 Hey, good afternoon, everybody. Tom Stewart here with Liz Trotter. This is Smart Business Moves. It's Monday, February 15th, right? Yeah, hey, y'all. 15th, every time we hear the 15th, I think text day, text day. Well, not quite. We're getting there, though. For some of us, you know, it's gonna be in March. Yeah, then in April too, I guess. I feel so sorry for the accountants this year. I feel sorry for them with all of the crazy stuff. Oh, gosh. I wouldn't want that job on the best of times, but this year, no. You know, actually, that's how they make money, though. You know, it's... That's the point, Tom. It's being sorry for the cleaning service. It shows up if the place is trashed or, you know. Actually, that's a really, really good point. I really love a filthy house. More money for me, so, yeah. We should probably feel sorry for ourselves because we might be getting a larger bill from our CPO than what we normally do. Yeah, and we're not even gonna be able to argue it because we know it's totally legit. Yeah. Yeah, absolutely. I was talking to somebody that, oh, I know what it is. She has two customers, or she has a customer that's a couple, and one of them is an attorney and the other is an accountant. And they watch her clock, like every minute, how long she's on the clock, right? You got here at this time, you left at this time. So if anything's missing, not done, they're like, you left two minutes early. And she's like just over the edge frustrated with these people because she doesn't charge by the hour. Right. But I'm like, hey, listen, you're dealing with an attorney and accountant. Both of those jobs charge by the hour. They don't understand that you don't charge by the hour. They don't know what that means. And then you wonder exactly, what are they charging for and what's an hour? It's kind of like, you get on the phone and you're talking to your attorney or your CPA. Hey, Tom, how are you doing? How's it been? It's like you're wondering, am I paying for this right now? Yeah. Because I don't want to talk about the weather if I'm paying. I'll pay. I'll talk about it if you're okay. This conversation isn't that awesome. No. Okay. Do you hear that alarm just keeps like bleep and then going off? No, what is that? I don't hear. Alonzo, you said you were talking to him recently. Yeah, I'm glad to hear it. And next time you talk to him, you say you're talking to him daily. Tell him I said hi. Okay. And all of our, and I know he has information about our friends and stuff. So let him know that I said hi. All right, I'm trying to get this alarm off. Maybe, I don't know. You guys might just have to suffer through with it. Keep popping up. Any, anything happening out there in the SBA, PPP, tax credit world we need to know about? I don't know anything. I know Bank of America just sent out their new form. I just got it today. The one with 10 questions that you fill out. And... Yeah, I know that for PPP too, there's not a rush on the bank. I mean, they're gonna have plenty of money. The, we were kind of brainstorming with a couple of other people last week about how to do PPP too and still maximize the potential of getting the employee retention tax credits. If you'd say qualify for them in first quarter. Yeah. And it was like, well, you know, if you're comfortable that the PPP money is gonna be there, PPP too, it might be logical to wait because you can't do PPP in the tax credit at the same time. Then we started reading though and we saw that PPP too, the deadline to apply for that is the end of March. Ooh. So... That's a good piece of information. Yeah, that's just to be mindful of that. You can wait a little bit, but you don't wanna wait too long because, you know, March will be here before you know it. I actually have somebody I need to tell that to because she hasn't been doing what she needs to do. So, okay. So end of March. Yep. The way the SBA website explains it now, yeah. Of course, they've been known to change things on their website from time to time. So... What? All right. Sounds good. I got it. All right. So I don't know of anything else really going on. All right. I'm super excited. We're gonna have all these slides today, aren't we, Tom? We are going to be talking about something other than loaded direct payroll to revenue. Woo-hoo. It's all new. Hey, Tom, I was talking with somebody today and she pointed out that what we always talk about is the green numbers going up and the red numbers going down. But we never talk about when the green numbers are going down or the red numbers are going up. I was like, oh, okay. Well, we kind of are. We're just never saying that. And so we probably need to point out, if you're not doing some of these things, your red numbers will be going up instead of down. So maybe talking just a little bit more about that. Yeah, let's see. I hadn't really thought of it like that before. I did talk to a couple of people. I talked to the growth MMA group today and told them that we're gonna be talking, or one of the groups, I think it was growth. Anyway, that we are going to be talking about this today. Cause one of the things that somebody was starting to work on really, really heavily. I was like, oh, you need to be on smart business moves today. So we're talking about. Yeah. So I'm gonna go ahead and bring my little thingy here to patrician. Hey, is nobody here today? Is nobody here today? Usually people say hi. Yeah, I mean, there are people here. They just aren't talking. Hey, say hi. Let me know that you guys are here. I can't see that you're here. If I don't see, if you don't say hi. Linda's always here. Denise here. Leslie's always here. Oh, say hi, y'all. Hey, Linda. Feel better, right? Yeah, Robin's always here too. Yeah, good. Hey, Robin. You're doing better. Yo, yo. I say that all the time. People laugh at me. So, to answer your question, all things being equal, if all of these 12 numbers, you know, or whatever they are in your business, you want to be able to track these. So, if you know what all 12 of these are, you can freeze 11 of them and change one of them. And if you change a green one, and if you make that number go up, you're gonna be more profitable. If that number goes down, you're gonna be less profitable, okay? Yeah. So, like on the red numbers, if all, if 11 of them are fixed, but you got one red number that you're able to make go down, you're gonna be more profitable. If you got a red number that winds up going up, you're gonna be less profitable. So, that's what we mean. You want the red numbers to go down and the green numbers to go up. So, she understood that concept, knowing that, you know, we want the green numbers to go up and we want the red numbers to go down, but you're looking at your KPIs, you're tracking them, and some are going up, some are going down, and what if the wrong ones are going up and down? I did talk to her about, because I thought we had made this point many times, that if that's the case, the first number you wanna look at is that LDPR. If that number is going up, then you wanna address that first and fast. You don't want that number going up ever. The worst case scenario is it sits still. If you can drive it down, yay! And if you remember, we spent several weeks talking about all of the things that we could do to make that number go down. Yeah, yep, and the woman I was talking to, yeah, she understood how she's been on all these calls, she knows, all that, but the question was around, so, and we make this point a lot, Tom, you especially make this point a lot. This isn't just an exercise of looking at the numbers, it's not just, okay, yep, I see that number, it's a red number, it's supposed to go down, but it's going up, okay, checked, I looked, and this number is a green number, it's supposed to be going up, nope, it's going down, okay, checked, I looked, it's not a, what's the word I want when you just look at stuff? It's not a spectator's story. Yeah, thank you. You need to participate in the process. Yes, and so that was your point, like, if they're all over the place going up and they're going down, like, what do I do? Then it starts feeling overwhelming. I was like, well, the first thing you do is you look at your LDPR, if that number is either going down or it's in a really good spot, then you'll have to panic. Don't panic, just relax and just pick one of the other numbers, whichever one is moving maybe more quickly in a direction or that's gonna have more impact. And then I told her that today, we're gonna be talking about another really, really important number that you might wanna look at second. And so that's kind of how I brought this up today. And it's all about continuous improvement, truly. Yeah. People ask all the time, is this good number, is this good? These are my numbers. This is my average bill rate per cleaning. This is my loaded direct payroll to revenue and they throw numbers at me. Is that good? And it's all relative. And we answer the question in the context of business model and what part of the country you're in. And I mean, there's so many factors that go into that. What's more important though in terms of growing a profitable business is whatever it is, that's what it is, you know? And then it's a matter of how can we improve on it? It's like, stand on the scale and say, hey Liz, I weigh blah, blah, blah, is that good? And- But I would know, but actually I like that one, Tom, because going back to what you said, if they ask me if that's good, I can give them an answer. Like I can say, like if you tell me, Tom, that your weight is 250 pounds, is that good? Then I'm gonna say, well, how much do you weigh? I mean, how tall are you and how old are you? And I'm gonna ask you some other questions, but then I'm gonna finally say, how often do you exercise? You know, what kind of foods do you eat? After you give me all your answers, I'm gonna say, yes, Tom, that's very good, good job. Or I'm gonna say, eh, you might wanna look at that a little bit more. And I think that's what happens with KPIs. How much do you smoke? Stuff like that. Yeah, yeah, exactly. Yeah, your weight is good, but you got other issues that you really need to look at. And so I think that's a lot of times what people are looking at need to know when they're looking at their KPIs too. Yeah, that number might be okay. But the first question I wanna know is you asked me, is that number good? I might look at it initially and think, yeah, it sounds like a pretty good number. What's your profit like? What's your net profit like? If you tell me you have 1% net profit, then I'd say, well, I'm not sure then. Maybe that's not the thing to look at, but it could be, we don't know. Well, let's look at some of your other numbers. So kind of in my mind is the overall health is like your net profit. So if you tell me you weigh 250 pounds but you can't walk up a flight of stairs and you start talking to me about your overall health being bad, your blood pressure is bad, you're having to be on a lot of medication, then you probably shouldn't even be worried about your weight right now. Because that's not where the problem is. Even if the number is good, even if you're loaded direct payroll to revenue, say is low 40s, which all things being equal, that's a pretty strong number. Good number. It's definitely below average. But the real question is, is there opportunity for improvement? But Tom, if your LDPR is 40%, let's say it's exactly 40%, right? And your profit is 2%. Then you got an issue somewhere and maybe at that point, I would be looking at some of these other numbers to something that's wrong. Something's wrong. And something's wrong in a really big way to be having that big of a problem when it's not LDPR, when it doesn't look like it's LDPR. Because normally if we saw a problem like that, we would expect the very first thing we would look at if we see that your profits out of whack is LDPR. And we would expect to be able to see some improvement there first. You're loaded direct payroll screwed up. We need to figure it out. And if I see, and actually if I see a 40%, loaded direct payroll to revenue, and then I see 1%, I think your numbers are wrong. I think you're making a mistake that that's my first thing is gonna be, let's check your LDPR. If you have a 40% LDPR, I don't really know how you have 1% in profit. And it seems like your collection is wrong. Or, I'm still gonna look there first. All right, so Susan has a question, Tom, did you see it? Do you know how to figure out percentages in QuickBooks? Yeah, wow. I don't know what you mean by figure them out because it, QuickBooks shows you the percentages for so many things. What exactly do you mean, Susan? What percentages are you talking about? I'm guessing she doesn't mean just like the percentage of this thing to that in QuickBooks. QuickBooks will show you all your income categories and all your expense accounts. It will give you the dollar amount but it will also give you the percentage to revenue where you don't have to spit it out in a spreadsheet. And there are reports, almost. Well, I know in QuickBooks Online, that's top two. You can go in there and you can choose a report that will tell you percentages if that's what you're asking. Yeah. percentages of different things. Do you have a dummy QuickBooks account, Tom? Um. That was a good Tom move, right y'all? That's not what we think of for Tom. Rebecca does, but I don't even know how to get to it. Okay. And I'm gonna get that out. I don't know, give me a second. It's a good question, Susan. Sometimes it's the little things that can really make a huge impact, especially if you've been trying to figure out different percentages all along. It would be huge to be able to see that QuickBooks can give you that if you click on the right report. Stop it. Stop it. Trips. I have two very old cats. And actually these ones that you hear, this is mother and daughter that are constantly swatting at each other. All right, so while Tom's looking this up, I would like to hear from you guys. And we're gonna talk about recurring home gains and recurring home losses. Oh, looks like we already got it. Oh, it's fast. Okay, so this is a dummy company called MC Cleaners and this is hooked up to a, I guess a dummy account, a test account, a demo account that we haven't made central. So I'm not sure how much data's in here, but I'm gonna go to reports, if you can see where that is. Or on the left-hand side, Susan, if you didn't see where he was. All right, over here. This is QuickBooks online, by the way. We moved away from desktop a few years ago. This integrates, I mean, this is the only thing that integrates was made central, but it's really an awesome program. I know a lot of people are a bit hesitant to move from desktop if that's what they're used to. Yeah, I was there too, but this is always backed up every night. QuickBooks takes care of that for you and to it takes care of it for you. It's got all the functionality you would need and you can get to it whenever you wanna get to it wherever you are, you don't have to be in the office to do it. And in a COVID-19 world where you might not be at the office every day, that's particularly handy. So that's my plug for QuickBooks online. I really like it. If you know Megan Likes, which almost everybody does, she is a huge proponent of QuickBooks online and she can even give you a, get you some sort of a discount. I think it was like 40% off or something. It was a great deal. So if you're not here. If you sign up, I think, I think at least they were recently as a couple of months ago, give you a pretty steep discount for like a new user. Yeah. Like this year. Yeah. Then it goes up a little bit. And that's what too, people think like I buy the desktop and I pay it one time, I never have to pay it again. But that's not true. You have to update from time to time. And depending on what features you use, if you use it for payroll and so forth, you still have to pay them for that. But more importantly is you can get to it anywhere and even more important that you know it's backed up. How many people do we know that even they have backup plan in place and it was all good until a computer crashed? Happened to me. I had carbon night. Yeah. So I thought I was good to go. Yeah. You don't know if your backup really is, most of us don't have any idea for backups any good or not until it comes time that you need it. And sadly, too many times you find out that it isn't. Yeah. Yep. That's right. We put Trisha on. Trisha, I love your new profile pic. That's so cute. Thank you. Yeah, Liz. I sent you a picture this week. Yeah. Maybe I'll update my profile pic. I almost put it on there just to make you see it. Never do a selfie when you're driving someplace on the weekend. I like it. It looks like the, it looks like a real Tom. I don't think there is any data in this whatsoever. We'll see. Well, you can still show her how to get. Sure. Yeah. If there was data here, you would see it down in here and you'd see the columns and all the accounts where you'd be down here on the left. In order to do what you want to do in terms of get percentages to income, you just check that box right there under companies. Compare. Oh, compare you. Compare another period. Click on a percent of income and it will take every number and every account and right next to it give you the percentage of what that number is to your income. So if you've got your chart of accounts set up where you've got your cost of goods all broken out separately and you've got your direct labor separate from your office labor, your indirect labor, then this will, just by clicking that little button right there, bang, it'll let you know what your loaded payroll to revenue as a percentage. They say income, we say revenue, but it's the same thing, those two numbers. Those two words mean the same thing. No math, anything. It just tells you exactly what it is. So is that what you were looking for, Susan? It's not, let us know what you were looking for. And up here you can pick various dates or you can do custom dates and do whatever you want to do from a date standpoint. And this other thing right here is really cool is display the columns. You can do totals and by default it's typically totals but if you want to take those numbers and break them out by week or month or quarter, you can do that too. So take a little sidetrack on QuickBooks online hacks, but. But that's super helpful for people that are trying to fill in some of these numbers. So. We're just talking about loaded direct payroll to revenue if we don't know where to get it is there. Yeah, good, so really good question. Thank you for that, Susan. I'm wearing a fun shirt. I was wearing a fun shirt this week. Nothing too crazy, you know. Okay, today we're gonna talk about, I promise you we're gonna talk about average monthly attrition rate per home. And I've got a graphic here of a bucket with holes in it. So what do we mean by that? What does that represent? I love that image. I feel like it's so accurate, right? We keep pouring water in, we keep putting clients in and bringing on new clients and they're leaving just as fast as we can get them put in there. Your bucket doesn't have that many holes, Tom. I see some areas with no holes and well, I could fill that bucket faster than you could empty it. Well, you know, all things being equal. I keep saying that because, you know, a lot of times they aren't, but all things being equal if that bucket, the stuff in that bucket represents recurring homes that the more recurring homes you have in the bucket, the more profit you're going to be generating. Yeah. So the amount of recurring homes you have in a bucket is a function of a couple of things at the highest level. How fast are new homes going into it and how fast are the, you know, current homes, the incumbent homes, that the total of all your recurring homes falling out of it? And the part about this that could be really deceptive is that the rate at which homes go into that bucket is fairly constant. Now, if you're a startup and nobody's ever heard of you and you, you know, don't have any SEO, you might not even have a website, you might not be getting a lot of leads, but after you do this for a little bit, you're going to get to the point where, you know, you're going to get leads coming in through your website and people are going to call you and you're going to get, you know, an adequate amount of opportunities to quote for new homes. And at that point, that number typically doesn't start going up at the same rate as your company grows. But, so that's the water going into the top of the bucket. At some point, you know, that all things being equal, that rate of water going into the bucket is going to be constant. But if you look at that bucket, it's got holes all up and down the sides, right? So if I'm pouring water in at a constant rate, not very much is going to be leaking out initially because there's a couple of holes down there, but most of the holes are up to the point where the water is not even at, right? Right. So you keep pouring more water in, the water rises and it's going to hit more holes and more water is going to run out. The way this works in the house cleaning world is you lose customers as a percentage of the ones that you have. You want to build a spreadsheet? You know you do, Tom. You've got to get your fun somewhere. All right, so this bucket here is going to help us to see a lot of different things. And one of the things that it's going to help us be able to see, I think, is how you get into these weird cycles where you're doing marketing and everything's awesome. You've got all of these jobs and you're getting all of these customers and it's great. And then you have to turn off or you think you have to turn off your marketing because you lost an employee or you can't hire enough people or something. And one of the things that the bucket shows us is even if you stop putting new customers in, you stop adding, you're still going to continue losing. So I think that's one of the things that people forget about is you can't really afford to stop because you're going to continue losing. And then that just perpetuates that cycle. And that's not the only thing that perpetuates it but it's definitely one of them. All right, Tom, show us what you got. So let's pretend we have a company that maybe gets 10 leads a week, quotes nine of them and winds up turning four of them into recurring homes. And that's a pretty good, pretty decent number. So I guess it depends. I mean, if you do in-home estimates and stuff like that that you can get hires number than that but if you're quoting over the phone on your website, 40% lead to recurring home. I know most companies would be happy with that. Wouldn't you think Liz? Yeah, I would think so. In-home, definitely not but nowadays so much is done on the website and over the phone, absolutely. And as an average, I think if you're just doing the website you would be thrilled to be getting 40%. That raises a little bit when you are doing phone because you can close quite a bit more on the phone than you can through your website. Typically, if you can close more on your website then you can buy phone. Awesome, share, share your strategies. But most people it works like this in-home, you close almost every single one of them. And then your phone, you close a good chunk of them and then your website and not so many, right? So. So we're gonna say that we're gaining four homes a week. Okay. Just to illustrate this. And we're gonna say that we're losing 5% of those homes a month, okay? Yeah. So let's do this. I'm losing 5% a month and this is kind of rough math and I'm kind of, you try to get fancy with this with the compounding and the miracle of compounding but just a few things simple. I'm gonna take that 5% and divide it by 4.3333. And then anybody wondering why I divided it by 4.3333? I think they probably know, but go ahead, Tom. That's the number of weeks in a month. A lot of times we just quickly say, well, there's four weeks in a month. Well, you always got that little bit more because it's like 52 weeks in a year. So 52 divided by four is 13. There's not 13 months, there's 12. So that 0.3333 when you're doing stuff like this really matters. So that's why we do that. So that means that I'm gonna say per week here, per month, keep it straight. If I'm losing 1.15 of my recurring customers on a weekly basis and I've got four of them, if I do that percentage times four, that's how many I lost, okay? Okay, so you lost less than a person, right? Or less than a customer, less than half a customer. Yeah, 0.04, so 4.100s of a customer. So if I take the difference between the gain and the loss, I've got 4.9, excuse me, 3.95 customers at that point. So it's like... Anybody getting hung up on this at all right now because I know it can seem confusing, how can you have 3.95 customers? It's kind of like, how can you have 2.5 babies, right? The odds are really strong at the end of that first week you'll still have four customers because you're right. You're not gonna end up the fraction, it's gonna be a whole number. So if we want to, I can do that. Is that what you still got four? So I am gonna drag these guys down like this. And the reason why it's looking a little bit wonky is because we have, at this point, we have so few customers, right? If we had more customers, the numbers would be a little bit easier to understand. Now, the percentage loss, the loss for this week, isn't gonna be this 1.15% times just four because I've got the four from this week plus the four that I got in week two, right? So now we have eight customers. Well, really it's 7.95 but we're going to... As far as how many people were cleaning, how many houses, we're still cleaning those eight houses now. So I'm gonna multiply the total from last week plus the ones I got from this week times my 1.15. That's, I'm losing 0.09. So still far less than one, okay? Yeah. If I drag this guy down here now, let's see what's going on. This number here now is this number plus this number, okay? Okay. So according to this, we really haven't lost anybody yet but if I go back here a couple of decimal points, you can see I have a little bit. It's just, you say that these numbers aren't quite, where you want them to be. But something's funky there, Tom. I need to subtract that number. There we go. There we go, there we go. So the total is basically last week's total plus what we gained minus what we lost. And because these numbers are so small right here, y'all, it doesn't look like it makes any difference. Well, five weeks in, I still really haven't lost any more people, but have you? If I look at the total gained over that five week period, I've got a sum of 20. Four times five is 20, but this is showing 19 now. Because now we're one. We can actually bring it in the same amount of people, same percentage going out. And we have a net customer base. We lost a customer overall. So we have net negative one instead of having the same amount that we were having before, we were having growth. But now, oh. Well, you're still growing. You're still growing, but not at the same rate. No, the rate of growth is starting to dip down a little bit. You added like 3.77 customers this week as opposed to four because your attrition rate's going up. If I take this and keep going now, net, yeah, gain minus loss. I keep dragging this down. If I go out down here to say week 52, by the time I get to the year, I'm gaining four, but I'm losing almost two, right? So my net is just a little snitch over two per week because the more customers I have, the more customers I have. So you're losing that many per week. So instead of gaining four every week, you're only gaining half that amount. I'm gonna go down here. Goodness gracious, 255 weeks. So help me with my math here, divide it by 52. That's almost five years out. You're still growing a little bit, but not nearly as much. I'm gaining four, but I'm losing 3.8 almost. See how my number is 3.8. So do you guys see what's happening there? It's hard, I know when he just... Let me go up here. So what do all these numbers mean again? You guys with me, is this helpful? So tell me, Patricia, Denit, Susan, Lizzie, Robin, are you guys following along with this? You see what's happening here. The loss number is getting closer and closer to the gain number, which means my net is kind of getting to the point where it's almost zero. And you see how that... You probably need to have that column in there, Tom, that net column. So you can see that initially you're getting this many. You have net of four new, but then... You can do that. Usually when they get it, they're happy to say they got it. And we're not getting any comments at all. It's bleeding me to keep this. We're losing it. We're gonna have to make somebody cry here. You see how the net keeps getting smaller and growth? This is called flatlining. And I'm gonna keep dragging this down a little bit. I go 10 years out, which is somewhere like right here. And for all practical purposes, I flatlined at 342. Yep, and it happened a while back. That means all things being equal if I gain four homes a week and I lose 5% of them a month, then eventually I'll get 342 homes and no more. And he didn't mean he loses 5% of the four. He meant he loses 5% of the total, right? Because the more homes you have, the more homes you have to lose. Because when we think about this, we talked about this sometime over the last few weeks. It's like you take all the recurring homes you have and you take the number of homes that you, the recurring homes that you've lost within a month and divide it by all the recurring homes you have. And that's your attrition rate for that month. Dividing about all the homes that you have, not just the ones that you sold over the course of that month. All right, so show us that math, Tom. So we're a month out. Show us we are one month out. What do we, what do we do? You're right, David. This is a big thing that people don't really ever look at. All right, Denique, don't worry. We'll keep it going. Tricia sounds like she's tracking, but she doesn't track this KPI. So she never really has looked at this number in this way. Let me, I just threw a graph up here real quick. Maybe this will help. And if I do this, and what do we got here? Visual aesthetic people. Nor the title, that's not really helping us much. But you see, and these are the months or the weeks, excuse me, down here, going across the bottom. And notice, and these are the number of recurring homes we have over here. You notice how quickly we're growing? We're growing. And then we're not kind of growing as fast because we're getting over here on this curve where the loss is starting to get bigger compared to the gain and the net's going down. And we get to the point where this just goes on forever and it'll never hit 350. All things being equal without changing something. So looking at this, Tom, looking at this graph and stuff, some people could look at this and think, there's really no need to change anything for like two years because the graph just continues to go up for two years and then two years in, that's when you should maybe make a change. Is that right? Well, you could think that. Why don't let's do something here. We're gonna- I know, right? So true. Tisha's impressed with how awesome you are on Excel, Tom. Oh, wow. Don't know why this alarm insists on going off over and over again. If I go about two years out, that puts us right about there because you see this is like 115 weeks. So two years out would be, well, 52 would be 104, wouldn't it? So I'd be, I'll move it back a little bit. I was thinking even longer, you're still going up for a while, right? Three years. We built this spreadsheet in a way where we could do from a fancy term, they call it sensitivity analysis, but it's also called what if analysis. What if we're able to reduce our attrition rate from 5% to say 4.5% per month. Now remember, this attrition rate that we're talking about is over here. It's a red number, right? Yep. So we want it to go down, but obviously if it goes up to 6%, let's do that first. Okay. Which is going up. We got a red number that's not going down. Instead it's going up. This speaks directly to the person that I was talking to today. So, yay. So. Will this have a new line on the graph, Tom? No, it's going to be the same line. Yep, I see. No. This is, it changed the scale on me. So that kind of messed me up. I didn't plan on that. See how the scale goes to 300? Yeah. See how it goes to 400? So, let me do this. You just have to kind of remember. Tom can't play the saxophone like his son, though. It's so true. You said that. It's very true. Very true. Can you play any of the instruments your kids can play, Tom? We don't want to talk about that. They're very musically inclined. It's a very musical family. Kate's taken all my good guitars to school with her. So I don't even do that anymore, but I haven't done that in a long time. Oh, so it sounds like you used to at least be able to play. I cannot. I've never been able to play any or I never have played anything. Not even the recorder that everybody else plays in school. That still changed. But you'll look at where the number is. And I did five percent. And we basically are getting around 250, right? Yeah, what time? What does that mean? Homes, recurring homes. OK, so at two years, we've got about 250 homes. If our attrition rate is at 5 percent, I'm going to change it to 6 percent. And it goes down to I'll have to do that. I'll go down here. Two years. Two years would be one of four. Two hundred and eighteen. You know, let's see what it was at five. Well, for 40. So this is like your total customer count. Yeah, two years out. So even even though you're growing in these early months, you still will grow early weeks. You'll still grow a lot faster if you get that attrition rate down. So we do point four. It goes to two sixty six. You're going faster. Yeah. Another number. I'm going to double dip. I'm going to give you a bonus here because we weren't even supposed to talk about this today, but the number of quotes per week, we get times the close rate multiply those two together. What does that give you? It gives you this number here, right? The number of new homes per week. If I do 10 quotes and if I'm closing 40 percent of them as recurring customers, my number is going to be four, right? OK, yeah. Let's say I do something where I go from. Let's just do this. Tough craft is is liking this. If I'm doing 10 and a four percent close rate. Then. This number really is coming from this times this. Oh, right. You guys with me? No, I'm not. You have to talk me through. OK. I want to go back here just for a second. OK. What I'm showing you here is this number here quotes per week. And I'm showing you the average close rate for recurring customers. These two numbers here I'm doing together. So you guys are getting a bonus. I'm planning on doing that today. All right. So average quotes per week is 10. So what that means is with all of your marketing channels, whatever you have coming in, Yelp, Google, Angie's List, whatever you're doing, little magazines, you have 10 quotes that you're doing. Doesn't mean that's how many leads you have, but this is how many quotes that you actually are able to give somebody a price. Right, Tom? Is that what that is? That is right. All right. So average quotes per week is not the number of people that contact you or say they want cleaning. This is the number of people that you actually give a price to, whether it's on your website, whether it is on the phone, whether it's in person, however you're able to give them a quote. All right. And then the next number is the recurring close rate. And so this is what percentage of those people that you gave a quote to that actually said yes. Okay. So that's what that means. And this number has a lot to do with, gosh, how do I say that? I'm not going to say that. I think that just will muddy the waters. I think what I was going to say would make things confusing. So, all right. So what you got here, Tom, is you show us that if we have 10 average quotes per week, and if our recurring close rate is 40%, so we close 40% of those or we close four of them, which means we get four new customers per week on average. And this is what you're going to show us here. Yeah. And we started off at 5%. So let's go back to that. Okay. Oh, if I've got an attrition rate of 5% per month, and I'm doing 10 quotes a week and I'm closing 40% of them. And this could be confusing too, because we do attrition rate. Hold on. Before we go forward, we got a question. Robin wants to know when you're talking about your close rate, are you talking about only those that close for recurring? In this discussion, all we're talking about is recurring. That's a good point. You will turn some percentage of these quotes will become one-time sales. But for the sake of this discussion and building this model, we aren't including the one-times. So we're assuming that 40% is all recurring customers. And the assumption here is that the majority of your business is based on recurring customers. So if I'm able to leave those the same, and if I'm able to get this down to, say, 4%, at the end of year one, I guess, is 155 and 240, these numbers go up to 1,64 and 266. Now, what we haven't done here. What were they before? 1,64, 266. Or, OK, 1,240. I'm going to just put these guys up here just to kind of help us remember. OK. And this is 5%? That's at 5%, with 10 quotes and 40. Yeah. And these two numbers here are green. And this number here is supposed to be red. And so tell me, what does that mean, you guys? Why is he telling us that these numbers are green and this other number is red? What's the point? Anybody? Because that matters. You need to know that. And when you see these numbers, typically what we think of when we see green and red in the past, you think good number, bad number. But that's not how we want you to look at green and red. We want you to look at those numbers in terms of this one going up and this one going down. Yeah, Brian, I know. Hopefully, I mean, I could do all this in advance, but I do really hope that you guys can see that some of what we're doing behind this, so you guys can do some of this on your own because this is how you really, really can get a deeper understanding of your numbers. So green numbers, all things being equal, if the green numbers go up, you're more profitable, right? Yep. Now, we haven't even turned this into profit yet. We haven't even turned this into revenue yet. Oh, we're talking about recurring homes. Yep. That's common. That'll be another day. More revenue with more clients is green. Divided by lower attrition rate is red and better. Lower the attrition rate, the better the higher the clients. Yes, relative to. I was reading as divided by. Yeah. I'm going to go back to what I'm saying, all things being equal. So I'm going to just change one number, but instead of changing the red number, which is at 5%, which I saved up here. Let's say I take the quotes and I go from 10 to 15. So that's the course of a week. That's from two a day. I'm excuse me, a course of a week. That's from like two a day to three a day, right? Yep. I can do a marketing campaign and I can do one extra quote a day and I continue to keep my close rate. Am I attrition rates the same? Wow. That's pretty, pretty significant, right? Look at year five, y'all. Your five is so amazing, right? From 326 to 489. Looking at the difference here, y'all. And that's the percent increases is constantly across. You just increased your recurring homes by 33%. Year after year over that five year period. Like I said, we haven't translated this into jobs and the revenue and to gross profit yet. We don't have a lot of activity yet, except looking at these numbers and understanding that why it's so important to be paying attention to the bucket, right? How many jobs are coming out? Super, super important because it's easy to see when you think of that bucket, even just plugging a couple of those holes will make a big difference, right? So let's back this. Go back to the 5%. What happens if I make it go 0%? Holy cow. Look at my growth graph here. I can get there. Here's an example of a number where if somebody told you this, you would say, yes, that's good. That's good. I don't care. I don't have to see anything else. Yeah. Well, no, there would be a flaw. If I saw that there, I would think there was a flaw in your numbers because people die and people move. So you have. Go ahead. We've heard people over the years make this statement that I never lose recurring customers. Never, never had never have. I heard somebody that says that they've been in business for five years and they said they've never lost recurring customer. And to me, what that means is you're tracking something different than what I'm tracking because that means you probably don't include people that die or people that move. I have never seen a model where nobody ever dies even of a car accident or something. Right. And maybe you don't ever take anybody that is older than 50, say, so that you reduce the amount of people that could potentially die, but people still move. So you're not going to get zero. This is an old number. I don't know what it currently is, but I don't know, a dozen years or so ago, the post office had a statistic that they shared with me that 2% of all the residents in the United States move on a monthly basis. And we're at the top of the aisle hour. So that's the last piece of data that y'all are getting. Okay. Okay. That's not up tomorrow. That's not up tomorrow. Exactly. Let me know. That's going to be the first question tomorrow, Tom, right there. How do you handle the recurring losses due to COVID? Which is why we're talking about this. COVID is... Do they count? Do they not count? Yeah. We'll pick up on that tomorrow, but give us some feedback. If this is working for you guys. Because... Keep in mind, we want you to understand this, the foundational understanding of it before we start telling you what to do. Otherwise, you'll just drop the ball later on down the road. Like the rest of us. If I'm skipping some stuff, I can drill into this a little deeper. Yeah. They totally count. You're welcome. Robin, he just wanted a quick answer. They do. They do count. We will see you guys tomorrow, 5 o'clock Eastern. Take care. Bye-bye. Bye, y'all.