Ezra McCarthy
Hello and welcome back to the Lawn Care Blueprint. Today we’re joined by none other than Joey Coberley, financial coach, podcast host and owner of the Landscaping Bookkeeper and now Lawn Care Launch. Also into playing the piano and flag football. I just found out today we’re going to be digging in.
Joey Coberley
Well, I play football. I haven’t heard that one yet. I thought you did. No, I don’t play the piano. Yeah, but where’d you get piano from? I was just curious. That’s…
Ezra McCarthy
I was doing some research and I saw you had, I thought you had sung to your wife at your wedding and I thought you were playing the piano too but maybe it was just…
Joey Coberley
Oh dude, that’s some hardcore research right there. No, so I pretended to play the piano in the music video but I don’t play. That’s funny, dude. Yeah, that’s funny. I forgot I even did that. That was a long time ago, years. Married eight years now or coming up on that, coming up on eight. Yeah, that’s what, man. That’s some hardcore research. I’m impressed. That’s funny though. Well…
Ezra McCarthy
What a cheater.
Yeah, what can I say? ChatGPT leads you down some rabbit holes.
Joey Coberley
I couldn’t even find that video. I was looking for it last year and I was like, where is this thing? So man, you dug it up before I could even find it.
Ezra McCarthy
Oh yeah. But today we’re going to be diving into money mindset, scaling and systems. So first I got to ask you about flag football. It looked like you were in a couple of leagues there. Do you still do that?
Joey Coberley
I played a year ago. I used to play hardcore. I played professional. I was quarterback for a team called All Madden in Pensacola and then we would travel around and play. It’s gotten a lot bigger over the years. I used to play from 2011 to 2016. We got really good towards the last three years that I was playing. Then I got married in 2017 and kind of ditched it all because it’s just a lot to keep up with. But yeah, we played a lot of the teams that have played on ESPN and stuff like that and played at the…
Ezra McCarthy
Oh, wow. So it’s actually big?
Joey Coberley
It is now. Right when I was getting out of it, it was starting to go on television and stuff. A lot of the guys that we had played at the professional level were on there. They actually beat the NFL team out there on ESPN. But I mean, it’s a different sport. The NFL teams played the guys in flag football, so it’s a totally different sport.
Ezra McCarthy
It would have been flat.
Joey Coberley
Route running and stuff like that, but it’s a lot quicker routes. You have less time to throw, there’s no o-line because it’s like a direct rush. There’s no offensive line or anything, so it’s a lot faster of a game.
Ezra McCarthy
Oh, because you can’t block people like in normal football.
Joey Coberley
You can, it depends on the rules, but you can kind of set picks like basketball.
Ezra McCarthy
Okay, I’m a little illiterate in this.
Joey Coberley
No, you’re good. It’s just a different game because size doesn’t matter. As long as you’re quick and alert, that’s what counts. If you got Maurice Jones-Drew out there or somebody, it doesn’t really matter if you can run over somebody or not. It brings a lot of other really good athletes into the equation who maybe played D1 or whatever but didn’t make it because of size. So it’s really just football, but a little bit different at the same time.
I played it for a while. I love playing and I get back into it from time to time. But now that I got kids, it’s like, how much do I want to commit?
Ezra McCarthy
I’m sure it can get, especially if you’re traveling. That’s a big commitment.
Joey Coberley
Yeah, so everybody’s always trying to get me to come to Tennessee and play with this or whatever. And I’m like, man, if it’s local or something, I’ll come by. My quick decision-making isn’t there like it used to be. I used to be able to make four or five reads, and now I might make two. At quarterback you have to be able to make a lot of quick reads really fast, especially in flag, because it’s like a direct rush off the line. You usually have to make a move to make the throw or set a pick and roll out or whatever. But yeah, it’s an intense game. You got to be quick.
Ezra McCarthy
That’s actually fun.
Well, I really got you on here today to talk about finances. This is something we actually had a podcast coming out here a little bit with Paul. We talked about personal finance, but I’d really like to get into some of the business finance. Something I’ve been noticing, and obviously we serve the lawn and landscape businesses, you do as well helping with their bookkeeping, etc. Something I’ve noticed, we’re in the middle of the busy season, recording this in the middle of June. This is a time when the businesses should be flush with cash. There’s spring rush.
They’ve got work like crazy, but surprisingly, sometimes even at a very reasonable rate, their cards are bouncing. And I’m just thinking to myself, what is going on? I was just talking to somebody, a customer of mine yesterday. He’s trying to start another location and he was telling me it was May or May and June and he lost like $100,000. They’re not that big to lose that much money, and I’m just like…
Joey Coberley
Wow, so this is like a… okay. Wow.
Ezra McCarthy
Well, they have three, four locations and I’m not saying their business name, but yeah, I think they’re pulling it back. Business finance obviously matters a lot. We get into business for time freedom and financial freedom, and no one wants to have a business with all the stress and then make less money. So I really like to dig into it a little bit. You see the back end of a lot of businesses, and obviously we’re not going to go into specifics on people or their businesses, but maybe some general ideas on how we can.
Help them and maybe as they’re going in, they find themselves like that business owner, hopefully not at that scale, but they say, hey, our finances are terrible, how do we get out of this muck? So we’re going to get into it here a little bit. I know this is something that probably everyone doesn’t wake up in the morning—now I do. Actually, one of my most used apps on my phone is probably my calculator, but I think I’m probably the odd one. So I don’t expect most people to get up and think about finances or numbers, but…
Joey Coberley
Yeah, that’s interesting. Usually if I hit calculator, it’s just because I meant to hit calendar. It’s like, really? Yeah, I always hit the wrong thing. I don’t need that. So yeah, that’s funny.
Ezra McCarthy
I love it. It’s something I really enjoy. But as you begin to talk to business owners, most of them probably don’t necessarily look forward to the calls with you just because of the subject matter. How do you get business owners comfortable with their finances? And when you start with someone, what are some of the things that you really try to hone in on to help them see, okay, this is what’s wrong and how can we help you get to a solid financial footing?
Joey Coberley
A lot of times they’re just not organized and they don’t have a goal. You can’t really do anything with your numbers if you don’t have any information to pull from, first and foremost. And then they don’t have a goal. They’re out there just cutting yards, but at the end of the day they’re just putting their head down and going, like blue collar hard work. A lot of times they need the numbers to fit into a story.
And so most of our job is, number one, crafting the organization of the data so that we can help them with a story they can use to reach their goal and fulfill that part in the story. A lot of it is goal setting and organization, and then the numbers are just a necessity to actually proceed with that goal.
Ezra McCarthy
So let’s give you three scenarios here and walk through them. Say you’re under a hundred K. The second one, you’re between three to five hundred K. And the other one, I don’t know that you take people with this, I think from what you said, but say someone’s over five hundred K. Let’s just walk through it. Say they onboarded with you. Maybe they’re struggling, maybe they’re like, hey, sometimes I can’t even pay a two hundred dollar bill and I have to wait till work comes in. Say someone was in a rough patch and you wanted to help them get organized.
Let’s start with the under 100k. Someone comes to you, how would you help get them organized?
Joey Coberley
Most of the time at that stage, their personal and their business is kind of intertwined. Just getting them to see the basics, like hey, you need to make sure that you have accounts for your business and accounts for your personal. I think that’s the biggest one at that stage.
Ezra McCarthy
And then what about from maybe the three to 500k range?
Joey Coberley
Yes, so like you said, we don’t onboard anybody over 300k. I think you said 500, but it’s usually 300. We will onboard people that are clients larger than that, but most of it is we will onboard small and then scale with you. So we do have clients over these levels, we just don’t onboard over that. Typically at 300 to 500k we’re starting to get into some. A lot of times my guys at that stage can kind of start reading their profit and loss. They can kind of interpret the data. They kind of know some KPIs and how they fit in.
Which fits into what they’re trying to do. A lot of times that’s when you’re starting to kind of run a business. You have employees, you’re starting to gain more leads because your business is getting bigger, and old customers are dropping off. They’re looking into maybe getting organized in the office a little more because it’s getting a little over their head.
But yeah, I think a lot of times those guys are just starting to really understand what it means to run a business and how it can serve them rather than just the job they were working before. Once you get over 250, 300, you’re kind of in it. You’re managing people and doing a lot more than you did at a hundred K. It’s a big jump and you have to make investment decisions you may not have had to make whenever you were just driving around your little blazer with your five by eight trailer. It’s starting to look a little different at that point.
Ezra McCarthy
So of course, hopefully everyone listening in knows that a P and L stands for profit and loss. Would you be able to describe to someone, maybe they say, hey, I’ve heard these words thrown around a lot, why does it matter, how can that help me navigate my business on the finance side?
Joey Coberley
Yes, so the bigger your business gets, the harder it is to know where everything’s going. Think about when you were a kid and you had a thousand dollars or whatever you saved up.
It’s pretty easy to determine where you’re going to spend that, where it’s going to go. And if you think in ratios, the bigger your business gets, a 1% mistake isn’t that big of a deal at a hundred thousand, you might lose a thousand dollars. But if you start making 1%, 2%, 3% mistakes on two, three, four hundred thousand, that’s a big chunk of change. You’re starting to deal with five digits. If you don’t have that data to interpret, you’re starting to really tweak.
Hey, how can I shave 2% off my labor and you’re at 500k? That’s a big deal, and it’s only going to get bigger. You also need to learn how to do that before you get to the 10 million mark. You start shaving one, two, three, four, 5% off 10 million, that’s all profit going into your pocket. It’s about learning to be habitual with these things and understanding how important it is to get all your systems and processes in place—to have tight route density, to have value-added services to add on to those routes—so you’re not spending so much time in the truck and you’re focused on your customers more.
All that’s going to play into your bottom line and save you quite a bit of money in the long term. If you can start learning that stuff early and get organized, it’s a lot easier when you do start getting to the big level and really have a lot of money coming in and out of your business. You’re doing a million in revenue, having eight, nine hundred thousand dollars cycled through your business a year.
That’s a lot to take on, and you don’t want to get sloppy with that. You want to have good habits that you build up to. It’s kind of like the Jordan Peterson thing: you start cleaning your room first, then you can manage your house, then your community, then your state as you move up the echelons of growth. If you start small, you can learn how to manage a little and then manage a lot whenever you get bigger.
Ezra McCarthy
Now, something I know that Dave Ramsey is a big fan of and I’ve tried to incorporate in my business is always keep back—you can call it an emergency fund, you can call it retained earnings for the business. Personally, I think you should have an emergency fund. In business, maybe call it retained earnings. In the businesses that you help with their bookkeeping, what are some guidelines?
I know it’s really hard to give someone a hard and fast rule because it’s going to vary on their business needs, but what are your thoughts on that and how can you help businesses? In the lawn and landscape industry there’s some insane fluctuations, and you don’t want to be relying on debt because it can get you down a really dark hole real fast. So on retained earnings, how would you guide someone in walking them through that?
Joey Coberley
So for an emergency fund, it just depends. You’re going to have to use a little wisdom on it when it comes to stuff like this. If you listen to Dave, he’s going to tell you something along the lines of if you have inconsistent revenue—and he’ll be talking on the personal side most of the time—but if you have inconsistent revenue, say you’re a sales guy or whatever, you’re going to want to save a little bit more for the harder times.
And so that three to six months, if you have a recurring revenue model and you have consistent payments and maybe you’ve got some year contracts, you can be more stable. Maybe you’ve even got three-year contracts signed out, so you can get by with a two or three-month emergency fund. Whereas if you’re doing more hardscape, floating money more, and doing big commercial jobs that take a long time to get paid, you might want to have a little bit more saved up. So it just depends on the cyclicality of your business.
Do you have seasonal work? Are you shutting it down in the winter? A lot of that is just exercising a little wisdom and nuance in each situation. For our business, we have a recurring revenue model. We do two to three months of expenses in our personal and in our business. So it really just depends on, as I said, the stability of your recurring revenue or one-off jobs.
Ezra McCarthy
I think it’s really good, and I think as well, even above that, to just have retained earnings for opportunities. Something that we do is we’ll just put a set amount aside. We don’t plan to touch it for a long time, so we put it into a brokerage. Every month we put a certain amount in there, and then it’s kind of like it’s not there. You have to think, for a lot of landscape companies, if they have a competitor—maybe some small local company—they can buy it for pennies on the dollar.
Joey Coberley
Like, yeah, that too.
Ezra McCarthy
Because I know down there in Texas, it’s funny. It can be super wet, and then I remember one year it was so dry. You know the sheetrock squares that are like four feet long, the T’s—are you familiar? Okay. I had a friend, it was so dry the ground cracked, and maybe it’s like that down there where you’re in Florida. But he put that whole sheetrock square in a crack in the ground all the way down. Literally that crack had gotten like four feet deep.
Joey Coberley
That’s wild.
Ezra McCarthy
So it could get crazy, like a couple inches across. If you’re not sprinkling, the grass is gone. I had an instance with a guy who was basically almost giving away a bunch of his customers—he was going away to college. If you have some reserve in there, then you have opportunity, or maybe unfortunately a business goes out of business and you can snap that up. That’s something to keep in mind as well. If business owners are listening in and asking, how could retained earnings help me, that gives an option as well.
Joey Coberley
Yeah, I’m talking the emergency fund is kind of like a hedge against downturn or bad luck or misfortune or whatever. Then, yeah, like you’re talking about, the opportunity cost.
That’s something you can look to put more into a less liquid situation. You start thinking about how you can get a return on that money as you’re waiting. It depends on what you’re purchasing. If you plan on doing a land purchase 10 years from now, you might want to put it in something that’s going to generate you a higher return with a little more fluctuation. If you’re looking into five years and under, you might want to just go with something like Ally Bank or Relay that pays you close to at least the Fed’s discount rate.
Cause that’s what interest rates are based off of, what you’re going to get paid on it. A traditional bank’s not going to pay you anything for your savings, so you might want to look at something that’s going to pay you. I think the rates right now, a good one you can get is maybe four and a half percent, and that would be considered a good rate. A couple of years ago you were looking at getting stuff at five and a half, 6% on a risk-free rate, which is crazy. So it really just depends on what you’re trying to do with the money. That money can be represented as opportunity cost, so I like what you said there.
Ezra McCarthy
Yeah, maybe I should have separated that out for clarity. I think you should have an emergency fund just because something as simple as I was doing work for someone’s email and it was literally like $100, $200 and their payment bounced. I’m just like, man, if you got a business… yeah, it just blew my mind.
Joey Coberley
It happens a lot, man. It’s crazy. It’s more common than you think.
Ezra McCarthy
Like how in the world? Right. But what a stressful way to live. And if you’re there, I’m not casting shade on you, but there’s a better way to live. I’ll tell you that. It takes hard work. I remember I like to read books, and Brian Tracy—some of his books are good, some aren’t—but he had a really good thing he talked about. He had, I think, a secretary or something, and she was hearing him talk about saving money. She said, I don’t make very much, I can’t save money. And he basically told her—and if you’ve heard this, then okay—
Joey Coberley
No, I haven’t heard this.
Ezra McCarthy
And he told her, start with 1% and put it into savings. Then the next month do 2%. All of us could take 1% and put it into savings every month. It literally changed her life because she realized she could take control of her money and that it didn’t have control of her, because paycheck to paycheck sounds like a terrible way to live.
Joey Coberley
Yeah, i saw some numbers on that a long time ago. i don’t remember how many americans are actually living paycheck to paycheck or just running a deficit, charging more and racking up more debt each month. dude, i choose to live a stress-free life. it does wonders. i think it’s probably the number one indicator of future health too. you can talk about diet and exercise and everything, but what’s your stress level at? that’s going to put you in the grave faster than anything.
Ezra McCarthy
That’s the truth. Now, don’t give us names, but you’ve probably worked with people that are there. Have you seen any that have turned it around from maybe that place where they’re just really struggling to now being financially secure in their business? And if so, what changed in their life or business?
Joey Coberley
We don’t really run a turnaround company like Ramsey Solutions or anything. We had the option to do that, and initially when we started off it was like, okay, we’ll bring on this company that’s bringing in three million a year and they’ve got all these wasted opportunity costs and debt levels, and how can we fix that? But we didn’t want to build a system around that.
So it just wasn’t interesting to us. It was very demanding and we were dealing with other people’s stress, so we had to weigh that stress. We started more of a nurturing and foundational type of company. Most of the companies we deal with are companies that we grow with. They learn these concepts early and they don’t get into a lot of the trouble. Can it happen? Sure, because they’re still independent people. They can do whatever they want. They don’t have to take the advice.
But I would say for the most part, we haven’t had a lot of turnaround stories simply because we onboard them when they’re really young and we can really teach them. A lot of times they don’t get into this trouble, and I’m big on that because I always talk about this. In our company it’s kind of like the company that helps you, like a pre-cancer screening. Guys want to know that they’re okay, and we can help them through checking all these different numbers and making sure this stuff doesn’t happen to them.
I mean honestly, I don’t think we have. We’ve had a lot of light bulb moments, but I can’t say we’ve had this company that was debt laden and then turned it around. I know Profit First is big on that concept you’re talking about, where it’s like, hey, you can’t take your profit at 10% right now, but you can take one, you can take two, and it’s a slow build up to that. But honestly, that’s kind of our business model.
Ezra McCarthy
That’s a good problem. I’m surprised though.
Joey Coberley
Yeah, it’s really uncommon in the bookkeeping and accounting world, because typically they try to land the big clients and get paid a percentage of how much they save the client. We don’t have that model. I’d rather they just not have those problems to begin with. That’s honestly a big message of our company.
Ezra McCarthy
That segues into an interesting point. You hear a lot of people say, well, we don’t really make a lot, but we’re investing a lot into the business. Basically, the translation is we’re not making any money and we’re just telling ourselves that we’re putting it all in the business. So when you’re helping people, when is reinvesting back into the business smart? And how would you recommend that they prioritize paying themselves or conversely building reserves, whether it’s an emergency fund or retained earnings?
Joey Coberley
Yeah, that’s a good question. First of all, you’re just going to assume that you have profit if you’re asking that question. So if you have the profit, you can either reinvest into your own company or invest in something that’s generating you some cash flow or equity growth. A good time to reinvest in your company, I would say, is when you have really good systems and processes, like standard operating procedures, and you have a scalable company. So you have a system for hiring.
You have a system for finding leads and you can repeat that, and then it’s a good time to take a lot of your profits and reinvest them into something you believe in that can scale properly. But if you don’t have a lot of that stuff and you don’t really plan on scaling a company, then you can always do an index fund. Take your money, stay small, stay at 200k per year, draw a $100,000 salary from that or 80,000 or whatever, and then just reinvest into an index fund or mutual funds.
And if you want to take it to the next level, invest in your local community and things that you understand. I really like that option because it keeps money local, helps people out, and you can see that your money’s actually making a difference. That’s really important to me. I don’t really like sending my money off to have other people manage it when I don’t have an eye on it.
But as long as you’re investing for the future so that you’re not a burden on somebody later on. You don’t want to be that person that didn’t plan and then brings everybody down at the end of your life because you were never wise with what was given to you. Then you have to be a charity case later on in life. It’s important to at least invest in things that are going to generate you cash flow one day or that will have the ability to generate cash flow if you need it. I don’t know if I answered your full question or not, but…
Ezra McCarthy
This brings me to an interesting question that I’ve been pondering. It’s the middle of the year, I’m working through tax stuff. Don’t you love it? I get the joy of paying taxes in two countries.
Joey Coberley
That’s complicated.
Ezra McCarthy
But it is very complicated. So I’m starting through that and thinking about this next year. I was just wondering, do you see people that quote-unquote invest to reduce their taxes and end up just wasting money? Maybe someone did that in the past or is thinking about it. What would you encourage someone to think about in relation to taxes, investing, and keeping track of their expenses?
Joey Coberley
Yeah, I’m not a huge tax professional, so I’ll speak on this as best I can. I’m just going to go ahead and say never buy things just for the sake of reducing your tax burden, because eventually you’re just going to kick the can down the road and have to pay more later on. Go ahead and have a strategy, put money towards that strategy, and be very intentional with what you’re buying.
And then if you’re investing but you’re day trading, that’s not investing, that’s short-term capital gains. You’re going to get ripped on that. Let’s say you made a profit on it—if you had a thousand dollars, for example, and made something ridiculous like a hundred thousand dollars on that investment—if you pull that out and flip it, you’re going to end up paying taxes on that of like 40%. Whereas if you just kept it long-term, you’d go into a long-term capital gains tax bracket and it’s only going to cost you 15%.
And what that’s going to do is increase your compounded rate. If you have that money that doesn’t get touched and it keeps compounding without pulling it out to pay taxes every year, it’s going to compound at a much higher rate. Day trading also takes a lot more of your time, whereas traditional investing is very passive income based. I see a lot of guys doing that, saying, yeah, I’m investing, I’ve got my stocks, and they’re on their phone on the job flipping in and out of stuff. Your tax burden is going to be ridiculous on that, if you even do make some money—which chances are, you’re probably not.
But yeah, that’s kind of my thoughts on taxes. Just have a goal, be very intentional with where you put the money, and be wise with what you got. Don’t be willy-nilly throwing stuff everywhere and hoping something works, because hoping is only going to take you so far. You might get lucky a few times but…
Ezra McCarthy
For sure. So this brings us to debt, especially when they’re managing their finances. When would you say that borrowing is a help versus when does it hurt the business owner?
Joey Coberley
Borrowing is going to hurt you when you’re experimenting with other people’s money. If you take out $20,000 and you’ve never managed $20,000 before, and you don’t have a business plan and you’re just throwing money at the wall hoping something sticks, I would say start smaller than that. You don’t need to start off with the biggest amount or the amount you can take out in terms of a loan. Start small, figure out a business plan, figure out what works.
And then you can start upping how much money you want to spend on certain things. That’s where people get into trouble. It’s usually younger people that don’t know business very well. They don’t have a place for the money and just throw it at something, hoping it sticks because they’ve heard you got to spend money to make money. That’s true, but the big guys are operating within a framework and a goal. They know exactly where their money’s going. If you want to borrow money at five percent or six percent, you need to make sure that you’re getting a higher return on that than six or seven percent.
Preferably you’re not borrowing six and getting seven. Hopefully you’re borrowing six and getting twelve or something like that. I think that’s really where young guys get stuck, just experimenting with other people’s money. So that’s really my thoughts on debt.
Ezra McCarthy
It’s really good. There’s something about when there’s no other option but to be ingenuitive and think, and you come up with some great options. I was just listening to a little bit of Jonathan Potoschnick this morning. He was talking about John or Jonas Olson. I think you were actually on his podcast, The Pest Control.
Joey Coberley
I was on Jonas Holtzman’s podcast. Yeah, it’s called The Pest Control Millionaire. He’s a great guy.
Ezra McCarthy
And he was friends with Jonathan Potoschnick, and he was telling about how he did a bunch of door knocking at the beginning. I’ve done more door knocking than I ever want to do in my life. I did it selling chocolates when I was a kid for my brother. I literally knocked on, not exaggerating, a couple thousand doors to sell chocolates. But you know what, it probably helped me being a pastor now. It doesn’t bother me to talk to people, so that part’s nice. And I was just a kid, so looking back, oh, it was a lot. But that being said…
Joey Coberley
It’s cool the things you can learn from past experiences and just putting yourself out there, how much you can gain from that and relate to people. I always wished I could sell chocolate bars, but I lived out in the boonies. So when we had our school chocolate sale, I was way out in BFE. Who was I going to go knock on the door of—my neighbor that’s five acres away? So I had to get my parents to take me somewhere in order to go to a neighborhood, because we really didn’t have a neighborhood.
So I would end up selling no chocolate bars for the most part, and all the kids were getting the bikes and all the cool stuff. I was sitting there with my one box of chocolates that I sold, basically because my parents bought them and ate them. Other than that…
Ezra McCarthy
Man, drive like sometimes 50 minutes away, and I remember one time it was near Christmas and we were standing outside this grocery store by the Santa. Just a fool I was, I forget how old I was, my mom was there the whole time, it was safe for me. But I was probably like eight, maybe nine. I remember this one time, there’s a couple of things I learned. One, always sell with a story, a true one. We were doing it for my brother who was going on a mission trip.
And so I’d always tell the story. One time my sister was out there as well and I followed her. I didn’t know she had already knocked on the door. So I went and knocked on the door too. When I left, my sister was like, oh man, I already went there. Did you buy anything? And I was like, oh yeah. She was so ticked because she had tried to sell it and she didn’t.
Joey Coberley
What?
Ezra McCarthy
And I had went after her, yeah. And there was this other time—and I’ll stop with my chocolate stories—but I went to the store and this lady had a beautiful garden. She obviously spent who knows how many hours, her whole front yard was done really nice. I asked her if she wanted to buy chocolates, gave my little spiel, and she said no. Then she was fixing to leave, and I just said, hey, I think your garden looks really nice. I was kind of sad—when you’re a kid and you get rejected, it’s like…
You’re not going to cry, but when you’re that young, you’re half there. And then she turned around and said, you know what, thank you so much for the compliment. Because you did that, I’m going to buy from you after I said no. I was just like, oh, I had forgotten. So, getting a little bit derailed, I don’t even know how we got onto the chocolate stories, but yeah, let’s get back to the finances here.
Joey Coberley
That’s cool. Nice.
Ezra McCarthy
Dude, I think that’s where we’re going—innovative solutions. That’s what I was talking about. He was talking about door knocking, and no one likes doing it, but he was saying how effective it was for him. So many times money can feel like an easy shortcut, when sometimes, just like you’re saying, we’re experimenting rather than putting in the hard work or the less enjoyable option like the door knocking.
Joey Coberley
Yeah, money in the hands of the right person goes a long way. But being inexperienced and taking a lot of money, you basically become the government and just start throwing things at the wall. Look how much waste goes through the government, man. If we put money combined in the hands of good, ethical, wise people, it goes so far. It’s unbelievable, you can move mountains with it. But yeah, don’t be the government. Don’t just experiment with it and hope stuff works.
Ezra McCarthy
It reminds me… have you heard about the space pencil? Space pen? You’ve never heard about it? Okay, so let me tell you this true story. The US government, because obviously in space there’s no gravity, wanted to build a pen that you could write upside down. They spent, I think, literally millions of dollars trying to design this pen. And you know what the Russians did? Brought a pencil.
Joey Coberley
What’s that? Yeah, that sounds about right. That’s probably a true story.
Ezra McCarthy
I think it is. And literally so many times in business we’re trying to build this upside-down pen when the pencil may be door knocking, or maybe going without, or using something used. But it’s a lot more fun to design the upside-down pen.
Joey Coberley
It’s also just like the government doesn’t make their own money—well, they do print it—but they take it from the citizens, right? So they don’t care what happens to it. It’s the same concept on a micro scale when you borrow other people’s money and you’ve never dealt with it before. You care about it, but it’s not like you sweated for that.
I didn’t bleed for that. It’s like I just took it and it feels like free money, kind of like a credit card, right? You don’t really care how much you’re spending on that thing. It’s see no evil, hear no evil, you’re just swiping it, swiping it, and eventually it’ll catch up with you. But yeah, that’s funny, man.
Ezra McCarthy
And that’s why proper accounting is so important—using a bookkeeper, whatever you use. I’ve got a bookkeeper myself, and I actually made a custom GPT for ChatGPT. She sends over the P&L, the year-to-date, and I put all of that in there. Then I query it and ask it stuff about it, because keeping track is really important.
So there’s things you can do like that, and getting someone like Joey or a bookkeeper is really a life changer. I hate to confess, I was not doing it very well, and then at the end of the year you’re scrambling trying to put all these things together. Finally I was like, okay, this is silly, I need to get it organized well. I’ve tried—and maybe the listener has as well—to set up their own QuickBooks, try to get it all. I was so frustrated I just quit.
Joey Coberley
Yeah, those are usually the ones that we have to charge a lot of money to fix.
Ezra McCarthy
And it’s very reasonable. For what you’re going to save by knowing your numbers, you have got to have a bookkeeper. What do you say is the lowest revenue number where someone should really get a bookkeeper?
Joey Coberley
I used to say 75k. I had a client tell me he wished he had started at 50k, so that’s the lowest I’ve heard. I’d still say 75,000 revenue a year is when you need to start thinking about it, because you need to start thinking about all the stuff you can delegate.
Get hyper-focused on building that awesome team that you’re going to lead and conquer the world with. Anything else is a distraction. I do that in my life too. My dad’s always like, why don’t you do—because I used to do stuff like this—I used to do all the repairs on my car. But now I pay a mechanic. Do I have the time to deal with it? I don’t have the shop, I don’t have the lift, I don’t have all that stuff. Do I enjoy it? Yeah, but I have kids. I could be hanging out with my wife and kids, and I get super hyper-focused on what I need to get good at in order to grow my company. That’s what I do.
And so everything else I delegate just because it’s the most efficient way to do it. You need to let others be good at what they do, and you need to get good at what you do. That’s how we all thrive together in a community. Everybody’s an expert in a certain field because they hyper-focused on it. The guys that think they can do it all themselves are honestly the ones that have the hardest time scaling past three, four, five hundred thousand dollars, because they’re still trying to wear all the hats. That’s not what a business does.
You don’t try and build a city by yourself. You’re not going to be the engineer, the accountant, the banker, and everything else that makes that city operate. You’re going to have an entire team and community of people that work together, ideally inside the same goal and operation. That’s how anything’s been built since the beginning of time. Your business is the exact same way—like building a house, a city, a car. There are so many different professionals that go into building anything. Think of your business the same way.
Ezra McCarthy
I think a lot of people unfortunately don’t factor in what their time is worth. When they’re looking at their P&L, their time sheets, figuring all their employees, maybe they’re calculating that, but then they’re working 50, 60, 70 hours per week and not factoring that into their quotes or their business.
So they’re really not accounting for that in their quotes, and they’re undercharging. Then they’re having to do all this extra stuff just because they’re not factoring it in. I think that DIY mindset—because most of us probably running a lawn and landscape business no doubt grew up blue collar—we’re just used to working harder. You want to make it better? Just work harder, without realizing that’s probably not the best plan.
Joey Coberley
Yeah, working hard only gets you so far. I know a lot of broke working people that worked hard. You do have to work hard, don’t get me wrong, but you also need to be calculated and have a goal and understand what you’re doing. You could also be on the other side of the equation—you could just sit around and think all day—but you’re not going to get anywhere if you’re not working hard. So you have to do both, man. That’s my message to the world. I’m tired of watching people work hard their entire life—half of it’s my family. They worked hard their whole life and now they got zilch, and they’re 60 years old.
Man, you did so many valuable things for society and what do you have to show for it? So don’t be that person.
Ezra McCarthy
So people really get into business for profit. Do you have some benchmarks that you can maybe tell the listener on what is good or normal at different revenue levels?
Joey Coberley
I would say your profit should, in a good business sense, stay about the same or get better with time. Revenue-wise, if you’re at a hundred K, I want to see you still hitting. You might hit a little bit higher profit at a hundred K because you’re the one doing everything, but you’re also a little disorganized, so that’s going to slow you down. You’re obviously going to work on your properties better than any employee ever will. I mean, that’s just natural.
But if you start at 15% profit, you’re going to have some hiccups along the way. A good business is going to pivot with the economy. If you’ve got a nice recurring revenue business, I want to see you pinging between 10 and 15. You’re never going to stay at a stable 15. There are economic conditions that are out of your control, and there are things inside of a business that are variables. But if you have systems and processes in place, then you can handle those variables.
I’d say you just have to understand what drives profit, and a lot of it is… there are so many things that go into it. In lawn care, it’s a lower profit margin business because it has a low barrier to entry. A lot of people get into it, and there’s a lot of competition, which drives down the price. There’s not an enormous moat around it—there’s nothing that protects you or gives you exclusive content that somebody else can’t do. The only thing you can really do better is provide ideal customer service. Do what you say you’re going to do, be there on time, be professional. That’s going to set you apart quite a bit.
But you’re not Apple. You don’t have proprietary information, you don’t have a switching moat. For example, you can’t just switch between Apple and Google stuff, and so it’s a pain—you stick with Apple. Apple can essentially charge you whatever they want without you switching. They can charge so much that eventually you might switch to Google, but there’s a point to that. That’s one reason Apple is such a profitable business—because they’re tech. It’s a hard barrier to entry, and there are a lot of capital expenditures that go into it.
And there’s also a lot of proprietary information, and they have a switching moat. That’s going to be a driver of profit. A tech business can get away with really high profits, whereas a home service business is going to be more dependent on the barrier to entry. For example, HVAC is a little harder to get into than basic mowing. HVAC will have a little bit higher profit because people have to go to school or trade school for a lot of that stuff.
You don’t have to do that in lawn care unless you’re maybe doing application-type treatments. That’s one reason lawn care is a lower profit margin business. The ways you can improve it are by really nailing down your route density and providing outstanding customer service so customers come back to you for more. You can upsell your value-added services to them and spend less time in the truck and more time on the job. That’s what’s going to drive the prices and your profit margin.
So you really need to focus on your route density and your existing clientele rather than always trying to gain other yards, because that’s going to spread you thin. If you’re in the truck the majority of the day, your profit margins are nonexistent because there’s no value in one yard by itself. That yard does not sell for anything. It’s the synergy among the yards and the system behind your team that actually make your company valuable.
And so you really need to focus on tight routes and building amazing trust between yourself and your client so they will buy from you again. You can offer more of your value-added services on their property. That’s really the key to driving profit in a lawn care company.
Ezra McCarthy
Well, Joey, there’s been a lot of value for the listener. Hopefully they’ve enjoyed it and got some additional information to help them grow in their business. If they’re interested in finding you, perhaps for bookkeeping services or some help with numbers, what’s the best place to find you?
Joey Coberley
Yeah, you can find us at thelandscapingbookkeeper.com. You can schedule a 15-minute phone call with us and we will see if your business is a good fit with ours, because we don’t want to offer you something you don’t need, and you don’t want to work with somebody that doesn’t offer the service you need. We just make sure there’s good synergy there. From there, we’ll sit down with you, gather a lot of your information, and send you a personalized quote for your business. We don’t have standardized quotes in landscaping and in The Landscaping Bookkeeper.
And then also check out my show, The Joey Coberley Show. I co-host it with Kevin Salters. He’s a bit of a mentor to me and has taught me a lot. He’s been doing lawn care for 40 years. He was a GM of BrightView and of multi-million dollar landscaping companies. He’s done a lot in terms of selling these companies and team leadership. He knows a lot about leading and exit plans and stuff like that.
And then you’re going to get me more on the financial side. We’re obviously on Instagram and Facebook and trying to build up my YouTube, but it’s not quite there yet. We’ll get there when we get there. But yeah, that’s how you get a hold of us.
Ezra McCarthy
That’s a wrap with Joey Coberley. Hopefully today this conversation sparked some great ideas and gave you some clarity that you’ve been needing. Until next time, be sure to hit the subscribe button, share this episode with another lawn or landscaping pro, and we’ll catch you on the next one.
