Rasenpflege-Franchise: Das richtige Personal finden und halten

0:00Unternehmer/Gast Hey Alex, my name is Jordan and I'm the owner of a multi lawn care franchise locations. We make tall grass short. >> [laughter] >> We've been in business for 1 year and reached 600k in revenue. Nice. Nice man. I'd like to copy and paste that. Uh-huh. And reach 25 million. Okay.

0:25Um and that's Yeah, go ahead. You're good. My biggest constraint is people. Trucks? >> hire experienced technicians, they aren't always a culture fit. Mhm. And when I hire culture fits that aren't experienced, we've been unsuccessful in training them. So this is lawn care, correct? >> were seasonal, we lose half of our force. Yeah, and so this is lawn care, correct?

0:53Correct. Okay, so what I mean this is not me, you know, being insulting here. I want to be really clear. How are you unable to train people who are good culture fits on how to mow lawns? Um it's probably the pressure of the short time one. Okay. And with the lower margins, you have to be really efficient to be successful in our process.

1:24Alex Uh-huh. Okay. Um how are you paying them? I would use pay for performance. Okay. So you have a a low base pay. Mhm. And then a option to earn a percentage of revenue. Okay. Um and that option is based on what? Uh

1:50>> [clears throat] >> basically the budget hour has a a fixed cost for the customer. Mhm. And if they complete that work inside the budget hours, Mhm. >> they get a percentage of that. Of the of the like excess, right? So, they're incentivized to do more jobs faster. Absolutely. Does that Is that actually working?

2:16Alex It is for the A players. Okay. So, right now, like you have a cleaning business. I'm just going to tell you right now. You have a cleaning business. Um the business will always be constrained by talent. It's not hard to have people who would rather have somebody else mow their lawn. And so, you will always be in the recruiting and training business. And so, this is a feature, not a bug. And so, to your point of like wanting to be able to copy and paste this, the thing that you need to nail before you scale is your recruiting, hiring, and onboarding process. Like the fact that you're getting customers and you can sell them, all that stuff, like that's very easy. Also, if you're in a supply constrained industry, which you are, you likely have more pricing power, even though you feel like um you know, margins are thinner, right?

2:59Mhm. If you can barely take on more business, then you are supply constrained, right? And when you have supply and demand and supply is constrained, you can typically raise prices. What are your close rates right now? Um we are like right at 70%. Okay. So, if you're familiar with my pricing guide, if you're at like basically everything above Basically, every 10% above 35, you usually have like a 25 to 50% lift in pricing.

3:27All right? Mhm. So, what are you charging right now? I'm charging $75. An hour? Okay. Um you could probably go up to like, I don't know, 85 95 and get away with it because you're closing 70%. I doubt your close rate's going to cut in half if you go to 95. What are your margins right now?

3:51Um my margins on the direct cost of labor is about 55%. Okay. And so, that means Hold on. One moment, please. All right, so we've got >> And we 75 an hour, you're making uh 55, so you you pay them 34 bucks an hour, roughly?

4:16Yeah, there's some there's some inefficiencies that come that cost us. Driving between place to place and all that kind of stuff, right? Correct. >> Yeah, yeah, got it. So, but for you though, if you could add an extra $10 per hour or $20 per hour, it'd be pretty material, right? Yes, I I think the reason why we're at the price we are is we still have um extra capacity and we wanted to fill that before we raise prices. Okay, so do you have a lead gen issue?

4:45Alex Or do you have a talent issue? No, we we will reach that Okay. Um, once the the like in the next month. Okay. But that wouldn't it would include me adding like eight new technicians. Wait, you just said that you're you already have you need to fill up what you already have, correct?

5:10Uh, for for like a physical capacity or equipment. For equipment capacity, not head count capacity. Correct. Okay. So, >> [sighs] >> okay. So, right now you cannot take on more business, correct? Incorrect. I guess without with All right, listen to me listen to me real quick.

5:38Alex This is feeling complicated. You're closing 70%, you're going to hit capacity, you need to raise the price, you need to raise the price so you can pay people better so you can get better talent. That's the process. That being said, on the recruiting side, um what are you doing right now to bring people in? Um indeed [clears throat] ads. Okay. I mean, there's nothing really wrong with that. >> We use I mean, the thing that I tend to reject is just like at the onset you said like people are good culture fits I can't train. Like how how hard is this to train?

6:12Um it's it's not hard and that's why I I put culture into the Uh-huh. question. Cuz it seems like uh the where we really fall apart is you we're trying to raise the level of professionalism in the industry. Mhm. So quality is really big. Yeah. And we train them they they they show us they can do the work Mhm. and then when they're on their own the quality falls apart.

6:39Okay. So part of the incentive, right? How do you know the quality falls apart? Uh complaints from customers and audits. Really, really easy. So the problem is your incentive plan is only one-sided, not two-sided. So whenever you have a KPI it always has to be a past has to be a paired metric. So the classic is quality and speed. Right? So you have a speed performance, but you don't have something that weighs out the other side. So in the cleaning world, it's you get X per clean and you want to clean as many times as you can.

7:10But if you have a one-star review or a complaint, you got to go back and clean it again. Right? And so in your situation, it's going to be if you get a complaint, they don't get paid for the whole day. And we do that, but we only hit them for the work they have to complete. Okay, just make the make it make it for the week. I mean, you know what I mean? Like you just like you have to enforce this.

7:36Alex Yeah. And to be clear, you probably do you teach them like how to talk to customers? Um yes, but I would say that 75% of the time they don't have to. Okay, so then like what are the complaints about that they just like literally cut corners, quite literally? Or don't cut corners. >> [laughter] >> Yeah, the the short grass that we're supposed to make is still long. Yeah, got it. Okay, so I would say you got to do two Number one, if I'm going to pay you this performance thing, if you cut a corner, you got to go back on your own time and do it.

8:12Alex Zero, I'm not paying you for it. Number one. That would probably be my first level of defense. If that doesn't fix it, I would say that and you don't get you don't get your performance bonus for the whole day. Right, so I I just got to be a a little bit more You need to enforce Rules without enforcement are not rules, they're suggestions. Mhm. Like you sound like you want to be a nice guy cuz I'm just listening to you on the phone.

8:41Um but like you It's like you have to protect the business. And the thing that you have to protect that you have to protect most is the reputation cuz that goes fast. For sure. Right? Okay, zooming out. We're going to raise the price by at least $10 an hour. Please commit to that one. Cuz you have 70% close rate, it's not going to be an issue. I bet you can go 25 an hour more and still won't matter. Number one. Number two, we have to add a second pairing to this which is that if they [ __ ] up, they got to go back and do it on their own time. If that doesn't, you know, reinforce you know, basically punish the adverse behavior, you also pair in that if they have to do it, you know, two times in a month or I mean you would know the cadence better than me, two or three times in a month, uh they'll miss their bonuses for that and on the third time they lose their job.

9:25Alex Right? Yeah. The third thing that um we need to do is that you need to be very You need to be more specific about the training uh in terms of the actions they need to take but I think a lot of this just comes down to like if you just put the incentive right from what it sounds like if they're never even talking to the customers you got just got to get them to do the job. You just got to incentivize them well and that's basically it. And if you want to you could put a third piece of this which is that they have to take a video on their phone of the whole lawn and it probably takes I don't know 5 minutes and and then that includes it.

10:01And and if they aren't motivated or incentivized by money does that mean they're not the right person? They should be incentivized by what you reward publicly. Money is going to be a portion of that needs to align with it but if you allow people who cut corners I love that that's literally like what this is. If someone actually cuts corners in your business and you don't publicly you know give kudos to people who are consistent and you don't punish or remove the people who are not you basically reinforce that it is okay to cut corners.

10:35Alex Mhm. It's unfortunate but like you have to make an example and vast majority of people do not know how to build culture. For sure. Like you need to be >> If I understand you. >> Yeah, go ahead. Is is it so by setting that example that's how you're building culture? Yes. You have to define exactly what you want into observable terms. You have to demonstrate it in front of them. You have to get them to actually do it and then you have to see what they did and then you have to immediately correct the people who [ __ ] up. You have to give kudos to the people who do it well and you have to keep repeating it until it sticks and then you'll move on to reinforcing people for giving kudos to each other and as soon as they start giving kudos to each other in public that is when you'll know that you'll start to have built the culture and then after that what ends up happening is they start punishing each other in private meaning they say hey man you [ __ ] that up. Don't let him see that.

11:30It's going to get all of us in trouble. Awesome. Like those are the behaviors. That is how you do it. Cool? Cool and easy. Thank you very much. >> and roll, John. Appreciate you. If you are a business owner and you are not growing as fast as you'd like, I'd like to give you a free gift. So, my team and I put together the $100 scaling road map, which is basically 200 hours of us looking over all the portfolio companies we've had and what stages of growth they went through and more importantly where they got stuck and how they got past it. And so we broke it in these 10 stages and we made this little kind of quiz thing where if you put in your business information, it'll tell you where you're at and the most important part for you, what to do for each of functions of the business across product, marketing, sales, customer success, recruiting, IT, human resources, and finance. And so, no matter what you're struggling with, someone else has already struggled with it and solved it. And so, I'd like to give you this thing absolutely free. You can go to acquisitions.com/roadmap, plug in your business information, and if you want us to actually help you de-constrain the business and you're trying to scale, we'd love to help you out. On the thank you page, you can book a call with my team and we will look at your business, see if we can help, and if we can, we'll invite you out to Vegas and we'll do this in person live.