Video Transcription:

Just grinding through the fall season here and I want to make a quick video about the 3 bottlenecks to growing your business fast and breaking a million mark and well beyond. Traditionally in a business we find that there’s 3 bottlenecks of when you go to scale a business; The first one is really going out and growing fast without having the right people on your bench and reinforcing the culture, the next one is growing fast and not knowing your numbers and the final one is cash flow. As we dive into this we’re going to scale this business and create a scalable business that is replicable without the business owner and as you know basically when I realized I want to get at the day-to-day operations of my business and achieve the success that I wanted I needed to go in and create a culture that was replicable and basically empowered my vision and where I wanted the company to go. The first thing we did is we actually spent probably close to twenty five thousand dollars over two years and went out to Phoenix, Arizona and figured out how to create a mission and vision and values for the company and create a cultural piece. The business had been pretty much a revolving door sometimes to our staff and part of the reason was we had a great pay structure but we didn’t reinforce a culture so especially with our millennial workers as time went on and on after 20 plus years, almost 25 years, the staff that was with us got older and left and as we started to turn up with more of a millennial workforce we really needed to go out and create job postings that went out to be the mission vision values the culture, it was an alignment thing. Basically as we created this alignment we created job descriptions and job postings that actually went out to the culture of the business and then we actually created an interviewing process that aligned to the cultures as well, one of the examples one of the core values that we believe is we would do what we said we did in as we interviewed people pre-screening interview question would be how do you feel about when somebody says they’re going to call you back and they don’t we just let the applicant respond to that and that was a good alignment question so if they responded that they absolutely hate it and you know if someone says they’re gonna do something and they don’t do it then that right there was a good telltale sign that we needed we had a good culture alignment. The next thing was knowing our numbers so at least myself and many of us started business don’t know the numbers when we start in the business after five years of college I will tell you I hated college accounting it really didn’t teach me much it was textbook accounting but after going and buying a industry-specific education and so the school of hard knocks with the education I went out and figured out what it costs to operate per division in the business so our landscape maintenance our snow removal and we had a really good idea what it costs us to operate per employee or per man-hour breakeven before we made a profit and that created a non-emotional wage bump.It was no longer walking up to a yard going well it’s just a thirty to thirty five dollar cut in my market in the first phase was I think it’s going to take X amount of minutes to mow below an edge this yard and we’d multiply the attempts at how early and that would be our price not emotionally and then eventually with some data we were able to go in and track custom fields basically like turf square footage or square footage of the pavement they were plowing or small, medium and large shrubs different production rates so it was it evolution so I’m not suggesting if you’re following this model to make an overnight change because if you’re still making money and things are profitable but just kind of stuck in the owners head that’s an issue but the progression that we saw by knowing the numbers which was a big bottleneck to growth for our business and many other businesses it was a progression of taking what was in the owners head and creating non-emotional way of plugging in how long you thought it was going to take and then when you open up an estimate calculate the price time and budget cost before profit. Then after we hit six to twelve months worth of data and the software we’re using we’re able to create non-emotional reports so based on my guys and girls in the field in my particular equipment not on an industry average we knew not emotionally on average how long it took the mow, blow and edge that property or plow or trim the small, medium or large shrubs. So first thing is creating a culture alignment that’s not just based on a paycheck but cultural alignment getting the right people on the right seats on the bus and driving all in the same direction together surrounded by a mission vision and values and that’s gonna help. Next thing is knowing your numbers you’ve got to know your numbers if you’re going to scale that business and then the next thing is cash flow, cash flow is king so one of the things we’ve learned throughout the years it wasn’t concept that I came up with something we borrowed from Jonathan of the lawn care millionaire and his company City Turf was getting a credit card on file and billing the previous works- week so everything we did this week we could bill the following week on a Monday or Tuesday, cash was in the bank before payroll and going in creating different systems especially in the winter to diversify our contract so we took the highs and lows of the winter our net profit margin was always within about five percent each time each year so we took the risk out about balancing unlimited contracts with capped retainers prepaid so no matter what we cover a fixed and variable cost with a predictable profit margin. If you’re looking at a three major bottlenecks in your business they’re potentially going to slow you down to break that million market beyond first one is going to be having a culture and reinforcing it with the right people and being slow to hire too quick to fire and indoctrinating the culture that’s gonna help for that long ten year, next thing is knowing your numbers so having a predictable and delegateable production rate based estimating system but maybe an evolution but something that’s delegateable and it’s not going on what you think the market would charge but it’s based on your specific equipment and overhead numbers and then the last thing is cash flow cash flows king so we need to go out and create predictable systems potentially automated to follow up and make sure you got a credit card but those three main things will be your bottleneck to growth in just about any business particularly in the lawn care, landscape, home cleaning and snow plowing industry so that is predominantly what we saw as we were growing our business those were the main bottlenecks to growth and predominantly when we deal with other businesses and we talk to them those are the bottlenecks that they face as well. Any comments or questions drop below I’m happy to answer those. But those are going to be your bottlenecks to growth sad story locally here a company that from the outside looked like it was absolutely just blowing up all new fleet trucks winning all the big contracts everybody thought that they wanted but low and behold unfortunate this individual basically I’m assuming didn’t know his numbers a cash flow and they are now out of business and they blew up I’m guessing from the outside well over that million mark within two three years but with the systems and processes if I was to guess behind the scenes were not there on that ultimately led to their demise so you know very very interesting that you know we can grow a business sometimes passed that million mark because it seems to be that magic number but if we don’t have the right people in culture we don’t have the numbers not emotionally to create an estimate process with built in profits and a system to have positive cash flow especially in a seasonal business such as lawn care, snow removal you’re gonna get in trouble and you getting in trouble quick. A book I’d highly recommend is a Profit First by Mike Michalowicz and it seems a little goofy at first but I will tell you that that book in the methodology or most of the methodology at least has been instrumental in both of my businesses and it’s something to be said on a quarterly basis when your accountant calls you and says hey you owe $40,000 or so in taxes projected for the quarter when you go to look in your bank account there’s forty five thousand in there it’s not an instance where your robbing Peter to pay Paul but you’ve got that actual cash aside and you’re pulling a percentage of your net profits projected and putting in a savings account a separate bank account so your building actually projected wealth that can be pulled out in a distribution so these things are paramount and scaling a business in my opinion and it’s gonna be the foundational part to grow a successful business. So you know like I said comments or questions dropped below I’m on a beta version of Facebook live here so people are written questions in here right now and I don’t see them I’ll get some back on the recorded version but video today is just is just the main three things you got to watch what you want to scale a business quick break that million mark or whatever your goal is is having that right culture right people on the right seats on the bus the old saying goes so that culture mission vision values get those people aligned extend that 10 years so your learning curve and onboarding costs are lower number two is going to be knowing your numbers create predictable estimate system that can be delegated as well as job costing the accountability publicly for all the estimates and the crews for production meeting those goals and then the last one is cash flow cash flow systems cash is king you’re really a possible want to build that war chest of cash so you have your own internal basically line of credit when you need it and when you’re going to scale and that next individual a little bit before you need them is ideal but if you don’t have an extra cash flow in that war chest then it’s usually not possible especially in these seasonal businesses and everything’s front front loaded up in the spring especially lawn care so comments questions drop them below but hopefully that’s a little bit helpful and those are three key areas to overcome those bottlenecks are growth and if you’re checking out the Simple Growth Facebook page theres an article I just posted I wrote for one of the magazine’s nationally that brings down the exact detail on talking about here so till tomorrow we’ll see you on Facebook live.