The $15K Plan to Grow Your Lawn Business (in 3 Years)

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I want to talk first about the fact that when it comes to getting more customers, you're really going to have two different options when you first start your business.
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Either one, you're going to have money and you're going to spend it on advertisements in the form of Facebook, Google, Angie's List, Home Advisor, etc.
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Right?
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So you got either, you know, pay to play where you're going to spend money to go get these advertisements or
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you're gonna have time.
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Now, if you're getting started and you don't have much money to go spend on ads, you're gonna have to spend time.
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So over here, again, pay is gonna be things like Facebook ads and this carousel
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of different ad platforms you can use online is going to always be changing.
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So this will always change as time goes on.
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But right now, you know, Facebook, Google ads, and this can come in the form of YouTube.
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Google has multiple different ways to advertise as well as the local services, etc.
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And then also just obviously their AdWords platform.
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And then you have things like Angie's List, Angie's.
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You got HomeAdvisor.
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So all of these are online platforms to be able to spend money.
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We'll talk more about Angie's List, HomeAdvisor versus these other platforms down the road.
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But the second way that you can do this, if you don't have money to spend on Facebook ads, Google ads, et cetera, is you go spend time.
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And that is literally knocking on doors.
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That is going to be putting out yard signs.
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That's going to be putting up door hangers.
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So a great resource for this one, again, is going to be things like door to door.
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So door to door.
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And again, if you're going to go knock on someone's door, you might as well give them a price on a door hanger.
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So we actually have door hangers on lawncaremedia.com.
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And let me actually show you one right here, where we call them an instant quote.
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And these is where you can go and you have time.
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And while you're walking up to the door, you can literally fill out the price for weekly and biweekly service for mowing, again.
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And then also put any notes that are relevant to the quote.
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and say that the quote is good for seven days, put the date up here.
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So this is a great formula to use if you're doing door hangers.
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Again, it's not taking you any money to do this.
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If you're already going to the door and knocking on the door and they're not home, you might as well put something on there with a price so they don't have to call you for a quote.
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You don't have to come back for an estimate.
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It's already done for you.
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So we call these instant quotes.
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We got them for lawn mowing.
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We got them for mold installation, property cleanup.
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So check out lawncaremedia.com.
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You can get these templates.
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You can customize them yourself.
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And then all the customer has to do is literally take a picture of this and put their name and their address and their phone number, send it back to you, and you have yourself a customer.
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So this is the type of thing you're going to do if you don't have a lot of money to go get these advertisements and drive a ton of traffic.
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Rather, you're going to have to spend time, knock on doors, put door hangers, do yard signs.
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So any of that print media, flyers, postcards, et cetera, you're going to find that all on lawncaremedia.com.
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So check those out.
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But even like postcards, you're going to have to spend it on what we'll talk about later, every door direct mail campaign and setting those out.
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That's expensive.
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So at this phase, if you do not have a lot of money, when I say a lot of money, if you don't have more than $500, you're going to be spending a lot more time than money on getting your first 20, 30 customers because you don't have the money to go spend on all these advertising platforms.
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So you're going to have to buckle your big boy boots on and you're going to have to go knock on doors.
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Knocking on doors and talking to people is still the number one best way to get customers for a low cost.
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Your lowest customer acquisition cost is going to come from knocking on doors.
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on doors.
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Now this is not fun, it's not exciting, but hey, what's your option?
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You don't have the money to go spend it on getting free traffic, i.e.
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less sweat on your brow.
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This is gonna be taking more money, but if you don't have the money, you're just gonna have to do it with sweat equity.
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That's gonna be knocking on the doors, talking to people.
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And when you go do that, when you knock on the door and you talk to someone, you don't have to be super salesy.
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You just introduce yourself, say, hey, my name is Mike.
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I'm getting a long care business start in the local area.
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If you ever need anything, let me know.
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And if they don't answer the phone, or they don't answer the door, you're literally gonna put a door hanger with a price on their front door knob.
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That's a fantastic way to do it.
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And by the way, if they answer the door, and you've already filled this out as you walk up the driveway, you can literally say as you're introducing yourself, oh, and here's a quote, just in case you ever need it.
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You don't have to be super salesy.
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Give it to them.
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If they are interested, they'll close the door, say thank you and goodbye.
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So that's what I would recommend you do.
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If you don't have money, use time.
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That's your first year.
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You're really going to probably have to be leaning on this unless you have a bunch of money stacked away to be able to do advertising.
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Now, the next thing I want to talk about is the fact that your second spring rush is typically when you see a massive amount of growth.
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Typically, that is when it really starts to, you know, hockey stick is in your second spring rush.
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Because a lot of times we'll get started in like our first summer, our first spring.
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We'll get our first 20, 30 customers, and that's all fantastic.
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You know, Augusta Lawn Care, I think our best.
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our biggest first month ever from someone brand new.
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They got like 100 customers in the first month.
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That's not super common, and again, they had money in order to be able to spend on advertising.
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They didn't just have to rely on time.
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That time when you're knocking on doors and things, you're going to have to spend a little longer growing because you can't just immediately get a ton of customers.
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You have to knock one by one by one.
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You have to do yard signs.
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You have to get a little more guerrilla marketing.
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We'll talk more about that later when it comes to the marketing section.
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But in your second spring rush, this is typically what I see in most standard lawn care businesses.
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Your first year kind of goes like this.
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You know, then it's the winter kind of it slows down almost to nothing like, oh, my goodness.
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But then your second spring rush is when it really starts to take off.
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And so this is the second spring rush.
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And the reason for this is cause if you have a good website.
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okay so the reason for that is because usually it takes 6 to 12 months in order for your website to start really ranking well on Google and we'll talk more about your website we'll talk more about getting Google reviews down the road and just how important that is to making sure that this happens because again all this assumes that your website is really done well that you do have a lot of reviews so we'll talk more about that later but assuming that you have a good website assuming that you have Google reviews your second rush
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Your second spring rush is really when you're gonna take your business to the next level and very, very quickly.
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You're gonna see massive amounts of growth.
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Exponential growth will happen right here because this is when demand for your services goes really, really high.
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For most of us this is like April, May, June, that's the spring rush.
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And during that time, the reason you're growing so much is because now when people search for your services because there's demand that's higher, now you start to pop up because your website is starting to rank more.
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Well, so you can check out lawncarewebdesign.com.
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We build websites for you.
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It's completely based on subscription.
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There's no long-term contract.
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There's no $5,000, $10,000 up front that you need to spend on it.
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But that's going to allow you to get a really good-looking website that will drive traffic to you.
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And after 6 to 12 months is usually when you're ranking at the top of your entire city, county, whatever you're targeting your location is.
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And that's why your second spring rush is always when you take off.
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I consistently see this.
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Unfortunately, most people don't get through this lull right here, which is the first winter, when you all of a sudden don't have any work.
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You have 20 or 30 customers, but it goes during three, four months where there's no growing season, there's no mowing.
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You don't have much of a brand.
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You don't have a very good client base to be able to tap into and be able to ask them for more work.
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So this is where a lot of people will quit, and that is their first winter, because there's a lot of a drop-off when it comes to the amount of work coming in.
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But if you have a good website,
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and that website is starting to rank well by the year, you know, end of this year, six, 12, et cetera.
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Going in when demand takes off, which is during the spring rush, as long as demand is high, and you are the most relevant website in your local area, that is typically when I see a massive increase in the revenue and growth for a lawn care business.
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All right, now I wanna talk about the fact that during your first six to 18 months, most of
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your leads are going to be some sort of paid marketing.
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Now that could be online marketing, that could be print marketing, like with postcards, door hangers, knocking doors, all that's marketing.
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Most of your leads are gonna come through that form of marketing in your first six to 18 months.
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And the reason for that is because you haven't been able to get your website to rank really high.
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You don't have any brand awareness.
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You don't have a bunch of trucks driving around.
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So people are not talking about you.
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You're not getting a lot of branding.
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You don't have people knowing about you.
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You don't have a lot of large customer base that talks about you with their coworkers and refers you to their friends and family.
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When that starts to take over, after month six to 18,
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somewhere in here, you should be able to start getting most of your customers from existing customers, word of mouth, and people just finding you on Google because of your website, all right?
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So as long as you're investing into a great website, a great brand doing really good quality work, typically the results really start to take off in that second spring rush.
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So I say that to give you encouragement, because this is a tough year.
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You put a bunch of money at the beginning, you're getting started, you have a lot of boots on the ground, working hard to get every single lead.
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This is very discouraging.
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That winter time, when your revenue dips down for that first time, very, very discouraging.
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But that second spring rush, that if you can just have a great website, get great Google reviews, do good quality work,
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This is where now you have a brand.
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You have maybe 40, 50 customers going into that second spring rush that are talking about you, getting friends and family.
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You might have a couple hundred people in your database that you can send emails to about your services going into this time.
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That's when you can really get a massive amount of momentum.
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Now the thing I want to talk about now is in that second year, this is something you want to track over time.
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And that is what percentage of your revenue is coming from recurring services.
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So what I mean by that is,
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If you take the amount of work that is project-based work versus recurring, you can really break this down really simple.
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I said install versus maintenance in the last one.
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But it's the same as saying recurring work or maintenance, things that happen every week or biweekly go back to the property.
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Recurring versus one-time jobs or projects.
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Now, what I want you to do is really try to focus as much as possible on building this recurring revenue.
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Now, the thing about recurring work, this is mowing typically for us in the lawn care industry, potentially chemical treatments, property cleanups, weeding services, etc.
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One-time projects are going to be like paver installs, wall installations, planting bushes and trees, pressure washing, all these one-time projects.
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My goal is to increase the recurring work, but the thing with recurring is it comes like a trickle.
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For example, I might do door knocking next week and I got five customers.
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And let's say two of them are mowing customers.
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Well, great, I just got two mowing customers and that might generate me $300 in the next month.
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Whereas those three other project-based jobs might create $3,000 worth of cleanups, a mulch install, and some other, you know,
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planting some hedges or some bushes or something like that.
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So one time projects very quickly can ramp up your business and grow it and scale it very quickly.
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Typically the landscaping companies that grow the fastest are the ones that focus on one time projects because you can scale it so much faster just because the numbers are larger.
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But what I want you to focus on is what percentage of your work is coming from recurring revenue.
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And what you can do, how you can determine this is, okay, what percent, how much total dollars of recurring work is coming in every single month?
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Okay, so recurring dollars is what I want you to look at.
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And you can just usually use your CRM to filter out by service, your revenue by service, and then choose the services that are recurring, like mowing or treatments, whatever you consider recurring in your line of business, and then divide that by your total
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revenue for the month.
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Okay?
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And when you do that, you're going to get a percentage.
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And it might be like, say, .46.
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That would be 46% of your work is coming from recurring jobs.
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Now, I want this to be as high as I possibly can get it, but it's going to take a little bit of time to grow up.
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I typically see the first year in business, someone only having a 20 to 30% of their work being recurring but it gets so much easier to grow your top line revenue using projects.
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project-based work.
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Now, this is a trap you can fall into that you keep growing and growing top-line revenue, but all of a sudden, this number starts to shrink.
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And all of a sudden, you mean 10, 15, 20% of your work is recurring.
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Now, if your goal is to do just hardscaping and big projects and things, that's fine.
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But in my opinion, having a recession-proof business, I want this number to be as high as possible.
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Even if I'm doing projects and recurring, or big one-time hardscaping jobs, I still want at least 30, 40% of my work to be recurring, even if I'm not super passionate about it, just to pay the bills, because in a time of recession, recurring work, mowing, those type of services are going to hold up much better than things that are with discretionary income, like a new patio or an arbor, or some new bushes, or whatever it might be.
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So I really want to try to focus on growing this.
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So this is a percentage, a metric, that I want you to constantly follow, and don't get discouraged if your first year it's like 20, 30%.
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That's going to happen simply because it's so much faster to grow top line revenue using projects.
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And again, that is the tantalizing seduction that many landskeepers will fall into is growing that top line revenue by simply adding more and more project-based services.
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Okay, well, we'll do a paver patios.
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Oh, we'll do walls, we'll do water features.
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Oh, we will do tree services.
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oh we'll install artificial turf.
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Like those are all different businesses.
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So just be aware of that trap of growing top line revenue simply by using one time projects and adding more and more services.
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We'll talk more about it later but the two most unprofitable ways to grow your lawn care business is going to be through growing geographical expansion like servicing properties further and further away.
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And then the second
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least profitable way to grow your business is just adding more services.
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So I don't want to keep adding more services and taking more one time projects and different types of excavation.
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Now I'm going to do this and not.
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If you keep doing that, yes, you'll grow top line revenue, but you're not going to grow your profits because those are the least profitable ways to grow your business.
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I'd rather you focus on a couple services and go really deep and really, really scale those.
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Even if it takes a little bit longer, I'd rather you focus on that recurring work and make sure you have that good base of recurring work instead of getting so
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so focused on one time projects and just diversifying into all these different types of services, all right?
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Try not to be a master of all when it comes to landscaping because otherwise you are literally running 10 different businesses.
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I would rather have one service that is $500,000 in revenue than a business that does 10 different services
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at $100,000 each.
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So I'd rather have a $500,000 business with one service than a business that does one million in revenue but 10 different services.
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Because that first one I can systematize, make it way more simplified.
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It's way easier to find labor and I can make it much more profitable.
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Now, that third year in business is usually when you start thinking about salary.
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Okay, and as I mentioned in the first video,
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depending on how fast you wanna grow the business is gonna determine what your salary is in year number three.
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Year three, you can usually start to make a decision, and that is, do I start to continue to grow, and I'm gonna really scale up past a million, or am I going to really focus on profit, saving cash?
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And this is gonna really be determined by your own personal situation, if you have family, if you're trying to invest in other things, if you're passionate about other business ventures, or investing in real estate or something else, or you have family events that happen.
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Just keep in mind that if you're gonna grow, what's going to happen is you're gonna take as small a salary as possible, and you're gonna pump that in to capital expenditures like trucks, equipment, hiring, marketing.
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That's gonna be the formula for growth.
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And that might be what you want to do if you want to continue to grow the business past a million.
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After year three, though, if you're like, man, I don't want to keep growing.
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I want to be a general manager.
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What you want to do is focus on increasing your prices, which is going to increase your profits.
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And you're going to essentially increase your distributions in the form of...
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owner distributions, and we'll talk more about LLCs and S-Corps down the road, but ultimately, an owner distribution is gonna be something that you take from the business, and you're gonna increase that.
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As you increase prices, you're going to reduce your close ratio.
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You're not gonna close eight out of 10 of your jobs and get accepted if you're raising your prices.
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But you don't care because you're not trying to grow the business.
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You don't want to have to go hire more people and buy more trucks and get a bigger shop.
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So these are two different options you're gonna have and the path that you can go down, usually around year number three.
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Now if you go slower, this might be year number five situation or year number eight situation.
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But just know that once you start getting to the point where you have a salary, your salary, how big it is, is really going to determine which way you go.
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Because if you're taking a bunch of profit away from the business, you're not gonna have the money to invest in more trucks and more hiring and a bigger shop and more marketing.
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And so you're gonna have to have a smaller salary if you're trying to do those things.
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So just keep it in mind and realize that if you are growing the business, just realize that you can't just say, oh, I'm unprofitable, therefore I'm investing all the money back in the business.
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No, if you're investing the money back in the business, it means you're buying equipment, you're buying trucks, you're spending money on marketing.
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If you're not doing those things, you shouldn't be very profitable.
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If you're not,
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It probably means you need to raise prices.
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It means you're doing things that are unprofitable in the business.
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You might need to cut out services.
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You need to raise your prices.
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You might not want to have an 80% close ratio.
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You might want to have a 30% close ratio, but have prices way higher.
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We'll talk more about that in the future when it comes to pricing, but ultimately this is the sort of path they're gonna hit.
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sometimes around year three, but really depending on your salary and what you want from the business, this might be more of a year five decision if you've grown the business slower.
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If year number three, you're a million in revenue, this is probably the decision you're talking about.
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But if in year number three, you're doing maybe 300 or 400,000 in revenue or 200,000, you're probably still in growth phase and you're going to be keeping your salary as low as possible, keeping your personal expenses as low as possible, and investing in the capital expenditures like trucks, equipment, and marketing that are going to allow your business to continue
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growing top line revenue.
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So now a good decent truck is probably $12,000 to $15,000 just in and of itself.
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Now to get started, I'd rather you spend on a junker five or six grand if it can just last you one or two years.
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Because I really don't care about anything else than the money that you were able to spend on marketing.
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Okay.
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So regardless of your budget, whether your budget for your business is $5,000 or $5,000
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15,000 or 50,000?
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Regardless of what your budget is to get started, I would recommend that you just simply focus on one thing and one thing alone.
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I don't care about your total budget, I care about how much can you spend on marketing because marketing is what is actually going to move the needle for your business.
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It is actually going to drive results and get more customers.
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You can have all the trucks in the world and I see this all the time.
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People will literally spend $50,000 on
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There are two trucks, a whole bunch of mowers, a trailer, a dump trailer, all this stuff, and literally they have zero customers.
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And they somehow think that getting the equipment and getting the trucks is going to lead to getting customers and creating a business.
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Well, it's the complete opposite.
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You get a business by having customers and you just so happen to have to buy trucks and mowers and trailers in order to perform on the work and fulfill on the sales that have been given.
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So, let me be very, very clear.
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Trucks and equipment is all a means to an end.
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Getting line trimmers and gas cans and safety glasses and gloves and all that other stuff is simply a means to an end.
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And the end is doing work.
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And to do work, you must get customers.
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Getting more trucks and equipment does not move the needle for your business.
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It doesn't.
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You could buy all the trucks and have all the mowers in the world and your business would still generate zero in revenue.
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What creates a business is customers.
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So please, I'm begging you, stop thinking about your budget in terms of what can you buy trucks and equipment.
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Start thinking about what percentage of whatever budget I have can I put towards marketing.
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That's what's going to be the propellant, really the propane, the gasoline, the, what's the word I'm looking at?
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Not propellant, the accelerant to the fire you're trying to build in the form of a business.
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All right?
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So if you're like, I only have $5,000, you might be saying, I have $500.
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That's fine.
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Here's how you can actually start your business with zero dollars.
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And that is by focusing on the thing that actually matters and that's selling and getting more customers.
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So what you can literally do is go to people's house and you can literally sell them on project based work like a property clean up, installing mulch, and require 50% or even 100% of that project up front.
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Mr. Jones, it's going to cost you $700.
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I'm going to trim all those bushes.
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I'm going to haul those leaves off.
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I'm going to pull the weeds in your flower buds.
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I'm going to edge up this lawn.
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And you're literally selling something that you do not have the equipment to actually fulfill on.
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But again, you're putting in sweat equity to go get the customer.
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You're going to get that $700.
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Mr. Jones, fantastic.
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All I need today is a check for $720.
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We'll get this job done next Tuesday.
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That is what you need to be doing.
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And if I say next Tuesday, guess what I'm going to do?
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I'm going to go sell five more of the jobs for Wednesday, Thursday, Friday, next week as well.
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And what you're trying to do here is, number one, you're going to go sell projects.
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All right, so sell projects.
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and you're gonna schedule, whoops, projects, and you're gonna schedule those jobs out in the future.
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Okay, so a week, two weeks, three weeks down the road, that's fine.
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That's gonna give you, the more time you can schedule out, the more you're gonna have time in order to keep selling more projects and get more cash.
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And what you're gonna do, like I said, is gonna collect either 50% or even 100% optimally, all of that project up front, okay?
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The third thing you're gonna do,
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is you're gonna go buy the equipment, okay?
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And somehow, people do this all backwards.
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They go buy a bunch of equipment, then they start thinking about where they can do the marketing.
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Then they think about getting customers.
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Completely backwards.
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If you have a whole bunch of money to burn, yeah, it makes sense to go get the trucks and equipment up front so you can literally sell the job today and get it installed and done tomorrow.
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That's great.
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But if you don't have the money, it's not an excuse.
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I don't care what your budget is up front.
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It's a focus on you've got to sell first.
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Customers are the only thing that create revenue.
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Trucks and equipment do not create revenue.
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They actually cost you money, all right?
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They are an absolute drain on the revenues of your business because they take fuel and you've got to fix them.
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And them sitting there and looking shiny does absolutely nothing for the valuation of your business.
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It is absolutely nothing to generate revenue.
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What does, though, is sales.
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That's the only thing I want you to focus on.
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And what percentage of your total budget at the beginning, I want you to think about how little can I spend on trucks and equipment so I can spend as much as possible on marketing.
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So specifically why lawncarewebdesign.com is not a big front up cost, upfront cost.
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I want you to be able to get a great website when you're just getting started.
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And if you have the ambition to grow really big and do above 200,000 in revenue this year,
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You're a perfect candidate for long-term web design because you don't have to spend $10,000 up front to get your website built.
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Same thing with marketing.
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Whether it be flyers or door hangers or Facebook ads or Google ads, as much as you can possibly spend at the beginning of your business on marketing and getting more customers, that's what I want you to focus on.
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So instead of focusing on marketing,
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the price of the trucks, how to get the best deals in your mowers, and if you should buy used or new.
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I really don't care.
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All I care about is are you spending money on marketing and generating new customers?
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Are you spending your time and your money on marketing?
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The only reason I really like financing my mowers, my dump trailers, et cetera, is because as long as I can get zero percent down, I like it because why?
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It frees up the cash so I can go spend it on marketing.
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You will, I never regret spending a dollar on marketing.
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Alright, never.
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As long as it's done correctly, and I'm getting direct response, and we'll talk more about that later, to drive leads to my business, I've never regretted it.
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Because as long as that marketing is being done right, I'm gonna get a massive return on that money.
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I can't say the same thing about spending $20,000 a truck.
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If I spend $20,000 on a truck and it sits there, it ain't gonna do nothing for my business.
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If I spend $5,000 on marketing, I expect that $5,000 to make me at least 50, 60, $70,000 in revenue this year.
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And if I sell all the recurring work, I can get another 50, 60,000 next year.
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So the return is much greater on that marketing dollars, especially when you're talking about a small business.
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You get all the trucks.
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all the fancy trucks and equipment in the world, it will not bring a single dollar of revenue to your business.
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What will is spending money on marketing.
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And that could be as simple as having the money to print out some flyers and door hangers and things from lawncaremedia.com.
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It could be getting a website from lawncarewebdesign.com or it could be spending money on Facebook ads and Google ads and Google local services and Yelp.
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well, maybe don't spoil any of that, we'll talk more about that in the future.
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HomeAdvisor, Angie's, all the different platforms, I'd much rather you be spending money there than on the next shiny $20,000 truck where if you just spend half that money on marketing, like $10,000 spent on marketing will completely blow your business up
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$10,000 extra on a truck is not going to get you any more customers.
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I'd much rather have a $10,000 truck and spend $10,000 on marketing than I would get a $20,000 truck.
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At the end of the day, when I get my $20,000 truck, guess what?
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It doesn't come with customers.
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Whereas if I just do a halfway decent job at spending $10,000 on marketing, I'm going to get a lot of customers.
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a lot of customers and a lot of brand awareness that's gonna lead to, in perpetuity, customers coming to me.
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So, highly recommend, I don't care what your budget is, ask yourself, how little can I spend on equipment up front to be able to just go start selling?
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And if you have $100 in your pocket, you literally should go get some business cards and maybe some door hangers and go pounding on doors and set up where three weeks later is when you actually do the work so that way you can go buy the equipment based upon the down payments that you collect.
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That's how you should be doing your business.
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Get the customers, get the cash, then go buy the equipment and the trucks.
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Don't get it backwards.
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Buying trucks and equipment does not make you a landscaper.
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It makes you someone who knows how to buy stuff.
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And that is very simple.
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And so it's all showy and everyone thinks you're great.
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And you feel that warm, fuzzy feeling because you got a bunch of nice trucks lined up inside your shop and that does nothing for you.
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And that's why landscapers go broke is because the appearance of success is what they're going for instead of the actual appearance of the bank account statement going up.
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Now, some people will say that the only way to start a business is just go in 100%, jump in the deep end, and don't try to do a part-time job on the side, or keep doing your nine-to-five.
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And I think that's the right move for a lot of young people, or people that don't have a lot of obligations, you don't have a lot of debts, you don't have a mortgage, you don't have a car payment, you don't have a spouse, you don't have kids.
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These are the things that are going to, like some people would say, tie you down, but I don't believe that.
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I think it's a matter of like, you have obligations, you have things that are important that you need to take care of, and you can't just...
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throw every dollar back into the business.
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So I'm a big believer of you can ease into it.
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You can get started part time.
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Now, another alternative to what I just talked about is where you still keep your nine to five job and then you have someone else
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work the lawns throughout the week you can literally get to almost 100 lawns because you could literally have someone out mowing in the field doing 10 15 lawns a day and then you help them in the evening you help them on the weekends and you can get a lot of a lot of work done you
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And you'd really grow the business to, you know, 15,000 a month by just having a full-time employee out in the field working while you do your nine-to-five job and they're out doing the lawns.
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Now, the way that this works is if you have a high-paying nine-to-five job.
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If you're doing $15, $20 an hour working, doing roofing, there's no point in paying $15, $20 an hour for someone else to go mow the lawns for you.
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But if you're making $70 an hour, $80 an hour as a software engineer, it's probably a good investment to go hire someone for $15 or $20 to go do the lawn care.
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Alright, so if you have a high paying job, and a lot of times this is what happens, you hate your job, and you want to have your own business, you want to have your own lawn care company, that's what you're passionate about, but in that first year, that first one or two years, you might actually keep your job and then have someone work for you out in the field at a much lower rate.
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So that's a good option.
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Again, a great way to subsidize and slowly migrate over into business ownership because maybe you can't live on what you're going to make on that long-term business.
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You can't put every dollar back in.
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So what you can do is keep your nine to five, hire somebody out, and then your profit margins are going to be lower because you have someone to hire.
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But then you can take every one of those dollars in profit, shove it back into the business, keep growing it.
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And
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then eventually one day you're like oh my goodness I made more in profit on my lawn care business than I did in my nine to five job that's a good time to switch over to going where you now go full-time and that's a massive catalyst a big shift to growing your business is when you go from part-time business owner to full-time business owner
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Okay?
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So, a couple things you gotta keep in mind though if you're gonna do this route.
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If you're gonna hire someone else while you're out working all day long on your job.
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Now, some people's careers allow you to have the flexibility to be in touch with your crew all day long, but most jobs, if you're in meetings or in appointments, like, you can't, there's gonna be hours of time where you can't actually interact with your employee out in the field.
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And that can be pretty scary, a little bit dangerous too.
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If they have a flat tire, if they make a damage case, if they get into an accident, and now you're not available for a couple hours.
382
00:30:49.439 --> 00:30:53.962
So ideally, you're like, you know, working from home or something like that where you have more flexibility.
383
00:30:54.222 --> 00:30:59.106
But assuming that you don't, you're going to need certain things to make sure that this employee stays efficient.
384
00:30:59.166 --> 00:31:04.870
Because the worst thing that I see is when people do this, they have their own job and they hire out the lawns.
385
00:31:05.450 --> 00:31:07.812
The thing I see the most is inefficiency.
386
00:31:08.072 --> 00:31:13.675
Okay, I see this all the time because now, inefficiency, I'll spell it wrong.
387
00:31:13.796 --> 00:31:14.376
All right, whatever.
388
00:31:15.717 --> 00:31:21.660
What I see all the time happen is someone has their nine to five, but then the person that they hire is so inefficient.
389
00:31:21.680 --> 00:31:27.124
They stop at gas stations, taking 20 smoke breaks, taking a nap because it's unmanaged labor.
390
00:31:27.144 --> 00:31:28.885
All right, and we'll talk more about this later.
391
00:31:29.585 --> 00:31:35.306
But unmanaged labor, which is the largest variable cost in your business, is labor cost.
392
00:31:35.687 --> 00:31:43.689
Especially if you have just one employee, you might make $10,000 a month in revenue on them, but like $4,000, $5,000 is going out the door to wages.
393
00:31:44.169 --> 00:31:46.149
So you've got to make sure they're extremely efficient.
394
00:31:46.809 --> 00:31:51.771
And so what I recommend in order to combat this is use P4P.
395
00:31:52.071 --> 00:31:53.051
We'll talk more about this later.
396
00:31:53.331 --> 00:31:57.412
But especially if you cannot manage the employee throughout the whole day and you have your own job,
397
00:31:57.892 --> 00:32:00.054
you better make sure they're getting paid for performance.
398
00:32:00.254 --> 00:32:03.717
They're getting a percentage of the labor revenue that they make for the business every single day.
399
00:32:04.078 --> 00:32:07.040
You can check more about this at p4psoftware.com.
400
00:32:07.360 --> 00:32:12.124
I own this company, the train's completely free and we're gonna talk more about it later in the course.
401
00:32:12.485 --> 00:32:19.211
But it's extremely important that they're on P4P so that way when you're working and doing your job, you know they're being as efficient as possible.
402
00:32:19.511 --> 00:32:23.574
They're not taking three hours to go get a belt because it broke on the mower.
403
00:32:24.875 --> 00:32:33.823
You need to be, okay, how can I most efficiently drop by the shop, drop by the dealer, go grab the belt, and get back to getting the work done.
404
00:32:34.163 --> 00:32:36.165
So P for P, extremely important.
405
00:32:36.525 --> 00:32:39.067
Now, you can also do things like truck trackers.
406
00:32:39.868 --> 00:32:42.929
I'm less inclined to really care about truck trackers.
407
00:32:43.190 --> 00:32:43.910
Because guess what?
408
00:32:44.350 --> 00:32:49.973
If someone's a bad employee, they can still make, if they know you're tracking their truck, they can still make it look like they're working.
409
00:32:50.193 --> 00:32:55.015
They'll just now be on their phone for five minutes after every single job in the truck.
410
00:32:55.495 --> 00:33:01.241
Alright, so people getting to track truck trackers and recording their employees and audio recording.
411
00:33:01.261 --> 00:33:07.909
Like honestly, if I don't trust them to drive my truck, I'm not going to track them and do audio and video and all the rest of it.
412
00:33:08.209 --> 00:33:15.878
Now I do like having a GPS on the trucks, mostly for the fact that most truck trackers now that you plug into the computer of the vehicle,
413
00:33:16.358 --> 00:33:18.739
You can see a live updated map of where they're at.
414
00:33:18.819 --> 00:33:21.781
So if they do get into trouble, if they get in an accident, you know exactly where they're at.
415
00:33:22.261 --> 00:33:24.803
It also gives you really good mechanical information.
416
00:33:25.183 --> 00:33:30.886
So if you're out working your job, you know, okay, the tire pressure is low, the oil needs changed.
417
00:33:31.166 --> 00:33:36.069
There's a part on the truck that needs to be fixed and replaced because you're not in the truck every single day.
418
00:33:36.449 --> 00:33:38.751
A truck tracker might be actually a really good investment for you.
419
00:33:38.811 --> 00:33:40.952
If you're doing your business, you're doing your work,
420
00:33:41.372 --> 00:33:44.374
and then the business is being ran by somebody else working out in the field.
421
00:33:44.674 --> 00:33:53.819
But this is the one that's going to be the best in terms of making sure that the employee is thinking about the business's best interest throughout the whole day because it aligns their best interest.
422
00:33:53.840 --> 00:33:56.921
They make a percentage of the labor revenue they earn for the business every day.
423
00:33:57.242 --> 00:33:59.923
So being on P4P is extremely important.
424
00:34:00.463 --> 00:34:02.585
Now, I do recommend if you're doing this option...
425
00:34:03.345 --> 00:34:13.227
It's important at least the start of the day, but optimally the start and end of every day, you still make connection with the employee, especially the start.
426
00:34:13.647 --> 00:34:29.291
And I just find so many times when an owner that is working their own nine to five doesn't get the day started, doesn't get their crew started in the morning, it's very difficult for that crew to get their day started off correctly, have the tools and equipment they need for that day.
427
00:34:29.551 --> 00:34:30.611
They just need someone to kind of
428
00:34:31.431 --> 00:34:32.852
check home base with.
429
00:34:32.892 --> 00:34:43.298
Check in with, see what they need for the day, ask any questions that prevent so many damages, so much downtime, so many unhappy customers if they can have someone they can just start the day with.
430
00:34:43.658 --> 00:34:52.983
So my recommendation is if you're doing this kind of split start where you're doing your nine to five and you hire one or two people to do lawns, try to at least get them started in the morning.
431
00:34:53.423 --> 00:34:56.125
Connect with them, go over their route, touch base with them.
432
00:34:56.485 --> 00:35:14.376
Make sure you have great communication if you're doing this with a WhatsApp group, you're communicating with them throughout the day and if you're not able to communicate with them throughout the day you better make sure they're on P4P and you better make sure that they have some sort of accountability to the profitability of the business so that they don't just sit around for two hours because
433
00:35:14.836 --> 00:35:18.897
oh, my tire was flat, so I sat there for four and a half hours until you got off work.
434
00:35:19.177 --> 00:35:27.079
You could have someone that's accountable, someone that's on the ball and really trying to get their job done, and I don't mind if I have to pay them a little extra.
435
00:35:27.339 --> 00:35:38.981
I don't even have to pay them a bonus or a profit sharing to make sure that the work is being done profitable because a great employee can easily do two to three times as much work as a C-level horrible employee.
436
00:35:39.301 --> 00:35:43.282
An employee that you can't trust, an employee that saps the clock, is on their phone all the time.
437
00:35:43.582 --> 00:35:44.222
So trust me.
438
00:35:44.522 --> 00:35:51.166
Having these things is very important if you're going to have that hybrid model where you work a nine to five and you hire someone else out.
439
00:35:51.487 --> 00:35:59.492
Again, I'd only do that if you're making probably more than 40 to $50 per hour at your nine to five, your current salaried position, your job.
440
00:36:00.032 --> 00:36:03.273
Then it makes a lot of sense to go buy it and get someone for $15 or $20 an hour.
441
00:36:03.553 --> 00:36:11.174
If you're making $20, $25, even $30 an hour, it's not worth going hiring someone for a little bit less because you're going to be the most efficient employee.
442
00:36:11.574 --> 00:36:18.116
So even if you're paying someone $20 an hour, if you're making $30 or another job, I'd just start your lawn care business, honestly.
443
00:36:18.336 --> 00:36:23.997
You're going to be way more efficient than any other employee because you have the business ownership and equity in the company.
444
00:36:24.537 --> 00:36:33.343
Keep that in mind, but it's a great option if you wanna grow this business up even to two, three, four employees before you actually become full-time down the road.
445
00:36:36.065 --> 00:36:40.749
All right, so I add a little flavor to that by talking about LLCs versus S-corporations.
446
00:36:41.289 --> 00:36:45.252
So limited liability company versus an S-corp, okay?
447
00:36:45.753 --> 00:36:51.777
Now keep in mind that an S-corp is what's called a pass-through entity, is not the equivalent of a C-corp, okay?
448
00:36:51.997 --> 00:36:52.638
How I've always,
449
00:36:53.318 --> 00:37:00.422
kind of kept the two apart in my mind is C is the first letter of corporation and therefore it is a real corporation.
450
00:37:00.522 --> 00:37:01.943
That's not really the truth.
451
00:37:02.263 --> 00:37:13.189
But when you think about big corporations like corporate America, typically C corps, massive companies that have stock between hundreds of shareholders and they're traded on the stock market, Apple, Google, et cetera.
452
00:37:13.430 --> 00:37:17.292
Those are all C corporations, but an S corporation is specifically built for
453
00:37:17.772 --> 00:37:23.296
companies with less than 100 shareholders, typically smaller businesses that are privately held typically.
454
00:37:23.836 --> 00:37:33.102
And this was going to be a past rentity, which means the income, the profit on this business is what you are going to be taxed on as your nominal income personally.
455
00:37:33.743 --> 00:37:37.588
So don't think that by putting it into an S-corp you're somehow getting taxed at a different rate.
456
00:37:37.748 --> 00:37:38.128
You're not.
457
00:37:38.389 --> 00:37:41.853
That's a C-corporation that you get a corporate tax rate on.
458
00:37:42.454 --> 00:37:51.586
That is not the case with the S-corp. Any income that you get from an S-corp is still going to be taxed at your nominal tax rate that you have personally.
459
00:37:52.073 --> 00:37:57.818
Now, the thing that's different, though, is with an LLC, you're typically, you can take a W-2, like pay yourself as an employee.
460
00:37:58.058 --> 00:37:58.859
Typically, you don't.
461
00:37:59.319 --> 00:38:07.326
But even if you do, it doesn't mean, it doesn't protect you from the fact that you're going to have about 15% self-employment tax.
462
00:38:07.586 --> 00:38:07.866
Okay?
463
00:38:08.347 --> 00:38:12.690
So, any profits that come in the business, you're going to have 15% tax right off the top.
464
00:38:12.830 --> 00:38:14.952
And then, you're going to have your nominal tax rate.
465
00:38:14.972 --> 00:38:15.252
Okay?
466
00:38:15.272 --> 00:38:15.433
Okay?
467
00:38:16.113 --> 00:38:18.456
Now with an S-Corp, it's a little different.
468
00:38:18.917 --> 00:38:27.829
I'm going to have to pay myself a W-2 or I'm going to have to pay myself a salary or some sort of wage as an employee of the business.
469
00:38:28.630 --> 00:38:31.934
So some people are like, well, it's only savings that you get when you go to an S-Corp.
470
00:38:32.495 --> 00:38:46.298
potentially, but the thing is, I also now have to pay myself as a W-2 employee, and a W-2 employee, right off the top, I'm paying into Social Security, I'm paying into Medicaid, all the other stuff, so I'm going to get taxed here like a regular employee, literally.
471
00:38:46.738 --> 00:38:55.220
So, typically, that's why what you pay yourself as a salary underneath an S-corp, you want it to be as low as possible, because paying yourself as a W-2 employee is like...
472
00:38:55.680 --> 00:38:57.482
the highest tax you can possibly pay.
473
00:38:57.982 --> 00:39:07.250
So to this day I have a very low, and most CEOs and owners are gonna have a very low salary because that's what you're gonna get taxed the most at.
474
00:39:07.510 --> 00:39:09.972
So why in the world would I wanna give myself a big salary?
475
00:39:10.352 --> 00:39:15.256
So when an owner that is a massive company is like, I make $100,000 a year.
476
00:39:15.276 --> 00:39:16.577
It's like, yeah, that's your salary.
477
00:39:17.258 --> 00:39:18.059
No one cares.
478
00:39:18.499 --> 00:39:20.721
We all know that you just have to do that for the IRS.
479
00:39:20.921 --> 00:39:22.482
But you have to make yourself an employee
480
00:39:23.443 --> 00:39:25.404
of the corporation under an S-corp.
481
00:39:25.644 --> 00:39:30.226
So you do not have to pay the 15% self-employment tax underneath this S-corp.
482
00:39:30.266 --> 00:39:37.469
However, you are going to, if you file as an S-corp from the beginning, so just hold on to your, hold on for a second.
483
00:39:37.889 --> 00:39:40.870
If you file from the beginning, you're gonna have to do articles of incorporation
484
00:39:42.195 --> 00:40:04.879
which states like what happens if you have a treasurer, you have a secretary, you have a president, all these different parts of the corporation, and you have a board, and again, at the beginning, you might be all those positions, but you still have to create the articles in the corporation, and you also have to have annual minutes with an attorney to go over if anything's changed inside of the corporation.
485
00:40:05.219 --> 00:40:08.600
Now, what's really, really cool is the fact that,
486
00:40:09.280 --> 00:40:18.066
that you're able to now file a form, this is for the US, so this is going to be specifically for the US folks, Form 1120-S, okay?
487
00:40:19.707 --> 00:40:26.712
And this is going to allow you to be an LLC, that you started as an LLC, but be taxed as an S-Corp.
488
00:40:27.132 --> 00:40:31.855
So you get the tax advantage of an S-Corp without having to file all of this stuff up front.
489
00:40:32.535 --> 00:40:57.960
So this is just a recent tax law that I would recommend you do, and that is start as an LLC, and then talk to your accountant, talk to your attorney, and when they think you're ready, any good accountant will know when it's the right time to file a Form 1120S, which is basically an election to be taxed as an S-Corp. And you can literally, what's really cool about this, is you can file for this at the end of a tax year.
490
00:40:58.281 --> 00:40:59.381
So it's the end of 2025,
491
00:41:00.641 --> 00:41:10.247
you know, it's January 2026, I'm filing last year's tax return, I can elect in that year on the form 1120S to be taxed as an S Corp, okay?
492
00:41:10.447 --> 00:41:12.088
Without having to go through all of this stuff.
493
00:41:12.608 --> 00:41:14.229
Now, this does cost money.
494
00:41:14.289 --> 00:41:16.631
Articles and corporations doing minutes, it's costly.
495
00:41:16.931 --> 00:41:26.096
So I actually would recommend you just file as an LLC and then after the first couple years, once you're consistently profitable, typically if you're making about $40,000 to $50,000 a year,
496
00:41:27.537 --> 00:41:34.560
in profits consistently, then it's worth to do the Form 1120S and be taxed like an S-Corp. Why?
497
00:41:35.080 --> 00:41:37.861
Why don't I just do it from day one when I'm a dollar profitable?
498
00:41:38.041 --> 00:41:41.762
Well, the thing is, as an S-Corp, I have to file a separate tax return.
499
00:41:42.062 --> 00:41:46.724
So you're going to be paying $400 to $800 extra just to file the tax return.
500
00:41:47.084 --> 00:41:49.625
So there's definitely extra costs involved with an S-Corp.
501
00:41:49.845 --> 00:41:57.168
It's a little bit more complicated when you file for your annual report with your state, your Secretary of State.
502
00:41:57.668 --> 00:41:59.449
If you're in the U.S., you're going to pay more for this.
503
00:41:59.649 --> 00:42:01.549
You're going to pay more for that tax return to your accountant.
504
00:42:01.970 --> 00:42:10.893
Instead of just having a Schedule C on your LLC, you have to have a completely different tax return underneath this new form or being taxed as an S-Corp.
505
00:42:11.053 --> 00:42:12.856
So that's the kind of difference between the two.
506
00:42:13.176 --> 00:42:19.986
Again, I always, almost always recommend you start as an LLC and then you can always elect to be taxed as an S-Corp if it makes sense financially.
507
00:42:20.447 --> 00:42:26.896
Now another couple of things I wanna talk about because we've talked about insurance, we talked a little bit about licensing and bonding and all that fun jazz.
508
00:42:27.557 --> 00:42:32.678
Now I want to talk about some things that are going to really impact your insurance that people don't take into account.
509
00:42:33.138 --> 00:42:52.183
The first being when it comes to buying new trucks, new equipment, especially if you have debt on it, what people forget is that if you have debt on a piece of equipment, like a piece of a truck or a trailer or something like that, there's a good chance that the person who owns that debt is going to require you to have a certain amount of insurance.
510
00:42:52.463 --> 00:42:56.584
So for example, if I lease, if I lease a brand new truck,
511
00:42:57.324 --> 00:43:09.313
I could literally be spending $250 per month on insurance because they require me to have very high limits and very low deductibles on my auto insurance.
512
00:43:09.653 --> 00:43:13.116
Now if I buy a truck, maybe I have to spend more upfront.
513
00:43:13.496 --> 00:43:17.559
However, now my monthly cost for insurance might literally be $100.
514
00:43:18.580 --> 00:43:24.543
So everyone always takes into account what you pay on the lease itself or on a loan.
515
00:43:24.703 --> 00:43:25.883
Same thing could go for a loan.
516
00:43:26.443 --> 00:43:29.765
Some people always, you know, you can take that into account very easily with that monthly cost.
517
00:43:29.965 --> 00:43:41.730
But what they're forgetting about is the fact there's an extra $150 just in insurance per month, let alone the cost of interest or other expenses that come along with that lease or that loan.
518
00:43:42.890 --> 00:43:50.453
Keep that in mind, when people, a lot of times will forget about when it comes to insurance is, what is the cost of adding a piece of equipment that has a lease or a loan?
519
00:43:51.093 --> 00:43:57.155
Not just in that monthly cost for the actual loan or the lease itself, but the actual insurance cost.
520
00:43:57.816 --> 00:44:02.037
Another thing that's gonna affect your insurance is going to be the type of services that you offer.
521
00:44:02.377 --> 00:44:03.298
And a couple of the big ones,
522
00:44:04.038 --> 00:44:09.662
that I always think of when it comes to insurance is trimming bushes and snow plowing.
523
00:44:10.363 --> 00:44:16.387
Just trimming bushes above 12 feet typically will double or triple your general liability insurance costs.
524
00:44:16.867 --> 00:44:18.929
Also, if you are looking for
525
00:44:21.310 --> 00:44:25.571
to do snow plowing, that might literally double your general liability as well.
526
00:44:25.831 --> 00:44:31.833
Those are typically services that have a high rate of injury and mistakes and very expensive mistakes.
527
00:44:31.853 --> 00:44:41.897
Like if you're snow plowing, you could easily do $50,000 worth of damage by backing into a building or backing into a vehicle, taking a whole bunch of curbs out when you're snow plowing.
528
00:44:42.157 --> 00:44:43.077
Same thing with trees.
529
00:44:43.737 --> 00:44:54.653
It's very possible you're dropping, if you're 15 feet above the ground, very liable to get hurt, very liable to be dropping trees and large branches that potentially hit a car or a house or a person.
530
00:44:55.013 --> 00:44:58.478
So those liability things when it comes to insurance, adding those servant.
531
00:44:58.698 --> 00:45:12.321
you might add 5-10% to your revenue, but it might not be worth it if it actually doubles or triples, literally I've seen tripling of general liability insurance from like 200 bucks a month to like $600 a month just by adding one or two services.
532
00:45:12.581 --> 00:45:28.305
So talk to your insurance agent and make sure that you are getting the right type of insurance for the services you provide, and then start working yourself backwards and realize that you might not actually want to offer all those services based upon the extra cost that it incurs when you add it to your policy.
533
00:45:28.465 --> 00:45:28.735
Thank you.