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Hi Guys,
This question is geared toward those of you that run multiple trucks, over the last month or so I have probably lost about 20 jobs because I was unable to get them done soon enough. This is the first time this has happened to this degree and combined with the missed calls I am trying to decide when to pull the trigger and hire someone, I am already talking with some answering services to take care of the phone problem but the employee issue really bugs me because of all the additional paperwork and tax issues when you have an employee that I don’t want to make the jump until I am sure. I would like to know what you guys used as benchmarks when deciding to hire your first tech.
Thanks in advance for any help!…
Make sure you know where you are at before you start getting directions as to where you want to go.
what is your average size of each invoice? And how long does that take you? How many spotter bottles do you sell? How much protector? How much upholstery cleaning? Whats your commercial/ residentail split?Remember volume is not the name of the game. Profit is. It’s not how much money you make, it’s how much you keep.
start by raising your prices. 10% tomorrow with at least a $99 min charge. and another 10 % in a month.
go to a second van when you are north of $150,000 at 30h/week of cleaning time. $3000/week, $600/day.
If your busy season is thru the roof adjust your prices seasonally
Thanks for the info Dennis,
My minimum charge is $95, I am at about 12.5k for the month so far, I am spending about $100 a month on advertising. I have been playing around with the idea of raising prices but I have also thought about lowering them some and going after more volume. If I factor in lost jobs due to pricing and time conflicts I probably lost closer to 45 jobs in this month. I try to average $100 a hour from my first stop till I finish the day and so far seem to be on target. My current plan is to work on getting more monthly commercial accounts thru the fall and winter and hire my first employee in the early part of spring next year but not really sure at this point. Just trying to get some different opinions and see what has worked for you guys in the past.
imho raise prices first. volume will still come with time. Adding a second guy to run an evening/sat shift using one van is far more profitable.
If you are at $100/hour figure out what you need to do to be at $140.
The second guy evening route idea is also something I have been thinking about. The $140 an hour sounds great but is that realistic for a multi-truck operation?. I know some single truck guys that do that easily but can it be done with employee’s?.
why not?
I guess, it just seems like a big jump in revenue. I would love to hear some numbers from other guys as to what you average per hour as the owner vs employee?.
There are a lot of ways to look at this. The way we moved into a second van was to hire a helper when I had reached my physical limit. We were doing about 90-$100,000 before we added help. That was 8 yrs. ago. I don’t know What that number would be today. You can do about a little more than 1/3rd your current volume with that helper.When you have reached the limit on what 2 can do from 1 truck, then look at the second truck. Maybe this person could do some evening commercial work for you too.
What I like about the above approach as well is you have someone to fill in if you get sick or injured. And for a while, you wouldn’t have the overhead of the second truck.
The first thing I would do right away is raise prices . . . like Dennis suggested. There’s nothing wrong with making more money working less time. We raised our prices by 20% a few months ago and business is just as good and profits are up. Our $99 jobs instantly went to $129. This move made me pretty nervous at the time, but we got rid of a lot of really crappy jobs, and size of our jobs seems to be growing.. . (more money, fewer unloads) Don’t quite know how to explain that except for better quality of customers maybe??
If you go to the second truck, I would take into account your slow season.I would prepare to add a second truck right before the real busy season begins so you’re not supporting that added overhead. If you add a helper, you could have them trained in when it’s time to get another van.
Glad your business is doing well. All this is great, exciting stuff!
I agree with Ferris’ approach and in fact is exactly what I have done. Deciding when to put that second, third etc truck on the road really comes down to timing especially in today’s economic climate. I have chosen to invest in an set of additional equipment for the time being. This allows me to expand, if you will, without the expenditure of an additional vehicle, insurance etc. You will find you are able to bust out more work with two people. If you train to your expectations there is no reason why an employee cannot meet or even exceed your sales per man hour. The time you spend with your helper working out of a single truck is invaluable. By all means, raise your prices. Too often I have found my neighboring operators believe they should lower their prices as they believe they are missing out on jobs/volume. I believe one must look beyond simply the dollars earned today. There is some business that is not worth having. If you choose to raise your prices you must believe it is the right thing to do for your business and be confident when discussing price with your customers. Are you really spending less than 1% on advertising? That’s awesome!!
The helper idea seems like the best option for now so I am leaning toward it. I am going to spend the next couple of months going after commercial accounts and then hire someone to work with thru the Holidays and early spring. I will decide at that point how best to move forward. The raising the price concept is something I have been looking into and am still undecided at this point. I seem to lose a decent number of jobs because of price and if I look past the single truck concept and plan for growth being the high price is not always the most profitable position.
I agree with others. Add a second person to your van first. You will be able to increase your workload with no increase in costs outside of employee hrs and insurance (worker’s comp, etc). Then, the next step is to go to 2 vans with that person running the 2nd. Just my opinion.
Just an added thought. I’ve been doing this for 10 rs. now and I find in almost 100% of the cases that need work done today or tomorrow is work that we hate doing. It’s very dirty, pet pee abounds and our profit margins are out the window. It might be different elsewhere, but that my take in my area.
How each franchise owner grows is up to them. What works good for someone may not work as well for another. And A lot of it may depend on the quality of the employee(s) you end up with.
One thing for certain though is if your business is not making as much profit as it should be increasing volume won’t help. And trying to get the prices up is tougher, not easier as you grow. Once that second van is on the road and employees are wanting to work you will feel pressure to drop prices lower and lower to keep the machine going.
So make sure your ducks are in order and your strategy is well mapped out before you begin your quest. Set your prices, know your targets and remember profit is not a four letter word.
IMHO
lot’s of great points, profit is the name of the game but trying to quantify it is the hard part. I attended a seminar awhile back and one of the guest speakers was Ken snow who is the owner of the 2nd largest carpet cleaning company in North America, They have about 150 full time employee’s and 2 full time chemists that go out after the tech’s clean if they are unable to remove a stain and they do this all with a very low pricing structure. The main point of the guys presentation was that higher prices is not always the answer to a bigger profit. The most amazing part of all was the speaker right after him was one of the owners of Dalworth, which is the largest privately owned carpet cleaning company in America and he was in total agreement that he made more profit year after year with multiple price decreases. It seems that if you want to stay a owner operator to maybe a 3 or 4 truck operation you can base it on a higher price multiple but if you want to really grow then it becomes an issue of volume vs price and the most profitable point seems to be just below average prices.
The ability to have a couple of chemist on staff that the only job they have is to go out and wow the customer while at the same time you can compete with the lower pricing guys is pretty impressive. One of the offers that Ken mentioned they run often was 5 rooms for $99, I don’t know about you guys but to me that sounds really cheap yet he makes a higher profit percentage then most of us could ever imagine. On top of all of this he is able to do this all in the Detroit metro area.
I have great appreciation for your hunger and desire to grow. In all due respect, if it sounds to good to be ture it probably is. I hope you didnt pay to attend these seminars. I dont know, I would rather follow the proven Heaven’s Best operating system. You can chase all of the business in the world and attempt to be everything to do everybody but sooner then later you will find this doesnt work. At some point you will need to decide who want to be as a no business can be everything to everybody. In my opinion, a price point of 5/$99 invites a lower end customer with much dirtier carpet, a potential of a lowering of cleaning standards and a potential of a bait and switch mentality, to name a few. I would encourage you to analyze the pricing strategy of the competitors in your market and price yourself somewhere in the middle. A price point of 5/$169-$199 may be the way to go/grow. All of this however, is simply my opnion based on my real life experience in various businesses. Best of luck to ya
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