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It is great to know that so many smart, hard working, dedicated folks are part of this business. It is why Jim and I were so happy to become part of the State Owner community last year.
Since Cody’s posting last Thursday, there has been significant decrease in posting volume on this thread. We have been re-reading all of the posts, and would like to propose a conceptual solution that assimilates everyone’s ideas into a workable plan for discussion.
Firstly, I think we need a clear definition of the problem(s) that the increase in the monthly fee was trying to solve. From our perspective, there are three issues:
1. MCo needs an increase in revenues.
2. Many operators own territories that they are not working, leaving them unavailable to sell to prospective new franchise owners.
3. Heaven’s Best needs a good answer to those clamoring for national / regional advertising.The proposal to increase the monthly royalty fees could be said to solve all of these problems – MCo makes more money, operators are encouraged to work ALL of their territory, and there is a fund for national (or regional) advertising.
The problem with this, as Jim pointed out in his post last week, is that it LOOKS like there is simply a doubling of the fees with no specific value proposition. If we had a near-mutiny among state owners, imagine what will happen in the larger franchise community!
With that in mind, we propose the following solutions:
Problem – Corporate needs an increase in revenues
Solutions:
1. Cody should calculate the additional revenue needed to ensure appropriate profitability
2. Charge for shipping and handling. A declining percentage of the order seems to be used by most companies.. This will allow operators to know what their S&H fee will be at the time of order, as well as provide incentive for placing larger orders (one $200 order costs Cody less to handle than two $100 orders).
3. The difference between needed revenues and expected S&H revenues should be made up with an increase in the price of 101. This can be implemented gradually if necessary.Problem – Many operators own territories that they are not working, leaving them unavailable to sell to prospective new franchise owners
Solution:
1. Implement a monthly per-territory minimum purchase. As stated in other posts, this cannot be universal (different states have sold their territories based on different population calculations). However, a standard can be implemented (one gallon per 100,000 people, and allocated by territory). This would need to be determined between Cody and the individual state owners. Since this is a new provision, it will need to be implemented in new contracts.
2. Given the points made by Dan and Greg regarding operators taking over additional territory, there should be some mechanism for operators to return fallow territory to their state owner. Of course, there can be a time limit on this.Problem – Heaven’s Best needs a good answer to those clamoring for national / regional advertising.
Solution:
1. An Advertising Advisory Board consisting of state owners, city owners, and representation from corporate should be appointed (or elected). This board would do the following:
a. Determine the appropriate programs for national / regional advertising or publicity (if any)
b. Calculate a corresponding budget.
c. Calculate from that budget (based either on a per-operator or a per-100,000 population basis) the monthly fee to be charged to operators.
2. This board would be fiscally responsible to the general franchise community to account for income and expenses.
3. Regional advertising would be allocated to Regional Advertising Advisory Boards.
4. The national advertising budget could be used to run create high quality radio / television ads for use by franchisees, or to actually run national ads (which we would vote against).
5. If this board needed to meet, travel expenses would be paid out of the national advertising fund.If we have missed any problems, or failed to incorporate ideas that work toward solutions, we welcome your feedback as we work together to devise the best solution for the franchise community, the state owners, and MCo.
Of course, we know that Heaven’s Best is not a democracy, and the final decision on all policies will still reside with Cody.
Dennis,
We’ve only done two, so we’ll await feedback from more experienced users, but I don’t see any evidence of wax buildup.
Barry
Well…I called on this today….Amex only offers this for merchants who do less than $2,000 per 12 months in authorizations. So – it won’t work for us (we did over $36k the last 12 months) 🙁
Ammon and others,
Thanks for the tips on this. We just went to our regional seminar and got some training on this. We’re planning to add to our repertoire.
My question is this….
We schedule our jobs with a firm (specific) arrival time. We have a pretty good idea how long each job will last (e.g., 4 rooms will be 90-120 minutes), and can be on time for more than 90% of our jobs.
I really want to add the spot dying, but my big concern is that the timing seems like it could vary widely. I’m not concerned about our initial (training) jobs.
When you area adding the $50-75 for the spots (as described earlier), is the time that you’ve said (20-30 minutes) consistent? Or does it sometimes leak into an hour?
Also, do you usually know that you will be doing this work in advance? Or is it something that you discover when you are on-site cleaning the carpet?
Thanks for your help!
Regards,
Barry
Laura,
One question for you. We feel very nervous about really getting into cleaning leather – we are concerened about the liability that comes with cleaning more delicate / expensive pieces.
Do you find that the training and the leather kit have made you secure enough in your knowledge of leather cleaning to mitigate this kind of concern?
Thanks,
Barry
Laura,
How much leather do you clean? We haven’t bought the new kit yet, as we have cleaned very little leather with the old method.
Thanks,
Barry
Ron,
I think that this is a great idea. We have a newsletter coming up the end of this month – please let us know if you see a big increase in referral business.
Barry
Being bonded is easy and inexpensive. We pay about $150/year, and that is with 5 employees.
Talk to your insurance salesperson (same one who sells general liability insurance).
We do the Washington Home and Garden Show each year. We budget about $2,500 for total expenses annually.
In 2005, we booked nearly $9,000 from the show.
In 2006, the show dates were moved from mid-March to mid-February. We knew that this wouldn’t be good (people aren’t ready yet for spring cleaning), and it did really hurt us – we barely did $3,000 this year! It didn’t help that there was a big snowstorm that nearly shut down the Saturday of the show.
What we do is as follows:
1. We print special literature for this show – with two levels of discount – one if you book during the show, and lower level of discount if you book within 1 month of the show.
2. We stand in the aisle in front of our very professional looking booth, and give out brochures.
3. We confirm appointments on the show floor.
The show in 2007 is back in the March timeframe, so we’re going to do it again – but we woudn’t if it was in February. You can only sell when the buyer is ready to buy!
Hope this helps.
Barry
We booked $11,786.00 in new business from our website in the month of May.
Including repeat business from customers who originally found us on the web, we did $15,477.00.
Total web costs for the month were $3,116.00. This is mostly for google adwords, and Verizon Superpages. About $200.00 spend on service magic.
In Washington, DC and the suburbs there is no doubt that this is one of our best marketing tools. We recognize that the access to high bandwidth connections, affluence of the population, and relative technical skill of the population make our area ideal for web based marketing. Usage falls off sharply as you move into the more rural areas so what works for us won’t work for everyone.
We have refined our website a few times and we keep improving our return each time we do. Testimonials have done a lot to improve our return. I put a voice message on the home page and our web business is up 30% since I did that.
The most important key to managing your return on the website is to watch your keyword lists on google adwords and make sure that you are minimizing the number of clicks from people outside your geographic coverage area, or who are looking for something other than what you offer. You need to monitor it daily using the web analytics tool that google provides. You’ll burn up some money trying to figure it out, but it will pay in the long run. The only way to learn is to dive in and read the documentation on the google website.
In short, the web works for us, but it takes a lot of work to make it work.
One more point about the plug in hybrids (not only Sprinters, but cars as well).
The idea is that you plug them in at night – when the demand for electricty is low. That is when electric rates are at their lowest, so the cost for “topping off” is much less than the cost of gas!
I heard on the radio yesterday that Dodge/Mercedes is testing a new “plug-in” hybrid Sprinter in Los Angeles. The advantage to a plug in is that you can “top-off” the battery overnight. Some folks have converted their standard hybrids into plug-ins, and are able to double their mileage.
We have one (standard) Sprinter now. It gets 22mpg (50% better than our 2003 AstroVan!). We’ll be adding a second Sprinter next month, and then as soon as the hybrids become available, at least one more.
This idea is good on many fronts – firstly, you save $$$ on gas – secondly, better for the enviroment. Finally, what a great way to say to your customers that you are a good corporate citizen!
There are some really good and interesting comments on this board. I thought that I would add my 2-cents worth.
We have just reached the point where we (the owners) are going to be able to almost entirely concentrate on “working ON our business, not IN our business.”
We have just finished training our third full-time employee. We also have one part-time guy who does night and weekend work.
One of our guys has been with us for more than 2 years, the other for just over 1. Last year each guy made over $50,000 gross pay, with benefits (health insurance). Our pay structure is mostly commission – it rewards the guys for excellent service and high productivity. All of our vans are run with one person.
As to some other questions, adding employee(s) does not increase auto or liability insurance. Workmans comp is based on the $$$ that you pay employees, so there is a direct relationship between employees and that cost.
One of the keys for us is training – we spend several weeks before the new person is really in front of customers, and then we really wean him along before we try to push hard on being fast. It is always easier (and more effective) to train someone to do the job right, and then to work on speed, than the other way around.
I hope that this helps.
Mike,
We have four employees today (three full-time and one part-time). One has been with us for over two years, another for one year. The others are relatively new.
We do several things with our employees that you may find interesting. You can get alot of information from our website at http://marketing.heavensbest.biz.
There are a handful of things that I would specifically point out:
1. We pay mainly commission. This commission is calculated based on customer satisfaction (comment cards and calls) and productivity. Details can be found on the site above, in the documents called Position Contracts.
2. We do extensive training. Our guys are out for about 4 weeks before their first job alone. They work for 2-3 additional weeks with a light schedule, so that they can focus on quality first, speed second. There is a training plan on the site as well.
3. We don’t worry about carpet cleaning experience when we hire. Our biggest goal is to find someone who has a presence about them – someone who can command the customer’s respect at the door. Of course, we do want somethings in the resume/application. Those would include:
– keeping most jobs for at least one year
– no major gaps in employment history
– promotions at past jobs
– demonstrated ability to handle physical workI hope that this helps.
