How I'd Grow a Landscaping Business Beyond One Crew — Transcript

Full transcript

1. 0:00Uh, I own a landscape design
2. 0:02construction company in the Florida
3. 0:03panhandle. We sell primarily to
4. 0:07homeowners. Last year we did around 1.5
5. 0:10million in revenue, around 300k net.
6. 0:13This year closer to 2.2 million and 400k
7. 0:17net. Uh, I have one main crew, seven
8. 0:21crew members, and then I sub out another
9. 0:23like five guys.
10. 0:24>> Um, [clears throat] I got about 300k in
11. 0:27cash. And my big goal is to have, you
12. 0:32know, a $50 million plus landscaping
13. 0:34construction firm with multiple
14. 0:36divisions.
15. 0:36>> Enterprise, right?
16. 0:39>> What is it?
17. 0:40>> Enterprise value or sales?
18. 0:43>> Enterprise value.
19. 0:44>> Okay, got it.
20. 0:47>> Yeah. So, my main bottlenecks right now,
21. 0:50uh, it's it's kind of a little bit of
22. 0:51everything. recruiting ops, uh, deciding
23. 0:55where to place the big bets, you know,
24. 0:57buy property, invest in crews,
25. 1:01um, you know, where to put that big
26. 1:03allocation of money. So really the main
27. 1:07question I have is with everything that
28. 1:09you have with context as far as what I
29. 1:11do with the the revenue, the net cash,
30. 1:15what I have in uh you know dried powder,
31. 1:18where do you think I should put the next
32. 1:19investment that gets the highest
33. 1:21compounding return over the next 12 to
34. 1:23four or 24 months that'll give me the
35. 1:26closer to my goal? more trucks, you
36. 1:28know, buying or leasing a property that
37. 1:30I've thought of that's high traffic area
38. 1:32that could get me ideal clients, more
39. 1:35marketing brand or something else I'm
40. 1:37not seeing.
41. 1:38>> Yeah. Well, first off, uh kudos on the
42. 1:40question and context and getting to it.
43. 1:42It actually gives me very helpful. Um
44. 1:45so, basically, you have to 20x, right?
45. 1:47If you want the $50 million enterprise
46. 1:49value, so 8 million in IBIDA, call it
47. 1:506x, 6 and a halfx, uh is what you're
48. 1:53going to get in multiple. So, that gives
49. 1:54you your $50 million enterprise. You're
50. 1:55currently doing 400k. So 20x that uh
51. 1:58would be uh 8 million. So uh we got to
52. 2:01get to like 44 million, you know,
53. 2:03topline as the goal. So that's a great
54. 2:05long-term goal, but in terms of short
55. 2:07term, the best allocation of resources
56. 2:09is always going to be the constraint
57. 2:11because that's where you're going to get
58. 2:12the highest return. And so the question
59. 2:13is number one, why can't you do more of
60. 2:16what you're currently doing? So what
61. 2:18stops you?
62. 2:20>> So right now I am kind of in everything,
63. 2:23you know, I'm in what you call the
64. 2:25swamp. Sure.
65. 2:26>> You know that one to3 million where I'm
66. 2:28my hands are kind of in everything and I
67. 2:29don't really have like two to three
68. 2:30pillars
69. 2:32>> that can run crews or you know
70. 2:34eventually division like I kind of have
71. 2:36to put out all the fires. Yeah.
72. 2:37>> I have to make all the decisions. Yeah.
73. 2:39>> And I can market and sell. I've marketed
74. 2:41and sold up to this point. And I think
75. 2:43if all I had to do is market and sell, I
76. 2:45could easily take it to 10 million plus.
77. 2:48>> Yeah. pretty quickly, but I'm only able
78. 2:50to allocate maybe 20 hours of my time
79. 2:52per week, actually
80. 2:54>> go do consultations, market, and
81. 2:57>> what are close rates right now?
82. 3:00>> Close rates are right around 30%.
83. 3:03>> Okay. What's the sales motion?
84. 3:07>> The sales what? Sorry.
85. 3:09>> How do you sell people? Like what's walk
86. 3:10me through the the process of selling?
87. 3:13>> So the process is
88. 3:14>> So lead comes in from what?
89. 3:15>> They usually Yeah. And they usually come
90. 3:18in um inbound through organic search,
91. 3:21organic social. That's where I get about
92. 3:2470% of my lead flow right now,
93. 3:26>> 60 to 70%. And then they fill out a form
94. 3:29and then we schedule an in-person
95. 3:31consultation where we decide what they
96. 3:33want to do with their property. And I
97. 3:35have a range of services from everything
98. 3:37from
99. 3:38>> Yeah.
100. 3:38>> you know, full refreshes to, you know,
101. 3:42150k plus landscape design and
102. 3:44renovation projects. So there's kind of
103. 3:46a huge range.
104. 3:47>> And do you close on that meeting
105. 3:49problems?
106. 3:51>> No, it's a two-part clo. It depends on
107. 3:52what I do. So if it's a design, then we
108. 3:55have to walk through the property, get a
109. 3:57design, and then from the design, I try
110. 4:00to close during the design presentation
111. 4:02because I bring a proposal with all the
112. 4:04numbers with it.
113. 4:04>> Yeah, got it. Um, do you have any like
114. 4:08videos or anything that they see in
115. 4:10between there?
116. 4:12>> So I have my social media content. We
117. 4:15post like three times a day between
118. 4:17Instagram.
119. 4:20>> No. Yeah, I don't have an ide.
120. 4:21[laughter]
121. 4:22>> Yeah. Okay. So, um, one is there's two
122. 4:25VSSLs that are missing. Number one is
123. 4:27VSSL between um setting appointment and
124. 4:30then and then you showing up there. So,
125. 4:31that's VSSL number one. Number two is
126. 4:34between first appointment and second
127. 4:35appointment. Need a second second VSSL.
128. 4:36So, video sales letter for anyone who's
129. 4:38listening. Um, we need to do that. I
130. 4:41would do that so that you could like
131. 4:42that might be the single largest
132. 4:44influence on your close rate. And so
133. 4:46basically like you are properly priced
134. 4:48without the correct sales motion. So if
135. 4:50we do that you might boost to like 50
136. 4:52maybe 60% close rates. And at that point
137. 4:55we'd be able to increase the price by
138. 4:57like 25% 35%. And so when we do that we
139. 5:02more than double the profit. When we
140. 5:03double the profit that'll then free up
141. 5:05the cash so that we can hire some like a
142. 5:07crew chief um or a crew looter that we
143. 5:10need. So, is there somebody inside of
144. 5:11the company right now that you think is
145. 5:12a leader? I'm guessing no, because that
146. 5:14person would have already come up.
147. 5:17>> Well, there's one guy that is definitely
148. 5:20uh head and shoulders above everyone
149. 5:21else.
150. 5:22>> Okay.
151. 5:22>> He leads he leads the main crew, so like
152. 5:25the bigger projects, more complex
153. 5:26projects. He's been in the industry for
154. 5:28a long time. Then he helps on the
155. 5:29smaller projects whenever is needed. And
156. 5:32then he also oversees some of the subs.
157. 5:34So, he's honestly kind of spread thin.
158. 5:36And the goal is to get a crew leader to
159. 5:38make him a full-time project manager to
160. 5:40make him a pure pro, you know,
161. 5:42operation. He handles all of the
162. 5:44operations that cost, you know, 20
163. 5:46hours.
164. 5:47>> Yeah. How much would that cost
165. 5:48>> right now? He he he's at about a 75K.
166. 5:51>> How much would it cost to No. How much
167. 5:53would it cost to get him the help that
168. 5:54he needs?
169. 5:57>> Another
170. 5:59probably 60k position.
171. 6:01>> Okay. So, two options here. I do think
172. 6:05you should do the VSSL regardless. I'll
173. 6:06just say that. Number one. Number two,
174. 6:10are you willing to make $340,000 so that
175. 6:13you can get the time back to be able to
176. 6:16like double the revenue of the business?
177. 6:19>> 100%.
178. 6:20>> Okay. So, if we wanted to go like
179. 6:22two-step plan, make the two VSSLs, that
180. 6:25should take a day. This is not long,
181. 6:27right? And then number two, immediately
182. 6:30go put out the ads that you need to or
183. 6:32do the outreach to get the crew leader,
184. 6:35which would be easier than replacing the
185. 6:36main guy,
186. 6:37>> right?
187. 6:38>> Mhm.
188. 6:39>> So that you can debottleneck that
189. 6:42constraint so that you can have that
190. 6:43person handle most of the fires so you
191. 6:45can get another 20 hours a week back so
192. 6:47you can scale the business.
193. 6:50>> Got it. Okay,
194. 6:51>> that's it.
195. 6:51>> And
196. 6:52>> that's it.
197. 6:53>> Awesome.
198. 6:54>> Just do the VSSLs. That'll improve the
199. 6:56crows rate. That's that's upside. If
200. 6:59nothing happened, we should still put we
201. 7:01should should still make 340 so that you
202. 7:04can get the time back because you can
203. 7:05still double it assuming no margins
204. 7:07change,
205. 7:09>> right? I gotcha. And where do you think
206. 7:11we should allocate the the large kind
207. 7:13of, you know, amount of cash I'm sitting
208. 7:15on now?
209. 7:16>> Well, you're going to need more you're
210. 7:17going to need more trucks and equipment
211. 7:18soon. You're going to need more trucks
212. 7:19and equipment soon. That's what I'm
213. 7:20going to save it for.
214. 7:22>> Yep.
215. 7:23>> Okay.
216. 7:24>> So, for your business, like where is
217. 7:25capital going to go? It's always going
218. 7:27to go towards the constraint. Right now,
219. 7:28the constraint is talent. So, we're
220. 7:30going to allocate of the 400, we're
221. 7:31going to make 340. 60 is going to go to
222. 7:33the talent. So, we can increase
223. 7:33capacity. Once that talent comes in,
224. 7:35you're going to free up your time to do
225. 7:37more marketing and sales. With the
226. 7:38improved motion, you should be able to
227. 7:39close at slightly higher prices, which
228. 7:41will make up for that 60K pretty easily.
229. 7:43With that, right, we can still grow the
230. 7:45business. What's going to be the next
231. 7:46constraint? You're going to be like,
232. 7:47well, I don't have enough crews or I
233. 7:48don't have enough uh, you know, mowers,
234. 7:51whatever, right? U, at that point, it's
235. 7:53like, great. Well, I'm going to need to
236. 7:54put out another 150 grand, you know, for
237. 7:56equipment or whatever. So, it's like,
238. 7:57great, we're going to put that out and
239. 7:58that's that's how we're going to roll.
240. 7:59And then at that point, it might be uh
241. 8:01talent constraint again,
242. 8:04>> right? Gotcha. Okay,
243. 8:06>> cool.
244. 8:07>> And as Yes. And I did have one more
245. 8:09question if uh if I have the time. um as
246. 8:12far as enterprise value goes because
247. 8:14right now my business is kind of smash
248. 8:16and grab you know we go in we do the
249. 8:18project and more or less unless somebody
250. 8:21calls us for a project down the line or
251. 8:22you know they give us word of mouth you
252. 8:24know that's about all I get from them
253. 8:27>> should I try to allocate you know maybe
254. 8:29this is a six or 12 month play more
255. 8:31reoccurring revenue into the business to
256. 8:33get a higher enterprise value
257. 8:34>> the thousand% if you want to sell this
258. 8:36yes absolutely
259. 8:38>> so the the best
260. 8:40>> should be done sooner than
261. 8:41Uh I mean yeah I mean I would rather get
262. 8:44you out of the weeds first. So like get
263. 8:45your time back the the first basically
264. 8:47the first two steps that we just said
265. 8:48get the time back then from there with
266. 8:51the extra time is do I want to expand
267. 8:52the existing model or do you want to add
268. 8:54more reoccurring? Either of those would
269. 8:55be the next step.
270. 8:56>> So I would probably say I would add the
271. 8:59reoccurring nature to the business. The
272. 9:01reason I think this is important or the
273. 9:02way that I would think through this is
274. 9:03that most people that I've seen who
275. 9:04succeed with this model, they will run
276. 9:07they basically run this as their way of
277. 9:08acquiring customers profitably and then
278. 9:10that serves as a phenomenal price anchor
279. 9:12for the ongoing maintenance and
280. 9:14continuity.
281. 9:17>> Got it.
282. 9:17>> So it's like it's $75,000 for a whole
283. 9:20backyard, you know, a whole backyard
284. 9:22redo, whatever, you know, plants and all
285. 9:24that right? and then afterwards
286. 9:25it's, you know, 800 bucks a month
287. 9:28>> uh to to mow the lawn and and keep it
288. 9:30going. You just made the $75,000
289. 9:31investment. You'd rather just have the
290. 9:33guys who like
291. 9:34>> know where all the pipes are, know
292. 9:35they're not going to cut one of the one
293. 9:36of the water hoses, you know, they just
294. 9:38know where everything is, so you're just
295. 9:39like not worried about it. Cool.
296. 9:42>> Yeah, absolutely. And then as far as
297. 9:44acquiring leads for that type of uh you
298. 9:47know caliber client because that's
299. 9:49really what I'm looking for with your
300. 9:51>> with you going through everybody that
301. 9:53you contractors and home service are
302. 9:54using the workshops what's been the most
303. 9:56effective lead source
304. 9:58>> it's not like most effective lead source
305. 10:00because all like there's many so Google
306. 10:04search crushes for it you know again all
307. 10:06of them every lead source is a different
308. 10:08sales motion
309. 10:11>> so the way that you treat Google search
310. 10:12inbound leads leads is going to have a
311. 10:14different motion than how you're going
312. 10:15to treat Facebook meta ads and the
313. 10:17conversion rate like you should be
314. 10:18converting 30 you know 30% of your you
315. 10:21know Google inbound leads um at minimum
316. 10:24and then on meta it might be 10 right
317. 10:27it's just going to be different because
318. 10:28it's colder it's interruption based
319. 10:29versus intention based
320. 10:32>> gotcha yeah the only reason I ask is
321. 10:33because we've invested a lot honestly
322. 10:35since consuming your content over the
323. 10:37last two years we made like a thousand
324. 10:39pieces of content and I haven't really
325. 10:41even been into meta ads or Instagram ads
326. 10:43And I've started to gain some traction
327. 10:45and got some branding from it. So that's
328. 10:46why I asked.
329. 10:47>> No, that's good. I mean, don't stop
330. 10:49doing that. It's an and, not an or.
331. 10:52>> Cool.
332. 10:52>> Right. Got it.
333. 10:53>> All right. Rock and roll. Appreciate
334. 10:55you, man.
335. 10:55>> If you're not getting as many leads as
336. 10:57you want and your business is demand
337. 10:58constrained, [music] meaning you could
338. 11:00service more customers than you
339. 11:01currently have, then this is for you.
340. 11:03So, marketing is changing and I think
341. 11:05ACQ tends to be on the bleeding edge of
342. 11:06this stuff. We certainly spend the money
343. 11:08uh to do it, but we also build custom
344. 11:10software and we pay amazing vendors and
345. 11:12very expensive people to figure out the
346. 11:14system that we have right now. And I
347. 11:15want to share it with you kind of open
348. 11:16kimono style. If you're not getting as
349. 11:17many leads as you want, boy, do I have
350. 11:19the thing for you. Click below, book a
351. 11:21call, and uh hopefully I'll see you in
352. 11:23Vegas.