Who will make more money?

[daniel@procarpet]

Let's analyze three business models.

First is the tm carpet cleaner that decides to invest in a few more trucks, hires employees, advertises through direct mail, yp, online, print ads, and possibly some tv or radio. The trucks are busy with modest pricing. Repeats are decent not great and a few referrals every now and then.

Second is the tm cleaner that is owner operated either solo or an assistant, has everything paid for or pays cash for everything, has a decent customer base, grosses 200k per year, gets all business from referrals or repeats with some advertising to database but nothing major, and is able to save money easy and has a good income.

The third is the cleaner that buys portables, does mass coupon advertising, upsells every job hard, has very low repeat and referral rates, but has five crews out doing a hundred jobs per week with a 125 average. The tech provides the transportation and gets 45 percent of the gross. If the company averages 50k per month and the owner gets 27,500 minus lets say 10k per month in advertising, that leaves 17k which is great, but still a lot of work.

 

[daniel@procarpet]

Edit: The cleaner with all the portables will have to pay someone to answer the phones and have an acutal place of business so knock another 4-5k per month off that NET.

 

[Ryan]

The first one will.

Thats Stanley Steamers business model, and Services Masters and Coits.

I do think there is a certain point maybe 2-3 trucks where you would make less then a low overhead O/O but once you punch past that point you have much more potential then a O/O would. And besides wouldn't you rather work out of an office all day then push a wand?

 

[juniorc82]

Ok what about employee turnover, employees tearing up equipment, and employees who are not as hungry as you and do the bare minimum? I think an owner op with a lead tech who can do a variety of jobs will do great. I know a couple guys that run huge outfits and it seems that having a larger staff can create more problems. I think a smaller staff that are properly trained with owner presance is the way to go. I know there will always be the rental units and restaurants and anyone can do those , but do you wana trust your techs on the higher upper end jobs? I also think running both porty and tm is the way to go. I would rather make an easy 10k a month than be stressed to the limit and make 20k

 

[Ken Snow]

How aboout #1 with almost all clients repeating and referring? That is my preference.

 

[Brian R]

The one that brands it and franchises it.

 

[ronbeatty]

Two works best for us. 8)

 

[GeneMiller]

#3 plus he gets income from his subs because he rents then the equipment and they have to buy all his chems.

gene

 

[Royal Man]

#2 beats # 1 untill they have more than 4 trucks and don't upsidedown on overhead.

 

[steve frasier]

I would put a bullet through my head if I was #3

 

[Jay D]

how many (%) of single truck operators actually do $200K per year, I've known a few but they were the exception to the rule. Most I have known do 60-100k per year Gross. Yes BDCC. :roll:

 

[Jeremy]

You're confusing profit margin with total revenue...

20% of 1 million is more than 50% of 250k...

 

[Johnny]

Regional conditions need to be considered.

For example, in California, high workers comp, taxes, real estate prices, regulations, etc. make large operations more expensive and a hassle to manage.

So the owner-op model is more attractive.

 

[joe harper]

how many (%) of single truck operators actually do $200K per year, I've known a few but they were the exception to the rule. Most I have known do 60-100k per year Gross. Yes BDCC. :roll:

My guess would be that the average O/O..."residential cleaner"...will clean about 3
jobs per day...! "If he is established.." He will clean about 750 homes a year..!

So if he has a $150.00 job average...He will GROSS...$112,500 a year..!

With "KEN" being the exception...!!!

It is QUIET DIFFICULT to gross $200K..operating just 1 unit... !gotcha!

Lots of variables..weather,customer base, & "PRICE"..... :idea:

This same O/O...can Achieve the $200K "mark"...But he MUST be able to land
some LARGE commercial accounts ...or...Be doing some WR work... :idea:

I would assume the average O/O ...on this board...Gross @ $75k per year... :!:
This should provide them with a $40k a year job.. 8)

THERE ARE "NOT" MANY OF THOSE JOBS AVAILABLE IN THIS ECONOMY.... :idea:

Basically ...all that does is move his Job Average.."UP"..to around $250.00... !gotcha!


Ps I doubt that even KEN'S...trucks could hit the $200K mark...if they were REsI only...
They would have to complete 1000 jobs per year.. :!: The TECH would have to UP-SELL
@ a rate of 25% on every ticket..."Which is GREAT".... 8)

 

[The Great Oz]

The owner that will make the most is the one that invests his profits in real estate, stock market funds or commodities futures.

 

[joe harper]

The owner that will make the most is the one that invests his profits in real estate, stock market funds or commodities futures.

 

[Brian R]

Chem dry told us years ago....1996 or so? That each truck should pull in no less than $125.00.
I did $220.00 my self when I cleaned full time. I don't know my job average or how many I did because I personally didn't track it...and my sister in law/business partner was horrible. lol

My goal was and is $1000.00 per day from a truck...and I don't hit it very often.

If you add Scotchgard and or tile cleaning, you can bring your job average way up and get close to or better than $200k a year.

I did the $220k with carpet cleaning, upholstery and protectant only. No tile and no WR.

When you are at the house, you can't be afraid to "ask" and you can't be afraid to "promote" and you can't be afraid to charge.

Simple....it's getting into the house that most have a problem with.

 

[Willy P]

#4 - The owner that gives outstanding customer service and reasonable pricing.

 

[Brian R]

outstanding customer service? Yes...reasonable pricing? Not so much....but I suppose that depends on which side of the fence is deciding reasonable.

 

[Ken Snow]

Love you Joe- you may be right for your business, but you are way off in my opinion. My top guy in 2009 did $362,219.80 and only about 40k of that was commercial (that is a guestimate, but not off by more than 5-10k). He also had the second highest satisfaction % (we use the positive vs the negative vernacular), and also one of the highest referral and request rates. He and his Assistant are not only fantastic cleaners, but genuinely good guys and had an upsell dollar rate of 42.02%.

The next 7 crews after them also were in the low to mid 300k and then we had a bunch north of 200k. It is isn't till we get down to our #17 that it starts to get under 200k.

None of the above is restoration work- this is handled and recorded in another division.

Ken

 

[joe harper]

Ken,

I wasn't taking a shot at your BIZ.... :!:

The word "AVERAGE"...is used for a reason... !gotcha!

I am NOT questioning your..#'s..


I realize that your ...VOLUME OF CONSTANT WORK...Is MUCH higher than MOST... :idea:

You are running TWO man crews...and TWICE the hours on a UNIT as an O/O... :!:

My #'s...are based on the "AVERAGE"...SINGLE OPERATER...on this board...!!!!!

I am sure you are PROUD of your employees... 8)

HOWEVER.....NOrth of $350K...on one unit .."With NO commercial work"...is HARD to
Swallow... At these prices... :shock: It READS to me ..."That I can get 4 rooms
up to a 1000 sq ft ...For $100.00..." ...."Am I mis-reading the ADD...?"

 

[harryhides]

A couple of points, imo are required to achieve the 300k numbers that are simply not available to O/O's.

1/ A very long term established multi-truck business = trust and very short drive times.

2/ Repeat customers that repeat once per year or more have carpets that are not full of soap and have been guarded. = Better results in less time. No need to explain your system or spend much time selling extras.

3/ No time spent by the Techs doing truck maintenance on the street, loading chems, van washing, fueling or dropping off flyers etc.

4/ Also how many days per YEAR are these Techs working and how many hours per week ?

It is the Henry Ford efficiency model and it wouldn't surprise me if he started Haggopian or at least influenced it.

$350k is a thousand per day all year long. 1k days can be done by almost anyone but doing it daily for months on end takes an awful lot of office support.

 

[joe harper]

A couple of points, imo are required to achieve the 300k numbers that are simply not available to O/O's.

1/ A very long term established multi-truck business = trust and very short drive times.

2/ Repeat customers that repeat once per year or more have carpets that are not full of soap and have been guarded. = Better results in less time. No need to explain your system or spend much time selling extras.

3/ No time spent by the Techs doing truck maintenance on the street, loading chems, van washing, fueling or dropping off flyers etc.

4/ Also how many days per YEAR are these Techs working and how many hours per week ?

Happy Holiday's to you & your Family.. :!: :!:
Good Post..."for a cHaNgE..." :mrgreen:

It is the Henry Ford efficiency model and it wouldn't surprise me if he started Haggopian or at least influenced it.

$350k is a thousand per day all year long. 1k days can be done by almost anyone but doing it daily for months on end takes an awful lot of office support.

 

[Ken Snow]

"Ps I doubt that even KEN'S...trucks could hit the $200K mark...if they were REsI only...They would have to complete 1000 jobs per year.. The TECH would have to UP-SELL
@ a rate of 25% on every ticket..."Which is GREAT".... "

This is what I replied to Joe, and it was 362k with 40+ of that 362 being commercial work, not + commercial work.

Tony you are exactly right~ in fact Haroutun (Harry) Hagopian came to Detroit because Ford Motor Co was paying $5 a day, way above normal wages. read all about our history at http://www.originalhagopian.com/pages/History

Ken
Ps 4 rooms of carpet in a typical home is typically between 5-700 sq ft.

 

[harryhides]

A couple of points, imo are required to achieve the 300k numbers that are simply not available to O/O's.

Happy Holiday's to you & your Family.. :!: :!:
Good Post..."for a cHaNgE..." :mrgreen:

Even a broken and retired clock is right once in a while.
And a very merry Christmas to you, good luck with the New years resolutions but I ain't holding my breath you you incorrigible piece of work.

 

[joe harper]

"Ps I doubt that even KEN'S...trucks could hit the $200K mark...if they were REsI only...They would have to complete 1000 jobs per year.. The TECH would have to UP-SELL
@ a rate of 25% on every ticket..."Which is GREAT".... "

This is what I replied to Joe, and it was 362k with 40+ of that 362 being commercial work, not + commercial work.

Tony you are exactly right~ in fact Haroutun (Harry) Hagopian came to Detroit because Ford Motor Co was paying $5 a day, way above normal wages. read all about our history at http://www.originalhagopian.com/pages/History

Ken
Ps 4 rooms of carpet in a typical home is typically between 5-700 sq ft.

MAN....That was a LOUD...Reply... :shock:

XOXO

 

[Ken Snow]

Sorry I didn't realize how loud that would come off. At least it wasn't filled with :?: :shock: somewhat amus Ivebeensold Ivebeensold Ivebeensold

somewhat amus

 

[ruff]

My top guy in 2009 did $362,219.80 and only about 40k of that was commercial (that is a guestimate, but not off by more than 5-10k). He and his Assistant are not only fantastic cleaners, but genuinely good guys and had an upsell dollar rate of 42.02%.

Ken

Ken,
I am curious, does any of that total include area rugs to be taken away or any off site services?

 

[Ken Snow]

No Ofer, it is carpet, furniture, & tile cleaning & related services.

Rug cleaning is handled by my Rug Care Services division whih does pick up and deliver, but almost 90% of the rugs come to us through our 5 Rug Cleaning Drop Off Centers.

 

[joe harper]

No Ofer, it is carpet, furniture, & tile cleaning & related services.

Rug cleaning is handled by my Rug Care Services division whih does pick up and deliver, but almost 90% of the rugs come to us through our 5 Rug Cleaning Drop Off Centers.

KOJ....What were the MACHINE HOURS....on that Butler LAST year... :shock: