 Hey guys, good afternoon. Tom Stewart here. I'm with Liz Trotter. Our guest today is Matt Ricketts, and this is Smart Business Moves Wednesday, April 21st. Awesome. I've got my pad of paper over here. I've got my pencil. I'm ready, Matt. We're ready. Rock and roll. Tom, this is the way I'm just starting out. How many days, you know, how many, when did we start Smart Business Moves? It was over a year ago, so we need to just have a sequential calendar, you know, day 417 or something. Why don't we, Tom? That's totally your jam right there. Yeah, I'm on it. I'm on it. What are you, what's the news? I want to know what news is going on right now. Man, I've been, so I've been four hours of Zoom calls today. I do not have any news for you. I've been deep into Zoom calls. Well, I think the big news is going to be about the guilty verdict, right? That's the big news right now. Sure. And yeah, that's going to be going on for a while, I guess, but... That's the beginning. I mean, that's the beginning of this, obviously. There's no beginning with the jury, right? That's just the beginning of the process. Yeah. You know, so I don't know if that's the news. The markets have been pretty dropped the last couple of weeks. Is that me or...? I don't know. It's not me. I don't think it's me. Is it me? I know. Well, I'm going to play my song. I'm going to mute for a second. See if it's me. Okay, now. Is it Matt? Yeah. I don't hear it now. Yeah, we're getting out, Matt. Can you sign language? Okay. Speak really clearly. I'll read your lips and tell everybody what you're saying. This is a technical term. It's launching. Wackoing. Wacko, wacko, wacko. Wacko, wacko, wacko. I don't hear from before when we had this problem. We could mute when Matt was talking and we could get rid of it. So let's try that. Matt, you go ahead and talk after we mute. Okay. I don't think it's me. I think it's yours, Liz. Well, he said, yeah, you sound good now. It's always Liz. Technical problems. And there's a red button on your mic. And when it's lit solid, that means you're hot. Blanking. That means you're muted. Yeah, you're good. Tom, that's so rude. I don't hear it. All right. So I will mute. I have, I'll let you guys lead and follow. We were going to talk today a lot about this labor market and ways that you can kind of drive, you know, some success through it, which would be, you know, things like focusing on making more money per job, you know, which would allow you to pay your people more. And how do you, how do you connect those dots really? Like that's the hard part is, is that, yeah, we want to charge more and we want to do these things. But how do we, how do we connect the dots on that? And that's kind of what we were going to talk about. And, you know, Tom's got it as a deck. So I'll let him lead a little bit and I'll fill in the blanks where things come up. Yeah, I mean, but be exactly right, Matt, you know, we've used the term unprecedented times more than the ones lately. And I guess over the last year, as they say ad nauseam, but not for, you know, we had good reason to do so. You know, there's a lot of things are changing and unique situations are popping up and that's still going on. That's still in place. So I did, I put together a deck maybe to help us through some of this, just explain what's what's going on and how it's affecting the labor market. And, you know, for starters, there is just a whole lot of money washing around out there that, you know, have some intended consequences, some unintended consequences. Maybe some consequences that we're pretending is unintended, but maybe it was really intended after all. I don't know. These are things that we can debate, but the reality is, you know, this is an example of where some of the money is coming from. And this is like going, you know, to people who, you know, it's going to a lot of people, including the population from which we would be finding candidates to work in our cleaning businesses. Yeah. The first one I have here is the American Rescue Plan at ARPA. This was the big bill that, excuse me, this is the unemployment benefit of the $300 a week. And this is coming from the federal government on top of what anybody would be qualified to get from the state. And I actually put a link in here with an article that can be useful, and I'll drop this in chat. So, for your particular state, if you're curious as to, you know, what type of benefits somebody could be entitled to, you can click here in this article, it explains, it's even got a calculator that you can plug in your state and see what they can get. And the maximum number of weeks that they could be qualified. So like in South Carolina, it says it's 24 weeks, and this has been going on for a while. So you would think that there would be people that would be running out of unemployment benefits, but somewhere down in here, it says that even if your state benefits are expired, you still can be a candidate to get the $300 for the federal government all the way up through 9621. I think we're all kind of aware of this one. That's certainly one that's driving it quite a bit, right? So, you know, making in Missouri, it's probably about $600 a month is the is the where I'm sorry week would be where you'd be between the state of 320 for the state plus another another 300 in federal so 620 week. I mean, that's, that's pretty decent, you know, if that was a part time job at 30 hours a week, that's almost $20 an hour, you know. So you're not working. And you don't have to pay taxes on it right away. Now you're going to get taxed on it later. Oh, so in Missouri is 251. Is that the minimum? That's what I'm saying here. Yeah. Okay. So yeah, 550 a week, not to work is not a bad deal for some people. So you're, but I think that the inverse of that is the people that are applying are have been really good that the people that I've hired lately have been really solid. So that's what I wanted to say. So the people that are deciding not to go on unemployment and that are deciding they want to work. These are some quality people. These are the people that enjoy working. They want to work. So if we can give them good jobs, they're happy. So it can work in our favor. It's just a matter of making that happen. Are we doing the things necessary in order to attract those quality candidates? That's a good thing. So we, you know, everyone knows we, you know, we had those 1400 plus the 600 before that in the previous plan plus whatever was in the plan before that. But a lot of that money still hasn't run through the market yet. I mean, a lot of people with three or four kids within 30 days got, you know, six, 8,000 bucks, something like that. Like that's a lot of money that they hadn't had before. So that gives people a lot more flexibility that they might not have had where they might be able to say, I don't have to work for two months, three months. Like I can take some time off. Yeah, yeah. So you mentioned that the people you're hiring are quality though, but let's just pick on that for a minute. I've seen a lot of people and, you know, we're experiencing this as well where, you know, you might invite a dozen people. Well, you might have like 100 leads off of Indeed and maybe get, you know, half a dozen to even talk to you and if you invite them in for an interview. You know, maybe one shows up. Yeah. Our lead flow, like of candidates, typically in a normal week pre-COVID, we'd get maybe 80 applications, full completed applications, not an Indeed app. I get hundreds of Indeed apps per week because we pay a ton of money for Indeed. We're spending like $60, $70 a day on Indeed, maybe, maybe more. I hate to even think about it. But so, so full applications now per week is maybe 15 or 16. It's not even a quarter of what it was, you know, prior to COVID. So it's definitely, it's definitely choked way back. So that's a dynamic that I don't know if anybody's got a perfect answer for or can even explain. No, I mean, perhaps going after some different channels. Why do so many people express an interest like an Indeed but they don't even want to talk to you and certainly don't want to come to an interview? Why is it you invite 10 people to an interview and one person shows up? Yeah, potentially that's continuing that unemployment. You know, potentially that's a requirement in some states, you know, that they need to, that they need to maintain. A lot of states have waived all that stuff because of COVID. Like in South Carolina, they're going to start doing actually, I think today is the day that they're going to start requiring individuals on unemployment to demonstrate that they're actually, you know, looking for work. But everything prior to today, they just didn't didn't have to provide any proof. Lake posted something last week, y'all about her state now providing a form to complete if people North Dakota, right? Switching that, it might be switching just a little bit. Yeah, very easy to just click on jobs. And indeed, yes, I agree, Royce, we've seen that in the past two. We do not have as good of follow through with the people that come through indeed as we do through other channels. So I think it's just really easy to just be like, yeah. Facebook is kind of the same thing. Somebody's going through their news feed. Oh, this is interesting. They click on it. You know, they'll make up the next morning and forgot all about it. Facebook ads. I would say that probably are the least. I mean, we're still actually hiring off of Facebook, but I mean, it's our least productive as far as like of engagement for sure. This is Facebook. Right. So just to swing it back around to like the money that's flowing out to the general public, including to the individuals who would be candidates to clean professionals and organizations. You know, the American Rescue Plan, that was the $1.9 trillion bill that got passed, I guess, back in March. And that entitles, you know, qualifying individuals and basically everybody out of the population that would be, you know, working an hourly job for like a house cleaning business would qualify for a $1,400 check long with a $1,400 check for all their dependents. And I was looking to see if there was a maximum cap on that and I couldn't see where there was one. Do you know, Matt? I never actually looked. That's a good question. And I guess if you had 13 kids, I guess you'd still qualify for, you know, that tax credit. I mean, the 300 per month additional, because this new tax credit that they're doing is, is you're actually getting that as, but I think you have to be working for this last one to work. Don't you have to be actually working a job? You could get that child tax credit unless you actually have compensation coming as a check, correct? I don't know. Say that again. So the way this new tax credit is working for child tax credit, is there actually see- Oh, you're skipping ahead. We're still talking about the ARP. He's excited about the tax credit. We'll get you there, Matt. That's a good question. I don't know. But there's a chance that we're going to be getting a fourth stimulus check that they might not be done with that. There's some debate if it's going to be happening or not. But here's a, here's an article that came out on the 16th last week about that kind of the latest there. So we want to be keeping an eye on that. How sure does it seem, Tom? Kind of a toss of a coin at the moment, at least according to Matt's article. What have you heard, Matt? I haven't really thought that it's like realistically going to happen. But I didn't think PPP2 was going to happen either. So I did not believe that some of these things would be done again. So yeah, I don't know. But if you got, but the $1,400 out of the ARP would go for each dependent as well. So if you've got, you know, three kids, then that would be 14 times three times four. I guess yourself plus your three kids. Right. Child tax credit. What were we saying there, Matt? Well, so normally you see this back in a year and you get a big tax return. What they're doing now is per child, you're actually getting a deposit of $300 into your check and your checking account. It's actually coming in advance. So from my understanding is that you have to be working to get that tax credit. Like that one is only really advantageous to people that actually have that actually have about because it's based on on earned income. I could be wrong though. And if you're, if you're getting that without work, again, that's another negative incentive that would make it easy to choose not to. I don't know how that one works exactly, but I do know that it's paid in advance instead of having to wait for it. But the way that it's reading right there, they would want to be working as long as they weren't making more than $150,000. Right. Okay. So Roy says that you have to be working. That's cool. I wonder if though, if you had a household where two people were working and one of them was working, would you be qualified for that? And the other one would then not have to work. Absolutely. As long as one of the people in the household claims the kids are coming. So yeah, from households right now, they don't need to have to, they don't need to have two in, you know, income. So obviously that, you know, that is a, again, a negative incentive against work. And as a rule, if there was a two income family, the supporting income probably would be the one that would be working as a cleaning professional. But it's one thing to be all like, you know, this is all terrible. But this is our reality. So now we need to talk about like a few more, I guess we talk about a few more bad things. And then we can talk about some solutions, right? Hang on, Matt. This is where we're just getting started. Patience, my friend. Patience. Okay. You know, I might have positive stuff sometime. We can't handle it much. If not, we're doing this smart business moves to be like 10 minutes. Yeah. Any questions? I'll pick it on you. I'm sorry, man. Okay. So, you know, and obviously, you know, we've had the expanded government subsidized. Did I spell that right? Maybe. I don't know. Stick pay regardless. It's, we know what it means in the expanded FM LA. There's a whole lot of money out there floating around that basically makes it easier for people not to work if they want to. For a lot of people working is now an option rather than a necessity. You know, you know, like Matt was saying, I don't know if that's a good thing or a bad thing. I mean, there's probably a lot of good out of that reasons why it is what it is. But there's no point in debating that the fact is that's the fact as long as you fall jointly, many of the staff fall head of household. Okay. The other part of this is employers are getting a lot of assistance as well. You know, you're familiar with the idle ones. I guess the idle ones are the first things that came out. Well, it wasn't really explained that way after like the first week or so they decided they needed to cap those out at $150,000. And it was only for six weeks of relief. They recently came back out and announced that they would raise the cap to a half a million dollars and you can get a relief for up to 24 weeks. It's alone, but it's a 30 year AM at like 3.75. And if you believe that inflation is something that goes along with all the money that they're printing and the wages that are going up, then 3.75% interest over 30 years is, you know, very possible the cheapest money that you are going to be able to borrow for a long, long time. But there's still a choice. There's a link here that. Can I copy that? We've shared this before, but I want to share it again because this gives instructions on how to apply for that. And even if you got one of the original idle loans for $150,000, you can apply here and get the additional money and or at least apply for it. And it's a symphony is sending an email, send an email to these guys and say, hey, I want it or even a phone number here now. They changed this the last time we looked at it. What's Royce? She probably won't. Okay, what's this? Don't have personally guarantee if it's under $200,000. That's that's a true statement. Yeah. But it's like a rich uncle loan as long as you get under $200,000. And the $150,000 ones that originally don't even show up on your credit. I mean, I've checked it a few different ways they do not show up on your credit at all as far as a loan. So either on your business credit or your personal credit. Right. So my advice to everybody is to at the very least send an email to this address or call these folks and say you're interested in being considered for this. It doesn't mean you have to accept anything. It's just while we're trying to sort all this out, there's no sense and they're not getting in line. Back when we were talking about this last week, Tom, I believe we sent out an email and we haven't heard anything back. Have you heard of anyone getting response from anything yet? We got one email back, but we sent out we did it for for several companies. Yeah. But it was kind of nondescript. And we were concerned because we didn't get emails back for some others. We followed up and they said, well, you may not have don't sweat it. I imagine I've got so many emails. I don't know which way to turn. Yeah. I'm curious about that phone number because how many people are going to be trying to do this? That seems easy. You remember like when this thing first started and this was even before PPP, there was a phone number and it was kind of like a secret phone number. And you could dial to certain times and I mean, it was in some people like guy much more than $150,000 because they got it up front. But if you get expanding from six weeks to 24 weeks, if you got $150,000 the first time, you could probably get another $350,000 more with the same term if you wanted to. And this makes a good point that over 200,000 you have to personally guarantee it. But you probably have other debt you've personally guaranteed as well. And if you're handling the money wisely, it could be something worth considering. But it's always dangerous borrowing money too. So you got to have a plan. So by a new Ferrari, that's not a great plan, Tom, or that is a good plan. I'm sorry, what's a good plan? Buying a new Ferrari. That's a bad plan. That's a very bad plan. Royce has gotten to the next step. They're asking for 18 returns and 20 financials and liabilities. That's awesome. Wow. Yeah. That is awesome. Thanks, Royce. It's really interesting to keep us in the loop on that, Royce, because you're on the leading edge of this business plan and narrative. How about that? So they've raised the bar a little bit. Yeah. It was pretty... They're actually going to have to work for it. Yeah. Give me your business plan. Okay. They know this is the United States. What the heck? Just give me the money. Okay. Show me the money. Okay. So, PPP-1, PPP-2, Employee Retention Tax Credit. That's probably one of the more underappreciated benefits floating around out there. I'm going to call you to Joe Walsh, and he's taken the course, the Golden Sacks MBA type entrepreneur course, and a bunch of other businesses, sophisticated business owners, he said relatively nobody in there even knew that the Employee Retention Tax Credit even existed. Wow. And the belief is that a lot of companies do qualify for that. If your revenue, say, first quarter of 2021 is 20% less than what it was first quarter of 2019, you're pretty much a shoe in to get tax credits for Q1 of 2021. It can overlap with PPP-2. I mean, it's a lot of other rules, but the fact is there's tax credit companies out there that will help you figure that out. I know there's more than one. I will share one of them. And this is a company that Matt uses. This is a company that we use. Negotiate, y'all. It's definitely, everything's negotiable. This is definitely one of those areas where you want to basically play hard to get a couple of quotes, and it's all negotiable on that. Yeah. So go back and make them sharpen their pencil a little bit. Some companies are going to ask you for 30% or something like that. I mean, don't sign for that. You could get it down to 15, 10, 12. I don't know what the number is going to be. The credit, Robin was saying. Robin, this is excellent advice, Robin. Start with your CPA. Yeah. I'm kind of at a disadvantage at that point at the moment. Yeah. It's good advice. You should always look for people you trust on your financials that actually have certifications, not just people on the internet doing radio shows, right? Yeah. Come on now. Live streaming. That's true. And you might get a better deal. So talking to my CPA. So I have a CPA that also owns an accountant's office. And so my accountant is through my CPA. And they're doing our tax credits for us. And they just gave us a price. I'm hesitant to even say they're only charging us $500. So look at Matt. You want to drop a link in the chat? Yeah. I don't know. It might be because it's my brother's CPA and accountant. And he kind of made their business. So it might be from that. Mine's in the tens of thousands of dollars. So yeah. That's why I'm like, check. Go with Robin's advice. Ask your current people. I don't know if the situation is that my CPA is like, yeah, yeah. Sure Liz, it'll probably be around $500. They get in there. They're going to recognize, oh, sorry. I thought you were talking about blah, blah, blah. It really didn't have much work. I mean, my people put together a packet together. I mean, I'm paying them a substantial amount of money for like basically a packet that's like a few documents and some supporting legal letters. And they are taking, they are taking, you know, power of attorney. So they, they're saying that the doc, you know, they're basically taking the legal stance that they're, that the information they're providing is all true to the, to the, to the fact that, that, you know, that they're taking some responsibility, but 10% is a chunk. I mean, you know, at 15% or whatever these companies want to take is a chunk. I still uncomfortable with that because I know for a fact that my, my company uncovered quite a bit more tax credits than a friend of mine that actually was just using through his software and trying to just use like the click buttons that theirs had. Yeah. Basically almost an extra 40 or $50,000. So it, in my instance, it paid more than the, than the free tool that was available through like payroll processors and things like that. So some of you all that are on Gusto or on other tools, you might even look and see what the software has. Yeah. It might be worth double checking with your CPA. Good advice. It's some payroll service providers have some tools and some services already built in, you know, Royce is saying it's a 76 credit on your Q1 payroll. And yeah, I guess, I guess for Q1 2021, for the most part, it would be I doubt if many of us or if any of us would have technicians that for salaries exceeded the cap on that. You can then go back and find credits for 2020 as well, though the criteria is different and the amount of credit you can get earn as much and rules. There's a lot of other more squishy subjective rules that can qualify for these credits. And that's part of where, where a third party administrator can help as well, though, because you give them power of attorney. And at that point, if it's their judgment, you know, if, you know, worst case, I guess, you know, the, is it the, I guess the IRS would be the one that would be determining if you qualify or not. Is the IRS or the Small Business Administration? This is IRS. IRS. You know, you know, I like having a partner in the deal who's got. You and I are more risk averse. Like we have insurance on insurance sometimes, right? So like, it's like, You were asking me about, did we have a certain type of insurance and you were like, assumed I didn't and I laughed. No, you were like, yes, of course I have that insurance, Matt, because I was like looking at all these things. I was putting some terms of service together for something for a website. And I was like, hey, do we have this kind of insurance? Cause if we do, I want to disclose it basically. Like, do we, do we have this? And it's kind of, you know, part of the terms of service. And I wasn't sure that he did. And it came back like, of course, you know, it was like, yeah, I would do because I have that same kind of insurance on my business. It was kind of a cybersecurity insurance for, for reaches of data. And I even have that for my maid service. So unemployment rates have been going down. Nationally, most recent number has it at 6.0%. However, I saw an interview last week from Jay Powell, he's the chairman of the federal reserve. And he said the real problem with unemployment is 20% of the bottom quartile of wage earners are unemployed. And that's the same population of people from which that we're recruiting. Right. So if you really think about 6% overall, but 20% of the lower quartile of wage earners, that's where most of that 6% resides. Pretty much there's no unemployment in the top, you know, like if you have any skills in the marketplace, but a lot of this is driven, you know, there's, there seems to be the demand. I think the unemployment will be back to like 3%. Cut this number in half. If, you know, if, if those people would come back to work, I think a realistic, this, we're almost in a world where we're at zero unemployment in reality because it's acting like that. I mean, I've never seen the unemployment effectively lower than like 1.9%, like across the country. But we're almost in a zero unemployment environment. I've never been in this competitive environment before. So what does all this mean? It means that the bottom quartile of wage earners for, for a number of them, not all, but for, for, for, for a number working as an option. It also means for many employers, they've got, you know, they got cash on hand right now. They're flush with cash, which are a lot of cleaning business owners. A lot of them have more money in the bank right now than they ever had. So what's happening, companies are bidding up wages as they compete for labor. And, you know, we're, it's, it, you know, I don't have a crystal ball. Nobody does. You know, I saw some, an article from a C-suite person at the last door and they think it's going to continue to go up until at least September. And if unemployment, you know, insurance at the front of the level gets pushed off past that, it'll keep going higher. And it's going to create some unprecedented challenges for us as cleaning business owners. So what are we doing? I was going to have a chat with my employees and have them earn $25 or something to go on to glass store and just do, just, you know, fill in an honest evaluation. Of course they're working for us. So how bad is it really going to be, right? A favorable, an honest favorable. More people, but we just need some more, some more posts in there. And then we can start using it. We can start advertising with that. So it makes me wonder and not, you know, maybe I'm a sucker for conspiracy theory, but it's across my mind that if you give, you know, people money so they don't have to work and then give employers money to try to entice them to come back to work, is that going to get our minimum wage up nationally above $15 an hour? Not through legislative, you know, not by changing the minimum wage law, but just using free market forces to do it. Yeah. I'm not sure that they're smart enough to think of that. I know you are, Tom. It was a brand, you know. It's done. It's done. Minimum wage is effectively $15 an hour or higher at this point. Exactly. You are not going to hire anyone? That needs to get on board because that, that part's over. Three years ago, I was like $11 an hour and I could hire all the people I wanted, $12 an hour. And then we were commissioned, but that was our base. That was our bottom that you could make. Now our bottom is $15 and I'm not even sure that's enough. And I average closer to $19.55 per hour and I'm not sure that's enough. Like, again, I'm going to probably raise my customers like five or 10% so that that trickles down to the employees because we pay a commission, a commission structure. But the idea that you're going to pay somebody less than $15 an hour and be competitive is, is going to be a very strong struggle. Now, not every market's the same. So I can't, I can't say that for wherever you're at, but where I'm at, it's not going to, $14 might still draw some, some talent. $15 is kind of the bottom and then you're still not even, you know, you still need to be able to describe your work better, describe, you know, the culture, the, what are the real benefits of working here? You know, like, you know, make, you've got to paint a picture, right? Like, you know, drop your kids off at work, drop your kids off on your way to work, you know, you know, pick them up on your way home, you know, you know, no nights, no weekends that we've always talked about, but really paint that picture of, of the job. And, you know, I'm even talking about what my loaded pay is with, with the credit card tips where they average $19.55 an hour. I'm putting that in the ads now because that's, we get, you know, we can see at least $15, but most of my technicians average $19.55 an hour. So Leslie is starting at $16. And that's in California. I'm surprised that's working for you. She's $17.90 days. It looks like. So she's already telling us that. I promise you that she's telling them that. It's just a kind of a preview of where we're all going to be here in the next, you know, 90 days or so. You know, this is giving a lot of credence to the, you know, we had talked a while ago, Tom, about a guaranteed wage. So instead of guaranteeing, you know, a certain amount per hour, but instead guaranteeing a certain amount per week. So if $593 is what unemployment can be paying your people, if you can guarantee, you know, $575, $600. And you just set up some parameters around that guaranteed wage. Now might be the time to try something. You have to have some commitment on both sides. Like. You got to reach some common understanding there because we've got a couple of lit points and we'll skip to the middle one. You know, you know, being a good employer, I don't think is good enough. You know, we need to be excellent and, you know, pays a part of it that benefits flexible schedules are huge. And there's some people that don't want to work but 25 hours a week. And like Matt was saying, I want to be able to put my kids on a school bus at home before, you know, the bus drops off. And maybe you can guarantee a wage, but that's almost, we talk about customized scope, you know, home specific customized scopes of work with customers. I can see it's going in a direction where you have to have, you know, employee specific scopes of work for every team member in different terms and, you know, different outcomes. If you do this, we do that. Yeah, this is all evolving, but I think some of these ideas are going to take hold and it's going to be more commonplace. Other things that we've talked about in past culture engagement, we're going to be talking more about some of these things next week. The part before that is hiring that she's finding people to hire at those prices or those wages, so that's awesome to hear, Leslie. I love that. Yeah, yeah, we hire part time. It's funny though, back in the day a year ago, two years ago, we hired part time, but the people that wanted part time were the people that were going to school and that was why they wanted part time. They had some other thing that they were trying to do. Now they want part time because that is their idea of what work-life balance is. So work 25, 30 hours a week and then have the rest of your time off to do the things that you want to do and to enjoy. Three interviews tomorrow. Leslie, what is your response rate? If you have three interviews set up tomorrow will all three of them show? And if so, how are you making that happen? Because if you're using Indeed, especially not a lot of people are having that type of response through Indeed. Still getting people to set up interviews, but not. One thing that is working better is setting up the interview faster, not making people wait. Right, so great. Well, we can do an interview right now in the next 15 minutes. Do you have time? That's actually working. That's part of the whole workforce development workflow, the recruiting, the interview hiring, onboarding, training, retain. I believe that we all have to pick our game up there. Work in the past you could have been good in the past and made it work. I don't think you're going to have to be better than you used to be to reach the same level of effectiveness, the same level of competitiveness. And what we were talking about in MMA groups earlier today is whatever you were doing that was working really well a year ago, if you're still trying to do the same things today and they're not working, of course they won't work. This is a new pool. You are advertising to a new pool of people. The people themselves may be the same names, but they have different expectations. They have, they are different people. What they're wanting in a job is different. You can't be doing what you did a year ago. If you are, that's the problem. Stop doing that. Start doing new stuff. But we know we will have to be paying more. Waving is not effective. Yes. Yes. Exactly. A lot of people are using that strategy. Okay, well, or hoping. The other one is they're waiting and another one is hoping. Well, I'm hoping that this is going to pass, right? Yes. That's not going to work. Do you want to watch everybody raise their wages and do you want to be chasing it and trying to catch up with them? Or do you want to jump over that and be the leader in that? I look at this as musical chairs. I don't think you want to be the last company in your market to figure out that you need to do that. I think I've been working on this for a while. This has been a big project during COVID because I was trying to make the most of the resources I have. Technician-wise, I'm averaging 21 technicians a day pre-COVID. I had 36 or 37. Yet I'm doing almost 90% of the revenue with 30% less people. This is a screen I'm pulling from Made Central where I'm pulling some of this data. Again, it's okay if you don't know these numbers right this second. Most people don't know this stuff. You're not alone. It's not stuff we were all taught. We need to start thinking this way now. We cannot do things the way we used to do. It's not your fault if you don't know this now, but you need to learn this stuff pretty quickly. You need to know what you're making per hour on every job for the billable hours. That's $3.80 per revenue divided by total available hours. Most of you guys are probably not that high. I won't even keep a job if we can't make at least $52 an hour on it. Have a number in your mind that if you have a customer that you aren't making that much money on, you need to get rid of them because that effect which you can pay your average employee. That's $2.55 per hour. That would have sounded crazy, but that's only averaging out to about 36% of payroll to revenue. We have some negative fees to our customers that actually drives this up a little bit that doesn't necessarily go to customers because I charge skip fees and lockout fees. I have no problem doing that at this moment because I'm trying to encourage behavior, but if you want to skip, our skip rate is like 10% and we're charging up. I'm making a ton of money just on skips. It's probably $100 a day just in skip rate. But again, payroll to revenue, this is going to be probably the number one thing you look at to know if there's going to be any money left for you. If this number is too skimpy, there's not going to be enough money here to pay them without really driving this number up to the point where you don't have anything left for you. It's like a triangle, right? It's like these three things are just deeply related as far as numbers you really need to look at. And if you can drive up that hourly rate by price increases, or even still there's so many customers coming in right now, really looking at your production rates and tying what you charge to the time that it really takes to do jobs, like quit guessing, figuring out what your production rates are, so those are some numbers I think you should really get to the bottom of. It's going to cost us more in the future to be the employer that we need to be in order to attract and retain the talent we need to be successful. And as we talk on the KPI discussions back at the beginning of the year, we have to be able to charge the rate amount for just to make that happen, and that's new quotes, that's increasing rates on incumbent clients, that's doing rate adjustments on services that aren't priced correctly. We need to be able to schedule a way where we're maximizing the revenue for a very short job hour that we're paying for. We need to update of work, we need to be able to dispatch in a way to do less minute adjustments to the revenue for every cleaning professional working. Training, equipment, coaching feedback accountability, all of that certainly is a part of the mix as well. But what worked a year ago, what worked pre-COVID we can do those things but we've used the analogy sometimes we can make money just because we're lucky by accident things are changing, your cost is getting ready to change and if you don't change great things in your business your outcomes might not be as good moving forward as what they have been in the past. And what I want to point out too is along the same lines is right now a lot of business owners have a lot more money and so they're not recognizing that the shift is happening because they have money there's money in the bank and they didn't have money before so it can feel like what I'm doing is working don't forget what we talked about also that a lot of times businesses are bankrupt before they even know they're going out of business before they even know they're already bankrupt. Checkbook counting where your success is do I have money left in the checkbook at the end of the month is it's a scary place to be when the government gives you a bunch of cash that you're not used to having that kind of takes that type of accounting and throws it out the window you can bring cash. It's good because now it gives you the availability to be strategic now you have the money to do all of the things that you wanted to do it's just you have to shift what you're doing that's all because it's a new unprecedented times you have to shift what you're doing to still be strategic with that money cash flow from operations yeah yeah yeah That's the real part of the term if you've got the right tools you can measure that Yeah if you haven't raised your prices in the last six months a year here's an opportunity to really do that so Matt Clarify when you're talking about raising prices you're not talking about raising prices for your clients right you're talking about raising your price that your company charges for brand new customers is that right? I mean both you're existing user base needs to pay more too so we raised our prices we raised our prices about a month ago using made central and we identified first thing we did is we identified all the customers that were not paying us at least $52 an hour and we raised those prices bigly as our former president would say we raised like if it was 30% we raised them 30% and we lost very few of anybody I did a price increase to 350 customers with some major rate adjustments first to customers that weren't hitting the target hourly rate that we wanted and we only lost three customers out of 350 and we added about $47,000 in annual revenue with a very quick report now this used to take us a long time made central gives me a ton of data I can pull a report really quick and see how are we doing on each house and I can look for exception so I can look for jobs that are just way over to start with right and I fix those first and I really go after those customers that have huge amounts of variance this is not real data because I didn't want to show on a live thing the back end of Better Life Mades and accidentally show a customer's data but what we look at here is what's the allowed hours here what's the average time it's taking and then if it was a normalized this normalized idea is that it looks at the productivity of all your technicians because how do we solve things in this industry right we it took too long so we send our fastest person and so even though jobs might look like they're okay let's look for one that's actually like got some variance but it's like it's really only because we're sending our fastest employee there I don't see it in this example but for example let's say this job hadn't allowed hours of 2.5 hours and the normalized hours would be 3% like would be 3 that just means that you sent somebody fast there to solve a problem and what's that one down there doesn't have a scorecard right after the 4 there you go yeah this one's not quite a perfect example either down down one more this one here 4.75 down one more there this is actually someone that's actually oh I see yes you're right average allowed hours so okay you're right allowed hours 4.25 it's only taking 3.72 hours to do it actually this is still probably an example of a slow employee but if it was normal hours it would be 3.24 so not only do you want to raise their price you also probably want to raise the amount of allowed hours so that if you're going to continue to do business together you actually have like the right productivity rates matching so if you're going to make a big adjustment to a customer by you know raising their prices 20% or something like that you're also going to tell them hey we're going to add 20% to the time we're going to spend there so it's going to be a wash you know but now it leads to hitting your target hourly rate of $52 now that's like kind of our bottom and you've kind of solved some of that stuff so you know when this is done you've sorted through the data you have everything you need all you got to do is hit update base log fee it'll email the customers telling them the new price when it's going into effect you know and then any other things that you want to share in that letter and then I mean we can do that right now this is test data so do you want to say did you get Robin's question Tom this might answer oh great ratio I'm not sure which one he's talking about um how do you position the price increases with clients sure so for price increases I really talked about you know the pressure on the marketplace and to maintain the quality that they've consistently had through the years with us we need to we need to be an employer of choice so we need to be one of the top places to continue to continue to keep their employees and my turnover is very low I have very long-term employees at this point so I need to be able to continue to pay them well and give them the things they need so they prefer the stock letter you can make this say whatever you want but at the end when this sends it it'll tell them what their new rate is what the effective date is this stuff will be done let's hit submit and are you sure you want to send this these people these new price increases it'll ask you one last time before you do it confirm it and it's going to tell you basically how much extra revenue you just produced you produced like so one year this you know is a small service that we added three thousand dollars in annual revenue what does that do in 12 in five years about twelve thousand imagine that with a hundred customers again imagine yourself doing this your business right you got to do this price increase for a hundred customers why aren't you doing it now there's something holding you back and it's because it's too time consuming or whatever but you got to do this stuff so so I've talked to multiple people even this week four people this week that are still afraid so I have to go because I have another appointment but you guys talk about fear how should they get over it why why should they not be afraid anymore Matt Tom you guys know there's no reason for fear right now this is in today's market in particular our experience is most clients are thanking us for taking care of our employees yeah for being responsible so part of explaining what you're doing is like you don't want to say hey I'm going to raise your rate you want to give them the why mind it right so explain that you're doing that so you can be the employer that your your team members need you to be you can be the service provider that your customers are trusting you'll be they'll thank you you'll lose a couple but guess what how many of you are working with a waiting list anyway right let me tell you an anecdotal story Tom I told you this but I don't think I've told the group I fired a $13,000 a month customer about $150,000 your customer last month and we talked about this I offer them a price increase and they just they didn't want to bite they're like we're at our budget and I was like well I can't continue to do this here's 30 days notice and I did it without even worrying about it I have already pre-sold all those three employees that I'm getting back off that property I'm sold out through June even including the fact that we stopped cleaning at that property through May 6th my availability calendar is sold out through June so we're what are we what are we like seven or eight weeks out we're sold that's unprecedented like I would normally that would normally be terrifying to take a customer off that's $150,000 a year I didn't bad an eye because I wasn't making enough profit from them it just it was driving down my profit margins it's the business is out there folks and every one of your competitors is struggling to hire people as well and if you're striving to be excellent you're doing better than they are so supply and demand everybody supply constraint you lose a customer you're going to be able to replace them but you're not going to I promise you been doing this for a long long time your fears are much greater than the reality and if somebody does push back it's negotiation at that point they just don't fire you unless the end of the discussion they want your service they might reach out and say hey I can't afford this or this doesn't make sense you have a discussion with them then you can make a decision some point sometimes you can reduce the scope of work you can reduce the frequency of service if they're a recurring client it's a lot of things you can do to get the numbers right you don't have to be heartless either if it's a customer that's been with you for 10 years and they're elderly and it just wouldn't fit in their budget obviously one customer is not going to make or break you this is more about globally making you position yourself because again if I do a 5% price increase because I'm commissioned that's a 5% raise to my employees at averaging close to $20 that's almost an extra dollar now in their pocket an extra $2,000 a year that they're earning I'm going to do that again so my employees are earning almost 10% more than they were the year before through price increases so again this is about employee engagement and employee engagement is when they open that paycheck or they look on the app that you have where they can see their pay and they see that they made $700 this week that's engaging them to do the things that you want to be able to do I'd also really recommend that you make it easy for your customers to give you tips and figure out a way to do that so if Made Central does it on the surveys there's some other software surveys quality driven that does that if you're using another product where you can drop a tip amount in the survey tips are huge I know in a lot of cases it's over $1 plus an hour that your tashes are making because of tips $1.16 an hour in my company so yeah that's just in credit card tips I don't track their cash tips but they can see every tip that comes in and it is a huge morale booster for them to earn that additional money and I really believe you should be figuring out ways to make your employees pay more through their satisfaction and tips is a great way to make your employees earn more so yes Robin you position it based on wage inflation and needing to pay more to hire the caliber of individual that your clients would expect you to and you got to do more than just pay more you can talk about that as well benefits, expanded PTO more flexible schedules there's a whole narrative that goes along with needing to be a better employer than what the expectation was pre-COVID to make it work in today's world and I'm going to make a plug because we're getting to the end of the hour. If you want to look at some of this stuff some of this reporting in more detail with me about how I do things in my company I'm going to jump on a demo with me for Made Central go to MadeCentral.com click on schedule a demo and if it's a good fit we'll take an hour together and I'll really show you what we're doing to do all this stuff. So I'm going to plug MadeCentral while we're wrapping up and I really highly recommend you do that. I'm also having a group demo tomorrow. Let me grab the link before we go and we should probably post that in the chat really quick. This website looks different than the old website because it's a new one right? Yeah they probably change the landing pages up every day I'm showing the MadeCentral website now. Oh yeah we have a new website I got that up and running this week so check it out book a demo with me and I think you'll be really surprised if you haven't seen it in a bit how powerful the software is but how customized it is to our industry and the ROI you're going to get especially in this really constrained market where you need to make profit on every job that's my whole focus in my business that's why me and Tom really get along with stuff. He was my coach and really coached me to kind of think that way and it's been nothing sort of revolutionary in my thinking about my business and I'm going to copy this invitation into the chat really quick so now Tom if I put it in the chat is that going to show up for everyone? Hi, under comments do you have a link for comments over on the right hand side? I don't do it in chat do it in chat I'll leave it for you and then you can post it to everybody so yeah I'd say for sure come tomorrow to that Zoom me. I'm going to be doing it with, I won't be using Live Better Life Made to that data so I can record this one and I'll be able to share it but if you register and even if you can't make it I will share the video for you on the Made Central demo and it's not just going to be a pitch for Made Central I'm really going to show you deep dive how I think and how we solve problems that affect all of our businesses so I think it would be very valuable for you to come even if you're not ready to make a switch today Truly, I mean would we like to see people use Made Central? Obviously the answer to that question is yeah but bigger than that understanding the principles that we're sharing here they're important things that you need to know especially now with wages going up and you're going to be having to make a lot of changes in your business to make you know make a go of it and be competitive Yeah, this is kind of a quick place to show you that tip thing you need to have something like this available to kind of help you increase those wages too so we're at the top of the hour, anything else we're good, thanks guys we'll be back with smart business moves again Monday we'll be posting you know on Facebook more details on that got the link for Matt's webinar tomorrow and that's at one o'clock eastern Oh man I might be actually two o'clock eastern one central I was called it was one o'clock eastern It is one central tomorrow just the way that my calendar lined up I know that interferes with something you have it is two eastern sorry well you guys take care we'll see you next week, hopefully we'll see you tomorrow bye bye