Why start a multi-branch local cleaning company?
Starting a business, especially in this climate, may seem a little lacking in sense but some of us just can’t work for the man. Here is how and why we did it, problems you may encounter and our brilliant solutions to conquer them, and some funny stories along the way. Each Blog post will include a summary at the bottom if you hate reading. We will do our best to link each section of this blog to the pertinent blogs as they are written.
In The beginning
Do not confuse this series with the series that explains the development of a business from one of this company’s CoFounders that is also a multi part Blog.
One day a friend went to a friend and said, “hey will you help me expand my cleaning business”? “Sure”. After sitting down and talking it was quickly established that a new business needed to be formed. Entire minutes of deliberation passed and a company began to take shape, on a Tuesday, while eating muffins, and drinking the finest coffee GetSome Coffee in Clarksville TN had to offer.
We both needed something to work toward, to create, to guide to success for that ever difficult purpose in life; fulfillment. We knew it was going to be a cleaning company at first because that is where the initial conversation started but we dreamed a little bigger and decided maybe it would not end there, so we did what anyone with a dream would do. We worked backwards from big idea to a starting place.
The Big idea
The broad idea; Do Things Better but smaller (more on that in a second). We sat down at a table, all two of us and named it, then began to dream. Done Right LLC it would be called (and it is), which became the parent company of CleanIt LLC. Done Right was the idea that when you look back on whatever had been done, it was done correctly. CleanIt LLC would be the first subsidiary of Done Right LLC with the potential to expand to several other subsidiary possibilities should the model reach any level of success.
We registered the business online with the IRS within a few minutes and then took a whole 500 bucks from each of our personal bank accounts and walked across the street to open a business bank account. While at the bank, we realized we didn’t even have a partnership agreement so we downloaded one online, read it, altered it a bit, and submitted it to the bank with our newly formed company docs. We decided insurance was a good idea early on and contacted someone local to get that started. In less than 3 hours, we were a legit LLC with the federal government, had a bank account, and had started an insurance policy. We were literally in business. We took our little bit of money left in the bank and turned it into cleaning products. We were going to have to do some of the work ourselves if we wanted to make this work, which is what we did.
CleanIt began in TN, becoming CleanIt Nashville and within a few short months CleanIt Arizona was born. The opportunity was there so we wanted to grab it. Systems were going to be a necessity to make this thing function smoothly and grow the way we projected it should. While we had big plans to add South Dakota, Texas, and a few other states, two was enough to handle for now. The pitfalls of a multi-state (physical presence) business that neither of us ever attempted before were immediate. We started it, now it was time to figure out how to run the day to day with as little input as possible.
We decided that cleaning everything ourselves was far too much work if we were going to be building websites, writing social media campaigns, conducting sales, managing staff and building back end systems for that staff, record keeping, and a slew of other day to day necessities. Eventually we were able to find a few people to clean houses in all four cities but that is a story all by itself.
The smaller dream of Done Right comes from years of launching businesses on the cheap. To date, one owner alone (update: now the sole owner) has owned and operated a successful motorcycle shop, an online parts business, a family fun center, an escape game facility, and a handyman company. All of these were started with 1000 or fewer dollars and a few reached a value well over a million dollars. I want to teach people how to do that. All of that teaching is and will be FREE and can be found online…links at the bottom.
Insurance and adding states
The insurance we had purchased needed to know the name of our business in each new market except we didn’t yet know what we were going to be called in other states because if the name filed in state one is taken in state two, a fictitious foreign entity name may have to be filed before filing state LLC paperwork. Goto summary.
THE PHONE nightmare.
After hanging out a digital shingle or two (ads), incredibly, the phone began to ring. What we didn’t realize was that cell phones and call forwarding would quickly become a nightmare. The phone system debacle took a YEAR to figure out. Read about our pain and avoid it yourself. Goto summary.
The tracking issues.
Then the booking system, which we had decided to use before ever taking a single client wasn’t enough. More on software woes later, but they mounted heavily with the more clients we took on and the more information we had to track. Somewhere down this journey we will surely tell you about ALL of the software we now use.
Tracking was tough and began to give rise to increased customer acquisition cost because we weren’t good at it….couple that with “who the heck is calling everyone back” and we were paddling up river against class 3 rapids type currents. It wasn’t working.
So, we now have a phone issue and a software tracking/booking issue. Super. Just wait until you read how much worse we made it before it got better. Even I can’t believe it. Goto summary.
Staff, early on, we weren’t that busy and some staff didn’t want to stick around based on how we pay for gigs. We projected this company could weather any storm if we based the entire thing on percentages rather than guessing at pay rates. So we paid our staff the way we planned to spend the income, based on a percentage. This worked for some and bothered others. Other problems in this arena developed getting new staff onboarded using paper contracts, no competes, paper background check forms, and legal docs. We will get there in part 4 of this series.
Problems became difficult to solve when they were compounded. Between the phone, the wasting of money because of tracking, and staff, we didn’t think we were going to make it. Goto summary.
Advertising, Advertising, Advertising.
Ads got very expensive very quickly. It was all because of the three issues already mentioned and today it has been fixed but for 6 months we far too much of what should have been profit on ads. Part 5 of this series will talk about all the trouble we had with advertising, the never ending battle you will have as a result of trying to do it right and the absolutely insane number of books we have read as we try to understand what our marketing company is now doing FOR US.
You don’t need to advertise to start any business but we wanted the head start on client generation we couldn’t achieve without it. Goto summary.
We never even saw this one coming. Who knew that once in a while people are dishonest? Sometimes you are going to see a client dispute a charge on their credit card as fraudulent. Sometimes they simply won’t be able to pay or won’t want to. From time to time they will complain about the work done weeks later and you will need solutions for problems you didn’t know you had. It happens with employees too. It will happen with a call center or an internet provider. This blog will go over every bit of dishonestly we have seen and what you can do to overcome it. Part 6 Goto summary.
Social media is NOT advertising in the paid sense. It is advertising in the organic sense. You need one to compliment the other and frankly this blog is social media. We have never been big on social media but have found a way to conquer even this monumental undertaking with several resources that we can finally afford.
Client generation comes from many facets and paid ads are not the end all be all but neither is social media. Talking to people, referrals, word of mouth and a process are all good. Part 7 will explain more about our social media and why we now know you need to operate all of these facets at the same time. Goto summary.
Thing we did right.
By the Percentages
Having already mentioned that one of the owners has a completely separate series that explains his business experience development, allowed us to come up with this approach. We can confidently share this company development with you, our readers, because of that experience. Many things were planned on day one for this company including the way we would structure accounts payable and receivable. Cash flow if you will. We decided that all general category expenses would be a percentage of overall income, period.
This allows for two things. We cannot kill this company if we wanted to sticking to the math. The math allows for projections (read: quasi business plan) for growth which means we can scale this to whatever size we want and almost never reach a point of diminishing returns. Not every business is like this. Our repeat costs come in the form of subscriptions and very small rent payments, which means we only have to make small money to break even each month and then this formula applies which you can read about in part 8. Goto summary.
Okay, Part 9, this is sort of a system but systems (PART 11) isn’t going to cover everything and this was a huge developmental process for us and we wanted to share it as a super quick and easy to read blog post. Goto summary.
We all know that if you have a brick and mortar business that location is EVERYTHING right? I hope so. It really is. You can find out why in the other series being written right now about owner Justin’s business development skillset journey. Did you also know that this applies to where you are going to put a service based business that isn’t near you? Research is a thing, like, you have to do it or you are going to have a very tough go. In this series, Part 10, we will share with you how we came to know how true this is.
You have to be aware of social climate, literal climate, propensity to lose work to an underpaid workforce, market cost of advertising, and potential client reach in any county, city, or even zip code you decide to target. You don’t need a 10,0000…ha made you look at that twice…10,000 dollar study to tell you if it is a good idea or not but you do need to understand the market you are getting into to. Goto summary.
We have a system for everything. This may became a multi-part Sub-Series…or one really really long blog post. Either way, this is going to be one of your top reads right here. We are going to go over software we ended up using and the reasons behind each one, how we conquer task delegation, where we track clients, the unique process for ensuring we get the most out of every lead source we use, how we have the edge on SEO, and so so much more. We have spent the entire history of this company creating systems for scale. From onboarding employees electronically without any input from us, to preventing charge backs on credit cards, and well beyond.
This is a must read if you are in a similar business model. Part 11, my favorite. Goto summary.
We started with no debt, on a shoe string. Since starting this company have never had a month where we had to question if we were going to be able to grow, pay our regular bills, our staff, advertising, or anything else. We are simply going to explain how here. That’s it. No frills. No funny business. This is a blog about how you can start nearly any company with no money and run it without incurring debt, without the requirement of acquiring debt, and how to avoid failure from the onset by running at a deficit (which most companies do for much of each year). We don’t run at a deficit…ever. Our accounts grow over time…consistently. We encourage you to do the same.
Like our other blog series, this is not intended to teach you to go borrow huge gobs of money in Class A, B, and C rounds while creating a monster that may fail on someone else’s dime. This is the story of our company and how to start one without the need for financial backing beyond startup monies and a small bit of leverage. This is the story of building a moderately successful company a person can be proud of that will provide fulfillment and a living. Goto summary.
Taxes and licensing
This should be pretty obvious but it may be more than what you think. This is not a go it alone process and it is necessary once you decide you want to grow. You can start a company as nothing and claim in on your schedule C for you personal taxes, but the second you start doing business in a broad sense you will want the protection afforded in becoming an entity separate from your person.
This post is going to be boring and we aren’t even going to write it but we will find the best person for it and give you all the ins and outs of what each setup can do for your and why. We will got into some detail about what kind of business licenses are required to have, places we are not required to carry them, taxes that must be collected and more. It will be long, it won’t be fun, but it will probably be the MOST necessary read out of this entire collection. Look for this as the dreaded PART 13. Goto summary.
Damage Control and Prevention
Controlling your reviews online is critical for what we do and this blog will tell you how we are able to do it. It will go into detail of customer complaints and why we DO NOT give refunds as a result.
Follow Up, Follow Up, Follow Up.
This ties into dishonestly from and honest perspective. Why continued and never ending follow is important if you don’t want to lose clients to another company, one of your own staff, or to poor service. This will explain why every member of your team needs to know this happens the consequences of anything that could arise as a result of follow up applying to good and bad.
Things to Avoid altogether.
This blog will cover the worst way to handle staff but provide solutions to properly let an autonomous employee (folks that don’t report to an office) go and still keep your supplies. It will cover the pitfalls of working with companies that advertise lost cost cleaning solutions as a lead source or ad partner, why doing everything yourself is a poor idea, why trying to be “good at hiring” is a misstep, and why you should not become a workaholic as a result of this new venture.
We started this with an idea. To build the best damn cleaning company ever built with systems that support it so well it simply cannot fail. Each section of this blog will have a link…eventually. We will add to it under this section to address your questions and comments.
- Part 2 – Phone Issues and eventual Solutions
- Part 3 – Tracking and Client Booking Software
- Part 4 – Staffing Woes
- Part 5 – Dishonesty Control
- Part 6 – Advertising mistakes
- Part 7 – Social Media Disconnect
The Good from the bad.
- Part 8 – The Percentages
- Part 9 – Supply Coordination
- Part 10 – Locations
- Part 11 – Systems
- Part 12 – Debt
- Part 13 – Death and Taxes
- Damage Control and Prevention
- Follow Up, Follow Up, Follow Up.
- Things to Avoid altogether.
- The Best Type of Clean