In this video, Jonathan gives the pros and cons of accepting lawn maintenance subcontractor jobs.
I’ve had a number of Service Autopilot clients and individuals that watch Lawn Care Millionaire email me and ask this question. It has to do with management companies that control a lot of work. Maybe not necessarily a property management company but you might imagine in this scenario a company that has foreclosed on properties and has to have or find a contractor to go out and mow the property, change the locks, wash the windows, or perform some level of service. There are a lot of these companies and basically they will give you work and they will pay you for that work. Basically they’ll give you a list of maybe 50 jobs they need you to service. You’ll do the 50 jobs and they’ll give you a check.
I’m not sure what you call those companies. I think of them as management companies and there are a lot of these. We have quite a number of Service Autopilot clients that will work with these companies. Over the years, we’ve had some Service Autopilot clients that exclusively built their entire business around getting a spreadsheet every week from a management company and doing as much of that work as they possibly could. They would then send in before and after pictures and get paid.
The question was, is this a good idea? Should I take this work? Should I accept the lawn maintenance subcontractor jobs? It comes with a contract that you have to sign. Is it a good thing for my business? My answer most recently, and I’ve given this answer before, is I don’t think that doing work with these management companies is a great long term strategy to build your business around.
Their jobs generally pay less. They don’t generate as much revenue for you as a job where you went out and sold it and found that client yourself. Also, these jobs tend to be harder on your equipment and they tend to be more difficult to perform. These are generalizations. That’s not always true but that’s been my finding and my understanding in talking with others.
The other concern that I have about jobs of this type is that if you get too much or too many of these jobs, you’re building your business around one customer. If they stopped giving you work, it could be really bad for your business. It could potentially end your business if they make up too much of your revenue. I would say that early on if you’re just getting started or you’re very small that accepting this type of work might make sense strategically. You might want to accept this type of work for some period of time while you’re learning how to sell and market and bring in your own work.
In other words, you would perform this work for a while. It would help you bring revenue to your business which would help you grow, hire employees, buy equipment, things of that sort while at the same time you’re working on marketing and getting your own clients where you eventually replace the work you’re getting from the management company with your own clients. You would slowly phase out of accepting that type of work.
My answer is, I think it makes sense strategically for a short while in your business. But, don’t let it get you distracted from doing your own marketing and getting your own clients. If you take so much work from the management company that you’re so busy and you’re doing most of the work yourself that you’re now too busy to go really build a business, all you’ve done is secured for yourself a job and you’re not building a real company. That job could all go away one day if the management company stops giving you work.
That’s my recommendation on how to think about taking lawn maintenance subcontractor jobs.
What makes a lawn care business successful? Learn why I don’t 100% agree with the EMyth for landscapers.
A very long time ago I read the book, EMyth, by Michael Gerber. It’s a really good book. It was a very influential book. It absolutely had an effect on how I think. But, thereare a number of reasons why I don’t completely agree with the EMyth for landscapers. At first glance, if you read the book, you will think that you need to create a process and a procedure and a script for every single thing in your business.
While a lot of that resonates with me, and it makes a lot of sense, and I do think you need a lot of that in your business, what I feel that possibly isn’t communicated is that in the world we live in today, where we are running McDonald’s type businesses, and what the next 10 years looks like, I believe that if you’re going to be a dominant company, your team will not be reading from scripts. They will not be following step-by-step procedures in most every activity. It’s not realistic.
Rather, the ideal is that you train your team how to think. You train your team how to talk. You invest significantly in the training process. This isn’t a new idea. This isn’t my own idea. This is what a lot of very savvy companies do. Take somebody like Zappos. It’s a very good company. Their individuals working the phones and selling new shoes are not reading from scripts. They are very well trained. Individuals that can figure out how to solve problems and are empowered to solve their own problems on behalf of the client.
Take Hilton. Hilton is not necessarily my favorite hotel chain, but take a Hilton-type hotel and better, Four Seasons. The individuals in that company have been very well trained. They know how to deal with problems. They know what the most common problems are that could present themselves. They know the most common scenarios that they might bump into in dealing with their clientele, and they’ve been trained on how to deal with those problems. Then they’ve also been trained on how to critically think and how to be aware of a situation. That’s what’s needed in our business. The idea of reading EMyth and creating a step-by-step checklist procedure has absolute value in the business and is needed in the business, but that’s not enough.
I think for many of us we think if we create a new procedure or add something to our employee handbook, problem solved. Taken care of. No. It’s not solved. Adding something to the employee handbook solves nothing. Nobody wants to read that stupid thing anyway. What they really need is communication. That’s what the team needs. They need training, they need instruction, and that’s very difficult.
It’s easier for us to tell ourselves, “I’ll just create a procedure around this. I’ll just modify the guidelines or the handbook, problem solved.” What I’m saying is that’s our easy out as business owners, and as managers. What we really need to be doing is reassessing how we are training, how are we communicating with our team so that our team can solve these problems themselves. The procedure, the process and the task list is an aid that supports a very-trained person that knows how to think critically, to solve problems, and to look out for the company and do what’s best for the company.
That’s my argument against the black and white implementation of the EMyth for landscapers. I hope that helps you really think about how you can train and make your company great through training.
Your life after you sell your business may not be all that you imagine. Here is why…
Recently I recorded several videos about selling your company and it is something that I’ve thought about for years from different experiences I’ve had in business. This goes all the way back to mid 2000 in terms of experience in selling your business and thinking about it. It is a topic that I am very aware of and it is a topic that affects both the very small business owner and the multi-million dollar business owner because in both cases you are thinking about it. Many times it is the dream of both, the small guy and the big guy. The little guy a lot of times is in the middle of being frustrated and burned out and dreams of the day he can walk away from their business. The bigger guy might have those exact same dreams, because as you get bigger, your problems don’t necessarily go away. You just have different problems.
I think that it is an important topic to think about no matter where you are in business even when you are small. The reason for that is, as you build your company, if you are building just to sell, you build your company completely different and you work on your business in a completely different way. You are more worried about building top line revenue and growing profit as fast as you can whereas, in my opinion, if you are building your company to keep it, you are more worried about culture and people and procedures and systems and things of that sort. Not that you don’t worry about those things when you are building your company to sell it because all of those things help you get your company sold at maximize price. Yet you just think about things at a different level.
You want to make sure when you are going to keep your company, that you are still going to want this thing in 5 or 10 years. Whereas when you are building it to sell it, you might mentally let certain things go and say, “I don’t care. That’s going to sort of be the next person’s problem.”
I said all of that to lead into a point. I was talking with someone that I am friends with that is very successful, has built multiple very successful businesses, and is at a point where he can take off for 1 or 2 months at a time easily. I am not at that point anymore because I have Service Autopilot. I couldn’t be gone for 2 months. Whereas, this individual can and what he has observed from being gone for quite a period of time is it gets pretty boring because all of your best friends still have jobs. They are still working and you can’t just call them out there in the middle of their life. They can’t necessarily just take off and travel. They might have kids or maybe you have kids and your kids are going through school and your kids have sports.
What he has observed and even other individuals have said the same thing. The idea of selling and walking away, not really having much to do sounds wonderful but, the reality of it is, once you do that, what do you do? Who do you do it with? Everybody else still has a job and everybody else is still working and not everybody else can get away.
I say all of this because I think back in the beginning, you need to know whether you are building to sell or building to keep. You may change your mind but you at least need to know up front because if you are building it to sell, then you are going to do things differently than if you are building it to keep. And what if eventually you have the realization that you know what, maybe selling isn’t as great as I thought it would be. Maybe I should focus more on building a great company, one that can run itself. Maybe I should focus a little bit more on solving some of these problems in my business instead of ignoring them because I think they are going to become somebody else’s problems down the road.
My point of the video is to consider, and maybe try to look at if you were to sell the company, meaning that you are not going to work as hard on building a great company that you’ll own in 10 years. If you are building it to just sell it, what will you do when you actually sell the company? And, if there is a way that you can experience that and find out for yourself, I think that might change your attitude on selling. The other thing about this is I have known a number of people that have sold their companies and become very bored very quickly and in most cases they’ve sold their company and within a couple of years were disappointed that they had. Even though they made a lot of money, they miss being in the game, they miss having the friendships, they miss being challenged and they miss all of that.
This is two fold. One, try to figure out for yourself exactly what you’d really do if you sold this thing and you had 3, 5, 6 months a year to do nothing. What exactly would you be doing in your life? Is that really something you want? And two, once you have that answer, what might you change within your business, the way you are doing things, or the problems you are not solving, to make it a company that you do love that you will want to keep 10 years from now.
This video explains whether a COO or CEO is a better option for your company.
I talk a lot about building a real company that can run itself and that doesn’t require your daily involvement. I really do believe that’s the ultimate goal of business. You want to build this asset that can generate wealth for you and it becomes an investment in the sense that you don’t have to actively participate in it every day to make this thing run and operate.
The goal for many is to get a president or a CEO or someone to run this company. But, here is an alternative thought. What you really need is a COO. You could be CEO or president, they’re almost interchangeable terms in most cases. You could be the CEO and still create a pretty exciting, amazing lifestyle and still generate a lot of wealth and not completely relinquish all of your duties within the company.
The number one position that you need in your company so that you have some time and freedom to get away is a COO. It’s a Chief Operating Officer. This is the individual that essentially runs operations.
Now, when you’re smaller, your operations manager generally isn’t the same person that can grow into becoming your COO. COO is typically a term you’d use for a bigger organization. So, your operations manager when you’re doing $500,000 or $1 million probably isn’t going to be the COO of the company when you’re doing $10 million, unless that individual is really learning and studying and growing as an individual. A lot of times you’re going to have to replace that individual and bring in someone that has some experience in that area.
The COO is going to run operations. They’re going to do a lot of hiring. They’re going to do a lot of firing. They’re going to make sure the processes and procedures are in place. They make the engine of the company run, whereas the CEO, which might be you, is more the strategy, the strategic thinking, the big ideas, the moving the company forward, leading, and recruiting. A lot of those roles, they can take 60, 70, 80 hours a week, but most of the time they don’t really. What I mean by that is if you have a great COO, operations manager, you as CEO could really get away from your company for three weeks. You could get away from your company for four weeks and the company will still keep turning and running.
I created the video because it’s very easy to think you’ve got to hire a president or CEO to run your company. You believe that until you get to that point, you won’t have built a real company and that’s not necessarily the case. What I’m suggesting is that what you really want to focus on is operations and then hiring a COO-type person to run the operations of the company. You don’t have to completely walk away from this thing to be a great company that can sort of run itself to be a real company. Rather, you could put yourself in a position where all you do is the core CEO-type activities of strategy and some money and key hires and things of that sort.
When that’s all you have to do within your business, now you have a lot of time to do other things. You have a lot of time to go on trips, a lot of time to be involved in your family’s life, or to start another business or to do something else. Now you’re not consumed by the daily grind of everything that goes into building and running a company. Think in terms of COO versus CEO.