22 Year Old Starts a $200K/Year Lawn Care Business | EP. 3

do you want to start your own lawn care business but just don't know how if you're a regular on upflip you might know nick reed he started his own lawn care business from scratch and we've documented his entire journey back in january of this year today we're doing a follow-up with nikri to see how his business has been growing he started his business at the age of 21. we'll also see if he's close to his goal of 160 000 a year for revenue mike andes the owner of augusta lawn care took nick reed under his wing and helped him start his lawn care business from scratch how many leads actually convert to clients it's around sixty to seventy percent what's your take home right now in other words what do you pay yourself at the end of the month as a franchisee owner it's not cutting into the margin if anything it's increasing it in this video nick's going to share with you guys what struggles he faced when he opened his business how you two can start your own business and how choosing mike as a mentor helped propel his business that's by far been the highest rate of returns in terms of your revenue how much of it is from reoccurring lawn care maintenance versus landscaping jog all right without further ado you guys like the video subscribe to our channel hit that bell so that you don't miss any of our amazing videos and let's go give you a full update on how nick's do and i can see he's picking up leaf by leaf and that's attention to detail nick good morning oh hey paul how's it going good good to see you want to do this yeah all right nick for those that haven't seen your first two episodes with us tell us a little bit about you your background and how you got started in the lawn care business yeah absolutely so um i got started with augusta lawn care in 2019 um i started working with mike when we had one location and now we're up to 60 cross country and then before that i'd always done lawn care and landscaping just for like neighbors around the neighborhood and uh you know making cash under the table and uh yeah this is my first year in business this is our third follow-up video and uh yeah it's november [Music] all right nick talk to us about how your business has grown since we last spoke with you and have you been able to meet your 160 000 a year mark yeah yeah so so we actually hit um 160 000 um back in august i think man yeah not even the end of the year yeah yeah it's it's gone really great you know we had a we had a hiccup in the spring you know i was having a hard time hiring people and i was actually working every day of the week you know seven days a week and i did that for over almost three months um and just doing work out in the field and i just got so burnt out and i started to slow down and actually was less effective yes you were doing everything by yourself no employees right yep yep and i i you know i thought i could make up for the lack of help but it's not the case at all you know working each day of the weekend that's eight extra days a month and it was just wearing me down physically and mentally and it just didn't make a difference in the bottom line the work i was doing was a lot slower than if i was well rested so you had some either possibly project management issues or was it mainly employee issues and how did you get that resolved nick yeah it was uh it was definitely employee issues just not being able to get the right people on board i waited longer than i should have and i wasn't as aggressive about hiring because it was my first employee i didn't have experience in it before um and i didn't realize how the labor market was i didn't know any of that so so that was that was a hiccup and uh yeah the projects have been fine but just that lack of being able to hire someone at first was really detrimental nick in terms of margins when you hire your first employee how do how does that impact margins have you looked at the numbers yeah yeah so um you know obviously it's it's going to take somewhat of a hit right because i'm going to have more expenses related to having an employee it's like i'm going to have more taxes to pay and then i'm going to have equipment that's going to go into you know a truck all the equipment to like 20 grand right there and then you know just the consistent cost where it's fuel you know trimmer line just stuff that he needs to do his work every day but it's it's not so much of an expense as it is an asset because the amount of money that he's generating for the business outweighs all of the expenses that might be associated with having him so so if you're operating under 30 40 margins would you say that it cuts in five ten percent or you just don't know the details are that specific we're we're operating at 27 percent right 27 okay and it's um it's it's not cutting into the margin if anything it's increasing it awesome yeah we're running really lean this year in terms of your revenue for 2021 uh how much of it is from reoccurring lawn care maintenance versus landscaping jobs and projects yeah um i would say you know probably about 40 of it is from recurring um so basically every week i'm sending matt out and we have around 50 clients that he does every week he handles all the recurring stuff and then i'm just doing projects because they're typically higher margin i have more experience and i can get those done really quickly and just stack cash using those although our main focus will be on recurring okay um just right now while i'm still out in the field in the business i'm able to devote some of my time towards doing these projects that i can make a lot more money on easily okay and how many recurring clients do you have for lawn care maintenance right now um right around 50. wow yeah are they weekly or they buy wheat or is that changing some weekly some bi-weekly yeah they're weekly in the spring and then people switch at different times to weekly and bi-weekly just depending on if there's like tons of leaves if the grass is growing a lot i'm just curious how fast that grown like you got first client and then a month later you had 20 or was it 10 yeah yeah tell us a little bit about how that happened so so march it was pretty steady um i think that's when we did the last video pretty steady you know i was getting a couple clients we were starting to ramp up i could see it but then once we hit april it was just like through the moon and i was you know uh like five or six estimates mowing a day and you know a lot of those clients didn't get we didn't have the infrastructure to handle it april may june july august basically the really busy months okay and then september we noticed a bit of a slowdown october a bit of a slowdown and then just starting in the last week of october and uh november here we're starting to ramp up nice okay where are you at now in terms of uh the amount of time you work per week per month how does that compare to before yep five days a week monday through friday and sometimes on saturday there's always like a couple hours worth of work but i'm really strict about cutting it off now because it affected me in such a negative way before working on the weekends and it was making me less effective each following week which is crazy because i'm the kind of person that wants to like go go right yeah i had to take a step back and realize that it was actually uh making things worse for me you must have done something to change that so what what what is that yeah um so something that i think is going to be really important for everyone out there um i'll share that later in the video as a hack okay let's do it keep watching what's your take home right now in other words what do you pay yourself at the end of the month as a franchisee owner yeah so um i basically just set a salary for myself because in the beginning i wasn't paying myself because all that money was going back into growth okay um but my salary for this year it's only thirty thousand um it's it's pretty low um obviously in the future it'll be higher the goal is to put as much money as i can back into growth and my original plan was to have 50 000 left to put back into the business nice okay and we're actually exceeding that goal so we're gonna have even more um so somehow ending up uh better than we pictured so that's always always good yeah uh what about your work-life balance what do you do to just take time off as a franchisee owner and reset for the next week yeah you know on the weekends sometimes i like to be physically active and that that's kind of a way that i you know kind of decompress i i can maybe sit still for a couple hours and then i have to get up and go do something um so so i go hike uh with my girlfriend on the weekends nice um you're in the right area for hiking for sure yeah and you know we don't we don't spend a lot on anything you know i like to picture life happening in seasons and right now i'm in a season of work right that's awesome that's a simple life uh tip i would say that that can go a long way yeah and it's a season right um you know in the future i'm sure that i'll be able to expand my social life and you know it's like right now i don't have any friends and that's kind of how it goes if you're a business owner out there you know how it goes um and it's yeah i'm just in a season of work and that's where my focus is and let me encourage you by saying this too shall pass yeah so that's always true you guys check out our podcasts we talk to people like nick other successful business owners and dive into more details more questions you tell us by commenting what things we should ask check it out upflip.com forward slash podcast [Music] so nick you've worked with mike at augusta lawn care for almost two years before you became your own franchisee owner how has that experience to help you grow your business and do you think it's necessary to have on the ground experience to get into this industry yeah um i see it as a massive advantage just on the on the technical aspect you know the cultural things were great that's not really my main focus right now and then just learning the systems and how we do things and why that was really helpful but the technical aspect is probably the most important because right now as a business owner you know i'm supposed to be transitioning into the visionary not the technician but right now it's really helpful because every day i am still out in the field and i'm having to do the work so i have all of this added stress of all the business stuff that i've never dealt with before that i now have to do every single day and if i didn't have the technical experience as well that would be another layer of complexity so i i think it's a huge advantage that i just know how to do all the work and then the business up comes second so it almost makes sense to be patient get under the wing of somebody else absolutely learn and at the right point do what you're doing yeah and you know there's a the flip side of that right there's an argument against being a technician going into the leader position because you're going to always want to jump in and fix everything whereas you know let's say you have no experience in the lawn care industry and you buy a company or you start a company and you're forced to delegate right off the bat so you're not going to be mowing lawns you're not going to be doing cleanups and stuff and it's going to require more capital investment up front but you're not ever going to have to jump in your focus is going to be on the higher revenue producing activities right off the bat nick one of our viewers asked before why you as a franchisee have to spend money on marketing doesn't corporate level take care of some of that walk us through the marketing setup when you're a franchisee yeah absolutely so so you know mike he's doing a lot of testing with the marketing consistently with the bellingham location and there there's so many reasons why they can't pay for it on a mass level for one you know their market is completely separate from everybody else's so you know what's uh what ten dollars is to me here might be 20 to them there you know it's just different right okay so and different sizes of businesses so if there's a franchisee that's over the million dollar mark and they're spending fifty thousand dollars a year in marketing and i'm over here and i'm spending less than ten thousand a year in marketing it wouldn't make sense for the franchise or to pay for that um it's just not scalable right if we have 60 locations all of them are in a completely unique scenario you would have to hire someone full time just to manage every individual's marketing so they provide support they provide templates stuff that they test on different platforms different visuals and texts and they supply us with that but then it's up to us to test those in our market you know we use our money for that because it's just not scalable otherwise so the franchisor does not pitch in for your local advertising in any way not financially no but in a sense financially because they're spending you know mike spending his money to test the marketing in their market and just to know if it works and then if it works you know they'll give us the resources but you know every different person's gonna have a different budget for their market okay [Music] walk us through the evolution real quick you started with one truck when did you buy the second third time wise in the gap between the yup two yeah yeah so um i started with one truck in uh january uh we didn't do our first project until february so from february until june i was solo and then i hired matt um he's working down there absolutely amazing um i i couldn't be where i am now without him and he's the only reason that the business has gotten to where it is because i cap out it like i can only make the business like 15 grand a month right one person any employee should be able to make 12 to 15 a month but back to the truck thing got the second truck in june when he started okay i trained him up in a couple weeks super fast learner he just knows what to do and it's amazing so i sent him out he takes care of all the recurring maintenance and then i had my truck and i would go do estimates and property cleanups and we've been doing that this entire year um and then just last month i bought the third truck yeah which we won't use until next year awesome [Music] nick last time we spoke you mentioned next door as a marketing platform do you still use them and what are the best marketing platforms that you're using now yeah so you know in the spring i was experimenting with a lot of stuff you know i was using facebook nextdoor youtube uh google pay-per-click and google local services wow so like five different avenues and you know i was just trying to figure out which one had the highest rate of return for me and by far that's been google local services you know my market's a lot it's a lot of young millennial people and basically you know they see something that needs to be done outside you know where's the first place we go to google so you know local services basically you know you show up right at the top and it says google guaranteed you know you go through the verification process and uh that's by far been the highest rate of return so i only use those things for you know maybe less than a month in the spring so no next door just google screen at this point or local services yeah i would say 95 if not more percent of my revenue has come from uh local service ads uh year-to-date or last month for example what did you spend what's your ad spent on google's local services um it's right around 500 500 bucks okay yeah yeah it's it's consistently been around 500. what would you say your retention rate on the 500 is or how many customers would you get yeah so so the close ratio um how many how many leads actually convert to clients it's around 60 to 70 percent wow which is good where it needs to be so that is good [Music] you're franchised with the gust of lawn care services what are the advantages for starting your own firm versus franchising and as a starting out entrepreneur what are the pros and cons yeah um so you know i always describe like an insurance policy and it makes me feel good knowing that i have a support system you know we have a network of over 60 franchisees and i can always reach out to them or i can reach out to mike there's always support on things that i haven't done before there's marketing support you know mike's always testing marketing on the back end and he's always innovating stuff on the back end software and there's just so many advantages stuff that i can't do day to day you know it's like i need to focus on getting the work done and dealing with the clients and they handle all that and not to mention command center um they you know they take all of our phone calls you know we can do full service they can schedule they can do basically anything you need them to yeah okay so as they improve does that improve your business as well absolutely right yeah yeah the more infrastructure that they build out which as we grow franchisees obviously they're going to do more of they'll be able to handle the call volume and it's going to prevent me from having to stop what i'm doing every day talk on the phone jump on the computer when i'm out and about and it's it's really difficult so it is really nice you know if there's customer complaints commit command center will take it they'll route it to me and then i can decide what needs to be done with it okay nick talk to us about the process that you went through for hiring matt and what you learned what platforms you used and overall yeah so basically you know i was using uh craigslist ziprecruiter indeed um just like all the online job posting platforms you set a budget um and then you know it displays your job you know candidates can click on it and they can apply and matt he was pretty late it was it was right as i was about to run out of money on ads actually and i was just getting no results interesting um and so you know i i called him um and he was like hey you know i'm interested in the job and i was like okay cool this is like when i was really disgruntled and feeling like giving up yes i was like why don't you come in for a working interview and i think the working interview is really important because it's like hey let's just do a day you know i'll pay you in cash and we'll just see how you work how you respond to instruction and then me get to know them as a person um and and decide whether you know they're a good person for the team that's it yep talk to us what you do during the slow season of this business to continue growth and increase revenue yeah well if you guys look at mike's channel he put a video out uh last week i believe and it was basically talking about how not to become complacent in the winter when it could become really easy you know the leads aren't coming to you you have to be more active in going and searching for them so you can do a lot of door-to-door and you know contacting your existing clients saying hey there's this thing that you were thinking about doing we can give you a discount and we can get that on the schedule because some work is better than no work right that's like when it's okay to give discounts but you know in that video he talks about for us december january february super slow with most seasonal businesses not not even just lawn care three months that's 25 of the year yeah 25 of your bottom line is affected by those three months so you know if you can be active you can be going door-to-door and like aggressively trying to sell jobs and if you can make stuff happen without dumping money into marketing because it becomes really expensive you're gonna end out on top you have three months to make stuff happen and most people take those three months off or yeah they just don't put effort into it [Music] besides cost of franchises are there any cons you would say for doing that that's what you know now and the experience you have obviously yeah not at all right it's an expense for sure but the value like 10 times outweighs the actual expense and it's a no-brainer honestly i i don't have enough mental bandwidth and time to be able to do all this stuff on my own so sacrificing a little bit of cost which that's how businesses operate right it's like 75 of your 75 of every dollar is going towards expenses 25 goes in your pocket so you need you need to be able to invest in the infrastructure in order for me to do everything i do every day awesome [Music] nick what's the biggest challenge for you as a business owner currently um biggest challenge is going to be hiring people um so it's not so much of like a personal challenge as it is just a challenge for the business it's just getting the right people on board and people i can trust so that i can delegate stuff and actually grow seems like always that's the challenge always yeah yeah it's it's the age-old question right with business owners yep besides that what's giving you the most headache right now too can you think of anything um leaves leaves yeah yeah we're super busy with leaf cleanups and then um you know kind of blurred lines with clients trying to manage people's expectations you know when we're mowing they seem to think that we need to come through and clean all the leaves off the sidewalks all the garden beds the driveway and with our regular mowing service and you know we just can't logistically do that that's not part of the service no no um we can definitely add it on as a separate cleanup but you know when we're filling a day with budgeted hours you know matt's typically mowing from first thing in the morning until it gets dark it gets dark really early now yeah and yeah we just don't physically have enough time to be able to do that on a weekly basis but we can come through and schedule those uh one-time cleanups but that's the biggest pain point right now it's just just managing client expectations oh so i was gonna say yes it sounds like it's an expectation issue so how do you overcome that challenge is it first meeting second meetings just to follow and say hey it's not included what can you add to that yep yep it's basically just communicating and um you know they have a question just because they want the leaves gone and they want a solution so instead of me saying we don't do that with our mowing service i'll say you know we don't do that with our mowing service but you know we can add a separate cleanup and here's why and as long as you explain to people why they're completely okay people just just don't want to be left in the dark and they don't want to feel like they're being taken advantage of one of your fellow lawn care business owners wolf jackson commented on your last video that he's struggling with managing projects because you know the employees aren't reliable some people don't show up lots of stress what advice would you give to wolf to manage that project manage the staff and just reduce the stress overall yeah that's the age-old question right you know it's a business owner always looks at the employees and says you need to work harder and it's just never going to happen right no one's ever going to work as hard as you as a business owner i think it starts with hiring and i don't have this figured out but i know what i need to do going into next year um and i need to spend a lot more time actively recruiting so from a hiring standpoint if i'm just spending ten dollars a day on like craigslist or next door zip recruiter stuff like that you're hiring out of a pool of people who have either not been employed or quit their jobs or been fired right all the good people already have jobs so we need to spend time actively going out searching for these people hire for attitude and then train them on the systems but that's my goal going into next year it's basically just trying to actively recruit people not rely on these platforms to supply me good people because it doesn't always happen that way how would you actively recruit though where would you go what tools would you use yep so everywhere i go i'm actively recruiting um i actually just interviewed someone a couple weeks ago who was at the local home depot basically anyone in a customer service position anyone that i deal with on a regular basis you know if i see them going above and beyond um they're making conversation with me they seem like they have a good head on their shoulders nice i want to bring them into our culture and give them a promise to be able to you know become a manager an estimator be able to own their own franchise manage a location and you know incentivize them with performance pay because if you're offering someone a dollar amount per hour they're not going to be very motivated you know they're it's competitive yeah there's nothing going to be pushing them to attain more whereas performance pay there's no cap so basically you can make as much as you feel like as much hard work that you want to put in nice well wolfe i hope that's helpful to too [Music] do you still do the monthly coaching calls with mike and what's the single most important value that he's provided to you or advice up to this point yeah well uh mike's giving me lots of advice so it's hard to point out one uh specific thing but mike is really good at reminding me of things that i already know um but he just confirms my suspicion or just shows me what i already knew but i wasn't thinking of in the moment i know it's kind of vague but that that's definitely like my biggest takeaway from the coaching calls nowadays you know mike he's putting a lot more effort into command center and growing their infrastructure there so he's actually stepping away from the coaching call role but i get to talk to lee who he was office manager um when i worked and we actually worked in the field together you know he moved up at the bellingham location um but you know he he's the one that does my coaching calls now and we've we've had a couple and uh yeah he's a great resource do you do you value that resource is it important to continue that it is great yeah yeah so as a franchisee you know we get 30 minutes a month to be able to talk and it's really nice because as a business owner a lot of times it's pretty lonely and a lot of times people don't understand like what you're going through and you're just day to day just doing the grind and you can't talk about it with a lot of people but it is nice i take advantage of that every month just to have that just like touch base and just say hey this is where i'm at um and just bounce thoughts off of them you know if i'm not directly struggling with something i'll just use that time just to talk to someone that's associated with augusta and it kind of regrounds me in the vision and the goal of changing the level of professionalism in the entire industry [Music] all right blitz questions with nick nick what's your favorite business book favorite business book it's more in the realm of leadership but it applies completely to business it's extreme ownership jocko willing nice okay what is the single most important factor for expanding any business marketing marketing sales and marketing and you need to have someone that's dedicated to that what's one fact that changed your perspective on life forever um that tomatoes are fruit tomatoes are fruit okay what's your favorite unnecessary device or thing um i'm a very minimal person so i don't have anything unnecessary okay what's the one thing you cannot start your day without exception coffee smoothie i have a smoothie every day i love it these are fan blitz questions thank you garrett stevenson three questions from garrett one of the most important questions for anyone at least in the us is how to deal with labor shortages and how to deal with out-of-control labor rates he says 250 bucks per day per guys average in the california bay area so how do you deal with that um so basically selling people on the vision um millennials nowadays it's not like how it was back in the old days where it was basically you get a stable job and you work your entire life whether you're happy or not and then you retire millennials are really driven by being a part of a cause and they want to feel like they're actively contributing to something so you know if you as the owner are passionate and you have a compelled vision and you're trying to achieve something as a team people are going to buy into that cool uh garrett stevenson also asks how does one land more commercial accounts commercial property management clients etc yeah that's not really in my realm um but you know if i had to guess from an outside perspective it would be um just to make connections with people um people in that space you know property management people um this project that we're actually doing it's not commercial but it's uh i have a client who's a property manager and she lets her clients know about me and then her clients come like you know client is renting out this house you know she connects me and then we come over and do the clean up for them so it's not really commercial but it does work um relationships is probably going to be the the biggest thing in that department as always this is from garrett as well how do you properly bid each account like a flat minimum charge by hour per guy or just a feeling quota quote or do you care each job based upon each budget yeah so so basically you know we have a labor rate you know we have a separate labor rate for projects and mowing and then you know basically i'll look at the square footage i'll look at the access if it's on a hill i'll take all these things into account and then i'll bid accordingly to that um so it's basically it's per job every job's unique and it you know it does cause me to have to you know look at every property see it and then be able to sit down and just think about myself doing it and then come up with a price [Music] let's go back to what we talked earlier in the video and you guys this is the hack that we mentioned earlier where you got to a point where you burned out what did you do to change that and improve your life your business everything else yeah so you know that was the time period where i was working seven days a week and i did that for almost three months and i basically just i hit a wall i was being really slow at the work that i was doing so it would have made more sense for me to which is what i do now i take you know i work five days a week and you know work work work and then maybe a couple hours on saturday tying up some loose ends and then i take the whole weekend off you know i go hiking i just decompress i don't think about work i don't look at my email i don't do anything work related and then i come back the next week being fully recharged so basically my hack is to to know your limit because everyone has a different limit right you know i used to think that i could work endlessly and just like go go go and like let's make a difference and it becomes really ineffective you become less happy i wasn't enjoying the work as much and interesting yeah it was just drained emotionally and physically but it takes hitting that limit to be able to find what that limit is for you everyone has a different limit you know someone else could be working two weeks straight they might hit the wall someone could be working six months straight or a year straight and then a a year in and they're like hair's falling out and they're just like man this is ridiculous but you got to identify that limit nick what are you doing now to grow more in the future and what's next for your franchise moving into 2022 and 23 yeah you know we're investing more in infrastructure i just bought another truck we're gonna do another trailerless setup so it's push mower and then all the equipment the racks so that that's you know around a 20 25 000 investment wow so that's going into next year so we'll have three trucks total and then next year i'm anticipating hiring two starting out in the spring i'll actually hire more just because i know that someone's not gonna work out right and our revenue goal is half a million um so this year we're finishing out at 200 000 yeah yeah it's it's going great um you know we beat this year's projection so that's really nice and yeah as long as i can get the right people on board that's going to make all the difference going into next year awesome one more hack too that i was kind of thinking of is to keep it simple i already know just in starting the business this first year we you know we took on a couple clients that were you know beyond our original scope of not work but um area service area and so you know we would spend half an hour driving to these clients just to do them and then they were budgeted wrong so we were over budget on them and the drive time and we were just losing mass amounts of time and money that we could have replaced with a bunch of smaller clients in our service area knowing your service area keeping a tight dense area if you're doing mowing and recurring services staying in that area and not deviating from it because it's really easy when you're starting out you want to gain momentum and you want to take these clients you're like yeah i can handle it but then when you have an employee they're on performance pay and you're seeing that affect their numbers then it falls on your shoulder you need to take ownership over it and i actually ended up letting those clients go but um keep it simple keep your service area really tight route density is way more important than taking on more clients keep the work simple like if you enjoy the big equipment you want to do really complex custom work that's completely fine but while you're starting out you need to keep it simple because you need to be able to stack cash stay super lean and then you can invest in that stuff as you get bigger over time nick what's the single biggest mistake you've made in the business so far and how did you recover yeah so luckily i haven't ran into anything detrimental you know i haven't gotten in over my head on any projects nothing really bad has happened okay what's the secret to that sauce i guess yeah so you know i listen to people who have been there and done that and that that involves possessing humility um you know and being able to just realize like you know these people have done exactly what i'm doing right now and they failed and then they shared their story you know mike he shares a story really publicly about stuff that he went through growing his business you know people on audiobooks and they just talk about all of this stuff that you need to avoid or be aware of and if i can proactively listen that i'm like huh i would have never thought about that happening and until i listen this book um so that that has helped me avoid a lot of the mistakes that most people that don't invest in in learning they make those mistakes and learn the hard way from the mistakes so yeah just being proactive and uh either getting a mentor or uh you know just listening to plenty of books that's really cool incredible advice nick thank you it's been a good pleasure yeah giving your update to our audience um and look forward to doing it again absolutely hope you guys enjoyed this follow up with nick reed what an incredible growth story with more to come make sure you like the video subscribe to our channel hit that bell we appreciate you guys supporting don't forget to comment we read all the comments tell us who you want us to interview the questions to ask and we're here for you

2021-11-25 05:38

Other news