
00:47:50.788 --> 00:47:53.469
And so if you're like, well, I'm going to add the service to do it during the winter.
624
00:47:53.709 --> 00:47:59.451
If it freezes, you can't work at either of these services like either either one.
625
00:48:00.051 --> 00:48:02.572
And so the demand curve on both of them is kind of the same.
626
00:48:02.672 --> 00:48:03.152
Exactly.
627
00:48:03.252 --> 00:48:03.592
Yeah.
628
00:48:03.712 --> 00:48:13.135
So I would I would prefer not to do it because all you do if that business grows, all you do is compound the stress during spring rush and make the off season drop even harsher.
629
00:48:13.635 --> 00:48:13.835
Yeah.
630
00:48:14.796 --> 00:48:15.036
Okay.
631
00:48:15.216 --> 00:48:15.676
That makes sense.
632
00:48:16.324 --> 00:48:16.564
All right.
633
00:48:16.864 --> 00:48:17.225
That's all.
634
00:48:17.345 --> 00:48:17.925
That's all I got.
635
00:48:17.945 --> 00:48:18.285
Thank you.
636
00:48:18.305 --> 00:48:18.726
Sorry.
637
00:48:18.806 --> 00:48:20.547
I hope I didn't dash any hopes or dreams.
638
00:48:20.987 --> 00:48:21.948
But I just wanted...
639
00:48:21.968 --> 00:48:22.848
Sorry, I didn't do anything yet.
640
00:48:22.868 --> 00:48:24.269
It really doesn't matter.
641
00:48:24.289 --> 00:48:25.550
I just wanted to see where you were at.
642
00:48:25.850 --> 00:48:26.030
Yeah.
643
00:48:26.251 --> 00:48:29.313
Which I kind of thought you were going this way, but no, I appreciate it.
644
00:48:29.453 --> 00:48:29.893
You got it, brother.
645
00:48:29.973 --> 00:48:30.433
You have a good one.
646
00:48:32.334 --> 00:48:35.637
Two landscape maintenance and design were around a million dollars in revenue.
647
00:48:36.217 --> 00:48:45.283
And I was curious when you set your vision, deciding that you were going to franchise and have, you know, 100 plus locations or 200, whatever it is,
648
00:48:45.925 --> 00:48:47.927
and how many years it took you to get to there.
649
00:48:48.488 --> 00:49:00.940
And I know I often might ask the same question on some of the steps to get there, but I think in repeatedly asking that question, I get a slightly different answer each time, so I'd like to ask some of the steps you took to get there.
650
00:49:02.181 --> 00:49:07.407
Specifically on the franchising level, or can you frame that into question?
651
00:49:08.255 --> 00:49:09.916
Yeah, for sure.
652
00:49:09.956 --> 00:49:21.083
So when you decided to have the vision of, okay, I'm going to franchise, and this is how many locations I want to get to, when you set that vision, how many years it took you to hit that vision?
653
00:49:21.103 --> 00:49:23.064
Let's say you might be at 200 right now.
654
00:49:23.084 --> 00:49:25.986
Maybe when you set the vision, it was only 100.
655
00:49:26.006 --> 00:49:27.887
So when did you know your vision?
656
00:49:27.987 --> 00:49:29.448
How many years did it take to get you there?
657
00:49:29.828 --> 00:49:31.730
And what were some of the steps you took to get to the 100?
658
00:49:32.838 --> 00:49:37.242
Yeah, for me, like I work backwards from what is the vision and then I put numbers towards it.
659
00:49:37.302 --> 00:49:41.585
So like when I said, hey, I knew our goal is to change level professionalism in the landscape industry.
660
00:49:41.625 --> 00:49:42.366
That's the vision.
661
00:49:42.766 --> 00:49:45.188
I then have to ask myself, OK, well, what does that actually mean?
662
00:49:45.228 --> 00:49:47.550
Because that is a infinite game.
663
00:49:47.870 --> 00:49:58.899
So I need to put some numbers like some hash hash marks to towards the end zone specifically for the team, because I'm not necessarily the type of person that needs a victory lap, but for a lot of times your team,
664
00:49:59.878 --> 00:50:03.821
They want to know if they're if they're doing a good job and if they're making progress towards the goal.
665
00:50:04.181 --> 00:50:12.627
So the goal, the touchdown might be, you know, a very big ethereal goal or infinite game, but most people get very discouraged if there's not hash marks all along the way.
666
00:50:13.008 --> 00:50:18.692
And so that I reverse engineered, okay, to change level professionalism, I need a thousand locations.
667
00:50:19.132 --> 00:50:32.642
And the reason we needed 1,000 locations was to compete with enough people to where they would listen to paid for performance, profit sharing, stages of success, and answering the phone, having a great website, having uniforms, treating the team members a certain way.
668
00:50:33.023 --> 00:50:36.165
And so I reverse engineer from the goal back to numbers.
669
00:50:36.505 --> 00:50:41.169
A lot of times people will start with numbers, and then five or 10 years later, they'll try to figure out what their vision is.
670
00:50:41.529 --> 00:50:42.830
And that's why it feels contrived.
671
00:50:43.150 --> 00:50:45.052
If you're trying to figure out your vivid vision,
672
00:50:45.692 --> 00:50:49.755
and you're like struggling or it feels like you're just kind of making things up or it doesn't feel authentic.
673
00:50:50.055 --> 00:50:53.137
A lot of times because you start with a number and then you move to the vision.
674
00:50:53.317 --> 00:50:54.298
I like to work the other way.
675
00:50:55.038 --> 00:50:57.020
And as like, here's the vision, here's what the goal is.
676
00:50:57.040 --> 00:51:06.466
And in order to be able to make that true, what number of locations, what amount of revenue, what number of team members, what number of trucks do I need to have in order to make that vision a possible possibility?
677
00:51:06.606 --> 00:51:11.470
I didn't hear the majority, but I did hear the tail end when you're talking about starting backwards.
678
00:51:11.850 --> 00:51:13.011
Hey, here's where we're going to be.
679
00:51:13.051 --> 00:51:14.392
How many trucks do we need to get there?
680
00:51:14.432 --> 00:51:14.832
All that.
681
00:51:15.212 --> 00:51:16.613
Yeah, that's what I would start with.
682
00:51:16.633 --> 00:51:27.020
That's why that's why for most people when they say they want to franchise and things, it's I usually push back because when they actually identify what their goal is, they don't need to franchise to make that happen.
683
00:51:27.481 --> 00:51:31.423
And then when times inevitably get tough, they say, oh, man, I shouldn't do this.
684
00:51:31.864 --> 00:51:37.588
And they probably are right, given the fact that they do not need to franchise in order to hit their goal.
685
00:51:38.028 --> 00:51:43.632
And so do you specifically want to franchise or what's your what's your sort of vision?
686
00:51:44.335 --> 00:51:45.175
Yeah, for sure.
687
00:51:45.476 --> 00:51:48.997
I'd say the goal or the vision is to be a top 100 company.
688
00:51:49.558 --> 00:51:53.019
Um, in order to do that is kind of scaling, maybe acquiring other businesses.
689
00:51:53.539 --> 00:51:54.880
Um, franchising is an option.
690
00:51:55.280 --> 00:52:05.825
Um, when, when sharing the vision from the guys on the team, he just made a comment about, oh, if we acquire other businesses, or just some of the concerns about, you know, the shared culture and, um, being on, you know, the same mission.
691
00:52:06.365 --> 00:52:09.347
And it seems though franchising might be a better option to
692
00:52:10.032 --> 00:52:18.977
to execute that game plan rather than, you know, getting to top 100 by just buying a bunch of other, you know, $3 million company, $4 million company, and just kind of scaling it in that way.
693
00:52:18.997 --> 00:52:23.860
So that's kind of what brought us the idea of, oh, you know, franchising could be a good idea to hit that top 100.
694
00:52:24.240 --> 00:52:26.502
And, you know, you might ask why hit the top 100.
695
00:52:26.522 --> 00:52:33.646
It's really, you know, obviously money's cool, but, you know, it's really the greater vision of just having a, you know, like many entrepreneurs, you know, trying to,
696
00:52:34.423 --> 00:52:35.525
have our full potential.
697
00:52:36.165 --> 00:52:47.439
If we have different skills, trying to make the most of our abilities, thinking big, trying to impact more lives, different things like that, that sharing the faith with more people, something that's really, that we're passionate about in our company.
698
00:52:47.479 --> 00:52:50.723
But there's many different things like that, which I'm sure you guys can understand.
699
00:52:51.103 --> 00:52:52.904
Yeah, I think reverse engineering, that's okay.
700
00:52:52.924 --> 00:52:56.846
Well, if I need to get the top 100, it means you probably need to do about $30 million in annual revenue.
701
00:52:57.366 --> 00:53:09.693
And so it becomes, do I, you know, do I do go out and I do three to four large locations in large metropolitan areas, or do I do 20 to 30 smaller locations in smaller, smaller suburban areas?
702
00:53:10.334 --> 00:53:14.376
And then the question becomes, okay, does either of those require a franchise?
703
00:53:14.996 --> 00:53:17.998
And I don't think so, because I don't think so.
704
00:53:18.840 --> 00:53:24.866
I will also say both of those, both directions are hard, either A, M and A, mergers and acquisitions to be able to get to 30 million.
705
00:53:25.226 --> 00:53:32.153
Yes, it is hard to acquire or bring in new talent from a company that has a different culture and assimilate them to your culture.
706
00:53:32.493 --> 00:53:32.973
That is hard.
707
00:53:33.454 --> 00:53:39.740
It is also hard to convince someone that has paid you money to uphold the brand standards that you want them to.
708
00:53:40.180 --> 00:53:41.321
And that would be franchising.
709
00:53:41.541 --> 00:53:42.662
So either way is hard.
710
00:53:43.363 --> 00:53:46.607
And so there is no easy way when you start getting a larger organization.
711
00:53:46.627 --> 00:53:55.776
It all comes down to leadership in terms of whether or not people actually get on the bus and go in the direction of the vision and uphold brand standards and the culture that you're trying to build.
712
00:53:55.916 --> 00:53:59.280
Either way is hard, whether you're doing mergers and acquisitions or franchising.
713
00:54:00.001 --> 00:54:00.722
And I think
714
00:54:01.917 --> 00:54:03.618
Either of those strategies would work.
715
00:54:04.179 --> 00:54:15.648
If your goal is top $130 million, you can probably do it within 20 years, 20 to 30 years, if you are trying to grow yourself, each individual location.
716
00:54:16.028 --> 00:54:27.017
You could probably do it in 10 years if you are trying to do mergers and acquisitions, mostly because it's getting the capital and you're going to make a couple errors likely on your first couple of months.
717
00:54:27.637 --> 00:54:33.787
Acquisitions and then franchising you could probably do it a lot faster but whether or not you want to get into the game of
718
00:54:35.022 --> 00:54:35.843
managing a franchise.
719
00:54:35.883 --> 00:54:37.464
It's a whole different business.
720
00:54:37.944 --> 00:54:41.387
The same way that mergers and acquisitions is a completely different business than landscaping.
721
00:54:42.068 --> 00:54:48.733
So it's determining what industry you wanna be in for the long run, but regardless, it's just a matter of how fast you need to go.
722
00:54:49.494 --> 00:54:51.415
And yes, franchising will do it faster.
723
00:54:51.776 --> 00:55:00.103
Also, you gotta go convince someone to buy your business versus it's a whole lot easier to convince people to take money from you when you do mergers and acquisitions.
724
00:55:00.743 --> 00:55:01.524
That makes sense.
725
00:55:01.544 --> 00:55:02.264
That was a great one.
726
00:55:02.284 --> 00:55:03.145
I really appreciate that.
727
00:55:03.165 --> 00:55:15.393
What are some of the things that some of the main points you touch on when, you know, shifting to different locations or, you know, it's not usually franchising, but if you were to buy a location, what are some main things you look at buying a business or changing a different location?
728
00:55:16.353 --> 00:55:18.014
You know, leadership is always, you know, a big thing.
729
00:55:18.034 --> 00:55:18.795
Who's the owner?
730
00:55:19.415 --> 00:55:21.737
But what are some of the things you look at on that spectrum?
731
00:55:22.350 --> 00:55:34.474
Yeah, if you're buying a larger size business that has an established brand, established teams, and established leadership already in place, so you're buying companies that are already doing multiple millions in revenue, you have to be extremely strong in terms of leadership.
732
00:55:34.634 --> 00:55:37.635
Otherwise, you will get beat up on the acquisition.
733
00:55:38.135 --> 00:55:47.797
And so most people, when they go out and try to buy a really established brand that's already doing a few million dollars in revenue in a local market, usually I see that the biggest mistake is someone having dumb money.
734
00:55:47.817 --> 00:55:53.158
So they have plenty of cash, but they don't have the leadership chops to actually turn the culture into what they want it to be.
735
00:55:53.579 --> 00:55:58.860
And so what ends up doing is they buy a business that's doing well because of the great leadership that's already there.
736
00:55:59.160 --> 00:56:03.401
But then as the leader of the company moving into it, as the acquirer,
737
00:56:04.061 --> 00:56:09.464
They do not have the skills to be able to keep that leadership team and that leadership team churns within 12 to 24 months.
738
00:56:09.925 --> 00:56:14.407
And now they do not have the skills to go higher the caliber of individuals required to grow that business.
739
00:56:15.008 --> 00:56:19.731
And that's usually the mistake I see people doing when they're going out and doing their first couple acquisitions for larger companies.
740
00:56:20.091 --> 00:56:24.053
The question becomes, well, do you hire, do you go out and acquire small companies?
741
00:56:24.074 --> 00:56:26.015
They're doing $300,000, $400,000, $500,000.
742
00:56:26.035 --> 00:56:27.556
And now you don't really need to be a strong leader.
743
00:56:27.576 --> 00:56:30.918
You just need to have systems to move clients into your database.
744
00:56:31.578 --> 00:56:37.785
And that is easier in terms of leadership, but also much harder in terms of integration because you're changing the brand.
745
00:56:38.345 --> 00:56:42.390
You are you have no skill, like you have no talent, but it comes with the business.
746
00:56:42.710 --> 00:56:47.815
You've got to go out and hire a bunch of people, get the trucks and the assets, and you're buying them usually at a much lower valuation.
747
00:56:48.736 --> 00:57:14.749
than comparatively if you had a larger brand leadership team installed etc but it comes with the extra task of upgrading their pricing to what needs to be going out and hiring all the talent all the technicians and so it's like which flavor of hard do you want i i find most people though that if they have a whole bunch of cash going out and buying larger businesses and underestimating how difficult it is to uh merge their leadership team into their leadership style
748
00:57:15.728 --> 00:57:18.552
I see we're near the end, but I'll ask you one more question if you're down for it.
749
00:57:18.572 --> 00:57:19.052
Go for it.
750
00:57:20.915 --> 00:57:21.175
Sure.
751
00:57:21.215 --> 00:57:25.200
So I was curious, when you started your second, third location, what were some of the
752
00:57:25.895 --> 00:57:32.479
the key factor you looked at was like, hey, there's not any other landscape companies in this area, or perhaps it was, oh, there's a lot of landscapers in this area.
753
00:57:32.499 --> 00:57:34.340
There's a lot of work that needs to be done.
754
00:57:34.981 --> 00:57:41.985
And what do you do as you're scaling with different, you have a franchise, you have these different things you got to hit on, but then you have different climates.
755
00:57:42.005 --> 00:57:49.210
Like near us, we have snow, down south they might not, and how you restructure things from different locations throughout different states.
756
00:57:50.057 --> 00:57:57.990
Yeah, so the main thing is I'm just looking for how few of services can I offer while still maintaining decent revenue during the offseason.
757
00:57:58.451 --> 00:58:02.637
So if I could get away with just one service, that's all I'd offer.
758
00:58:03.499 --> 00:58:03.759
But...
759
00:58:05.075 --> 00:58:30.708
Usually in home services, I have to offer something else to do one of two things either a add revenue during the offseason and be Increase the annual customer value high enough to where I can spend money on customer acquisition costs advertising at a faster clip And so that's the only reason I would add other services for those two things And then in terms of when I looked like when I started my second location, etc was looking at my customer acquisition cost and and
760
00:58:31.875 --> 00:58:46.831
as it would go up in my market just ask myself okay if i'm now spending a hundred dollar customer record costs in my existing market and my new market is smaller and i'm already boiling this tiny puddle i'm in i'm spending a lot on customer acting costs can i
761
00:58:48.107 --> 00:58:51.329
going to this new market and get customers for $50 instead of a hundred.
762
00:58:52.009 --> 00:59:05.637
Now I'm comparing my customer, I wouldn't cause difference between between moving the location or starting a second one, or the fact that there is, there is also a lot more cost and headache by splitting locations.
763
00:59:06.137 --> 00:59:12.881
And so sometimes I'm willing to spend a higher customer, I can cost at my primary location to increase route density, have everything centralized.
764
00:59:13.181 --> 00:59:16.944
But over time, if you're in a small market, like in our market is 80,000 people.
765
00:59:17.224 --> 00:59:17.464
So like,
766
00:59:17.944 --> 00:59:23.389
In a small market, if you start boiling that puddle, you're starting to spend a lot of extra money on customer action costs.
767
00:59:23.689 --> 00:59:26.632
And it makes sense just to move to a different puddle and start there.
768
00:59:26.732 --> 00:59:29.834
And so you can take off the cream of that new market.
769
00:59:30.535 --> 00:59:31.096
Does that make sense?
770
00:59:31.716 --> 00:59:33.017
That makes so much sense.
771
00:59:33.037 --> 00:59:33.658
That was great.
772
00:59:33.698 --> 00:59:33.958
Yeah.
773
00:59:34.058 --> 00:59:34.539
Thank you.
774
00:59:36.040 --> 00:59:45.268
How about the challenge of like state to state when you have different, you know, like one summer and winter, some don't as people are, you know, buying your franchise and.
775
00:59:45.923 --> 01:00:04.153
and you're you know you're dealing with the weather changes how have you dealt with that the same thing is true just like what's their core service they can keep you eight to nine months busy at the year because almost all our services are seasonal and then what other one maybe two do i need to supplement that with in order to make sure my off season isn't as harsh
776
01:00:04.973 --> 01:00:10.538
And so I can cross sell other services to my existing customers and make them work so much more.
777
01:00:10.998 --> 01:00:13.601
That's really the only two reasons I'm thinking about adding services.
778
01:00:13.621 --> 01:00:17.404
It doesn't matter if it's in a market up north or it's like, oh, it's snow and mowing.
779
01:00:17.584 --> 01:00:18.084
Very simple.
780
01:00:18.164 --> 01:00:18.385
Great.
781
01:00:18.665 --> 01:00:21.607
I'm not going to do all these other things in some markets.
782
01:00:21.928 --> 01:00:29.955
It might not snow and they would complement their mowing season with landscaping so that way they only do landscaping for four months of the year.
783
01:00:30.707 --> 01:00:32.129
but then they do mowing the rest of the time of the year.
784
01:00:32.349 --> 01:00:34.071
For others, I don't want to do landscaping.
785
01:00:34.211 --> 01:00:36.754
It's a whole other, like trailers and equipment, et cetera.
786
01:00:36.774 --> 01:00:36.975
Great.
787
01:00:37.355 --> 01:00:44.864
I'm going to do Christmas lights, or I'm going to do treatments because I can do fertilization weed control during the offseason.
788
01:00:45.165 --> 01:00:54.336
So the only thing I'm thinking about is what's my core service and what supplementary services must I add to fill in my offseason or increase my lifetime value to where I can keep spending money on ads.
789
01:00:54.556 --> 01:00:55.057
That's really it.
790
01:00:55.677 --> 01:00:56.819
Really appreciate that, Mike.
791
01:00:56.859 --> 01:00:57.660
Thank you so much.
792
01:00:57.960 --> 01:00:58.541
You got it, brother.
793
01:00:58.601 --> 01:00:59.062
You have a good one.
1
00:00:00.171 --> 00:00:03.212
business will make $1 million in revenue this year.
2
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I need help with collecting on $57,000 in past due invoice.
3
00:00:09.035 --> 00:00:17.019
They're just trying to push off payment as long as possible because it's cheaper to get the money from you and you charge a tiny little bit of fees compared to going out and getting a line of credit.
4
00:00:17.379 --> 00:00:19.840
They promised a few times through the winter
5
00:00:20.935 --> 00:00:25.056
that they would make sure to get it paid, asked us to keep servicing them.
6
00:00:25.096 --> 00:00:26.736
They were going to make sure it was paid.
7
00:00:26.956 --> 00:00:28.717
I agreed to it mistakenly.
8
00:00:28.897 --> 00:00:31.137
The biggest mistake is someone having dumb money.
9
00:00:31.517 --> 00:00:36.459
So they have plenty of cash, but they don't have the leadership chops to actually turn the culture into what they want it to be.
10
00:00:36.819 --> 00:00:43.600
If you build a business around one person, you actually create more risk in the business because there's more key man risk when there's only one person running the whole operation.
11
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If you have a million dollar home service business and you're trying to get to $10 million in annual revenue, this video is for you.
12
00:00:50.962 --> 00:00:54.505
I'm talking to several entrepreneurs that are inside of Home Service Boardroom.
13
00:00:54.665 --> 00:01:02.871
They have a seven figure business and they're running up against the challenges of leadership, advertising and trying to get to the next level using pay for performance.
14
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We're going to be discussing what they can do to make sure they get past this constraint and continue to grow the business.
15
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Now, this is a recorded call and one of the coaching calls that we do inside of Home Service Boardroom.
16
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It's a private school community where we have 30-day challenges and we keep each other accountable to becoming the leaders that is required to grow to a $10 million organization.
17
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Let's go ahead and roll the coaching tape.
18
00:01:26.885 --> 00:01:31.488
Our long-term snowplown business will make $1 million in revenue this year.
19
00:01:32.529 --> 00:01:36.351
I need help with collecting on $57,000 in past due invoices.
20
00:01:39.555 --> 00:02:06.218
pay and 57k is that commercial or residential invoices mostly commercial some residential 20 000 of it is from one commercial account last year for snow two customers owe for ten thousand dollars one for snow last year one from the year before and then the rest is from you know smaller businesses or residential
21
00:02:07.106 --> 00:02:12.190
And do you have any sort of like, so we can talk about how to try to get this money now.
22
00:02:12.671 --> 00:02:19.617
Like to set, to prevent this in the future, do you have any sort of like overdue fees that accumulate on invoices?
23
00:02:21.198 --> 00:02:21.679
We do.
24
00:02:22.399 --> 00:02:22.579
Cool.
25
00:02:22.820 --> 00:02:27.123
And so on like the 20 grand one, for example, is there a bunch of fees also on top of that?
26
00:02:27.724 --> 00:02:28.164
There is.
27
00:02:28.224 --> 00:02:30.606
That 20,000 does include the fees.
28
00:02:31.007 --> 00:02:31.307
Got it.
29
00:02:31.827 --> 00:02:32.027
And...
30
00:02:33.046 --> 00:02:38.010
Commercials in general, they're slow and bad at paying, but like, have they been communicative with you?
31
00:02:38.630 --> 00:02:48.657
They have, they, they promised a few times through the winter that they would make sure to get it paid, asked us to keep, keep servicing them.
32
00:02:48.697 --> 00:02:55.082
They, they were gonna make sure it was paid and I agreed to it mistakenly.
33
00:02:55.923 --> 00:02:59.866
And, and have you threatened with like any sort of a lien on their property or anything like that?
34
00:03:00.626 --> 00:03:01.527
I have not yet.
35
00:03:02.560 --> 00:03:13.208
what, like, I would look at your state laws, like, just, this is a great use for AI, like, I'd put in all your email communication, the invoices, and say, hey, in this state, like, what should I be taking in terms of legal action?
36
00:03:13.228 --> 00:03:16.450
What can I do before actually trying to do, like, a lawsuit?
37
00:03:16.770 --> 00:03:22.874
I think it's probably going to fall into the category of some sort of a lien on the property.
38
00:03:23.495 --> 00:03:28.438
And are they, like, let's talk about the $20,000 one, for example, are they a tenant or do they own the land?
39
00:03:29.199 --> 00:03:30.240
They own the land.
40
00:03:30.260 --> 00:03:30.660
It's a,
41
00:03:31.969 --> 00:03:37.325
I suppose there's a whole bunch of apartments in there, and it's just a big area of
42
00:03:38.170 --> 00:04:05.032
plowing parking lots and drives and yeah yeah so sometimes like putting a lien on a property will immediately cause them to get their attention because if they go to try to pay like taxes if they try to sell the property there can be downstream effects for them but i would i would personally take all your communication correspondence with them i take their invoices i would dump into ai and be like hey i'm in this state in this city what could i be doing and when you make the emails
43
00:04:05.472 --> 00:04:08.954
I would start off with a much more friendly tone of like, Hey, we got to get paid.
44
00:04:09.014 --> 00:04:10.474
Like we're a small business in this area.
45
00:04:10.594 --> 00:04:13.175
In order to pay our employees, we have to get paid.
46
00:04:13.655 --> 00:04:15.696
If we don't, we'll have to go to these measures.
47
00:04:16.036 --> 00:04:30.062
And then you try to reference a specific RCW or code that is going to give you the permission to be able to put a lien on the property or some other way of taking legal action without taking legal action.
48
00:04:30.703 --> 00:04:31.063
Got it.
49
00:04:31.383 --> 00:04:31.523
And
50
00:04:32.630 --> 00:04:37.151
Is a lien a lot different than suing someone for individual invoices?
51
00:04:37.811 --> 00:04:42.072
I suppose to keep it from under like a $5,000 threshold or what have you.
52
00:04:42.392 --> 00:04:42.572
Yeah.
53
00:04:42.612 --> 00:04:47.113
Like if you're doing a lawsuit that, that, that is a much more aggressive approach compared to a lien.
54
00:04:47.753 --> 00:04:51.614
I think that if you position yourself much more like, Hey, we're a small business, we got to pay our employees.
55
00:04:51.634 --> 00:04:52.934
This has really been hurting our business.
56
00:04:53.254 --> 00:04:56.575
If we don't get paid by this date, we've got to put a lien on the property.
57
00:04:57.035 --> 00:04:58.875
That feels different than a lawsuit.
58
00:04:59.035 --> 00:05:01.936
Like a contractor's lien in most states, you can put this on.
59
00:05:02.356 --> 00:05:05.296
It just depends on your state specifically and what services were done.
60
00:05:05.316 --> 00:05:07.057
And did you have a signed agreement?
61
00:05:07.097 --> 00:05:07.777
All the rest of it.
62
00:05:08.197 --> 00:05:09.918
But I think it sounds like they're communicative.
63
00:05:09.938 --> 00:05:24.201
If they dropped off the map and just like did not talk to you, that's when you usually have to go a little more nuclear and start saying, hey, we're pressing legal action and sometimes just getting paying $500 to an attorney and say, hey, can you draft up this document and send it to them on my behalf?
64
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Then it shows you're really serious.
65
00:05:26.561 --> 00:05:28.842
And that will usually also get them to move faster.
66
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Okay.
67
00:05:31.375 --> 00:05:34.798
So like I would say in the short term, I would be dumping AI.
68
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I'd be trying to come up with an email that is, Hey, I'm a small business owner.
69
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I need your help here to try to make this work.
70
00:05:40.163 --> 00:05:49.611
Otherwise I've got to take this and then you cite the violation code or like the actual code in your state that gives you license to be able to do a contractor's lien or whatever remediation.
71
00:05:50.211 --> 00:05:59.499
And then the more nuclear option is pay a small retainer to a lawyer to just basically be the person that sends a much more legally, you know,
72
00:05:59.719 --> 00:06:02.982
legalese type of document to them that's going to be a little more threatening.
73
00:06:03.282 --> 00:06:07.846
And that would be more of like, hey, if this doesn't happen, we're going to we're going to suit the property and sue you.
74
00:06:08.606 --> 00:06:12.009
I don't think you'll have to go nuclear because they have been responsive with you.
75
00:06:12.329 --> 00:06:16.893
Usually people are responsive as long as you communicate well and you cite what's the law.
76
00:06:17.213 --> 00:06:21.677
They're just trying to push off payment as long as possible because it's cheaper to get the money from you.
77
00:06:21.817 --> 00:06:25.960
And you got you charge a tiny little bit of fees compared to going out and getting a line of credit.
78
00:06:26.501 --> 00:06:26.841
Got it.
79
00:06:27.761 --> 00:06:31.822
And with one of these customers, it wasn't from last winter snow.
80
00:06:32.603 --> 00:06:34.343
It was from the winters before.
81
00:06:35.244 --> 00:06:39.425
They were an EV charge in place.
82
00:06:40.045 --> 00:06:41.946
They opened up a second business.
83
00:06:43.146 --> 00:06:45.127
Then we started plowing both businesses.
84
00:06:45.167 --> 00:06:48.608
Their second business, we got paid for everything.
85
00:06:49.368 --> 00:06:53.770
From the EV one we had gotten paid the year before because we were formed the year before.
86
00:06:54.770 --> 00:06:57.977
And then since then, they've just ghosted us on that account.
87
00:06:59.077 --> 00:07:05.198
Yeah, that's the one where I'd probably be looking for an attorney and just be like, hey, this has happened.
88
00:07:05.398 --> 00:07:06.659
They have not been responsive.
89
00:07:07.259 --> 00:07:09.959
Can you please draft up a document that basically threatens them?
90
00:07:10.699 --> 00:07:17.621
90% of the time, when they get that document from a lawyer, all of a sudden they get responsive because they don't want a lawyer in their business.
91
00:07:17.641 --> 00:07:22.442
They've got to defend against that, and that'll cost them a whole lot more than just paying the invoice, especially at 10 or 20 grand.
92
00:07:23.002 --> 00:07:26.803
It's going to cost them more to get a lawyer under a retainer and defend themselves for
93
00:07:27.163 --> 00:07:36.085
And so I would I would do your due diligence and work with AI so that when you go to an attorney, they're not going to bloat this thing into a huge expense.
94
00:07:36.105 --> 00:07:37.866
But rather, like, hey, I just need this document.
95
00:07:38.226 --> 00:07:39.746
Here's approximately what I want said.
96
00:07:39.766 --> 00:07:43.587
And I want you to send it and I'm willing to pay your fee.
97
00:07:43.967 --> 00:07:56.910
And a lot of times a lawyer that is, you know, just a smaller claims type of situation, you might be looking at between five hundred to a thousand dollars for them to like just draft that document up, send it to the client and take a few customer emails back and forth.
98
00:07:57.951 --> 00:07:59.011
That cost is bearable.
99
00:07:59.552 --> 00:07:59.892
Got it.
100
00:08:00.552 --> 00:08:04.435
Now, we've been owed money plenty of times before.
101
00:08:05.115 --> 00:08:06.636
We have never sued anybody.
102
00:08:06.956 --> 00:08:12.180
Generally speaking, how long do you have to collect on something until it's just tough
103
00:08:13.527 --> 00:08:14.528
It depends on your state.
104
00:08:15.568 --> 00:08:18.429
I typically if I don't collect within a year, I just consider it bad debt.
105
00:08:18.870 --> 00:08:28.735
But if it's if I'm going to allow it to go to bad debt, it means that I have warranted it not enough of funds for me to go take this new more nuclear option, which is go get a lawyer involved.
106
00:08:29.155 --> 00:08:39.480
Once you do get a volume, a lawyer engaged with your business, it's usually assuming they are smaller and they're OK with working with you on an individual one off case basis.
107
00:08:39.980 --> 00:08:47.723
It can be like, hey, it's $500 per time I need to reach out to a client because they know just their letterhead and their email alone will usually get 90% compliance.
108
00:08:48.403 --> 00:08:51.944
I believe though, like to be clear, I have never had to sue somebody.
109
00:08:52.304 --> 00:08:57.246
I have always been able to deal with it without having to go all the way to a lawsuit, either A-
110
00:08:58.146 --> 00:09:01.167
if I'm going to settle B, if I am going to.
111
00:09:01.267 --> 00:09:07.430
So, for example, settle would look like, hey, we both disagree on the fact that maybe we did some we messed up a couple of things on the property.
112
00:09:07.450 --> 00:09:08.590
Now we're going to go back and forth.
113
00:09:08.890 --> 00:09:09.150
Okay.
114
00:09:09.631 --> 00:09:11.391
What about 17,000 instead of 20,000?
115
00:09:11.511 --> 00:09:14.292
Because that $3,000 covers the damages, for example.
116
00:09:15.473 --> 00:09:17.794
But if you're like completely in the right, usually
117
00:09:18.494 --> 00:09:25.979
you can either A, just cite the infractions or the codes that allow you to be able to get the money or put a lien on the property.
118
00:09:26.560 --> 00:09:28.261
Almost always, they'll respond to that.
119
00:09:28.701 --> 00:09:30.683
If not, then I usually get a lawyer involved.
120
00:09:30.903 --> 00:09:33.545
And I just have a lawyer on tap that basically is like,
121
00:09:34.654 --> 00:09:35.856
I could just use to threaten people.
122
00:09:36.337 --> 00:09:41.725
And it sounds horrible, but if they're not gonna communicate and be reasonable, then I'm gonna use that more nuclear option.
123
00:09:41.765 --> 00:09:45.070
And I have never had to go beyond that point, but I am willing to.
124
00:09:45.090 --> 00:09:49.176
I'm not willing to do it for over like 10 grand because it's gonna cost me more
125
00:09:49.977 --> 00:09:53.300
to just have the lawyer do the suit, go to court the whole nine yards.
126
00:09:53.700 --> 00:10:01.766
And so the 20 grand one starts to be coming where if you actually had to go all the way through with it, you know, the attorney would take you to court and try to sue them.
127
00:10:02.146 --> 00:10:03.828
But I have rarely ever had to do that.
128
00:10:04.028 --> 00:10:05.649
I've never had to do that, to be honest with you.
129
00:10:07.150 --> 00:10:12.214
I've got a pool service business that does about 1.3 million in sales a year, and I've
130
00:10:12.960 --> 00:10:15.703
I asked all the standard questions and gotten all the standard answers.
131
00:10:15.723 --> 00:10:16.984
So I'm looking for some girl math.
132
00:10:17.364 --> 00:10:17.725
Okay.
133
00:10:17.785 --> 00:10:18.786
If that applies here.
134
00:10:19.246 --> 00:10:19.807
Let's do it.
135
00:10:20.147 --> 00:10:27.033
So I was reading the copy and paste millionaire and maintaining good admin talent is good.
136
00:10:28.175 --> 00:10:33.800
Costs more to rehire, retrain, have turnover in that position.
137
00:10:33.820 --> 00:10:33.940
Okay.
138
00:10:34.622 --> 00:10:39.985
So I'm trying to not let my best people go over the winter, but I'm trying to justify the cost because they do contribute to sales.
139
00:10:40.005 --> 00:10:41.686
They do all the follow up on sales.
140
00:10:42.126 --> 00:10:44.148
I do all the sales myself, but they do all the follow up.
141
00:10:44.888 --> 00:10:49.271
They do all the regular admin stuff and do some of their own smaller sales for standardized things.
142
00:10:50.351 --> 00:10:56.875
So I'm just trying to see what is the quantifiable cost of.
143
00:10:57.823 --> 00:11:09.408
letting somebody go and offering them a return to work bonus that they don't take and they just go get another job and having to retrain that position every summer versus switching to a, you know, a VA service or something that's a little bit less.
144
00:11:10.842 --> 00:11:36.822
reliable than what we have with an in-person worker yeah totally so you know it saves money to have good admin costs money to retrain admin so then where is the threshold of like well just paying i know that you're not supposed to just pay them through the winter yeah but i'm looking for how do i just pay them through the winter yeah i got you all right well the way that you can convince yourself of your return to work bonus to like increase like what is the return to work bonus now that you've proposed
145
00:11:37.633 --> 00:11:41.945
I've never done it because I've never had enough admins and need to lay anybody off in the winter.
146
00:11:41.965 --> 00:11:44.111
This is the first winter where I'm like, I have to let somebody go.
147
00:11:44.151 --> 00:11:44.973
It's too expensive.
148
00:11:45.054 --> 00:11:45.896
I have two admins.
149
00:11:46.745 --> 00:11:46.965
Okay.
150
00:11:47.285 --> 00:11:48.707
Or I have to find another solution.
151
00:11:48.947 --> 00:11:49.127
Cool.
152
00:11:49.307 --> 00:11:58.914
So before we endeavor on this, which we will, I want to say I hate fighting ghosts, which means we don't know if this is a problem because we haven't gone through an off season where we lost admin.
153
00:11:59.154 --> 00:12:10.683
So I was just like, as a little disclaimer there, mostly because I thought this for so long and it cost me hundreds of thousands of dollars before I had to tear the bandaid off because I was forced to and everyone came back.
154
00:12:11.184 --> 00:12:13.986
So I would just put that as an asterisk next to this.
155
00:12:15.947 --> 00:12:39.605
so first off how many admin are there one or two two okay and are they both full-time right now yes okay um additional caveat yeah because it's pool service and we're in the south we only have about two and a half months off oh that's not bad like long care five months perfect perfect okay so full service um
156
00:12:41.238 --> 00:12:47.842
Okay, you can quickly usually calculate how long, how much it actually costs you to replace them by looking.
157
00:12:48.243 --> 00:12:52.586
Most will determine like their wages, but the biggest cost is going to be your time.
158
00:12:53.086 --> 00:13:01.252
And that's the part that I'm always most cautious of is the owner spending four or six weeks of their time vested fully in getting them up to speed.
159
00:13:02.252 --> 00:13:03.633
And let's hope and pray they actually work out.
160
00:13:04.254 --> 00:13:06.255
So I don't want to lose these people either.
161
00:13:06.695 --> 00:13:10.618
But if you actually do the math on replacing the admin person, usually for what I have seen,
162
00:13:11.883 --> 00:13:16.906
especially when there's only two of them in the office and they're generalists, meaning they have to do a bunch of different stuff.
163
00:13:17.366 --> 00:13:21.149
I'm going to go on a limb and say it takes them four to eight weeks to get really good at their job.
164
00:13:21.709 --> 00:13:27.793
I think that just shows the trash quality of our training because it's like six months before they're like, okay, that's fine.
165
00:13:28.373 --> 00:13:29.614
I think that's actually relative.
166
00:13:29.674 --> 00:13:30.594
I was being conservative.
167
00:13:31.175 --> 00:13:34.617
Um, but it's probably because they do a lot for you.
168
00:13:34.677 --> 00:13:38.339
I'm assuming they do, do they do like your QuickBooks and like payroll and everything?
169
00:13:38.930 --> 00:13:40.391
Pretty much everything, yeah.
170
00:13:40.772 --> 00:13:40.932
Okay.
171
00:13:41.412 --> 00:13:43.154
So there's two ways to fix this problem.
172
00:13:43.854 --> 00:13:48.238
One is you start piecing off some of the most complicated admin tasks and getting outside help.
173
00:13:48.578 --> 00:13:54.904
So, for example, like a bookkeeper would reduce their need for them to even know how to do bookkeeping or expense tracking, et cetera.
174
00:13:55.504 --> 00:13:56.765
Maybe that's not something we tackle, though.
175
00:13:57.166 --> 00:14:02.890
If it's six months to get them up to speed, let's just say it's four before they're decent and you don't have to micromanage them.
176
00:14:03.951 --> 00:14:13.818
I would go out and say it's costing between $8,000 and $10,000 to replace them by the time you factor in your time, their wages, and mistakes they will make in their first six months.
177
00:14:14.699 --> 00:14:20.243
And so I would keep that in your mind when it comes to how much do I pay them to come back to work.
178
00:14:21.444 --> 00:14:24.586
And so I see a lot of people do like, I'll get $500 return to work bonus.
179
00:14:24.606 --> 00:14:29.230
And it's like, well, compared to four to eight grand, maybe we should reconsider.
180
00:14:30.337 --> 00:14:37.479
Um, have you talked to them that you about this or is, or, or have they talked about, like asked you about what you're doing during the off season?
181
00:14:38.159 --> 00:14:38.559
Yeah.
182
00:14:38.780 --> 00:14:42.701
They, this came up a couple of weeks ago because they said, here, we cutting hours like we did last year.
183
00:14:42.721 --> 00:14:48.843
Cause the way I solved this last year was that it's cut one of them, the less tenured person down to three days a week and the other one down to four days a week.
184
00:14:49.423 --> 00:14:55.224
And that was like, maybe you were saving enough collectively that it, we don't have to let anybody go.
185
00:14:55.264 --> 00:14:56.325
And they were okay with that.
186
00:14:56.365 --> 00:14:57.205
They were annoyed, but.
187
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It was an okay solution.
188
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Yeah.
189
00:15:02.021 --> 00:15:03.242
The perfect situation is this.
190
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This is what we do with our admin.
191
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And that is we determine what months of the year we need certain amounts of hours of admin tasks.
192
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So, for example, for you, it might be like December, January, February, you basically need them for like 20 hours a week.
193
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But then during the peak season, you need them 40 plus hours a week.
194
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And there might even be a spot in between there where it's like you need them 30 to 35 hours a week.
195
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And just setting the expectation might be all that's required to take away this fear for them of what is to come.
196
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And just by knowing that, okay, starting this date, I'm going to be down to 20 hours or I'm going to be down to 30 hours.
197
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And then they've got to make the decision.
198
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Do they stick it out with a lower pay throughout the off season?
199
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Or do they go find another part job or something else to supplement the income?
200
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Or do they leave, come back to work two and a half months later after they go out and get a job someplace else?
201
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And then you have a big fat bonus attracting them to do so.
202
00:15:57.350 --> 00:15:59.692
And so I would just give them a couple options.
203
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Like, hey guys, one, we can do what we did last year.
204
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We've all got to trim our hours a bit.
205
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Two is one of you, if you want to leave, go get another job full time.
206
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When you come back, you'll get this big bonus.
207
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I think it's having the open conversation with them.
208
00:16:14.917 --> 00:16:15.998
You'll probably save them.
209
00:16:16.358 --> 00:16:20.923
I would then lock in though what your what your system is for this.
210
00:16:21.263 --> 00:16:23.985
So that way everyone just knows this is how the offseason rolls.
211
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Otherwise you have to have this awkward conversation every single fall with all your admin.
212
00:16:31.780 --> 00:16:56.483
so i think what i would probably do if i was used this year is say hey guys i don't like cutting your hours but in order to get by we have to so we can do one of two things either a we all cut our hours back to 25 to 30 hours a week or 20 to 30 or b if one of you want to leave go get another job and come back i will pay you a bonus and i'll maintain any of your benefits throughout the off season but when you come back you'll get a big fat check uh
213
00:16:57.103 --> 00:17:22.467
to make up for any loss of wages compared to a different job that you might have for just a short period of time the positive thing is that period of time is during the retail peak season and they can usually get a job really easily anywhere due with retail because christmas yep i guess that's where where i'm trying to do the girl math i'm like okay by letting one go and then giving them a three thousand dollar return bonus i'm saving
214
00:17:23.281 --> 00:17:40.825
20 000 but then giving back three versus just cutting both their hours in half is like 18 000 in savings and then it's just a hassle and they're annoyed it's better like one of them called out sick now all the admin is back on me for a month or a week or something it's just like
215
00:17:41.579 --> 00:17:43.800
I think we have one of them takes vacation every January.
216
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So that's like a whole week of like paid vacation that I'm paying that they're gone for that somebody has to cover.
217
00:17:49.942 --> 00:17:52.783
And then if I'm covering it, I'm like, great, now I'm back in the trenches again.
218
00:17:53.103 --> 00:17:53.963
So it just feels bad.
219
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Yeah.
220
00:17:54.964 --> 00:17:59.185
And I think when you're at two employees, no matter what you do, you're going to be at their mercy somewhat.
221
00:17:59.605 --> 00:18:04.447
And so this is where I lean heavily into having the conversation with them and giving they make the decision.
222
00:18:05.454 --> 00:18:07.236
Hey guys, these are the two options.
223
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It's up to you because you're fine with either option, either a one of them opting for the bonus.
224
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And you know that next spring rush, you're gonna have your two odd person be happy to keep scaling up and not worry about this.
225
00:18:17.967 --> 00:18:21.210
Or you're also happy if they both just decide to cut their hours.
226
00:18:21.630 --> 00:18:22.471
And they're like, Okay, that's fine.
227
00:18:22.491 --> 00:18:23.552
We'll both get part time jobs.
228
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We'll accommodate each other's schedules, make sure there's coverage, but then we'll have we'll both find something else on the side.
229
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But they make the decision so that you don't have this awkwardness and feeling like you're not a good boss and then they might leave.
230
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You don't want to feel that way.
231
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You want them to make the decision.
232
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Makes sense.
233
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Cool.
234
00:18:40.267 --> 00:18:40.868
You got this, brother.
235
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Good work.
236
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Thanks.
237
00:18:43.328 --> 00:18:43.669
You got it.
238
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Take care.
239
00:18:45.629 --> 00:18:46.409
Hi.
240
00:18:47.230 --> 00:18:49.811
This is my first time on the other side of this.
241
00:18:50.011 --> 00:18:50.291
Let's go.
242
00:18:50.311 --> 00:18:50.651
Let's go.
243
00:18:50.851 --> 00:18:52.031
I've listened to a lot of these.
244
00:18:52.391 --> 00:18:53.532
Yeah, this is really cool.
245
00:18:53.652 --> 00:18:54.472
Very interesting.
246
00:18:55.012 --> 00:18:56.113
How can I help, brother?
247
00:18:56.393 --> 00:18:56.673
Awesome.
248
00:18:57.990 --> 00:18:58.250
Great.
249
00:18:58.330 --> 00:18:59.852
No, I'm sure in a lot of ways, man.
250
00:18:59.932 --> 00:19:05.100
I think the biggest challenge is to focus in on, it's like don't know what you don't know.
251
00:19:05.160 --> 00:19:11.588
So focusing in on the question that's going to move the needle forward the most.
252
00:19:11.608 --> 00:19:14.853
And my wife and I, we have a landscaping business and we are,
253
00:19:15.702 --> 00:19:21.063
I've always been fascinated with pay for performance, especially in the lawn mowing world.
254
00:19:21.424 --> 00:19:22.864
We don't do any of that.
255
00:19:22.924 --> 00:19:26.225
We have a specialized type of maintenance that people do pay for a certain amount of time.
256
00:19:26.365 --> 00:19:27.965
So this isn't about the maintenance side.
257
00:19:28.005 --> 00:19:31.246
This is more about the landscape installation side of things.
258
00:19:31.586 --> 00:19:40.389
And I actually did a little test of it today, and we've done it before, where we're calling it efficiency pay, where essentially we have, we do four 10s.
259
00:19:41.369 --> 00:19:44.770
And if the crew has a job that we have budgeted, for example, today,
260
00:19:45.931 --> 00:19:50.333
We're in Florida, it's super hot, so it also incentivizes them to get out of the heat because it's just brutal right now.
261
00:19:50.393 --> 00:19:55.136
But we have them scheduled for the full day.
262
00:19:55.336 --> 00:19:59.978
I had two guys for a full day of cleanup, planting, mulching, you know, basic stuff.
263
00:20:00.699 --> 00:20:13.585
And I told them, you know, this morning after talking it over with my business partner, my wife, and saying, hey, you guys finish adequately all the things I talked about and all the little extra things the customer asked for.
264
00:20:14.290 --> 00:20:26.553
and the cleanup and get everything, you know, look in stick and stand when we leave and you get back to the shop, clean out the truck and clock out, we'll fill you in the hours for the rest of the day.
265
00:20:27.053 --> 00:20:33.515
So we're kind of starting with that because I think that's just the easiest way to move forward.
266
00:20:33.595 --> 00:20:37.616
And just from that, the reaction I had from the two guys was they were super grateful.
267
00:20:39.236 --> 00:20:41.317
And it's something I know you're always talking about.
268
00:20:41.798 --> 00:20:46.421
but it's taken me a while to actually implement it, but it really changes the whole incentive structure.
269
00:20:46.461 --> 00:21:02.533
So my question is what kind of problems that I'm thinking of that could possibly come about with that is that if maybe the customer thinks that they're getting a certain amount of time and they just want them to stay more and they find more stuff to do to them.
270
00:21:02.553 --> 00:21:09.999
If the crew thinks they got everything finished and they actually didn't, they don't do a good job and they have to come back out again.
271
00:21:10.019 --> 00:21:11.480
I know you guys do the yellow slips, so.
272
00:21:12.568 --> 00:21:25.143
It's not a straight, exact question on something specific, but more or less from that system, from what you understand, working in landscape installations, what problems do you foresee with that?
273
00:21:25.845 --> 00:21:31.588
Yeah, so the challenging part with day rate, that's essentially what you're doing, is it all is great.
274
00:21:31.668 --> 00:21:36.911
Like, it's the easiest way to do it until there's a callback or a mistake or damage case.
275
00:21:37.711 --> 00:21:46.736
And specifically, when it's like someone has a callback, then they leave for vacation, and someone else has to go back to the property and fix their mistake.
276
00:21:47.196 --> 00:21:48.717
So that's when it starts to get really murky.
277
00:21:48.737 --> 00:21:49.698
Yeah.
278
00:21:50.218 --> 00:21:54.780
And that's why the ultimate version is P4P, where everything's down to the budget hour.
279
00:21:55.220 --> 00:21:59.782
But we can absolutely make this work and at least get some positive results.
280
00:21:59.902 --> 00:22:02.543
The thing that you want to be careful of is a couple things.
281
00:22:02.583 --> 00:22:07.745
Number one, never giving the customer the estimated amount of time for the job.
282
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So if it's a 15 budget hour job, the customer cannot know that because if they do, that's when they'll start pulling the crew back in like, hey, it said 15 budget hours.
283
00:22:18.617 --> 00:22:19.638
You did it in 12.
284
00:22:19.918 --> 00:22:20.879
That means I got three more hours.
285
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Right.
286
00:22:21.319 --> 00:22:24.982
And then they put it puts the crew in a really awkward position.
287
00:22:25.803 --> 00:22:26.843
So that's the first thing.
288
00:22:27.264 --> 00:22:30.186
And the second thing is having clear parameters of what done means.
289
00:22:30.906 --> 00:22:31.186
And so.
290
00:22:32.282 --> 00:22:37.765
Like whether that be a walk for us, it's like a walkthrough with the client is considered done.
291
00:22:38.245 --> 00:22:42.448
You could also have like where they have to take a video of the property to prove that everything was completed.
292
00:22:43.268 --> 00:22:46.370
In addition to the customer doing a walkthrough with them.
293
00:22:47.365 --> 00:22:52.449
So the reason for that is because that's going to massively diminish the amount of callbacks you do have.
294
00:22:53.010 --> 00:23:04.299
And so even though the callbacks is going to be your kryptonite when it comes to day rate, you can massively reduce it if you just say, hey, in order to get day rate, you have to have the customer either sign off or do a walkthrough.
295
00:23:04.439 --> 00:23:08.382
And I need a video attached to the job showing everything was done on the estimate notes.
296
00:23:09.263 --> 00:23:10.183
Then you can get day rate.
297
00:23:10.764 --> 00:23:13.106
So doing those couple things will help a little bit.
298
00:23:13.659 --> 00:23:15.360
Yeah, that sounds great.
299
00:23:15.380 --> 00:23:16.941
And I really like the video idea.
300
00:23:17.021 --> 00:23:25.225
Just for example, today, I mean, it wasn't that big of a deal, but it was about a 15 minute drive there, and 15 minutes with the crew, 15 minutes back.
301
00:23:25.245 --> 00:23:28.207
You know, that takes up 45 minutes or even an hour of my time.
302
00:23:28.867 --> 00:23:30.528
And we have, we use Housecall Pro.
303
00:23:30.808 --> 00:23:34.210
You know, we've just gotten used to using that and they have a video attachment feature.
304
00:23:34.870 --> 00:23:36.011
I could have very easily asked
305
00:23:37.267 --> 00:23:41.269
The two guys that were out there to just send me a video of everything before they leave.
306
00:23:41.670 --> 00:23:45.151
You know, those are some small little finishing touches I wanted them to do.
307
00:23:45.171 --> 00:23:53.776
But I think I'm still going to put myself or possibly our operations manager out there to be the final say along with the customer because they're really the final say.
308
00:23:53.796 --> 00:23:56.157
If they say something is good, then it actually is good.
309
00:23:56.778 --> 00:23:59.199
But those pieces of advice really helped, Mike.
310
00:23:59.219 --> 00:23:59.599
Thanks, man.
311
00:23:59.939 --> 00:24:00.299
Absolutely.
312
00:24:00.360 --> 00:24:00.780
You got it.
313
00:24:02.005 --> 00:24:08.289
The thing to be careful of is like having an operations manager or someone else going at a straight overhead.
314
00:24:08.309 --> 00:24:29.460
You sometimes will wipe out 50 to 50% plus of your efficiencies gained from your crew by having an overhead person going out and trying to make sure they walk through the customer in order to get P for P. So like, if you're not already doing that, if you're just doing that in order to make sure that the job is completed correctly, that's where I'd be like, okay, you're going to start off saying a huge amount of your efficiency gains.
315
00:24:30.160 --> 00:24:34.504
by having that extra overhead person go out and visit the project.
316
00:24:34.924 --> 00:24:36.386
But it's still going to have some gains.
317
00:24:36.926 --> 00:24:43.232
And I think that would be the worst case scenario is you do have an overhead person or you yourself are going and checking the job, making sure it's completed.
318
00:24:44.794 --> 00:24:52.701
I became an arborist and some networking found out about a contract and we plant trees for the county where we're at.
319
00:24:53.101 --> 00:24:55.744
And the markup is
320
00:24:56.985 --> 00:25:01.108
The way we make money on it is we have to take the wholesale price of the tree and market up a certain percentage.
321
00:25:01.368 --> 00:25:09.452
And within that percentage has to contain a full year of warranty and tree watering, planting, lodge poles, mulch, everything.
322
00:25:09.553 --> 00:25:12.274
So usually we do 20, 30, 40 trees.
323
00:25:12.334 --> 00:25:18.698
So it's a big payout, but I have to I have pretty much almost a full time guy who just waters trees.
324
00:25:19.705 --> 00:25:23.608
He also does planting when we need him.
325
00:25:23.828 --> 00:25:30.753
I'm trying to train him to do herbicide, trying to add some more things to what he's doing because the watering definitely lowers in the wintertime.
326
00:25:31.653 --> 00:25:40.660
But with some sort of efficiency system like that, and this is a conclusion I came to is that we need to really track how long it takes us to plant these trees.
327
00:25:41.600 --> 00:25:47.685
We've now done it for a few years, so I know the average number of waterings is about 18.
328
00:25:48.690 --> 00:25:57.074
So at least 18 watering events that were going out, but it sometimes can be upwards of 30 or 40, you know, if it's in a very dry sandy spot.
329
00:25:57.094 --> 00:26:04.657
So that one's hard, but we came to the conclusion that a good number for two crew to plant in the day is about 12.
330
00:26:05.758 --> 00:26:08.919
But so I want to incentivize them.
331
00:26:09.039 --> 00:26:16.803
But if one of those trees dies, not even because of lack of watering, just because it happens, if, you know, whatever, something comes up,
332
00:26:18.055 --> 00:26:19.198
I still want to incentivize them.
333
00:26:19.238 --> 00:26:20.100
It's really hard work.
334
00:26:20.140 --> 00:26:21.804
Again, I want to keep doing it.
335
00:26:21.844 --> 00:26:25.734
We love the tree planting, but I don't know how to incentivize that.
336
00:26:26.295 --> 00:26:27.598
So that's a little more complicated.
337
00:26:28.147 --> 00:26:38.993
Yeah, we've always found any sort of warranties or guarantees that claw back from months before make it really, really difficult to actually get that money back from the technicians once it's given.
338
00:26:39.394 --> 00:26:49.380
And so personally, I would just be looking at, OK, what what what percentage of the initial amount do I need to set aside for repairs or damages that are inevitably going to come?
339
00:26:49.720 --> 00:26:50.901
And I'll have to pay my guys for them.
340
00:26:51.681 --> 00:26:52.722
So, for example, like I.
341
00:26:53.522 --> 00:26:57.467
on some of our work, we would do 30% of revenue, labor revenue goes to the employees.
342
00:26:57.968 --> 00:27:04.295
But when we started saying, OK, well, if we're going to guarantee this, for example, planting specifically, let's do 25% knowing that
343
00:27:06.932 --> 00:27:14.902
In six or eight months, there's going to be some percentage of these plants die or projects that go awry, and we're going to have to replace it for the cost.
344
00:27:15.303 --> 00:27:19.789
And we're going to have to cover that cost because there's no way you go back and take someone's pay from six months ago.
345
00:27:19.949 --> 00:27:20.650
Like they will leave.
346
00:27:21.191 --> 00:27:22.272
So that's the challenging part.
347
00:27:22.292 --> 00:27:22.392
Yeah.
348
00:27:24.174 --> 00:27:24.835
Yeah, it is.
349
00:27:25.055 --> 00:27:32.839
And I mean, because we got that one county contract, and this is something I'm learning from all these municipal contracts, the cities can do something called piggybacking.
350
00:27:32.979 --> 00:27:33.360
Yep.
351
00:27:33.540 --> 00:27:42.345
Where, you know, the county already went through all the work of putting this, you know, long, and this is pre-ChatGBT world, so I actually read through the whole contract.
352
00:27:42.905 --> 00:27:47.708
I didn't just throw it in and be like, chatGBT, tell me what I need to know, which is what I do with contracts now.
353
00:27:47.768 --> 00:27:51.430
But they were able to, we got two additional cities.
354
00:27:51.908 --> 00:27:58.574
The nice thing about the two additional cities is that their billing and invoicing process is a little bit easier and they pay faster.
355
00:27:59.574 --> 00:28:03.638
The county, for whatever reason, takes about like one and a half times the amount to pay.
356
00:28:03.898 --> 00:28:06.800
It's net 45, which is just forever.
357
00:28:06.841 --> 00:28:09.363
But what we do, we just had some hitter bank account.
358
00:28:09.383 --> 00:28:10.884
It's like, oh, that's nice.
359
00:28:11.144 --> 00:28:12.125
Like, okay, good.
360
00:28:12.707 --> 00:28:15.528
and pay off some of the wholesalers.
361
00:28:15.588 --> 00:28:18.808
But because we've gotten it with them, so maybe I can...
362
00:28:19.128 --> 00:28:37.452
I was thinking, going back to what I was saying before, that if we say, ideally, you guys, we want the two of you to plant, we came to the conclusion of about 12 to 15 30-gallon trees that's loaded up in the truck, planted, mulched, lodge-pulled, and staked, and inspected, so everything's looking good.
363
00:28:39.103 --> 00:28:42.844
And we already want them to do that in the full day if they finish it like today.
364
00:28:42.904 --> 00:28:45.825
They finished around 2.30.
365
00:28:46.145 --> 00:28:52.826
By the time they get back and unload, they'll probably have an extra hour and a half in their regular allotted day.
366
00:28:53.426 --> 00:28:55.087
So I kind of think I could still go through that.
367
00:28:55.107 --> 00:29:00.168
That's why I think that efficiency pay for just for what we do seems to work better.
368
00:29:00.648 --> 00:29:05.029
Does that same crew have to do all the watering and maintenance or just the installs?
369
00:29:05.702 --> 00:29:07.203
They're just doing the installs.
370
00:29:07.243 --> 00:29:09.064
They're sometimes they're not even loading up.
371
00:29:09.084 --> 00:29:14.926
That's something as a business owner, I it's taken me a while to claw myself away from popping up like I'll do it.
372
00:29:14.946 --> 00:29:15.327
I'll do it.
373
00:29:16.007 --> 00:29:26.572
Um, but I used to, uh, get there early and I would not agree for the back, but I would take like 30 gallon trees and muscle them up onto the back of the trailer and load them up for the crew and everything.
374
00:29:26.612 --> 00:29:27.492
But I'm like, wait a second.
375
00:29:27.512 --> 00:29:34.816
If I'm already trying to incentivize them to do this, the trees are already there, it's gotta be part of their day, you know, because I can't.
376
00:29:35.740 --> 00:29:37.481
Like I'm trying to take myself out of the equation.
377
00:29:37.661 --> 00:29:38.682
That's the, that's the big part.
378
00:29:38.702 --> 00:29:40.023
You know, I got three young kids at home.
379
00:29:40.863 --> 00:29:46.667
I, I'm trying not to inject myself into all these things because that just skews the whole system.
380
00:29:46.707 --> 00:29:49.509
Like you wouldn't be able to do what you're doing if you're like, I'll be there.
381
00:29:49.589 --> 00:29:50.369
I'll be at every job.
382
00:29:50.509 --> 00:29:51.270
I'll go check one.
383
00:29:51.610 --> 00:29:52.390
I'll check each one.
384
00:29:52.410 --> 00:29:53.931
Let me just hop in the plane real quick.
385
00:29:53.951 --> 00:29:54.832
Like it just doesn't work.
386
00:29:55.272 --> 00:29:57.414
So I'm really trying to pull myself away from that stuff.
387
00:29:57.454 --> 00:29:58.094
And there's that like.
388
00:29:58.635 --> 00:29:59.755
And now I'm going all over the place.
389
00:29:59.795 --> 00:30:03.116
But yeah, that's that owner mentality because we built it ourselves.
390
00:30:03.136 --> 00:30:05.437
You know, we have that quality control with that.
391
00:30:07.097 --> 00:30:08.058
I've gotten better with it.
392
00:30:08.118 --> 00:30:11.379
But yeah, that still is sometimes hard where I'm like, I want to do it.
393
00:30:11.439 --> 00:30:12.659
But hurting my back, that helps.
394
00:30:13.019 --> 00:30:13.779
I'm like, I can't.
395
00:30:13.959 --> 00:30:15.200
I physically cannot do it.
396
00:30:15.220 --> 00:30:15.480
Sorry.
397
00:30:15.987 --> 00:30:34.262
Yeah, I think there's always a identity shift of leading from the front and being a leader that is, you know, out with the front on the front lines, taking the bullets with the team and realizing that that actually does not serve the team at the highest level because it puts you in danger.
398
00:30:34.703 --> 00:30:41.408
And so a lot of times we will fantasize or lift up the generals that would be like on the front lines with their team.
399
00:30:41.428 --> 00:30:42.889
And there's certainly a time for that.
400
00:30:43.662 --> 00:30:52.246
But also that is potentially the worst thing for the team, because if that general goes down, the entire army is gonna be affected.
401
00:30:52.867 --> 00:30:59.870
And so you spending time out with the guys in the past has probably been the thing that allows you to generate and foster great culture.
402
00:31:00.210 --> 00:31:02.412
They like you, they want to work harder for you.
403
00:31:02.592 --> 00:31:08.135
That's all very good, but taking it to the extreme, you can't grow the business or be a strategist if you're in the front lines.
404
00:31:09.195 --> 00:31:16.341
you have to step back and be able to see where everything's happening and make good strategic calls that affects the entire team, not just the crew that you're working with.
405
00:31:16.841 --> 00:31:25.287
And so when you zero out to a large size business, almost no large business can the founder or the owner or the CEO
406
00:31:26.391 --> 00:31:29.193
know, hire or have a connection with every single team member.
407
00:31:29.633 --> 00:31:38.459
So if you look at like the large companies have hundreds of thousands of employees, there's no way the founders will stay in touch with all of them outside of like an all hands meeting or a video, but he does not know them individually.
408
00:31:38.719 --> 00:31:41.461
He or she cannot step in and actually do their job.
409
00:31:41.862 --> 00:31:43.283
And yet they still could be a great leader.
410
00:31:43.503 --> 00:31:46.164
They can still have great vision, have great camaraderie, great culture.
411
00:31:46.585 --> 00:31:48.886
And so it is certainly identity a shift.
412
00:31:48.966 --> 00:31:51.008
And I think the thing that you are in the middle of
413
00:31:51.608 --> 00:31:55.572
is creating the systems that still manage the labor when you're not there.
414
00:31:55.872 --> 00:32:01.777
So that when you are the strategist, that there's people out performing on the strategy, the way that you intend them to do.
415
00:32:02.197 --> 00:32:03.618
So you don't have to be there in person.
416
00:32:04.099 --> 00:32:08.783
And so things like efficiency pay, ironing out, okay, how many can they install per day?
417
00:32:09.263 --> 00:32:12.026
If they have to go back and install another one, do I hold that against them?
418
00:32:12.086 --> 00:32:15.268
Or do I just bundle that in with the number of plants per day?
419
00:32:15.649 --> 00:32:17.010
As like, okay, if you got to, you got to go with,
420
00:32:17.330 --> 00:32:21.352
you know, install three ones that died six months ago, but I will still pay for the three.
421
00:32:22.292 --> 00:32:27.794
What is their incentives like figuring out this is the hard part that no one does, and that's what keeps them out in the field.
422
00:32:28.095 --> 00:32:33.577
Having to be the leader by example instead of the leader by stepping away and the actually be a thing about strategy.
423
00:32:34.077 --> 00:32:40.242
And so I just encourage you like all these little like the nuances of the planting, the maintenance, how many do I take away from their pay?
424
00:32:40.643 --> 00:32:42.324
What percentage can I afford?
425
00:32:42.664 --> 00:32:48.129
All of those things are the unlock that allows you to not have to be the leader by example all the time.
426
00:32:48.669 --> 00:32:50.991
That is yeah, that really hits the nail on the head.
427
00:32:51.011 --> 00:32:59.078
And I think that is exactly my challenge because when there is a fire to be put out, a plant to be planted, a customer to assuage.
428
00:32:59.619 --> 00:33:00.540
I can run out and do it.
429
00:33:00.640 --> 00:33:01.300
No problem.
430
00:33:01.581 --> 00:33:01.761
Yeah.
431
00:33:01.881 --> 00:33:02.521
Flat tires.
432
00:33:02.561 --> 00:33:02.902
Boom.
433
00:33:03.102 --> 00:33:03.582
Oh, one.
434
00:33:03.622 --> 00:33:05.243
It's like, I knew you've mentioned it.
435
00:33:05.283 --> 00:33:06.204
Like I've listened to all your stuff.
436
00:33:06.264 --> 00:33:11.008
It's like a, it's almost like a little, uh, uh, jolt of, uh, adrenaline and energy, like, Oh, awesome.
437
00:33:11.028 --> 00:33:11.528
I did something.
438
00:33:11.548 --> 00:33:12.089
I fixed something.
439
00:33:12.109 --> 00:33:12.569
I'm helping.
440
00:33:12.589 --> 00:33:27.901
But, um, I, I, the reason I was avoiding sitting down on my computer, opening up our spreadsheets, looking at the efficiency and looking at the budgeted hours with our trees and developing these systems, obviously again, AI and tragedy, do you have made things much more.
441
00:33:28.388 --> 00:33:29.409
I'm efficient in that.
442
00:33:29.549 --> 00:33:30.770
You've still got to review things.
443
00:33:31.250 --> 00:33:32.991
So that's still my challenge.
444
00:33:33.011 --> 00:33:39.335
My wife is way better at it than me, so I'm really grateful that I have her to kind of nudge me and remind me, like, no, no, no, don't.
445
00:33:39.475 --> 00:33:40.996
You can't go and play with trees right now.
446
00:33:41.056 --> 00:33:41.756
You don't want to.
447
00:33:41.776 --> 00:33:44.838
Like, that's not how it's going to move the needle forward.
448
00:33:44.878 --> 00:33:47.900
So, yeah, that hit the nail on the head for me to really spend the time.
449
00:33:48.250 --> 00:33:49.791
Continue to spend the time with that.
450
00:33:49.851 --> 00:34:14.443
It's like I need to hear it a hundred times sometimes And the challenging part is the dopamine hits still come but they just way more time in between and so when you go out and fix a tree you immediately get this Joel like I fixed this problem The customers happy awesome and you can get ten of those in a day being out in the field with your crew Because okay you you got the gas can that they forgot you fix the problem like this fix it mentality is the thing that gives you the dopamine hit and
451
00:34:15.303 --> 00:34:19.346
when you start working on the systems or the strategy of the business, you still get dopamine hits.
452
00:34:19.546 --> 00:34:21.968
It just might be three to six months between dopamine hits.
453
00:34:22.629 --> 00:34:25.031
And so the one way to stay focused, that's a big one.
454
00:34:25.191 --> 00:34:25.451
Yeah.
455
00:34:25.952 --> 00:34:31.536
So so so the way to to hopefully help this is like you can do one of two things.
456
00:34:31.776 --> 00:34:31.896
One,
457
00:34:32.897 --> 00:34:34.999
Have these big chunked up goals that you're focused on.
458
00:34:35.259 --> 00:34:39.142
That's the first part is like six weeks sprints or like what am I focused on this quarter?
459
00:34:39.503 --> 00:34:40.584
What do I need to achieve?
460
00:34:40.684 --> 00:34:41.384
What do I need to achieve?
461
00:34:41.404 --> 00:34:45.608
That's a big domino in the business that if I achieve it, it kind of fixes all these other problems.
462
00:34:46.148 --> 00:34:53.515
And the second part of that is specifically if you like the if you know, the dopamine hits are what you're looking for is break that larger goal into smaller pieces.
463
00:34:53.795 --> 00:34:55.977
So you have something to celebrate all along the way.
464
00:34:56.417 --> 00:34:59.121
So if you're like, well, I've got to do efficiency pay for my whole crew.
465
00:34:59.421 --> 00:34:59.801
Okay, great.
466
00:35:00.162 --> 00:35:02.745
Can we figure out what it is for just the planting?
467
00:35:03.146 --> 00:35:05.489
Well, can we do it for just the maintenance person?
468
00:35:05.889 --> 00:35:12.297
Can we somehow figure out a way that we're, the person that's doing the watering wants to minimize how many waterings, but they also don't want to
469
00:35:12.958 --> 00:35:13.758
have trees die.
470
00:35:14.159 --> 00:35:17.360
Like, these are all the hard problems that we usually will skirt around.
471
00:35:17.740 --> 00:35:29.845
And we will go after the more urgent problems that are happening on the field, because we can immediately see progress versus the things that do take weeks or months to really wrap our head around test, iterate, try again, revise.
472
00:35:30.146 --> 00:35:36.528
And that's the part that me and all of us included as leaders have to forge into if we're ever going to scale.
473
00:35:36.988 --> 00:35:38.649
That's, that's a great example.
474
00:35:38.889 --> 00:35:42.591
I really well, yeah, I'll look at some of these bigger goals in the systems and
475
00:35:43.213 --> 00:35:55.045
you know, doing our employee reviews and everything and systemize it and look at something that I can do, chunk it up in a little bit smaller pieces instead of saying, wow, there's these like 20 things I want to do for our business.
476
00:35:55.405 --> 00:35:58.969
But actually breaking it down into a little bit more digestible pieces, I think it's a,
477
00:35:59.665 --> 00:36:26.227
great idea because right now i'm using i know i'm sure you've heard of the eisenhower square that helped me a lot at first but now i just have a daily goals list and a not urgent and the not urgent ones i don't even look at and then the daily goals like small little things but i need a bigger one um so that's that's really good advice i appreciate that man excellent anything else to help with oh awesome well i mean pretty much what i was going to say as well is uh and if anyone else is also dealing with this uh i
478
00:36:26.801 --> 00:36:28.902
Can I say that I'm also in that in the boardroom?
479
00:36:29.262 --> 00:36:31.183
Yeah, yeah, that's fine.
480
00:36:31.203 --> 00:36:31.383
Yeah.
481
00:36:31.843 --> 00:36:48.410
Um, so, so the one of the things that we're, we're working, working through and it's something that I kind of put to the side because, you know, I know a lot of guys out there have kids, they got family members, they got all these different, um, responsibilities and you kind of put aside.
482
00:36:48.430 --> 00:36:54.153
One of the first things you start putting aside is your sleep, you start sleeping less and then the health goes and then you start,
483
00:36:54.867 --> 00:36:57.969
Chugging coffee, which is kind of where I was at.
484
00:36:57.989 --> 00:37:08.255
And I have now trying to lean myself off of a probably, you know, four to six cups a day caffeine habit for many years.
485
00:37:08.615 --> 00:37:11.257
And it's not easy.
486
00:37:12.138 --> 00:37:18.301
But it's a big change in the way that I'm approaching problems.
487
00:37:18.862 --> 00:37:20.783
I think the coffee was great for the,
488
00:37:21.611 --> 00:37:27.696
broken tire, plant something real quick, go over there and help that employee, hop in the truck and run and grab some supplies, run around.
489
00:37:27.736 --> 00:37:32.499
It was great for that kind of more jittery, scattered type work.
490
00:37:32.980 --> 00:37:47.751
But now that I'm leaning off of it and I'm still tired and trying to figure out how my body's going to function without it, but I think it's opening up my mind to some of those more long problems.
491
00:37:47.791 --> 00:37:49.553
I need more like long thinking into them.
492
00:37:49.633 --> 00:37:49.873
So...
493
00:37:50.570 --> 00:37:53.277
That's a part of it and that's been a big help and a big amount.
494
00:37:53.297 --> 00:37:55.604
But I didn't really put the emphasis on it before.
495
00:37:55.624 --> 00:37:57.248
I was like, yeah, whatever, yeah, health is fine.
496
00:37:57.268 --> 00:37:58.191
You know, you got to sleep, sure.
497
00:37:58.874 --> 00:38:07.477
We always hear about that, but it is, it is such a big part of, of being a successful business owner is to be a successful body owner, I guess you could say that way.
498
00:38:07.757 --> 00:38:22.461
And a lot of times, whatever you do with your body, it's kind of, it almost reflects itself in the way you leadership, because if, if the leader is constantly trying to get the dopamine hit or like solve all the small problems instead of the big hairy problems, usually to your point, it's just the same thing in health.
499
00:38:22.521 --> 00:38:28.163
It's like, okay, I'll cram the caffeine or I'll, I'll take this high, you know, a bunch of sugar just to get me through the day.
500
00:38:28.983 --> 00:38:32.185
Instead of doing the much harder, longer task of like, okay, what do I need to work out?
501
00:38:32.205 --> 00:38:36.827
Do I change my schedule so I can sleep, change my diet, change the way I'm buying at the grocery store?
502
00:38:37.147 --> 00:38:38.847
And so I think it's very reflective.
503
00:38:39.188 --> 00:38:43.970
So what the caller is actually talking about is the first 30 day challenge inside of home service boardroom.
504
00:38:44.510 --> 00:38:48.852
And usually when people join a mastermind or a group of some sort, they're like, I want tactics.
505
00:38:49.452 --> 00:38:53.154
The thing that gets you from $1 million to $10 million is usually not tactics.
506
00:38:53.655 --> 00:38:57.437
It's not a marketing hack or this little website or use this URL.
507
00:38:57.977 --> 00:39:04.542
It's most of the time becoming the leader that other great talent wants to follow and great management wants to join your team.
508
00:39:05.222 --> 00:39:22.267
and to become that we have 30-day challenges inside of home service boardroom the first one like he's mentioning is all about health and it's all about your diet and your exercise and we do that and the second one is all about your marriage and we do those first as the foundation for everything else we talk about in the future in home service boardroom
509
00:39:22.807 --> 00:39:29.009
whether it be public speaking, communication styles, compensation models, that stuff has to come after getting the foundation right.
510
00:39:29.229 --> 00:39:30.289
And that starts with your health.
511
00:39:30.649 --> 00:39:36.291
If you'd like to join home service boardroom and you have a seven figure business, click the link down in the description and apply it today.
512
00:39:38.672 --> 00:39:40.913
This year we'll do about like 1.2.
513
00:39:41.153 --> 00:39:42.193
I started another location.
514
00:39:42.253 --> 00:39:48.335
I talked about you with that, um, this upcoming season, I guess a separate, um, point off of that is.
515
00:39:48.876 --> 00:39:50.637
Is this the right decision to do or should I not?
516
00:39:50.737 --> 00:39:56.701
And that is starting, it would be kind of a separate, I guess, business in a sense, but obviously like have some overlap.
517
00:39:56.721 --> 00:40:01.424
It would be stump grinding and it would be, because right now we're just subbing out all our stump grinding.
518
00:40:01.464 --> 00:40:05.547
And I mean, we don't have a general sum out, but we're obviously not trying to get stump grinding either.
519
00:40:05.967 --> 00:40:09.650
It's just kind of like, if it's part of the job, then we'll sub it out.
520
00:40:09.950 --> 00:40:12.192
This would be probably my dad just to do it.
521
00:40:12.232 --> 00:40:13.352
He's a teacher during the...
522
00:40:14.819 --> 00:40:19.326
school year, so he's off in the summers, and he just kind of be him like doing it like by himself on a one man job.
523
00:40:19.346 --> 00:40:24.655
So, I mean, besides buying equipment, I think I would kind of be like, not really in it at all.
524
00:40:25.236 --> 00:40:28.702
But I guess just from your point of view, starting in another location, obviously next year,
525
00:40:29.281 --> 00:40:30.302
I'm going to take a lot of my time.
526
00:40:31.263 --> 00:40:32.564
So is it a smart thing to do?
527
00:40:32.584 --> 00:40:36.467
Because in my head, it's just like I need to buy the equipment and, like, we're good and that's kind of it.
528
00:40:36.927 --> 00:40:42.752
But what are your thoughts on, like, should I do that or should you stay clear where you're kind of at with that?
529
00:40:43.112 --> 00:40:45.334
What's your primary or core service right now?
530
00:40:46.355 --> 00:40:50.078
Mainly maintenance, so mulling, cleanups, and then, I mean, small landscapes.
531
00:40:50.118 --> 00:40:52.580
So nothing, like, no hardscapes, but, I mean, grading.
532
00:40:52.600 --> 00:40:53.301
Yeah.
533
00:40:54.333 --> 00:41:17.062
plantings mulch stuff like that so i mean we don't do any tree work okay um but sometimes stumps are just like obviously kind of part of it like oh we'll move this stump plant the tree or whatever else um so again we're not trying like to get stumps but it just kind of happens with the job obviously if i did this i mean i'd probably just set up like another website and and just looking at the people in our area too i mean there's some companies but they're like you
534
00:41:17.590 --> 00:41:17.930
I don't know.
535
00:41:17.950 --> 00:41:22.733
I feel like I could crush it, like just getting a good website and Google reviews and whatever else.
536
00:41:23.354 --> 00:41:24.394
And like I said, just have...
537
00:41:24.934 --> 00:41:29.017
I'm just looking at it more for like, even if my dad's like in retirement, just like have him like do something.
538
00:41:29.057 --> 00:41:31.398
Obviously, if I'm physically demanding, just grinding stumps.
539
00:41:31.418 --> 00:41:34.640
So I'm kind of looking at it that way too, like get him doing something.
540
00:41:34.660 --> 00:41:36.622
And like it is just kind of a one-man show.
541
00:41:37.802 --> 00:41:41.284
So it's not like setting up a whole other thing that I need to be like managing every single day.
542
00:41:41.304 --> 00:41:42.165
Yeah.
543
00:41:43.008 --> 00:41:43.308
But yeah.
544
00:41:43.869 --> 00:41:48.233
Well, what percentage of revenue right now is constituted from sump grinding?
545
00:41:48.253 --> 00:41:50.055
I know you said you sub it out.
546
00:41:50.115 --> 00:41:51.116
Super low.
547
00:41:51.537 --> 00:41:51.817
Okay.
548
00:41:51.917 --> 00:41:53.098
Yeah.
549
00:41:54.239 --> 00:41:55.240
Yeah, I don't know.
550
00:41:55.321 --> 00:41:56.021
Like, I don't know.
551
00:41:56.041 --> 00:41:59.465
As far as jobs go, I mean, we probably give this guy like per year...
552
00:42:00.577 --> 00:42:02.438
30, 40, some kind of jobs.
553
00:42:02.618 --> 00:42:04.939
So over the course of a year, I mean, that's not obviously a lot.
554
00:42:05.759 --> 00:42:06.579
But that's another thing.
555
00:42:06.719 --> 00:42:10.141
If in the beginning, like, my dad was working one day a week, like, he wouldn't care.
556
00:42:10.161 --> 00:42:16.563
If I would have to, like, fill a schedule or anything, obviously, like, over time, like, I would want to, like, obviously get that working more.
557
00:42:17.264 --> 00:42:20.905
But it's not really like a rush where I need to, like, book someone out, otherwise they can't pay their bills.
558
00:42:20.925 --> 00:42:23.306
Like, it's just kind of like whenever he has time, like, he doesn't really care.
559
00:42:24.166 --> 00:42:30.291
Like right now, like right now you're giving him probably three to 4% of your revenue, the subcontractor.
560
00:42:30.892 --> 00:42:40.059
And so even if you spent time on this, did the website, put reviews, got your dad set up, get the business lentils, whatever bank accounts.
561
00:42:40.679 --> 00:42:47.845
If you tripled the amount of, of stump grinding, which would mean you'd have to go out and get reviews, you'd have to generate leads.
562
00:42:47.905 --> 00:42:49.646
You'd have to triple the amount that you're currently getting.
563
00:42:49.686 --> 00:42:49.866
Yeah.
564
00:42:50.306 --> 00:42:51.928
That would still be 10% of your revenue.
565
00:42:52.488 --> 00:42:56.153
And so I generally look at things like, okay, I got a crazy website.
566
00:42:56.173 --> 00:43:00.619
I'm gonna get new reviews, new accounts, or like setting up a bank account, whatever it might be.
567
00:43:01.340 --> 00:43:08.329
If you just put that towards your current business, I happen to think you take 1.2 and add a whole lot more than 10% of revenue.
568
00:43:08.829 --> 00:43:09.050
Hmm.
569
00:43:10.049 --> 00:43:11.751
No, I'm kind of thinking the same way.
570
00:43:11.771 --> 00:43:12.431
I don't know.
571
00:43:12.472 --> 00:43:13.673
That's why I just wanted to talk to you.
572
00:43:13.693 --> 00:43:14.734
You're good.
573
00:43:15.154 --> 00:43:17.537
If you look at it more from like the realistic version.
574
00:43:17.557 --> 00:43:18.978
But no, I see what you're saying for sure.
575
00:43:19.078 --> 00:43:22.602
The other part of it is if it goes great, right?
576
00:43:22.622 --> 00:43:27.066
And it 5Xs and now you're adding like 15% of revenue, for example, even if it goes great.
577
00:43:27.747 --> 00:43:47.600
if you build a business around one person and then they leave for whatever reason life happens now all of a sudden you've built a business around someone who leaves you have no systems you were out of day to day like it was kind of quote unquote running by itself and now all of a sudden you either have to cut it anyways or b you have to go out and find someone who has all the skills he has and can run the whole business himself
578
00:43:48.440 --> 00:43:50.421
And so you kind of pigeonhole yourself.
579
00:43:50.721 --> 00:43:57.366
If it goes really well, you actually create more risk in the business because there's more key man risk when there's only one person running the whole operation.
580
00:43:58.006 --> 00:43:59.667
Versus you have $1.2 million business.
581
00:43:59.907 --> 00:44:17.959
Can we just 50% increase that where you already have systems in place, labors, technicians, systems that are already firing, and just do more of that versus going out and doing this other thing, building around one person and creating, at best, a dependency in the business, and at worst, a huge distraction from the thing that's already working.
582
00:44:18.480 --> 00:44:22.122
Yeah, like even if you guys get like hurt or something too, like then like who's going to grind stumps?
583
00:44:22.162 --> 00:44:23.242
Like we need stumps to be grown.
584
00:44:23.282 --> 00:44:24.363
Yeah.
585
00:44:24.863 --> 00:44:29.785
No, but obviously you think like even if it wasn't my dad, like just a new employee, like same thing.
586
00:44:29.845 --> 00:44:43.331
I mean, obviously it's going to be one, like it doesn't need to, I'm not going to have a crew of stump grinders, so it's still going to be kind of one person unless, I do take it to a huge thing with like a couple of crews of stump grinding, but obviously that's a general, like that's a whole nother obviously business that I don't want to do.
587
00:44:43.371 --> 00:44:45.912
I kind of just wanted to have like a little add-on thing, but yeah.
588
00:44:46.552 --> 00:44:48.453
So you're thinking probably no, just stick to that.
589
00:44:48.753 --> 00:44:50.133
I would with great prejudice.
590
00:44:50.153 --> 00:44:50.953
I haven't done anything yet.
591
00:44:50.993 --> 00:44:52.093
I don't really care.
592
00:44:52.113 --> 00:44:53.054
But I just, yeah.
593
00:44:53.094 --> 00:44:56.274
I would encourage you heavily to just focus on what you're currently doing.
594
00:44:56.314 --> 00:44:56.854
It's working.
595
00:44:57.055 --> 00:44:57.935
You're at 1.2.
596
00:44:58.395 --> 00:45:09.097
All that discretionary effort that would go towards setting up the website, getting reviews, setting the business license, doing the stump grinder thing, figuring out the employee or your dad situation, all that attention just focused on this business will get you to 2 million.
597
00:45:09.417 --> 00:45:13.898
And a business at 1.2 million is in this weird spot where like, you can't really get managers and all the rest of it.
598
00:45:14.199 --> 00:45:15.739
If you can get us a 2, 3 million,
599
00:45:16.099 --> 00:45:19.708
this starts to look very interesting and be much more profitable.
600
00:45:19.748 --> 00:45:22.957
And more importantly, it'll have a business that doesn't depend on one person.
601
00:45:23.742 --> 00:45:26.864
And in a $1.2 million business, you have five other services.
602
00:45:26.884 --> 00:45:34.509
It just so happens that your dad does the sump grinding thing, but there's probably five other services that you also sell about, whether it be gutter cleaning, pressure washing, a bunch of other stuff.
603
00:45:34.929 --> 00:45:37.611
And those are all two, three, four, 5% of your revenue.
604
00:45:37.951 --> 00:45:41.333
But that doesn't mean I need to change the business or add a new business line.
605
00:45:41.634 --> 00:45:50.940
Otherwise, you will wake up with a $3 million business, but have 10 different entities, all with a huge amount of key man risk, and each and every one of them constantly having fires that you're just...
606
00:45:51.620 --> 00:46:16.717
hopping around to I'd just take the current thing deploy all your energy towards it and scale this to 3 million okay I mean right now the plan is actually do multi-locations but keep it actually smaller um which I know it's kind of like this I mean that's still better just to do keep everything like the current one is not playing the girl like at all like next year no more employees more crews um and then just kind of have like one GM kind of run like that one so kind of more separate locations rather than one big one
607
00:46:16.997 --> 00:46:18.698
Yeah.
608
00:46:18.839 --> 00:46:20.240
And that's different.
609
00:46:20.540 --> 00:46:23.262
That's more of like a copy and paste versus build new.
610
00:46:23.663 --> 00:46:23.803
Right.
611
00:46:23.843 --> 00:46:29.828
So I would rather have your dad if you're trying to make a role for him, just have him go replicate what you've already done in your market.
612
00:46:29.928 --> 00:46:30.408
Do it again.
613
00:46:31.009 --> 00:46:36.613
That way, if something happens to him, whatever, like you can just say, hey, we already know what good looks like.
614
00:46:36.633 --> 00:46:37.414
Here's location one.
615
00:46:37.434 --> 00:46:38.075
It's crushing it.
616
00:46:38.695 --> 00:47:03.673
do this and instead of being like oh we don't really have a recipe or a system for stump grinding and how to get customers we don't know what that demand curve looks like what our cost per lead is you already have figured out so many things you're already ahead of like 95 of people in landscaping let's just keep doing that and if you're going to go copy it again the likelihood of that second location succeeding is much higher because you've already done it one time right what do you think about off season just trying to like supplement that if
617
00:47:04.497 --> 00:47:09.499
I know sometimes you can sometimes on the ground, like we're in Wisconsin, so sometimes the ground's completely frozen, you can grind stones.
618
00:47:09.539 --> 00:47:12.740
But what do you think about like, if you're looking at it from that point of view?
619
00:47:12.760 --> 00:47:14.081
I mean, I'm probably not going to do it.
620
00:47:14.161 --> 00:47:20.243
I'm just kind of saying like, if you come at it from that way, they're kind of because we do snow, but obviously if it doesn't snow, like we're kind of
621
00:47:21.063 --> 00:47:46.463
doing much um so just looking at from off season point of view what do you see that as yeah would that be more of a smart way to go if you look at it from that way or no well ideally if i'm adding a service for off season it has an inverse demand curve from my core service meaning when i look at all the pnls i've ever seen from tree companies that do stump grinding they match very similarly to what you do with landscaping which is very busy spring to you know very consistent throughout
622
00:47:47.367 --> 00:47:50.508
the summer and fall slowly petering off and then an off season.
623
00:47:50.788 --> 00:47:53.469
And so if you're like, well, I'm going to add the service to do it during the winter.
624
00:47:53.709 --> 00:47:59.451
If it freezes, you can't work at either of these services like either either one.
625
00:48:00.051 --> 00:48:02.572
And so the demand curve on both of them is kind of the same.
626
00:48:02.672 --> 00:48:03.152
Exactly.
627
00:48:03.252 --> 00:48:03.592
Yeah.
628
00:48:03.712 --> 00:48:13.135
So I would I would prefer not to do it because all you do if that business grows, all you do is compound the stress during spring rush and make the off season drop even harsher.
629
00:48:13.635 --> 00:48:13.835
Yeah.
630
00:48:14.796 --> 00:48:15.036
Okay.
631
00:48:15.216 --> 00:48:15.676
That makes sense.
632
00:48:16.324 --> 00:48:16.564
All right.
633
00:48:16.864 --> 00:48:17.225
That's all.
634
00:48:17.345 --> 00:48:17.925
That's all I got.
635
00:48:17.945 --> 00:48:18.285
Thank you.
636
00:48:18.305 --> 00:48:18.726
Sorry.
637
00:48:18.806 --> 00:48:20.547
I hope I didn't dash any hopes or dreams.
638
00:48:20.987 --> 00:48:21.948
But I just wanted...
639
00:48:21.968 --> 00:48:22.848
Sorry, I didn't do anything yet.
640
00:48:22.868 --> 00:48:24.269
It really doesn't matter.
641
00:48:24.289 --> 00:48:25.550
I just wanted to see where you were at.
642
00:48:25.850 --> 00:48:26.030
Yeah.
643
00:48:26.251 --> 00:48:29.313
Which I kind of thought you were going this way, but no, I appreciate it.
644
00:48:29.453 --> 00:48:29.893
You got it, brother.
645
00:48:29.973 --> 00:48:30.433
You have a good one.
646
00:48:32.334 --> 00:48:35.637
Two landscape maintenance and design were around a million dollars in revenue.
647
00:48:36.217 --> 00:48:45.283
And I was curious when you set your vision, deciding that you were going to franchise and have, you know, 100 plus locations or 200, whatever it is,
648
00:48:45.925 --> 00:48:47.927
and how many years it took you to get to there.
649
00:48:48.488 --> 00:49:00.940
And I know I often might ask the same question on some of the steps to get there, but I think in repeatedly asking that question, I get a slightly different answer each time, so I'd like to ask some of the steps you took to get there.
650
00:49:02.181 --> 00:49:07.407
Specifically on the franchising level, or can you frame that into question?
651
00:49:08.255 --> 00:49:09.916
Yeah, for sure.
652
00:49:09.956 --> 00:49:21.083
So when you decided to have the vision of, okay, I'm going to franchise, and this is how many locations I want to get to, when you set that vision, how many years it took you to hit that vision?
653
00:49:21.103 --> 00:49:23.064
Let's say you might be at 200 right now.
654
00:49:23.084 --> 00:49:25.986
Maybe when you set the vision, it was only 100.
655
00:49:26.006 --> 00:49:27.887
So when did you know your vision?
656
00:49:27.987 --> 00:49:29.448
How many years did it take to get you there?
657
00:49:29.828 --> 00:49:31.730
And what were some of the steps you took to get to the 100?
658
00:49:32.838 --> 00:49:37.242
Yeah, for me, like I work backwards from what is the vision and then I put numbers towards it.
659
00:49:37.302 --> 00:49:41.585
So like when I said, hey, I knew our goal is to change level professionalism in the landscape industry.
660
00:49:41.625 --> 00:49:42.366
That's the vision.
661
00:49:42.766 --> 00:49:45.188
I then have to ask myself, OK, well, what does that actually mean?
662
00:49:45.228 --> 00:49:47.550
Because that is a infinite game.
663
00:49:47.870 --> 00:49:58.899
So I need to put some numbers like some hash hash marks to towards the end zone specifically for the team, because I'm not necessarily the type of person that needs a victory lap, but for a lot of times your team,
664
00:49:59.878 --> 00:50:03.821
They want to know if they're if they're doing a good job and if they're making progress towards the goal.
665
00:50:04.181 --> 00:50:12.627
So the goal, the touchdown might be, you know, a very big ethereal goal or infinite game, but most people get very discouraged if there's not hash marks all along the way.
666
00:50:13.008 --> 00:50:18.692
And so that I reverse engineered, okay, to change level professionalism, I need a thousand locations.
667
00:50:19.132 --> 00:50:32.642
And the reason we needed 1,000 locations was to compete with enough people to where they would listen to paid for performance, profit sharing, stages of success, and answering the phone, having a great website, having uniforms, treating the team members a certain way.
668
00:50:33.023 --> 00:50:36.165
And so I reverse engineer from the goal back to numbers.
669
00:50:36.505 --> 00:50:41.169
A lot of times people will start with numbers, and then five or 10 years later, they'll try to figure out what their vision is.
670
00:50:41.529 --> 00:50:42.830
And that's why it feels contrived.
671
00:50:43.150 --> 00:50:45.052
If you're trying to figure out your vivid vision,
672
00:50:45.692 --> 00:50:49.755
and you're like struggling or it feels like you're just kind of making things up or it doesn't feel authentic.
673
00:50:50.055 --> 00:50:53.137
A lot of times because you start with a number and then you move to the vision.
674
00:50:53.317 --> 00:50:54.298
I like to work the other way.
675
00:50:55.038 --> 00:50:57.020
And as like, here's the vision, here's what the goal is.
676
00:50:57.040 --> 00:51:06.466
And in order to be able to make that true, what number of locations, what amount of revenue, what number of team members, what number of trucks do I need to have in order to make that vision a possible possibility?
677
00:51:06.606 --> 00:51:11.470
I didn't hear the majority, but I did hear the tail end when you're talking about starting backwards.
678
00:51:11.850 --> 00:51:13.011
Hey, here's where we're going to be.
679
00:51:13.051 --> 00:51:14.392
How many trucks do we need to get there?
680
00:51:14.432 --> 00:51:14.832
All that.
681
00:51:15.212 --> 00:51:16.613
Yeah, that's what I would start with.
682
00:51:16.633 --> 00:51:27.020
That's why that's why for most people when they say they want to franchise and things, it's I usually push back because when they actually identify what their goal is, they don't need to franchise to make that happen.
683
00:51:27.481 --> 00:51:31.423
And then when times inevitably get tough, they say, oh, man, I shouldn't do this.
684
00:51:31.864 --> 00:51:37.588
And they probably are right, given the fact that they do not need to franchise in order to hit their goal.
685
00:51:38.028 --> 00:51:43.632
And so do you specifically want to franchise or what's your what's your sort of vision?
686
00:51:44.335 --> 00:51:45.175
Yeah, for sure.
687
00:51:45.476 --> 00:51:48.997
I'd say the goal or the vision is to be a top 100 company.
688
00:51:49.558 --> 00:51:53.019
Um, in order to do that is kind of scaling, maybe acquiring other businesses.
689
00:51:53.539 --> 00:51:54.880
Um, franchising is an option.
690
00:51:55.280 --> 00:52:05.825
Um, when, when sharing the vision from the guys on the team, he just made a comment about, oh, if we acquire other businesses, or just some of the concerns about, you know, the shared culture and, um, being on, you know, the same mission.
691
00:52:06.365 --> 00:52:09.347
And it seems though franchising might be a better option to
692
00:52:10.032 --> 00:52:18.977
to execute that game plan rather than, you know, getting to top 100 by just buying a bunch of other, you know, $3 million company, $4 million company, and just kind of scaling it in that way.
693
00:52:18.997 --> 00:52:23.860
So that's kind of what brought us the idea of, oh, you know, franchising could be a good idea to hit that top 100.
694
00:52:24.240 --> 00:52:26.502
And, you know, you might ask why hit the top 100.
695
00:52:26.522 --> 00:52:33.646
It's really, you know, obviously money's cool, but, you know, it's really the greater vision of just having a, you know, like many entrepreneurs, you know, trying to,
696
00:52:34.423 --> 00:52:35.525
have our full potential.
697
00:52:36.165 --> 00:52:47.439
If we have different skills, trying to make the most of our abilities, thinking big, trying to impact more lives, different things like that, that sharing the faith with more people, something that's really, that we're passionate about in our company.
698
00:52:47.479 --> 00:52:50.723
But there's many different things like that, which I'm sure you guys can understand.
699
00:52:51.103 --> 00:52:52.904
Yeah, I think reverse engineering, that's okay.
700
00:52:52.924 --> 00:52:56.846
Well, if I need to get the top 100, it means you probably need to do about $30 million in annual revenue.
701
00:52:57.366 --> 00:53:09.693
And so it becomes, do I, you know, do I do go out and I do three to four large locations in large metropolitan areas, or do I do 20 to 30 smaller locations in smaller, smaller suburban areas?
702
00:53:10.334 --> 00:53:14.376
And then the question becomes, okay, does either of those require a franchise?
703
00:53:14.996 --> 00:53:17.998
And I don't think so, because I don't think so.
704
00:53:18.840 --> 00:53:24.866
I will also say both of those, both directions are hard, either A, M and A, mergers and acquisitions to be able to get to 30 million.
705
00:53:25.226 --> 00:53:32.153
Yes, it is hard to acquire or bring in new talent from a company that has a different culture and assimilate them to your culture.
706
00:53:32.493 --> 00:53:32.973
That is hard.
707
00:53:33.454 --> 00:53:39.740
It is also hard to convince someone that has paid you money to uphold the brand standards that you want them to.
708
00:53:40.180 --> 00:53:41.321
And that would be franchising.
709
00:53:41.541 --> 00:53:42.662
So either way is hard.
710
00:53:43.363 --> 00:53:46.607
And so there is no easy way when you start getting a larger organization.
711
00:53:46.627 --> 00:53:55.776
It all comes down to leadership in terms of whether or not people actually get on the bus and go in the direction of the vision and uphold brand standards and the culture that you're trying to build.
712
00:53:55.916 --> 00:53:59.280
Either way is hard, whether you're doing mergers and acquisitions or franchising.
713
00:54:00.001 --> 00:54:00.722
And I think
714
00:54:01.917 --> 00:54:03.618
Either of those strategies would work.
715
00:54:04.179 --> 00:54:15.648
If your goal is top $130 million, you can probably do it within 20 years, 20 to 30 years, if you are trying to grow yourself, each individual location.
716
00:54:16.028 --> 00:54:27.017
You could probably do it in 10 years if you are trying to do mergers and acquisitions, mostly because it's getting the capital and you're going to make a couple errors likely on your first couple of months.
717
00:54:27.637 --> 00:54:33.787
Acquisitions and then franchising you could probably do it a lot faster but whether or not you want to get into the game of
718
00:54:35.022 --> 00:54:35.843
managing a franchise.
719
00:54:35.883 --> 00:54:37.464
It's a whole different business.
720
00:54:37.944 --> 00:54:41.387
The same way that mergers and acquisitions is a completely different business than landscaping.
721
00:54:42.068 --> 00:54:48.733
So it's determining what industry you wanna be in for the long run, but regardless, it's just a matter of how fast you need to go.
722
00:54:49.494 --> 00:54:51.415
And yes, franchising will do it faster.
723
00:54:51.776 --> 00:55:00.103
Also, you gotta go convince someone to buy your business versus it's a whole lot easier to convince people to take money from you when you do mergers and acquisitions.
724
00:55:00.743 --> 00:55:01.524
That makes sense.
725
00:55:01.544 --> 00:55:02.264
That was a great one.
726
00:55:02.284 --> 00:55:03.145
I really appreciate that.
727
00:55:03.165 --> 00:55:15.393
What are some of the things that some of the main points you touch on when, you know, shifting to different locations or, you know, it's not usually franchising, but if you were to buy a location, what are some main things you look at buying a business or changing a different location?
728
00:55:16.353 --> 00:55:18.014
You know, leadership is always, you know, a big thing.
729
00:55:18.034 --> 00:55:18.795
Who's the owner?
730
00:55:19.415 --> 00:55:21.737
But what are some of the things you look at on that spectrum?
731
00:55:22.350 --> 00:55:34.474
Yeah, if you're buying a larger size business that has an established brand, established teams, and established leadership already in place, so you're buying companies that are already doing multiple millions in revenue, you have to be extremely strong in terms of leadership.
732
00:55:34.634 --> 00:55:37.635
Otherwise, you will get beat up on the acquisition.
733
00:55:38.135 --> 00:55:47.797
And so most people, when they go out and try to buy a really established brand that's already doing a few million dollars in revenue in a local market, usually I see that the biggest mistake is someone having dumb money.
734
00:55:47.817 --> 00:55:53.158
So they have plenty of cash, but they don't have the leadership chops to actually turn the culture into what they want it to be.
735
00:55:53.579 --> 00:55:58.860
And so what ends up doing is they buy a business that's doing well because of the great leadership that's already there.
736
00:55:59.160 --> 00:56:03.401
But then as the leader of the company moving into it, as the acquirer,
737
00:56:04.061 --> 00:56:09.464
They do not have the skills to be able to keep that leadership team and that leadership team churns within 12 to 24 months.
738
00:56:09.925 --> 00:56:14.407
And now they do not have the skills to go higher the caliber of individuals required to grow that business.
739
00:56:15.008 --> 00:56:19.731
And that's usually the mistake I see people doing when they're going out and doing their first couple acquisitions for larger companies.
740
00:56:20.091 --> 00:56:24.053
The question becomes, well, do you hire, do you go out and acquire small companies?
741
00:56:24.074 --> 00:56:26.015
They're doing $300,000, $400,000, $500,000.
742
00:56:26.035 --> 00:56:27.556
And now you don't really need to be a strong leader.
743
00:56:27.576 --> 00:56:30.918
You just need to have systems to move clients into your database.
744
00:56:31.578 --> 00:56:37.785
And that is easier in terms of leadership, but also much harder in terms of integration because you're changing the brand.
745
00:56:38.345 --> 00:56:42.390
You are you have no skill, like you have no talent, but it comes with the business.
746
00:56:42.710 --> 00:56:47.815
You've got to go out and hire a bunch of people, get the trucks and the assets, and you're buying them usually at a much lower valuation.
747
00:56:48.736 --> 00:57:14.749
than comparatively if you had a larger brand leadership team installed etc but it comes with the extra task of upgrading their pricing to what needs to be going out and hiring all the talent all the technicians and so it's like which flavor of hard do you want i i find most people though that if they have a whole bunch of cash going out and buying larger businesses and underestimating how difficult it is to uh merge their leadership team into their leadership style
748
00:57:15.728 --> 00:57:18.552
I see we're near the end, but I'll ask you one more question if you're down for it.
749
00:57:18.572 --> 00:57:19.052
Go for it.
750
00:57:20.915 --> 00:57:21.175
Sure.
751
00:57:21.215 --> 00:57:25.200
So I was curious, when you started your second, third location, what were some of the
752
00:57:25.895 --> 00:57:32.479
the key factor you looked at was like, hey, there's not any other landscape companies in this area, or perhaps it was, oh, there's a lot of landscapers in this area.
753
00:57:32.499 --> 00:57:34.340
There's a lot of work that needs to be done.
754
00:57:34.981 --> 00:57:41.985
And what do you do as you're scaling with different, you have a franchise, you have these different things you got to hit on, but then you have different climates.
755
00:57:42.005 --> 00:57:49.210
Like near us, we have snow, down south they might not, and how you restructure things from different locations throughout different states.
756
00:57:50.057 --> 00:57:57.990
Yeah, so the main thing is I'm just looking for how few of services can I offer while still maintaining decent revenue during the offseason.
757
00:57:58.451 --> 00:58:02.637
So if I could get away with just one service, that's all I'd offer.
758
00:58:03.499 --> 00:58:03.759
But...
759
00:58:05.075 --> 00:58:30.708
Usually in home services, I have to offer something else to do one of two things either a add revenue during the offseason and be Increase the annual customer value high enough to where I can spend money on customer acquisition costs advertising at a faster clip And so that's the only reason I would add other services for those two things And then in terms of when I looked like when I started my second location, etc was looking at my customer acquisition cost and and
760
00:58:31.875 --> 00:58:46.831
as it would go up in my market just ask myself okay if i'm now spending a hundred dollar customer record costs in my existing market and my new market is smaller and i'm already boiling this tiny puddle i'm in i'm spending a lot on customer acting costs can i
761
00:58:48.107 --> 00:58:51.329
going to this new market and get customers for $50 instead of a hundred.
762
00:58:52.009 --> 00:59:05.637
Now I'm comparing my customer, I wouldn't cause difference between between moving the location or starting a second one, or the fact that there is, there is also a lot more cost and headache by splitting locations.
763
00:59:06.137 --> 00:59:12.881
And so sometimes I'm willing to spend a higher customer, I can cost at my primary location to increase route density, have everything centralized.
764
00:59:13.181 --> 00:59:16.944
But over time, if you're in a small market, like in our market is 80,000 people.
765
00:59:17.224 --> 00:59:17.464
So like,
766
00:59:17.944 --> 00:59:23.389
In a small market, if you start boiling that puddle, you're starting to spend a lot of extra money on customer action costs.
767
00:59:23.689 --> 00:59:26.632
And it makes sense just to move to a different puddle and start there.
768
00:59:26.732 --> 00:59:29.834
And so you can take off the cream of that new market.
769
00:59:30.535 --> 00:59:31.096
Does that make sense?
770
00:59:31.716 --> 00:59:33.017
That makes so much sense.
771
00:59:33.037 --> 00:59:33.658
That was great.
772
00:59:33.698 --> 00:59:33.958
Yeah.
773
00:59:34.058 --> 00:59:34.539
Thank you.
774
00:59:36.040 --> 00:59:45.268
How about the challenge of like state to state when you have different, you know, like one summer and winter, some don't as people are, you know, buying your franchise and.
775
00:59:45.923 --> 01:00:04.153
and you're you know you're dealing with the weather changes how have you dealt with that the same thing is true just like what's their core service they can keep you eight to nine months busy at the year because almost all our services are seasonal and then what other one maybe two do i need to supplement that with in order to make sure my off season isn't as harsh
776
01:00:04.973 --> 01:00:10.538
And so I can cross sell other services to my existing customers and make them work so much more.
777
01:00:10.998 --> 01:00:13.601
That's really the only two reasons I'm thinking about adding services.
778
01:00:13.621 --> 01:00:17.404
It doesn't matter if it's in a market up north or it's like, oh, it's snow and mowing.
779
01:00:17.584 --> 01:00:18.084
Very simple.
780
01:00:18.164 --> 01:00:18.385
Great.
781
01:00:18.665 --> 01:00:21.607
I'm not going to do all these other things in some markets.
782
01:00:21.928 --> 01:00:29.955
It might not snow and they would complement their mowing season with landscaping so that way they only do landscaping for four months of the year.
783
01:00:30.707 --> 01:00:32.129
but then they do mowing the rest of the time of the year.
784
01:00:32.349 --> 01:00:34.071
For others, I don't want to do landscaping.
785
01:00:34.211 --> 01:00:36.754
It's a whole other, like trailers and equipment, et cetera.
786
01:00:36.774 --> 01:00:36.975
Great.
787
01:00:37.355 --> 01:00:44.864
I'm going to do Christmas lights, or I'm going to do treatments because I can do fertilization weed control during the offseason.
788
01:00:45.165 --> 01:00:54.336
So the only thing I'm thinking about is what's my core service and what supplementary services must I add to fill in my offseason or increase my lifetime value to where I can keep spending money on ads.
789
01:00:54.556 --> 01:00:55.057
That's really it.
790
01:00:55.677 --> 01:00:56.819
Really appreciate that, Mike.
791
01:00:56.859 --> 01:00:57.660
Thank you so much.
792
01:00:57.960 --> 01:00:58.541
You got it, brother.
793
01:00:58.601 --> 01:00:59.062
You have a good one.
