We’ve done a lot right obviously to have reached $2 Million a year in sales by year 5. But we did some stuff wrong along the way. Never dwell on your mistakes but always learn from them and never repeat your mistakes. In this video Lee talks about some mistakes that have been made that has costed over $100,000 in profits, some real and some “potential”. Check us out at https://www.junkra.com Subscribe to this channel for all the best junk removal industry info Like and follow us on Facebook at Junk Removal Authority
Good evening guys. I hope everybody’s doing great on this Saturday evening. I Hope it was a good day for you. I hope it was a nice profitable day. I hope everybody made a good money and nobody had any major issues. We had a problem today. Our old truck, truck number one broke down. We had it towed back. One thing I always want to tell everybody is maintenance issues. Once you have multiple trucks, I swear the old saying things running threes, they do. Right now, we’ve got two trucks down and we got a third truck that has an issue. Crack on the turbo. The parts had been ordered. The truck can run, but if it gets a little hot it will throw it in safe mode. We’ve got to keep it very local. We can’t get on the highway where I think it kicks on a safe mode. Into limp mode and won’t go about five miles an hour. It a safety issue for our guys. Things always run a kind of together. Generally, that’s the reason it’s so important. As soon as you have one maintenance issue, go ahead and get right on top of it because chances are you’re going to have another one closely following up.
What I want to talk to everybody today about is we had a consulting call earlier this week. One of the questions that the guy asked me is, what were your three biggest mistakes? Operational mistakes since we started Junk Doctors. The three reasons I had named is one was just being a little too lenient on team members. Not being strict enough. That’s something I’ve talked about before we’ve kind of addressed. We’re hiring and we’re setting it up like a sports team. The people that perform the best get the play in time. The people that don’t perform well, ride the bench then eventually they either quit or they’ll let go one of the other. So, being little too lenient on team members. We made a mistake one time on some new construction. We thought we were making money. The rates we were charging instead we were losing money. We lost a lot of money because we went from doing no new construction homes at all. To do it in about 40 in the span of a month. We made our prices based on our competitors’ prices without first verifying our numbers. To give us a little slack, it’s hard for us to know our numbers because we’d never done it before. You have to learn as you go. We made a mistake because we didn’t test it first. We should have tested in about 3 or 4 homes. We didn’t know the numbers at that point and follow the numbers closely. Figured out exactly the expenses. We didn’t know we’d lost it.
It’s one thing, if you’re losing $1,700 per home. If you’re only doing three or four homes. It’s another when you’re doing 40 homes. We lost somewhere around $28,000 on that deal. That was operational mistake number 2. The third one was some worker’s compensation issues. Just being not estimating the payroll high enough. We had an audit year that was skipped. There’s one year we didn’t get all of that and we were still on 2 years prior payroll. We had doubled two years in a row. It was a $51,000 that was owed on that worker’s comp bill because our payroll was a little higher. We had the sales luckily. We had the sales and profit margins where we can make that up and get that stuff paid off, but it’s still an unexpected expense. One thing I didn’t list out, I would just call it more of a general business or general mistakes. Not even business. Just people that aren’t in business, they just have a regular job.
One of the mistakes that is easy for you to make. As soon as you have a good week, good month, good quarter and you’re making a lot of money. It’s really easy just to spend that money on stuff you don’t necessarily need. New cars or airplanes. This isn’t our business plane. This is a fun plane back here that were restored, but toys like that airplane. The other airplane we have, we use that for our business. A couple times for business for a several of times a week. That’s a great business tool, but this thing right here is a toy. I got another one that I’d like to buy in the foreseeable future. So, you’ve got to limit your purchases like that. Motorcycles and cars, you don’t need. Even going out and buying trucks before you really need a truck. Yeah, there’s a fine line, you’ve got to really walk. As you find a deal on a truck, you might want to go in and buy it.
Like, we were working with a guy. He just recently purchased a truck. It was a hell of a price and he was having a little bit of maintenance issues on his other vehicle. So, he could have gone either way. He could have bought that truck and it was a good move. He could’ve held off and it was probably a good move. He chose to buy the truck. It’s a good move. It’s a good-looking truck and I think it’s going to do him well. I haven’t seen it personally, but he’s been running for several weeks and there are no problems. He got a hell of a price on it, so it was a pretty good move there. It’s easy if you go a month or something. If you have a good month or a good quarter to decide that you’re going to upgrade the truck you already have. You’re going to go from a truck that’s 10 years old and you’re going to upgrade to a brand-new. Even if that 10-year-old truck isn’t really struggling, so you’re going to go out to get a $65,000 truck. You got to pay a thousand dollars a month on it.
Is that a smart business move? Again, it’s maybe, but you’ve got to really do an evaluation. What you always have to know in business, you got to really regulate yourself. When you have a huge hit, you have a really good week and really good month. You should celebrate that. Go out. You can take some of your guys if you want. If you’ve got a business party, smoke a cigar and drink a little bit. Celebrate, whatever you want to do. Go out and celebrate a little bit, but then you’ve got to get right back to work. You can’t consistently celebrate. The other thing is you’ve got to be just as hungry for jobs on a busy week as you are a slow week, because that missed income in a busy week is the same amount of money. If you miss out on that job during a busy week, there’s no difference in the amount of money than when you take that job during a slow week.
We got to come a couple of companies that past business off to us and it’s great. We pay them a referral fee. We give him a little kick back when they do that. They give business to us because they can’t keep up. They’ve got one truck. They might have just bought a box truck. They got one truck and they’re afraid to expand. They’re afraid to buy another truck. They’re ready. I’m not going to tell them they’re ready. If they see this video then if they watch this video, they’ll probably know who I am talking about. At that point, maybe they’ll go out there and buy a truck. I might go volunteer that information to them if they found this video great. There are good people, but I’m in their competition. I’m not going to give them so much information. Then they’ll have slow weeks and it was like “During your busy weeks. You passed seven jobs to us”
You got to be able to tackle those jobs. It’s easy when you’re having a busy week to say “I don’t need to mess with a little piddly job” But it’s not just that one piddly job and that income you’re missing out. You’re missing out on the long-term income. The referral business, potential review online and the repeat business. That’s what I’m trying to bang in. I’m trying to bang every single one of you to the fact that it’s not just one transaction you’re going after here. It’s not one transaction. It’s more like 20 transactions because the lifetime of that customer. If they’re 40 years old, they’re going to probably keep using it. If they don’t move out of the area, but maybe they will move out of the area. You probably got between 40 and 70 on average. A lot of our repeat customers use us about once every two years or once a year or multiple times a year. Figure on average, one out of every two years. They usually one out of every two years. That’s 15 transactions over the lifetime of that customer between 40 and 70. That doesn’t count for the referral business. Their son, daughter, and friends. It’s only them. Every time you miss out on a customer. Every time you pass the customer off, you think of it as one singular transaction. It’s not, it’s at least 15. If you miss out as far as the referrals and the reviews on Google and Yelp or whatever. It’s probably more like 30 or 40. One job is probably more like 40 jobs. If your average job is $300 per job, that’s $12,000 you missed out right there. $12,000 that’s gone for just a one job. If you pass up seven jobs or whatever. I mean think about that all money you just missed out on.
You got to be even keel. Then when you have your slow weeks, you got know you can’t get too down in the dumps. It’s easy. Listen, when you’re having a slow week, it’s not bad. Check where your competition is doing. You can check on the online booking calendar. How busy are they? That only works if they have one truck. You check Junk Doctor’s online booking and you’ve got no idea how many jobs we have. We have so many trucks that run.
You have no idea how many jobs we have. 1-800-GOT-JUNK? is the same way. For most of their locations, they have enough trucks. You’re not going to have jobs they have. If you’ve got a company, especially if you know they have one truck. Then you check the online booking availability and see how busy they are. See, are they doing some to have want that extra business. Do you need to make site changes? What do you need to do to improve your business? It doesn’t need to be a pricing change. Don’t just make those changes because of one slow week. You have to remember if you’ve been having good weeks prior to that. If you’ve been having busy weeks prior to that. It’s going to come back up.
If you haven’t changed anything, people aren’t going to go from just banging your business every chance they get. Just banging to no longer using you anymore. It’s not like some random hookup with a girlfriend where you bang or whatever. Then she might be sick of you and you never come back. If you’re doing it right, that isn’t going to happen. But you know what I mean? This is something that if a customer is satisfied. If you’re doing a good job. If they’re finding you, they’re happy with your pricing. If you just have one slow week and you haven’t changed anything, it’s just a random cycle. That’s all it is. It’s a random cycle. Don’t get too psyched out during the slow weeks. We’ve had a slow week this week and that used to bother me. I hate slow weeks. I hate it. I get stressed. My hair would start turning gray. If you look at it, I’m 28 years old got gray hair. I get stressed out over the slowest week. It’s going to come. If you’re doing everything right, your business is going to come back when you have a slow week. When you have a busy week, don’t think it’s going to stay that way. It isn’t, you’re going to have a slow week coming up. You’re going to have an average week. You’re going to have slow weeks. You’re going to have weeks that you can’t keep up. Get every job you can when you’re busy or slow. You bang out every single job you possibly can.
You keep hustling. You keep selling. When you’re busy, you find time to sell. When you’re slow, you sell all the time. When you get slow, don’t take off. Something else a lot of people do is they get slow. I’m going to hang out with my wife. I’m staying home with my wife. We’re going to lay in bed, eat Oreos and munch popcorns. Watch the Vampire Diaries or whatever. That’s happened to be with my wife’s watching right now is Vampire Diaries. Listen, you’ve got to spend time with your wife. I’ve said it before. All 4 areas of your life, you’ve got to be hitting. You got to be banging as often as you possibly can, but during the day you’d better be working.
You got to be working on your slow days. What you must do on your slow days is to determine how many busy days you have in the future. Your slow days determine your success. Your busy days don’t. What I want to get across to everybody. That has been a mistake I’ve made in the past when things got really good, I kind of over obligate myself sometimes. When we first got going and we started making more money that I’ve ever made before. Is this going to stay this way? Obviously, you have some slow weeks in a row. You just went out and you bought something you probably shouldn’t have. You’re like “Damn! I kind of love to have that money back.”
Anyway, investments are something different. Investments, you get the money for an investment. You spend the money on it. It’s going to argue money on the other end. You spend that money. You spend it and you just work hard to make it back up. You put that investment to work to make money back. When it comes to toys back there, try to avoid them. You deserve some but try to limit your toys. Try and limit your toys. Try not to get too excited on your good weeks or too depressed your slow weeks. You’re going to be able to build a business. If you don’t, you’re going to burn yourself out. You’re going to talk yourself out of business when you’re slow and you just aren’t going to be successful. We’ll talk to everybody real soon. Have a wonderful evening.