# Business not going anywhere.



## Clean by Choice (Jan 7, 2011)

Need advise. I started a cleaning business will be 4 years in April. Have a few employees and around 40 clients which most do not want to pay what we need to get to do the job. So in some cases we lose money. Sometimes I fell like it is not getting anywhere. Does anyone have any advise. Sometimes I just want to give up, but I am too far in debt. I love to clean, but the passion is gone. Any advise would be helpful.:sad:


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## mikeswoods (Oct 11, 2008)

Tough spot--a lot of people are in trouble,too.

First thing--raise the price on the loosing accounts---If they go away,you will be better off.


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## tinner666 (Nov 3, 2004)

mikeswoods said:


> Tough spot--a lot of people are in trouble,too.
> 
> First thing--raise the price on the loosing accounts---If they go away,you will be better off.


Mike beat me to the puch. Raise your prices and 'market' the quality of your services. You have to sell your value, not lower prices into the gutter. I just raised my prices another 12%.

Sink your advertising money into your website SEO to get more clients.


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## Nils (Dec 22, 2010)

Raising prices is good. Is you get push back...you will need to walk away. That will confirm in your customers mind you are serious. More important...it will confirm in your mind your value as a professional service provider.

The "thing" that says alot about your situation is that you passion is gone. It's tough to be "out there" when that's gone. That affects everything/everyone, including your employees and customers.

One suggestion is to meet with other business owner(s) in a non compete industry that you respect/know. Even better if you already have a realtionship with them (personal or business). More often than not, they have been in your shoes and can share what they did/didn't do. People like to be asked. Explain readson you want to meet with them, etc. If you do meet with them...and it's a positive thing, ask if you could meet with them again on the future. Advice, encouragment, insight may even start to ignite the passion again.

Hope this is not too long. First time I've offered suggestions.

Take care.


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## Clean by Choice (Jan 7, 2011)

Your message is not too long. Thanks for all the advise.


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## Winchester (Jun 29, 2008)

If you're losing money on jobs you shouldn't waste your time doing them. Why? So you can keep them as clietns and lose more money from them in the future too?

Why would _you_ pay money to clean for somebody else?

Just because I really want to work doesn't mean I'm willing to pay someone to do it.:laughing:


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## hanksr (Jan 9, 2011)

We all have gone through what you are going through at some point in our careers. My advice would be to fire the clients that are costing you money. Find clients that value your time and your service. Believe it or not there are people that will take advantage of you if you allow them.


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## Roofing DFW (Dec 25, 2010)

First of all i'm going to try to be honest with you, 
You need to get a new redesign, a fresh new look. -- ( To start with a new positive year, i would get yellow, blue shirts, maybe a new logo and a new slogan). I know your going with green with the whole eco friendly stuff.

Second do what they say, raise your prices i will give them A++ for that, and also I would need more detail on this clients that do not want to pay.
I can't tell if they are low income clients than that explains why your are going to have a hard time getting them to pay. Then just focus on high income potential clients.
Or
if they are high income clients then that means you have a weak mind, if you let one slide like if they tell you i will pay you next week/month. They will just think i can walk all over you and they will not respect your company or take you seriously.

That's just something to think about. 

I know the cleaning business is really good, because my friend in Austin is making a killing over there.

Let me know if you have any questions.


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## A. Spruce (Aug 6, 2010)

Any accounts that are not profitable should be terminated as soon as possible or the terms renegotiated to make them appropriately valued.

As someone said earlier, check into working with non-competing businesses. For instance, on my larger remodels, I would go in and clean the entire house after the completion of the job (particularly vacant properties ). No homeowner wants to walk in and see construction dust/debris everywhere. I usually did the work myself, but there were a few occasions where it was more feasible to sub it out. Look into picking up commercial clients. Businesses are usually a little more willing to pay for services than handy homeowners are. I've even hired gardeners to come in and clean up the grounds a few times.

Another thing to look at is if there is a way to specialize your cleaning services. For instance, are you willing to clean up after a death? Can you do mold or odor abatement? Can you do clean-outs - removing trash/debris and cleaning a foreclosed or rental structure? Is there anything you can do that your competition can't or won't? If there is demand for it and no one else is providing it, you've just created your own niche.

The biggest thing to look at is the quality of your work versus time spent and cost to customer. Quality work is worth more than bad. Speed = less time on the job = more money per hour. Value to customer - you're providing a service that they either don't want to or can't do themselves. If you can put out a quality product and sell your clients on your value, they will be more inclined to use your services.


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## Tscarborough (Feb 25, 2006)

What exactly is the reasoning that would persuade you to pay other people to work for them? I do not understand that concept at all. Come clean my house every week and I will let you pay me 100 bucks to do so?!

You may be better off as an employee for someone who understands the concept of P&OH.


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## Mike Finley (Apr 28, 2004)

What this guy is doing is no different then what is going on in some home improvement businesses all over the country. For any of you guys who are confused at why he is doing work at no profit - my guess it's the same as what your competitors have been doing, and what some of you have been doing - getting work to keep crews working, avoiding having to lose key employees, trying to make it work until things get better. It's gonig on all the time. What do you think those low bids are that you lose work to? What do you think those guys are doing, making a fortune on those low ball bids or doing what this guy is doing?

Tscarborough - you have to have guys buying materials for you every day who are doing exactly what this guy is doing.


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## Mike's Plumbing (Jul 19, 2010)

I hate to say this but one of the reasons why we see so many threads like this is because construction is filled with folks who start a business because they think it's a good idea. This is NOT a good reason to start a business.

When this happens the business becomes just another business in a sea of businesses, most of which limp along and one day collapse. I believe this is why so many fail and why so many not only lack the knowledge of where a business needs to be financially to be viable but also don't do any research or activities to figure it out.

The basic foundation of any business is a little more complicated than just a willingness to "be a business owner", it requires many hours and much passion focused in the right direction.

No amount of advice can fix this.

If you go into business the very first thing you need to figure out is what you offer and what it's worth, if not this market will swallow you up and spit you right back.

My advice is to study business 101

Mike

-----------------

I'm going to edit this; If what you offer is simply cleaning, that's not good enough. If I offered just plumbing I would be out of business in less than 6 months.


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## THINKPAINTING (Feb 24, 2007)

What I hear everyday from Gc's to one man bands working for a pay. No one around here( my area) ever talks about making money anymore. After awhile you lose your drive, lose money and take jobs you wish you walked away from.

This is a test and you need to re-group get some support and positve vibes going and get rid of dead weight both workers and accounts.

Trust me I've lost accounts that we had for years who paid on time and paid well but there long gone. Its a tough out here right know take a good look at where your at and where you want to go and most of what your willing to settle for. We were just discussing this same subject its tough when you lose your drive but it happens we all get burnt out but its how you recover:thumbsup:


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## Tscarborough (Feb 25, 2006)

I do Mike, and I even know which ones are doing it. They are the ones paying cash, because I wouldn't loan them 5 bucks, much less extend them a line of credit.


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## summithomeinc (Jan 3, 2011)

I'm sure no one here started their business knowing everything they should have known. I'm also sure they made alot of mistakes along the way. So why act like the next guy is such a moron for trying too? I say good luck. Take all the good you can get from here and use it. Ignore the rest. If you offer a good service at a reasonable price you will succeed or a great product at a high price you will still do well.


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## Mike Finley (Apr 28, 2004)

Tscarborough said:


> I do Mike, and I even know which ones are doing it. They are the ones paying cash, because I wouldn't loan them 5 bucks, much less extend them a line of credit.


Maybe that's a joke, I don't know.

But I guarantee you, you've got customers with lines of credit who are working jobs no different then this guy. The bigger the company the more likely it's going on from time to time.


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## Tscarborough (Feb 25, 2006)

That is no joke, and I know exactly which of our account customers are riding the thin line. They and we both agree that joint check agreements are the best way to protect everyone in that situation. I have no control over how they bid projects, nor do I want it. We provide good prices, good service, and excellent product knowledge. Everything else is up to the customer, and if they want to pay someone to work, it is no business of mine.


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## Mike's Plumbing (Jul 19, 2010)

summithomeinc said:


> I'm sure no one here started their business knowing everything they should have known. I'm also sure they made alot of mistakes along the way. So why act like the next guy is such a moron for trying too? I say good luck. Take all the good you can get from here and use it. Ignore the rest. If you offer a good service at a reasonable price you will succeed or a great product at a high price you will still do well.


While that may be true I'll fire right back with a question.

What is the current strategy? Is it a solid strategy or is it a "hello world I'm here" type of strategy. This may come off as hard to swallow but we are in the middle of a nasty recession, is there another way to look at it?

You see, it's my experience that when I ask this question to people I know they give me the deer in the headlights look. If you have a strategy mistakes are fine and they will happen but the constant flood of contractors rambling through business have no strategy. 

If you think I'm kidding research the failure rates of business start-ups, then look at what percentage are construction related. Your ability and passion are what keep you going, strategy is what keeps you alive.

Mike


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## JamesDibben (Apr 5, 2010)

Great stuff Plumber Mike!

Mr Clean, You may need to take a look at the way you are pricing. Can you sit down right now and evaluate which clients you are making money on and which ones you aren't? You need to answer this with concrete numbers, not, "Well, a few bucks here and maybe a couple of bucks over there."

If you are doing what so many other contractors (me included up until several years ago) are doing then you are charging per square foot or some other gut based pricing system. You need a system you can be confident in. A system that will take into account how long the job will take, how many people are there and what you are paying them combined with overhead and desired profit margin and even material expenses.

You need to know EXACTLY where you are with each customer before you can start planning on which one's to dump and which ones to keep. Of course relationships always come into play when making price adjustments. Your clients whom you have the best relationships with are most likely to understand the changes you need to make.

Let me know if I can help.


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## summithomeinc (Jan 3, 2011)

Mike's Plumbing said:


> While that may be true I'll fire right back with a question.
> 
> What is the current strategy? Is it a solid strategy or is it a "hello world I'm here" type of strategy. This may come off as hard to swallow but we are in the middle of a nasty recession, is there another way to look at it?
> 
> ...


 I agree everyone needs to have a plan, a process, a strategy. But I for one, and I'm betting alot of others did too, started business thinking I'm the best at what I do so that's enough. Well it's not a surprise now that being good is a long way from being good at running a business. My point is how many people starting their business from scratch had a business plan, a set of processes that worked for their trade, ect.. Not many or the failure rate you are talking about would be alot less.


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## Rob PA (Aug 30, 2010)

we have all made mistakes...thats how you learn.

If you have accounts that are not making you profit...then talk to them "man to man" tell them this is what you need to make a living. Raise your prices.. if they do not want to pay and you lose them. You will actually make money! If they stay at the new rate..you will make even more money!

I have a few customers that have been there from the beggining and i make sure that since they supported me when i was fresh...i take care of them on price. BUT i do not pay them for me to work at their house. Over the last month i took on a new attitude..about not chasing after every job that came my way and not worrying about lost bids. I have focused on the jobs that i could get. The outcome? I have actually made more money doing that...then going out working 7 days a week 12 hour days for all those junk jobs.


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## BamBamm5144 (Jul 12, 2008)

Rob PA said:


> we have all made mistakes...thats how you learn.
> 
> If you have accounts that are not making you profit...then talk to them "man to man" tell them this is what you need to make a living. Raise your prices.. if they do not want to pay and you lose them. You will actually make money! If they stay at the new rate..you will make even more money!
> 
> I have a few customers that have been there from the beggining and i make sure that since they supported me when i was fresh...i take care of them on price. BUT i do not pay them for me to work at their house. Over the last month i took on a new attitude..about not chasing after every job that came my way and not worrying about lost bids. I have focused on the jobs that i could get. The outcome? I have actually made more money doing that...then going out working 7 days a week 12 hour days for all those junk jobs.


Rob - an old acquaintance of mine did work and still works how you used to. 7 days a week, 12 hours a day. That is one benefit when you enjoy working for wages. I never understood it but oh well.


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## jason. (Aug 18, 2010)

Good luck with everything hope everything works out for you we all go through tough times eventually


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## Corbin3388 (Jan 5, 2011)

Have you tried working with property management firms. There isn't a lot of profit bit a large building should average 2-5 vacancies a month. A firm with 20 buildings that's 40-


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## Rob PA (Aug 30, 2010)

realities and those firms offer very small margins.....controlling materials and what you have to buy with those jobs will make or break ya


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## Electric_Light (Nov 25, 2007)

Clean by Choice said:


> Need advise. I started a cleaning business will be 4 years in April. Have a few employees and around 40 clients which most do not want to pay what we need to get to do the job.* So in some cases we lose money*. Sometimes I fell like it is not getting anywhere. Does anyone have any advise. Sometimes I just want to give up, but I am too far in debt. I love to clean, but the passion is gone. Any advise would be helpful.:sad:


Some cases, you lose money and there are activities that appear to lose money, like production on products not making any profit(variable cost exceeds contribution margin), however still support pay the fixed cost of production line. 

If you drop that product, variable cost will instantly drop to zero along with the revenue that product brought. Even though it may not have been profitable, if that product's portion of allocated fixed cost had to be reallocated across current products, the loss can be greater. Lowering the utilization of machine may lower the maintenance interval, but the rent on the building, or the loans on the production equipment won't change one bit. 

Sometimes accounts/products with zero contribution margin is a way of sustaining economy of scale and fixed cost. If you have very little fixed cost, then drop them, but it sounds like you have fixed cost like loans.

So, you can kick off the guy that is seemingly costly to feed from the table to clear the space, but the lost revenue might mean you're suddenly making the table support the remaining weight on three legs and it might collapse.


If you have accounts you want to drop or change, you can't do so without their agreement, just as they can't without yours. If they have annual contract, they're expected to not find a lower bid and dump you two months into the contract, just as they expect you to honor the contract price for the duration of contract. (Since you do commercial cleaning, I'm assuming you work on a contract service rather than day-by-day agreement). If you propose a price raise that's not on contract, or you drop them, they can sue you for breach of contract. They don't get to pay you less because there's a lower bidder and they feel like paying less. You don't get to charge more just because you feel like current negotiated price isn't good enough. Contract is a two way street. You can try to weasel out, just as a renter can try to weasel out of a lease. Even if you're forgiven and let off the hook, it doesn't give your company a good reference.


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## newcomer9747 (Jan 21, 2011)

Electric_Light said:


> Some cases, you lose money and there are activities that appear to lose money, like production on products not making any profit(variable cost exceeds contribution margin), however still support pay the fixed cost of production line.
> 
> If you drop that product, variable cost will instantly drop to zero along with the revenue that product brought. Even though it may not have been profitable, if that product's portion of allocated fixed cost had to be reallocated across current products, the loss can be greater. Lowering the utilization of machine may lower the maintenance interval, but the rent on the building, or the loans on the production equipment won't change one bit.
> 
> ...


Never been closer to the truth. :thumbup:


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## deep sliver (Dec 19, 2008)

Best thing I ever learned in the early days was to raise my rates even though I knew I would lose some good clients.

But you know...... I cannot remember how many called me back and pleaded with me to come back.:thumbup:


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