What would you do with an investment in your business?

[Rick4Life]

I am currently running a 1-man show and have been doing so for almost a year now. I use a Mytee 1003dx out of my pickup truck and my business has been improving slowly every month.

I have a friend who runs a few businesses and is cash heavy and is talking about investing / purchasing part of my company and give a $50k investment to leverage the company.

What would you do with that investment to increase sales to $10k per month?

 

[Mikey P]

get a well wrapped box van with a truckmount.

Referrals, walk ups and increased productivity should earn you the extra 10k.

 

[Rick4Life]

I know everyone says get a truck mount, but does that really increase business?

 

[Brian R]

No.



A great image and a good way to get people to see it creates business.


Work on your image....logo, vehicle, website, ads, cleaning results, people skills, ....etc.

Work on your office...Tracking, paperwork, CPA etc

Make sure you have the resources to handle the work you are trying to get...If that means a boxtruck with a TM...So be it.

If it means employees or subs...so be that.


EVery success story has a different path...but they are all fueled with persistence.

 

[Bob Foster]

If all your buddy is doing is investing money and nothing else for the business I would not bring him on as your partner. The very worst partnerships are those that are friends or family. Most all people here or and other business owners will tell you that you will regret being in a partnership. But maybe instead your buddy would give you a loan at a mutually favorable interest rate. Try tying your repayment to the monthly volume of business you do. This will benefit you with the ups and downs that every new CC business like yours goes through.

Yes the truckmount will do wonders for your business and will open up avenues of work you would not otherwise get or be capable of. I would buy a good used truckmount and van and wrap it. I would also make sure you gave every customer supreme quality service. Those two things will bring you the business.

What I just suggested could be easily be done for under $35,000 giving you a good solid working platform that, if you took care of it, will stead you well for at least 5 or more years. If you go much less in a TM van package you may well be headed for trouble that you don't have the financial capacity to handle unexpected down times and associated disruptions of cash flow that often comes from worn out or poor TMs when they break down frequently. Be very careful which used TM van you buy no matter what any distributor or BB hype you might be exposed to.

 

[Brian R]

I didn't read it all the way through.


I would never put another persons name on my company...I've made that mistake.

Bob has a good idea of trying to take it as a loan with an interest rate....Tie it to the business income if you can...I've done this in other aspects of my business.

If you have a great month you pay up to a certain amount....If you have a dead month then you just pay a %.

 

[Lee Stockwell]

Brian not the first time you've started posting without actually reading the question.

 

[Brian R]

Thanks Lee, I really like that kind of set up as well. Great suggestion.

 

[Steve Toburen]

What Bob and Brian said.

The classic definition of a partnership is "marriage without sex". All the disadvantages- none of the benefits. (Yes, there are exceptions to this rule but they are few and far between.)

Never give up equity- never give up control. And yes, your friend will expect some of both to invest 50K in a risky business. (Don't get your feelings hurt- all small business is risky today.)

Steve Toburen
www.SFS.JonDon.com

PS If you REALLY need the capital (you may not if you need to ask what to do with it) then borrow the money. Pay the interest. It will be INFINITELY cheaper and less complicated than giving up equity and/or control. Wait- I already said that, didn't I?

 

[Brian R]

WAit a minute...I thought Marriage was a partnership without sex.

Somebody always gets screwed in a partnership.

 

[scottpeterson83]

Check with your city. There are usually non profit company's that lend money to small businesses for lower interest rates than banks allowing them to grow so that they hire employees. They usually require ensuring your business is making some money now along with a business plan and collateral. They could give you enough money to buy a van and machine and will hold the title until its paid off. I have had partners in other businesses and ended up selling them all since it doesnt work. I personally would avoid taking money from any friend or family member. Good luck to you.

 

[Ron Werner]

As an owner-operator I would suggest investing in Steve Marsh's Program. It teaches you the mindset to provide the better service and charge more. Strategies for Success is another program I've heard good things about. Steve does do a lot for you and is always a phone call or email away if you need to talk to someone. It was the mindset that helped me most.

A truck does help you to grow your busn, but it comes with extra expense that you currently don't have with a portable. You're in a big city with lots of highrises. Talk to Willy in Vancouver Canada. He's in a niche where a TM would be useless. A nice lettered or wrapped van, the right equipment, and you could be THEE MAN for highrises in Houston. Add a Cimex to your portable to clean hallways easier, or a OP machine, and a good vacuum. You could easily do $600+ days.

 

[Desk Jockey]

I'd check with JonDon and make plans to attend the next SFS. In the class you'll get step by steps instruction on how to approach commercial accounts from Chuck also how look and manage the buying experience from Steve and how to market from Bill.

All of this at a mere fraction of what it would cost you to get this information from one of the industry marketing package sellers.

Then after the class evaluate if you want a partner and if you do how you want to approach it.

$50,000.00 isn't much but it could get you moving in the right direction. Owning a TM and van won't bring you work but it will make you much more efficient when you do get the work.

I'd focus a share of that money on marketing, once you get the money flowing then focus on new equipment to make you more productive.

 

[Steve Toburen]

I obviously agree with Mr. Chavez's suggestion on SFS, Rick. (Thanks, Richard!) But I think the best phrase in his post is this:

$50,000.00 isn't much ...

Rick, 50K is just not worth "selling your soul for"! You will have a rapid infusion of money (at least some of which you will piss away- I would too!) and then it will be gone. But a partner sticks around forever or at least till you go through the emotional agony and big expense of severing the relationship.

There are only two reasons for a partnership, Rick. You either need a) their skills (doesn't apply to you since evidently this fellow would be a "silent partner" and won't help you in the business) or b) their money. My solution for these two needs? a) Hire skills and for b) borrow the money. What you pay out now in either wages for skills or interest for a bank loan will be infinitely cheaper emotionally and financially down the road than giving up future equity and control.

But that is just me ...

Steve Toburen
http://www.SFS.JonDon.com

PS I know so many people who have casually took on a partner in their early in their career 25 or 30 years ago (after all, what is 50% of nothing?) and now when it is time to sell the company there is plenty for one partner to have retired on but the sale price will not provide for two.

 

[Ken Snow]

I obviously agree with Mr. Chavez's suggestion on SFS, Rick. (Thanks, Richard!) But I think the best phrase in his post is this:

$50,000.00 isn't much ...

Rick, 50K is just not worth "selling your soul for"! You will have a rapid infusion of money (at least some of which you will piss away- I would too!) and then it will be gone. But a partner sticks around forever or at least till you go through the emotional agony and big expense of severing the relationship.

There are only two reasons for a partnership, Rick. You either need a) their skills (doesn't apply to you since evidently this fellow would be a "silent partner" and won't help you in the business) or b) their money. My solution for these two needs? a) Hire skills and for b) borrow the money. What you pay out now in either wages for skills or interest for a bank loan will be infinitely cheaper emotionally and financially down the road than giving up future equity and control.

But that is just me ...

Steve Toburen
http://www.SFS.JonDon.com

PS I know so many people who have casually took on a partner in their early in their career 25 or 30 years ago (after all, what is 50% of nothing?) and now when it is time to sell the company there is plenty for one partner to have retired on but the sale price will not provide for two.

Ditto that- if cash is needed for your business and credit is an issue offer to pay your friend/neighbor higher than prevailing interest rate for the added risk he is taking.

 

[Brian R]

For friend loans I would suggest offering a said amount to be paid back...Buying money.

For $50,000 I'll give you ?? back.

But that's just me.

 

[tmdry]

I am currently running a 1-man show and have been doing so for almost a year now. I use a Mytee 1003dx out of my pickup truck and my business has been improving slowly every month.

I have a friend who runs a few businesses and is cash heavy and is talking about investing / purchasing part of my company and give a $50k investment to leverage the company.

What would you do with that investment to increase sales to $10k per month?

Everyone needs to start somewhere.

Like others have said, I would personally NOT get an investor, you can do it on your own. If you're on this website than chances are you care about your clients and quality of your work. Most hacks don't even know of carpet cleaning forums, so cleaning quality should be a standard practice.

$10k is very achievable, just takes time, if you have the time you can do it. I'd also contact Fred Cordell (FredC) on the board to do your SEO if you don't already have someone doing it (and you're happy w/ them). Fred is the SEO guru and I use him for my business for a few months now, he's also very affordable.

Lastly if you don't have a real heat source to heat your cold water (propane/diesel) when using your portable, I'd look into an used OP machine (w/ wheels on the ground), you can use it separately, or better yet use it with your porty, it'll do wonders to your cleaning, and you may even get more $ for using the combo.

You don't need a van and TM from the get go, save your money, with time when you are ready you can buy an used TM/VAN combo, they're always for sale everywhere.

Invest in obtaining work first (aka marketing) than go after equipment purchases. Most businesses go out of business because they got themselves in loans or large investments but just didn't have enough residual income to sustain it.

 

[Steve Toburen]

Like others have said, I would personally NOT get an investor, you can do it on your own... Invest in obtaining work first (aka marketing) than go after equipment purchases. Most businesses go out of business because they got themselves in loans or large investments but just didn't have enough residual income to sustain it.

Rick, that is some GREAT advice Bill has given you.

Steve Toburen
http://www.SFS.JonDon.com

PS It is a thread like this that makes me reflect on how much further I could have gone in business and with so much less "collateral damage" to my family if support like this had been freely available back in the pre-Internet Dark Ages when I was down in the trenches.

All kidding and snarkiness aside you guys should be grateful once in awhile to the Head Troublemaker and Chief Pot Stirrer here- Mikey.

 

[PTMatt]

I know everyone says get a truck mount, but does that really increase business?

Helps our business. We get someone everyday who walks up to ne of our vans and asks for a card. Most say they are impressed with our equipment and want to see what we'd charge for their house. I think having good equipment and a well kept professional looking van goes along way.

I agree with what others have said also. Get the work first.