What to Expect When Your Cleaning Company Reaches the first $100K

Episode 20.

 

Ray

Joel, we’re talking about a couple of barriers for new business owners in the cleaning industry. It looks like the first threshold we’re looking at is 100K. Is that about right?

Joel

That’s about right because most people who go into business, the first thought process is, “I want to make $100,000”. Now, $100,000 in sales doesn’t necessarily mean $100,000 in profit. That’s the first thing as a new business owner, we have to consider. But we don’t always realize that until we actually own our own business, and realize all the other functions that happen behind it.

Ray

Are you telling me that they shouldn’t be excited that they made $100,000?

Joel

They should be excited. Because that’s a good indicator that you’ve got something that people want. If you’re struggling only doing $10,000 to $30,000 a year-Yeah, you should be doing something else. But that $100,000 is a good barometer that what you have, people want. But getting there is not always easy because when you’re first starting out. And this is why I’ve said in other ones, you want to run a job parallel. You’re bootstrapping the whole thing without any financial backing from anybody. Oh, it’s a killer. To get to that first $100,000 is a lot because you have to reinvest in your company. You need equipment, you need computers, you need software, you have to get insurance. So, there’s a lot of these things that new business owners don’t understand that go on that backside to get you to that first $100,000.

Ray

Well, that and the cost of the equipment itself, right?

Joel

Particularly if you’re buying commercial-grade equipment over the stuff that you buy over the counter and you think it’s cheap until you go through 10 vacuum cleaners at $39, and you could have bought a $500 vacuum once.

Ray

For our listener, we do have another podcast about vacuum cleaners.I’ll put a link in the transcript.    • Keep it Clean Episode 4 Vacuums  

Joel

So, getting that first threshold is very important because that’s going to tell you as a new business that you have something that people really want. If you’re struggling and you can’t hit those dollar amounts and you really want to do this for a living, then you have to look at what’s wrong. ?Do I have the right processes? Am I talking to the right people, to the right audience? Or are we performing the level of work to an area that is acceptable to clients for the price that you’re charging?” You really have to take an inside look at yourself.

Ray

If I’m understanding correctly, it sounds like part of this is really reevaluating your process, looking at, is your process good? Maybe the other question is, is your sales technique refined?

Joel

Definitely sales technique! I work with another guy out there, Adon Rigg, and he helps on the front end to eliminate a lot of the cold calling that small businesses really don’t have the time to do.

Ray

Shout out to Adon.   / adonrigg 

Joel

Adon. Here you go, buddy. We love you, man. But taking all that time that is really a waste of your time because you want to be doing something that’s going to generate money, money into your business. And the only thing that’s going to generate money is sales. Once you make that sale, everything else against those dollars is now a cost center. Your labor, your equipment, your insurance, your overhead. So you want to get to that price point. Once you get to the $100,000, that is a big move telling you you’re doing the right things, and then it’s duplicating what you did to get there. So, hitting that benchmark of $100,000 tells you that you have a viable business. And what you need to do is look at, as you moved along the process, what worked and what didn’t. Refine that process. And then once that process is refined, that’s duplicated. And then hitting the other milestones becomes much easier. When you continue to have to recreate the wheel, you are going to struggle in business.

Ray

My question for you at the $100,000 mark, you have someone who’s either working this as their side hustle, or maybe they’re doing this as their prospective main gig, and they have another as their side hustle. They’ve got a separate stream of income. At $100,000 are we talking one person, maybe two?

Joel

When we started our business and we hit the $100,000 threshold, we had a total of four people. Okay. Two part-time, two full-time, with the two full-time being the two ownership, and two part-time people working about three hours a night, five days a week.

Ray

So not only are we running business operations, performing service, doing sales, we’re team managing. That’s a lot of hats to wear?

That’s why a lot of entrepreneurs do what they do because they love to be busy doing a lot of different things. But as you grow, you have to start refocusing on what your role is in the company.