already came out it hurts

lsa and google ads okay all right so again not saying it's a great idea but here's the here's the way i want you to think about it so this is a direct attack on and angie's list dumtac all those companies it's like the anti of that and the way i think about the problem i've always thought because when i think about marketing I always think, well, how does the buyer want to buy? Nobody wants to go to Thumbtack and fill out a form and then get 90 people bombarding them with phone calls and say, hey, nobody likes that.

But how does everybody want to buy and how does everybody actually try to buy? So whenever I need something...

or Tiffany, my wife needs something, we'd go to our neighbor, like Irina across the street.

And Tiffany would say, hey, Irina, who would you recommend for pool service? Or who would you use to mow your lawn? Or who would you hire to fix your HVAC? So I've always wanted to create a business around this concept of creating a network of all your friends and all your people and what service companies they use.

Again, I don't even know how to pull this off, but this is the idea I like because I consumer wants to go to somebody they trust and get the answer.

And so I just want to ask our friends, who do you use? And I would like to know if five of my friends use that same company because that's exactly who I want to use.

that come across nicer to the person that's getting canceled?

Okay.

And so that's my favorite of his books.

And he's incredibly successful.

And he is a phenomenal marketer and a very successful business person, not just a marketer, across a variety of domains from...

Selling newsletters and information to real estate to just a whole bunch of...

He's been involved in a lot of businesses and invested in a bunch of businesses.

So he's got a lot of experience.

Yeah.

Yeah.

What, uh, what does that mean, and is it really even what you need in your business? Tons of people early in their business have heard, and it's, you know, I am a person that conveys this message.

I believe it.

People need operations managers earlier in their business than they realize.

But if you hear that, you're like, "Well, I need one." Well, m- maybe or maybe all you need is just an assistant that can run around and do things for you.

So it's like, it's this getting really clear is what I'd say.

What is this long answer to, uh, trying to answer what you're asking.

[laughs]

Well, now at six, seven, eight, nine percent, 10% for some people if they don't have great credit on equipment even, uh, it's completely different calculus.

Yeah.

I, I agree.

I have a, a whole list of things that, you know, you, we can talk about that you can do and that's absolutely, that fits right into that bucket of the things that I think strategically you wanna be thinking about.

Um, maybe going back to the interest rate a bit.

Something I think I should put out there is what I'm seeing, and we might have talked about this a little bit before, but in talking to lots of lot, other business owners and then talking to some we'll call them consultants in the trades that work with lots of owners, they're seeing a lot of their clients and they're seeing a lot of companies in the industry missing their numbers.

So they might have had goals and they're not hitting the goals this year or their da- they're not necessarily...

Uh, but what's sort of, uh, your feedback on this overall trend?

If I have low profit, is that because I'm growing, or is that because I have an unprofitable business? And then what can I do to fix that? And so that's how I kind of ti- de- determine what profit is those three ways, and I'm sure there's, uh, there's, uh, other ways to measure it, but those are the three ways I always think about it.

Yeah, and th- those are the typical ways I would as well.

And for the purpose of this conversation, we're really gonna be focusing on net profit, although i- in the sense that that's the money you have left over to grow the business with.

That's the money you have left over to live a life.

That, that's, that's what we're all, we all started a business for is that net profit number.

Now, all these other Numbers are imperative, and what we're gonna talk about impacts the other two types of profit that Mike talked about, but at the end of the day, they all drive down to this net profit number, which could be your take-home number.

And so that's the number I tend to think when most people say, "I'm highly profitable," or, "I'm not profitable," that they tend to be talking about is that net profit number that is usually shown at the bottom of...

Wow

Go ahead.

Okay.

All right.

So I think what we do, what I've done, I suspect a lot of us do this, is we sorta have a plan for the next year, and my, my belief is most of us, our plan is based around revenue.

Like, you'll of course say, "Hey, I wanna fix this," or, "I wanna get a new truck," or, "I wanna replace this per-" Like, there's th- "I need to hire another person." Like, that's part of it.

But if you think about the way most people think about what would make a better next year, it's usually, "I wanna grow my business by X. I wanna make more money." It's something revenue related, okay? And so most of us technically have a plan.

"I wanna grow my revenue by 100 grand.

Yeah.

[chuckles]

Like...

Yeah, yeah, yeah.

You know, door knocking.

Like all the things.

Like, so I'm setting the tone for when I bring in a future leader to run this, that they can sort of follow the template.

It's kinda like you as a leader create the culture, and then that culture needs to get mimicked by your team.

Got it.

So we know the lawn care millionaire and service autopilot, all the things that you've done throughout the years, like a decade now, what were those humble beginnings that you kind of alluded to in your business in lawn care?

Yeah.

Okay.

All right.

So I'll tell you a quick story.

So as I told you, I never thought I was going to be back in the lawn care business.

I was doing this other business with some individuals and my partners were always starting other businesses.

Like, you know, like what is, is there a transition to be able to then get to the million dollar mark and above and get to eight figures and all that? Or is it similar, but, you know, just looks different as you grow?

Go ahead.

All right.

The o- the other thing where I felt like there were some similarities in what you said is your number two and then mine is I was kind of thinking about these phases that you go through, and you kind of alluded to it.

So I kind of think about in the earlier days in the business, you're... you run everything, you answer everything, you, you do all the work, or you do all the work with your team.

Like, that is...

And you get programmed to live your life that way.

Like, this is what you do every day.

Yep.

What's your second one?

Second one somewhat aligns with this because it's related to money.

It's the speed of getting paid.

[laughs] It's like, you know, I know you talk about it as well.

It's, it was the breakthrough going way back...

It, it's really been the breakthrough in every business I've ever had.

Like, how do you finance these things? So way back in the cleaning industry days where they would pay on 30 and 60-day terms, we would renegotiate to get paid weekly.

All right, what's your third one?

[laughs]

I'm gonna sound like I'm just repeating you guys.

I've been in lots of different circles in life, and I do not like fake, and I do not like showy.

And in this industry, there's a lot of people that every day wake up and do the work and work really hard, and I love people that put their head down and go and build things and work really hard, kind of s- I think of as like salt of the earth.

That's how we built this country, and that's what you find inside this industry, and I love it.

They're my people.

What'd you learn building Lawn Care Millionaire YouTube back in the day, five for fifty now?

I didn't learn the lessons I needed to learn because it was just this little bitty thing I did, and I did it at a time that YouTube was easy.

nah,

I have no interest in this.

He convinces me.

We go to lunch.

And this fella, probably 65-year-old guy, is selling his business.

He's doing about $50,000 a year in gross revenue on an old Cushman Ryder.

I don't know if anybody knows what that is.

Like, you know, like what is, is there a transition to be able to then get to the million dollar mark and above and get to eight figures and all that? Or is it similar, but, you know, just looks different as you grow?

Is there a tipping point in terms of profitability or tax? What is sort of your way to identify when is the right time to diversify and invest outside the business?

Yeah, it's definitely a personal thing, and I don't think there's a tipping point based on tax.

Um, I wouldn't wanna try to keep my income under any certain level or anything like that.

Uh, t- the way I...

It's gonna come down to, in my opinion, what does the owner want? They gotta get clear on what do they want.

And the principle that I really believe in is that most of us, we're really gonna create all of our wealth by concentrating, like concentrating on the business we have or concentrating on building a business.

And so that's how you get wealthy.

[laughs]

how can I get some of these benefits and think about my business more as an investor instead of an operator? And is there some sort of a middle ground that I can use these principles to get out of an operator's mindset and do much more of an investor, not like private equity, but what are the sort of mental shifts or even the skillset shifts that someone can adopt to take on more of an investor mindset in their own business?

Well, it really goes back to much of what I said.

So the first question you asked was in hindsight, the perfect buildup for this, because if you, I think it's really valuable.

We spent a lot of time talking about how a private equity company would look at a business.

If that's how they look at the business, then what can you extrapolate from that, that maybe you should be doing? So I'll kind of think about that list again, as I rattled it off.

you wanna be very thoughtful about the market you're serving.

Okay, so if I used to give this analogy in Academy and I'll come right back to this.

Yeah.

And so.

Yep.

So along these lines of complexity, um, at City Turf, we created some complexity for ourselves, but I, but I believe for the right reason.

So the backstory here, and we've probably talked about it here, is we...

Our mowing business is smaller than it used to be by a decent amount, and that's intentional.

And we started transitioning the business years ago to more fertilization we control.

So something like 93 to 95% of all our clients buy fertilization we control.

Okay.

If someone's wanting to maybe shift how they think about it, is there any ways that you think might help them, or did you always have this mindset of there's opportunity or there's room?

Uh, the first part of that is no. [chuckles] I did not have this mindset.

I was definitely ambitious as a young person.

I wanted to have more money than I had growing up, and I wanted to have cool stuff.

So I was very motivated, but I didn't know how to get it.

I didn't know anybody that had it.

I didn't really have any examples around me of wealthy people.

Where does that name come from, and what's kind of the purpose of this?

Yeah, like, what did you learn about either yourself or even for someone that, let's just say for a moment they've made a sale or they're between businesses, would you recommend it? But more importantly, how would you structure it?

Yeah.

Yeah.

So, uh, I'll just tell you what I did first.

Man, I 100% recommend it, and I would 100% recommend it without a sale, but you've got to build the business to a place where the business can support it.

And I, I don't know how to...

I think...

Yeah.

[laughs]

...

but it will never happen.

All right, so, um, wh- where I was going with that, we've talked about this over the years and, you know, there's a...

And I agree with you.

There's, like, this amazing value of bringing everybody back to the shop and having everything right there and seeing everything every day and being able to coach in the moment.

All...

Mm-hmm.

What are some of your biggest takeaways?

Everybody's an expert at, at a...

They've got a thing.

Like, so, uh, I think maybe one of the biggest ideas that I might've had is I was gonna g- it's the same thing that happened to me when I sold Service Autopilot.

So I sell the Service Autopilot business.

We have a leadership team.

We do all kinds of planning and, like, we'll just call it meetings, like, where you're trying to figure stuff out.

Mm-hmm.

Yeah.

I don't know.

I, that's kinda how I think about this.

And so I just feel like this ex- higher rates, homes not selling is just gonna be the way it is for quite some time to come, and I go back to something we've already talked about and that is I think what's happening in the market where people just, I mean, everybody I talk to, like companies are growing, but they're not growing to expectations.

Like some are, but a lot of them aren't, and they're spending pretty significant amounts of money still marketing.

It's just like the quality of leads are lower, the lead flow is lower.

A lot of people are seeing that.

Very hard.

I like more recent.

Okay, so this one's actually pretty quick, so if I need to do another one let me know.

So Service Autopilot V3, uh, there was a learning that came from it.

The failure happened in my mind because we sold the business.

I mean, that's the short of it.

But we also, uh, saw the clues of maybe making a mistake right after we sold the business.

So here's the idea.

Uh, and so what happens? How do they buy? Does this change who we're actually even going after with marketing, uh, as this begins to happen, the wealth transfer?

You, you, you start off.

Okay.

Sure.

Um, so I only thought about it from a few stan- a few things.

So, um, starting kinda at the business thing, I won't spend much time on this one 'cause we've talked about it before.

Um, I would be very attracted figuring out how to wiggle my way into the private equity world in some way.

Um, and, or because I don't have money, I don't know how else I would do it, uh, bec- but I just think there's a real angle with my knowledge around private equity, focused on home services, applying technology, sophisticated finance knowledge, like KPIs, tracking, understanding the, the numbers that move a business, marketing, like really bringing sophistication in those areas to home services businesses.

[laughs]

So what would you be giving advice to that person that is actually building to exit the business and not just live on it, more of a sustainable passive investment for the long term?

You probably need to clean up some stuff in your business.

So I would tell you first and foremost, there's, there's a lot of things we can talk about here, but you need your accounting and your books to be very clean, very trustworthy.

They need to...

If they're gonna get audited and they're gonna get compared to all your bank statements, like they, these peop- the people buying are not dumb.

[laughs] They are very sophisticated.

And so it, your stuff has to be legitimately clean.

[laughs]

[laughs]

Because, yeah, and so Loom is an example of keeping someone like myself focused.

[laughs] To a degree.

And so it's like, okay, what's the conversation? What's the point here? Here's a problem, solution.

Whatever the scenario is, I create a Loom on that, and I can send it to you.

So most of my communication is done with people via Loom by, like, "Hey, I need to get this done," and then I can give them all the context that they need.

So here would be an example of why I like it better than a typical phone conversation or a Google Meet.

I was analyzing someone's presentation, and I didn't wanna wa- Now, usually you'd go through the presentation, kinda gather your thoughts, and then you would make your video response, whereas in this case, I was able to go to the next slide, be quiet, digest it, respond to it right away, and then just click one button and it removed all the gaps where I was quiet, and it was a perfect presentation afterwards.