WEBVTT
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Chapter 7.
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Start a New Brand The fifth and final cure for Seasonitis is to start a new brand.
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We've looked into several strategies.
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Cure 1, Lockdown Mode, which involves shutting down and laying off staff.
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Cure 2, Boost sales through better advertising and upselling.
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Cure 3, providing adjacent services through cross-selling.
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Cure 4, establishing recurring maintenance programs.
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Let's discuss creating a completely new brand for your business.
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This cure helps businesses when the first four cures don't completely fix Q4 collapse.
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It's a last resort.
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meant for implementation after you've tried the previous approaches.
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If you can't reach over 50% of your peak monthly revenue or keep facing losses in off-seasons, then it's time to think about Cure 5.
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Let's shift perspective for a moment to manufacturing.
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What does a factory do when demand for its products drop a lot?
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They could shut down production, turn off the conveyor belt, turn off the lights, and lay off everyone.
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That's the same as Cure One, lockdown mode.
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The factory could boost sales by advertising and growing its market share for the limited demand.
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That is our second solution, Cure Two, sell more and better.
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The factory could sell similar products by making small changes to the current conveyor belt.
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Cure Three, sell an adjacent service.
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The factory might stabilize revenue through recurring contracts.
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They could enforce regular shipments on a monthly basis year-round.
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This would stabilize production demands and cash flow.
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That's the equivalent of CURE 4.
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They could finally start a new production line.
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This line would feature different products and demand cycles, our CURE 5.
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CURE 5 carries high risk and high reward.
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The reward potential is high.
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00:01:57.300 --> 00:02:01.081
You're reaching a different demand curve that isn't part of your core service.
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00:02:01.681 --> 00:02:04.822
But I want to emphasize that this is a last resort.
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00:02:05.623 --> 00:02:09.504
Improve your current business using Cures 1 to 4 first.
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00:02:10.304 --> 00:02:12.325
Then think about creating something new.
33
00:02:13.466 --> 00:02:17.387
Many people jump to using Cure 5 before it is appropriate.
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As Alex Ramosi says, focus on more and better before new.
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00:02:23.852 --> 00:02:29.018
I looked at the climate, demographics, and Q4 performance of each Augusta location.
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00:02:29.819 --> 00:02:36.206
About 31% may not achieve a complete cure for seasonitis with the first four cures.
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That's when Augusta Christmas Lights and AugustaLights.com were born.
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Why Christmas lights?
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Several factors made it ideal.
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It targets the same customers.
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People who use lawn services usually don't put up their own holiday lights.
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It requires no major equipment purchases.
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We use the same trucks and crews.
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Adding it to our liability insurance was easy.
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We didn't need a separate business entity.
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Demand for Christmas lights is zero during our spring rush.
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It spikes right after our lawn season ends in October.
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Christmas lights installation is also a recurring service.
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We can come back each year and the margins get much better after the first year.
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This is because we reused the same lights.
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The cash flow is great.
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We collect payment up front, buy the lights, and then schedule installation.
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We won't spend any cash up front.
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In later years, we will earn even more profits with the same materials.
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What are the advantages of starting a new brand?
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00:03:40.474 --> 00:03:44.155
First, you can reduce your per-hour overhead recovery costs.
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Businesses spread fixed costs like rent, utilities, insurance, and wages across more hours worked.
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For instance, if your fixed expenses are $16,000 each month, that's $192,000 a year.
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If you have six workers each working 1,500 hours for nine months, you will have a total of 9,000 labor hours.
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Dividing $192,000 by 9,000 hours gives you $21.33 per hour in fixed costs.
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But if you create a new brand that keeps your crew busy year-round at 2,000 hours each, you now have 12,000 total labor hours.
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The same $192,000 in fixed expenses divided by 12,000 hours drops to $16 per hour.
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That's an extra $5.33 profit per hour.
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You achieve this by spreading fixed cost over more productive hours.
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You can also promote your new service to current customers with special offers.
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00:04:49.460 --> 00:04:52.384
Your established customer base becomes your initial market.
67
00:04:53.085 --> 00:04:56.829
But starting a new brand comes with significant warnings and risks.
68
00:04:57.710 --> 00:04:59.192
It often becomes a distraction.
69
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It's exciting to launch something new, but you soon discover unexpected problems.
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00:05:04.864 --> 00:05:07.005
Avoid shiny service syndrome.
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00:05:07.886 --> 00:05:10.848
Don't keep jumping to new services or industries.
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The next one may seem better, but it often isn't.
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The skeletons in the closet will reveal themselves.
74
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Focus on your core business instead.
75
00:05:20.815 --> 00:05:23.257
Several specific risks deserve mention.
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First, customer confusion.
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Wait, the person who mows my grass also does painting?
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This confusion can damage your brand's reputation.
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Second, you might dilute your marketing efforts.
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If you have $10,000 for ads, splitting it between two brands means they both get less exposure.
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You won't get the six or more impressions needed for conversion.
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Training employees on new services, uniforms, and procedures adds extra costs and time.
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Look at McDonald's.
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They can hire a 16-year-old with no skills.
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In days, that teen can start earning $120 an hour for the business.
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McDonald's does this through systematization and simple services.
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They're not trying to train employees on 50 different things.
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They do not customize each burger.
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They simplify and standardize the process.
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They simplify and standardize the ingredients.
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They simplify and standardize the training, restaurant layup, and menu design.
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They avoid complexity and customization.
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Adding a new brand is the easiest dollar to earn in a short amount of time.
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Taking your core service and doubling it will be harder, so you'll always make more revenue with a new brand, at least in the beginning.
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Plus, it's fun to create a new LLC, website, and logo.
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Buying a new website domain is the entrepreneur's version of Crack Cocaine.
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We convince ourselves that it is good because of higher revenue.
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We made hundreds of thousands more dollars, so it must be good.
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This is hard to deny or refute.
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But in truth, you might be ignoring your main business.
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With the right focus, you could achieve better results.
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Many people choose Cure 5 due to its excitement.
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But Cures 1 through 4 have a much higher probability of success.
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You're more likely to succeed by improving what you already do.
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Starting something new can distract you, dilute your marketing, and complicate employee training.
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It also brings extra work with trucks, equipment, and logistics.
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Let's assume that after all these cautions, you still need to start a new brand to solve your Q4 collapse.
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Do you need to start a new website to start a new brand?
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Yes.
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If a service page on your current site works, it counts as cure three, adjacent service, instead of cure five.
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Do you need a new legal entity?
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That's a qualified answer.
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In most cases, a DBA, doing business as, or trade name is enough.
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It allows you to run a different brand with minimal legal or financial issues.
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This is what we usually do for Augusta Christmas lights.
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You'll need a separate entity for different liability protection or tax benefits.
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This might also be useful if you plan to grow the second brand bigger than your main service.
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Consult your accountant and attorney to determine the best structure.
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Should you create a new Google business listing?
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Yes, but keep it updated throughout the year.
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You can't let it sit inactive for eight to nine months until your off-season returns.
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Alternatively, you can change your business name on Google to include both services.
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For example, Augusta Lawn Care and Christmas Lights.
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This might trigger re-verification from Google, which can be a hassle.
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But it also means you won't have to manage two separate accounts.
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I recommend using a business name that echoes your current brand.
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This will help with cross-selling.
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We didn't name it Billy Bob Christmas Lights.
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We called it Augusta Christmas Lights, using the same mascot with slight variations.
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This helps customers identify the connection between brands and simplifies cross-selling opportunities.
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Here's a case study from Joel Heck at Augusta Lawn Care in Lafayette, Colorado.
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He said, Augusta Lights were a great addition this year.
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36 installs and $37,000 in revenue.
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November was our best month, with $65,000 in revenue and $24,000 in profit.
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Essentially, it added a 13th month of revenue for the year.
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This was his best month of revenue in his first two years of business.
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Jason Murphy from Augusta Lawn Care in Middletown, Kentucky, reports, Christmas lights transformed my business.
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In three years of doing lights, we went from burning through $100,000 during winter months to adding $100,000 in profits.
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That's a $200,000 swing in just three years.
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Now, five years into lights, Q4 is by far our most profitable quarter.
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Ryan Payne from Augusta Lawn Care in Rockport, Texas shares, We don't do winter services, so year-round mowing and Christmas lights have been our two tracks.
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Christmas lights have added up to $100,000 in revenue in Q4 during our best year and added $18,000 our first year in a tough market.
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He emphasizes that Christmas lights can determine whether you lay off employees or not, whether your family has a good Christmas, or none at all.
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On page 22 of your workbook, list three new brands or services you might start in your company.
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Practice pitching one to someone as if they were an existing customer.
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For example, sell Christmas lights to a customer who already uses your mowing services.
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Practice your pitch.
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This way, you can turn many spring rush customers into off-season revenue.
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Remember, Cure 5 is a last resort.
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Do not jump into starting a new brand.
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Examine Cures 1 to 4 first.
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Only use Cure 5 to treat seasonitis if you cannot solve Q4 collapse without it.
1
00:00:00.311 --> 00:00:00.992
Chapter 7.
2
00:00:01.792 --> 00:00:08.335
Start a New Brand The fifth and final cure for Seasonitis is to start a new brand.
3
00:00:09.156 --> 00:00:10.677
We've looked into several strategies.
4
00:00:11.117 --> 00:00:15.519
Cure 1, Lockdown Mode, which involves shutting down and laying off staff.
5
00:00:16.140 --> 00:00:20.002
Cure 2, Boost sales through better advertising and upselling.
6
00:00:20.682 --> 00:00:24.045
Cure 3, providing adjacent services through cross-selling.
7
00:00:24.666 --> 00:00:27.548
Cure 4, establishing recurring maintenance programs.
8
00:00:28.149 --> 00:00:31.932
Let's discuss creating a completely new brand for your business.
9
00:00:32.533 --> 00:00:38.278
This cure helps businesses when the first four cures don't completely fix Q4 collapse.
10
00:00:38.839 --> 00:00:39.940
It's a last resort.
11
00:00:40.540 --> 00:00:44.344
meant for implementation after you've tried the previous approaches.
12
00:00:44.784 --> 00:00:53.834
If you can't reach over 50% of your peak monthly revenue or keep facing losses in off-seasons, then it's time to think about Cure 5.
13
00:00:54.554 --> 00:00:57.277
Let's shift perspective for a moment to manufacturing.
14
00:00:57.938 --> 00:01:01.621
What does a factory do when demand for its products drop a lot?
15
00:01:02.373 --> 00:01:07.294
They could shut down production, turn off the conveyor belt, turn off the lights, and lay off everyone.
16
00:01:07.895 --> 00:01:10.175
That's the same as Cure One, lockdown mode.
17
00:01:11.016 --> 00:01:16.537
The factory could boost sales by advertising and growing its market share for the limited demand.
18
00:01:17.157 --> 00:01:20.458
That is our second solution, Cure Two, sell more and better.
19
00:01:21.119 --> 00:01:26.140
The factory could sell similar products by making small changes to the current conveyor belt.
20
00:01:26.820 --> 00:01:28.961
Cure Three, sell an adjacent service.
21
00:01:29.714 --> 00:01:33.235
The factory might stabilize revenue through recurring contracts.
22
00:01:33.575 --> 00:01:36.975
They could enforce regular shipments on a monthly basis year-round.
23
00:01:37.496 --> 00:01:40.376
This would stabilize production demands and cash flow.
24
00:01:40.976 --> 00:01:42.456
That's the equivalent of CURE 4.
25
00:01:43.257 --> 00:01:46.357
They could finally start a new production line.
26
00:01:46.897 --> 00:01:51.198
This line would feature different products and demand cycles, our CURE 5.
27
00:01:52.098 --> 00:01:55.039
CURE 5 carries high risk and high reward.
28
00:01:55.539 --> 00:01:56.860
The reward potential is high.
29
00:01:57.300 --> 00:02:01.081
You're reaching a different demand curve that isn't part of your core service.
30
00:02:01.681 --> 00:02:04.822
But I want to emphasize that this is a last resort.
31
00:02:05.623 --> 00:02:09.504
Improve your current business using Cures 1 to 4 first.
32
00:02:10.304 --> 00:02:12.325
Then think about creating something new.
33
00:02:13.466 --> 00:02:17.387
Many people jump to using Cure 5 before it is appropriate.
34
00:02:18.427 --> 00:02:22.389
As Alex Ramosi says, focus on more and better before new.
35
00:02:23.852 --> 00:02:29.018
I looked at the climate, demographics, and Q4 performance of each Augusta location.
36
00:02:29.819 --> 00:02:36.206
About 31% may not achieve a complete cure for seasonitis with the first four cures.
37
00:02:36.847 --> 00:02:40.871
That's when Augusta Christmas Lights and AugustaLights.com were born.
38
00:02:41.885 --> 00:02:42.826
Why Christmas lights?
39
00:02:43.706 --> 00:02:45.247
Several factors made it ideal.
40
00:02:45.767 --> 00:02:47.268
It targets the same customers.
41
00:02:47.929 --> 00:02:52.031
People who use lawn services usually don't put up their own holiday lights.
42
00:02:52.692 --> 00:02:55.113
It requires no major equipment purchases.
43
00:02:55.633 --> 00:02:57.214
We use the same trucks and crews.
44
00:02:57.755 --> 00:03:00.076
Adding it to our liability insurance was easy.
45
00:03:00.656 --> 00:03:02.818
We didn't need a separate business entity.
46
00:03:03.538 --> 00:03:07.020
Demand for Christmas lights is zero during our spring rush.
47
00:03:07.541 --> 00:03:11.023
It spikes right after our lawn season ends in October.
48
00:03:12.159 --> 00:03:15.300
Christmas lights installation is also a recurring service.
49
00:03:15.981 --> 00:03:20.102
We can come back each year and the margins get much better after the first year.
50
00:03:20.822 --> 00:03:23.103
This is because we reused the same lights.
51
00:03:23.784 --> 00:03:24.824
The cash flow is great.
52
00:03:25.384 --> 00:03:29.726
We collect payment up front, buy the lights, and then schedule installation.
53
00:03:30.586 --> 00:03:32.547
We won't spend any cash up front.
54
00:03:33.427 --> 00:03:36.749
In later years, we will earn even more profits with the same materials.
55
00:03:37.873 --> 00:03:39.754
What are the advantages of starting a new brand?
56
00:03:40.474 --> 00:03:44.155
First, you can reduce your per-hour overhead recovery costs.
57
00:03:44.895 --> 00:03:50.717
Businesses spread fixed costs like rent, utilities, insurance, and wages across more hours worked.
58
00:03:51.398 --> 00:03:55.399
For instance, if your fixed expenses are $16,000 each month, that's $192,000 a year.
59
00:03:55.419 --> 00:03:59.800
If you have six workers each working 1,500 hours for nine months, you will have a total of 9,000 labor hours.
60
00:04:07.911 --> 00:04:10.293
Dividing $192,000 by 9,000 hours gives you $21.33 per hour in fixed costs.
61
00:04:16.729 --> 00:04:25.931
But if you create a new brand that keeps your crew busy year-round at 2,000 hours each, you now have 12,000 total labor hours.
62
00:04:26.511 --> 00:04:35.353
The same $192,000 in fixed expenses divided by 12,000 hours drops to $16 per hour.
63
00:04:36.033 --> 00:04:39.734
That's an extra $5.33 profit per hour.
64
00:04:40.394 --> 00:04:43.875
You achieve this by spreading fixed cost over more productive hours.
65
00:04:44.855 --> 00:04:48.660
You can also promote your new service to current customers with special offers.
66
00:04:49.460 --> 00:04:52.384
Your established customer base becomes your initial market.
67
00:04:53.085 --> 00:04:56.829
But starting a new brand comes with significant warnings and risks.
68
00:04:57.710 --> 00:04:59.192
It often becomes a distraction.
69
00:05:00.000 --> 00:05:04.163
It's exciting to launch something new, but you soon discover unexpected problems.
70
00:05:04.864 --> 00:05:07.005
Avoid shiny service syndrome.
71
00:05:07.886 --> 00:05:10.848
Don't keep jumping to new services or industries.
72
00:05:11.508 --> 00:05:14.431
The next one may seem better, but it often isn't.
73
00:05:14.931 --> 00:05:17.553
The skeletons in the closet will reveal themselves.
74
00:05:18.253 --> 00:05:20.135
Focus on your core business instead.
75
00:05:20.815 --> 00:05:23.257
Several specific risks deserve mention.
76
00:05:23.917 --> 00:05:25.359
First, customer confusion.
77
00:05:26.197 --> 00:05:28.939
Wait, the person who mows my grass also does painting?
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This confusion can damage your brand's reputation.
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Second, you might dilute your marketing efforts.
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If you have $10,000 for ads, splitting it between two brands means they both get less exposure.
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You won't get the six or more impressions needed for conversion.
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Training employees on new services, uniforms, and procedures adds extra costs and time.
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Look at McDonald's.
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They can hire a 16-year-old with no skills.
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In days, that teen can start earning $120 an hour for the business.
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McDonald's does this through systematization and simple services.
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They're not trying to train employees on 50 different things.
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They do not customize each burger.
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They simplify and standardize the process.
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They simplify and standardize the ingredients.
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They simplify and standardize the training, restaurant layup, and menu design.
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They avoid complexity and customization.
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Adding a new brand is the easiest dollar to earn in a short amount of time.
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Taking your core service and doubling it will be harder, so you'll always make more revenue with a new brand, at least in the beginning.
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Plus, it's fun to create a new LLC, website, and logo.
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Buying a new website domain is the entrepreneur's version of Crack Cocaine.
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We convince ourselves that it is good because of higher revenue.
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We made hundreds of thousands more dollars, so it must be good.
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This is hard to deny or refute.
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But in truth, you might be ignoring your main business.
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With the right focus, you could achieve better results.
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Many people choose Cure 5 due to its excitement.
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But Cures 1 through 4 have a much higher probability of success.
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You're more likely to succeed by improving what you already do.
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Starting something new can distract you, dilute your marketing, and complicate employee training.
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It also brings extra work with trucks, equipment, and logistics.
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Let's assume that after all these cautions, you still need to start a new brand to solve your Q4 collapse.
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Do you need to start a new website to start a new brand?
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Yes.
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If a service page on your current site works, it counts as cure three, adjacent service, instead of cure five.
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Do you need a new legal entity?
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That's a qualified answer.
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In most cases, a DBA, doing business as, or trade name is enough.
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It allows you to run a different brand with minimal legal or financial issues.
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This is what we usually do for Augusta Christmas lights.
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You'll need a separate entity for different liability protection or tax benefits.
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This might also be useful if you plan to grow the second brand bigger than your main service.
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Consult your accountant and attorney to determine the best structure.
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Should you create a new Google business listing?
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Yes, but keep it updated throughout the year.
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You can't let it sit inactive for eight to nine months until your off-season returns.
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Alternatively, you can change your business name on Google to include both services.
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For example, Augusta Lawn Care and Christmas Lights.
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This might trigger re-verification from Google, which can be a hassle.
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But it also means you won't have to manage two separate accounts.
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I recommend using a business name that echoes your current brand.
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This will help with cross-selling.
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We didn't name it Billy Bob Christmas Lights.
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We called it Augusta Christmas Lights, using the same mascot with slight variations.
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This helps customers identify the connection between brands and simplifies cross-selling opportunities.
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Here's a case study from Joel Heck at Augusta Lawn Care in Lafayette, Colorado.
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He said, Augusta Lights were a great addition this year.
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36 installs and $37,000 in revenue.
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November was our best month, with $65,000 in revenue and $24,000 in profit.
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Essentially, it added a 13th month of revenue for the year.
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This was his best month of revenue in his first two years of business.
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Jason Murphy from Augusta Lawn Care in Middletown, Kentucky, reports, Christmas lights transformed my business.
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In three years of doing lights, we went from burning through $100,000 during winter months to adding $100,000 in profits.
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That's a $200,000 swing in just three years.
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Now, five years into lights, Q4 is by far our most profitable quarter.
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Ryan Payne from Augusta Lawn Care in Rockport, Texas shares, We don't do winter services, so year-round mowing and Christmas lights have been our two tracks.
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Christmas lights have added up to $100,000 in revenue in Q4 during our best year and added $18,000 our first year in a tough market.
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He emphasizes that Christmas lights can determine whether you lay off employees or not, whether your family has a good Christmas, or none at all.
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On page 22 of your workbook, list three new brands or services you might start in your company.
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Practice pitching one to someone as if they were an existing customer.
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For example, sell Christmas lights to a customer who already uses your mowing services.
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Practice your pitch.
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This way, you can turn many spring rush customers into off-season revenue.
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Remember, Cure 5 is a last resort.
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Do not jump into starting a new brand.
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Examine Cures 1 to 4 first.
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Only use Cure 5 to treat seasonitis if you cannot solve Q4 collapse without it.
