 Hey, good afternoon here Tom Stewart. This is smart business moves Liz will be joining me sometime here later on in the in the stream, but at the moment she is tied up with some other Commitment at the moment. She's Temporarily indisposed I guess we should say so We'll be holding the fort here by myself For the first part of our discussion anyway We've been having some discussions here over the last couple of weeks about various aspects in parts of Our foundations program the one that Liz Derrick and myself share and we're going to be continuing that today We're going to be talking about KPIs. We're going to be sharing a a new model relatively new model that We we came up with called Pay price productivity and efficiency or PPP e model. Hey Leslie, how are you doing today? Good to good to have you We're going to be Talking numbers, but this is going to be different. It's going to be fine Let me pull up here what we're going to be doing for the rest of the week and Next week as well before the day completely gets away from me here. Boom. Oh stop that This is our agenda for the for the three-week period and for those of you that were here yesterday Derrick Share at SEO and plainly English for us We had some requests for some other languages But we felt that we would stick with with English and that was a good discussion. I think it was useful. Hey Linda How are you today? For you guys who are joining late just to let you know Liz is on her way She's temporarily indisposed at the moment, but she'd be joining us here shortly Today we're going to going to talk about numbers a little bit we're going to be talking about Pay price productivity and efficiency and how those four numbers work together to Drive profit and it's a it's a different one But I think that you'll find it useful and have some takeaways that you can apply to your business Liz is going to be with us tomorrow and she's going to be talking about how to improve recruitment Improve recruitment to improve retention So that's kind of attacking it from both ends because everybody's struggling to recruit people But at the end of the day the idea is to hire the right people and be able to keep them. So She's got a some some some new information for she's going to be sharing on that That would pretty much wrap us up for this week. So next week. We would be jumping back into a discussion that Derrick would be leading Talking about sales as a teachable skill, which is really kind of interesting because a lot of us Kind of think that you need to be born to be a salesperson and a lot of it's about personality and behavior types and so forth, you know how Liz does disc assessments and uses that to Determine behavioral You know characteristics and you know there I guess there are some disc profiles at least the common convention is We'd make what a better salesperson than another but I think there are a lot of examples that regardless of what one's profile is Hey, how are you doing today? We're going to Be showing that you can take just about anybody that that that has a drive in an interest To learn how to do sales and a lot of it is just about the process It's about the playbook and if you follow the playbook step-by-step It doesn't matter if you're charismatic. It doesn't matter if you're outgoing. You can be introverted You can have a lot of different disc styles if you will and still be a successful salesperson by following the playbutt and Tuesday of next week. We're going to get back to KPIs again and we're going to be Demonstrating how stacking income through high-frequency recurring revenue is an awesome way to build a house cleaning business and share techniques that you can incorporate into your marketing plan into your sales approach Into your scope of work actually the type of service that that that you offer that increases the Probability that you're going to be able to take leads and turn them into high frequency recurring revenue a lot Of it is just setting the expectation up front in your your your marketing and your website and your communication plan to To clients that or prospective clients that you know any rational person would want Recurring service for their home and then you build upon that through the whole Sales and onboarding and service delivery process. So that's what we're going to be doing and we're going to be wrapping the series up Wednesday, I guess it would be your Wednesday of next week by controlling your quality standards and Liz is going to be Be leading that I forgot to mention that Thursday of this week and Thursday of next week We will be streaming and we'll be having shows. It's not going to be part of this Foundations introduction it's going to be fun and we've got some activities We'll be doing some doing zoom and getting more people, you know on zoom calls for those Thursday Meetings and you know, we might play a game. How about that? we'll go as far as to share share that and Some of us will be on the zoom playing the game and others of us might be watching The live stream, but it'll be it'll be a different experience Just so everybody knows If you're interested in foundations and more information about it There's a website and I'll drop the website in a link here in chat and Bottom line is it's an awesome program. We spend a week at the beach. We're doing it this year October 3 through 10 We spend a you know, a couple of days at our office the Castle Keepers office in Charleston as well This location is Isle of Palms It's a beachfront place this picture actually doesn't do it Justice I've got a lot of other pictures. I need to dig up to actually show It's got a pool and it's the oceans out back and It's it's really an awesome experience and you're locked in a house for a week with other cleaning business owners and it's immersive and We've got a long list of people have done this this is the 11th time that we've done it and I don't think there's a single person that's ever done this program that wouldn't tell you that it's a it's a life-changing experience that you'll build relationships and you'll make friends and you'll learn things about your business and about yourself and and take away things from this that will will affect how you approach your business from that day forward so It's it's it's really really really cool activity and we're it's we're gonna be Sharing more about this over the days ahead. I'm gonna try to dig up some pictures here Maybe I can share later this week of more about the property and where it is and How how this whole program works? So For today's discussion Let me pull up my deck here. We are going to Be talking about managing with numbers that matter This is Parts of this are presentation I did for the Gino summit parts of this are from Materials that we've used and and foundations past We got a really cool spreadsheet. I'll be able to show you here and kind of walk through You know some of the assumptions we're making in terms of how these numbers play together and How by measuring these numbers in your business you can predict outcomes and then you can play What if analysis with these numbers to? Determine what your outcomes would be if you're able to say increase your bill rate or increase your productivity or through making operational changes basically Lower your pay as it relates to to revenue or Improve your efficiency basically out of the day that somebody who's working Actually get more cleaning time out of that and reduce the amount of windshield in in in meeting time So The agenda for today we're going to start by just taking kind of a high level view of Five steps of making money in your house cleaning business And this is an evolution that I've observed over the years That every cleaning business Goes through and when you first starting out your focus and interest and needs are in one place and as you grow Your business changes and your priorities change and how you run your business changes We're going to talk about that then we're going to jump in and actually talk about The pay price productivity and efficiency model or the PPP E model Because we've talked about PPP a lot. We've talked about PPP Eli So if you're gonna, hey, what the heck? Let's just jam it all together and do PPP This is completely different. It has nothing to do with SBA loans and it has nothing to do with personal protective equipment It has to do with those four metrics pay price productivity and efficiency and how they all Relate together to to drive outcomes in your business I'm gonna talk about gross profit and why that's important and then I'm gonna show you our spreadsheet and we're going to do Guess the technical term for it is sensitivity analysis, but that's just a fancy word for Doing what if analysis so your numbers are what your numbers are But if you can put them into a model you want to be able to say well What if I raised my bill rate for $5 an hour? How would that impact revenue? Gross profit and the amount of money I'm making while a model like this will do that for you So the five steps in making money in your cleaning business Pretty much spelled out here. The first step is you want to grow the number of homes you're cleaning It's kind of funny through the coaching work that we've done over the years On certainly more than one occasion. We've Had students that that are participating in our programs have gone through foundations as a matter of fact Who had never cleaned a house or their company had never cleaned the house. They were starting from scratch. They wanted to Do foundations so they would start out the right way and know what they needed to know about the business to be successful Which is rational. It's a good thing to do The problem was they hadn't cleaned anything yet And the focus was we need to write manuals. We need to get our training materials together We need a marketing plan. We need to build our website. We need to find some office space We got to figure out, you know, what equipment we're going to get what chemicals we're going to use You know, what our pay plan is going to be and it just kind of goes on forever in days turning the weeks It starts to turn into months and Home one hasn't been cleaned yet. So you're not really in the cleaning business to start cleaning something. So you start by focusing on cleaning homes and for anybody who Has started the business from scratch and been successful. That is where the focus is but shortly The focus should change from just the number of homes you're cleaning to You know, what is the revenue you're getting for the homes that you're cleaning? Not only is it important to clean homes, but you want to be cleaning Homes that are properly priced to give you the opportunity to generate the The gross profit off of those homes that you need in order to have a successful business because the thing aren't priced right for for those of you who Have you know seen some of our earlier presentations on kpis know that if it's not priced right It's almost impossible for you to have a competitive Loaded payroll to direct load of payroll to revenue in which case Here you're going to clean a lot of homes and not have much money to show for it So the second part is growing revenue per home The third step now, I've got a slide on each one of these we're going to get in details I just want to go through these real quick is to grow your gross profit per home And again for those of you who have been with us in sessions like this past Gross profit is really the the magic number and the thing that we want to be driving up Certainly as a percentage of revenue There's operating expenses your fixed expenses if you guys remember that so the fourth step Is really focusing on the Other expenses in your business to make sure that as much of that gross profit as you're generating Translates into net profit And then finally if you're making money at some point you really need to be thinking about well What am I going to be doing with that money? and You know you need to be thinking about building wealth and investing it and doing you know smart things with it where You know it accumulates over time and you're minimizing your tax liability as you're doing it I mean those are all in other discussions, but those should be the evolutions of of any cleaning business and you can look at a business and By asking a few questions Kind of figure out where they are in that spectrum. We're all on that spectrum somewhere Um So the first is to grow the number of homes that uh that we claim And that's kind of a sales activity Um, we talk about the whole sales funnel where you get leads and you take a lead and you do a quote and You might wind up with some type of campaign where you're nurturing those leads and eventually some of them are going to decide to do business with you Out of those a smaller number of them are going to make a decision to do business with you on a long term basis Signing up for some recurring Frequency ideally it would be you know some high frequency getting their home cleaned every other week or or every week And you know, you might even have upsell opportunities for for you know through Um, you know that whole process So it's generating leads it's closing sales and it's retaining recurring clients You know customer retention is a huge part of that the whole discussion of what is the lifetime value of Of a recurring client And if you remember we measure our turnover rate is a term as a as a percentage of a monthly percentage of The homes we lose divided by all the recurring homes that we have And if you take the inverse of that whatever that percentage is and divide it into one That gives you the number of months that a recurring client Does business with you on the average for instance Um losing five percent of your recurring clients a month as a month is not a bad Baseline it's not uncommon to see that so if you have a five percent turnover rate on your recurring clients That means your average return recurring client is going to be doing business with you for 20 months So then you can kind of do the math to figure out what their lifetime value is So what does What are some of the numbers? Uh from a kpi perspective that would be important to a business that is in phase one Where we're just trying to grow the the amount of homes that we're playing Um As we said, you know leads per month obviously is an important number It all starts with with having the opportunity to sell somebody something The number of quotes that we're able to get out of those leads in this example We're saying 80 of the quotes We're getting the leads brother that we're getting we're actually quoting That number can vary greatly depending upon your business model and where your leads are coming from You know if you're getting leads primarily from you know customer referrals and things like that You're going to quote just about all of them if you're getting leads from You know lead generation sources like you know home advisor and stuff like that where they're taking that same lead and Farming it out to several cleaning companies Then you probably are you know going to be quoting a much smaller portion of those because They're not you know, it's qualified or is motivated um Another number that you would be uh interested in and managing on on phase one would be recurring close rate per quote So out of the quotes that you're doing you're going to actually close a percentage of them And then out of the ones that you close Um, what is your retention rate on those? So all of these are important Metrics for a company that is in phase one. You want to know the number the amount of leads you're getting per month You want to know what your quote per lead rate is you want to know what your recurring close rate is per quote You want to know what your customer retention rate is? Guess what these are also important numbers to know if you're in phase two three four five So as your business grows, it's not a matter of well These numbers don't matter anymore and I need to focus on the other numbers The numbers in phase one are going to be important to you regardless of what phase you're in but starting out These are the most important numbers So then you get to phase two and phase two are is is the growth Of revenue for the homes that that you claim So we talk about increasing the service frequency trying to get people who are just wanting one time cleaning to take recurring service Um, you want to control the skips skip rate is an important metric, you know at this point What percentage of your recurring clients just don't get their home cleaned on any particular day because You know, I'm out of town just go ahead and skip my cleaning and come the week after next at your normal time Well, that's lost revenue You know, you can see that skip rate of 10 or more in some company out and needs to be measured and Needs to be controlled. By the way, if anybody has any questions, please don't Be bashful about jumping in and uh, and asking we can certainly uh, stop and take questions throughout our discussion Um, upsell opportunities are certainly important. Um another way to generate additional revenue um Being able to accurately predict, uh, the the time that it's going to take to clean a home We call that the allow time Is really important for so many reasons because if you're able to predict how long it's going to take to clean a home You're able to price it more accurately to make sure that you're you're you're getting as much money for that home As you should be you're able to schedule more Tightly more efficiently. So you're able to use the day to generate more revenue Out of every hour that you're paying your technicians Um, it's it's it's it's a number that that we use in many many ways within our business that you we need to be able to do that And that's important when you're in step two of this process and um, you want to be able to um, consistently raise your rates you want to make sure that At least on an annual basis, you're you're kind of doing an audit of review of your pricing Take a look at the market. Take a look at what your costs are take some assessment as to where labor is going and uh, adjust your Rates accordingly and do like an annual rate increase for your existing customers. So these are what those numbers look like um, a loud rate Excuse me the bill rate for a loud hour Is an important metric at at, you know, the second phase of growth Number of jobs per month per home Your price uh per upsell opportunity, you know, where you're just adding on like cleaning appliances and windows and Deep cleans and things like that are um, all an important metric to be measuring Um upsells uh per jobs, you know, how many jobs do you Actually what percentage of your jobs do you actually get to do these upsells for? Is the number that you want to be measuring at this stage? Um, and your rate increase your annual rate increase is certainly a number that you want to be watching so level three I have no idea what that is for level three is uh, The gross profit and this is really where things start to get interesting and quite honestly This is where a lot of companies struggle um When you're starting out the idea is getting more homes to clean companies are usually pretty good at that Companies are pretty usually pretty good at you know, once they kind of get the ball rolling to kind of figure out What the competitors are charging and kind of charge the same rates and It's somewhere along the line. You you get pretty good at figuring out what your um, You know, how long it's going to take to clean a home when you get to this point though When you're really looking at the gross profit, this is where things get tricky And this is where uh, this is really where the money is made because we get to improve productivity at this point and You know, we talked about this is the beginning of the year as well where training is an important part improving productivity and productivity basically is a function of You know the amount of time that you think it's going to take to clean the home divided by the actual time it takes to clean the home and if you're um able to constantly have productivity at greater than a hundred percent Then you're uh, you know, you're going to be more more competitive. You're going to be more profitable Uh tools having the right tools is another way of Increasing productivity the certain products that just clean butter that you can clean You know certain vacuum cleaners that will allow you to clean more square footage of carpet, you know per Per per minute than others. Um certain cleaning agents chemicals that do a better job in others so A lot of times when we're selecting these tools and equipment we our priority needs to be productivity Which tools which which chemicals are going to allow us to clean as quickly as possible within bounds of reasonability? It doesn't even matter what you're paying for them. You're going to save that money if it's saving you labor time It's all about saving the labor time tools such as aprons or productivity enhancement tools that you know should be part of the mix um Committed workforce obviously is part of it as well You want to have compensation plans that motivate your your your cleaning professionals to be as productive as possible You know paying based on commission or paying based on you know job ticket hour, which is basically just Determining the allowed hours for a home and paying Uh an hourly rate for those allowed hours regardless of how long it actually takes the technician to clean the home um If you think it's going to take three hours to clean the home and for you might want to pay 20 bucks an hour for just the allowed time and you pay 60 bucks to clean the home and You know if they get it done in two and a half hours, they still get 60 dollars But if it takes three and a half hours that they still get 60 dollars for the home So those types of incentive programs will help with productivity as well Um improved efficiency is another dimension of this Um, let's see Denise got a comment here excited for f11 can't wait to get Her numbers in order. Well, you will I promise you you will And there's going to be work that we're going to be doing before october to kind of help with that as well but There's a ton of a number You know crunching that we'll be doing during that week as well And we're going to be talking about these things like productivity and efficiency and again efficiency is the time Uh that technicians spend actual cleaning homes divided by the time the entire work day at the time on the clock So we want efficiency to be close to as close to 100 as possible But if you're cleaning multiple homes in a day, there's always going to be a certain amount of drive time and so forth So um, you want to schedule in a way where um drive time is minimized so you want to Group your your jobs together your homes together in a way where you're you're zoning it out and you're minimizing drive time and Create incentives for your clients to be flexible in terms of how you schedule them So you can move them around and cluster them in a way to to reduce the drive time um part of that is managing clients expectations if you can get your clients to understand how important how they benefit by Helping you be more efficient You know, you want them to be spending more time cleaning their home not time looking out of a windshield going from job to job And by helping you be more efficient You can be more cost effective and you're more cost effective You know, I hope you contain your rates and you can actually make that pitch that You can make more money and you can save the customer's money if you guys work together to reduce the dot drive time and the uh, the other nine productive time And again a committed workforce here as well, you know Need to be committed to try to get the homes cleaned as as as quickly as possible and still meet the scope of work I also want to be committed to use our time between between jobs as as as efficiently as possible The final number here is the uh, loaded pay per clock hour Loaded direct payroll from from our previous discussions um So there's a lot of ways that we can do that, you know, safety programs Uh are important because if we have accidents our workers comp goes up and that takes our loaded pay and can make it go up Materially and that's just money that we're spending that we don't have to So we certainly want to manage loss runs as kind of the industry term for Accidents that the insurance company has so we want to manage those and keep them low Unemployment claims or other parts of the labor load that we You know Don't want to lose unemployment claims as a rule, you know trying to fire people more times than not this industry If it's not working out you can talk to them and they'll agree that maybe they need to find another job And they'll quit so you don't have to terminate them If you do have to terminate them make sure that you have everything properly documented and walk them through a process So if you have a claim you can defend it and it won't Count against your unemployment loss run um And just reduce employee turnover This is probably the biggest one out of this category Because turnover results and having to hire more people and having to onboard more people Train more people and if you're going to lose somebody More times than not it's going to be somebody that you just hired and that can drive your loaded direct payroll To on the on the clock, you know clock hour basis up in a in a material way. So we want to manage that So here are some of the numbers productivity allowed hours divided by job hours Efficiency is another number that we want to manage and the average loaded paper clock hour We want to keep that number down And again, we can do that through, you know safety and managing unemployment claims and There's a there's there's the productivity all of that plays into that Uh growing the net profit that's basically controlling what I call the non strategic operating expenses um You know, you can say that I'm going to go to lower my expenses by eliminating my marketing budget Well, you can do that and at the moment it's going to make it look like it's you're generating more net profit But the long run it's going to hurt you So you want to be strategic and you want to be thinking about long run? And if you're going to be cutting expenses, you know, if you can find, you know Cheaper office space that still meets your needs if you can um You know look at your business model maybe and do more, you know solos reduce the amount of cars that you need to have I mean, those are some things that you can do Well, there's a lot of strategies you can take but uh, you know And if you're gonna, you know, your marketing you need to measure that's a whole another discussion But uh, you know just not spending anything on on operating expense can can basically, you know Do more harm than good from a net profit standpoint You need to have operating expenses. You just need to to be applying them strategically You know, we talk about that. We talk about that a fair amount at Foundations we do a deep dive on that Um Don't want to can yeah, what I'm saying here is don't cut your expenses that control growth That contribute to growth and you want to automate where you can You know, if you can make an investment in technology that actually automates and helps you get better outcomes in other ways um Technology is not a commodity, you know, if you're really going to be be looking at uh technology You want to be looking that in the perspective of what's going to get you the best outcome It's just like your cleaning products and your cleaning agents. Hey, Liz. How are you? You're muted I know I don't know why okay. We can hear you. All right. Good. I can hear you now too Oh, I like your little graphic here. Tom looks like I'm missing out on some good stuff here, huh? Yeah, we're uh, we're kind of going through the stages of growth of cleaning business and Just just for your benefit, you know, we start off Just cleaning homes and then we need to kind of dial in making sure that we're charging the right amount Then we do the things to increase our gross profit, which is the whole cost of good sole thing Then we talk about net profit and that's kind of where we are now and You know, we we don't want to be spending money in the operating expense side That's uh, not strategic. That's not helping us be more profitable. But at the same time Cutting our marketing budget, you know, completely and there's a lot of things that you can do to Make more money, you know next month, but the long run it's going to hurt you So you need to spend money here. You just need to spend a strategic life So what you made up to Liz we missed you You're muted You're muted. I can't hear you Try again All right. Well, it has been a crazy week already for me I am doing um The Certified high performance coaching that brennenberg charge Uh offers so i'm super like Overwhelmed and excited and tired and uh But i'm I'm learning a ton and Really can't wait to You know put some of this new stuff into practice. So anyway People didn't come here to hear about what i'm doing. I know they really and everybody's loving the whole numbers thing so Hate to pull everybody away. I'm loving all your new slides tom He's good, huh? Yeah, really? Yeah, super nice Okay, so the final stage once you've Figured out how to get homes to clean and figured out how to price them and figure out how to You know manage the whole variable cost thing to maximize gross profit And then strategically handle the operating expense side to get net profit Is in time you're going to find out that that net profit keeps getting bigger and bigger And you're going to have a bunch of money and you got to figure out what to do with it in a wise way. So A lot of things you can do you can invest it back in your business. You can buy Office space for instance as opposed to rent. You can acquire other businesses. You can diversify you can just get into the real estate Business in general, there's other things that you can invest in you can buy bitcoin You can do whatever you want to do But the fact of the matter is You know that needs to be part of your thinking and tax liability is part of it as well because once you start making money you're going to find that you're going to be giving a bigger and bigger chunk of it to The internal revenue service. There's all kinds of strategies and this is stuff that Derek spends a fair amount of time talking about in terms of You know how to take the profit that you're generating and putting it in 401ks and other types of investments where the Tax liability is either You know non-existent or at least it's deferred where you'll have to pay it at some point in the future presumably at a time where the Percent of the tax would be be less would be more modest So let's take a minute and talk about PPP We're talking about pay price productivity and efficiency I can't be the only one that's like every time I hear this I have this whole thing that goes on in my head around Are we talking about the ppp? Are we talking about? um personal protection equipment? Like what are you talking about here? it's uh You know we we kind of take advantage of that that you know ppp is something we talk about on a on a regular basis um The deadline for the second round of that by the way has been extended from the end of march to the end of may So if you haven't You know apply for your second round yet If you qualify you got a little more time to do it Certainly take a hard look at that and if you think it uh, you can rationalize that you do qualify I would it Be very helpful It's uh, I love the money for the government for so long. I didn't know they extended it for two full months That's awesome. They did you've got to the end of May now to apply for it. Oh Very cool Is there any reason why people would not want to take advantage of the ppp tom? The only reason would be if you didn't qualify and you have to show uh A diminution of income quarter over quarter over some of the course of 20 versus nine year year 2020 versus year 2019 Is it 25 percent or 20? I can't even remember I can't either because um The employer retention tax credit you had to show a diminution of of Income as well. Although there were other stipulations with that where If the government said you had to close and some other things you could apply you could you could qualify for those Income didn't drop that much I think it's 25 percent is either 20 or 25 Um, you know linda deni lesley. I may know if it was 2025 So really though You're thinking if you qualify you should be getting the reason not to apply for the money if you qualify, right? Oh, absolutely you qualify You know, I mean the bank basically kind of looks at your numbers and if they say you qualify they submit it to the sba And um, that's a pretty good. You'll get it and then you have to go through No, use it the way that's intended to be used But if you do then you know, it'll be forgiven. So at that point, you don't have to pay it back You know what that is weird tom is my um My first ppp I You know, I put in for forgiveness and every week i'm getting an email saying that it's under review It's under review. It's under review I'm like just Just to prove it. You're making me nervous stretching it out every week Have you heard of that from anybody? Do you get I mean so they're they're they're they're pro they're proactively telling you that we're still still reviewing it Yeah, every single week. I'm like, hey just to prove it So this is at the bank. They haven't passed it on to the sba yet Oh, you know what you're so smart tom because you're right. That's exactly what's happening It's just at the bank. It's still the bank level 25 reduction of income quarter over quarter for most of that that most of us that's quarter Most of us are the biggest taken quarter too that was uh When things started getting real crazy and businesses were being shut down We're having all the discussions about we essential businesses and We really didn't understand very much about what covid was and how it spread and Nobody wanted to go, you know, have any people in their home. It was um That's our best bet, but if you can show a 25 drop in income You know your 2020 top line revenue versus your 2019 You qualify and you want to you want to apply Have a higher training pay with an improved training program. Yes smart Yeah, I mean training is Well, tom you and I we talked about this and actually dare to we have a lot of people that are paying full price For foundations right off the bat instead of making payments like they typically do because they have PPP money and really We actually said amongst ourselves how smart is that? I mean really that that is one of the smartest things to do is to invest in your company invest in training How many other things do you get as big of a return on your investment as you do with training? I mean So and I know and I'm not trying to sell the program y'all because actually we're booked up So It's not what's happening right now. I just think that that's really smart to invest it to be investing So we're we're sold out, right? So we're not selling or so Well, we're we're sold out Can I start talking about it? Okay, um, because we were uh, we were talking with heather about maybe Hey paul about maybe um finding a way to like double up people in rooms or something because paul You know we need a shelf. Yeah my goodness. We got to figure out. We got to find some Solution we'll work something out paul Because maybe a sofa or something left. We'll figure something out I'm still talking about all the the food that you made. I'm excited that you're in two susan there are This is going to be our biggest foundations by far to date We're actually trying to work on logistics and how we're going to fit all the people in all the different rooms and You know, so we're we're going to be making some modifications. Well, we have to modify every single year because we have to modify content obviously I was really thinking that I was going to be able to get when we first set this up that I was going to be able to get away with Maybe 10 percent modification to my presentations and then coven What the heck? so At this point anybody that's been to foundations before and saw my content Yeah, this is going to all be all the alumni All of my content is going to be new about 90 percent of my content Has to change and shift because coven Covid so your stuff doesn't really have to shift all that much does it tom? Well, it's evolved. There's some of some new stuff. I mean i'm sharing a little bit of it here, you know, this was We've done this we built this model since the last foundations class. Oh really? Oh, yeah Okay. Oh, yeah. Yeah, because you did it at um, this was Juno genius. Oh, no We did this for Juno. You know, you know we The concept we've used internally for a long time if you remember We would like open a branch and we use this to kind of peg you know our goals and what we needed to do and We weren't getting there quick enough. We'd do the the whole what-if analysis to figure out Well, where do we want to adjust but we never really? Put it in the class and share it Yeah Cool, it's new lots of new stuff Yeah, I mean I've got a few things more in the deck here, but you know, you guys have Wired in enough this guy's willy sot. He's a bank robber from I guess the 20s of the 30s and When he was arrested by the fbi a reporter asked him Why do you rob banks? He says that's because you know rob banks because that's where the money is, right? and for us the money is Primarily in this direct labor expense thing, which is that cost to get sold which is that loaded direct payroll to revenue So if we were thinking like willy sotten and we wanted to go to where the money is We really want to attack this direct labor expense And there's we've talked about you know the p&l and how to do the whole cogs and gross profit And operating expense to get your your net profit. We know how to do that. We understand this We've seen this ad nauseam list. Have we seen this enough? I feel like we have but you know, every once in a while we get new people on here that are like wow Well, that's true. We can go back and look at the old videos. We've talked about this before Where's robin robin do we need to go? But go back a slide tom real quick If you would The reason I wanted you to come back a slide here is this is something that we don't show very often We don't show when the cogs are getting a little bit unwieldy and and what that can look like and how it can impact things and Yep I don't need to do that again. It's not a lot Robin, did you get the devs? I sent you I hope you got the link because I know it was a little bit tough to get into with the Zip file. Let me know if you need me to change that out. Okay, but back to this. I was wondering tom Like we talk a lot about you know, like your willy-sutton thing go to where the money is, right? And so we talk about cogs, but Like when your cogs are at 62 percent isn't that kind of a scary place to be What we have seen in the past is where people will start Sort of going into this denial thing Where they just sort of Stop looking at the problem all together Well, look, I sent it by I think I sent messenger by messenger And so I was wondering if you could talk a little bit about You know when your cogs are going out of control, we've already talked agnauseum I would think about how to manage that but what about just managing the the fear around that or the The idea that you don't have to be afraid it's You know just there are things to do you can fix it well What's scary is When the number is high or let's back off a little bit What's really scary is you're cleaning homes week after week after week and you don't have enough money to cover payroll and the other expenses And you don't know why Once you understand why Then you can understand. Well, these are the things that I can do to get a better outcome and that not I mean, it's you know, you're managing your business at that point and you know, so Your your your your your cost of your soul is huge if it's too high. I don't care what you do You're not going to make money. You're going to be miserable your jobs are going to suck Your customers are going to hate you and you're not going to want to get out of bed in the morning Yeah, I don't know. Maybe I'm maybe I'm exaggerating a little bit But truly you can't build a healthy strong business without controlling This number here The 62% is is getting up there, you know, it would be it would be A problem area that you would want to to address And there's a long list of things that you can do about that once you once you once you Are able to get your your profit-and-loss statement in in in this format You can actually see the number and say, okay. Well now I understand why I'm working so hard Don't have anything to show for it. So we can can implement, you know strategies to attack it and Susan take answer your question this An example that tom showing could be at for any time frame the awesome thing about a p&l is that you could Or that that number that we just saw that could have been a large company's Month could have been a large company's week a very large company's week to be a smaller company's year It could be a six-month time frame. It could be any time frame, which is so awesome about your p&l You can you know change those dates so it could be Any any I believe the spirit in which this was done would have been like a monthly p&l Normally when it comes to p&ls, I mean you can run them for any any time frame and for certain circumstances It's it's useful Maybe to run them on a week-to-week basis to calculate what your revenue was last week and the payroll was this week because If you do like a weekly payroll the checks that go out this friday were for the revenue that you generated last week So you would divide that payroll by last week's revenue to figure out what your payroll to revenue is You can do that for a series of weeks. You can like if i'm sitting here in the middle of march I might go back and look over the last three months and run a p&l Showing each week and drop it in the spreadsheet and do that math And those are the kind of the exercises that we we go through and in foundations as well to figure out What your uh payroll to revenue uh numbers trending This is a company that's oh, sorry tom. This is a company that's doing You know north of a million dollars a year and for this particular month. They did $100,000 in revenue That had two things that I really want to say first thing is It doesn't really matter Like what this time frame is that the bigger point that tom's making is pull your p&l All right, just pull it whatever every month Look at it every month And if it doesn't look like this with your cost of goods sold at you know You get your revenue at the top and below it you got your cost of goods sold if it doesn't have a number here That says gross profit Then you need to go back and whoever is your bookkeeper does your accounting sets up your quit books And you need to say hey, I want my p&l to look like this and If you can't get that done come to foundations and we'll show you how to do it. We'll help you do it We'll do it with you and for you specifically susan because you are signed up for foundations and the beginning of April you're going to be Joining the mma groups So we track this in the mma groups. We have a way to track it Daily, you don't have to track it daily, but until you get familiar with it We will encourage you to Start tracking this information on a five numbers on a daily basis until you're like, oh my gosh I know that number and you feel comfortable pulling it because that's that's usually the biggest thing is just Getting over the oh, it's so hard thing Yeah, you're gonna love it susan So yeah, the beginning of next month you're it's gonna be a lot of work So just I know you're excited, but just be ready linda. Tell her how much work it's gonna be Okay, you might not feel like it list, but we're close to being to the top of the hour here. Sorry tom I I missed you Just quickly. I promise that I would we would we'd show how this works within the ppp e model Uh, if you remember the whole You know green numbers go up red numbers go down so The numbers that we really adjust are over here And if you've got a business with an average bill rate of $35 an hour with a efficiency factor of 75 Which means over an eight hour day You're typically cleaning six hours and you're driving around two because six divided by eight. It's 75 And if your average loaded pay rate per clock hour is $18 then Depending on what your productivity factor is. Oh, and also um Your average uh allowed hours per job is three and you've got an operating expense of $5,000 And those are variables you can play around with as well for these various productivity factors and for these uh levels of monthly revenue This is how much money you would make or you wouldn't be making so for example If I'm at 90% productivity and $21,000 a month in revenue. I'm breaking even So the real part of important part of it is you know, how much revenue you're generating in a month um You get things that you can do to drive that number up and there's things that you can let happen That'll let that number go down But I'm here right now. You can probably predict at a very deep fairly decent level how much revenue you're generating next month So you go down here and say, well, you know, I'm generating maybe $20,000 a month So I would go here and that's almost 20. That's 19,950 and I would go look across here and say, okay well If I'm building $35 an hour and 75% efficiency and if say my productivity is a hundred percent I'm making $1,200 a month, $1,270 But maybe that's not enough because maybe I got other bills to pay and I've got a mortgage and a bunch of stuff Maybe I need to make three grand. Well, what does that look like? Well, maybe I can get my bill rate up to 40 If I do that Actually, it was the number of jobs per month that we were doing let me go back to that And I was on a couple hundred make it 200 jobs a month and if I go across here and I got a productivity of 100 Then I'm making 1600 but say I need three grand for the month to make it work Maybe I need more than that if I bump this up to 40 And if I go back to my 200 and I'm still At 100 productivity. I'm up to 4,600. So just by raising my bill rate per hour or five bucks I've made and you know, basically more than double the amount of money that I'm making if I can do some training I might be able to get my productivity up to 110 percent. So I'm up to about six grand Yeah, if I start scheduling a little bit better and I can get my efficiency factor up to 80 And I work on my workers comp and get this down to 17 dollars an hour. Oops, that's a little too low And I'm still stuck at the 200 You know jobs a month though, and I'm at 110 percent that's 7,500 You know, you might be able to live off of that Certainly a lot of using you could in 1600, right? So if you're not making the money you need to make you don't you know, it can be scary But if you understand the numbers that are driving it, you know, you know where to spend your time in order to fix it And then it's not just about getting more customers A lot of times we fool ourselves into thinking that's the answer When it might not be and there's more here in terms of percent profit and there's a growth model and you know, all that's for another day, but um Just an example of how those basic KPIs Are really important in terms of understanding how you're making money And those are the ones that you want to manage and the ones that you want to Want to drive in the right direction. It's not about how many homes you clean. It's about how much money you make doing that Yes net profit net profit. I love that. I think that's one of the things I really love about that ppe Spreadsheets that you share tom because nobody really talks about net profit No, they're always talking about the top line. How much money you're bringing in Version rates what you're gonna lose are you getting how many you know all that and all you know conversion rate is is important I mean, that's a contributing factor But that's not where it ends. That's just where it starts Yeah Absolutely And that that bottom and when people are talking about the bottom line Right, they're literally talking about the bottom line on the p&l. Y'all Is the bottom line isn't it bottom line? All right, which which I always kind of like so thanks for everybody that is on here today. Thanks for Letting me ramble It's been a rough day and I kind of missed everybody in smart business moves. So I appreciate that been a rough day It has been a rough day for me. I I was up early today You all know I get up early. Anyway, I normally I'm up at 415 and today I was up at 345. So It's been a rough day Yeah, this wasn't one of my most awesome days either, but we're here and um, it's all good Oh Paul and in the call on a high note. It's not what you make. It's what you take Here you go. I like that. That's awesome Paul Do you make me happy? That's awesome. Paul. Thank you for that. That was an awesome chair Okay guys, um, it's top of the hour. I dropped the link to foundations. I'm not sure what that means Liz is telling me that it's sold out So anyway, we'll be back tomorrow. Liz is going to have an awesome presentation for us and Thursday, we're going to do something fun. I'll wait as far as to say we're going to play a game, Liz Okay, no, we're going to talk about that. We're going to do a zoom call and we're going to it's going to be, you know We're not going to dress up in green and You know drink green beer or anything, but Can I break out my my uh teletubby suit or what was it? teletubby Although teletubby would be fine too. Okay guys, we'll see you here tomorrow at five o'clock. Hey, sir. Bye. Bye