If I buy lawn care accounts, will I be able to grow my landscape business faster?
Hey, if you’ve been considering buying lawn care accounts, or lawn mowing accounts, I’d like to give you some ideas to help you make the decision and decide if it’s right for you.
One thing to consider at the outset. The vast majority of lawn mowing businesses, or lawn care businesses are not sellable, meaning that they’re not real businesses. They can’t run independent of the owner. What you’re really doing is you’re just acquiring accounts. So, it’s really important to understand when you’re valuing the business, all you’re doing is buying accounts from the owner. You’re not really buying a business.
Yeah, maybe you’re buying some equipment and trucks; that doesn’t make a business. A business is the management team, the processes, the procedures, the marketing systems, it’s all that other stuff. What is happening most of the time, you’re buying accounts and you’re buying assets. Generally I don’t even like to buy assets. I’d rather go buy my own trucks and my own equipment, so you’re really focused on buying accounts.
The way I believe you think about buying accounts is, what can you go acquire an account for on your own? If you’re organically growing your business, meaning you’re growing it yourself, you’re not acquiring outside accounts and bringing them into your business, you’re growing organically from within. What does it cost you to get an account? Does it cost you 100, 150, 200 dollars? What does it cost to get an account through door hangers, post cards, letters, pay per click, SEO which is organic search, referrals, door knocking. What’s that cost? If it’s $150 then the top end that I’d be willing to acquire an account personally is $150. The reason it’s the top end is every day all day long I would rather acquire my own accounts organically than buy accounts.
The reason for it is when I send out marketing and I speak with a prospect on the phone and we sell them, they have chosen us, they have bought into our philosophy, they’ve bought into the way that we work. Whereas, when you acquire accounts, they didn’t choose you, they didn’t buy into you. They may not like the way you operate, they may not like the changes that you’re going to have to make to make them a profitable account. Because, let’s face it, generally if somebody is selling their company it’s because something’s wrong with the business, not because they’re making hundreds and hundreds of thousands of dollars a year.
Those guys that are making huge amounts of money that run awesome businesses and are looking for an exit, they’re generally selling real businesses. But the majority of businesses for sale are not real businesses. They’re being sold because somebody’s burned out, done, tired, and it’s not working. Generally when you acquire accounts there’s something to be fixed, and when you make the changes that need to be made and you change the original agreement you had with the client, they don’t like that and they have reason to shop around. An account you acquire yourself is far more valuable than an account you acquire.
Let me give you another example. Remember my main point here is that I wouldn’t want to pay more for an account than I could acquire that account for on my own. I would discount the value of the account I’m acquiring because of the risk I’m incurring knowing that quite a number of the accounts I’m acquiring will potentially leave because they didn’t choose me.
The other thing to consider is how do you price the account? I gave the example of what does it cost to acquire one. Another example is, let’s say that you decide to pay the total value of the accounts, so one year’s worth of revenue. Let’s say it’s a lawn mowing account. It pays $40 a week. To keep it simple let’s say that account’s worth $1000. If you pay $1000 to acquire that account, one times gross revenue, and that account is worth about 20% net, meaning you take about 20% of what that job pays a year and you put it in your pocket, that would take you 5 years to break even on that account. You’re going to basically mow that account for 5 years just to break even on the price you paid for it before in year 6 you actually start to make a dollar. Now you can make that type of stuff work if you have a great back end, you acquire the account and then you sell them lots of other really profitable services, but that’s not what most people are doing. Generally, you can’t make the math even work to pay one times gross revenue on the accounts.
I tend to prefer to value accounts like what we’re talking about here for 3 times mowing or 5 times mowing, or less if possible. You have to determine what it’s worth to you, and you have to determine at what point in the year you’re buying those accounts. If I’m buying it at the end of the year, they’re worth way less than if I’m buying them at the beginning of the year, because at the end of the year we might go through the off season, there’s a higher probability I’m going to lose those.
Think about those factors as you’re making the decision. My general answer is, it’s not worth acquiring accounts. The reason you do it is when you don’t know how to build your own business through marketing, or when you’re a big company and you’re trying to grow so fast that you can’t generate enough leads and grow fast enough organically, or you have so much attrition that the only way to replenish it and keep your company at the same size and growing is to go out and acquire businesses. That’s not the situation that the majority of us are in. So, those are usually the reasons you acquire accounts in my opinion, and I just don’t generally think it’s worth it. There are opportunities but you have to be super choosy.
How would you like to double your sales? Here is one easy change you can make to your sales strategy that will make all the difference to your clients.
Generally, when I do these videos, I’m answering a question, but in this case I recently had an experience that I’d like to share with you, that I think is one of the most, most important selling lessons and marketing lessons. If you can absorb this, and I’m going to tell the story to you. If you can absorb it, and apply it, and look for these instances in your world, and then apply them to your selling process and your marketing process, it will make you infinitely more successful. Now this is something I already know. This is something that I’ve practiced many, many times. But I’ll admit, it’s also something that I’ve somewhat gotten away from. Or, when I’m trying to maybe sell something or get a marketing piece out quickly, I neglect to do what I’m about to tell you. When you do what I’m about to explain, everything works so much better, and you have so much more success.
I need you to imagine, so I can paint this picture for you, I need you to imagine that you’re buying a home, buying a property. If you’ve ever bought a property, or you’ve ever looked at properties thinking you were going to buy, if you can imagine the experience. More than likely, if you’ve bought something in the last many years, you’ve found it on Realtor.com, or Redfin, or some website. You look at the pictures and you think, this looks good, this has potential. Then you make a judgement the moment you open that front door and you walk through the door. You make a judgement about the property. You get a subconscious, first ten second, initial feel. You walk in and you think, Oh yeah, this is it. Or you walk in and you’re like, Eh, this is okay. I’ll keep looking. Or you walk in and you’re like, this is not it.
You’re going to have one of those three experiences and it happens like that. As soon as you walk in. That’s really important to know because that’s how we make hiring decisions in life, that’s how we buy things in life. Generally, we make our decision in the first few seconds and then we find reasons, and facts, and data to justify that thing that we wanted to do, from a selling standpoint. I won’t even go that direction, but just go with me on that one, just buy into that concept. Now, put yourself in a place, you’re buying a property. My wife and I, and our oldest son…our youngest son doesn’t want to have anything to do with this process…we’ve looked at four properties in the last two weeks. This past Sunday, we looked at three properties.
The very first property we looked at we were like, “This is it, this is it.” Then, the next three properties we looked at, we really liked them. The first one was great. I’ll explain some details here in a moment, but the first one only met our criteria because of balconies. Doesn’t really matter, but there’s a few other things about it that we really liked. But it wasn’t perfect.
The second property, great place, without question. Soon as we walk in the door, the reaction is, “This is a cool place, I like it.” It’s not a reaction of, “Oh, this is it.” So you have to know that balconies are incredibly important. This is a downtown property. Balconies are incredibly important to us. This property has a lot of balconies, but it didn’t have exactly what we were looking for. You could see it the moment you walk in because the whole back of the building is glass. The feeling you have is, this is cool, the decorations of the place, the way they designed it and the interior. Immediately you think, this is cool, but just based on what we want, there wasn’t that reaction of like, “Oh my gosh, this is it.” It was like, “This is cool.” It’s definitely a property that I want to look around just to see what the options are, but it’s not the property. That’s the reaction. It’s really important that you understand, that was the feeling. I had it, my wife had it, we didn’t verbally say it, but that’s what we both were feeling.
We were going to look at the property, make a tour once or twice, and leave. The agent was there before us, and when we walked in it just so happened that the owner was there. We assumed it was the owner, this is insane, because there was a picture in the place of a guy standing in front of a Ferrari 458. It wasn’t a picture, it was a painting and there’s the guy in the kitchen. So we knew the owner was in the property. He didn’t say a word to us, he’s just staying away from us, moving around. But the agent is going to show us the property. Again, stick with me, this is going to be a little bit longer. There’s a really good point. At least it’s a profound point for me. I think it’ll be good for you.
The agent, showing us around, he’s like, “Hey, here’s the living room, here’s the balcony, here’s the view. Come with me. Here’s the master suite, here’s the bathroom area. It’s got this, this and this.” He’s running through the checklist of things that a property of this type would have that are important to somebody that’s buying it. He’s showing us around rather quickly, and it’s as though, in his mind, he’s got a checklist. The kitchen matters, these appliances matter, the balconies matter, different things matter. The master suite matters, the view from the master suite. He’s just like, “Hey, look at the view from the master suite,” check. “Hey, look at this master bathroom. You can walk into the shower. It’s got all this stuff,” check. He’s just moving us through the property.
He continued our feeling of, okay, this is a nice property. Then, I don’t know how it happened exactly. Oh! I asked how many parking spaces the building had. How many parking spaces could I get, because that’s the most important thing to me. It was only two, which is a problem. The owner then stepped in and says, “Well, how many do you need?” I told him how many I needed. He’s like, “Oh, well I don’t know that that’s even possible.” It starts a dialogue. This is the part that’s really important to understand, and the reason I’m telling this story.
The owner, he starts talking about the property. He says, “Well, have you noticed my cabinets?” The cabinets go all the way to the ceiling, and they’re super nice. No doubt about it. He starts talking about the cabinets. He starts talking about the storage in the cabinets. Then he talks about the backsplash. We’re standing in the kitchen at this moment, and he tells us that this was the seventh backsplash. He’s had six prior backsplashes, had them all torn down, and this is the seventh. It’s pretty interesting. It’s very unique. He tells us the story of that and how the contractor’s were frustrated.
Then he shows us in the living room how he has this floor to ceiling, backlit cabinet and built in entertainment system. He then tells some stories around that. Then, he shows us the security system. He travels a lot, and the security system automatically kicks in when somebody shows up at the property, and there’s different codes for the maid service because this is in a hotel. So, there’s different codes for the maid service. If he needs to send somebody up to the property, the security system can do all these things. He tells us stories about when he’s traveling, and the security. These are the things you want to look for in a property. How all the blinds in the place lower and raise based on certain times of day and the amount of light being detected in the property. We’ve always thought we want to be up on the 20 or 30th floor. This is on the 14th floor. He tells us, “Hey, step back here and look with me at the …” Because it’s completely surrounded by buildings, like the skyline. He says, “Notice how every building, you can see the top of every single building in Dallas.” So, what happens is you’re surrounded by building’s at night. It’s one of the best views in Dallas.
He knew of another property that we looked at. He’s like, “Yeah, you can be up on the 28th floor in that building, but what then happens is you’re looking down. You’re not surrounded. You’re looking at the tops of buildings. But in my building, in my space that I carefully picked, that I put down the deposit on when this building was being built in ’07, I specifically picked a building so that it was like a picture frame around me. I could see the top of every building. And I was framed in lights,” and he told the story of that.
He told the story of going from the living room to the master suite, and how this door, that he had to have it custom built. It cost $18,000, so that it would fit around a column, so that the glass wouldn’t be too transparent so that you wouldn’t accidentally walk into it, or a guest, or if you’re having a party, wouldn’t walk into it at night. At the same time, it needed to be perfect glass, so that when it was closed, only a very small little part at the bottom would lock that door, so that no one could enter it.
Then he told a story around, if you have someone over and there’s maybe someone in the bedroom and their not feeling very well, maybe they’re ill and you don’t want your guests going in there, you could lock the door. He went through story after story of the property. I could go on and on. None of that matters, but as he told the stories our feeling on this property totally changed. When we walked in the property we thought, oh, most of the 60 or 70 units in this building, that you can buy, are probably very similar to this. Then after telling the story, we realized that none of the units in the building are like this. This is the only one you can get like this. It took three years to build the interior. You can’t get another property like this. The story of the door, the story of the skyline, it changed my opinion and it was all based on stories. That’s my point. That’s why he gave me so much detail on this.
The first agent had a checklist. He was selling based on what’s most important: master bathroom, kitchen. He was going down that checklist of what is important to a buyer. Then based on the price point of the property, what are the important factors to somebody that’s buying a property of this type, and he covered those. He did an adequate job selling. He covered all the bases, but that’s all he did. He only covered the bases. The other guy, the owner, he told a story. He told a story about things that are mostly insignificant. A door. An $18,000 door separating the living room from the master suite. He turned that into an entire story, probably four minutes, and I remember it. I can recite it to you.
He then, I gave you some of the examples of the stories, the skyline was one of the most, that was one of the biggest revolutions to me because I’ve always wanted to be up as high as I could get and he turned it into a story about entertaining and such. It totally, as I said, transformed the way we looked at the property.
A little later he found out that … Well, back to the parking garage. I asked a question about the parking garage. He’s like, “Oh, oh, oh come down. Come down to the parking garage.” So, we go down to the parking garage. He’s like, “Okay, So, I was one of the very first people to put money down on this condo, so I have first dibs on parking spaces. Here’s the two parking spaces you should’ve had.” They’re right when you come in. They’re super convenient, but he’s like, “But here’s why…” He has multiple Ferraris and some other cars. He’s like, “Here’s why I don’t want my Ferarris parked here, because valets coming in and out, sometimes in a hurry, and they have tons of guests. There’s a lot of entertaining in this building, so lots of cars are coming through, so I moved my parking spaces over here. And notice how they’re protected. Notice how nobody can get to them and so I know that my Ferraris are safe. I know that all my cars are safe.” So he tells a whole story about that.
Think about that when you’re selling something. He didn’t even need to tell me that. He didn’t need to tell me about the other spots that he didn’t take. All he needed to do was tell me about the spots that he did take, but the story about the care that went into it, the thought that went into it; the reason why I want to be there and why his place is the perfect place. When we’re selling tree work, when we’re selling lawn care work, when we’re selling landscape, there’s a story for everything.
No matter what you’re selling, there’s more to it than I can just mow your lawn. I will close your gates and I will do a good job training my people. There’s even more that can be told. When you’re installing a landscape, of all things, you can really tell a story around that. What is the experience going to be that they feel? What are the differences in the environment going to be when they’re entertaining? What experiences will they have when they have family members over? Take it a step further. What is the care that goes into selecting their plants. Hand selecting their plants, and picking them out, and considering factors like what will the plants be like in five years and ten years? These are things that many of us already do, but what are the stories that can be wrapped around this stuff. Where, now you’re painting a picture in a person’s mind. That’s what happened to us.
Now this isn’t the property for us. We’re not going to buy it, but I will tell you that when we walked away, we felt totally different about that property. Maybe on a scale of one to ten, when we first saw it, from a present standpoint, awesome. But from matching some of the criteria that we wanted and being located where we wanted it, it was maybe a five. When we left, it was probably an eight and a half, if not a nine. But because of the location, that would be the only factor that would really kill the deal, is where it’s located. It’s way too noisy when there’s sporting events and things like that. So, it’s not a fit for us, but that was really the deal killer. The presentation, had everything else been right, would have probably sold us on the property.
I hope that I’ve painted a picture. I gave you a lot of detail and I did it so that I could paint a picture and give you some examples of story. How can you craft stories around what you’re selling? How can you craft stories around the experiences of what somebody’s going to feel? How can you craft stories about the effort that goes in to delivering to them what they’re receiving? The effort that goes into selecting the plants, and the trees, and caring for those trees. There are stories for everything. I’ll tell ya, I’ve done it and I’ve had success with it, but it takes more work. It takes more thought. When you’re writing marketing, it takes more effort. It takes longer to create that piece. So, it’s very easy for us to quickly get a piece out. Quickly try to close that sale. When if we just slow down a little bit, and put a little bit more effort into it, might our closing percentages, might our conversion rates, go way up? Stories sell. I’ve heard a saying once, “Facts tell, stories sell.” Very, Very good lesson. I hope it resonated with you.
“Will offering job perks offset low pay and help me retain good employees?”
The question is, “Have you found that offering perks to your employees helps offset the low pay scale common with these labor positions?” No. The answer is definitely no.
My opinion on perks is, perks help frame culture, they help encourage your team because they like you and they like the environment to refer you, and it should help attract more team members to the company. They make it an environment that given equal pay might keep them on your team, or maybe just a little bit higher pay elsewhere. They don’t want to give up that environment, their friends, the culture, and the people.
In the lower pay scale positions, if an individual has an opportunity to go down the street and make several more dollars per hour, they’re going to take it. They haven’t generally satisfied all of their financial needs in life. There’s a number that you reach before incremental money doesn’t have an impact on your life. They’re not living in that world. An additional dollar, two, three dollars an hour, that impacts their family and their children and such.
Giving a perk, or series of perks, that basically are not money in that individual’s pocket, they’re not good enough to keep that individual on the team. I say that the strategy, and I believe this for a while, the strategy is to not be the low priced provider in your marketplace so you can afford to provide to your clients fantastic service. Best in market service. Best in market quality.
The only way you can do that is to hire the best people and pay the best people fairly, and do so in a way that you can keep those people on your team for a very long time so they learn your company, and that they learn the nuances and the culture, the ins and outs, how to serve your clients and take care of your clients. The role of training that you give them, they’ll be able to do all of that. You don’t want to train them and then lose them.
For that reason, I believe you need to price towards the top of the market, not top of the market, but you need to be pricing a little higher in the marketplace so that you can afford to take really good care of your clients and your employees, your team. That’s how you keep them, but offering a series of perks, that’s not enough. The perks accomplish a different goal. They make your company, as I said, the place to be, the place to work, the place to recommend their friends, recommend that their friends come work. That’s the idea behind perks.
If you want to build a profitable landscape business, this is the number one thing to keep an eye on. It will make or break your business.
If I could only watch one number in my business and I had to operate everything else about my business by gut feeling, but I could only have one metric that I could look at constantly to course correct and make sure we’re moving in that right direction, it would be my per man hour rate earned per man per day. You might think about that as job costing.
For every single job, I would want to know, did we achieve our per man hour rate? This does require that you first know how much you need to make per man hour. Your per man hour rate’s going to vary by service. Maybe for lawn mowing, you need to make 45 a man hour. For bed and bush work, you need to make 50 a man hour. For irrigation, you need to make 75 a man hour. I’m not saying those are the numbers, but let’s say that’s the scenario.
You first know what it is. Then for every single job, every day, I want to know, did we achieve 45 a man hour when we were mowing. For ABC Acme Corporation, did I make at least 75 per man hour. For the irrigation work we did, meaning, depending on how many people we had on the property, did each person make at least $75 an hour? If I had three people mowing, did each person make at least $45 per man hour? Then, when I find that I have problems, I can course correct.
The logic behind this being the most important number is that if you get the most basic part of your company correct, meaning the jobs, you’re selling the work at the right price and then you’re executing the work within budget, you’re earning 45 a man hour, or 75 a man hour, whatever that rate is, if you’re getting that right for every job.
When you’re wrong, meaning, you’re not earning it, you go back and raise prices or you quit doing that job. You make adjustments to how you’re selling the work so that you’re selling at the right price, that you’re estimating correctly. If you do that, your company will be profitable.
Generally, now clearly, you can screw it up by buying too much equipment, having too many fixed overhead expenses. There’s clearly ways you can screw it up, but generally, if you get it right at the most basic level, at the job level, you will be successful. You’ll make it. Again, there are exceptions. There are other factors, but that is to me the most important thing.
Now, the way you do this, it’s really simple. For every single job, you track the start and stop time of every job, who is working on the job, and how many people are on the job. You have to do a little bit of number crunching. You have to divide that time by the rate for the job and you have to know how much it paid and you got to take materials out of it. You got to figure out how to labor level. Are we making the target per man hour rate?
This is a reason why I’m a big fan of mobiles because a lot of companies are trying to write in using the good software. A lot of companies try to write this on paper and doesn’t get recorded, they never use it, so they don’t have this data available to them and then they’re flying blind. The companies that are tracking it, measuring it, watching it daily, and using that metric to guide their companies, naturally tend to be the more profitable ones.
If you can only have one number everyday, track your start time and your end time at every job. How long were you on the job site? How many people worked the job? Then do the math to figure out what you made per man hour. Based on what your goals are, or what you need to be making, you’ll know for every job, everyday. Are you hitting your goals? Are you missing your goals? If you’re missing them, make the corrections.
Don’t be discouraged! You CAN start a landscape business with no money. Here is how…
This morning, I was driving into the office and, like I usually do, I was listening to a podcast. This particular podcast was an individual interviewing several guys that were worth hundreds of millions of dollars, that were doing really big and interesting things, and he was asking them about their businesses. I had the thought that these are guys that are extremely successful now, and they have been successful for quite some time, but the reality is if you go all the way back into their career to when they were in their early 20s, they had started another business and along the way they’ve had multiple businesses to finally arrive at the business that’s making them extremely wealthy.
The question that I get all the time is, “How do I raise money to start my business?” I feel like most people that ask that question, and this is a broad generalization, they sit on the sidelines waiting for the money to show up, when, in fact, they should just take some form of action. The reality about raising money to start a lawn care business or an irrigation business or a tree business is that it’s going to be really difficult to get that money. Unless you have equity in your home and you can refinance it or you have some other assets such as a paid-off car that you can finance and get cash or you have credit cards, you’re really left with asking a relative or a friend or a family member for money, or maybe there’s somebody you know that will invest in your business sort of as an angel. That would be a word that they’d use for it.
Outside of that, you’re generally not going to get a bank loan, and the reason for it is because these industries are higher-risk industries. They’re lower-barrier-of-entry businesses. That means a lot of people get into these businesses, they don’t make it, and they fail. There’s a lot of turnover with the smaller business. Now don’t let that scare you. Don’t think in any way that that means that that’s going to be the situation for you, because you’ll learn and you’ll do things other people aren’t going to do and, therefore, you’ll be successful.
The reality of it is it’s much like starting a restaurant. These businesses have high risk to the bank, so the banks don’t tend to like to loan money. You’re really going to have to get your money in one of the ways I described, friends, family, credit cards, taking out a mortgage on your home, things of that sort, or if you can find somebody that’s successful to loan you the money. They’re going to want a pretty big piece of your business for taking the risk along with you, because it’s a lot of risk. You’re giving away quite a bit of your business basically to just get a faster start.
The reason I told you about the podcast is I’d love to have you think about this a different way. Think about your business career as a journey. It’s so easy to read news articles and listen to podcasts and hear the story of the guy that’s in his 20s, and it’s generally a tech story these days. It’s a guy that’s in his 20s that just sold for $30 million or $40 million or $100 million or whatever that number is. The reality is there was a thousand other guys like him trying to do it that you never heard about. There’s a whole bunch of those guys that didn’t raise money to do it; they did it themselves. They cash floated themselves, they grew slower in the beginning, but later, things started to take off. My point here is that you only hear about the big stories, the very few. What it does to all of us is it makes all of us think that, “Man, I need to make it on my first thing. I need to have this first thing go big and go big fast, and I need to cash out and be done.”
The reality is, and the way I’d encourage you to think about this is, your business career is a journey. If you’re trying to find money for your first business now, this is your first business. If you learn the skills to build a company, you learn how to build a team and you learn how to market, you learn how to build a leadership team to help you run the company, you learn how to recruit, you learn how to sell, you learn how to cash float the company, you learn all the legal side of it, you learn all this stuff that, again, might intimidate you because it’s a lot of stuff to learn, but you don’t have to learn it all at once. It just slowly happens over time, and then one day you wake up and you’re like, “Man, I can’t believe I learned all that.”
If you go through that process, then you’ll know how to do your second business and your third business. There’s a next thing in life. We’re going to be around for a while. This is just your first thing. Who cares if it takes a couple extra years in the broad scheme of a 40-year career or maybe longer, because when you own the thing and other people run it for you, why would you retire? Back to my point, who cares if it takes you a couple years longer to build your very first thing, because along the way you learn a lot of lessons. If you could have 50 grand today to start it and you could shave 12 months of time off of growing the business by giving up some ownership and getting 50 grand or 100 grand versus not getting that money and taking a little bit longer to get there, does it really matter over the course of a 40-year period or a 30-year career, over the course of owning multiple companies? Maybe this is just your first thing.
I’m saying it’s going to be very difficult to go get a bank loan. You could find an investor. It’s going to be somewhat challenging, and if you’re going to get an investor, I wouldn’t just get one for money. I would get an investor that has the experience that can show you how to do it. Otherwise, you’re giving up a lot of equity and getting no advice. You’re just getting money. What happens when you raise money is you basically take money and you apply it to bad thinking, because in the beginning, you don’t know what to do, you don’t know the ideal business model, you don’t know who the ideal client is, you don’t know the marketing that works best.
You don’t know all these things, so what you do is you pour money into bad decisions, whereas if you have to first figure it out, you’re forced to be aggressive, you’re forced to scrap, you’re forced to work really hard. You’re forced to figure stuff out, find creative solutions because there isn’t any money, so you get to a place faster where you figured out what to do and what the right things to do are. My argument is that if you do raise money, it should probably be 4 or 5 years out when you’ve figured everything out, because now you can pour good money on top of good strategy instead of good money on top of bad thinking and bad strategy, and that’s what happens generally when you raise money early in the businesses.
Again, I say all that because I want to give you some encouragement that there’s an alternative way of thinking, that raising money probably isn’t even the best strategy anyway. If you can’t get it, don’t be completely beat down and say, “Well, I can’t do it. I’ll have to wait till some day I have money or some day I can raise money.” No, just go out and start doing this thing on the side now. Just get your first mower, get your first truck. Stock it with your initial irrigation parts. Get your first whatever, your pool equipment or whatever it is and just start doing some stuff on the side. Go make that first $1000. Then get that next $5000 in recurring business.
Yep, you didn’t have money, so it took a little longer to get there, but you got there. That’s the path to follow. Don’t be beat down if you can’t raise money, because it is very difficult to do in these types of businesses. Start doing something, and then think about what I was talking about. You’re playing the long game. This is not a figure-it-all-out, cash-out, 5-year kind of thing. This is build the experience so I can build the next thing that’s even bigger and then the next thing that’s even bigger. That’s how you create wealth and that’s how you create confidence, because you have the knowledge to go do whatever it is you want to do later in life and whatever business it is you want to build later in life. Don’t give up if you can’t raise the money. Just find an alternative way to get there.
Jonathan has been upfront about how he feels about residential lawn maintenance contracts. Here is the number one reason he feels they impede your success.
I’ve recorded a number of videos on why I think contracts for residential maintenance are completely unnecessary, and I’m against them. I’m going to record one more video and I’m going to give you one reason. I’m going to condense it down. If you want a bunch of reasons, Google contracts and lawn care, you’ll find some of my YouTube videos and potentially a blog post, or two.
I’m going to give you the one deciding factor. If there were no other reason, and there was only this one reason, this is why I do not believe in, and would not institute residential contracts in my business. You may or may not agree. Many don’t, but here’s the reason. Speed. Your prospect is not sitting around saying, “Man, I wish that my lawn care provider, my pest control provider, my whatever provider would make me sign a contract.”
Remember, I’m focused on residential maintenance. They’re not sitting around saying that. They’re not saying, “You know, I really would like to sign a contract for four thousand dollars, and lock me up for the rest of the year, and if my husband loses his job, or we want to move, or something goes wrong, I don’t like the provider, I would really like to be in a contract when that happens.”
Nobody wants that. That is not the way they want to work with you, and so why not take that completely out of the equation, because when you add it you create resistance, and you slow everything down. Because now you have to measure everything. You have to figure out in advance for the whole year what they might need, and you have to sell all that to them.
Then they have to have a family discussion about whether or not you’re the best provider for four thousand dollars versus another, and if they should sign the contract, is this a good idea? Should we really include that service that they quoted, or take it out? Maybe just do it next year? It complicates everything, slows everything down, and you have opened the door for your competitor, who is potentially, more savvy.
Maybe unfair, but he is thinking a little bit differently, and he’s focused on speed. He has an inordinate opportunity to win the business over you. For example, let’s just break it down. Company A, Company B.
Company A says, “You know what? We don’t require contracts. We might even know how to price over the phone for certain services. You call us, we answer the phone every time you call, Mr. Prospect. Every time the phone rings we answer the phone, and then we find out what you need. We give you a price over the phone. We make you a client right there. We don’t require a contract, nothing, done, solved.”
That prospect is off the market. They’re not price shopping. The rest of the companies that they already called, they called back with prices, probably won’t get return phone calls. They have solved their problem. Mental to-do list item “Get lawn care company” checked off. Out of their mind, done, finished, they’re on to everything else going on in their world, soccer practice, and church, and work, and everything else.
They’re done with that. They’re sold. They’re your client. Company B talks to the same client, hopefully answers the phone, and they have to come out and walk the property, and give an estimate. They need to have a conversation about everything you might want to buy, and then they find a few things at the property that they want to go ahead and propose now that you might need this year so they can get it in the contract.
Then they have to write the contract, and they have to send you the contract. There might be a little back and forth. You know the game. Okay, who wins in that deal? Me, or Company A, who solves all your problems, and solves your to-do list, gets that thing off your to-do list in a twenty minute phone call, fifteen minute phone call, done, finished. Or Company B, that turns this thing into a five-day ordeal? Who wins?
Company A wins almost every time. There might be one exception. If Company A sucks, their quality sucks, their customer service sucks, and Company B is great, okay, now Company B is definitely still in the running, but if we have two similar companies in terms of quality and service, Company A generally wins that game. Now imagine that Company A and B each spend a hundred grand a year on marketing, and for a hundred grand you need a good return on investment.
You need a hundred grand to yield you a lot of new clients that spend a lot of money. Who wins that game? Company A wins that game because they can convert at a much higher percentage, a lot more clients for their marketing spent than Company B. Their company keeps getting bigger, and bigger, and bigger. Company B slowly gets bigger. They have more and more money to spend on better service, better people, better equipment, more marketing, on and on and on, and it just sort of amplifies.
It compounds, and that company just keeps getting bigger, and bigger, and bigger while Company B says, “I don’t understand why this market’s so hard. I don’t understand why I can’t get big. Company A must just be getting lucky.” No, Company A made a really savvy decision to optimize their business around speed and what the client wants, and they don’t require contracts.
Company B didn’t do that, and therefore they grow slower, and they don’t understand why they’re growing slower. Now, are there exceptions? Of course. Are there companies that require residential maintenance contracts that have multi, multi, multi-million dollar companies that make lots of money and do fantastic? Of course, but they are generally really savvy at sales. They’re also really on top of things.
They probably do a fantastic job of renewing. They spend a lot more money to do it, and they have success with it. Most companies won’t spend the money that those guys will spend. Most companies won’t do the follow through that the guys that do maintenance contracts and require them and still win the game. They probably don’t have the same follow through that that company has.
Can you be successful? Absolutely. Of course. I’m just simply saying if you want to find the optimal business model, my argument is it’s the one based on speed. I believe that that business model wins whether you’re in Canada, New York, Texas, Florida, I don’t care where you are, because you’re giving the client a solution that they want, and speed wins every day.
Another example of speed: Company A answers the phone, Company B doesn’t answer the phone. Who wins the business? We all know the company that answers the phone wins because they’re getting to the client, the prospect quicker. Exact same thing with selling the business.
The job is to take that prospect off the market as fast as you can so they can’t price quote you, so they can’t compare you, before they get too busy and forget about it, get too busy and say, “You know what? I’ll deal with it next month.” Your job is to make that happen fast. It’s all about speed. Contracts do nothing to increase speed. They slow everything down. That’s the one reason.
Rain delays for mowing crews can be a challenge for any lawn care company. Here are a couple of ways to stay on top of the game and keep the revenue coming in.
If you’re frustrated with all the rain and rain delays… If you can’t figure out how to route and schedule your mowing crews because of all the rain, you’re in the same boat with the rest of us. Everyone deals with the exact same problem. There’s a lot of different ways you can handle it. I’ll tell you what we do and then I’ll tell you what some other companies do.
We run five days a week. Some companies will run four tens, meaning they work four days a week for ten hours, and they try to stay out of overtime and they use Friday as a catch up day. For us, we have to work in overtime. We pay overtime. There’s no way around it because we can’t find enough people fast enough to grow the company the way we want to grow the company, so we have to absorb the overtime. We work five days a week. Saturday’s a catch up day. Sunday’s a catch up day. For our lawn mowing crews and for our bed and bush crews, they’re the two sides of the company that predominantly have to work the Saturday/Sunday. It’s not that spray techs don’t work Saturday, but they would never really have to work on a Sunday. Whereas, if it rains for three days, Monday, Tuesday, and Wednesday, then that means Thursday and Friday we’re mowing until dark. Saturday we’re mowing late into the day. Sunday we’re going to mow until we’re finished. We have to get the work done. It’s especially true for us.
Some companies are commercial. They’re under a contract and if they get so much rain, then they’ll skip a week of maintenance or they’ll really change up their schedules. They’re going to get the same revenue regardless. For us, we’ve done the math and it’s more profitable for us to be pay-as-you-go and not put our clients under contract. That’s a whole different video on why, but there’s a lot of reasons why we are one hundred percent positive it’s the more profitable route. For that reason, if it were to rain Monday and Tuesday and Wednesday and we don’t mow this week, then we lose that weeks work of mowing, and that’s a big deal. We have to do whatever we have to do to make up the revenue. Also, to keep the properties nice. Then, if we don’t take care of the properties, you know, you’ll pay the price in the second week when it’s really growing fast. Especially during the spring.
There’s no magic. The only solution is to do the work. The only days remaining in the week are Saturday and Sunday in our world, so we have to do the work. When we hire somebody they know the deal. That’s how it works. There’s just nothing you can do about it. When it rains, yeah you get a temporary break the day of the rain, but we’ve all got to suck it up and do the work and get it done. That’s how we all get paid. That’s what we do. Again, there’s no magic. Some companies are trying to avoid the idea of working on weekends or they would never work a Sunday, and in a perfect world that would be the case, but we’re outdoor service companies and we don’t have a choice.
Now, if your fertilization and weed control or pest control irrigation … outside of an irrigation emergency … you’re not going to lose the revenue by delaying the job. If you have a whole round … let’s say you have several thousand applications that need to happen within a round, like round three, yeah you might not finish on the day that you thought you’d finish all of those applications. For example, you thought you’d have all the applications for round two done in beginning of March. Maybe it takes you a few extra days into March than you’d expected because of so much weather pushing back some of the applications, but you can still capture all that revenue. That’s a little less of a concern. Just to be clear, for us, we’re not going to work on Sundays for that type of work. It’s not necessary. It is necessary for the revenue that if you don’t perform the work you’ll never recapture that revenue. Meaning that if you miss a mowing this week, you can’t make it up. It’s impossible. That’s how we handle it. No magic.
Now, how do some other companies do it? Some work the four tens, meaning they’ll work Monday through Thursday and that gives them a Friday and possibly a Saturday to fall over to. Some will bring their crews in and do maintenance, training. Some in light rain will still do some mowing. We do too. You can do some light mowing in rain, as you know. I’m not telling you anything you don’t know. From our standpoint, it’s a big marketing watch-out that if you’re mowing when it’s too wet there’s a perception problem. If the work doesn’t look as good, then we’re not viewed as the level of quality that we want to be viewed. We’re not viewed in the like that we want to be seen. I think it’s a real watch-out to mow in the rain or when it’s too wet. It can just lead to too many problems. However, bed and bush crews can still do some work. You can hand weed. You can do maintenance. You can do training. Now, I’d just say watch out because you can quickly get yourself into some overtime by doing these things.
Where we’re at in business at this point, we have maintenance crews. We have people to do everything, so when our mowing crews can’t mow there’s really nothing to let them do because everything’s taken care of by other people. In that case, what we do is we don’t have them come in. If the weather clears or the rain moves out, we might call them in at eleven in the morning and do what we can for the day knowing we won’t finish everything. Then, start to catch up on the following day. That’s how we handle it. I hope that gives you a few ideas, but know there’s no magic. You just got to do the work. Your team has to be educated when you hire them to know, “Here’s how we deal with it. Deal with weather delays. Here’s what we do and there’s nothing we can do about it.”
If you want to create a top-notch culture, you have to recruit a great team of employees.
I’ve got an idea for you that will be really impactful in regards to how much you love your company long term. If you’re proud of what you’ve built, so 10 years from now you absolutely want a place where you love the team, you love coming to work every day, it’s exciting, it’s an idea machine, you guys are leading and moving forward. That’s what everyone wants to create. A lot of that, the way you get there is by creating a top-notch culture. It’s a work in progress. Nobody has all the answers.
The reason I wanted to record this is I feel that for many of us running field-service businesses, lawn care, landscape, tree care, pest control businesses, where the majority of our team is out in the field, many of us hear of the idea of culture and we think, “Oh, that’s interesting.” Maybe we don’t think about it at all or we think, “It applies but not quite the same way it does at a company where I have 5, 20, 100 people in an office environment.” The reality is it applies exactly the same way. They just happen to be outside your office. They don’t come into an office every day.
If you’re not quite familiar with what culture might mean you might think of it this way. You could think of it as words. What describes your company? Is your company one where there’s a serious level of trust, where your team trusts you to take care of them, your team trusts you to build a great company, to take great care of the client, to always be able to listen to their input and take it?
As another example, are you a learning environment, one where you set the tone and you’re constantly learning and growing and you’re training and teaching? The team’s doing the same. They’re becoming better and better at what they do. Are you a hard-core sales environment, high-commissioned, predominately commissioned sales environment, hard-charging environment, or are you more of a consultive selling-type environment? Is it a fun place, an intense place, a very serious environment? When it comes to customer service, are you sort of, “Mr. Client, this is how it is,” or is it more an empathetic approach, there’s more empathy involved?
Culture is your beliefs, it’s your behaviors, it’s how you communicate, it’s how you treat your people, it’s how you deal with and treat your team and your employees, or your team being your employees, and your clients. There’s more to it than that. If you’re not familiar, it would be worth looking it up and reading about it a bit. My point here is that you don’t want to underestimate this, because what you do and how you treat your people will determine what kind of company you end up with and what kind of people you attract.
As I said, I think one of the most important things to keep in mind is, are you creating something that 10 years from now you’re going to be super proud of and you’re going to want to come to the office and work there? In the very beginning it starts with you. You’re the leader. You sort of set the culture. If you’re an angry, unhappy person, if you yell and scream, or if you’re nice and empathetic and you help people, and you care about your team, and you invest in your team and you try to help them, and you set a good example on the phone when dealing with clients, well, you’re going to probably attract people similar to you.
People are going to model you because that’s what they’re going to believe the expected behavior is, and that’s going to be the initial tone or culture of your company. Later, as you bring managers into the company, and they’re in the leadership position, what they do is going to enhance your culture, or it’s going to tear down your culture, or transform your culture. If you’re bringing people that don’t really fit with your vision and your values you’re going to slowly erode the culture. One day you’ll wake up and have a business that you don’t love and you really would like to sell because it’s not a place you want to be.
Everybody’s culture is different, there’s no one way, but if you don’t have a great, strong culture and you’re bringing people into that culture that fit within the company, fit within that culture, and getting the people out of the company that don’t fit, well then you’re going to have problems. It’s going to be difficult to build a highly productive company. It’s going to be more difficult to recruit.
These are really important things to think about. It’s not a new concept. I just want to make the important point that even though half your team, or more 75% of your team, is outside the office they, too, are part of the company just like everyone else, and there is still a culture. How you deal with the client in the field, how they grow within the company, how you take care of them, it all applies exactly the same way. Don’t underestimate that if you have in the past.
If you’re small you’ll be happy that you thought about this when you were young in business and that it became part of your company and you worked on it, because as you get bigger, if you’re not there yet, you’ll quickly realize your number one most important activity is recruiting and building the team, and finding the right people and making sure only the right people get on the team and the wrong people get off the team, and then creating a culture that is a place where people want to work and you can find more of them, and it’s easy to attract people.
That is your top, top responsibility if you buy into the idea that your goal is to build a company where everybody else eventually is doing the majority of the work. It doesn’t mean you don’t do anything, it just means that you’re no longer the bottleneck. You’re no longer the main person. You want to build a company that’s capable of achieving that. People are the key to that. Having a great place to work is the key to getting the right people and keeping them.
Do you want to know how to build your dream business? Jonathan gives you the number one thing you need to do here…
I’ve got a thought for you to think over as you’re working through the week. I heard a quote a while back that I noted, I thought it was a great one. It’s basically, “My definition of success-” This is from a successful person. “My definition of success is when you can’t distinguish the line between work and your personal life.”
I realize that that sounds really optimistic. Maybe in what you’re doing right now and what you’re struggling with, what you’re struggling with or in the process of building your company you’re thinking, “How could that ever possibly be the case?”
What I’d like to suggest that you might consider as your long term goal and as something that many, many, many, many, many people ahead of you have created in their lives and their world is that you can reach a point where in your business you’ve hired teams around you that do heavy lifting in the areas that you’re not uniquely skilled or in the areas that you don’t find energy or get energy from doing that task. For example, if you don’t love accounting you’ve built a team around you to handle accounting. If you don’t like managing the sales team, you build a sales leader around you. If you’re not great at marketing you have a marketing team. I realize that if you’re small and just getting started this sounds near impossible or is hard to imagine but it is reality for many.
The best entrepreneurs and the best business builders, what they’re doing over the course of years and years and years is they’re figuring out, “What am I best at? What do I love doing? What do I get energy from? What would I do even if I had $50 million dollars in the bank because after all, I would get bored eventually traveling the world. What would I do?”
They figure out that thing that they are gifted at, that they enjoy doing and they build teams around them to take care of everything else. Their sole job becomes one of doing what they’re best at. When you’re doing what you’re best at, you enjoy it and you study it. You learn it and then you get energy from it. The idea of retiring or selling your thing or cashing out and walking away slowly fades away because now you’ve got money and you get to do exactly what you want to do.
Ponder that thought, that’s the ultimate goal in my opinion and it’s 100% achievable.
Are you conflicted with business owners guilt? You aren’t the only one!
How’s it going? I’ve got a question for you. I am legitimately interested in what your answer is and what your opinion is. Before I ask you the question, I’ve got to give you two statements of fact. These are basically things that I believe that frame my outlook. One, I believe you are the leader of your company. I believe you set the example. I believe you set the tone. I believe you are charged with creating the culture of your business. Two, I believe that most people build a business that is nothing more than a business, a high paying in some cases, job. When in fact what you really should be doing is building an investment. When you think about whatever it is you’re building as an investment and not as a business, you act differently. You think differently. You do things differently. You invest differently.
An investment is one where you’re building a company that could run without you. You could be gone for a year, the thing keeps growing, it keeps spitting off cash and it pays you a distribution. You are not the bottleneck of that business. Knowing both of those things, I generally work everyday. I generally work most Saturdays unless we’re traveling or on vacation or I might run out to catch a soccer game or something of that sort. Most Saturdays I’m working if I’m in town. This past Saturday it was fantastic outside, it was 70 degrees, it felt great. I just didn’t feel like driving to the office, there might have been three or four people at the office. I didn’t drive to the office. I sat outside and worked on my laptop, but I felt quite a bit of guilt for doing that because I have a team that’s not required to come to the office.
Yet a number of people come to the office, not every Saturday, but many Saturdays. If I don’t show up, what are they thinking? Are they thinking I’m just not working this Saturday, I’m just taking it off while they’re busting their ass working. Likewise, I don’t generally come to the office until 10:00 in the morning. That’s a factor. There’s several reasons for that. One, sometimes I work late at night, so I sleep in. Sometimes I get up early and work and get work done before I get to the office and anybody bothers me. Other days I get up and I workout for an extended period of time and I don’t really do much work before I get to the office. What’s the perception of the team?
Do they know I’m working? Do they realize I’m working really hard or do they feel that I’m just leaving everything to them, because I feel that setting an example is critically important. At the same time building an investment is one where the team does the work. My question to you is, how important is it to come in on Saturday when others are at the office? Which I normally do, but I felt great guilt for not doing it. How important is it that I arrive at 8:00 in the morning versus 10:00 in the morning? Even though I’m working. Even though I work at night while everybody else was sleeping or doing something else. The team doesn’t know that. I’m not going to walk around telling them what I’m doing all the time.
Is it important to show up and be there even if it’s not the most optimal schedule just so you can set a good tone? I tend to think it is. I’ve been conflicted by a few of these items. Historically I’ve always been at the office. As I have more of a team around me I don’t have to show up in the morning. There’s other people that can fight fires and deal with stuff. I can work on the bigger activities. Which I really believe and you have to position yourself. You’ve got to get yourself where you have time to think. You have time to work on big stuff. These are things I don’t normally talk about in Lawn Care Millionaire.
I don’t normally talk about the idea of building an investment versus a business. These are things I deal with heavily in Service Autopilot Academy, but this is a much bigger audience and I’m super curious. How important is it that you come to the office every Saturday? How important is it that you come to the office before everybody else in the morning? You just suck it up and you do that even though it’s not the most optimal thing to do, in that it doesn’t give you undivided time where nobody can ask you a question. Where you can think through things. What do you think? Should owners feel guilt about living a different schedule than what they ask of everyone else in their organization? What do you think?