How profitable is a second truck?

[Mikey P]

Lets say a guy has plenty of higher end, work for his one truck all year long. Now he wants to make the big move and hire/ train a tech to run a second truck.

He will have to start a marketing campaign to appeal to a cheaper audience such as apartments and folks on a tight budget.

With the extra cost of the marketing , the truck and all the costs of having a employee, is it possible to turn a decent profit?

 

[Guest]

Dude

2 or 3 trucks will be when you are making bucks. After that it is a coupon and yellow page game. My experience, of course not shared by others on the board,

 

[Jack May]

Mikey, I was pondering this about 3+ years ago and plenty of people told me that 2 truck will be the lest profitable time of your business.

Caught between O/O possibly with a helper and a larger multiple unit business. Many told me they took that first step and then eventually went back to O/O to relieve the constant headache of that sized business.

I decided to go that route anyway and we'll look at possibly the next step in 2007.

Is it profitable? Yes but way less than O/O. My (extremely very healthy) margins dropped to about 60% initially and then started to claw back again.

Some of the issue facing you is 'letting go' of the choke hold on your business. You probably know each and every customer, how much they got done last time, who their mother is across town etc. All of a sudden, you loose that personal touch on your business. Yes you still know the day to day running figures of who owes what etc and whether you';re up or down on budget but it's not the same.

Then there's quality control. If you're working fulltime on your truck, who's doing the quality control on your other team?

I now have two truckmounts in two vans with 1 tech in each van. I went this course because of the flexibility with our insurance work. I can add a helper at the drop of a hat and almost double our workload.

I'm now looking for an experienced tech that I can employ in a dual role. I want that person trained for all aspects of the business from admin to sales, to demos, to actually doing the work. I intend to put another van on the road with all the gear EXCLUDING a TM. That person will be based in the office answering phones, booking appointments, sending out marketing/thankyous/followup cards, going out to do sales calls, demos but also to support the 2 vans on the road. Take out some drying equipment to save a return trip to the shed and that sort of thing.

If both vans are busy, then they could do a small stain treatment or do a service call on a WDR. They can drop in and do quality control on the 2 techs etc.

How hard is it going to be to find such a person? Nigh on impossible except that my Dad who ran a CC business for 12years in Aussie is looking for work having sold his other business for early next year.

Neither he or I want to be totally off a truck so we propose to do week about in the two roles.

Think carfeully though, because although your investment is double, your turnover won't be and your post tax figure certainly won'y be which will drag down your % overall.

However, if it's just a stage you have to go through to complete your business plan, then just grin and bear it and keep going.

Others here (usually with something to sell) will tell you differently, but while I'd listen to what they have to say, I'd take the word of guys in the trenches first.

John

 

[Jeremy]

Here is an interesting thought... Why not re-letter your ol' Butler with a DIFFERENT company name? Something catchy, easy to spell, and totally separated from your higher end business. Serve both markets under different names & with different pricing structures. That way if your techs aren't doing absolute miracles on Mrs. Piffs' carpet it doesn't sully your reputation. Hell, they could even recommend you for "specialty work".

 

[alazo1]

Are you thinking this for you Mike?. You probably make more money then at least some multi truck operations.

Good question for Ken btw.

Albert

 

[Guest]

This isn't a real scientific formula, but here's my formula:
-------------------------

1, 3, 5, 7, 9, etc....

The first truck can usually cover it's own expenses and overhead. The 3rd truck can usually cover the expenses and overhead of trucks 2 and 3. The 5th truck can usually cover the expenses of trucks 4 and 5, etc....

 

[Guest]

Mike,

You are either a high end cleaner or not. Don't try to be both. If you have the right person, train him to be just like you and you can step up marketing and get ready for truck 2. You can be extremely profitable with 2 trucks.

Have you thought about a 3 man crew with your truck? You have many good options.

New Vortex $1,300.00/mo.
Cleaning tech $4,000/mo.
Fuel $800.00/mo.
Truck ins. $200.00/mo.
Material and supplies $200.00/mo.

You can tweak the numbers. This is just quick off the top of my head. A tech solo should easily be able to do $20,000/mo. You just need the sales to support this.

Dave

 

[adamh]

We are setting up our second truck right now. I have always had a back up machine but I sold it 2 months ago and now am trying to get another truck out making money not just a back up machine.

I sometimes see the "not so picky cleaners" making good money. They don't have to worry about dry when we leave and if we can't get the stain out nobody can, or your money back. I have thought about starting another company and letting my employee doing the work. I wouldn't have to worry about the blood I have split for my company's name. I wouldn't have to worry about everything being perfect just good.

People like you and I can't get off the truck because we do way more than 99% of all cleaners and most likely do way more than our custys will ever notice but we stay up at night worrying our employee may not have ran the fan in the perfect spot or didn't post scrub the traffic on that hall. When I hear somebody say just duplicate your self I want to strangle them to death. There is no such thing as duplicating all the time and worry and feeling I have for the company I have built!! Sometimes I wish I would have started a real good carpet cleaning company and the BEST carpet cleaning company.

Just last week I sent my Employee out on his own to a place. (while I sit at home and just about to vomit from the stress I am going through knowing I am not there and he may not put a corner guard down or something stupid like that) The lady calls the next day and says it not a good job. I panic, drive like crazy to her home and the carpet looks perfect. Everything is 100% great after asking tons of questions the truth came out, " I just wanted you not somebody else" she said.

What am I to do? 1 accident and I couldn't work, we would loose our house. I need to get off the truck but I would have to learn to let go.

I am setting up another truck to try to let go and get a few more jobs in a day. I am trying to let go but its the hardest thing I have ever done.
And NO WAY am I setting up another Vortex to give to an Employee!!
just a nice small box truck with a pimped out slide in.

Give me 6 months and I will tell you if its worth it or not.

 

[The Great Oz]

Lets say a guy has plenty of higher end, work for his one truck all year long. Now he wants to make the big move and hire/ train a tech to run a second truck.

He will have to start a marketing campaign to appeal to a cheaper audience such as apartments and folks on a tight budget.

With the extra cost of the marketing , the truck and all the costs of having a employee, is it possible to turn a decent profit?

No reason to go after the bottom end, unless he wants to. People that have been there say the first employee with their own truck is the most difficult, just because you have to rearrange your thinking so much. There's a leap of paperwork at 5 employees, and another at 50.

How profitable depends on how much money he throws at this. If he insists on buying a new big boy, his break even might be two and a half years away. If you consider that equipment will last another five years of high return, this might be OK. If he keeps his expenditures down and lets the work pay for the equipment, the break-even will come sooner.

Lots of guys feel fine being owner operators, but all you have to sell is your time and expertise. The more employees, the more time you have to sell, even if you're on the beach. For the sake of round numbers, if each truck grosses 100k, and the O/O returns a 40% profit and the second truck returns 20%, it's still $20,000 he wouldn't have otherwise. Each truck he adds will return another $20k per year that he wouldn't have otherwise.

The better his training, the less headaches, and he'll be selling more lucrative expertise.

Of course, if he's in California, forget all of this. I don't know how anyone does business with employees there.

 

[Guest]

Brian just said it best of all.. above me.


"thats 20k that he wouldn't have had''..

and i'll take that.. and the fact that a good, properly trained tech.. helps me clear my schedule.. take on those new calling customers.. and he can establish a relationship with them as I do my existing base.


I'm gonna say, in my thinking, that a tech. with a nice Butler.. will earn me about 30k.

and thats fine. In 10 years.. thats 300k.. more thanI would have made. 2 vans is my goal.. nothing bigger.
one good tech, making a great living.. loving his job.. maybe not quite as thorough and good as me.. but I'll charge more for me to personally be on the job.. more than i'll charge for him to be there... and he makes a good living.. and adds to my vacation account.. he is working if i'm sick.. fishing. on vacation, etc
But i'm staying on my van.

so we'll get more work done.. more happy customers.. evenmore references..

I dont see how it couldn not work.. esp if you have a tech that lives on a nice budget.. and if there is some winter slow time.. he would welcome that. (but thats where commercial work comes in.. i forgot).. lol
My tech that I have part time,, in training.. loves that fact.
AS DO I. The bottom line.. having a tech that is an 'advantage' for you and not a 'disadvantage'.. and keeping him for the most part.. pretty busy.





winter is for traveling.

 

[Cameron1]

There are a few things that I can add to the above posts. Lots of good points and valid concerns. However, you must remember that you are not pioneers. You are going where others before you have all ready gone. So, it can be done and alto easier than you may think. I will guarantee you that you will someday have clients that will request one of your techs over you. Its hard to imagine, but with the right training, and the right tech it will happen.

Sure, I still have a few of the old timers that want me, but the list is getting smaller and smaller. It is the hardest thing to do... its called... letting go. I knew that no one could do it, as good, as fast, as trouble free as me. And you know what, I was right ! But that's the catch. They do not have to do as good as you. That's because the only thing that matters is what the customer thinks.

Here is what I mean. When I go out to do a client that one of my techs has been doing they nearly always ask, "where's Reshaun", or where's Gabe", they could care less that I own the company. They have a relationship with a certain tech, that they like, that knows their home, and knows their problems. It boils down to people skills. If you hire techs that have the people skills you can teach the technical part. You cannot teach people skills. It is something that you have or don't.

So, the key is the people, not the systems. Or, people first, then the systems. Plus, with the right people the systems come easy.

I would add some more but my fingers are tired. This may be the longest post that I have ever typed. Hope this helps.

 

[Jack May]

Good points Steve C.

I guess in the words of another, you're trying to say Hire the smile, teach the skill.

John

 

[Jack May]

Actually another thing taking that thought further.

From personal experience, it's easier to hire a new person to the industry with the right people skills and teach them to do it YOUR way with YOUR systems than the asttempt to retrain a tech to adapt from HIS systems to YOUR systems.

Hard to teach old dogs new tricks. In times of a busy period or whatever, they most probably will revert to the old.

John

 

[Guest]

Great post Steve Cameron.. and some good points by New Zealander John above..

good stuff..

informative thread and worth saving to a file.

thanks.

 

[Fon Johnson]

Mikey, I think your best bet is to ask that question of people who have run more than one truck. Then you narrow it down to those who have done it successfully. Gleen your information from there.

Not trying to slam anyone who posted here, as I don't know how many trucks you run. It is just a fact of life that you will (especially on ICS) get lots of opinions from people who have NO practical experience at what is being asked. How many people RAVE about a certain product/machine who have never even seen one?

 

[Cameron1]

Yes John, you are right, but it goes a little deeper. I recently hired the smile only to find out that the guy was dumb as dirt. The smile gets you in the door... but then its show time. You have to walk the walk, but you can start with the smile.

Yes, to answer the original question the 2 truck is extremely profitable.
Its like an out of the body experience. Some compare it to having sex.

 

[griffinbrothers]

Deciding what EXACTLY you want your company to be

Growing, It's a real problem. we're right at that 2-4 truck stage, the customers are surprised when Jeff and I show up. The lady last night said you must be the new guys, sorry Mrs Piff, we're the griffin brothers, LOL. How do you keep quality up when you are out working every day? You have to have Quality Employees, it's the only way. Had an over-wet carpet the other day, due to a loose Green Glide ( and a LAZY GRIFFIN-ME ). The Tech, learning of the complaint, said I must of done something wrong the T/m was running perfectly (not always the case) , in short he CARED, wanted to know what had gone wrong did not hide or shirk from the problem, in fact thought he was to blame and wanted to fix it.
I LOVE WORKING WITH THESE GUYS!!
Attitude Attitude Attitude, If we all have the right attitude, problems solve themselves.
Mike Griffin

 

[Askal]

I'm not sure why some folks say you have to change your pricing/marketing strategy when you expand. When we added a 2nd truck it reduced my profit a little at first but soon it was higher than before. We have a 3rd truck now working as a construction truck and will put a machine in it next spring. Then in summer (knock wood) we will add a 4 th truck. No change in pricing or marketing. You will be surprised at how many people will "forget" you as you grow. As our gross grows so does our marketing dollars (but not our percentage). The key is to have a written system in place to make it a little less stressful on yourself. My new tech who had NO experience does 1K a day on a regular basis and my customers call and write notes on a daily basis singing his praises. MORE than they did when I was a O/O! I consider it a compliment to my management skills rather than a slight to my cleaning skills. THAT is the difference of "letting go". Yes it is not for everyone but it sure is for me. Next years goal is 20 weeks of vacation and then the year after 26 weeks.
Al

 

[Guest]

Ask Jim Eckman and Dave Rampage

They have been there and done that.

 

[roro]

In answer to Mike's original question it depends on whether you want a high paying job or a business.
My rule of thumb is that it is time for an additional vehicle when we are consistently booked solid for more than 3 days out. Some customers want it done today or even yesterday.

roro

 

[Lee Stockwell]

Having a second and now a third truck has been a lifesaver for us.

Each new truck does NOT have to be either "new" or expensive.

We do shoot a new green paint job and graphics, and have standardized on late model extended Fords. Usually get a fleet maintained unit @ about 100k miles for about 1/4 of a new one. Put under 20k miles per year on it and unload it five or six years later. We currently run 3 PC405's and have two EZ's in reserve.

When we eventually go to cab-overs we will continue the same strategy.

Always have a good unit ready to go for backup.

 

[GRHeacock]

I was a single O/O for a very long time. occasionally had a helper on the truck to speed up the operation.

After a while, when I was booked out 4 to 6 weeks in advance, I decided to buy a truck and hire an employee full time.

Taught him as a helper on my truck, sent him to several schools, and he did well.

No additional marketing, advertising, etc, no lower class customers.

This brought the advance bookings down to 3 to 4 weeks out.

So, I hired a second employee, got a third truck.

Then one day, an old customer I had serviced for years said, when booking her appointment, "Send the young guy, not the old guy". (THAT'S ME!!)

BOO HOO!!

Now, I am down to bookings a week to 2 weeks out.

Employee #1 did a firing thing, and was let go.

Employee #2 stayed on for some 5 years.

Then he got a better offer, and went his own way.

Back to doing it all myself.

So, as to finances, I found the 2nd and 3rd employee netted about half the money I netted, and my income was certainly up, but not doubled, maybe 20% increase per employee.

Which ain't bad, but I think I was not a good people manager for employees, and I just like being alone.

Gary

 

[Numero Uno]

I started originally for a gentleman...Who was featured in Bane Clene digest numerous times.Due to the fact he utilized the Bane Clene removable sign concept.

One side was Park,the other Steigers which was a heavy clout department store,upper end clientele.An the other needless to say was General,which was a very established multi store dry cleaners.

Now Bob who owned Park dry Cleaners new his clientele was upper end and being the only Dry Cleaner in town who cleaned carpets,etc.It gave him great beginning background.

The department store not only had excellent clout,but the income bracket of clients was very,very high.He cleaned the stores also and numerous stores.

Although they were Banes his per day operating expenses were very low.A tanks worth of pca-the cleaning agent and gas to go back and forth.
Then pay...

When everyone else was charging 32 bucks for 2 rooms.An by that there were only 8 carpet cleaners in and around a area that now has about 150 plus...He charged 35 per room...

The point is by utilizing the 3 signs with great name recognition with established names.You save yourself a ton of marketing ,etc time.

Now all 3 divisions even though they were all in the same place all had there respective paper work.An 3 different phones.The park cleaner carpet line rang,Hello Park Carpet Cleaning,blah,blah...So very simple...

Dry cleaners will provide you with jobs,stores to do,area rugs,and instant easy cash flow.

Any one that doubts that,should understand that for a 4 year period,I had 17 different dry cleaners giving us work...

The pick up and Delivery were heavy enough a workload,in addition to the amount of carpet we were doing.But on average at least 60 to 80 rugs a week...

An all I had to do was ask...and deliver the goods and my promises kept...Easy...

Ironically most self imploded drug issues,tax issues,divorces,the others well they started to get to greedy.An forgetful of who got them the money the never would have had...

But soon a Caesars implant is in the works...

So you see you can start a cheap division,or just make another clone of yourself...

You will be performing the same level actually of work.You have to or the ratio of problems from callbacks,etc will make you give up...

Then slowly diversify,cause you never have all your eggs in one basket do ya?

 

[KC OHanlon]

Wrong way of looking at it Mike. This is a highly segmented industry. If your niche is in the high end, stick with it. There are over 750,000 people living in your market. That's is more than enough room for several multi-truck high end operations. Here in Austin, we've got four high end companies sharing two zip codes. Deep Eddy, Austonian, Aegis and my company rarely ever stray from a fifteen mile radius.
Add the truck and add a few smart marketing dollars and it will at the very least pay for itself through the first couple of years. With the right guy running it, you'll show serious profits in no time.

 

[Rob Lyon]

Ran a 10 truck operation, there are advantages and many disadvantages
and every market is a variable.I do think a well ran and efficient
operation of 2-3 trucks and very manageable and can be profitable
in the end.


All The Best, Rob

 

[Dennis Klager]

Often, as you grow, income doesn't expand equal to the amount of the increase in overhead.

The 1st truck has a full schedule and you are just busting at the seams. You already have a system set up for answering the phone etc., so adding a 2nd truck is, in most cases, relatively easy, and can be a good thing to do.

With your reputation and "word of mouth" you fill the schedule for that 2nd truck...usually no problem.

Now.....you decide to get a 3rd truck. More truck payments, truckmount payments and insurance. You were able to park 2 trucks at your house, but not 3. You need some kind of shop. You may need a receptionist. Overhead per truck is getting higher.

Costs on the 3rd truck start hitting you and something else is different. Word of mouth isn't filling that 3rd truck schedule like it did the 1st 2 trucks. Now you have to figure out how to get more business to keep that 3rd truck busy. You suddenly must be much much better at promotion than you were when you had 2 trucks. It can be different keeping that 3rd truck busy. Doing a great job isn't getting enough calls like it did when you had just 2 trucks. (or one)

And then there are employees. You are now a manager, with all its demands. You must figure out how to make "clones" of yourself.

Then you get to the point where you've been expanding and you realize, in order to make money, I need to have another truck on the road.

Where should I stop? Where will the best income to expense ratio be? 4 trucks? 5 Trucks? 6 Trucks?

This scenario will be different for each company.

It was tough sledding getting to 12 trucks.......but......after we got there it was really nice.

I liked being able to leave, any time I wanted, to pursue other things. Some people love cleaning and dealing with their customers every day. Other people love to run a company and not necessarily do all the field work.

I happened to enjoy training and managing people. That was good for me.

On the other side of the coin. I've seen 1 truck operators who make great money, and are happy as clams. That's what's good for them.

The measure of success is not how many trucks you run.

To answer the question........
A 2nd truck often does well because it can feed off the goodwill and momentum of the 1st truck and it takes relatively little extra overhead to run it. When you get into more than 2 trucks, the additional overhead required can make each truck, after the 1st two, less profitable. (but it can still be good) If you've been running with an assistant for awhile, he/she can be the tech on the 2nd one. (if they're cut out to be a lead tech)

Train another assistant to be able to double as an assistant/lead tech who can fill in when your 2nd lead tech calls in sick. (or quits)......(or gets fired) Never, never, end up running scared with an employee who knows you can't fire them.

Be ready to get the work done if (God forbid) your crackerjack tech on the 2nd truck leaves. Avoid "burnout" trying to do it all yourself. At that point, it's not fun anymore.

It must always be fun, overall.










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