Mike Interviewed on Landscape Lighting Secrets

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Welcome to the show, Mr. Mike Andes.
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What's up, Mike?
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What's up, Brian?
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How are you doing, brother?
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Thanks for coming on the show, man.
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I'm doing great.
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Thanks for asking.
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Well, I'm excited to have you on, man.
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You've had quite the journey.
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I don't know.
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I found out about you, I guess, a few years ago, and I've been following you ever since.
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And it's been pretty cool to see...
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see what you've done.
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I mean, you know, you've done some things that most people dream of.
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And honestly, most people are never gonna be able to do for maybe a variety of different reasons, but excited to have you on and kind of hear your story.
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And hopefully you can share some good tips with us.
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Awesome, man.
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Thanks for having me on.
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I really appreciate it.
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Now, this will be cool.
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We've got a kind of a mutual love for the green industry and excited to hear about how you.
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So, Mike, by the way, is the founder of Augusta Lawn Care.
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But, Mike, maybe could you just do a quick introduction on yourself and what you're doing now and then maybe how you got started into lawn care?
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Yes, I started mowing grass when I was 11 years old.
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My brother and I started Andy's lawn care back in the day, just pushing our lawn mower around the neighborhood.
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I think a lot of people in the home service industry started really young.
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And I did so because...
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I went to college when I was really young.
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I was 13 years old when I started college.
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And I did that because I thought I was going to become a doctor, a surgeon.
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And so I was like, you know what, I'm going to get this out of the way as fast as possible.
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And so that's how I kind of paid my way through college was mowing grass using Andy's lawn care.
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And then at the end of all that, I was going to go to medical school.
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And I went to Africa for a couple months and volunteered over there in orphanages and hospitals.
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And I was able to do a lot of really cool stuff in terms of like birthing, surgeries, injections.
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We did a lot of stuff with the burn units.
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in the pediatric side.
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So it was really cool.
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But then came back to the US and realized that I was not gonna be able to see as many patients.
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There's a lot more paperwork and bureaucracy, stuff around insurance.
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And more importantly, like, I didn't want to do the same four or five procedures the rest of my career if I was gonna go really deep into surgery.
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And so I decided, you know, drop out, I'm just going to do the only thing I really knew how to do and as mow grass.
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That's when I started Augusta long hair.
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And that was about 11 years ago now.
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That's cool.
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So I think it's funny because like, you know, growing up, I'm not sure how old you are, but I remember thinking like, yeah, you had to go get like a corporate job or be a doctor, an attorney, like if you wanted to be rich, you know, if you wanted to make money.
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And here you are like, yeah, I don't, I don't want to just do the same surgery over and over to make money.
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Like I want to do something that's fulfilling.
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Yeah, yeah.
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And it was just a function of like, honestly, it wasn't like I love mowing grass.
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I had a lot of allergies to lawn care, like grass in general.
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So it was not necessarily anything beyond there's the only way I knew how to make money and I needed to make money.
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So there was nothing really noble or grand about it.
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And I spent the first few years really not knowing what I was doing.
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And not really building the business with systems.
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And for that reason, a few years into the business, ended up getting a workplace accident because I was out on a job site.
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I got sucked up into the PTO of a dump truck.
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And kind of on that rehab cycle and just in the hospital and stuff, realizing that my business didn't have systems, it didn't have procedures, it didn't have systems.
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And it needed that.
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And so coming back is when I started actually making content, just like walking through all the stuff I was changing in the business, creating systems around estimate videos, creating system on compensation and pay performance, and just systematically just kind of sharing everything I was doing in the business.
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And yeah, so that's kind of the evolution of it all.
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That's very cool.
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So you were doing that, like, you didn't have the vision of getting it to where it is now yet?
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Or you were just doing that for your like one one location?
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Just my one location.
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And then I started sharing it because I realized like if I would have had kids or dependents or family at the time, I would have got bankrupt during that accident.
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And so very thankful I didn't and was able to get bounced back from it.
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But
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I know there's a lot of other people in home services that if that sort of thing would have happened and they didn't have systems and procedures, it would have impacted a lot of people negatively.
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So my hope was just to be able to share the content and kind of walk through what I did in the next 12 months.
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We basically went from making really no profit.
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I was working 80, 90 hours a week to like the next year, year and a half.
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I did 280,000 distributions from that same location.
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And so it was the same business, just with systems, simplified services, really nailed down the operating procedures for the business.
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And then shortly after that, a year or two later, that's when we franchised.
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So when did you have that epiphany and vision of like, hey, we have something here that we could franchise or take multi-location?
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I really was, I didn't want to franchise.
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If I could have achieved the goal without franchising, I would have preferred that.
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And so I was sharing the content, talking about paper performance, had created the software around it and everything, made the book available.
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And just really like when you make content, people just kind of look at you as a content creator versus if I'm a franchisee and franchisor relationship, I wear the same brand,
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We have the same uniform.
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When I say something, they know that it's in their best interest because them winning equals me winning, as well as the fact that I consistently saw people didn't really pay attention to the content until I competed with them.
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And it's like in my local market, people were really paying attention and following the systems.
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And so I figured, hey, if we want to actually change the level of professionalism in the landscape industry, which is the goal, then I should just compete with every single landscaper, and they'll be forced to kind of adopt things we talk about.
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answering your phone and having a great website and having compensation plan for your team.
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So that's really the North star, the route to get there most effectively is through franchising.
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That's actually pretty genius.
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I've thought about that, like, cause I don't have an active lighting company right now and I'm like, man, what if I, what if I just opened up a location in all of these low, like, I think people would be like, oh shit.
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Okay.
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We gotta, we gotta get on our toes.
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We'll start implementing what we're hearing.
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Yeah.
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A hundred percent.
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That's awesome.
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So how many, how big is Augusta Lawn Care now?
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About 187 locations now.
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Wow.
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And so, yeah, it's kind of more or less steady growth, you know, 40 locations or so a year.
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We're going to just starting now to think about really scaling it up and just making sure that the back end infrastructure and systems in place can facilitate the thousand location marker.
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Wow.
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Congrats, man.
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That's way cool.
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So 187 on the way to a thousand.
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Yeah, I think we kind of need to get there just to kind of like get the full penetration of the map.
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And so by doing that, again, the goal is to compete with every landscaper, not because I don't want them to lose, just because I want to change the level of professionalism.
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And, you know, if we answer our calls, the customer now expects that.
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And if the customer is going to choose based upon who's doing the most efficient and answering communication, their team is the most professional.
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That's kind of how we, you know, rise in title for all those boats.
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Okay.
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Very cool.
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So on the, on a Augusta lawn care on a average location, what's like the average revenue profit goal for each location?
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Yeah, so I think this year, we have to disclose all this stuff.
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So I think this year it was $519,000.
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And we've got ranging everyone from just starting out to $2 million plus.
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So it's a wide range, but the average thing is like $519,000.
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And our goal is always to get them to $500,000 in revenue as fast as possible and then to switch them into what we call profit mode, which is raise your prices, raise your prices,
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over the next few years as you hit capacity instead of getting more trucks and hiring more people.
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So we really like our sort of like location goal is between 700 800,000 in revenue, six to eight employees during peak season, one general manager that was working out in the field with the crew, and then command center, which is behind me here doing all the admin and back end work doing sales online.
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And so that's kind of like our perfect kind of picture.
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And then our kind of target is 200,000 on that 800,000 revenues, 200,000 profits.
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It's kind of like the Augusta model.
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Sweet.
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No, that's awesome.
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What's the average ticket for a franchise?
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For like their services they provide to the customer?
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Yeah.
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Yeah, so our regular mowing service probably average around $55 per service.
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And then our annual kind of customer value ACV would be right around $2,000 because other ancillary stuff that we add, whether it be Christmas lights or winter services or mulch installation or all those other services.
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Man, that's freaking epic.
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I mean, in the landscape lighting world, in my group, we just did like an informal poll.
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So, you know, don't come after me, everybody.
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In our group, it was like the average ticket was like $13,000.
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And some are, you know, doing $4,000 jobs and some are doing...
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multiple several hundred thousand dollar jobs, but just on average, like I feel like landscape lighting and average jobs like 10 grand.
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And so I'm like, man, you know, an average ticket of $55, you know, and average your ACV was 2000.
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Like we have like the ability to do five times that, you know?
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Um, so when I hear people like saying and coming up with excuses, I'm like, no, these guys are doing it with like low average tickets.
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Uh, there's so much, so much potential out there.
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Yeah, like the big focus for us is recurring revenue, right?
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So like, um, if you go project based, you can build a million dollar business pretty quickly.
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Um, even if you do focus on landscaping and hardscaping.
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Um, but really our goal is that the location we're on without the owner and to do that, having recurring revenue where I know the revenue forecasted throughout this whole year.
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based upon what's already been sold.
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I don't need to be running ads.
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I don't need to be running any sort of new sales.
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I'm simply just taking my current customers, raising prices on them as time goes on.
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That's really the model.
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And so recurring revenue in general is slower upfront ticket, slower growth, lower average ticket, but the long-term enterprise value is much higher.
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And so if you look at any sort of sale or acquisition or mergers,
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um, a roll ups, et cetera, your valuation is just so much higher when you have recurring revenue.
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And so that's really our focus is like generate a recurring revenue business that can run without the owner.
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And if people, uh, you know, have five, 10, 15 locations and roll that up, the valuation will be two or three times higher than if they were to do one time project-based work where there is no guarantee that it's going to be there in six months from now.
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And so that's kind of, that's kind of the ethos.
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Yeah, I like that.
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I appreciate you sharing too, kind of your model of like, let's get people up to 500K in revenue and then we can focus on profit.
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I'm, the show's called Lighting for Profits.
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I'm always talking about profit, but I think people do get confused every once in a while because I'm like, raise your price, raise your price.
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And I believe in that.
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Like if you don't start pricing like who you want to be,
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then you're never going to get there.
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You can't, you know, you can't, if you're just a solo guy today, you can, you can charge whatever you want.
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It's just, you're going to stay stuck there unless you raise your price.
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But some people I think kind of like cut off their own leg and not realize like, no, you just need to go get jobs.
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You just need to get customers.
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You just need to get in front of people.
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You do have to worry about profit enough to stay in business.
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But like I would reinvest a lot of those profits back into growth, into advertising and marketing and, you know,
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And, you know, land the deal with the front neighborhood clients to get the rest of the neighborhood and stuff like that.
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So we align heavily there, like focus on revenue first.
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Once you get to that $500,000, $700K, that's when you need to start focusing on profit.
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Because I see a lot of people at that point trying to scale.
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They hire, you know, two more installers or whatever.
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And then they're like, well, I'm broke.
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I don't have enough money to advertise.
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I'm like, oh, because you didn't focus on profit.
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Yeah, 100%.
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Um, you, uh, so when you did your, your first location, um, I guess, uh, what, what was the biggest bottleneck that you had to solve to get Augusta past that first $1 million in revenue?
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Most of them to get past a million, you really just have to be good at sales.
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And so at that time, Facebook ads was kind of like the arbitrage in terms of advertising.
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But really, as long as you can sell, as long as you know how to get on a customer's property, identify the problem, show the solution, and then get them to a sale, kind of like we were talking about prior to the interview, just about like, you know, just figure out how to sell this thing.
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If you can sell really good, you can build a million dollar business.
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What kind of differentiates a good million dollar business versus a business that is pretty lousy to operate is whether or not you can be a good leader.
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And so I've always said, like, you know, grow up to 500,000 using off the back of you literally just knock on doors and talk to people and sell 500,000 revenue.
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But the business that goes to 500,000 to a million, two million, three million is a leader.
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Someone who can actually attract great talent, have great team meetings, train people correctly, create systems and procedures, and work vicariously through their team and be effective without them having to be on the property every single time.
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And so that's a very different business.
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I've seen businesses that are doing a million or two million and the business owner still runs ragged.
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And I've seen businesses that do $500,000, $600,000 in annual revenue.
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The business owner hardly has to think about it and it prints money, very high profit margins.
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And I'd just rather have the second business.
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And so focusing on leadership is usually the thing that gets you to that million-dollar market and beyond.
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Is that the business owner, like reading a leadership book and becoming a good leader?
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Or is that them recognizing like, I'm not a good leader.
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I'm going to hire one.
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It could be a little bit of both.
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I think if you're a hands-off owner and you're kind of like you're hiring an operations person or a general manager, that could certainly be an option.
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It's like you just go out and hire someone that's really good at it.
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I think that for the vast majority of us, the business is not profitable enough to sustain hiring a high level person that could just like hire, fire, train, recruit, and basically build the business for you.
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Most small businesses can't afford that person.
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And so if you're not going to be able to afford them, you're going to have systems in place in order to make that happen.
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And so a lot of times it's like sales systems and leadership.
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You sell, you get the jobs, prove demand for your product or service, but then create systems in place that you can hand leadership off down the road or that you, it makes it easier to lead when things are simplified, when things are standardized, when you have systems in place,
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And so that can be a great intermediary.
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If you're like, I'm good at sales.
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I got to recruit the business.
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Now I need to move in this leadership thing that I stink at.
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Great.
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Why don't we systematize the business so it's easier to become a leader instead of you juggling a bazillion different weird one-off systems inside the business.
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Yeah, that makes sense.
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I like that.
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So sales, system, then leadership.
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So let's talk about systems.
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I mean, sales, I just already talked about it.
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I'm going to talk about it every day the rest of my life.
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I feel like I love it.
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I feel like it solves a lot of problems to get you to that point where the next problem is systems.
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What's one system that you think every service business should have or maybe build first if they're like, I don't know, where do I start?
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How do I get into these systems that you talk about?
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Yeah, instead of how to create system, I like to think about like, in which conditions do systems exist?
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I think whenever I think about systems, it's like, well, what's the opposite of a good environment where systems thrive?
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And I would say it's complex and custom.
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So anything that's complex, hard to do.
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Custom is different every single time, is the exact opposite of what a system is.
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And what's the opposite of custom and complex is simple and standardized.
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And so if you're like, oh, I want to create a system for my sales process.
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I want to create a system for how I answer the phone.
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I want to create a system, how I answer emails.
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Great.
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Let's make it simple and standardized, which means it's simple, easy.
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And then second is standardized.
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We do the same way, the same way every single time.
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And so I would just encourage people to use that as the framework instead of like, what is a good system?
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Because like, for example, we use the system called estimate videos where
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Once you're at the project, the estimator takes a video of the project.
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Even if they are not talking to the customer, we're going to take a video of the project.
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It's attached to that job.
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And that estimator will never come back to that project to do an orientation of the project, et cetera.
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And this is a direct result of me being out on a job site and getting in that accident.
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It was like I should never have been there because there should have been a video attached to the job to where the crew did not have to ask me what was going on.
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And so that's an example of a system that will prevent you from being out in the field with the crew and preventing a bottleneck from happening.
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And so many times the system is put in place just wherever there's a bottleneck in the business.
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And many times...
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when you're switching from sales and trying to grow the organization, it's like the handoff from sales to operations gets really, really bottlenecked there.
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And so that's where something like estimate videos is the system that allows the estimator to hand things off to operations much easier.
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So I'm looking for bottlenecks, and then I'm looking for how do I simplify it and standardize this process.
246
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Yeah, I love it.
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Well, and I like how it relates to like now all of a sudden you're a better leader because there's less chaos in the company.
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And now people want to stay there longer because they're not like, holy cow, if this guy could ever get his crap together, it might be a decent place to work.
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Yeah, it's easier to be a leader too when jobs are standardized and you're doing the simple same few things over and over.
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Not every single job is different.
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Every single is custom.
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Like in that environment, it's so difficult to get employees, train them and actually have them do a good job that you spend most of your time just trying to be a good operations person and just like trying to get the jobs done right.
253
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And the customer's happy versus stepping back and actually leading and
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Training them think about their future as members of the team and so certainly having systems like has so many downstream effects.
255
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Yeah, love it man.
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That's cool.
257
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All right, put you on the spot a little bit here.
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What's a in terms of leadership.
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What what's maybe a leadership mistake that you've made in the past that others can learn from.
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Um, yeah, like I think.
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I think the biggest thing we can do that's wrong as leaders is being a leader that the business does not need.
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And what I mean by that is like the role of a leader in the business and the role of the owner changes as the business grows.
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So as a solo operator, you're out in the field, you're doing admin, you're doing sales, you're an opportunity, everything.
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Well, as the business grows, you can't do that.
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And you got to stop leading by example and start actually leading through leadership and through systems and through procedures.
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and so i kind of think of it because like you have a solo operator and then you kind of go into a working gm even if you're the owner operator you're kind of working as a working gm you're doing some management you're also kind of in the field with the crew and it looks very different you're leading through example many times and then as you become even larger usually six seven eight nine employees
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Now we're moving into the full time GM, your quote off the truck, your quote out of the field.
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And your full time usually doing sales, you have an admin person.
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So the leadership hat that you have to put on is very different because now you're not, you can't actually just go show your crew how to do the work.
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And then as time goes on, you actually have a leadership team underneath you.
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We call this the GM plus model.
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Now we actually have
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you know, a manager for the office, we have a manager for operations, we have a manager for sales, and then I'm above all of that.
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And now this business looks very much like a 1.5 to $3 million company.
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And the leadership that I have there is very different, because now actually don't even have interaction with my frontline team members.
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Rather, I have to vicariously through my leadership management team make changes happen.
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And so very different leadership is required at different sizes of business.
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And for that reason, many of us get led astray because we listen to people that have a billion dollar business or a hundred million dollar business talk about leadership.
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And to them, they are saying what's correct.
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But that size of business won't reflect over to your $200,000 year business.
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And so I do believe that one of the biggest misconceptions and problem mistakes I've made is trying to apply the wrong leadership advice to the wrong size of business that I'm at.
282
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That's gold.
283
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I love that.
284
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That's well said.
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I know you listen to like the Dan Martells and stuff and it's like, oh yeah, of course.
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But it's like, I don't have time to do that.
287
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How am I going to, I literally have to go do the job.
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I have to be there.
289
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I have to lead by example, you know, like I'm stuck on the truck.
290
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So how do you decide when you're at that phase?
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Cause I think most of our listeners are, they're sub million dollars in revenue.
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Um, they've been, they've been frustrated.
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They're stuck.
294
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They have a couple of people that, uh, help with the installs, but they're still doing most of the sales, things like that.
295
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How do you decide what to delegate and what to like?
296
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It's hard to let go.
297
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You know that, right?
298
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So how do you decide what, what to delegate and what to personally obsess over?
299
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Yeah, like I think first off, if you sell really hard, it basically puts more pressure on all the systems of the business.
300
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And it usually becomes pretty easy to identify where the constraints are.
301
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And so a lot of times when people get ahead of themselves, like I'm going to fix this thing of this or I'm going to like delegate is like, wait, wait, let's just like double the input of leads.
302
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Let's double the amount of sales.
303
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Let's put your backlog so far out.
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All of a sudden, you will find where the problems in the business are.
305
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And then you can identify them pretty quickly.
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It's like,
307
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So caveat number one for the people who overthink because if you're in that camp, you'll hear what I'm about to say and be like, I'm going to delegate everything in my business.
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It's like, whoa, whoa, you do $100,000 in revenue.
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There's no reason for you to start delegating.
310
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And so the second thing I would say though in terms of what to delegate is usually the things that you are not good at or you do not enjoy doing.
311
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uh... to do because if you enjoy doing it you'll do more of it if you're not good at it the more you do it uh... the worst of business and we saw and so i'm usually trying to either fill in a gap in my skill set i'm not good at it or i'm trying to have some of those do a task that i do not enjoy doing
312
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so that I can focus on what I am good at and what I do enjoy doing.
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And usually that's where you have outsized returns.
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And so if I can get someone else to do like 80% of the job that I'm not that great at, or I don't enjoy doing, but then I go focus on something I have like a 10X on everyone else on, in terms of my returns, then like my time should be focused most on that higher leverage task.
315
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And as a good broad rule of thumb for people that are under a million, I kind of like look at each of the business departments as sales, operations, and admin.
316
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So sales, I get the work, operations, I do the work, admin, I kind of grease the gears, payroll, email, phone calls, etc.
317
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And I think as you move from zero to a million, what you want to be doing is focusing more on the higher leverage task of sales and less on operations and nothing on admin.
318
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And so usually the first thing that we delegate as you're growing from zero to a million is your admin.
319
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So phone calls, emails, create systems in place for all that stuff to be handled, invoicing, billing, automations, follow up, et cetera.
320
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As time goes on, you step out of operations is when you get off the truck and then you actually hire someone to do operations management for you as your operations manager.
321
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And they're responsible for that.
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And so you can spend the vast majority of your time on the highest leverage tasks, which is generally sales.
323
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Now, the only way I see this usually flipping in terms of sequence is if the owner is not good at sales, and they love operations.
324
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Again, you love it, you're good at it, great, you stick with it, but then you gotta go find someone to go do sales to be able to scale the business past a million.
325
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And so usually that's the sequence I see most owners following, though, is delegate your admin, then delegate your operations.
326
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As you near that million-dollar-plus marker, then you're going to go delegate sales.
327
00:23:17.965 --> 00:23:18.626
Yeah, well said.
328
00:23:19.486 --> 00:23:20.547
I completely agree with it.
329
00:23:20.607 --> 00:23:32.035
What's kind of crazy is when I got my start in the lighting business, we hired two installers pretty quick because I was like, dude, I do not want to be trenching wire in the Texas heat.
330
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I was in Texas at the time and I was like, this sucks.
331
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And I knew I was good at sales and I wanted to do sales.
332
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So I'm like, okay, we're doing that.
333
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But it took me a couple of years to hire an admin.
334
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Because I made excuses about, well, where are they going to work?
335
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I mean, if I get an admin, then I still, then I have to get a, can't work out a storage unit.
336
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We got to get a warehouse and that's another, you know, $1,500 a month or whatever.
337
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And I just made all these excuses.
338
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I'm like, plus, we're not that busy.
339
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I can just answer the phone here and there.
340
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And I found that almost everyone in the lighting industry is the, they followed my exact same path, even though they're not, they didn't know.
341
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It was just like, that's what we all do.
342
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How important is it to replace that admin?
343
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Um, you only have so many hours in a day is a it's a finite resource.
344
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And so if you're using all of your current hours to their highest output, the only thing to cut is the least valuable thing in your day now.
345
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So you have to actually quantify what's the most valuable and how do we actually quantify this value is usually our replacement.
346
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You know, what's our hourly rate to replace this?
347
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And so to replace an estimator, someone has experience out in the field or can even do operations and install the work is usually a much higher skilled valuable task compared to someone that can answer a phone or send an email or do these other tasks.
348
00:24:46.404 --> 00:24:47.424
Now, can they do it?
349
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Well, maybe not.
350
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You know, maybe I get the best of the best, but I'm okay with 80% so that I can go focus on higher leverage tasks.
351
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Are they going to answer every single thing the way you would?
352
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Are they going to know everything about the wire and the lights over the phone to the customer room and upsell them?
353
00:25:01.976 --> 00:25:02.716
Probably not.
354
00:25:03.277 --> 00:25:04.798
But the focus is that I spend...
355
00:25:05.358 --> 00:25:16.223
Now, let's go 30% of my day goes from admin to now sales and that extra 30% and the discretionary effort that happens when I'm in the shower, etc, is all falling on a much higher leverage tasks.
356
00:25:16.323 --> 00:25:24.686
So that 30% extra time spent on sales doesn't lead to a 30% increase in business, it results in a double or triple in the business, because now I fully focus on it.
357
00:25:25.186 --> 00:25:31.889
And so you got to convince yourself that sometimes to make the jump to actually go allow someone else to do 80% of what you're currently doing.
358
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And
359
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And take the potential hit on yes, the extra cost of habit is a straight overhead position.
360
00:25:37.453 --> 00:25:42.016
So is hiring a general manager and operations manager that doesn't actually produce work out in the field.
361
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And so that's why we have to work backwards from what do we want the business to look like?
362
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What is the end goal of this and then work backwards like if you don't want to work on the field, okay, you're going to have to have an operations manager, you're going to have to have an office manager, okay,
363
00:25:54.886 --> 00:25:55.286
okay, great.
364
00:25:55.466 --> 00:26:01.129
How big of a business do I need to build in order for this to be able to actually sustain these other roles.
365
00:26:01.549 --> 00:26:13.955
And so working, I think the biggest thing we want to focus on is like, how do we work backwards from the goal that we have for the business, and then figure out what roles will we have to build and then building the business to a size that actually sustains those roles.
366
00:26:15.096 --> 00:26:15.697
Yeah, I love it.
367
00:26:15.837 --> 00:26:21.784
Well, I think, you know, we say admin is an overhead, like non-revenue generating position.
368
00:26:22.125 --> 00:26:25.349
But at the same time, I was having a chat with one of my clients the other day.
369
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It's like, well, you're not able to be focused.
370
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Like you can't be a game salesman material focused.
371
00:26:31.957 --> 00:26:41.099
when you just got off the phone with an irate customer, like how are you going to go from like, oh man, like this person hates me and they're going to give us a one star review to like, Hey, we're awesome.
372
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Whatever.
373
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Like you have to separate this role.
374
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So while that position, while it is true that they're, they're, they're going to be an overhead position.
375
00:26:48.481 --> 00:26:54.523
It frees you up to be in your unique, like it allows you to be your number one and be the best at it.
376
00:26:54.583 --> 00:26:54.823
So that,
377
00:26:55.523 --> 00:27:03.336
And that's not going to show up on a P&L, you know, but the fact that you are going to be able to close better, you're going to be able to perform better.
378
00:27:04.197 --> 00:27:05.960
I mean, there's a lot of value in that, you know.
379
00:27:07.262 --> 00:27:07.723
Yeah, for sure.
380
00:27:09.169 --> 00:27:09.890
Um, okay.
381
00:27:09.930 --> 00:27:11.491
So actually I want to do something.
382
00:27:11.511 --> 00:27:14.472
Uh, I've got, I'm starting a new segment today.
383
00:27:14.813 --> 00:27:15.493
So lucky you.
384
00:27:16.093 --> 00:27:17.614
Um, I'm going to, we're going to do this thing.
385
00:27:17.654 --> 00:27:19.135
It's called, uh, it's really fast.
386
00:27:19.155 --> 00:27:20.896
It only takes like 30 seconds.
387
00:27:21.857 --> 00:27:24.218
Um, it's called quick hit controversials.
388
00:27:25.239 --> 00:27:25.639
Are you down?
389
00:27:29.641 --> 00:27:31.382
Quick hit controversials.
390
00:27:31.622 --> 00:27:32.663
It's like a lightning round.
391
00:27:32.683 --> 00:27:34.624
I'm just going to ask you like, what is it?
392
00:27:34.704 --> 00:27:35.665
Six or seven questions.
393
00:27:36.745 --> 00:27:38.006
Um, straight up answers.
394
00:27:38.746 --> 00:27:41.408
If you want to make an explanation, you can, if you don't, then don't.
395
00:27:42.669 --> 00:27:43.189
Um, all right.
396
00:27:43.269 --> 00:27:45.631
So hiring family, smart or stupid.
397
00:27:48.392 --> 00:27:49.513
I'm going to go with smart.
398
00:27:51.854 --> 00:27:52.295
Okay.
399
00:27:53.635 --> 00:27:58.178
Uh, should solo operators even try to scale or should they just stay lean and profitable?
400
00:28:00.259 --> 00:28:01.080
Depends on their goal.
401
00:28:03.180 --> 00:28:06.841
Better to take a low margin big job or high margin small one?
402
00:28:09.782 --> 00:28:10.722
Depends on your goal.
403
00:28:13.423 --> 00:28:14.383
But if you had to choose one?
404
00:28:15.904 --> 00:28:17.444
Probably small and large margin.
405
00:28:18.265 --> 00:28:19.565
All right, cool.
406
00:28:19.645 --> 00:28:22.846
VAs for service businesses, useful or overhyped?
407
00:28:24.406 --> 00:28:29.708
Definitely overhyped, but useful if you have the management in place to track their performance.
408
00:28:31.577 --> 00:28:33.779
Is profit more important than growth?
409
00:28:35.940 --> 00:28:43.225
Really depends on your goal because if you're gonna try to take a company public or do a merger and acquisition with a PE firm, they could care less about your profit.
410
00:28:43.265 --> 00:28:44.446
They just wanna see massive growth.
411
00:28:45.267 --> 00:28:45.567
Nice.
412
00:28:46.628 --> 00:28:49.630
And last one, should you take out a loan to scale faster?
413
00:28:51.578 --> 00:28:57.843
As long as your confidence in the return on that investment is significantly higher than the interest rate, theoretically you should.
414
00:28:58.583 --> 00:29:07.410
But I think as a broad stroke for the vast majority of people, since we know that 80% of people will not make their business successful, I would probably say don't take out debt.
415
00:29:08.531 --> 00:29:08.831
Nice.
416
00:29:08.931 --> 00:29:09.271
All right.
417
00:29:09.491 --> 00:29:10.092
That was awesome.
418
00:29:10.252 --> 00:29:14.095
That was quick hit controversials with Mike Andes, our very first ever.
419
00:29:14.155 --> 00:29:14.535
Thanks, Mike.
420
00:29:15.378 --> 00:29:16.318
Very controversial.
421
00:29:17.078 --> 00:29:18.019
So controversial.
422
00:29:18.619 --> 00:29:22.500
It's probably going to make us get 200,000 subscribers on YouTube.
423
00:29:22.760 --> 00:29:24.661
We'll find out.
424
00:29:25.881 --> 00:29:27.361
Well, now it's good stuff.
425
00:29:27.701 --> 00:29:39.425
I think, you know, on the last one, the loan one, I think, like you said, like on paper, like if the loan's going to cost you 8%, but you can make 20%, then why would you not just leverage the debt?
426
00:29:39.925 --> 00:29:43.246
But the reality is most people suck with money.
427
00:29:45.487 --> 00:30:09.589
risk adjusted returns exactly uh if only it was that easy all right um we'll get back to my uh regular uh kind of outline i want to ask about growth uh you know that's what we're we're always talking about like i mean i'm like yeah you want to make more money so that you can grow so that you can get whatever it is that you want in life you know if you want more freedom or you want to
428
00:30:10.589 --> 00:30:12.409
have a legacy or whatever it is, right?
429
00:30:13.690 --> 00:30:15.690
But people don't necessarily know when to grow.
430
00:30:16.650 --> 00:30:21.391
I've been talking lately about like the, you know, kind of ready, fire, aim movement.
431
00:30:22.751 --> 00:30:24.772
Where's the line between growth and chaos?
432
00:30:25.012 --> 00:30:27.132
Like how, is there too early to grow?
433
00:30:28.872 --> 00:30:34.873
I think, I think growth becomes chaos when you,
434
00:30:40.080 --> 00:30:43.542
are above your max capacity in one of three areas.
435
00:30:44.243 --> 00:30:47.465
The first being your labor capacity.
436
00:30:47.545 --> 00:30:51.487
So if you're overworking your crew, eventually they burn out.
437
00:30:51.947 --> 00:30:55.970
Eventually people revolt, people don't wanna work seven days a week.
438
00:30:56.390 --> 00:30:58.751
They don't want to work 14 hours out in the blazing heat.
439
00:30:59.171 --> 00:31:09.557
I think if you are overcapacitizing your assets, so if your trucks and equipment are being used way too much, you're not able to get maintenance in, they are breaking down, et cetera.
440
00:31:09.777 --> 00:31:12.578
And then I think the last one is your personal capacity, if you're above that.
441
00:31:12.818 --> 00:31:22.963
Now, in the short term, whether it be asset capacity, your personal capacity, or your labor capacity, in the short term, if you extend past them, you will make more money, and you will be rewarded in the short term.
442
00:31:22.983 --> 00:31:24.484
But in the long term, you eventually burn out.
443
00:31:25.104 --> 00:31:36.892
And the biggest reason for for business failure is not because of lack of capital, but actually just burnout personally, especially in a market where you have usually you are supply constrained instead of demand constrained.
444
00:31:37.172 --> 00:31:43.556
We have plenty of people that want the work, but it is a supply of the labor that is actually the difficult part.
445
00:31:44.116 --> 00:31:45.217
And so I think.
446
00:31:46.698 --> 00:31:49.599
It becomes chaotic when you go above your capacity.
447
00:31:49.919 --> 00:31:54.280
And I think the vast majority of us, it's our personal capacity to actually extend past.
448
00:31:54.660 --> 00:32:03.042
You are capable of building a $100,000 per month business, but your business starts to grow so fast that now it's $150,000 per month.
449
00:32:03.302 --> 00:32:08.284
And you do not have the skills to be able to actually run the business efficiently or effectively.
450
00:32:08.864 --> 00:32:09.724
And in that...
451
00:32:10.764 --> 00:32:18.747
that gap between what you are capable of and you have the skills for and what the business is actually doing can be very detrimental and usually cause chaos.
452
00:32:19.467 --> 00:32:24.049
And that's where I see a lot of struggle when people start growing too quickly.
453
00:32:25.370 --> 00:32:26.570
Yeah, that's great.
454
00:32:26.630 --> 00:32:27.390
Great perspective.
455
00:32:27.750 --> 00:32:29.671
Have you ever regretted growing too fast?
456
00:32:31.592 --> 00:32:31.792
Um,
457
00:32:34.047 --> 00:32:42.875
I think I have gone out of sequence on like – I really like having growth spurts and then leveling for a second and creating infrastructure.
458
00:32:43.236 --> 00:32:49.201
So I kind of think it like when you build a high-rise building and you want to do concrete all the way up, you go story by story.
459
00:32:49.221 --> 00:32:49.922
You pour the concrete.
460
00:32:49.942 --> 00:32:50.542
You let it set.
461
00:32:50.582 --> 00:32:51.363
You pour the concrete.
462
00:32:51.383 --> 00:32:51.903
You let it set.
463
00:32:51.924 --> 00:32:52.664
You pour the concrete.
464
00:32:52.684 --> 00:32:53.305
You let it set.
465
00:32:53.705 --> 00:32:57.548
So there's actually points in time where you need forms just to keep the thing together.
466
00:32:57.809 --> 00:32:59.670
Because if you didn't, it would just be a sloppy mess.
467
00:33:00.071 --> 00:33:06.736
And so I kind of like going through periods of growth and I'm pouring the forms, I'm pouring more concrete, but then I will let it set for a second.
468
00:33:07.056 --> 00:33:10.940
And I usually see that as like, usually sales, like increased revenue.
469
00:33:11.520 --> 00:33:12.960
And then I'll go, Hey, I got systems.
470
00:33:13.020 --> 00:33:13.981
I got a higher talent.
471
00:33:14.021 --> 00:33:15.101
I've got to have procedures.
472
00:33:15.381 --> 00:33:16.381
I've got an infrastructure.
473
00:33:16.421 --> 00:33:17.881
I've got to make sure things are done legally.
474
00:33:18.181 --> 00:33:22.322
I've got to, you know, now do accounting, create more processes, create another department.
475
00:33:22.622 --> 00:33:27.383
And so I look at it as kind of like usually as not a linear growth, but more like they're steps.
476
00:33:27.763 --> 00:33:30.884
And I might go through a year, two years where we don't grow a lot of revenue.
477
00:33:30.904 --> 00:33:37.745
But like, I know that systematically we have gone through and made the business more structurally better by adding infrastructure.
478
00:33:38.305 --> 00:33:41.510
And so there's certainly times where I think we have grown too quickly.
479
00:33:42.371 --> 00:33:45.837
The biggest example is Copay at CRM a year and a half ago.
480
00:33:46.257 --> 00:33:50.163
We tripled in like a matter of like 30 to 60 days, the amount of people inside the system.
481
00:33:50.944 --> 00:33:53.308
And I was relatively new to software.
482
00:33:53.888 --> 00:33:58.891
and didn't have the talent pool of the team at the time to really navigate that.
483
00:33:59.151 --> 00:34:04.034
And so in theory, tripling in 30 days, great, yes, this is software, let's go.
484
00:34:04.994 --> 00:34:07.336
All of a sudden you have spammers, you have people hacking the system.
485
00:34:07.876 --> 00:34:08.997
We had a lot of problems.
486
00:34:09.137 --> 00:34:12.098
It led to a lot of bugs, downtime for our members.
487
00:34:12.498 --> 00:34:15.040
And so that was definitely a time because we grew too quickly.
488
00:34:15.340 --> 00:34:18.785
Now, it took me 12 months of level setting.
489
00:34:19.126 --> 00:34:23.973
And like, okay, we are gonna hire people, we are going to completely rebuild the stack and change the code base.
490
00:34:23.993 --> 00:34:30.403
Like, there's periods of time where then once you step back from a period of growth, you say, Okay, let's actually take some time with the set.
491
00:34:30.983 --> 00:34:33.264
And I think that's, I've become more comfortable with that.
492
00:34:34.165 --> 00:34:41.428
Less of a rush is really important to allow things to set and realize like, okay, like we were gonna grow this thing, but like, I don't need to do the next six months.
493
00:34:41.488 --> 00:34:42.789
I don't need to do the next 12 months.
494
00:34:43.129 --> 00:34:52.754
And if it means like, for example, we have not really like promoted joining Augusta outside of just my content vicariously through people seeing my shirt usually for years.
495
00:34:53.034 --> 00:34:55.976
But now it's like, okay, we're at the point now where the infrastructure, we can handle this.
496
00:34:55.996 --> 00:34:58.157
We could double or triple and we could make it work.
497
00:34:58.637 --> 00:35:00.359
And so now we're going to pour gasoline on it.
498
00:35:00.960 --> 00:35:04.584
And, you know, but I think I think so many of us are in a rush.
499
00:35:04.724 --> 00:35:12.413
We pour gasoline on on a spark instead of building the fire pit, instead of building the safety mechanism around it that could potentially take years.
500
00:35:12.753 --> 00:35:18.720
Having the talent pool in place to be able to make sure that when that growth comes, you can absorb it, be profitable in it.
501
00:35:19.120 --> 00:35:20.841
and thrive and serve your customers.
502
00:35:21.341 --> 00:35:28.686
And I think I've become more comfortable with that as time goes on, realizing that like flashes in the pan and growing really fast isn't all that it's made out to be.
503
00:35:29.527 --> 00:35:30.127
Yeah, love it.
504
00:35:31.208 --> 00:35:35.370
In your book, P4P, you just mentioned like labor capacity.
505
00:35:35.971 --> 00:35:37.912
I know you talked about like efficiency ratio.
506
00:35:38.492 --> 00:35:46.017
I think it's funny because when we start our business, like if we're paying someone for 40 hours a week, 60 hours a week, like why would they not produce 40?
507
00:35:46.617 --> 00:35:48.419
40 hours a week, 60 hours a week, we're paying them.
508
00:35:48.940 --> 00:35:53.705
But in reality, I can't remember what number you said, but I was shocked how low you said it was.
509
00:35:53.885 --> 00:36:02.956
What's a good efficiency ratio for someone that's trying to start to measure their capacity and how much they're paying for their guys and trying to job costs and things like that?
510
00:36:04.327 --> 00:36:07.691
Yeah, so like we compare budget hours versus actual hours.
511
00:36:07.731 --> 00:36:11.855
So it's it's it's it that way you can translate across different industries.
512
00:36:12.176 --> 00:36:20.084
Because if you use as a function of revenue, and you have a whole bunch of material involved, usually, you're gonna much lower percentage of your revenue going out the door to the direct labor.
513
00:36:20.985 --> 00:36:30.468
But when it comes to labor itself, I like budget hours, so how long the job should be taking and or how much you're actually charging for divided by clocked hours.
514
00:36:30.888 --> 00:36:34.850
And if you look at that efficiency score, anything above 70, I'm okay with.
515
00:36:34.910 --> 00:36:36.710
Anything under 70, no bueno.
516
00:36:36.910 --> 00:36:38.571
I'm usually not going to see a profitable business.
517
00:36:39.711 --> 00:36:41.673
I'm ideally shooting for 90% or above.
518
00:36:42.994 --> 00:36:47.538
If I have a business that is 90% efficient labor, I have rarely seen them be unprofitable.
519
00:36:47.998 --> 00:36:53.302
And so – but anything above 70 is usually when our crew starts making, like, extra bonuses on paid performance.
520
00:36:54.083 --> 00:36:55.504
The culture is decent.
521
00:36:55.524 --> 00:36:58.467
There's not a ton of training and newbies in the team.
522
00:36:58.487 --> 00:36:58.587
Yeah.
523
00:36:58.947 --> 00:37:01.848
And that basically accounts for drive time, unload and load time.
524
00:37:02.168 --> 00:37:07.151
And that number should be much higher if you're a project based company where you go to the job site and just stop all day long.
525
00:37:07.591 --> 00:37:17.175
When you have a route and you're stopping 10, 20 different visits in a day, that's when that number will creep up higher, or creep up like more waste creeps in the more stops you have in a day.
526
00:37:18.621 --> 00:37:32.387
Well, when people get to this phase of their business, when we always talk about working on your business versus working in it, this is one of those things where you like take a step back, you spend Thursday afternoon to start measuring your numbers and analyzing them and see what they say or whatever it is.
527
00:37:33.627 --> 00:37:42.711
This is when they can realize, wow, I do need to charge more because I had, I thought this was gonna take us a day and it's not a big deal.
528
00:37:42.731 --> 00:37:44.472
We had to go back the next day for two hours.
529
00:37:45.172 --> 00:37:51.375
But the next day, two hours was also drive time there and back and three guys on the truck.
530
00:37:51.755 --> 00:37:53.776
And then they didn't have another job after that.
531
00:37:53.816 --> 00:37:56.177
So they wasted a whole day's overhead.
532
00:37:57.257 --> 00:38:08.442
I mean, can you talk a little bit about how important it is to know your numbers and what are some tips that you have to help, you know, formulate your own pricing strategy and get to know how much it costs to run your business?
533
00:38:09.465 --> 00:38:13.067
Yeah, like you want to be really vicious about it.
534
00:38:14.027 --> 00:38:16.489
Pay your employees based upon your budget hours.
535
00:38:16.989 --> 00:38:27.995
Because now all of a sudden they will be they will not be so thrilled about the two hours you have to go back to a job site, or the extra drive time because you forgot a tool, or you miss mismanaging the hours are not charging enough.
536
00:38:28.475 --> 00:38:38.337
And so the ultimate way to make sure that you charge enough is give a percentage of it to your employees, because they will then keep you accountable for every single job, every single mistake, every single thing in the business.
537
00:38:38.777 --> 00:38:46.038
And so that's like the ultimate form of making sure you have a good pricing system is just give a percentage of it to your team.
538
00:38:46.098 --> 00:38:48.158
And all of a sudden you will get very accurate.
539
00:38:48.839 --> 00:38:51.519
And if you don't, you will have a revolt on your hands.
540
00:38:51.739 --> 00:38:57.280
And you also start to realize that like the team has an extra 30% inside of them simply because
541
00:38:57.780 --> 00:38:59.561
they can be more efficient.
542
00:38:59.601 --> 00:39:02.263
They can remember to get all the tools for the day.
543
00:39:02.664 --> 00:39:12.971
If you forget a couple light bulbs and you're 30 minutes or 40 minutes or an hour away from a job site, that could reduce their efficiency that day by 20 to 30% just because they forgot a couple of light bulbs.
544
00:39:13.552 --> 00:39:18.576
And so the forgetting of the light bulbs comes from you not incentivizing them to actually remember the light bulbs.
545
00:39:18.796 --> 00:39:20.197
You're incentivizing them based upon time.
546
00:39:20.537 --> 00:39:26.682
You're based on them driving in an AC vehicle is much better for them than being out in 100 degree heat.
547
00:39:27.342 --> 00:39:29.343
And so you wonder why there's so much drive time.
548
00:39:29.383 --> 00:39:32.444
People forget stuff and they make mistakes and they would go back to the property.
549
00:39:32.484 --> 00:39:42.607
There's back and forth because you've incentivized them to the longer you work, the more money you make versus getting this job done efficiently, profitably, and to the satisfaction of the customer, you make more money.
550
00:39:43.087 --> 00:39:44.528
And so I always just look for incentives.
551
00:39:44.548 --> 00:39:49.509
Like if the output isn't what I'm wanting, like Charlie Munger says, you show me your incentive, I will show you your outcome.
552
00:39:49.869 --> 00:39:53.831
And so if your outcome is lackluster and not what you want, just look at your incentives.
553
00:39:54.231 --> 00:40:01.053
And so if you don't have a good outcome of profitable jobs, customers aren't happy, lots of inefficiencies, like what's the incentive for the crew?
554
00:40:01.093 --> 00:40:07.516
What's the incentives for the team member to actually make sure that it's profitable, done efficiently, we don't forget stuff, the customer is happy when we leave.
555
00:40:07.976 --> 00:40:11.637
And so I'd really just like look at more deeper than just like pricing and just like,
556
00:40:11.717 --> 00:40:17.020
But like, what are the incentives of your team to make sure we don't miss these jobs and we don't go way over budgeted hours?
557
00:40:17.661 --> 00:40:18.541
Yeah, very cool.
558
00:40:19.022 --> 00:40:20.763
And what percentage?
559
00:40:20.803 --> 00:40:29.448
I mean, how does a company figure out, okay, I'm going to allocate 20% of revenue here toward these to my install crew?
560
00:40:29.468 --> 00:40:30.449
How do they come up with that?
561
00:40:31.111 --> 00:40:31.591
A couple things.
562
00:40:31.631 --> 00:40:34.814
So I have what I call the golden rule.
563
00:40:35.715 --> 00:40:37.756
It is the 25% rule.
564
00:40:37.956 --> 00:40:39.238
It's very, very broad.
565
00:40:39.298 --> 00:40:44.922
So I think in your industry, this would be way too high, but I use it nonetheless in all home services because it has applied.
566
00:40:45.563 --> 00:40:56.711
And across the board, when I look at home services, any industry, if their base pay they pay employees is more than 25% of the rate they charge customers, I almost never see that business make money.
567
00:40:57.732 --> 00:41:05.858
Um, so if you're paying 35, 40%, let's say you're, you're paying your employees 25 bucks an hour and you're charging the customer, uh, $75 an hour.
568
00:41:06.178 --> 00:41:07.299
That's 33%.
569
00:41:07.979 --> 00:41:09.420
I can almost guarantee you will not make money.
570
00:41:09.981 --> 00:41:10.701
You just won't.
571
00:41:11.181 --> 00:41:14.003
Um, and so that's the first like very, very dirty rule.
572
00:41:14.023 --> 00:41:25.011
The reason I say it's dirty because especially like lighting, uh, chemical applications and some of our higher margin services, you spend most of your stuff on things like acquisition and less on direct, direct labor.
573
00:41:25.611 --> 00:41:26.532
And so, um,
574
00:41:27.172 --> 00:41:31.853
But to answer your question more specifically is I would look at last year's direct labor.
575
00:41:31.873 --> 00:41:36.755
That is the revenue or the wages you had to spend on employees that were actually doing the work.
576
00:41:37.275 --> 00:41:40.996
I would take that as a function of the labor revenue they earned last year.
577
00:41:41.356 --> 00:41:44.237
So, for example, let's say you did a million-dollar business.
578
00:41:44.257 --> 00:41:49.418
$200,000 of that was supply markup, material markup, et cetera, fees, et cetera.
579
00:41:49.738 --> 00:41:50.978
But it was $800,000 of labor revenue.
580
00:41:53.119 --> 00:41:57.866
This is $100 now or whatever you're charging the customer, but you made $800,000 in labor revenue.
581
00:41:58.226 --> 00:42:02.452
I'm going to take that and I'm going to say, okay, $800,000 in labor revenue.
582
00:42:04.389 --> 00:42:07.832
I had $200,000 in direct labor expense.
583
00:42:08.312 --> 00:42:11.254
Well, $200,000 divided by $800,000 is 25%.
584
00:42:11.634 --> 00:42:16.037
So I could assume that about 25% of my labor revenue goes to my employees.
585
00:42:16.417 --> 00:42:19.900
And that would be a good benchmark to start pay for performance at.
586
00:42:20.260 --> 00:42:24.363
So when an employee walks in the job site, hey, you're making 25% of this job.
587
00:42:24.703 --> 00:42:28.846
Regardless if it takes you 5 hours, 10 hours, or 20 hours, you're making X amount.
588
00:42:29.326 --> 00:42:30.968
And so that would be a good way to benchmark it.
589
00:42:31.088 --> 00:42:32.970
And I would say, if you're like, man, I'm really struggling.
590
00:42:33.010 --> 00:42:33.931
I'm hardly making any money.
591
00:42:34.171 --> 00:42:34.992
We're struggling the business.
592
00:42:35.232 --> 00:42:35.452
Okay.
593
00:42:35.753 --> 00:42:37.574
Maybe you may make the threshold 20%.
594
00:42:37.594 --> 00:42:39.536
So you make the extra little spread there.
595
00:42:39.877 --> 00:42:41.758
And that's how the business can move forward and be profitable.
596
00:42:42.059 --> 00:42:43.740
And if you're like, well, actually I'm really profitable.
597
00:42:43.981 --> 00:42:46.223
I don't really like, I just want to give back more to my team.
598
00:42:46.583 --> 00:42:46.883
Great.
599
00:42:47.104 --> 00:42:48.465
Then don't change the percentage.
600
00:42:48.585 --> 00:42:49.686
Keep it at 25%.
601
00:42:50.047 --> 00:42:51.208
Give more back to your team.
602
00:42:51.808 --> 00:43:03.872
And, um, now just having a culture of accountability and, uh, with, with, it's a culture that attracts a talent instead of everyone just sliding the lowest common denominator of effort that's put towards the job.
603
00:43:04.772 --> 00:43:05.832
Yeah, that's awesome, man.
604
00:43:06.153 --> 00:43:06.553
I love it.
605
00:43:07.333 --> 00:43:11.374
Um, by the way, guys, if you have not checked out Mike's book, P4P, go get it.
606
00:43:11.394 --> 00:43:14.715
Cause people have been talking about it for like the last couple of years.
607
00:43:14.735 --> 00:43:15.735
I'm like, just go get his book.
608
00:43:16.036 --> 00:43:16.876
He tells you everything.
609
00:43:17.156 --> 00:43:19.537
So it's all in there.
610
00:43:20.037 --> 00:43:20.217
Um, yeah.
611
00:43:21.181 --> 00:43:29.508
When it comes to pricing, how do you build trust with customers when you're trying to charge more than the just average guy with a truck?
612
00:43:34.732 --> 00:43:35.192
You're on mute.
613
00:43:35.272 --> 00:43:36.173
Sorry, my thing went on mute.
614
00:43:36.193 --> 00:43:36.513
My bad.
615
00:43:37.313 --> 00:43:43.416
Yeah, like the bottom line is price can be termed by value.
616
00:43:43.637 --> 00:43:46.678
And that's really how we always want to be pricing is based on value.
617
00:43:47.118 --> 00:43:52.781
And so, you know, transactional always take place as long as value is higher than price.
618
00:43:53.301 --> 00:44:02.506
And so what that means is if I value this this water bottle at $3 and it's on sale for 10, I'm not going to buy it because the value is lower than the price.
619
00:44:03.026 --> 00:44:07.268
Now, if you put me in the middle of the desert, all of a sudden I think it's worth $100 because it's full of water to me.
620
00:44:07.928 --> 00:44:10.089
If it's priced at $10, I'm going to buy it every single day.
621
00:44:10.689 --> 00:44:17.592
And so the thing with that, that ratio is like value being higher than price is that you can always lower price to get the transaction to go through.
622
00:44:18.252 --> 00:44:28.016
And so if we're going to price ourselves based upon the competition, based upon all these other random factors, then we will always lower price versus the harder thing to do is increase value.
623
00:44:28.737 --> 00:44:31.598
So how do I make the how do I make the customer more thirsty?
624
00:44:32.358 --> 00:44:37.084
How do I make the value that they prescribe and ascribe to my service be higher?
625
00:44:37.104 --> 00:44:38.366
Well, I answer the phone on time.
626
00:44:38.666 --> 00:44:39.948
I have professionally wrapped trucks.
627
00:44:40.028 --> 00:44:40.969
I have uniforms.
628
00:44:41.250 --> 00:44:42.471
I have a great looking website.
629
00:44:42.491 --> 00:44:44.434
They can get their pricing immediately from that website.
630
00:44:44.754 --> 00:44:48.980
There's a host of things we can do to improve the value of the experience to the customer.
631
00:44:49.360 --> 00:44:51.721
and thereby be able to charge more on price.
632
00:44:52.081 --> 00:45:02.926
But the slippery slope we all fall into in home services or any entry, low barrier to entry industry is, you can always lower price in order to make the transaction go through.
633
00:45:03.386 --> 00:45:04.367
And that's a slippery slope.
634
00:45:07.559 --> 00:45:08.681
It's the easy way out.
635
00:45:09.722 --> 00:45:10.844
Everyone takes it.
636
00:45:11.024 --> 00:45:11.485
I took it.
637
00:45:13.127 --> 00:45:16.172
Until you learn that there's no money left for your mortgage.
638
00:45:16.713 --> 00:45:22.441
So at some point, you'll learn those things of answer the phone, wrap your truck, uniforms, like everything.
639
00:45:22.501 --> 00:45:23.341
And that's what's crazy.
640
00:45:23.661 --> 00:45:24.242
You mentioned it.
641
00:45:24.262 --> 00:45:28.123
You're like, no, I'm just going to start competing with these people so they'll start answering the phone.
642
00:45:28.423 --> 00:45:29.623
A lot of these things are basic.
643
00:45:29.663 --> 00:45:33.144
It's not like hidden in some super secret book in a super secret vault.
644
00:45:33.624 --> 00:45:41.986
Like if you just do what you say you're going to do and do things that you would want as a customer, it's not hard to differentiate yourself still in this world.
645
00:45:42.006 --> 00:45:43.807
I agree.
646
00:45:44.722 --> 00:45:46.903
What's, I guess, the last question and we can wrap up.
647
00:45:47.003 --> 00:45:54.566
I've got about 400,000 more for you, but I was planning on talking to you about YouTube and Facebook and all that stuff.
648
00:45:54.586 --> 00:45:59.307
So we'll have to have you come back on because I kind of have some other things I want to talk to you about.
649
00:45:59.707 --> 00:46:08.891
But what's a habit or routine that you credit for helping you really outwork, outthink your competition?
650
00:46:10.992 --> 00:46:11.832
Yeah, I think...
651
00:46:15.235 --> 00:46:18.513
if someone's just getting started or I would say like,
652
00:46:20.345 --> 00:46:23.006
The one thing we all have is the ability to work more hours.
653
00:46:23.387 --> 00:46:32.252
And I think that although it is fancy and cool to say work less and get more output, most people do not have the skill.
654
00:46:32.392 --> 00:46:35.694
And I would wrap myself into the same group.
655
00:46:36.014 --> 00:46:38.995
Most people do not have the skill to work less and have a higher output.
656
00:46:39.075 --> 00:46:39.956
They do not have the skill.
657
00:46:40.516 --> 00:46:47.280
And the people that are saying that have usually been in the game so long, have so much experience, and have so much skill that they can leverage less time
658
00:46:47.560 --> 00:46:49.121
Make one or two good decisions a year.
659
00:46:49.341 --> 00:46:55.203
That's like the quote, famous quote from like Bezos, Warren Buffett, like make one or two good picks a year and I'm good.
660
00:46:55.603 --> 00:46:55.823
Right.
661
00:46:56.063 --> 00:47:05.987
After 80 years for Warren Buffett, after 40 years of building Amazon, working his brains out, yes, you can go and rent Venice for a weekend for your wedding.
662
00:47:07.308 --> 00:47:09.271
But that is not the thing that actually gets you there.
663
00:47:09.471 --> 00:47:11.153
Yeah, it's not the thing that gets you there.
664
00:47:11.233 --> 00:47:23.910
And so I think that the thing is the vast majority, 98% of people would be better served simply figuring out prioritization of the hours in their day so they can deploy more time and energy towards the business they have.
665
00:47:24.290 --> 00:47:32.614
Because the number one thing I know is if you just deploy 25% more time to your business, you will have at least, at least a 25% higher output from the business.
666
00:47:33.015 --> 00:47:38.157
What I can't guarantee is whether or not you have good skills and all the rest of it, that's actually going to make wise decisions, etc.
667
00:47:38.177 --> 00:47:40.479
But if you just spend more time, you will have a higher output.
668
00:47:40.859 --> 00:47:46.722
And so I would say the first lowest hanging fruit for the vast majority of us is just more time and energy deployed against your goal.
669
00:47:47.022 --> 00:47:59.712
Like if your goal is to have an XYZ business, the question just becomes, is your goal to have an XYZ business greater than your goal to also have a great weekend, to be a great gamer, to drink on the weekend, to get plastered every evening?
670
00:47:59.912 --> 00:48:08.619
Like these are the goals that you have to determine and prioritize them and your time, your schedule, your calendar determines your priorities far more than whatever comes out of your mouth.
671
00:48:09.119 --> 00:48:13.782
And so I would say the first thing, and then as time goes on, as you gain skills, you do have more leverage with your time.
672
00:48:14.102 --> 00:48:27.849
Then it is less about outworking and working hard and hustling and much more about how do I take a limited supply and resource and extrapolate it much greater so that I can have leverage usually through things like code, content, as well as the people around me.
673
00:48:28.070 --> 00:48:34.153
So that one good decision for my leadership team then trickles down to 50, 100, 1,000 people and I have a great impact.
674
00:48:34.433 --> 00:48:37.676
And so as you grow the business, your time becomes more levered.
675
00:48:38.156 --> 00:48:49.645
And if you build the business in a certain way, in a profitable way, your leverage of an hour spent well, usually, as the business grows, you simply are just reciting the vision of the company.
676
00:48:49.885 --> 00:48:54.228
That's actually the main objective of the CEO and the founder is like, recite, recite, recite.
677
00:48:54.408 --> 00:49:00.293
So then your lieutenants and the captains below you are actually the ones that go out and put foot soldiers on on things.
678
00:49:00.753 --> 00:49:03.276
And so it's a very different mentality as the business grows.
679
00:49:03.296 --> 00:49:09.562
But I think for the vast majority of people, just putting more time towards their goal would actually be the unlock that they're looking for.
680
00:49:10.783 --> 00:49:13.466
Man, that, that is such a great answer.
681
00:49:13.486 --> 00:49:14.487
You're, you're the real deal.
682
00:49:14.567 --> 00:49:16.429
I, I feel like, um,
683
00:49:19.044 --> 00:49:28.108
Most people are not going to really, I hope people like pause and rewind this and then understand that like the average person spends like over two hours a day on social media.
684
00:49:28.128 --> 00:49:30.129
Because a lot of people are like, well, Mike, I can't do that.
685
00:49:30.149 --> 00:49:33.050
I've already, I'm already putting in so much time that there's, there's no more time.
686
00:49:33.550 --> 00:49:37.331
It's like when you do the math 365 days a year times two hours, that's over 720 hours.
687
00:49:37.391 --> 00:49:39.452
That's 10, that's 72 10 hour workdays.
688
00:49:41.931 --> 00:49:43.772
That's 72 10-hour workdays.
689
00:49:43.852 --> 00:49:44.993
We all have more time.
690
00:49:45.633 --> 00:49:47.855
It's just that we decide to not have focus time.
691
00:49:48.395 --> 00:49:57.962
If people get intentional on what they're doing and not just going through the motions and letting their business run them, but if they will just dedicate more time, embrace the suck a little bit more,
692
00:49:58.562 --> 00:50:01.085
than their former self or their competition or whatever else.
693
00:50:01.125 --> 00:50:02.526
I mean, that truly is it.
694
00:50:02.806 --> 00:50:04.528
When I look back at my life, it's the same thing.
695
00:50:04.548 --> 00:50:07.331
I'm like, no, I'm just willing to suffer more than anyone I know.
696
00:50:07.731 --> 00:50:11.415
Like maybe not more than Mike Andes, but I'm willing to suffer a lot.
697
00:50:11.575 --> 00:50:13.577
You know, that's great advice.
698
00:50:14.478 --> 00:50:16.880
And to be clear, I don't think it's a prescription that everyone should
699
00:50:17.287 --> 00:50:18.128
should adhere to.
700
00:50:18.548 --> 00:50:26.677
It's simply a function of if what's coming out of your mouth has a huge gap between that and what your actual reality is, then you should expect to work extreme amounts of time.
701
00:50:27.437 --> 00:50:40.571
And to say, I'm gonna build this massive business and do all these things, but then your calendar speaks otherwise and you spend more time on gaming and hanging out with your friends who have absolutely no goals in life and are not adding to your goals,
702
00:50:40.931 --> 00:50:41.991
then you're lying.
703
00:50:42.291 --> 00:50:55.656
And so I think the thing that the blunt advice I'd give myself 10 years ago is, make sure that your actions and the amount of time you deploy towards this goal is an adherence to what comes out of your mouth.
704
00:50:56.136 --> 00:51:02.698
And so if you just want to build a lifestyle business, as a just being in terms of size, not in terms of success.
705
00:51:03.558 --> 00:51:06.499
If you if you want to build a $200,000 a year business have 70 80% profit margins,
706
00:51:09.700 --> 00:51:14.402
and never have an employee in your life, and that's your definition of success, then you do not need to work a lot of hours.
707
00:51:14.882 --> 00:51:18.263
After a year or two of putting the time, getting sales, like you probably don't need to do that.
708
00:51:18.583 --> 00:51:26.305
But if you're also going to say, I want to build a $10 million business, and you are currently at 200,000, you better be ready to put huge amounts of effort and work.
709
00:51:26.605 --> 00:51:32.267
And either A, take 50 years to build it, or B, try to compress that into five or 10 years,
710
00:51:32.687 --> 00:51:36.009
and put in extraordinary amounts of effort, time, and energy.
711
00:51:36.530 --> 00:51:44.615
And the vast majority of people that got to where you want to be at today are simply the people who do not give up where 99% of people did.
712
00:51:45.235 --> 00:51:49.758
And so if you want to have a 1% outcome, you simply have to endure what 99% of people give up on.
713
00:51:50.198 --> 00:51:57.343
And so if you don't expect it to be 100 times harder and 100 times more difficult than what everyone else is willing to endure, then you're delusional.
714
00:51:57.923 --> 00:52:01.964
And it's not to say anything about the person that has lower goals.
715
00:52:02.224 --> 00:52:09.765
It's simply a function of if your goals are that big, just expect the sacrifice that you must give in order to get that much, much higher.
716
00:52:10.685 --> 00:52:11.345
That's so good.
717
00:52:11.525 --> 00:52:12.065
Love it, Mike.
718
00:52:12.766 --> 00:52:16.266
All right, guys, I highly, highly recommend you check out Mike Andes.
719
00:52:16.286 --> 00:52:17.326
You got YouTube channel.
720
00:52:17.706 --> 00:52:19.067
How do you want people to stay in touch with you?
721
00:52:19.107 --> 00:52:20.567
What's the best way to stay connected?
722
00:52:21.267 --> 00:52:22.027
YouTube is fine.
723
00:52:22.207 --> 00:52:24.908
The website has a bunch of free courses, so they can check those out if they want.
724
00:52:25.608 --> 00:52:27.268
Yeah, go to MikeAndes.com.
725
00:52:27.978 --> 00:52:28.078
Yep.
726
00:52:28.438 --> 00:52:29.359
All right, guys.
727
00:52:29.379 --> 00:52:29.739
Well, thanks.
728
00:52:29.960 --> 00:52:30.660
Thanks so much, Mike.
729
00:52:30.680 --> 00:52:31.281
I really appreciate it.
730
00:52:31.301 --> 00:52:31.981
I know we went long.
731
00:52:32.001 --> 00:52:34.924
Thanks for coming on the show and sharing all your insights.
732
00:52:34.964 --> 00:52:37.026
Congratulations again on what you've done so far.
733
00:52:37.046 --> 00:52:40.789
I know you got big things ahead and you're a high achiever.
734
00:52:40.849 --> 00:52:43.611
So looking forward to seeing what you produce over the next few years as well.
735
00:52:44.532 --> 00:52:44.972
Thanks, Ryan.
736
00:52:45.052 --> 00:52:45.733
I appreciate you having me on.
737
00:52:45.773 --> 00:52:47.274
All right, guys.
738
00:52:47.574 --> 00:52:48.755
Now the hard part, go implement.
739
00:52:49.956 --> 00:52:50.857
Don't just take notes.
740
00:52:50.897 --> 00:52:51.898
Don't just get inspired.
741
00:52:52.478 --> 00:52:53.099
Go dominate.
742
00:52:53.299 --> 00:52:55.741
Take some notes and go implement this stuff, guys.
743
00:52:55.861 --> 00:52:56.522
We'll see you next week.