How should I invest in my business?

[ACE]

It looks like I will have 35K to Invest. I desperately want to take things to the next level but, am a little unsure how exactly to do it. At this point %60 of my work is subcontract work. My TM is a White magic with 5300 hour PTO in a 96’ Chevy. At this point, the plan is to buy a nice used box truck with lettering or a wrap and set up a used slide in. I also planned to buy air duct cleaning equipment and set it up in a trailer. I can’t do much advertising on my current rig other then magnets because I sub for ServiceMaster. Because I’m a one man show at this point, I am starting to really have second thoughts about the duct cleaning thing. It’s a buyer’s market for used equipment now I Just can’t afford to make any mistakes with this money.

 

[Brian R]

If you have equipment now that is running, I wouldn't invest in that.
The only thing that you can do to get more customers is marketing...your in the right room.

Get your website to people, start networking.

If you have a certain area you want to dominate, get a flier campaign going in that area. Get some post cards made in bulk and send them out to the same homes once a month for about 6 months.
I don't really like the post card idea but it might help jumpstart you.

As far as getting your website to people...have you submitted your site to Google, Yahoo, Msn, Aol, etc?
Sign up for whatever local listing comes up when you put in "Carpet Cleaner" in your area.


Your pic is messed up on your site....I check mine everyday at least once but usually a few times.

Put your website on all your business cards...speaking of...get a few thousand well made business cards and hand them out like they are candy.

I don't care who you are talking to, they could be the next big loyal job...or know someone who will be.

If you can't put lettering or a wrap on your van then Magnets are the next best thing.
Your vehicle is a rolling billboard...we've all heard that.
Make sure it's clean and clean all the time...body and dirt.

Your best bet is local, so work on that.
Stop by every commercial building you can and give them your info...mail them something in an envelope first if you can and when you stop in, ask them if they recieved it and you are following up.

Hand cards out at the mall, supermarkets, you name it.
Get fridge magnets made for the customers you do get.


Don't steal custy's from Service Master...Mikey might say different. :wink:



Oh, and get on the Service Monster program...no contract so if you don't like it...which you will...you can cancel at anytime.


Hope this helped a little

 

[ACE]

Setting up another quality TM is a priority. I want better performance and I lack name recognition. A vehicle is a rolling billboard so, why put a just put a little magnet on it? I understand having equipment doesn’t get the phone ringing and that I have allot of work to do with marketing. I want to grow the business to a point where I don’t have to be on the truck if I don’t want to. I will be making major equipment purchases necessary for the next 5 years of business with this money. I really think I can set up another Used TM in a Box Truck for $15-20 K. So, what’s my best ROI with the additional 15-20K?

 

[Brian R]

Setting up another quality TM is a priority. I want better performance and I lack name recognition. A vehicle is a rolling billboard so, why put a just put a little magnet on it? I understand having equipment doesn’t get the phone ringing and that I have allot of work to do with marketing. I want to grow the business to a point where I don’t have to be on the truck if I don’t want to. I will be making major equipment purchases necessary for the next 5 years of business with this money. I really think I can set up another Used TM in a Box Truck for $15-20 K. So, what’s my best ROI with the additional 15-20K?

You're majoring in the minors.. You will get more name recognition from marketing.
Your rolling billboard will only bring in so much. And if you're not rolling because no one is calling then what? Drive and waste money just to show your new truck off?

Get the phone ringing first and then go from there.
The magnets on the van are only temporary and only for people who are looking.

If your machine is that bad then maybe you need to change it but don't do it thinking that it will bring you more work...it won't.

Ask the idiots with the V's.

Get your image rolling with new cards, ads, logo's...whatever.

If I had $10,000.00 I believe my website would be done by a pro.

If I were you, I would put money into the website, optimize it and start pushing the hell out of it.

It's better than a rolling billboard because, if done right, more people will see it and it's more like a store front where people will come to you, instead of you bringing the marketing to them.

You will pass 100 people a day with the truck but 1000 people a day and a lot more will come to your website.

Anyone else have something to say about this?

 

[Ken Snow]

Do both if you need equipment. Down payment of a couple-5 grand and finance the rest (money is cheap & plentifull still). Spend some more of the balance on marketing and website development.

 

[Royal Man]

You have great demographics!!

College town located being located between Topeka and Overland park. You need to develop profit centers through out your community.

Call me after the 4th for help.

402-423-7200

 

[ACE]

This would be an SBA Loan. No down payment and a great interest rate. I have been working on equipment financing for the last 9 months (Chapter 7, 6 yrs ago). It’s not a done deal yet there a few more hoops to jump through, but I really think it will happen. I got word from my banker that the SBA has approved the application. If it goes through I will post some info that I hope will be helpful to everyone here. I have been trough allot trying to make this happen and feel like a have some of insight into the SBA program, how to submit a business plan and how to find the banker who will make it happen. I wouldn’t mind spending part of the money on marketing but like I said I can’t afford to make any mistakes at this point. At least equipment has some cash value if things don’t work out. One of the draw backs to a SBA loans is you cannot discharge it with bankruptcy. It federally guaranteed like a student loan so if you default you can kiss your tax returns goodbye until it’s repaid.

 

[Brian R]

That's cool Mike...and I think Ken said it best...like always.


Anyway, yes please post that info. I am always interested in programs like that...even if I don't utilize them.

Good luck.

 

[tmdry]

Spend $34,999 in Marketing. Do not buy any equipment till you have sold or gotten the business for it waiting on you.

I have a buddy of mine that spends $10k a month in marketing and his ROI is $45-$80k a month gross in sales. Think as a business man not a cleaner. If you do get a TM finance it, i'd get Les's machine see if he might have a lease/finance program.

 

[Royal Man]

Saying spend 34k on marketing is too simple.

It has to be the right kind of marketing.

Some of the best marketing doesn't necessary cost much money.

There are tons of ways to market that ends up costing more that it returns.
(Ask most cleaners how they have fallen into this trap.)

Spending 10K a month and getting back 45K could be the quickest way to the poor house.

Too many cleaners are busy and broke due to making the advertisers rich.

It's the bottom line that counts.

 

[ACE]

Okay Dave, I’ll bite. I looked at your site and I like where you are going with it. The best marketing I have ever done was asking a carpet retailer for referrals instead of charging them to too clean the 300 sq ft of carpet in the show room. They send me 2 or 3 jobs every week. You’ll have to be a little more specific about what I would get with your program. I despise spray and pray marketing and allot of what the other marketing gurus offer doesn’t match my personality and is just too gimmicky for the most part.

 

[tmdry]

$34,500 in Marketing and $500 on Dave's program.

 

[Brian R]

If you are going to buy or finance the equipment then you had better be prepared to do some leg work networking to pay for it.
Hit all your networking groups in the are Letip, BNI, TNI...you name it...work the chamber of commerce and any kind of organizations that will listen to you because they want you to join.
Dave has a good idea but I can't say anything about his program to implement it because I don't know.
Great ideas sometimes fail....sometimes they fail because of lack of discipline or drive or inteligence....did I spell that right. :wink:

Anyway, money makes what you do easier...that's why everyone wants it.
Just like the four aspects of Carpet Cleaning are
Time
Solution
Agitation
Heat

The aspect of running a business are
Time
Money
Effort
Discipline

If you don't have enough of one you had better have more of the other.
Ken will be proud.

 

[Out of Character - 0]

Here is my suggestion, assuming that I'm assuming you situation correctly:

1. Fix your machine and van to meet your desired performance specs: Get a precision valve set for 15, a little giant #3 w/ belly tank, If your using the wand on your site then get a greenhorn or Ti, and some 2.5 if you don't have it.

2. Get another pto for less than 10k, but don't pimp it till it pays for it's self

3. Optimize your current site and get it listed in more areas. It's good enough to sell carpet cleaning if your good on the phone. Betters better but not yet.

4. Have professional literature made, and develop a strategy to maintain contact with every customer and prospect you meet.

5. Go get at least enough commercial jobs to fill 1/4 of a schedule. Do this by going into their establishments, I'd start with places that need cleaning regularly due to the nature of their business, and to be a prime target they would need to be a minimum of $700 jobs.

5. Look for a part timer who doesn't know anything about carpet but is likable person. Train them to do basic jobs and commercial work. Don't overpay them or discuss what you can do for them in the future, do it when you do it. Pay them through a employee leasing service.

6. Keep all the rest of the money and not all in 1 bank, and don't get the idea that you need to spend all of it to maximize it's usage... If things go good you will no doubt find things you need to spend money on and you'll not stress over it because you'll have it. Not having enough money can be very exspenive as you grow into having techs and expanding.

Remember the goal is to use the money to make more and to give it all back and then some as fast as you can not need it. The less you spend the more options you'll have and the easier it will be to give it all back.

 

[GeneMiller]

Ace ,
Some of the best ways to grow a business are free. What you need are great customers all located in the same area. Less driving means more time to clean. Go to that neighborhood on a Saturday around 10 and knock on every single door and introduce yourself. Leave them your literature and card but don't try to sell them anything. It's just an introduction. If you have a great truck then have your girlfriend or wife drive it along with you, other wise forget the truck ( magnets send the wrong message). I did it when I first started and it really works. People like to know the person they are calling and you are giving them a face. I would make sure my uniform was ironed. Body piercings and tattoos don't work well with this technique. If you have them cover them. Your competition will be to lazy to do it. I own entire neighborhoods because of this technique. Hold on to the money and spend it on better equipment if you need it. I don't have a web site or advertise any where yet I stay busy year round. All my techniques for advertising are basically free except for my time a little fuel and chemical.

Gene

 

[Wayne Miller]

A few things come to mind....

1. Stop subcontracting away 60% of your resources.

2. Take a good, unbiased inventory of your equipment, skills and business.

3. Do a business plan.

4. ShamWow

"At this point 60% of my work is subcontract work."

That's called a job. You're giving the lion's share of your resources to a competitor. How can you take it to the "next level" running on 40%?

New equipment might make you feel better, it won't necessarily bring you more business. This industry is more about relationships than equipment, perhaps even cleaning, for that matter. If you have enough work of your own to keep busy and new equipment will significantly increase your efficiency and your profits it might make sense. If your truck is the sort of thing most of your customers would rather see you park on the street, maybe it's time. Otherwise, you can probably do a lot more with what you have.

Most of us are great techs and not-so-great business owners. If you haven't been to SSF I'd make that a priority. It'll beef up your business skills and your marketing skills and you'll need both. It'll be much easier to pinpoint your strengths and weaknesses.

What's your business look like now? How many customers do you have? What's your repeat/referral rate? What can you do to capitalize on your existing customer base? Chances are you could be doing more with your current customers whether it's sending out a newsletter, reminders, monthy direct mail, an occassional phone call to "check in," asking if they want to buy protector, as you suggested, adding additional services, so on and so forth.

Do you have a business plan? I wouldn't spend a penny until you do.

You don't have a business unless people know you're out there and have a reason to call. Look at Sham Wow. A loud, obnoxious guy with a funny hair cut selling a product you'd never think of buying if he wasn't up in your face telling you German's make good stuff. You can't be afraid to invest in advertising. Develop a strategy and remember sometimes you win, sometimes you don't. Don't run off the first time something bombs. Test and track different ideas and sooner or later you'll start hitting on what works.

 

[ACE]

Wayne,
That’s all great advice But, I am way ahead of you on all of it. I know that subbing for 60% of the money is bad. I would like to tell SM to F off but it’s like a day job. You don’t quit until you can make enough with your business. Why do you think people call ServiceMaster instead of me? It’s name recognition. I need to be seen working in my market and a wrap or quality vinyl lettering is needed. I have been working my azz off on marketing. You name it I’m doing it or will be soon; Magnets, thank you cards, free spotter bottles, postcards, yp ads, and website. It takes me allot of time to develop all this but once it’s there it’s easy to keep it going. Do you really think I got a $35,000.00 SBA loan without a business plan? Debt is scary but what I am doing is allot smarter than the guys who are paying 20% interest to interlink financial. It’s a buyer’s market for used vehicles and equipment and that money will go along way.

Mike.

 

[tmdry]

We love our Shamwows! They are great for color sealing.

 

[Wayne Miller]

I'm not trying to insult your intelligence, Mike. I don't know what you're doing, that's why I asked if you had a plan. I'd wager most of us don't.

As far as working for SM, you gotta do what you gotta do. I'm with you on that. All I'm saying is it's a ball and chain. The sooner you cut the cord the sooner you can devote 100% of yourself to your business and the sooner you will take it to the next level. I guarantee there will never, never, never be a convenient time to make the move. And, I'd bet no matter how soon you do it, at some point down the road you'll wish you had done it sooner.

Best of luck, my friend.

 

[Desk Jockey]

Humm 35 big ones......... well Mike I would start off by giving your good buddy Richard 10 G’s just for the heck of it! That sounds like a good start to me! :wink:

Actually as much as you’ve complained about your rig I’d upgrade and get a newer truck and unit. But don’t blow your whole wad and have nothing left as a marketing budget.

Check out the used market, there are plenty of great buys out there right now.

Here is one on JD’s site, with just about everything you want.

http://www.jondon.com/used/detail.php?siteid=986

Newer truck only 34,000 miles, cube for high visibility, 2000 hours on the PC unit.

It in St Louis which is close enough to take a peek at, he is only asking $22,000.00

I’d offer $18,000.00 and see if he bites.

That still leaves you with $16,000.00 for marketing, I would get the truck wrapped and still have $1,000.00 a month to spend on marketing for the next year.

Unless of course you wanted to give me the 10-G’s then you’d have $2,000.00 for the next year! :shock:

 

[ACE]

Thanks Richard,

I’ll take a look at that TM. I don’t know if I’ll have time to get anything set up right way. I’m getting ready for the rental turnovers the end of this month. I think that’s my plan: Get the Truckmonut and advertising, sit on the rest of the money and market with it. The plan was to also add negative airflow air duct cleaning equipment but, I’m not sure if one man can run it efficiently and I am guessing it would be a slow ROI. I might by something that hooks up to the TM and test the waters with it to see how the market is. My ducts still need cleaning. I have the central air unit off and am running a window unit. I might have to pay you to come clean my ducts if I don’t buy some kind of duct cleaning equipment by winter.

 

[Desk Jockey]

I'm not trying to talk you out of Air Duct cleaning....even though you are a direct competitor but Air Duct cleaning should really be seen as a separate business.

If you decide to offer it then it needs to be with equipment capable of actual cleaning. Too many of these add on type accessories won't do an adequate job of removal. You'll need a large enough vacuum collector to draw the suspended particulate and the agitation to suspend it.

In comparison they are using a TM with 400-600CFM with a 2-inch, you need 10-times the CFM and 8-12-diameter hose.

Most of those over simplified systems are going to do more harm than good, they will disturb the contaminates and then not thoroughly remove them.

Something to think about as you count out my 10-G's! :wink:

 

[ACE]

Direct Competitor?
I’m not your competition and you know it. If I take one job from you in the next 5 years I bet I send you 10. I think your right about the duct cleaning thing. Do It right including marketing or not at all. I am already trying to perform too many services and it’s not efficient. I should be offering fewer services instead to adding them on.

 

[Desk Jockey]

You were suppose to be using this time to consider it & count my money.

You answered it too fast, something tells me I not getting any money out of this. :mrgreen:

Yea one thing at a time, once you're up and running expand your services as long as you don't violate the rule of line extension.

LIKE SELLING Mary Kay products!

 

[Brian R]

:roll:

 

[Desk Jockey]

Sorry Brian I didn't want to, but I had to! :wink:

 

[Brian R]

Yea, check the "Mikey, your too funny" in the bird room for the rebutle