Transcript:
0:00
Callahan’s Corner where you ask
0:02
the questions we answer them
0:03
live right here on Facebook.
0:04
Got a doozy this morning.
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Wanted to jump right in,
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submitted here via Facebook
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Messenger here. I’m going to
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read out parts of the question
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and actually dive in and answer
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this question live but kind of
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some background on this is well
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actually I’ll dive right into
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the question. Um Mike, we’re in
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the middle of doing our audits
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on the job like you were
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talking about on a recent video
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and looked at this client’s
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account over the last 90 days.
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Once again, remember, I’m
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going to open up the screen and
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show you kind of what we’re
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talking about here but when we
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go in, we do not want to
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continue to service jobs that
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aren’t profitable. So, congrats
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to this contractor. They’re
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going out and executing some of
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the the tangibles we’re
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throwing out here on Callahan’s
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Corner. So, they’re doing a
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90-day audit on every
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maintenance account among some
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other accounts I’m sure but
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particularly in a maintenance
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account here over the last 90
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days. So, they’ve done this, I
0:56
believe they’re down in the
0:57
south, possibly Florida and The
1:00
long and short of it is he he
1:02
wants no non-selective
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herbicides played applied to
1:06
his landscape beds so they’re
1:08
having to actually go out and
1:10
manually weed it. So I believe
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if I’m reading through this
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that they haven’t been able to
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keep pace because it is the
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rainy season starting down
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there with the heat the heat
1:18
and humidity. Um and they’re
1:20
weeding 95 95 percent of the
1:22
property manually. But
1:24
traditionally it’s a
1:25
non-selective herbicide sludge
1:26
is round up where they’re
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actually spraying it and be
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able to maintain that with a
1:31
significantly less effect. Uh
1:32
but time. So, it doesn’t look
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like they’ve actually raised
1:37
the price in this property but
1:38
to accommodate his needs from
1:40
what they normally do of doing
1:42
a spraying or spot spraying,
1:44
they’re actually manually
1:45
weeding the property to get as
1:47
close as they can near the
1:49
allotted time. Um they are at
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about $33 an hour on this
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account and it’s actually
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costing them $45 break even.
1:58
So, they’re actually losing the
2:00
difference between the 33 and
2:01
the $45 an hour. Um profit or
2:04
basically their revenue goal
2:06
per man hour is actually fifty.
2:08
So, they’re about 20 or $17
2:14
off. They’re they’re goal. So,
2:16
they’re actually losing money
2:17
on this account. Um they’re
2:19
getting thirty-three. They want
2:20
fifty but it’s costing them
2:22
forty-five. So, it’s about a
2:23
$17 per man hour gap here. So,
2:25
their question is the
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individual is demanding an
2:30
on-site visit with a
2:31
supervisor. Um they also have a
2:33
very large backlog of landscape
2:37
installation jobs well over a
2:38
month by the looks of it and
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their revenue per hour on their
2:42
landscape maintenance or the
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landscape installs is obviously
2:45
significantly higher and more
2:47
profitable their question is
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should they cut them loose we
2:51
should bill billing him 185 to
2:53
200 a month to break even small
2:56
profit and they’re currently
2:59
billing 1 30 so they’re at one
3:00
thirty they’re saying they
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should be somewhere between a
3:04
hundred and eightyfive and two
3:04
hundred a month so let me dive
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in and kind of put some concept
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or context to how we kind of
3:08
should track this I’m going to
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answer these questions directly
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and I’ve got a couple different
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options here because we have
3:13
been through this in my
3:14
company, the same exact issue
3:16
here. So, basically, your
3:19
client has demanded the
3:23
contractor to go out and kind
3:24
of go out outside of the normal
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standard rating operating
3:27
procedure for landscape
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maintenance. They do not want
3:30
pesticides or non-selective
3:32
herbicide. So, we’ve gone and
3:33
done some manual weeding. So,
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with all the changes, in New
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York State, this is something
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we have actually encountered so
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I’ll tell you how we tackle it
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or a couple different ways
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we’ve actually tried to tackle
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it here. So I’m going to open
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up the screen here and just put
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some context to how did this
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contractor go out and look at
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how what they should be making
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versus what they’re actually
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making to make that decision
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and if they have any questions,
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they should clarify that and
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then I’ll I’ll actually jump in
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and talk about how do we
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address this frustrated
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customer that has basically
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been able to get some services
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to make them more happy but
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it’s been outside standardized
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operating procedure or scope.
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Um so no judgement here. Trust
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me. I have done this myself. Um
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So, the first thing we’re
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looking at is a contractor is a
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simple growth client. He’s been
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watching these videos and
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they’re going in and doing the
4:23
right thing. So, that is huge
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step number one. Now, if you
4:27
haven’t seen the video that
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they’re talking about, I
4:29
want to show you this. So, what
4:30
we should be doing up here up
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top, we’ve got crew number one.
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Let’s imagine this is our
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maintenance crew. So, we should
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have budgeted times including
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drive time for all the jobs.
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So, this crew here fictitiously
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is budgeted for 20 hours and We
4:46
started at 7 AM, went to 5 PM,
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that’s a 10-hour day. I’m
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assuming they’d be running four
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tens based in this scenario and
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we got a half-hour lunch for
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two individuals on that crew.
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So, we got 20 hours an hour
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subtracted for lunch, non-paid.
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So, our payroll liability is 19
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hours and we budgeted 20 here.
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So, they’re actually one hour
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under budget. So, if this
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contractor is fully
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implementing this, these are
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the things that would go on the
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shop wall and then we’re
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actually going to dial into
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that specific job where
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thirty-3 an hour but they
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really need to be at about
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forty-five. Um but this is the
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first thing that usually will
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raise a red flag if this
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property’s in here and hurting
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us so much even on a daily
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basis throughout the week. So
5:28
we’ve got 1 0and5 percent. So
5:30
that is how we’re putting that
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on the shop wall or shop TV. 0
5:34
and 5%. Anything from 100
5:35
andabove is really good.
5:37
They’re they’re beating their
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budgeted times. You can tell
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the the crew. Hey you gave 105%
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today with a quality standard.
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You did a great job Conversely,
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if I went in and said, hey,
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we’re going to give these guys
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19 hours and they did it
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nineteen. That’s 100% once this
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update. So, they’d understand
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that with the quality standard
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and then, finally, what we
5:57
would want to do is say, okay,
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if we gave them 17 hours and it
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took them nineteen, this could
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be the direct effect. Now, this
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is a probably a smaller
6:06
residential property but if you
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had a large large HOA and
6:09
you’re only doing one or two a
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day, this could actually pop up
6:13
and be a red flag. There’s a
6:14
massive issue on this day
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because we’re going outside of
6:17
scope. We’re not spraying the
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non-selective herbicide. We’re
6:20
in Emmanuel leading at the
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customer’s request with no
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additional increase in price.
6:25
So, you could go to the crew
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and say, hey, you gave 89%
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today with a quality standard.
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So, this is a public
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accountability piece that we
6:32
should be doing daily and
6:34
reviewing weekly over here with
6:36
the company as a whole
6:37
throughout all our crews. Now,
6:40
going to the question at hand,
6:41
they’re losing money on one
6:42
specific account but before we
6:43
go in and do that audit, we
6:46
should be tracking on a daily
6:47
and weekly basis every crew as
6:48
a whole. Now, the question at
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hand is they’ve got lawn mowing
6:54
and landscape maintenance being
6:56
the Southern States most lawn
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care companies will do the bed
6:59
maintenance, some of the
7:00
pruning, and the mowing all at
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the same time in one visit. Uh
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if you’re in the north or mid
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west, it’s a little bit
7:06
different. Uh we work with
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hundreds and hundreds of
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companies across the US. This
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is very normal in the southern
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state that this contractors at.
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So, let’s let’s assume that
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this is just the bed
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maintenance portion and what
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we’re looking at is based on
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the start and top times in a
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mobile, this fictitious
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example, not the exact example
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it was submitted, but
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basically, they’re generating
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$57 and 30 cents. So, in this
7:33
example, if we had bumped this
7:35
up to about sixty-seven,
7:37
actually about sixty-nine
7:37
bucks, that’s the difference.
7:39
They’re desiring, say $69 an
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hour, they’re only getting 57
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and maybe it’s costing them $60
7:46
and operate before there’s a
7:47
profit. So, we’re losing money
7:50
on this. So, we need to go in
7:51
and figure out, okay, based on
7:53
that, what should we actually
7:55
be charging? So, the current
7:56
price is fifty-four but based
7:58
on the revenue goal and the
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historical data of the last 90
8:03
days in the question, they
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should be going out
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fictitiously. In this example,
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charging the one sixty-five.
8:09
So, I believe in the question,
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they came up with a billing
8:13
rate of somewhere on average to
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185 and 200. So, you want to
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take the average of those. I’m
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guess that’s going to come out
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to about one one ninety1 95 is
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what they should be charging.
8:24
So, to answer the question
8:26
directly, there’s there’s
8:27
there’s a couple pieces to
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this. Um first is the the
8:30
customer’s upset because we’ve
8:32
kind of basically gone out of
8:33
scope to satisfy them but we
8:35
haven’t been able to actually
8:36
maintain the property in the
8:37
same way we would with a with a
8:39
a round up or a non-selective
8:41
herbicide. So, what I would say
8:42
is we need to just have a
8:44
communication with them. Um via
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the phone with the manager. If
8:47
we decide to the client and
8:49
even if we don’t decide to keep
8:50
the client, let’s have that
8:51
conversation with them. I don’t
8:52
know if it necessarily requires
8:54
an on-site visit because if
8:57
they’re not going to pay the
8:58
higher amount, why waste the
9:00
revenue pulling a manager off
9:01
your hardscape division when
9:03
they’re generating some
9:04
revenue, making sure that
9:04
profit center’s going. So,
9:06
first thing is, I would call,
9:08
have a conversation, explain,
9:08
hey, we made the exception of
9:10
doing manual weeding. If you
9:12
want to continue the manual
9:14
weeding with no non-selective
9:16
herbicide, it’s going to be at
9:17
that 195 or 200. I would take
9:18
the high end of that at 200
9:20
because the expectation
9:21
especially in the season is
9:23
going to be pretty tough. So,
9:23
we want to make sure recovered.
9:25
We got some extra time. The
9:26
crew could do a good job. So,
9:27
they’re happy. Um the second
9:30
option there is if you
9:32
continually want to do it, we
9:34
charge them hourly. Now, this
9:36
would probably be the way to
9:38
tackle this in my opinion
9:39
because we’re going to take the
9:40
risk out of it for us and then
9:42
that gentleman who owns the
9:43
house can set a threshold to
9:44
how much he wants to pay. So,
9:46
we we basically alleviated a
9:49
billing situation there because
9:52
you know, if it’s hourly and it
9:54
takes three hours, one week,
9:56
and two hours the next week, we
9:57
want to make sure we’re
9:58
covered. So, either we raise
9:59
the price to that 195 or 200 a
10:04
week. We build them hourly with
10:05
a set cap of desired amount
10:08
that we can go up to each month
10:10
and those two options, we would
10:11
require a credit card on file
10:13
and a signed electronic
10:15
contract. So, we are covered
10:16
and we’re not going to get a
10:17
charge back because a lot of
10:19
times, you’ll see that instance
10:20
in the spring cleanup with a
10:21
contractor do the work. It’s an
10:23
hourly set amount and then it
10:24
gets disputed and who’s left to
10:26
hang the dry, the contractor.
10:27
So, you want to make sure we’re
10:28
covered there. Now, the third
10:29
option
10:32
is basically have a have a
10:34
candid conversation and say,
10:36
hey, listen, you know, we’re
10:38
sorry that you’re upset. Let’s
10:39
count them maybe a visit so we
10:40
don’t get a bad review on
10:41
Google for the inconvenience
10:43
but wash our hands but let’s
10:44
walk away. Let’s be honest.
10:45
Say, hey, we made the
10:46
exception. You’re a great
10:47
client. We’re going to manually
10:48
read this prop. We tried to
10:49
manually weed your property but
10:51
really what we do is we spray
10:53
non-selective herbicides,
10:55
Roundup and in order to get the
10:56
best quality and predictability
10:57
like we do on our other
10:59
hundreds of accounts, this is
11:00
our process we deviated the
11:02
process, try to make you happy,
11:03
and continue to have you as a
11:05
customer but unfortunately, if
11:06
you want to have these beds
11:07
maintained, it needs to be a
11:09
non-selective herbicide such as
11:11
a roundup. At this point, the
11:12
gentleman has the ability to
11:14
stay with you with the
11:15
standardized operating service
11:17
or leave you and that would
11:19
probably be my my top advice
11:23
because the problem is is when
11:24
we start to deviate our
11:26
services that are standard
11:27
across the whole entire company
11:29
for one or two individuals, It
11:30
creates inconsistency and what
11:33
people want really is only 80%.
11:35
Now, not that we shouldn’t give
11:37
them 100% but if you can give
11:38
’em 80% solid in its
11:41
predictable each and every week
11:42
and it’s a predictable process
11:44
and it’s a predictable quality,
11:46
they’re going to be happy. When
11:48
we go out, especially myself in
11:50
the early days, we go out and
11:51
try to be everything to
11:52
everybody. That’s where we get
11:53
into trouble. So, we want to
11:54
make sure that we kind of put
11:57
it back in the consumer’s hands
11:58
and say, hey, listen, we we try
11:58
to make the exception.
12:01
Unfortunately, we we can’t
12:02
continue this exception because
12:04
it’s not meeting your needs and
12:06
it’s out of scope of what we
12:06
normally do and do well that
12:08
you love. So, either you go
12:10
with an unselected herbicide
12:12
for the weed control in the
12:12
beds or we kind of part ways
12:15
and we copy maybe a mowing for
12:16
free and send some goodwill. If
12:18
we are going to keep the
12:20
customer, the two options here
12:21
is an hourly charge with the
12:24
consumer sending a cap of how
12:26
many hours, credit card on file
12:28
with signed capture or the
12:30
third option which I like the
12:31
least especially around bed
12:32
maintenance and weeding as we
12:34
that price that 195 to 200 that
12:37
we’ve seen here that we need
12:39
based on your numbers and we
12:41
move forward and continue it.
12:42
The thing you need to be
12:43
careful is job notes and
12:45
probably before and after
12:46
pictures through your mobile
12:47
app to document the process but
12:50
you are getting yourself, I
12:50
think in my opinion and I’ve
12:52
done this before is when we get
12:54
out of the scope of what we do
12:55
well and what we can train and
12:58
standardize when we get out of
12:58
that, that’s where we get into
13:00
trouble. We start losing money
13:01
and we start upsetting clients
13:02
and the quality is as good
13:04
because we’re not training to
13:06
that exact process procedure
13:07
across all say five or 600
13:10
accounts you’re servicing. So,
13:12
that is my take on it. Great
13:14
question. Um but I I gotta give
13:17
this contractor credit. If
13:18
you’re not tracking your daily
13:19
and weekly budget versus actual
13:21
hours and running that audit on
13:23
those clients in the middle of
13:25
July and November, December in
13:27
most areas and be able to raise
13:30
your dollar per man hour
13:31
revenue to the penny and make
13:33
those services apply to it. Um
13:34
you’re kind of flying lines.
13:36
So, this contractor, huge
13:39
kudos. Way to follow the
13:40
system. I would say have the
13:41
candid conversation, either
13:43
have them accept the
13:44
standardized service or they
13:45
don’t and we compliment maybe a
13:47
mowing to make sure they’re at
13:49
least kind of satisfied and
13:51
they’re not going out on social
13:51
to kill you but if you are
13:52
going to do it, do an hourly
13:54
with a minimum, signed
13:55
contract, card on file, we bill
13:56
it right afterwards, before and
13:58
after pictures in your mobile,
14:00
or the least favorite is raised
14:02
it’s the one95 to 300 or 195 to
14:04
200a visit. Same thing, have
14:07
them sign off, credit card on
14:08
file before and after pictures
14:09
and protect yourself.
14:11
Callahan’s Corner, you ask the
14:12
questions, we answer them live
14:13
right here on Facebook. We’ll
14:14
see you again later this week.