Need Advice - Business Expansion

[tmdry]

I need some advice/2nd opinion.

Our business is mostly carpet cleaning, and we are growing on the water damage side.

Several months ago I still picked up rugs/delivered to a local competitor who has a rug "spa" plant locally, however our vans are just too full w/ equipment that we're not able to carry rugs currently. So I stopped picking it up, and now just refer the work to local competitors who I know do good work. I get on average 2-10 rugs a week, usually someone who has at least 1-5 of them, so 1-5 calls per week on average regarding area rug cleaning (most are handmade cheaper rugs, not hand made). So a lot of people are not looking to spend big bucks to get it done right.

If I were to go the rug plant route, I would give the clients a percentage off if they were able to deliver/pick up the rugs, if not I would set up a day in the week where we would go around in a trailer picking up rugs.

I want to get out of the home office and into an actual office, in my area the average 150 sqft office is $500-700, while a 1500-2000 sqft warehouse is $1800-$2500 per month. Since I do not need such a large space (since I do not take on those rugs), I rent a climate controlled storage 10x25 that I keep chems, wd equip, etc, $350 a month in my area.

So for you guys that made the move, would you take the risk and go for the higher square footage/warehouse w/ office combo in the higher price range and try to set up a rug shop (and let the current client base know about it), so it could possibly pay for the overhead (that is what I had in mind), or stay small and just don't bother w/ setting up a rug plant and stick to a 150-200 sqft office w/ just an office manager?

I've been going back and forth on this, and can't decide what's best. Obviously cost is one of the concerns, but I'm also worried about the smaller space for having more than 1 person in there at a time.

Thanks for your help.

Bill

 

[Desk Jockey]

I hate to even comment due to the additional burden you'd possibly take on. I'd hate to steer you wrong and we are only guessing at numbers. What is the average rug size and price?

So lets say you average 5 rugs a week and each averages to around $80.00 X 4.33 a month, that's 21.65 rugs X $80.00 for a total of $1,732.00.

Rugs will make the payment but before you make a rash move let me say a nasty word here.....WINTER. Can you add enough additional work through the year to cover you through the winter months? Our rug business drops off in the winter just as carpet cleaning does.

The other issue is who is going to clean these 22 plus rugs? After a long day of cleaning are you really going to stay late or work weekends to clean them? You can get backlogged fast, especially if you start telling your data base you now clean them. We always get ourselves in trouble when we continually pull the "in shop" guys for emergency work.

You'll need to develop a plan for processing also. If I can cover all my bases comfortably then I sure would!

P.S. I'd hire someone to replace you in the field, it easier to replace a carpet cleaner than to train a new rug guy. You stay behind work on rugs and answer calls and develop & implement your marketing plans in between.

 

[Shane Deubell]

You can't find cheaper space then that?

We have about 5k squares and it only runs $600 month

 

[jcooper]

I wouldn't pay for anything I can't keep the van/vans in. An office will do me no good when it's -5 in Jan.

Do you have a garage at home? Could you clean the rugs there? If they are not piss soaked or super fancy rugs why not clean them on site?

I get on average 2-10 rugs a week, usually someone who has at least 1-5 of them, so 1-5 calls per week on average regarding area rug cleaning (most are handmade cheaper rugs, not hand made). So a lot of people are not looking to spend big bucks to get it done right

Your doing something right! 2-10 per week(every week), 4-20 calls per month is a lot. Imo. Nice job, really. My wife won't let me bring home rugs anymore!

Have a decent min. and clean on site would be quickest to implement.

However, I sure like the sound of Richards idea... Hang out at the office, clean some rugs... Ohhhhhh, I think I'll clean some fringe this afternoon.

It's a good issue to have. Good luck!

 

[tmdry]

Thanks Senior Richard, always appreciate your knowledge!

Shane, no, we are in the top 3 highest priced counties on the east coast, everything here is overpriced, and like I mentioned $600 will get you a 100 sqft shared office. I looked at some places in Florida to compare and I could get a store front 2k sqft on the main road for $500-1000, here that would be $4500-7500.

No garage, I've done that before and does not work with all the equipment we already have in there. I had a house w/ an office/large garage in the past (detached), but I still never put the trucks inside of the garage, just left the heaters inside the trucks when it got cold out, we don't get down to -5 around here, usually upper 20s to low 30's when it gets real cold. We do the rugs on site if there's no pee, I'm just looking to see how we can pay for the additional expense. Since it'll be in the $4k range with warehouse/office, utilities, n office manager.

 

[ruff]

Another issue to consider is your future plans.Will your area and potential clients make this a good money maker?
Every client you refer to the other guy does not only mean present money loss, it may mean future money loss as these clients may not come back. You're also opening the door to potential competition.

On the other hand, running a lean, low expense business is one of the less talked about reasons for success.

 

[Steamin McFadden]

Cut cost, and increase production. to heck with rugs, just do a topical clean in the home at a lower price while being honest with them saying " this is a low price hack job" if you want the real deal it will cost you 5 times as much , and I will be here in a week to pick it up with my trailer. Then take the thing to your rug guy.

Don't add another huge piece of over head for a side job. Next thing you know you'll have to buy a rug bagger, then a cimex for scrubbing, then towers for drying, then the spinning tube washing machine thing, and on and on .

So , Do em in their home for less money and no extra over head. Put money in to the water damage side of things.

DISCLAIMER : I know nothing about bizzness , I'm a high school drop out, I barley can pay my bills, follow my advise at your own risk,