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Profits with Pajak
Why Your Business Feels Hard, and What Henry Ford Figured Out First Ep. #482
00:20:22
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Most business owners think they have a labor problem. They think I can't find good help. My guys don't care. People just don't want to work anymore. But what if that's not true? What if the real problem is you haven't built a system that people can succeed in? Because over a hundred years ago, a guy named Henry Ford figured something out that most business owners still haven't. You don't scale a business by pushing people harder. You scale a business by building a system where people perform better naturally.
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Today's episode is brought to you by Yardbook, the All in One CRM for your lawn care business. And as an exclusive partner of this podcast, you can get started today and begin simplifying your business and maximizing your profits. Sign up now@yardbook.com the link is in. The show notes Time now for Profits with Paycheck, an essential podcast for you in the green industry who are looking to unlock the full potential of your business. Hosted by John Pajac, your certified financial coach, the show features in depth discussions with successful entrepreneurs, thought leaders and industry experts, providing practical advice and proven strategies on financial planning, operations, marketing and sales. Profits with PayJack has valuable insights and action steps that you can implement today for creating long term success. Now here's John Pajak
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Foreign. Welcome to Profits with Pajak, the podcast where we talk about business strategies and financial insights for the green industry. I'm your host John Pajak and today we're going to take a look at one of the most misunderstood business figures in history, Henry Ford. Now most people think of Ford and they think assembly line, Model T, mass production. But what I want to talk about today is something a bit different. I want to talk about how Henry Ford just didn't build cars. He built a system that allowed people to succeed. And if you're struggling with employees retention or consistency in your business, I'm really hoping that this episode might completely change how you see your operation. So let's look at this problem. Let's call it what it is. Most business owners are frustrated with people. You hire someone, you train them and then they quit. They don't show up. They steal your truck and go to strip clubs. They don't care about quality. They move too slow. And the conclusion most owners come to is people are the problem. But here's an uncomfortable truth. People are usually reacting to the system that you've built. So if your business feels chaotic or if you don't set the expectations to be to be clear, if your pay doesn't match the Performance. If your workload is inconsistent, you don't have a people problem, you have a system problem. And this is exactly what Henry Ford faced in the early, in the early 1900s. So, you know, back in the day, a $5 workday was above normal. Before this happened, Ford had a really insane turnover. People were quitting faster than he could hire. That sound familiar? So instead of blaming the workers, Ford changed the system. He took a deep look inside his business and how they were doing things. So what he did was he doubled wages to $5 a day. They were, normally wages were like 250 a day. And you're like, what? You got to remember back in the day, our dollar had much more buying power. Okay, anyway, let's not get, Let me, I don't want to get sidetracked with that. Okay? But you know, this is back in the early 1900s, okay, 250 a day was the norm. Now Ford comes out, he's offering $5 a day in pay. He shortened the shifts. You know, a lot of times people were working 10, 12, 16 hours a day. He shortened the shifts to an eight hour day. He basically went and he created stability. And what happened when he did this, people stayed, the productivity increased and his training costs dropped. Not because, you know, he had a pretty complex, you know, system. Even though he had the assembly line and everything was done very efficiently, the training cost dropped because he didn't have the turnover that he had. And if you've been in business for any amount of time and you have hired people, you understand how expensive it is to just get them on board and train them. You know, it's an investment as a business owner, it's an investment on our part. And a lot of times they quit or they leave our, our, our business before we even get our ROI out of them. And I know that sounds very impersonal, but that's just the fact, you know, I've had plenty of people where I've spent, you know, 30 days training to get them proficient at what we need them to do and, and meet the quality control standards. And finally, when they seem to just be getting it, that's when they leave some reason. But here's the lesson. You know, high turnover is very expensive. It's way more expensive than paying people properly. And if you're hiring, if you're, if you're constantly hiring and retraining and fixing mistakes, you're bleeding money even if your hourly rate looks cheap. Back when I was getting my lawn care business off the ground, I was juggling routes Invoices and customer notes with paper and prayers. It was chaos until I found Yardbook. Yardbook gave me the structure. It helped me track chemicals, route efficiently, invoice faster, and most importantly, it helped me grow a profitable business. If you're tired of duct taping your systems Together, go to yardbook.com and sign up for free. And if you're ready to go premium, use promo code PAYJACK to get your first 30 days on me. All right, quick reminder. If you're listening to this and realizing that maybe your numbers aren't as dialed in as they should be, you need to understand what it actually costs to run your business. And that's exactly what we do in the budgets, break evens, and bottom lines workshop. We break down your numbers, your real numbers, so you can price correctly, pay your team properly, and still be profitable. Check it out on johnpajak.com and if you're ready to get serious about it, I will be there for you, walking right next to you. So here we go. We're getting back with Henry Ford and talking about the way he basically innovated the basic work week. Okay? This is another thing that he did besides paying people more and giving them less hours to work. When you look at it, this whole thing blows my mind because Ford didn't just change the work with the assembly lines and the efficiency and all that, but he also changed how people lived. He gave workers more time off. And I know a lot of people, and I used to be in the union. I was A Labor Local 41. We always say, hey, the unions gave us the five day work week. Well, yes and no. When you really look back in time, Henry Ford was actually the advocate for that. Other companies were saying no. And that's where the labor unions agreed with Henry Ford, okay? And he. He. Ford did this not to be nice, okay? But he understood something insanely critical. People need time to spend money. Okay? It really. I know that sounds crazy, but I read so many things about this man now, and I'm like, huh? Okay. Well, he. He literally gave them more time off so that they could spend the money that they're making. Because when, you know, he. Instead of having, you know, working Monday through Friday was actually the. The goal here, right? Having Saturday and Sunday off, that gave people more time to travel, more leisure, you know, like time to spend with God on Sundays, right? But he also created a demand for his cars because in order to enjoy that time off and be leisurely and, you know, travel a little bit more, guess what? He had the perfect Vehicle, like literally the perfect vehicle, the Model T. And he didn't just build supply for his own business, you know, he created a demand for it. So while they're building the Model T, they, some of these people may have actually touched the, the future vehicle that they were going to buy. They might have put the transmission and they might have, you know, been the ones painting it or putting the wheels on or the headlights, whatever it might have been. And as it's going by, they're getting paid more. They're seeing that this vehicle is affordable for them. They could actually afford it. It's not for like the super high rich. It's like even, you know, like the middle class and you know, even low income families could actually afford to purchase his automobile. Now think about that in your business, you know, if your crew feels overworked and rushed all day and they might be feeling burnt out, what happens? You know, mistakes go up, callbacks start coming in, you know, they start to increase and your customer experience starts to drop and you're actually hurting your business trying to squeeze more out of people. And when you start to really look back in, like when Henry Ford was doing all this, man, he improved those working conditions. Not out of kindness, even though it felt like it, but he did this for efficiency. You know, he had cleaner shops, he had standardized processes, he had clear roles for each of his employees. Why? Because chaos slows everything down. And let me say that again, okay? Chaos is expensive in your business. Chaos can look like, you know, you don't have a clear process for the applications or whatever service you're doing. I got, you know, all my things are applications. We do fertilization, weed control. Right. But also if you have a clear process for everything that you do, chaos tends to shrink away if each of your technicians does the same job in a different way. Not to say that it doesn't get done. And I'm not trying to say there's multiple ways to skin a cat. We always hear that. But the thing is, if we standardize it and then let our technicians have a little bit of freedom to tweak things and improve things as they go along it, again, it takes a little bit of the chaos away because we might just assume, let's just say it's a mowing crew, that everybody knows how to mow a lawn properly. But when they get on the mower or they get on the trimmer, you quickly realize you give a piece of equipment to 10 different people and they're doing it 10 different ways. I found that in My business, when we were doing mowing, we were doing applications, we were doing aerations, all the things we were doing. I realized that if I taught people the turf tamer method, you know, that it was the way that I had scheduled it out or I have. I systematized everything we did. And when they did that one, they were more efficient. They weren't as tired because they weren't walking around as nearly as much because we had a whole system built out to make it easier on everybody working. And a lot of times this would also help how much time was being spent on each property. And when we're being more efficient, it reduces that time, it reduces our production time. The crew gets done faster, they're happier. And you know, our per, our profitability stays, you know, where we want it to be, you know. And again, if you don't have these processes built up in your business and then you wonder why, you know, jobs are taking too long or results are inconsistent or your profits are all over the place, you know, what Ford did was he eliminated variables. And I'll tell you what, that is where the money is. I want to say this. Ford built a human system and this is a big one because he just didn't optimize the machines. He optimized people and behavior expectations and the environment that they were working in. You know, he understood that the system determines the performance. It's not motivation, it wasn't personality and it wasn't luck. Because we all know everybody has those variables in them. But when you build the system and you have a way of doing it, all those other things that the, you know, if somebody's not motivated or they're, you know, they got a bad personality, a lot of times those things can be smoothed over because you have a good system. And if your system is solid average people are going to perform above average. If your system is broken, well, even great people are going to struggle. Perfect example of this is, you know, there's a period, a short period of time when, you know, my, this is my home garage before I got the, you know, the storage units used as my shop. You know, the garage was a nightmare. You know, we, I had personal items, I had vehicles in there. I had, well, a vehicle I had, I didn't have room for, to be able to put two in there. But we had equipment in there. We had personal things that were mine, tools and things like that. A lot of times it was like, oh, you know, somebody would, you know, be, you know, changing blades or something. And you know, next thing I Know, my breaker bar is missing, or, you know, the sockets are gone. And it's like, where did those go? You know, Oh, I put them in the truck because of this and that. And it's like, well, they shouldn't be in the truck because, well, you know, I actually should have them in the truck. But each truck should be equipped to be able to handle this on their own. There should be organization there. So each truck is available with the tools that they need. And it really wasn't until I moved over into these storage units where I had everything broken down and everything was lean and mean. I didn't have, you know, you know, old GI Joe toys in a box that somebody had to trip over to get to, like, a certain toolbox. You know, everything was very efficient. Everything was very clean and organized for our. You know, I had. And I know this sounds crazy, and it's. It sounds like a minuscule thing, but. But even have, like, one cat, you know, we have one storage unit we designate as the motor pool. And it carries. That's where most of the vehicles. Excuse me, not the vehicles. The equipment is the. Right on equipment. All that stuff is stored in there. And then we have shelves and cabinets in there that has everything that they need. So oil changes. The. All the stuff that's associated with taking care of it is in that unit. And then there's also little. I have these carts, and the carts guys could go and they could grab, you know, if they're. If they're on duty to maintain everything, they could just fill that cart with what they need, wheel it over to what they have to do, and do it efficiently. All the tools that they need, nothing more is in that box. So no missing tools, no going, oh, where's this? Where's that? Everything stays in place. So, you know, when I. A perfect example of, like, having great people struggle. You know, there was a point in time when my dad would, you know, kind of stop by just to say hi, and he's like, hey, you know what? I'm changing oil and something. He's like, yeah, I could give you a hand with that. And then he'd struggle finding the, you know, the filter wrench or something. And then, you know, this is my dad. Very handy dude. You know, a very capable person. Been on this earth for way longer than me. He's got so much knowledge and talent and all these wonderful things. But, you know, I was. I was, you know, giving him problems because I wasn't organized. He stopped by the shop, actually, about a year ago. He stopped by the shop and was so happy because he just looking around, he's like, man, you really got your stuff dialed in here, bud. And I'm like, yeah. He's like, I'm like, you want to change your oil? Like, no. But I showed him. I go, hey, look. Look at this card. It's all dealt out. And he's like, yeah, this is way better than how you had it before. But anyway, you know, in my own business, you know, again, like, I've seen these things firsthand when, when things weren't dialed in, jobs ran long, you know, my profitability suffered and, you know, frustrations, you know, started to escalate, you know, but, you know, again, once we started organizing everything and changing our environment, tracking time per property, standardizing our applications, and understanding our true costs, everything changed. And now we can identify underperforming properties. We can adjust pricing when needed and improve our efficiencies. And it's not just about pushing your guys harder. It's about giving them a system that they can succeed in. So I want you to take a good, hard look in the mirror and I want you to fix your system before you start blaming people. Look at your processes first. Are they clear? Are they repeatable, and are they efficient? And then I want you to understand your true cost of labor. Because cheap labor isn't cheap if it leads to turnovers and mistakes and callbacks actually one of the most expensive ways to run your business. And I want you to look and I want you to build for consistency, not chaos. Standardize everything. Your service processes, your time expectations, your pricing structure. Because when you're consistent across the board, the consistency creates profit. So to land the plane this week, Henry Ford didn't win because he had better people. He won because he had a better. He built a better system. And that's a challenge for you. Stop trying to find better employees. Start building a better business. Because when the system is right, everything else gets easier. So I hope you hadn't you enjoyed this. I hope this was very informative for you. Please go ahead and like this. Subscribe. Do all the things that you're supposed to do. Okay? It helps out, helps us out quite a bit. And leave a, you know, if you can leave a nice review for us, that would really mean the world to me. So in closing, I just want to say, as always, God bless, keep pushing through and we'll catch you on the next one. Thank you once again for listening. If you've enjoyed the show, please leave a review and share it with fellow business owners. Your support means the world to me and helps keep the show going strong. I want to give a special shout out to our friends at Yardbook. Their continued support has been instrumental in bringing this podcast to you week after week. If you haven't checked them out yet, visit yardbook.com and see how they can give you the tools to streamline and manage your lawn care business. Also, don't forget to explore the resources and upcoming events that I've collected just for you in the show Notes. These are curated to help you stay ahead in your business with the latest tips, tools and networking opportunities. Whether it's a new tool, an insightful article, or an event you don't want to miss, I've got you covered. Until next time, keep pushing through and God bless. Sam.