Pricing your outdoor services to capture overhead and make a Profit | Ep 1

They say you learn a lot from mistakes and I agree. Yeah, because you learn quicker, but it is something. Yeah, no, we don't. We're thick headed, man. Outdoor service people are thick headed as hell. Outdoor service owners rise and shine. It's time to start fueling your success one adventure at a time. Welcome to Outdoors, the entrepreneur brought to you by House Call Pro. We're business owners explore ways to take charge and level up. We are your host, I'm Kevin Fontaine. And this is me Amigo Patrick Harder's. Join us on this journey every Wednesday, like, comment, subscribe on our YouTube channel and listen to wherever you get your podcast and follow us on our social media platforms at Outdoorsy Boss. Patrick, our first episode, what is going on? It's exciting. This is a fun topic. I love, love discussing this. Early on in my when I was young, 19 years old, I heard a guy give me a some advice and it was basically like, I've been rich. I've been poor. Money doesn't buy happiness, but it does solve a lot of problems. So, you know, we've been in business a long time. Yeah, and we've had years that make money in some years that don't. So, you know, we want to really focus on how do we actually make money doing what we're doing? Exactly. We're so excited to be sharing our knowledge. We also want to learn from you guys listening and commenting. And this, what's exciting is being able to make money out of friend talk about this under the radar. A lot of times you think, do the college route, you know, go to work for a large corporation and we've done it different. And, you know, it's nice to be able to show up to the bank and boots and dirty jeans and everything like that. And when you have, you know, some money in your account and they treat you totally different way at the bank when you actually have money in the account. So, they do. You know, we want to make sure that we're building, building our wealth because a lot of us just get into this because we love being outdoors. We love, you know, the craft that we have what we do. But, you know, how do you go about actually making certain you're making money and not play on that rush to your lead at the end of the year? I want to look at structure of like how we're pricing our jobs out. And how are we coming up with pricing? And I think so often we just pick a number or we look at what our competitors are doing and we say, hey, we're somewhere in that range. But we wouldn't trust our competitors to most life decisions. And you got to think like what's more important in your business than the price you're charging and the profitability of your company? Exactly. Yeah. And you don't want to tie your your business onto some competitors business because you guys are A and B night and day. Totally different. And if you're not charging the right amount then you're, you know, it's hurting yourself, it's hurting your family. And, you know, one of the things we don't think about is the growth of our employees. You know, someone's going to break their back for us. You know, if they have no opportunity to grow and move up in the company then it's very limiting. So, you know, it's a duty that we have is to be financially secure in our business. No doubt. No doubt. And you've done some great things in your business, Kevin. Yeah, I mean, you know, first starting out, we have no idea what to charge, right? So we just listen to what other people are charging and say, oh, yeah, I'll do it for that. Or we, you know, race to the bottom with clients that say, I got someone that does it for 45 each. Can you do it for that? And you just say, yeah, just to get the business. So over time, I've been able to adapt consultants and pay for all kinds of programs over the years. And we've started to implement more and more processes, procedures, structure, etc. And that's really helped short up that question that I've always had about this. That or the other in regards to anything, you know, as a business owner faces, you know, what to charge is a big one each time. Yeah, I remember I came out of the franchise world and you think there's 83 franchises that I was with. And I got to simple question like, how much should we be charging for our systems? They came back and they're like, we have no idea. And I was like, you would think with that kind of background and that many people at high level, very educated people that there'd be some kind of answer, but it was all over the place. And so there wasn't a great answer. What did you do there? Did you just wing it or did you adapt a little bit? Did it last? To the end of the year, it turned on all your paperwork to your account and you go, like, how did I do this here? Which is just mind baffling to go like, oh, how did I do this year? And that was a franchise E model. That was franchise E model. So it was they were concerned about sales. It was like, hey, you got trophies for sales, but nobody got a trophy for like, hey, where did you actually put in your bank account? Exactly. You know, here's some pamphlets, here's some door hangers, here's what to say in front of a customer and your sort of product. You know, we have egos that we want to get every job. You know, we want to be the best of what we do. And like probably the number one thing you look at is your overall sales. But if you're losing money on every job or you're losing money on some big jobs, that just crushes you. So yeah, exactly. That's what I'm going to avoid to get those pitfalls out of the way and learn from the mistakes you and I have done over the years. No doubt. And it's valuable lessons learned. Yeah, no, we don't. I'm going to make this work. And I'm still learning. Bang and bang. I haven't arrived on all points that I'd like to. I keep going like, oh, that was a mistake last year. And there's always things that come up that you're not expecting. So yeah, let me go over. Sounds good. Let me go over a slide. I have where someone can look and kind of develop their own pricing. Okay, this is just a scenario we'll run here. And for one, let's capture overhead, right? So you got indirect overhead and direct overhead. Here's some of the direct indirect overhead. That's pretty common in small businesses. Rent utilities tax on the building, insurance on that building, or its contents. You know, this is all over the board. Maybe you're starting out. You may not have any warehouse or shop. You're just running out of a garage. That's totally fine because this is a can be a big fat zero, which is great for your books and great for your profit. It is, but I do think you have to like build that into your future cost too. Because a lot of times you're short-sighted and we go like, hey, I have no rent because I'm using my home. I have my garage. I have a shed in back. You know, all those expenses, but as you start growing, those start coming in. And I had this year's where you shock all your customers. Oh, yeah. Yeah. So as you go long as a small, you know, operator, then you start adding employees, etc. You're going to want to put in cost for a building or some kind of office warehouse. Yeah, you're a real smart-year planet. Yeah, you plan it out ahead of time to go. I'm going to have these costs. I might as well make a little bit more money now. So I could fund that stuff in the future and pay for it. Not stress out that you need to move out of the house or get an office or do those things and not be prepared for it. Yeah, or they come by late on a Sunday. Hey, I need to pick up my check. Yeah, Friday night at five o'clock, six o'clock. Yeah, that's no point. No. But, um, yeah, definitely build in cost for future growth. And that's another spreadsheet you guys can develop to plan and do future growth. Next is fuel. That's a big one. We all use fuel. It's a monster. Yeah. Especially my landscaping company. Devour fuel. God, the trucks and all that equipment, the mowers and talk about a fuel, fuel bill. I tried getting away from that. I put my, my designers and electric cars going like, oh, I'm going to save so much money. So they'd end up going to these charging stations for $50, $60 and two hours to charge, hour to charge. Wow. And it's like, well, that, we got rid of that in one year. So, um, so electric, is it fairly expensive or it just takes a lot of time? It can't be bold. Yeah, like you don't think of it. I think of it as being free because like, you know, we bought these little leafs and you know, they're like, okay, it's free charging and it can be come here. But when they're out an hour away and there's one charging station and it's $50 to charge for an hour, there goes my, my fuel savings disappeared quickly. Big time. And so you're going to have some tools in your overhead, you know, tool repulenishment, raking tools, etc. Shovels, it doesn't matter. You may have an equipment loan. Say you get a new mower or a new power washer or wire digger for a lighting company, anything, a lift, so many things you may have a loan for there. That's in your indirect overhead because you can't tie this to a specific job. That's what indirect means. Vehicle loan, it's insurance, it's taxes each year. If you got the maintenance on that, many repairs, you've got in company insurance, your general liability. And if you're over in my state in North Carolina, if you're over three employees, you have to get workman's comp. But if you're under, you don't have to have it. So that's a cost you may want to incorporate. Health insurance, that's another optional. Based on your scenario, you may want to put in your own health insurance and deduct it that way for a write-off owning your own business, you know, run that through your company. Yeah, and you can get away with it a lot of times to be like 25 year olds that don't care about it But the money you start digging into like guys are getting a little bit older and families like they want insurance Yeah, young young guys they don't care. Yeah Banking fees, you know credit card fees, etc. You got to have that and you're ever had That's a big one that takes up on you. Yeah, you know Offline marketing. That's your yard signs your brochures your door hangers your whatever gifts you're giving out for Referral rewards, etc. So that's all that kind of marketing Online marketing costs websites domain emails Google ads Facebook Wherever you're trying to market direct mail different things software Building up your Automations is important in our business. So routing software quickbooks What's some some other billing? The CRM's here to be you know, we've gone all over the place on CRM's and you know some are very inexpensive and very good and Some are really really expensive and we get into sales force and you're talking oh $40,000 a year on it No, there's some some that they get up there in costs. That's one thing You know a lot of times talk to people and say like what's your CRM and their biggest response you hear back is quickbooks You know like that's your CRM. That's your accounting package that right sure is your what a customer bought But you're not tracking and communicating anything in the future exactly I know they're rolling out more and more things with quickbooks They have like a contractor edition that has a bunch of add-ons, but I like a more streamlined CRM's because they're just so much better at it So you're gonna have a lot of costs Not now not when you're young and getting started out, but as you grow and Start scaling you're definitely gonna want to incorporate more and more software because it just makes life so much easier But I think the thing that we don't consider on that is like you know The value in the business if we go to sell it one day is gonna be that customer base And if you don't have a good database and it's yeah, you know hand notes or your memory Then there's nothing to sell. Yeah, and I like sending a monthly newsletter. That's an easy inexpensive thing You know, so that's an option too for people looking so next is a future buys pat you Discuss this a little bit any future trucks equipment shop Start saving now for the future Yeah, so just like an IRA There we go hit one year. Sorry dinner up. We got hit one year and it was like Four trucks all needed to be replaced at the same time and I was like that killed me like Had and planned for it didn't think about it. It's just like I'm gonna run these trucks into the ground Never understood why some guys like group some companies replace their trucks at three years or 60,000 miles And get a new ones of like what a waste of money, but then yeah, no transmissions and everything else out up to Yeah And the in the good thing about that is you can predict when to sell a truck or a piece of equipment They all have a lifespan that you can look up online and we used to like to sell our stuff before it died So it it's still had some value so we would sell our trucks and whatnot after about eight to ten years Yeah, our equipment when it still had some life in it so All right, so uniforms PPE that personal protective equipment safety supply office supplies, you know printers paper Yada yada and then you got to course anybody under payroll of indirect, you know, that's Gonna be in their office staff sales Managers owners Yeah, you know, we're ultimately billing from you know billble man hours and someone's answering the phone They're not actually contributing any money. They're not they're not billable at all. So you got to you know And eventually, you know, we get to the point that we're no longer, you know, a lot of times do available man hours because we're managing everything So that's right we become a drawdown from the company. That's right that overhead goes up. Yeah, all right Now we're gonna go look at direct overhead so direct overhead is any production payroll boots on the ground A lot of times owners early in your stage. You're definitely gonna be working out in the field. So you're gonna be in direct overhead Dragon your kids and life out. Yeah Helping you lift things Foreman you got crewman technicians, etc Other payroll that's tied to that client or to that job that would be subcontractor Pacific manager that has to just Do that job or that client sales commissions can be in direct overhead as well as bonuses and pay for performance You got ad labor burden The glorious labor burden. So that's your FICA food a soda Which in my area is about 16.65% of the base payroll Charges and then workments comp if that's something you have to implement in my area and my profession Which is landscaping and outdoor lighting companies? We're running about a 15% average on our workments comp and Your average will go up and down based on claims. So if you have a really good claim record where you only get a couple bumps and bruises each year It's gonna stay nice and low, but if that you start getting people going to the hospital etc That thing's gonna jump skyrocket and that is no bueno I was actually just talking to a guy today and his employees He tends to get a little cheaper on what he's paying his Labor employees But his insurance went up a hundred and eighty thousand dollars this year on his auto insurance On the auto. Yeah, he's like I had no idea, but they got in a ton of accidents like old bumps and dams. Oh Yeah, that'll kill you the mod. Yeah, and then of course materials everybody uses those in your job So that's a direct overhead cost and then you've got equipment rentals That can be tied to a job specific to a job and then you got to take a dump pat We all got to take a dump take a pp So any port of potty that's on a job site specific or a temporary office unit or storage unit All right, so let's run a scenario. Let's say We got one owner that works in the field and he's got two employees So he is under the workman's comparator in this case Total overhead costs are this is indirect and direct is $258,000 a Desired profit margin You want to put in there for your company to make and this case we're using 15% You know that can vary depending on how much you're trying to compete Yeah, and in this case 15% equals 38,700 because you're taking 15% of your total overhead and now we're dealing with 296,700 You're billable hours available. So this is where Depending on where you live and your climate and of course your trade how many days per year can you actually work and What does that mean in terms of hours? Yeah, you don't get the 2080 that you kind of think at the beginning of like I get 40 hours a week. That's 2080 Then you start getting rainy days and days that the guys finish early and things like that. So yeah, that drops quite a bit Yeah, cuz 52 weeks times 40 hours a week. That's 2080 So we did a realistic scenario being outside and we get you know Virginia where Pat lives in North Carolina where I live we get a good amount of rain fall each year So you're gonna have rain days you're gonna have holidays you're gonna have Hey, leave there's all kinds of things that aren't gonna get you that 1800 hour, you know that's 22080 Yeah, and I I'll admit I push that and I've I've lost employees on It's 39 degrees of raining and we're working outside That's always the day guys like I forget this. I'm gonna go. I'm sick Yeah, a truck won't start Yeah, I had a guy with type called like this is unsafe work conditions. I'm like what are you gonna melt like you're fine? That's what coats are for yeah, all right, so that's what he was gone that week like he let me water's for Stay hydrated, you know, and so you want to do this you want to have a realistic hourly output because you don't want to put 2080 in your formulation because then You're not gonna recoup your cost by only working less hours. So be conservative with this or put in 1800 per man hours per year Three guys that's 5400 man hours that we can bill for This makes an hourly rate of $55 per man hour that you need to charge and how this gets it there is overhead Plus your profit Divided by the total billable hours. Yeah, if you think he said two guys out to do a quick job that has an hour drive there hour drive back And then you're there for 20 minutes and you send a invoice for 95 bucks. Yeah, you just lost money Exactly, so it's let's get into some of the varying job types. You've got one-off jobs Where you just one and done so you can got small jobs and large jobs, reoccurring service jobs. So you create a recurring event where you're going there every week, every month, whatever the scale is there. Subcontracted service where you subcontract a lot of the work and then you may manage that work or you may choose a consult, design, management service where you're not physically performing but you're providing other elements to help the project. A good thing Pat just touched on, in-state minimum job pricing. So you're not stuck doing a half hour job and only charging a half hour. So create minimum job pricing, you know, and then another one's capture opportunity cost where what's the travel involved? What's the loading involved? Do I have to products delivered? What's that going to take? And you know, what kind of man hours is going to be involved with that? So always have that in your quoting or that job. And then charge more for difficult customers. Oh, oh my goodness. And we're, yeah. So often our difficult customers are the ones that are paying the least amount because they complain on everything and you end up going like, oh, I can't believe I agreed to this. So you're not happy. You know, they're never happy. No, and it's like your great customers are the ones that say, I care, here's a check, just come out whenever you're happy to come out because you're getting paid good money for it. And it just changes the whole dynamic of your relationship. I went to a lighting repair at a million dollar house. She picked at everything I center for quotes. Oh, well, if I get an old Amazon, I can get something for a tenth of your price. And I'm like, okay, do it. And then keep going from there. Just it's a race to the bottom with some customers. So protect yourself and have some sort of minimum pricing and being able to charge more if you find out, kind of get that winds that they're going to be really difficult. Or if it's a difficult job as well, you're on a hillside, putting in a retaining wall. Oh my gosh. Think of that. Yeah. I learned my lesson back in Charlotte, with Carolina in 1998. I got paid to sell light fixtures. So it was like 15 bucks a light. Whatever I sold is what I got paid. I sold one at the end of the driveway on a mailbox that had to trench like two sidewalks under a driveway through horrible ground. They spent three, four hours putting that one light in. And I just like, I got 15 bucks to sort of be a big word. My boss is like, you're not getting paid. I'm not paying you anything on that job at all for selling that one, which, you know, now, like, I'm going to go like, of course, why would you not charge a lot more for that? Yeah. And we had the same things happen. And we put in a lot of verbiage in our contracts for unforeseen circumstance. Yeah. There's some things you'd like to do that. Like you never want to, you don't want to be the guy going, hey, I totally missed this on this quote. And so you're going back for more money. But when there are work order changes and change orders on the job, you know, you got to dress up. But sometimes you do have to have that tough conversation. Like, this is a, this is a, that wasn't bit outright. Some other things, you know, charging more if you're developing a niche. Say you're getting better and better at what you do, you're going to create a new niche to elevate yourself up from competition, which is the best thing you can ever do. You can charge more for that. Quoting jobs and blocks of time, rounding up your jobs from three hours to a half day or a full day, if it's just under eight hours. And, and so on. If we got to the next slide, how do we further? Now that you know what to charge, how can you protect that profit that's in there in your hourly wage? Well, then a good, great way to protect your profit is to standardize all your processes that are used often. Standardizing process is takes time and effort. So choose your most profitable processes and start standardizing those. That's what you excel at. Like, there's a lot of guys in this that I talk to every day. And that's one of the hardest things to do for him is to go through, like, how do I get somebody else to do something because we just learn how to do it on our own? Right. Where we worked under directly for something, we weren't reading books and going through manuals on the standardized way. So, oh man. I go, I love it. I go nuts with. I found a army production rate binder. Okay. It was, it was old. And I don't know how I came across it. It was back in 2008. But it had every functionality you could do outside under the sun. It was unbelievable. And the production time's involved. So that got me started to like how much linear feet does it take to prune a hedge that's three foot tall to, you know, lighting, how much, how long does it take to install 10 ground lights. Yeah. So you run scenarios and build that into your quoting. All right. Let's see. We got lump sum bids. So Pat, you're, you're going through this a little bit. We're, customers are asking you to break down. What's your labor rate? What's your parts? Get away from that because you're going to race to the bottom. If they catch you, it's not that you're hiding anything, but you want to put everything you can into one quote, a flat rate quote, a lump sum bid because you're not going to ask them to pay more if the job goes over something you've quoted. Yeah. And it gets, it's a very complicated question is you look at this like a $50,000 employee doesn't cause $50,000 to us. So it's like, you know, how, what are you charging your labor rate? What are you charging for materials? It's like, you know, how much I want to break everything down and, and show everyone. And, you know, I love what we were talking about earlier just saying like this is the price to do it. This is the price not to do it. Which one would you prefer? But it a customer is there are customers out there that they want all the details. And they, as I said, I want to compare apples to apples. And it's like, well, you're not exactly. And the binding, another way to protect yourself, we mentioned is putting more, uh, verbage, legal, verbage that's binding in a contract form. So people can't go back and say, Hey, you only were out here six hours. I want you to reduce my invoice. Um, if it's a contract set up for a one price, um, say no to low, we touched on a little bit already, but customers that pick at everything price wise that you do from the start, you meet them, get a sense of that and, and just say no. It's just not worth it. Or people that want to do things lower than your minimums. Definitely. That contract is important. I mean, that's what's going to cover you. You know, we just had one recently that it was, we hit an irrigation system was two inches under the ground. It's supposed to be obviously much deeper. We hit it. We fixed it, but there's a joint down six feet from where we hit it that came loose. Did he lost 2000 gallons of water or 20,000, whatever it was? Did he, you know, sent us a $2,000 bill and so it's like, you know, there's all these different things to look at. But that contract's so important to have on your, on your proposal and them signing off. Like, hey, if you have irrigation, I want it marked, I want to know where it's at and, you know, we'll do our best. We'll fix it. But, you know, we're not responsible for everything that could possibly happen. Right. There's some what ifs that are up in the air. Now, comprehensive sales process is definitely going to help you protect your profit building in your value and having a complete sales process filtering out leads. So you can really get to your ideal client, right? So just as you're perfecting your craft, you're also going to protect or create your own ideal customer that you want to sell to the ones that don't pick in, in five and dime you on everything, the ones that value your service, no wire in business, why you do what you do that you love. You have that passion and they want the best of the best on their property and that's your clients. Yeah, I think it's a good exercise to go like who is not my customer and have that set up right? Just so you get to start seeing red flags, like, you know, in some of the sorts of talking, like I'm shopping online, I pick up some labor guys, you know, my guys that I pick up at Home Depot or, you know, 25 bucks an hour, what are you charging me? Like, you're not my girlfriend. Yeah. Is create a common service price listing or a job listing? Hey, a typical 4,000 square foot of side is X amount or a typical 10 light system that looks like your house for the front. We last did for X or lawn care apps. You can do a price list that's pretty much across the board based on a certain scenario that you can provide them over the phone or even put on your website and that helps funnel down the clients that aren't a part of your plan. Yeah. And it gives them a sense of what to expect as far as your pricing even before you get on site. So how are you adjusting for travel time? Because we find that, you know, if a job is two minutes from the office, it shouldn't be the same prices if it's an hour and a half from the office. No, no, yeah. So you could have your price list there plus travel. Yeah. So just avoid that. And then also I filter out a lot of my tire kickers with charging up front to come out to your place to look and see whether that's landscaping, hardscaping, irrigation work, et cetera, lawn care. even outdoor lighting. - Charge for designs? - Definitely charge for designs. - Oh yeah, yeah, that's another chargeable. But charging for just that initial consult, you know, hey, we can talk over the phone, no charge to you, I'll find out what you need, what you got going, maybe what your budget is, what our pricing generally ranges from to get into their perspective. And then all the time, you really need to go measure. I don't like to use any of those online measuring tools. It freaks me out because you can't see bushes under a tree, you can't see things that we have to account for. And I want to hand measure everything I do to be very precise. Plus you want to show the customer everything, drop off your pamphlets, let them get to know you and start building that relationship. We charge for that. We do give that charge back if they hire us for the work. - I've seen people do it both ways. So that's an interesting thing. But when you're new and nervous and, you know, you're running out there every job, you know, the thing to always keep mind is your customer consensus. They sense fear, they sense all of that, like bees and dogs do, same kind of thing. It's, you know, if you're running out there as quick as possible and you're panting and can't wait to get the job. - Yeah, they sense it. They know that got you under their thumb. Yep, so that process, no matter if you could go out there in 10 minutes, they need to follow the same process as a Fortune 500 company. You want to start building value with a process and they feel a part of that and they sense it. Increase your profitability. Now that you're protecting it, all right, let's look at ways to potentially increase your profit. Well, you've saved a score to job, no matter if it's a one off or recurring, well, you can start having all our card add-ons. Hey, you're there doing lighting. Hey, how about Mrs. Smith, some outdoor audio? Or, hey, Mrs. Smith, I saw the back gazebo could use some lights. We only priced the front. Man, that gazebo would look awesome. We could do it. - How do you control the lights? No, that's an easy one, like from the lighting standpoint. But, you know, landscaping, there's so many things you get at on. Like if you're there to, you know, if you're putting mulch down to put pre-emergent down and to get into some of the other things that are gonna be beneficial to them. - Yeah, for sure. So add-ons is a huge way. You've already got the client, you've already won the bid. Now, let's start farming and increasing your profitability. So, maintenance contract is another great way to add value to your bottom line because you've already spent the money to get that customer in your door. Now sell something that's gonna be reoccurring to them. - Yeah. - And you don't have to sell it. - Yeah. You're getting there every week, every month, whatever that schedule is. And now, you never sell them again, only with updates and add-ons. - Yeah. When we go to sell our businesses at reoccurring revenue, that can have multiple, add multiples to your final sale prices. You know, how long are you recurring revenue do you have? - Nice. All right, SOPs. You down with SOP, yeah, you know me. Get some SOPs in your house. These are standard operator procedures. So, this is where you take your best service and you standardize it, make it a process. This is gonna increase efficiencies as your team keeps doing more and more of this. Same function, they're gonna get better and better. And so that one's huge. Time trial, as your team, you or your team goes out and does these jobs, mowing, power washing, throwing up a wall, throwing in lights, time trial, every facet that you can. And then you're gonna do that in multiple stages. Say it's a small job, say in the next one's medium, a large, you're gonna do an average. And then now you're gonna have really great data to start building your quoting sheets. - And it mentions bonuses there. It's so often we don't think of that for employees. Like, you know, how we pay them, they're ultimately going to look to how much get as much money as possible while they're working. So if it's like, if they get the most money by working slow, they're going to work slow. If they can get overtime, they're going to get overtime. - Per hour. - Yep, three years ago, four years ago, we had 11 guys and we paid so much in overtime with 11 guys. And the next year we had five guys on a bonus structure and they did more work than the 11 guys and we had zero overtime. So it's amazing when the incentives are put in there and they're done wisely, like what you can do in your business and what other people will do for you. - Yeah, pay for performance instead of just a flat wage. - Yeah. - That's huge, but you do, you can hurt yourself on both sides of this fence. - Yep. - One side's pay for wage only so they just get hourly so they may, if they're not managed well or trained well or if your culture's not there, you're gonna get the time clock milked and they won overtime. And then the other side of the fence is you're paying them for performance so they're gonna be more efficient. Come in under budget, get paid more with a bonus, et cetera, but will they cut corners? So that's the other issue that you need to manage as well. - Or you have things that come upwards, like hey, this customer has a service call far away. Can you go knock that out? And they know there's really no bonus in it because you can't charge a customer a 600 bucks to go out and change out a lamp or whatever. So then they don't really wanna do it and then then you get into all sorts of problems because they want the bonuses. So it's always trying to come up with a system that works well and incentivize the right behavior and not the wrong ones. - The next is like technology, software automations that can significantly increase profitability for you. Better equipment, improve your team with trainings and procedure and then incentivizing your team like Pat said with goals or production, anything there. So that's just a nice little overview of what to charge and how much profit you need. - Two points on that. The SOP, like when you're looking at the SOPs a lot of times, like guys don't do that because you're doing everything yourself. Like when you're out in the field cutting grass, like you're not writing out your SOP because you're the one doing it. So you always do it the same way, but it changes everything once you have other people doing it. And a lot of times you just assume they're going to do it the way you do, but business owners always do it differently than someone that they're paying to do it. - Yeah, we do it. As an owner, we tend to do things more meticulously and perfect and guys on the wall. So we wanna, we're being identified with that where they may not be. - Yeah, and that's where standard operating procedure can help you bridge that gap. When you're performing an SOP and we'll get into that as we go through more and more of our master class and all that, but that's a great way to add what to do every step of the way so they don't miss things, you know? Or with tech automation, like House Called Pro, we use that. It has this really cool feature where you put in a checklist for your tech. So they're on a job site. Boom, bullet points and checklists, they have to check off every step before that job can be completed and charged for. - Sign off on it, 'cause if you're going back and I, why'd you check off that you check the time you check this, like you sign off and everything, you didn't do it. - Yeah. (laughs) - Yeah, the customer says, hey, my lights aren't working or whatever. - Well, and I think that gets into later, we're gonna be talking about company culture and the importance of that, but that's, you know, having employees that have that ownership mindset and how do you bring people all together? Because it gets really expensive, having crappy employees. - Big time. All right. (audience cheers) Next, we got Word of the Day. (upbeat music) What you got, Big Pha? - Just thinking what is a four letter word? - Okay. - If you wanna have more of it in your business in 2024. - Money. Oh crap, that's not four letters. Beer. Can I have beer? - Beer is it? - Yeah, there was a lot of Friday afternoons we've had, had the guys all come meet us and have a beer at the end of the day. - That's a nice culture building. - Oh yeah. - Technique. All right, so let's go with cash. Johnny Cash, Mulan Rouge, Mulan Rouge, and Robert De Nero. Oh, three synonyms. - Yeah. - But yeah, Cash, Cash is King. My dad always said Cash is King. You gotta have money in the bank. - Yep. - And you gotta protect it because what if next month it is good as this month? And you don't have any cash in your bank. Shit's gonna hit the fan, man, you gotta plan. - Well, you sell different too. Like, I was told a long time ago, make sure that always act like you have a million dollars in your bank account when you're meeting with a customer. Like, hey, I'm not gonna retire getting this job. I'm not gonna go broke if I get this job. I'd love to do this because I like what I do and this is gonna be a fun project. - Right. - That attitude conveys to the customer. So you're not in this bidding war and everything else. It's, I could walk away from the job at any time. Now, if you need to make payroll, then you need to get that job. Like, that customer's got you. And that one comes back to Baitya, where it's like, oh, I wish I never sold that because. - And I tell you, and we're gonna cover this further as we keep going each week, but having a business plan in place where you can get a line of credit from your bank. Or if you have awesome parents, et cetera or relatives, you need to have some kind of piggy bank in the background. Because like Pat said, times are not always great. And we can't predict the future nobody can. So always have a nest egg. And if that's cash, protect your cash and keep a minimum amount, always there like a pool of water. Don't let it evaporate ever. And I think in a lot of times this business owners, we become the worst one about this. And it's like, I'm working my ass off. I think I deserve a $130,000 truck. And it's like, I'm going to go out to lunch all the time. You just all send you just like putting all this out there. Wow. Yeah. Yeah. Well, that's we're going to get to that too. You can be your own worst enemy. Now usually we are. We are almost always the weak point in our business. I've been there done that. I've been my worst enemy. Yeah. Good stuff. And like we said, we are so excited guys. First episode, we can't wait to share information and gather information from you guys and build up this community of outdoorsy entrepreneurs. So that wraps up this episode. I make sure you subscribe to our YouTube channel. Outdoorsy entrepreneur. And hit those notifications. We win today, listen to wherever you get your podcasts and follow us on our social media platforms at outdoorsy boss. Our online masterclass will launch this summer and sign up for more details at outdoorsyentrepreneur.com. We are going to choose some winners to have a free course offering this spring. So check out that as we announce those entries, how you enter in future episodes. Level up your professionalism and reduce stress, baby, and workload for your business. No more paperwork. Check out House Call Pro and outdoorsy viewers receive a special introductory pricing by using our link down in the description below. Big thanks to all outdoorsy supporters as we fuel our success one adventure at a time. And just as Eris Smith wanted, you don't want to miss a thing. So refuel with us on our podcast every Wednesday. See you guys. See ya. [MUSIC]