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What's the number one reason Owner/Operator Cleaning Businesses Fail?

+16
The Spot Doc
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Post by Mo Wed Jul 30, 2014 5:11 pm

I think I read somewhere that the majority of start up small businesses fail within the first year. What do you guys think the number one and two reasons are in this industry? I think I have an idea.

How much odo large distributors in this industry contribute to this failure? Of course ultimately the business owner bears full responsibility for this failure.
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Post by Andy Mc Wed Jul 30, 2014 5:55 pm

Not having a wife that has a full time job so she can pay all the bills.

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Post by Ryan S Wed Jul 30, 2014 5:57 pm

With out reading. My answer is it's easy to become complacent, and that is a ticking time bomb.
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Post by Freemind1 Wed Jul 30, 2014 6:36 pm

First and foremost, I think it is because they don't know HALF what they think they do about business and marketing.

Too many distributors and chest puffers in biz telling falsehoods to the new guy.

Lack of a REAL plan.

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Post by milspec6 Wed Jul 30, 2014 6:38 pm

Odin has a pretty good list of all the contributors, but I think that it comes down to passion. Everyone starts out with passion and enthusiasm for that brighter tomorrow being self-employed or else they wouldn't have taken the leap.

It is that passion / enthusiasm that leads them to buy every tool in the place and spend every dime that they ever had to get that big truck mount and van right off the showroom floor instead of looking for used or smaller units.

Then once that honeymoon is over and the money starts going out faster than it is coming in, they start taking any job that they can find for pennies...cleaning entire houses for $60 kind of a thing.

That budget cleaning approach just makes thing worse as the jobs get harder and more miserable...the enthusiasm is gone and now it is just a matter of trying to stay afloat.

Then all those hard hours cleaning without having the money for proper preventative maintenance bites you in the behind...expensive repairs and no money to fix them.

Then you are on craigslist begging someone to buy your expensive equipment and guys like us walk up and offer 40 cents on the dollar and show off the steal on the forums.

See, if you still held the passion, you can still make it work. You might be using a bucket and a brush, but you can still make things happen if you have the passion. We see that all the time with success stories of people who started with nothing then became major players....they simply kept the passion alive.

Same thing applies to everything in life, not just business.
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Post by Ryan S Wed Jul 30, 2014 6:54 pm

Here is another.  

Where there is no vision, people fail to succeed.

With out a plan, where do you go?  With out a map, where do you arrive?  With out a goal, how do you win?
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Post by milspec6 Wed Jul 30, 2014 6:56 pm

Very valid points...no harm in returning to a day job to keep it together for awhile as you can still do both and make it work fairly well....just don't expect to sleep again.  Razz Shocked  Seriously, don't. Sad 

I think most of the start-ups that succeed early are the ones with a retirement check hitting the door monthly or a spouse that makes good money. In either case, it keeps cash flow active and the boat afloat in all seasons.
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Post by cush83669 Wed Jul 30, 2014 7:30 pm

Number one failure to attract enough business. Number two costs are more than sales. You can have the best product or service and if no one knows about it no one will want it. Most new business owners have no idea about the cost of doing business. Most will take the path of least resistance and offer a product or service at a lower price than the competition. They either are a hack or do good work for a low price. When someone refers them to a friend they tell them what a good job they do and how cheap they are. The thing someone told me one time that has really stuck with me is that a price sensitive customer will never be loyal. I know many of you think your different but truer words were never spoken.


Last edited by cush83669 on Wed Jul 30, 2014 7:31 pm; edited 1 time in total (Reason for editing : spelling)
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Post by Fuzzsucker Wed Jul 30, 2014 8:16 pm

Speaking of which I'm picking up a sweet deal on a almost new cimex this weekend. $1500 with business marketing plan and company name. Comes with a measuring tool too. Poor guy paid $3500 6 months ago.
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Post by milspec6 Wed Jul 30, 2014 8:25 pm

Fuzzsucker wrote:Speaking of which I'm picking up a sweet deal on a almost new cimex this weekend. $1500 with business marketing plan and company name. Comes with a measuring tool too. Poor guy paid $3500 6 months ago.

Sweet deal....and I agree about the price conscious only being loyal to price. I've met them and fired them a few times.
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Post by Matt; My carpet cleaner Wed Jul 30, 2014 8:33 pm

Marketing or the lack of knowing how to get your mssg out there.(and the right one at that)
Watching your expenses.
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Post by milspec6 Wed Jul 30, 2014 8:38 pm

Marketing is such an interesting topic to me. Partly because I am still learning how to do it, but also due to a local guy that I know who owns the largest trenching company in the area...35 years and never advertised.

In fact, his vehicles are plain and nobody wears a uniform shirt of any kind. He doesn't even have a business card. He gets work, because people come find him. It's amazing watching his phone ring constantly while the rest of just scratch our heads.
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Post by ej54 Wed Jul 30, 2014 9:06 pm

Andy Mc wrote:Not having a wife that has a full time job so she can pay all the bills.    

So true.

When l started 18 years ago my wife had quite a high paying job. She works 4 days a week now at a lower paying job.
l probably would not be here now if she did not have that job!
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Post by Pablos Wed Jul 30, 2014 10:59 pm

IMO first mistake is investing in expensive equipment before to get a solid customer portfolio. Now you have your truck and all your new tools but no carpets to clean.
Second mistake is ourself, we don't realize and value our knowledge, expertise, professionalism and commitment when comes to price our job. We don't charge enough, took me a few years to understand that. After 11 years on the field if I could start all over again I would charge more $$$$$$ for sure. Live and learn.

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Post by milspec6 Thu Jul 31, 2014 2:34 am

Pablos wrote:IMO first mistake is investing in expensive equipment before to get a solid customer portfolio. Now you have your truck and all your new tools but no carpets to clean.
Second mistake is ourself, we don't realize and value our knowledge, expertise, professionalism and commitment when comes to price our job. We don't charge enough, took me a few years to understand that. After 11 years on the field if I could start all over again I would charge more $$$$$$ for sure. Live and learn.

So very true... I still don't charge enough apparently. Biggest hurdle for sure.
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Post by cush83669 Thu Jul 31, 2014 6:00 am

Pablos wrote:IMO first mistake is investing in expensive equipment before to get a solid customer portfolio. Now you have your truck and all your new tools but no carpets to clean.
Second mistake is ourself, we don't realize and value our knowledge, expertise, professionalism and commitment when comes to price our job. We don't charge enough, took me a few years to understand that. After 11 years on the field if I could start all over again I would charge more $$$$$$ for sure. Live and learn.

How can you charge top dollar if your rolling around in a clunker pickup truck with a portable in the back. Bigest problem with people buying top of the line equipment is if they finance it. If you don't have payments on things you can hold out for better paying jobs. Build the business slowly but have higher profit margins. I'm just getting started and paying all cash. I started looking into carpet cleaning 5 years ago and wanted to jump in head first. I didn't have the capital to do it right so I held off until I did. I have another business I am running right now and will ease into the carpet cleaning slowly. I'm going to utilize my existing customers and relationships and build it around those who already know and trust me. I know up front going in this may not work out the way I think. That's why I'm paying cash, I don't want to have to take on jobs just to cover payments.
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Post by milspec6 Thu Jul 31, 2014 6:15 am

I went that route and paid cash for all my equipment too. I figured that if things didn't work, I could liquidate and walk out with some money.

It takes a lot pressure off starting out and once you have all the equipment that you need, it is just maint costs at that point which allows stronger profit margins.

That is, if I could stop buying new equipment...hoarders.
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Post by Pablos Thu Jul 31, 2014 7:24 am

Hi Cush83669,
There is nothing wrong with rolling around in a clunker pickup whit a portable in the back. Remember this: you are charging top dollar to your customer for your QUALITY work, they pay you for your KNOWLEDGE, EXPERTISE and PROFESSIONALISM in your service NOT for what type of equipment you bring into the home.
It's all about you and your effort to succeed. I don't charge my clients for my truck or my tools, I charge them for the hours that I spend taking all CC courses, for the hours that I invest reading and learning on the forums, going to CC conference and trade shows, research new chemical resource, try new technology in our industry, etc. This is what make the difference to me between us (truly professionals CC technician) and somebody else out there when I price a job.
Don't get me wrong, of course big and new equipment is nice but you can achieve excellent results with a portable and an old 175 rotary if you know how to use all the components in the CC pile.
Last, all ours referral calling us for the quality job that we did it before, nobody care what type of truck was park on the street, in 11 years I can count with only 1 hand how many customers were interesting in my equipment.
keep in touch my friend,
Pablo.-

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Post by Freemind1 Thu Jul 31, 2014 8:44 am

Pablos wrote:Hi Cush83669,
There is nothing wrong with rolling around in a clunker pickup whit a portable in the back. Remember this: you are charging top dollar to your customer for your QUALITY work, they pay you for your KNOWLEDGE, EXPERTISE and PROFESSIONALISM in your service NOT for what type of equipment you bring into the home.
It's all about you and your effort to succeed. I don't charge my clients for my truck or my tools, I charge them for the hours that I spend taking all CC courses, for the hours that I invest reading and learning on the forums, going to CC conference and trade shows, research new chemical resource, try new technology in our industry, etc. This is what make the difference to me between us (truly professionals CC technician) and somebody else out there when I price a job.
Don't get me wrong, of course big and new equipment is nice but you can achieve excellent results with a portable and an old 175 rotary if you know how to use all the components in the CC pile.
Last, all ours referral calling us for the quality job that we did it before, nobody care what type of truck was park on the street, in 11 years I can count with only 1 hand how many customers were interesting in my equipment.
keep in touch my friend,
Pablo.-

I will wholeheartedly disagree. Perception really IS important. You roll up in some rust bucket, and bring in a dirty vacuum or a paint peeled 175 and they are going to think you are a hack.

A first time customer has nothing to go by other than the IMPRESSION you leave. You can't charge top dollar and look like the guy who picked his equipment out of the dumpster. Most clients couldn't care less how many certs you have or where they are from, they just want to know you are knowledgeable and you will do a good job for them. While SOME may not care what equipment you use, generally, any half assed savvy customer will EXPECT you to use a TM. Generally, a customer will not tell you, they are less than impressed with you or your equipment.

To leave a good FIRST impression, you need to have the key components:
1 LOOK like a pro! (Uniform, grooming, and hygiene)
2 RESPECT their home/property. (shoe covers, door mats, corner guards, etc.)
3 Use equipment they will expect to see you using.
4 Act/talk like a pro. (be polite, LISTEN to them, offer solutions to their problems, SMILE, and make them feel COMFORTABLE.)

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Post by Ryan S Thu Jul 31, 2014 2:54 pm

^^^^^^^

some points I agree, but some are straight out of the show room floor sales men manual.  we all like good equipment, for reliability really, a TNT looks like the hump back of notre dame, look at it in my avatar> but it sure can help me and what i know put out the end result that your customer is looking for.  I dont buy the shinny new, bla bla bla!  its all drilled in your head from the early years dealing with big boy stores.  dont deny it, I still remember.  I just was luck to have a strong head on my should and picked through the BS from sells men in my previous career.  all the same!  Pablo is on the money.  

answer this:  when you do a good job, what does your customer say looks good?  

your uniforms?  Your cool VT14?  your rc99?  your big powerful tm?  your nice 2013 van? NO!!

This stuff is what give "YOU" confidence to get it done right!

You answer the question!
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Post by Pablos Thu Jul 31, 2014 3:53 pm

I will wholeheartedly disagree. Perception really IS important. You roll up in some rust bucket, and bring in a dirty vacuum or a paint peeled 175 and they are going to think you are a hack.


Hi Freemind1:
IMHO there is no point to be so extreme like you mention above. Why you should show up in a customer house with a rust bucket (new one from Home Depot less than $ 10 dollars), bring a dirty vacuum (good one and in clean condition around $ 300 or less) and a paint peeled 175 (decent looking used one $ 300 or less and I bet you than most of us "Real Cleaners" do not have a new 175 in our arsenal of equipment). So common sense, to me you can start your business without to expend a lot of money, and of course you can leave a very good first impression if you show to your customer you knowledge and your class. Is not about the car, is about who drives that car, you my friend only you and the vision of yourself.
In all the others key components I am 100% agree with you.
Very good discussion going on here gentlemen, very nice to see all point of view.
Keep in touch.

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Post by cush83669 Thu Jul 31, 2014 4:33 pm

I know a good tech can do a good job with a portable but in the customers eyes they are picturing something they could rent at the grocery store. Not to mention it is going to take longer with a portable and customers just want the job done right and us to be gone out of their house. Unfortunately we all make judgments on what we see through our own eyes. You could be the best plumber in the world but if you look like a convict and drive up in a heap most customers are going to be skeptical.
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