Learn from the mistakes we've made on the way to building a $2 Million a year junk removal business. These mistakes have costs us hundreds of thousands of dollars. https://junkremovalauthority.com/
Alright guys! Welcome to another episode of Junk Removal Made Simple brought to you by the Junk Removal Authority. My name is Lee Godbold. Happy to bring this episode to you today. Today we’re talking about the worst mistakes that we’ve ever made. We’re starting our junk removal business. Junk Doctors despite all these mistakes, we build it to be a $2,000,000 a year business by the end of year five. Had we not made these mistakes, I love to have seen now what we could have accomplished in that same period of time. I never dwell on mistakes, so I don’t really think about them all that often. But you do want to keep them in mind so you don’t repeat the same problem. What I’m hoping to be able to do is, this is really what this is geared towards the JRA customer. Somebody that we used JRA as a customer. Somebody that’s thinking large thing about growing a business, a pretty decent sized organization and service.
Not Somebody who’s going out and I’m just stepping on the truck all the time and I’m trying to push all of you all have your single truck operators. So, we’d all been out there doing it just as long, if not longer than I have. Some of you are new and, you just never thought getting past. Just having a regular job. So, part of what I’m trying to do is I’m trying to push everybody to think larger, demand more out of yourself. Have higher expectations for yourself. For the level of wealthy. Great level of happiness, you can have a level of freedom you can have in your life. This right here is geared towards, that person just does not apply to the single truck operator, but it applies unless it applies to a single truck operator who’s looking to get out of being an alcoholic, myself, operator who’s looking to get out of being a self-operator and becoming a legitimate, bonafide business person.
So, the worst mistakes. I do body to a business packages starting at $15,000 right now. $15,000 starting. You cannot continue, and also these packages are geared for most people can continue working a full-time job with our business packages up until the point they can replace their current salary or maybe they continue doing their full-time job depending on how it is. And they’re look at the business is more of an investment that runs a lot without them. Well you can do that with junk removal. Business owner that’s in the trenches and pound away everyday working on their junk removal business, going to ultimately have a more successful junk removal business. Yes, no doubt. But that doesn’t mean that they themselves are going to be more successful if they have a job and you’re out there and you make it a 100,000, 200,000, a few hundred thousand dollars a year with a full-time job, depending on your flexibility and your hours and how willing you are to work hard to run a junk removal business on the side with the systems we have set up to acquire customers. You get out there and pound doors and sell and all that kind of stuff and get more. But the majority of your business is going to go for and come from a good marketing and especially good online ordering platform. We’ve got that. This is one of the things that separates us from the franchises. The franchises only make money when your gross sales go up. We don’t care. You know we sell services at a flat rate. It doesn’t matter if you’re making 100,000 a year off over, if you’re bringing a million a year off of it, our services, whatever you use, their no obligation and you know it’s a flat rate. There’s no percentage involved in it. So that’s one of the key advantages we have of our franchise.
Franchise, they want you to, most of them want you to work exclusively on your business. They don’t want anything else because they won’t shoot hitting revenue targets because it’s only, they made more money as your revenue goes up. We just want to see you become extremely successful. And some of you guys out there watching these videos are more successful than I am. You know you’re out, you’ve been out there, you’ve been working 20 years, you’ve been making half million dollars a year or more, you look at it at a corporate environment, go into business for yourself. We’re here to show you how to do this and make this successful, open up freedom, and allow you to get to the same salary you’re making in your corporate job over time, but maybe you keep making your corporate job and a half a million a year. It’s going to take you I mean at least five years, six years. If not, maybe you’d probably even longer than that, five, six, seven years before you, yourself will be profiting and bringing home $500,000. So, I’d say within five years you can do it. Let’s get on the only episode of worst mistakes. Number one, not being tough and ruthless enough.
I did a video on this the other day and that you always thought of myself as a fairly tough guy, but often I won’t be a ruthless enough. I was allowing me a little bit of if there’s certain things that we considered important but not vital. They used to be stuff. Now we consider 90 percent what we do as being vital. It’s all part of the formula. But like asking for reviews, it’s so hard to get guys to send reviews and ask for reviews. That’s now a fireable offense. So, if it becomes a repeated problem and they just can’t fix it, it’d be demoted. They lose their TL status or it’s actually lose your job over it. There’s people out there. It’s a tough labor. Don’t work right now. You need to always be hiring, but there’s people out there that can fill those spots.
Always be hiring creative environment where the people that do the best, like a sports team, we treat it like a sports team. The people that performed the best get the playing time that people that don’t, so everybody walks hours, hours, hours, given hours, and people that aren’t in it, it doesn’t matter if they do with you for two, three, four years, or if they’ve been with you for two, three, four months. The people that have worked the hardest but do everything they’re supposed to do. The smartest should get the hours. You guys got to push people, also you got to push yourself. If they’re working too slow, if they’re doing a, you know, if they’re getting comfortable, then you got to push, you’ve got to get them on to the next level and you might push your mind on that of your business, but that’s fine. I hate staying in people. People that aren’t progressing. That’s what we’re doing now. I’m trying to push you, and again this is just certain people, some of you out there are hard working all the time. Like I said, some of you make more money than I am, but if you’ve been out there working 15, 20 years. And I want to. try to push everybody to become more successful. And then I for the longest time I didn’t really do that inside my business and that’s something we’re really starting to work on is just pushing people out more. Learning team members’ money. You just got to say no that’s tough, but you got to say no. And then allowing customers kind of Pry, allowing myself to lower price with the customer just because I believed they were not willing to pay the price. Go ahead and put price out there. That’s the worst thing to do is try to talk you down at that point. But don’t do the negotiating for the customer. Well, your price is your price. Get out there and don’t be fair, don’t overcharge. But give the price confidently and see what happens. And most customers will go for, I’m not training team members as well.
Training Your People
We train them. When you’re getting going, it’s hard to take time to train. Fill that person in there and you got to get into work because you got jobs, got to be taken care of. The problem is that really hurts the experience that you have with the customer. It hurts their job satisfaction and it allows increases the likelihood that somebody is going to get injured. One of our most pain in the body expenses right now is workers’ comp and that’s because we made a couple mistakes with this. I’ll not properly training team members for safety. You know one of the injuries that we had a guy grabbed a tin roof with a before all the nails around, he had to say get gloves on, whether it was just these leather gloves and he made the Tam will 10 slices to his hand is the $16,500 a torn ligament, workers’ comp expense.
That hurts our monitoring. The other expense we had a hit we had over his column was a fraudulent that guy we’ve done the worker’s comp companies quit paying on. He sued us, but we’re going to win that. He’s a fraud, but anyway workers’ comp and pain, you want to make sure your people are trained well and also like neighbor’s property that comes from not training your team members how to properly move items throughout homes, teach them how to make the proper courtesy call. That’s the first contact that the customer is going to have with the truck team, is that courtesy call and teach them a proper customer interaction. How actually interact with a customer now, not rewarding exceptional team members enough. When you have good people, guys that are doing everything they’re supposed to, guys that are working hard, guys that treat your company like their company, they’re getting reviewed request out, there doing all the checklists, they’re training people love. If you’re short staffed, they come in and they and they work the shift those people right there. You’ve got to pay them a lot more. It’s tough because you’re worried about making the bills or paying the bills, but you got to jack their price up and you’ve got to involve. Then one of the keys things is involve them in decisions. Talk over how a company’s doing financials, advertising, marketing, how the other team doing and get them involved in here. These are people that are driven. They aren’t just doing a job because it’s a job if they are going about this, they’re one they’re looking long term, but to, it’s not just that they take pride in their work and they want to feel like they make a difference. Made them make a difference, involve them and these kinds of decisions. Now, one guy needs to ultimately make the decision in the business, but you also take input from as many people as possible when they’re good and not just you and to see everybody on the team members have ideas. A lot of thoughts. But the ones that are really good, you’re exceptional. Involve them in decisions, promote them when you can. Keep them involved and paying a lot more guys.
They’re making you more money than your other team members of your team members. If you have other team members making 13 bucks an hour. Do you have somebody who is exceptional that should be making 15 or more 17, like we’ve got one guy been with us for six months and that’s become our gm of our Charlotte and Greensboro locations. He is making significantly more than people who have been working several years. He’s making quite a bit more. He’s still our island right now, but he’ll be going to salary soon. So, this is what we based mistakes in the past and they an unfair people. We just assume though that they had a job to do, they’re going to do it and, but if you aren’t involving them in all these decisions that they don’t feel like there is an important part is they really don’t. So that, that’s definitely been a major mistake that we made. Now this next one is probably going to prevent me from ever being on the Dave Ramsey shit and all, I guess some Dave, Dave is about, I’d probably agree with 80 percent of what Dave Ramsey says, consumer debt is bad debt. That for the most part, consumer debt is bad. If you can’t afford that TV, don’t put it on a credit card. 15, 16 percent interest or whatever, but one of our mistakes was not using debt soon enough.
It’s right here. It’s probably going to surprise a lot of people, but once you’ve got a proven business concept where you’re making money, you’ve got to expand quickly. Now you don’t over expand which you always have thing of his worst-case scenario. What if the market tanks and I, what’s my worst-case scenarios for his business? And if the market tanks can I continue to pay all my obligations? That’s the point where you need to reign in your day. And that can be tough because once you start getting dead, dead it’s easy to get. So, you got to be very careful. There’s not a hard and fast rule, but you always have to think about what’s the worst-case scenario? And can I keep up with my obligations? But for example, if you need a truck, um, don’t just, you don’t have to just wait until you save up cash for vehicle.
I guess when I first got started, I would have made sure I paid cash for vehicle and when you first get going, if you don’t have other income or if you don’t have a good amount of income already saved up and you’re going to go the JRA again. The JRA route is not, it is aimed at a kind of breaking even within the first few months, making a little bit of money, and then just starting to kill it and years to and allow. that first year it’s invest, invest, invest. That’s the JRA way. I’m using debt on your first vehicle. If you don’t have a little money saved up to make sure you can cover that for several months. That you might want to save up for cash for a used truck. You get a good use of junk truck for about 25 K, that’s a consideration you might want to have.
Do you have another income coming in or you have money saved up then using dental that first vehicle goes forward, go Randleman junk move was going to work? You know as long as you follow the formula on your patient, you’re a little bit patient with it and you don’t abandon ship too soon. Use debt, you got to be careful with it. But use debt, get vehicles, and your last year you made $100,000, then what you’re going to look at is if call somebody 60, I made $100,000 last year. I’m looking to make 40 this year and I don’t want to take that down that decrease in pay. The thing is, if you’re going on your hiring somebody to pay $60,000, they better make you at least 100 or 120 plus, maybe $600, I’d love to see 10 times return.
Either by freeing up time for you to go out and do sales and do stuff that’s going to increase business or directly themselves increasing business. Like when we went out, hired a marketing director, we’re paying a good amount of money between his salary and bonuses. I mean, he could make some serious money, as JRA sales go up some serious money I’m talking about big bucks. He has potential to make, we know where JRA is not profitable. That money’s, you know, more come directly from junk doctors. JRA just started, we’ve got some good business going on, but I mean, we’re hiring before we’re out there and make it even enough money to pay his salary so that’s coming from some other money we had through junk doctors, Junk doctors makes enough money.
It’s going to loan JRA money to pay for him, but we know that he’s going to make us back that and then so he’s going to make us a lot more money. That’s an example. A service is another example. JRA, if you’re going to go out there, if you’ve never done or if you’re even doing ad words and you never done ad words, bringing us in to do that, and that’s going to ultimately make you more money, a lot more money. Especially if you look later on down the line using us for consulting services, I’m hiring a good accountant or a bookkeeper to make sure your books are getting done. We can do bookkeeping services as well. All of that is a good idea. Is it an example. Get out there and hire people before you necessarily need it. A lot of times because they’re going to, as long as you’re sure they’re going to get you more money, you can use a lot of credit for that. So, a line of credit can be used for that if you don’t have the money. You’re confident they’re going to make you the money back. Go out there and get you a lot of credit. The other thing is with debt it drives you a little bit. If everything’s paid off you’re not going to be working as hard. Debt motivates you.
I think Dave would that be against Dave Ramsey right here all day? I could hear him right now trying to draw it out and try new to the game that point. But that is a hundred percent correct. Debt makes you feel a little desperate debt motivation. So that’s one of the biggest mistakes we made because I used to be all about being debt free. It helped my business back tremendously. It’s a mistake that a I promised I would never make again. There will be one day that I will be debt free, but it will be way in the future. I’ll be 70, 80, 90 years old. I get everything paid off because I have so much extra money around any way from real estate and successful business ventures and all that kind of stuff. That I’ll get that for you, but until then I’m going to use that as hard as I possibly can.
As long as I’m always constantly evaluating worst case scenario. I’m all as positive as you possibly can to make that I’m short of a, an apocalypse or, or the world ending or a major nuclear attack then I’m going to be able to survive. Unless the guys, it doesn’t matter how much debt you have, if a bomb goes off, if a rocket man launches a missile over here and it’s a nuclear bomb, hits us with a couple of nuclear weapons, then you know what’s going on at that point is food and bullet and it’s really the only thing that’s going to matter at that point. It isn’t going to be how much debt you have. All that’s going to be forgotten. We’re just going to be trying to survive at that point. So, I don’t really let that worry.
Well, that didn’t work too much as long as I can survive in normal, worst case scenario. A nuclear attack angle, I don’t worry about it. If it happens, it happens we’re just done. If you survive the blast, I will figure out a way to survive. Um, nothing we did is we manage the ad words. Again, this is what we’ve done is the worst mistakes. So, we managed ad words long enough. Why don’t you think we go out here and push this AdWords management? Own our own for too long. It’s because this was such a huge mistake. Hire somebody to fix it for us. We have all the data. We had six years of data. I knew what ads or, okay, well we’re having is wasted head spin is Allah as $300,000. We wasted 300,000 wasted and I’d wager to say that most of you out there, you aren’t even gross in 300 k we wasted $300,000. That is over a five-year span. So that’s not a year, but a $3,000 wasted, wasted over a five-year plan. The good thing about that is if we could wait three to $300,000, It means we’re making a lot more than that off of that word. So that’s just an example of how good google can be. It used to be get a lab origin and just be an ad words and make a tremendous amount of money. It is a multiple staff and multiple angle approach. It takes a lot of time to manage. It takes a little bit of patience to get going, but it is vital ad words. Google is vital to your long-term success.
Don’t think you can manage it on your own for too long. It seems simple. You Got Google, they call you up. But I’ll tell you a secret. When we started implementing some of these campaign changes that started saving us tremendous amounts of money without costing us any business whatsoever. Within about three days, Google was calling us and they were saying what’s going on? Your clicks are down, your clicks are down. You’ve got it. You’ve got to reverse everything you’ve been doing. You’ve got to go back to what you’re doing. We incent off. We sell the light in Google headquarters. We went, they had a red light on some little, you know, some little operation in North Carolina going around holding people’s trash. I want to know what the hell is going on. And they used to be, you know that generally they call, they say, let’s set up a meeting.
It was, we got to talk right now. What do you all do when you’re scrolling your campaign up? The thing is, is Google makes their money off of ad words. That is where they make money. If you’re taking advice from Google guys, there’s a little bit of conflict of interest code on there. They know the platform, they understand a lot of the tools. Yes, you will get more clicks, but clicks don’t matter. Sales matter, the JRA approached the bunch of AdWords that is going to be 100% different than anybody else. Managing AdWords, anybody else? Managing AdWords does not have the understanding of the business. We have five years of data. We were able to go through it. We brought in somebody that literally all this individual does all day is manage ad words. That’s all he’s doing. He knows ad word inside and out and then with our expertise, we knew what we were making money on and the data he was able to gather.
We knew what we’re making money, but there’s no way you can successfully manage a business and manage an average campaign at the same time. It’s not going to happen. You’re going to get burned or you have a budget so low. The average really isn’t doing any good and that you’re going to quit, go out and give up on. You got to be spending money on ad words. You got to be a 2000 minimum load to see it. 3,000 to Google every month on ad words. He can’t self-manage it. What lie? One of our largest mistakes. Worse mistakes we’ve ever made. Workers’ comp had two audits.
That means we under estimated our payroll. The problem is we’re growing. You know, a lot of years we were doubling in business so we were not keeping up with our payroll. Estimated payroll parallels evolve because our businesses where they increase, because we do it. We base it on last year’s payroll numbers. This was a mistake on my part. Look for a work tribe. One, you’ve got to get calm. You got to get you say, you got to get it. This can grow in you, not just your business, your entire life, your family, everything you gained, they can take away everything when your employee gets hurt. You do not have workers’ compensation insurance. They for your house, your car, anything of any value. If they could, they go after your wife. Anything of any value. They’re going to come in like sharks. They’re going to come in just as hard as they can to get every bit of money you have to pay for an injury. You’ve got to get workers’ comp just as soon as you possibly can. If you’ve got any sort of assets at all, you just make this a priority right from the start. Get Worker’s comp, it will ruin your life if an employee gets injured and you do not have it, I’m getting paid as you go. Plan. What we have now is we’re set up where every single month a workers’ comp company or church come to your views or payroll and they sent us a bill for the exact amount we owe. We pay him that, that means at the end of the year, there’s no longer. We don’t have to do an audit and there’s no chance of us owing this tremendous amount of money. It helps out your bookkeeper, you’re finding your cash plan and your cash flow tremendously because you have a good accurate idea of how much money you are truly making. Workers’ comp does you a serious business. You had employees, you got a business visa, you don’t have employees. Those of you that are out there, and I’m talking to multiple, if it’s just you and it’s just you and one other person you aren’t business guys. You all got to get in and get employees to actually have a business. Listen, I thought too cheap people used to think I was the cheapest person around. I took pride in it. I thought was being frugal. I’m not frugal, I was being cheap. The problem with thinking cheap if you think cheap on expenses, you will think cheap on your on income.
I don’t want anybody to think. I’m talking about going out and buying everything, your heart desires, not negotiating price and that kind of stuff. I’m not saying that what I’m saying is go after value. Look for value. When you find value, value’s going to have a great price tag on. Don’t simply settle for something that doesn’t have as much value just because it’s cheaper. If you think cheap on your expenses and you’re going think cheap on your income and that is a vital problem. I always keep that in mind. That is a good example. Some these cheap stuffs that I’ll keep on. I drove an old at 9,300 core things was wore out, 250,000 miles slap wore out. I was like a 12 learner and it had been beaten.
Driving old Junker right there. The problem with driving old Junker is you’re in that vehicle. You’re thinking of yourself being cheap. People were looking down on you a little bit and you don’t look down. It doesn’t bother me when people look down on me. The problem is they’re less likely to take me serious as far as a business person. You shouldn’t be driving old Junker. Once you have enough money, you can go ahead. I might say buy Ferrari. Before you buy Ferrari, you would be making a million dollars a year. Clearly a million dollars a year before you buy a Ferrari. Get your new f-150, get you something that makes you feel good about yourself. Makes you feel like you are getting successful. Now it makes others realize you’re getting successful and get your payment on it again, that it brought that debt drives you. So, get a little debt going on with it. All this can be written off. You do this within your business. Say you’re writing off all the interest in everything. If you have a lease payment write everything all the vehicles expenses, have it inside your business. The other mistake I made was micromanaging you.
Get good people in there. Everybody said the agenda set and everybody’s agenda is what the ultimate goal is. And let those people go in there and do their thing. They hire people that know more about what they’re working on that you do. Let him get in there. Lend them your thing or marketing director. What I’m going to do is I know a lot about marketing, so if I come up with social media ideas, we haven’t done a whole lot on social media. That’s about change. If I come up with social media ideas, video ideas, content, that kind of stuff, I might create some of it and I might let him know that i like this when you think of this and we’ll run some of that. But ultimately, most of them I’m not going to look at every single project he’s got go out.
You were going to set some parameters, kind of expectations and what we expect, a reset goals that we want, we want to achieve, and then he’s going to be able to work within the lines he’s going to, be able to work within that range and do about what he wants to do as long as he’s been hitting expectations he can do about what he wants to do. I micromanage the times. I want to know what everybody was doing at every moment. That does not mean you do not manage. For example, my call center, our call center, when people are on the phones, if I spend 45 minutes to an hour every, not every week, every other week listening back to call recordings, uh, for, for different people answering the phones, I want to make sure they are doing what they’re supposed to do as long as it was supposed to do.
Everything’s fine and Dandy won’t be with them. Every so often we’ll correct things that need to work on and we’ll let him know things are doing right even though you’re looking a good performance eval, but don’t micromanage. That does not mean do not manage this. This is a little tough. You got to find that fine line between. I’m a managing too much and managing too little. You need to be right there. I’m in the middle of trust but verify a is good. Finally, this is our largest mistakes. Did it start JRA soon enough. I am so excited to be able to bring this type of content. To help educate people and bring them information that I would love to have. And we started junk doctors. I wish I would’ve started this couple of years ago because I’m having a ball working in these videos. I’m having a ball talking with everybody and helping people out. You know, the few people we felt that, that have contacted us and we’ve been able to provide services for you. We’ve already helped them out, we’ve seen progress and that’s really exciting. And they were excited we got some several people that we think are about to move forward with starting their own junk removal business with the junk removal business package and just ecstatic to just really be able to just help them out do whatever we have to do to make them be successful. Because we’re taking a reputation on JRA.
Our entire reputation is being staked on JRA. We believe we have the way to become extremely successful junk removal. We’re trying to revolutionize the junk removal industry. And we’re going into the franchise concept. I do not believe at all in the franchise concept. This is a hundred percent better. When my bias can be a little biased, but I can tell you as an outside observer this is 100 percent better. same if not better service, tailored to what’s best for you, not necessarily what’s best for your job, your junk removal business. I’m no commitment if we’re, if as you grow, if you no longer need our services, you just stopped using them at any point. So just extremely excited to bring everybody to service, wish we could have gotten to it a lot quicker. Again, don’t dwell on all of your mistakes, but you yourself, come up with a list.
What are your biggest mistake you’ve ever made and just make sure you’re keeping them in mind every so often and think back on them before we make it and every major decision to ensure that you’re not repeating the same problem again. So, I have everybody have a wonderful day today, every week on Tuesdays and episode of junk removal made simple is uploaded a daily trash talk episodes. Will I bring you a just random thoughts and lessons from the past and all kinds of stuff in a daily episode or daily episodes of trash talk. Everybody, have a wonderful day. We’ll talk soon.