AI transcript
Hey, real quick, this week only is the annual BC Stack Bundle sale.
It’s a chance to get over 60 products related to growing your business for less than $1 each.
The theme this year is growing your income, how to get more traffic, viewers, listeners,
customers, and sales, and it’s a chance to get my new Get Gigs course for half off, plus
you get access to the 60 plus other BC Stack products as a bonus.
If you want to look at it that way, Get Gigs highlights 11 of my favorite customer acquisition
strategies picked up over the last 11 years, over the last 600 episodes of The Side Hustle
Show.
It’s all about breaking through those no-like and trust barriers as quickly and as authentically
as possible so you can get more customers to pay you because after all, getting another
person or another business to pay you for something you already know how to do is probably
the fastest way to increase your income.
But in addition to that, there are resources on email marketing, social media, video, paid
ads, SEO, digital products, and tons more.
I end up ordering this thing every year.
I always pick up a few new ideas to test out.
Make sure to order today through my referral link at sidehustlenation.com/bcstack.
And that’s important because doing so makes your purchase 100% refundable through the
Side Hustle Nation satisfaction guarantee if you don’t find $49 worth of value in the
stack.
Again, that is sidehustlenation.com/bcstack for a great bundle of products on how to
grow your business.
But gotta hurry because this offer ends June 16th, midnight central.
Check it out today, sidehustlenation.com/bcstack and now on to the show.
Here’s an oldie but a goodie from the archives from the Side Hustle Show greatest hits collection.
A service business is one of the fastest side hustles to get off the ground and you can
scale it by hiring other people to deliver the work.
But is there an advantage to staying as a solo operator?
To find out, it’s time for another Side Hustle Showdown.
What’s up, what’s up, Nick Loper here.
Welcome to the Side Hustle Show because you don’t want to swim in a roped off sea.
And tipped to Jimmy Buffett for that one.
Today, we’re tackling freelancing versus building an agency and we’re doing this through the
lens of a couple friends of the show who both run cleaning companies, again, trying to find
guests in similar industries so they can speak each other’s language.
But keep in mind, the stuff that we’re about to cover applies to any service business,
online, offline.
On the agency side today is Chris Schwab from ThinkMade.com.
And when I say agency, I mean basically you’re running the show and other people are doing
the actual labor because you might remember Chris from episode 294, which was a couple
summers ago, discussing how he built the cleaning business to 60 grand a month in revenue without
ever doing any cleaning himself and had scaled back his own involvement to just 10 minutes
a day.
You can find more about Chris at localbusinessmba.com.
On the freelance side, on the solo side, I’m excited to introduce Ken Fagnow from SmartCleaningSchool.com.
Ken’s a former engineer and a father of five who’s got his cleaning business dialed in where
he can knock out the work himself in just a couple days and enjoy five-day weekends
with his family.
Stick around to hear the contrasts between these two entrepreneurs, find out which model
makes the most sense for you, and learn how to avoid the dreaded valley of despair that
often afflicts service businesses.
Notes and links for this one are at sidehustlenation.com/showdown3.
The first voice you hear will be Ken’s on what attracted him to cleaning in the first
place.
Ready?
Let’s do it.
We were just looking for some different options.
The engineering field was not the environment that I wanted to be in.
There was a lot of divorce in there where I was at, and we’re starting a family, and
it was working a ton.
I just saw great flexibility in a side hustle of a cleaning company.
My wife started it.
It was an opportunity to pursue our dream through entrepreneurship.
As you and her doing the work throughout?
In the beginning, it was her and I doing the work, and then she said, “Well, this is your
business now, so I’ll stay home.”
That’s what we always wanted.
We’re her to be stay-home mom, and we homeschooled the kids.
I took over the business 2005, 2006, and been at it ever since.
I’m in my second version of it, so I sold my first one, and we were able to relocate
to our hometown.
That’s a little bit of our story.
I don’t want to take up too much time with that.
Okay.
I’m sure we’ll dive into some of the different nuances there.
Chris, what inspired you to get into the cleaning business?
For me, it was right before my final semester at college at the time.
I was in this place of knowing I wanted to travel the world.
I was in an international relationship, so partly it was commitment to my significant
other, but it was partly that drive to see the world as well.
I knew I had to have some sort of job that would allow me to work remote, and I was deciding
between web development, which I’m not very good at, but at the time I thought I was,
and starting a business.
I decided that one more requirement would be that I don’t want a boss.
I obviously have a great respect for freelancers, but as I hadn’t been in the workforce that
long, I didn’t have much more of an in-depth understanding of how to be your own boss as
a freelancer, because it felt to me like with clients, it was more of a boss situation.
I drifted more towards a traditional entrepreneurship model than I did towards web development,
and I wasn’t super serious, if I’m honest.
I was serious about having something remote and paying me, but I wasn’t super serious
about the idea specifically, but I’d read about some guys on Reddit who had started their
own cleaning companies and had done kind of a follow along style thing.
This was many years ago, they did it now.
I figured that I could set aside $5,000 to $700 over the summer and just try it out as
a side hustle.
I wasn’t super committed to the idea, but it was local.
I felt that a lot of local cleaning companies weren’t marketing very well.
They could be fantastic at the cleaning.
They could be fantastic at customer service, but they weren’t getting enough customers.
I felt like I could do that part of the equation well.
I could market, I could do sales, I could do some of the other business side of things.
I figured if I could bring on some contractors from day one, I’d be able to, at least with
one team, provide them some jobs by the end of summer and earn a little bit back.
I started it kind of from the mindset of a side hustle, but with the intention to grow
it into its own thing where it’d be able to run itself.
That was the reason behind the why behind it.
That’s interesting.
I want something where I could be international or I could be remote.
I’m going to start a local, in-person, surface-based business.
I don’t know if my mind would have gone there, but you’ve figured out how to make it work,
and I think that’s really inspiring.
Chris, do you remember where those first customers came from?
You say, “Okay, this is what I’m going to do this summer.
I’m trying to get these first customers.”
I should add just an addendum to that.
The reason I liked the idea of local was I was so bored of Gary Vee and Grant Cardone
and these other types of, they’re very great entrepreneurs, but I was bored of that type
of business, the super hustle all the time type of business, and softwares of service
businesses.
You heard all the same thing.
In 2016, it was all the same stuff.
I just didn’t, that type of business didn’t appeal to me.
Little did I know it would come.
Local was just something different, and I figured I’d give it a try.
To answer your question, our first customers came from a combination of Craigslist and
Thumbtack, so I wouldn’t recommend Thumbtack in 2020, but back then it was an absolutely
fantastic place to get people, and we had a great follow-up sequence that other people
weren’t using, and it allowed us to get hired hundreds of times that first year.
It was a big source of, our main source, I would say, even of marketing initially.
Very nice.
Ken, what about you?
Where did these first customers come from?
We started our company, we were living at an apartment complex, newly married, we had
our first baby, and the apartment complex property manager, one day, this is how the
business started.
He sees my wife at the balcony, they were already friends, and he’s like, “Oh man,” and my
wife, Teresa, says, “What’s wrong, Brett?”
And she’s at the balcony talking down to him, and he goes, “The cleaners,” and then that
was implied that there’s a lot more to it.
And he just looks up, and he’s like, “Hey, Teresa, you’re at home, do you clean?
Would you like to clean?
If you go get insurance, I can give you some work at the apartment.”
She’s like, “I don’t clean, my husband does, though,” but she said, “I’ll do it,” so
she went and got insurance.
That’s how the business started.
But that’s where our company began with apartment complexes, ours that we got referred to others.
That same property manager connected me to Coal Banker real estate agent, which got me
into a preferred vendor network at Coal Banker, and access to 500 agents in my area.
And I just became a little whipping boy for the first year, like, “Can go here, can go
here,” and I just learned how to do the different aspects of cleaning myself, completely solo.
And from there, that started spawning into, like, it was all one-time jobs, and it led
into recurring jobs over time.
And I developed a little niche of what I would serve, but it started from apartment complexes.
As these apartments were turning over, or…?
Yes.
Okay.
Yes.
Move in, move out, cleanings for apartment complexes, and then that moved into real estate, what
I call presentation, sale-ready presentation cleaning, to get a house ready for sale.
And then those clients would move somewhere, and they wanted to hire me to where they were
moving into, “Hey, can you clean more than once?
Can you clean every two weeks?”
And then just kind of, it was very much a referral.
And like Chris, I didn’t use Thumbtack, but I was using Service Magic back in the late,
in the 2007 to 2013 range.
They were fantastic.
They turned in Home Advisor and Home, I don’t recommend Home Advisor in 2020, but Service
Magic in the beginning, they were fantastic, but that’s where I got my leads from.
Okay.
Are there any similar marketplaces that you see being that have a strong potential today
for somebody getting started?
I think Google My Business is very strong, and it’s free.
Sure.
Just like setting up a profile there.
A local, yeah, Google Local Business profile.
That’s a great way you can do it.
I know Chris probably has his list of them being the same industry.
I personally, since I’m small and work small, I like to develop relationships and go through
networking, connect with people, and get into different various Facebook groups.
I believe Facebook is tremendous, especially where there’s groups of people that might be
hovering in one place that are in a niche that you’d like to serve.
Find the people you’d like to serve, find out where they hang out, and then go hang
out there.
Just like this.
Side hustle nation, people that want to learn how to do a side hustle, they end up congregating
in this tribe.
I said to find where my ideal client hangs out and go serve them.
Yeah.
Chris, so Thumbtack isn’t so good in 2020 anymore.
Are you just relying on the existing customer base word of mouth at this point?
What are you doing proactive marketing on any other channels?
I’d say two things there, and I’ll give you my marketing list as well, what we’re doing
now.
First is, the list is always going to change.
Because of that, you have to build early on a very strong client retention system, because
if you’re always focused on one-time cleans and it keeps changing, you’re going to have
periods of droughts.
If you’re able to convert a significant number of one-time cleans into regular customers
and keep them, that’s where the magic is, and that’s what’s going to sustain you more
than any marketing ever will.
For me, we do residential primarily, but given the situation over the past few months, we’ve
drifted a little bit more into commercial by necessity.
It’s been interesting to note the marketing differences between commercial and residential.
For us though, the common ground between both commercial and residential is, as Ken said,
it’s Google My Business is huge.
It was big when it came out, but every year it’s even bigger.
I’d say in most cities now, Google My Business is more important than Yelp.
There’s still some cities where Yelp is super important, but no matter where you are in
the planet, you want to have a strong Google My Business profile with a lot of reviews
and have it consistently used and updated.
That’s important.
Local service ads, if you’re in North America, is very big.
It’s different than Google AdWords, but they give you a consistent price per call, and
it’s worth the quality of the leads.
Those are the two big ones for us.
Other than that, I would say outside of the Google ecosystem, Facebook ads was very strong
for a while, and then it stopped, but it’s starting to become effective again.
I couldn’t tell you why because I’m not an ads expert, but particularly around seasonal
holidays like Christmas or Thanksgiving, having a strong Facebook ads campaign is a great way
to get customers, and it doesn’t cost a lot.
Interesting.
I’m clean enough for a party or something.
Seeing that we’re both in the cleaning industry here, and you have an audience ranging that
is looking at all different types of businesses, or maybe already in them now, inside hustles,
what’s unique about the cleaning industry, and I’m sure, I know Chris, I’m sure this
is part of his decision process as it was for mine, I wanted to find a business model
that allowed me to build on something, to build a consistent level of recurring income.
It’s like a membership program.
There’s a lot of companies like, hey, plumbing, electricians, carpentry, there are one-offs
everything’s a one-off, unless you can get like a six-month service plan or something.
But with cleaning, they’re designed to be weekly, bi-weekly, every other week, monthly,
and they are fantastic because you can build a tremendous amount of stability in your profits
and make it predictable.
I could not have optimized my company on a one-time model.
The way I optimize it is because it’s recurring, it was predictable, and I recommend if anyone’s
choosing a side hustle, hey, not go pick cleaning, but find something that you have a recurring
model available.
Is it primarily residential for you two, Ken?
In my first business, it was 90-10, 90% residential.
In this business, I’m in the Philadelphia area now, I build it a little differently.
I’m 50-50.
I think it’s also important, a diversification within your own industry if you can find one
that’s more stable and hard times and one will get hit.
So it’s a good question.
I do like your point about recurring revenue, yes, it’s going to get dirty again, yes,
that grass is going to grow again if I’m in a lawn mowing service, yes, the dog is going
to keep pooping in the backyard if I’m in the pet waste removal business.
It’s like, yeah, this stuff makes a lot of sense.
Okay, it lends itself well to a recurring type of client.
Chris mentioned this $500 to $700 in startup costs.
Ken, you mentioned the insurance piece.
Was that the extent of the startup costs for you?
Can you give a sense of what that cost?
Yeah, this is probably one of the most inexpensive businesses that you can start in the planet.
I don’t know if many that are cheaper to do it legitimately, professionally.
The first differentiator, are you required to get insurance?
No, but it’s a major, major trust builder and differentiator for you.
And you’re looking at, like you said, probably $400 to $1,000 per year to get $2 million
of general liability insurance.
And that’s the basic foundation of what you need.
And then the rest of the startup fee or startup costs would just be getting, from my side,
from a solo side, would be the equipment, a vacuum cleaner, some cleaning supplies.
It’s helpful if you have a car that runs.
So those things, I mean, for $1,000, you’re ensuring to do a down payment on it, plus
your basic expenses to get started and equipment.
For $1,000 or less, you’re off and running, and you can make that back in a few jobs.
Chris, what about you, so the five to 700, is that insurance, website, initial marketing
for bidding for jobs, what was that, what did that go towards?
So I can give people some real numbers, because I still remember them.
Five to 700 was the super initial investment, kind of like the week one investments.
I did spend a little bit more that month, but that’s because I actually made some back.
So for us, the five to 700 covered really basic website, the domain name, insurance for
one team.
It’s an ever friendly residential cleaning association.
They’re not around anymore, but at the time they covered independent contractors so that
we use them.
They had cheap insurance for that type of agency that I was doing.
That was the main expenses.
The rest was all pushed towards paid marketing and paying the cleaning teams for trial cleans,
because I would have them come clean my apartment, but I would pay them for that as well.
They knew it was a trial clean, but they still did the work, so they still got paid for it.
If I were to start today though, I’d agree with Ken.
If you could put aside 1,000 to 1,200, that would be a much better place to be than five
to 700.
You could do it on that, but you never want to be that tight with a new business.
So for us, the first month, to give you guys kind of a rough estimate, that first month
when I didn’t know anything, I spent about 1,200 total at the end of that month.
So five to 700 the first week, but we made about 22 to $2,300 in revenue.
So we broke even by the end of the first month, just about.
So your initial investment, it’s going to come in two stages.
It’s going to be what you need to get up and running, but then it’s going to be the initial
funds that you need to actually market with as well.
So you can get jobs for free, especially on the solo side, but if you’re starting the
way I did, you’ll want at least a couple hundred bucks set aside for marketing.
More with Ken and Chris in just a moment, including Ken’s ISO model for service businesses
that’s initialize, stabilize, optimize, and how Chris fought his way through the valley
of despair to come out stronger on the other side right after this.
Are you struggling to close deals?
B2B selling is tougher than ever.
And that’s why I’m excited to partner with LinkedIn Sales Navigator for this episode.
LinkedIn’s Sales Navigator is a sales intelligence platform that helps professionals effectively
prospect and engage high value customers, drive higher revenue, and increase sales performance.
Sales Navigator helps you target the right buyers, surface key signals such as job changes
or which accounts you should prioritize, and shows you hidden allies.
So you can find those buyers that are most likely to convert.
Fueled by LinkedIn’s billion member platform, billion with a B, Sales Navigator gives you
the most up to date first party data, enabling you to unlock conversations with the people
that matter most.
Right now, side hustle show listeners can try LinkedIn Sales Navigator free for 60 days
at LinkedIn.com/SideHustleShow.
That’s LinkedIn.com/SideHustleShow for a 60 day free trial.
At LinkedIn Sales Navigator help you sell like a superstar today.
Just go to LinkedIn.com/SideHustleShow to get started.
This edition of the Side Hustle Show is sponsored by Squarespace.
One of the biggest obstacles I hear from side hustle show listeners is simply dealing with
the technical frustrations of getting a site online and making it look the way you want.
If that sounds familiar, I want to invite you to try Squarespace’s new AI guided design
system called Squarespace Blueprint.
You can choose from professionally curated layout and styling options to build a unique
online presence from the ground up and then tailor it to your brand or business and optimize
it for every device.
It makes it easy to launch your website and get discovered fast with integrated, optimized
SEO tools so you show up more often to more people and grow the way you want.
Whether you sell physical or digital products or provide a service to clients, Squarespace
makes it easy to start selling online and you can make a checkout seamless for your customers
by accepting credit cards, PayPal and Apple Pay and even offer customers the option to
buy now and pay later.
Head on over to Squarespace.com for a free trial and when you’re ready to launch, go
to Squarespace.com/SideHustle to save 10% off your first purchase of a website or domain.
That’s Squarespace.com/SideHustle.
Ken, is there a ceiling to how many new jobs you can take?
Like if your phone rings today, “Hey, I’ve got a new commercial office building.
I need you to come in,” or “I’d love to get a quote from you.
Are you saying, ‘Yeah, I’ll be there at three or I’m good now.'”
This would be the main, maybe one of the biggest cons of staying solo as a freelancer is, sure,
you are limited by your own ability to perform and so if you build a team, you can start
to scale that out.
You say, “Yes, there’s only so many houses or offices that I personally will take or
want to take.”
However, and this brings up a bigger point that I was hoping Chris and I could dive
into because I think it’d be a lot of fun, it’s called, “You’ve got to pick a side.”
There’s two ways you can do this.
You can go to the solo optimized route or you can go and you can build something big
and scale it and do it with teams and do it the way Chris has done it.
I love Chris’s term.
Maybe he can use it, but in the middle is where we all die.
What do you call that, Chris?
It’s coined by a friend of ours, Derek Christian, who’s also in the cleaning industry.
It’s called the Valley of Despair where you’re stuck between both stages.
It’s the adolescent stage in the EMF.
It’s not a good place to be.
Back to your question.
For me, in my solo cleaning school, I run my own solo cleaning company and I’m also
teaching others how to start a cleaning company and how to go through what I’ve built up called
the ISO model, initialize, stabilize, optimize.
There’s phases of growing a solo cleaning business, but always staying solo.
At the end of that rainbow, you have a business that is optimized, meaning you can clean houses
ultra efficient and make really, really good profit per house.
I’ve had over $100 per hour cleaning in solo cleaning and I was doing two days a week at
50 to 60,000 in profit back when I was fully optimized.
Now, I didn’t start that.
I didn’t start there.
It took me time to get there, but see your question, part one of the answer would be,
well, if you’re new, you just take whatever you can get and build your business out and
you work as much as you’re willing to work, and then over time, you start to implement
efficiency improvements, so you take less, you can build waiting lists of customers,
you can start charging more.
There’s lots of little things you can do to basically build this like Tetris-like schedule
that works for you and your family, but produces the goal of income that you’re looking to
produce.
That’s the strategy for you to stack up all the work on two days a week and just knock
it out.
That was what I chose to do in my old business.
My strategy this time around is a little bit different.
I’m probably going to stack up as much as I can on two or three days.
I’d like to get to 100,000 in income this time on two or three days, but I have online
business, so I’m looking to be at home a lot of the week too, and then we’ll see, I may
sell that again.
I don’t know.
If you ever get pushed back from a residential customer, you’re in and out of there in like
45 minutes and you’re like, “100 bucks, like what?”
I wish I was that fast.
Actually, it’s counterintuitive when you think, “Well, hey, you used to be here four
hours, but now you’re only here three.”
People that think that way have a by-the-hour mindset, but really what they really want
is this.
If you ask the customer the question, “I’m going to continue cleaning your house with
excellence.”
It’s going to look awesome.
If it’s anything missed, you let me know, but check this out.
I’m going to finish faster than I was, so I won’t be in your house as long.
You don’t have to worry about the cleaning person being there all day long.
I’m going to be in and out, and as long as I maintain the same level of excellence, wouldn’t
you be happier?
They’re always saying, “Yes, that would be awesome.”
You’re actually doing them a service by being out faster, but maintaining the level of excellence
and continuing to keep that level of trust high between you and the client.
Is that ever frustrate you to get a call?
I just don’t have the capacity to take this on right now.
It feels like I could turn money away, or I could hire somebody at even 25 bucks an
hour to go and do this work for me, a perfectly qualified cleaner to go do this for me and
just take my profit on the top.
I struggled with that for years, because I didn’t just make the decision to stay solo
from the very beginning.
I did have employees for about two years.
I wasn’t good at it.
I really wasn’t, because I was in the Valley of Despair, so I was there.
I experienced it.
Many times, I wondered, “Well, maybe I should dip my toe back in.”
Ultimately, in 2011, ’12, ’13, I decided to stay solo, because I had a big dream of something
I wanted to accomplish that wasn’t cleaning related.
I needed my cleaning business to do something for me.
It needed to be a certain amount of time and a certain amount of money, so that I could
go do another side hustle, ironically.
With that as a goal, I made a decision and say, “No, I’m not going to teeter with turning
down work.
No, I’m going to max out what I personally want to do, get the most I can per client,”
and I had a referral network.
I have friends that I could give other business to, and maybe I could take an affiliate on
that, a small commission on that, or it’s just good faith.
I send them business, and down the road, I get business from them, and so you can look
at it different ways.
I like that.
We had a guest in the SEO space who was booked up with his freelance SEO consulting, started
a very similar thing.
He was like, “Well, I got other people I trust.
I can’t take on your project, but let me send you to this guy.
Hey, would you pay a finder’s fee?”
He ended up building a whole side business just around that referral element.
I was like, “Oh, this is pretty cool.
Chris, what got you through that value of despair?”
Yeah, this is a fun little story time.
For me, it was October 2016.
In the middle of my final semester at university, I was very solidly in the value of despair,
also university of despair, I guess.
It was midterm time, so a lot of despair all around.
We’d grown very quickly from about zero to 20,000 a month in about 90 days, so it was
a ridiculous amount of growth.
What are you thinking at that time?
Are you thinking like, “I am this entrepreneurial alchemist.
I willed this into existence,” and now look at this thing.
It’s funny.
There was so little I understood about business.
A big part of it was luck.
My profit margins were low because I was reinvesting everything back into marketing, so I was barely
paying myself.
Obviously, that’s changed with time, but I was in this situation where I was studying
for exams.
I was answering the phone all day, handling cleaning teams, marketing, and doing everything.
I was really deeply unhappy, and it came to a climax Halloween week where I was booking
seven, eight people a day because it’s Halloween week, and everyone wants their house cleaned
before the party and after the party.
I made such a stupid mistake, and I didn’t ask my cleaning teams if they wanted time
off with their family for Halloween.
I just assumed they would want to work on Halloween day because it’s extra money.
It was just a grave mistake, so I scheduled them in, and then that morning, half my teams
called off, something like six teams called off that day, which is a lot of bookings that
are not getting done.
It was 10 or 12 bookings that were not going to get done, and every other cleaning I searched
for hours that day before calling customers, every other cleaning business in that city
was booked solid, or if they weren’t, they did not have a good reputation, and so I had
to call all my customers and let them know the cleaning that they booked a month ago
was not going to be happening, and so I wouldn’t call it a nervous breakdown, but it was on
the edge.
I had a dozen people screaming at me, and it was at this moment that I decided there’s
no way that I could possibly run this business, even if it makes me a lot of money.
There’s no way that I could deal with this every day for years.
It’s not a business.
It’s this soul-sucking job that I built into myself and called a business, and so for me,
the way that I really escaped it was, well, two things.
I’ll keep it to one, though.
I knew I needed an office manager, but I knew that I couldn’t afford an office manager
full-time.
I didn’t even have an office base, so there was nowhere for the office manager to go.
I’d read the four-hour work week by Tim Ferriss a few times, and he talks about virtual assistance
a lot, and so I thought, is there a way that I could find someone who used to work for a
family business based in the US who could do the majority of what I do, but they don’t
have to be in DC?
I started looking for someone who used to run a family business, and I found two people.
They agreed to try it out.
They’d never worked as VA’s before, but I trained them up to handle most of the office
tasks remotely besides the hiring, and this was another stupid mistake, but I ended up
working out.
A week after I trained them, I took off to Japan for a week, and I just basically ignored
my phone unless it was an emergency, and I just let them handle it.
I threw them in the deep end, and they handled things okay, and I came back, and my business
was still in one piece, and so this was the first inkling that I had that I could run
a business in a very minimal amount of time each day and have it function and not fall
apart.
So, over the next few months, I started to work on systems with them, started to teach
them how to do stuff more in depth, and started to remove myself bit by bit from each different
area of my business.
Okay, very nice.
So, they’re working from home.
They’re working remotely.
They’re fielding your phone calls.
They’re scheduling the different teams on the ground to go to the different addresses,
and you’re just paying them an hourly wage or a salary, but how does that work?
So in the VA industry, and you’re quite knowledgeable about this as well, Nick, we do it by the
minute basis, and so what I do is I have them track their time.
So in an eight hour day, for a cleaning company of my size, we didn’t need someone working
eight hours a day.
We needed someone working maybe two to three hours worth of time, but available for eight
hours a day for when things came in.
And so I worked out a higher rate that I would pay them, but with the agreement that they
would track their time, and instead of paying eight hours a day, it would be on a contract
basis for the amount of work done each week.
And so we paid them to be available during that time, but only to be paid for the minutes
they put in.
Okay.
Interesting.
So it was like based on whenever the phone rings, the clock starts precisely.
And so that was a good middle point that they were happy with because it meant that they
could take on other high paying clients as well during their day.
And they weren’t just beholden to one client because they were their own boss as well.
And so we found a happy medium between us where I could afford them and they could afford
to pay attention to us.
That was the second thing.
You get to use two things and then only give us the one.
The second thing for me was shifting how I thought about my business.
And the EMIF really is a big shift in how you think about your business too.
I hadn’t read the EMIF at this time, but the way I started thinking of my business was
I knew that I couldn’t remove myself from everything all at once because I tried that
initially after the Japan trip.
And there was a big drop in quality because I basically transferred 20 different hats
for myself to two other people.
And so they were overwhelmed.
So I wanted to find a way where I could only have them do working on the areas that they
were good at.
And so I started to look at how big businesses structure their business.
And the way any big or medium sized business structures their business is by having different
department heads for each department.
You have a sales head, you have a marketing head, you have a communications director,
right?
You have a customer service agent.
So I thought, could I outsource each area of my business as if it were a big business
and assign a department head to each one?
And so that’s what I did.
I assigned the customer support and the teams to, so the customer support to VA1 and the
teams to VA2.
So the front end was being handled by VA1 and the back end was being handled by VA2.
Then I outsourced the sales to someone.
Then I outsourced the marketing to someone as if they were a marketing head.
And so I started to think of my business as if it were a big business and how all the
different moving parts work together so that I could outsource them one by one instead of
just throwing it all on someone else.
And so that was the other big thing that really worked for me was finding a way for someone
to step up and take responsibility for each part that they were an expert at.
Were those hires similarly structured in terms of the payment or was it this sprint to get
to where revenue justified those hires?
So we tried a little bit of everything.
We’re pretty solid now, which I can explain, but we tried everything.
We tried salespeople on the ground.
We had people doing door hangers.
We had professional marketing agencies.
But what ended up working for us was finding an expert in their field and negotiating either
if it’s a sales or marketing job, a retainer fee plus ad spend so that they’re earning
something the better they perform for us, or if it’s an office or customer support job
offering them a higher pay rate, but for the minutes that they work instead of the full
day.
And so what I’m saying is there’s no standard pay structure.
It depends on the position that you’re outsourcing in your business at the time because there
are different pay structures that work better for different positions.
But the two most common were paying by the minute per work or coming to some sort of
commission agreement.
Okay.
Gotcha.
Like a performance basis on new business that you bring in for us.
Right.
And so one thing that did not work for us was I tried to have my VAs who were not salespeople.
I tried to entice them to become salespeople as well.
I was going to offer them a bonus for every person that they closed, for every good review
that they got.
But the problem was I was spreading them too thin and they were not salespeople.
They didn’t have years of sales experience.
And so I could have these bonuses in place, but they weren’t getting used that much because
that wasn’t where their strength was.
And so don’t try and fit a square peg into a round hole, right?
Don’t try and force a person that you hire to be something that they’re not.
Gotcha.
And that has been, I guess, a common mistake for people looking for outsourced help is
like, well, I’m doing all of these roles in my business.
Like, why can’t I hire somebody to do that?
It’s like, no, like you can compartmentalize, departmentalize that a little bit more.
You set everybody up for success.
Nick, I would even take that expression, that quote from Chris, the round square peg round
hole, whatever.
I think that applies to, in general, if you’re coming into a business, into a side hustle,
want to know yourself, know your personality, know your goals, what your dreams are.
Do you want to go through the route and become like Chris, or do you want to stay small?
Like I think you don’t have to start small and like there’s so many cleaners that come,
they start small, then they feel like they have to scale.
It’s like required.
Well, if I want to make more money, I have to scale.
And some people don’t want to.
Some, like I’ll stay at home mom, they want to start a side business.
They’re already good at cleaning.
There’s tremendous pros of cleaning.
They’re already good at it.
They can make great money and they can be flexible.
They’re scheduled.
They can clean when they want.
It’s very therapeutic for them.
It relieves their stress while they’re doing it.
And they can bring home great money.
And then I don’t want to hire people.
I don’t want to scale.
And down the road, they might want to, but it’s just, some people may just want to pick
one of these two sides as per the name of this particular podcast.
That’s a really good point, me and Ken were talking before as well, about it’s very easy
these days to be sold a dream that’s not yours.
And I think that’s always been a problem in business, but now, so more than ever with
movements like the digital nomad movement or becoming a virtual assistant, which the
term is always expanding.
It’s almost meaningless at this point.
You need to be very clear on what your end goal is very clear.
For me, when I started, my vision of what I want my business to be has changed quite
a few times over the years.
I have the lifestyle of what I originally wanted, but the vision of what it will be
at the end is very different than it was at the start.
And if you end up buying into a dream that’s not yours, it’s going to get you stuck.
And maybe you’ll do well for a year or two years or five years, but you’ll eventually
get stuck because you, you reach a stage where you hit the initial goal that you had in mind,
but you never have a bigger end goal.
And so you don’t, you can’t get unstuck unless you actually map that out.
And so mapping that out at the beginning is so important.
And with Ken, for example, in our industry, it’s very common now, and I talk about this
all the time, because this is the way I run my business.
It’s very common to push solo cleaners.
You’ll see it in every thread and every comment, a solo cleaner says they’re overwhelmed.
The second they say that there’s a hundred comments saying you need 10 systems in your
business.
You need two virtual assistants.
It’s the same advice all the time, but it’s not right for that person.
If you read what that person wrote and you listen to what they want out of their business,
you’re telling them very bad advice.
It’s good generic business advice, but it’s bad personalized advice.
And so you have to be very clear on what that person and you yourself went out of your business
before you can find a way to get to whatever the next stage is for you.
Yeah, I like that.
Don’t get sold a dream that’s not yours.
Kind of know where you’re going, know what you want to get out of this thing, and go
down that path.
Like even if it’s quote the slower path or if it’s going to lead you through this valley
of despair, whichever it is, like know where you want to take it.
And Nick, there’s, there’s so many people, I believe listening to this podcast, they’re
in a job that they don’t like.
How many people, I mean, they got a taste of this work from home freedom.
Oh man, I got to go back to that place at some point.
And maybe it rekindled the dream, the fire, like I want to get out, I want to get out.
And they make their dream, like I want to have my own business on the side.
And maybe you’ve seen this and people have you’ve interacted with and like the dream
becomes I want a side hustle.
That’s my dream.
And then they get a side hustle, they get out of their job and they’re doing their side
hustle, they’re doing their dream, but then they realized that the side hustle wasn’t
the dream.
They made it the dream and they become unhappy with what they’re doing.
And they don’t get themselves, they don’t attach their why to something that’s emotional
quickly with an end goal, they’re going to phase out and they’re going to end back up
at that desk they were just sitting at.
So that’s a good point, Ken.
I guess I would say then what we’re all saying here is you can transition later if you need
to because your goals and your life will be different.
But when you start your side and also your business, you want to start your business
as close to the stage you want to end up at as possible.
So day one, you want to be as close to that stage as possible, whether you want to be
a freelancer and optimize your income then, or you want to run an agency style business
where you’re not doing the work yourself.
As soon as you start your business, you have to be as close to that end stage as possible
because it’ll make everything easier if you can versus Chris, you going out and cleaning
in the early days, like, I want to test this out, I want to see how I like it.
And then I’m going to hire people later.
It’s like, no, I’m going to hire people from the very onset.
Right.
So this is like from my own personal stress and mistakes and breakdowns.
I knew I wanted to travel, but that was it.
It’s a very vague goal with business.
I want a business that lets me travel.
That’s the most generic business in the world these days.
And so I got stuck in this valley of despair, this adolescent stage in the emeth, as he
calls it, because I wasn’t clear on what I wanted.
And so I had a job that was 12 or 14 hours a day instead of seven or eight hours a day
because I was pedaling my feet.
I didn’t know where I was headed.
I didn’t have any road map towards any end goal.
The vague goal that I had was grow my business bigger and then somehow skip a stage and then
not have to run my business.
There wasn’t a path there.
So you have to have it mapped out.
Yeah, step one idea, step two, question mark, question mark, step three, profit.
More with Ken and Chris in just a moment, including how Chris runs ThinkMades in just
five to 10 minutes a day and how Ken sold his original cleaning business, even though
it was centered on him doing the work.
I never thought I’d say this, but another spreadsheet of mine has bit the dust.
It was my net worth and investment tracking spreadsheet where I would dutifully log into
a dozen different accounts every month to update it and see where we were at as a family.
And you know what killed it?
It was our sponsor, Monarch.
Monarch is the top rated all-in-one personal finance app.
It gives you a comprehensive view of all your accounts, investments, transactions, and more,
create custom budgets, track progress toward your financial goals, and collaborate with
your partner.
And now, at Side Hustle Show, listeners get an extended 30-day free trial when you go
to monarchmoney.com/hustle.
So on top of saving me a bunch of time every month from logging into all those different
accounts and copying in the numbers, the interface is way better and way more intuitive than
my old spreadsheet ever was or ever could be.
I love being able to customize my Monarch dashboard to highlight the stuff that’s most
important to me, monthly cash flow, net worth, investment performance, and you can also set
up automatic rules for transactions and notifications.
And finally, unlike other personal finance apps, Monarch doesn’t sell your data.
So after trying out Monarch for myself, I understand why it’s the top rated personal
finance app.
And right now, Side Hustle Show listeners get an extended 30-day free trial when you go
to monarchmoney.com/hustle.
It’s m-o-n-a-r-c-h-m-o-n-e-y.com/hustle for your extended 30-day free trial.
Did you know that roughly half of Side Hustle Nation hasn’t started their Side Hustle yet?
If that’s you, I get it.
Starting and building a business is tough.
It takes more than just an idea, there are tons of moving parts, and it’s a bit like
trying to assemble your airplane in the middle of takeoff.
Thankfully, our sponsor Taylor Brands is helping Side Hustle Show listeners make that leap
and make it all a lot easier.
Their comprehensive platform guides you through every step, making sure you have everything
you need all in one place.
Think of it like you’re behind-the-scenes partner for things like LLC formation, licenses
and permits, getting an EIN, setting up your business bank account, bookkeeping and invoicing,
insurance, logos, trademark protection, and a lot more.
Taylor Brands helps you handle it all seamlessly.
But to get you started, Side Hustle Show listeners get 35% off Taylor Brands LLC formation
plans when you use our link.
That’s TaylorBrands.com/SideHustle.
Taylor Brands like a Taylor for your clothes, T-A-I-L-O-R-B-R-A-N-D-S.com/SideHustle.
Start your business journey today with the help of Taylor Brands.
Chris, can you give a sense of the time that you’re putting into operations today?
Sure.
So these days, this is another funny story me and Ken have talked about.
You’re going to hear a lot of these stories.
So for me, I spend about five to 10 minutes a day on my cleaning business.
I work all day, but on my other businesses these days.
And it’s hard for people to believe that because it’s a business with people in it.
It’s a very people-intensive business, the cleaning industry.
And there’s a lot of moving parts.
But this is the power of having an agency-style business that you’ve learned to work well
with and that you have hired the people to be in the right places.
So for me, I have my office managers handling the office work.
I have a sales guy, a marketing guy, a bookkeeper handling those parts of the business.
So at the end of the day, the only thing that I actually need to do is check in with them.
And sometimes I’m bad at that too.
Sometimes I won’t check in with them for a couple of days, and then they get annoyed
at me, but I won’t check in with them.
But the only thing you really need to do is jump in and say, “Hey, how’s it going to
each person in your business in different areas?”
And if everything’s going well, you can log off.
And if it’s not, you can chat with them for a few minutes and come up with a solution.
Me and Ken, we’re talking, a lot of people get stuck with a mentality that business has
to be a lot of work.
And it does it first.
It does have to be a lot of work at first.
And if it doesn’t, you find a unicorn.
The first two to five years, your business will be a lot of work.
But I talked to people who’ve been in business since 1979 or 1985, and they’re still working
eight or 10 hours a day in their business.
They’re doing something wrong there if that’s the case.
There’s no judgment there, but they’ve had time where they should have been able to work
on each part and optimize it a little bit more.
What I guess I’m saying is you have to be able to measure your progress and you have
to see how other people who are a step or two ahead of you are operating their business
so that you know how to actually get to that stage as well.
So I was talking to a guy in one of the Facebook groups in the cleaning industry.
He will sit there, and he’s been in the group for years, and he’s never said a single positive
thing.
He calls everyone doing better than him a scam.
We’ve all seen these people, and it’s impossible to run a business in 10 minutes a day.
But I told them there are tens of millions of business owners who are not in their business
at all.
There are so many shopkeepers.
There are so many textile industry owners.
There are so many people in every industry imaginable who are business owners who haven’t
touched their business in years because they have the right people in place.
It’s a normal evolution in business to eventually have someone in place handling each part of
it for you so that you’re able to just oversee the big picture.
If you’re stuck in a mindset where you think business has to be work, take a step back and
look at what people who are a little bit ahead of you are doing.
And if they’re still working just as hard as because if they’re not, which I’d bet you
that they’re not, then this is a limitation that you’re facing yourself.
You need to reframe how you start working on your business again.
Now, Ken, 5 or 10 minutes a day, doesn’t that sound appealing?
Well, sure.
He chose that path and he has owned it and he’s optimized it and I applaud him for it.
I didn’t choose that path.
Now, what’s nice is if you are a freelance solo, you can choose that path at any point
if you want to.
You always have the option.
What Chris and I are both saying, it sounds like if you’re going to get started in this
business or any, go grab the e-myth book.
And that because you really, I’ll give an example too, of a company that didn’t grab
the e-myth book right away and I found another cleaning company, probably in the same group
that Chris found his gentleman and we got on a phone call and I was trying to help them
out and after just hearing their numbers, I cringe and I feel sorry for them.
And they have a good business.
It’s doing $400,000 in revenue, which is really good.
And digging in further, I find out, okay, so you’re in the office.
You’re working those eight hour, nine hour days handling everything, six days a week,
their husband and wife with kids, six days a week at the office, not seeing their kids
much.
And out of a $400,000 revenue, they’re pulling out $30,000 to $35,000, $30,000, $35,000
in a salary and the business is doing no profit.
And I just pause and I said, well, let me ask you a question, just a contrast really.
That’s your business, $400,000 in revenue.
You’re working six days a week, you’re hardworking and you’re keeping $30,000.
My business is just me and my revenue is not even $100,000, but yet my profit is double
yours at $60,000 and I’m only working two days a week, not six.
I’m working one-third of the time and making twice as much.
I said, so what do you think is wrong with that picture?
And just that same mindset that Chris was talking about, it just didn’t register, we
didn’t talk again, I wish them well and there’s a lot of that and that company, they started
off with a dream of growing and growing and they just, oh, I got too many clients, I need
to bring on some employees and it’s always the growth happens and then they try and fix
it with systems and then they’re supposed to lead with systems and then let the growth
fill in.
They do it backwards and they get themselves in that value of despair and I didn’t want
to go that route.
So yeah, Nick, five and 10 minutes does sound good, but I was perfectly happy with what
I had optimized, I mean, five-day weekends and still making enough money for my family
and it gave me other days of the week to work on my other side hustles to make other income,
which I was able to build up an online business during that time and I was with my kids.
So that was the path I chose.
So I’m not saying that I prefer Chris or Chris prefers mine, I think each of your listeners
will have to decide if they want to go into a side hustle.
They need to pick a side, that’s what the point is.
Go small and optimize and find your perfect business or go big and do it right, but don’t
get stuck in the middle.
Yeah, they bring up an important point about the profit margins and being able to pay yourself
and minding those.
Chris, is there a target margin that you’re shooting for on a per job or per month basis?
Okay, it’s a really good question.
It ties into exactly what Ken was saying with the guy he just talked to.
Profit margins, the more you outsource through your business, are going to be lower.
So you’re going to have to build a bigger business to get the same pay because you’re
paying everyone to do the work for you, right?
It’s not cheap to do that.
For us, we’re in an industry where there’s a big difference between profit margins with
employees versus contractors.
So it’s a little hard to generalize, but generally, because I work with painters and lawn care
guys too, I have some general knowledge of the local industry.
Generally in this industry, you want to aim for between 8% and 30% profit.
If you run a massage parlor, for example, and you have a physical location that you’re
paying for and beds and therapists, I know a guy who ran a $70,000 month massage parlor.
His profit was good in the industry and he was profiting 8% a month, but that was really
good for him.
Most people weren’t profiting anything at all in that industry.
In the cleaning industry for us, the way I’ve set up my business, if you really truly want
to do minimal work, the owner will pay themself between 10% and 17% of revenue by the end of
the day.
I’m closer to the 10% because I outsourced absolutely everything.
I think it works out to between 12% and 14%.
So if my revenue is $500,000 a year, I’m only going to be making $65,000 or so from that
business, for example.
But you’ll need to work 10 minutes a day, so trade off.
But you do have a lot more liability.
You have a lot more chances for one of your teams to screw up by accident or for a customer
to be unhappy.
So there is a lot more risk that you’re taking on.
If you’re doing 300 or 400 jobs a month versus 30 or 40, there’s a lot more stuff that can
go wrong as well at the bigger scale.
And so that’s a risk that I take, but it is a bigger risk.
Leave yourself more open.
Do you have any of those nightmare scenario stories outside of the Halloween episode,
where something bad happened with one of these crews or on somebody’s property?
This is a little specific to the cleaning industry.
I actually don’t know if I can say this one on there.
Is this a family-friendly show?
Keep it PG.
I’ll tell you after the call.
This is not a PG story.
Okay.
It’s not.
But we haven’t had too many bad ones.
One of the ones we did have, though, was a person who was selling their house.
And we take before and after pictures.
We ask people for permission to do that.
We clean their house very well.
It was actually our A team cleaning that house, and they really are a truly amazing cleaning
team.
And they did a great job.
And there was no scratches left.
Again, we had the before and after photos, and they must have forgotten that we took
those because they scratched up their marble surfaces, and they scratched up different
areas of their house, like the fan above the stove tops.
And then they sent that to us, and they said, “Our team damaged it.
They were going to sue us for the damage.”
They were trying to basically sell the house and make a lot of money out of us by damaging
their own equipment and their own household.
And luckily, we took the before and after photos, otherwise we probably would have been
screwed.
Oh, my gosh.
Yeah.
Was that something like a liability policy would typically cover if you hadn’t had that
backup?
Well, yes and no.
Yes, if it’s unintentional, which wasn’t our fault at all, but it would cover it was unintentional.
But the way they were describing it, I think they would have actually had a pretty compelling
case to make some money out of us.
So they were trying to hold this hostage from damage that they caused themselves.
So there are things like that.
There are typical things like people leaving money in weird spots to see if the cleaner
will take it.
Our cleaners always text us a picture of it and we laugh about it, but people will test
you in little ways.
So there’s always things like that.
That’s interesting.
I never, okay.
Yeah, like here’s the sock drawer.
That’s kind of funny.
Do you ever get the threat of, so you’re taking a margin on top of this labor, do customers
ever go like, “Why am I going through this company?
Why don’t I just work with this team directly and save money or pay them a little bit of
it more?
Like just cut out the middleman.”
Does that ever come up?
Sure.
Yeah.
Early on, before I knew how to deal with that, that hit us very hard.
The first year in business, a great team of ours was slowly siphoning off clients of
ours to build their own thing and they did successfully.
We basically did the marketing for them and they built their own cleaning business and
stole those clients.
It’s very rare.
I’ve talked to so many clean business owners.
It happens, but it’s so rare that this actually happens.
But there are occasions where cleaners will take customers’ years behind your back.
I was going to say, they need to have the mindset of an entrepreneur to be successful
with it.
There’s a lot of folks that work in team cleaning systems.
They just want to do the work.
They don’t want to do the business.
Then when they try, there’s a typical, “Oh, I’m good at the work.
I can make more money because I run the business,” but then they don’t know how to run a business.
They don’t have the mindset.
They haven’t read the books.
They haven’t listened to the podcast like this and they miserably fail and then they
end up, “Hey, can I have my little job back?”
It’s bad for everyone when that happens.
I know companies that when they see entrepreneur like Tendencies or Desire in their employees,
they’ll encourage them and say, “You know what?
You want to go out on your own?
I’ll help you.”
That’s totally fine.
You can help the community and provide another cleaning company in the area.
There’s enough houses, enough offices to be cleaned.
Trust me, we’re not that competitive.
We tend to help each other out a lot.
Look at me and Chris.
We’re in the same industry.
We’re friends.
We help each other.
Well, you’re in different cities.
That helps.
He’s in London.
But what he’s saying is absolutely true.
I’ve helped several people start a cleaning business in D.C. where we’re based.
It’s never been a problem.
I think we’ve ever once had a customer conflict between each other.
If you’re even in a medium-sized city, there’s so many people who need cleaning or so many
people who need a local service, there’s no way that you’re going to be interfering with
each other unless you’re really determined to.
Well, and this is one of those examples, too.
The pie just continues to get bigger as more and more people outsource this chore versus
it’s probably orders magnitude what it was 20, 25 years ago or something.
That’s a cool place to be in this rising tide.
Ken, early on you mentioned selling the original business.
I’m curious, if it’s you doing the work, what is the asset that you’re selling?
Just the customer list?
I’m curious how that works.
It was.
I went through a pretty tedious process with this.
There was lots of online resources I was able to find on how to evaluate your business.
I did so.
There was nine different points.
I honestly evaluated that and it became a profit multiplier.
The ones about, well, you doing the work, I got a low grade there, obviously.
But the ones on customer retention, when my average customers were five years and they
were totally loyal to the business, and yet to me, obviously, but I had to find the right
person to fit in to my spot.
Then things like keeping amazing books, keeping your numbers, those are so vital.
The brand that you had, there’s little factors on how the recurring model.
I had a really good multiplier, it was around three, and then I looked at some comps from
a Biz Buy/Sell website, and I was able to come up with a price that seemed reasonable.
You have to know how to shop it around.
I did not sell it to another cleaning business because that wasn’t going to be the max I
could get for it.
I sold the dream, not the business.
I found someone that was working $16, $17 an hour, that was a good friend of mine already,
that he was not happy with his job, he was 25 years old.
He just wanted something more.
He wanted his own business, flexibility, and he was hurting his body operating these machines
he was doing.
I just presented him a dream and said, “Here’s what I’ve been doing.
I’ve built a company 15 years.
I got all these little clients.
Here’s what it’s worth.
Here’s what it does.”
If you were to take this on, you could triple your income, and you could do it on a fraction
of the time you’re doing now.
That allows you to pursue the other things in your life that you’d like.
He was so excited.
We were sitting at Starbucks a few days later, talking about this for three hours.
Within two weeks, he’s going on his first airplane ride ever to go to a cleaning conference
with me in Dallas, and two months later, he’s got the down payment money to buy the business,
and I go through a process to train him and to go through all of my clients and work out
arrangements.
Some people didn’t take the transfer, and I worked that into the price.
People said no, but most of them did.
It was a wonderful transition.
You got to find the right person.
I’ll tell you, you can sell a solo business.
If you do it right, you have to sell the dream, like the dream of what the business can do
for him.
Here he is.
It’s two years later, Nick.
Everything I sold him would happen for him.
He has done it.
I’m so proud of him.
His name is Ian Trainor, Albany Pure Cleaning, and Albany, New York, where I used to be.
His business is cruising.
He’s getting clients on his own.
He’s fully trained.
He’s teaching me some things now, actually, but his income is triple what he used to be,
and he’s working the schedule he wants.
He’s achieved his dream, and he’s thankful.
All right.
That’s an important note, sell the dream, and not in a scammy, sleazy way, but because
a typical business buyer investor type is like, “I don’t want to touch this thing.
The owner was doing all the work.
I want to be more hands-off and just get a return on my money,” so it’s like, you got
to find a different type of buyer that’s still a sellable asset because of this recurring
nature, but just have to position it a little bit differently.
Chris, do you think, I mean, is that the end game for think-mades?
Like, you’re going to have a big exit down the road?
What do you want to take this thing?
No, and this is so controversial what I’m going to say, but I’m going to say it anyway.
It’s funny, again, me and Tim were talking about this, and you’re going to hear that
a lot.
I’ve really changed this past year and a half on what I want out of my businesses, and I’ve
become a lot more clear, precise than what I want.
For me, what’s important is giving back to my local communities, and there’s certain
ways that we’re doing that now that we weren’t financially capable of before.
So I’m starting not single-mindedly, but I’m starting to reposition the way I view my businesses
and the way they’re going to continue growing in the future towards community service.
So they’re not nonprofit, but they’re like a nonprofit type of situation where I’m guiding
them towards supporting organizations that are really important to me.
So that’s one thing, but the other thing is, I actually have reduced intentionally the
size of my business the past year and a half of think-mades.
We were breaking that seven-figure barrier, and I was reaching a point where there’s
a couple of different stages.
When you go from zero to six-figure business, that’s your first business usually.
That’s where you start to learn about systems, and you start to put them in place.
And then from low six figures to low seven figures, there’s a whole new set of systems
that you have to put in place, and a whole new set of people that you have to put in
place, and a whole new type of work that you have to learn.
And every big chunk of revenue that you add, you have to keep having your business evolve.
At one time, relearning and redoing all that appealed to me.
But these days, I actually am very comfortable with the way my business runs, where it’s
at, the profit margins it has, the client retention that it has.
And so I’ve come to a point where it’s actually not desirable to continue growing it, because
I’d have to sacrifice more in order for it to continue growing, both of my time and
my money.
And I’d have to ask more of my people.
For us, the company culture is very important.
I also run my VA agency.
And one of the big things for us when we hire our VAs is that they’re coming on because
they want their own life too.
They don’t just want to work from home job.
They want their own work life balance as well.
And we promise them that when they come on with us.
And that’s what I want for my cleaning teams as well.
And so if I were to continue growing bigger, I’d be pushing and pressuring my teams and
my managers more than maybe they’re capable of, or I’d be taking more away from their life
just to continue growing a little bit more.
And so now at the stage amount in my businesses, it’s all about balance, a balance between
giving back to my local communities, but also a balance not just for me as the owner, but
for the people who work for me.
And so we’re finding a sweet spot where we don’t actually need to grow too much more.
That’s awesome to hear.
I think that’s a good place to wrap this up as well with like finding that sweet spot.
Having the business support the lifestyle that you want, support people, support the
communities rather than having it just be a drain and something that you dread doing
and all the things that can go into that pursuing growth for the sake of growth.
Chris mentioned his VA company, that’s inovalocal.com, I-N-O-V-A local.com specifically built for
local service type of businesses like cleaning companies and localbusinessmba.com.
Like you said, hey, only 10 minutes a day on cleaning operation, but lots of other projects
in the fire.
I’m always excited to see what you’re up to.
Check it out, localbusinessmba.com.
Ken is over at Smart Cleaning School.
Any parting shots closing arguments before we wrap up here, Ken?
I would say this.
You need to really figure out why you’re starting a business and what you’re trying to accomplish
and take this podcast episode because we are two diverse and two contrasting models to
one industry, and I think this contrasting model could apply to other business models
out there.
I think it’ll be very similar, so figure out what kind of a business owner you’d like
to be.
Would you like to do the work because you love the kind of work, you could be therapeutic,
you love the feeling of it, and hey, you’d love to stay small and optimize and have four
or five-day weekends.
Or do you want to grow it big and go through that value to spare and push through it and
get to the other side where Chris is at and then be able to pursue that lifestyle and
freedom and the other end of it?
My biggest takeaway is what we talked about already is just pick a side, don’t get stuck
in the middle, and both Chris and I, I’m sure Chris would agree that both of us are available.
If you just want to bounce ideas off us, I have a podcast, Solar Cleaning School, you
could check that out.
Chris has plenty of resources.
I’m available, and so Nick, my takeaway is just pick a side and don’t question it.
Pick a side, set a goal, go after the goal, and make it happen.
I like it.
Chris, any closing arguments to add or are you good?
That was great advice.
I wish I had something profound to say, but I don’t.
I guess the only thing I’d say is it’s all about balance.
It’s easy when you start your business, whether it’s going to be a solo or an agency, whatever
stage you’re at.
It’s very easy to get consumed by it, but you have to put limits in place.
You have to have sacred time for exercise, for family, for other parts of your life.
Otherwise, it will become all about business, it will become all about money.
Even if you never intend that, it might be years before you get out of that trap.
All I’d say is go with the intention to work hard, and honestly, but make sure that you
have balance as well when you start your business.
Sounds good, guys.
Really appreciate you joining me.
Really appreciate your involvement and engagement inside the Sinocell Nation community, and
we’ll catch up with you soon.
Again, big thanks to Chris and Ken for sharing their hard-earned wisdom in today’s show.
Be sure to check out Chris’s stuff at localbusinessmba.com, and you can grab Ken’s solo cleaning
a quick start guide at smartcleaningschool.com.
That is it for me.
If you liked this conversation or any other Side Hustle Show episode, be sure to tell
a friend about it, and then hit the subscribe button in your podcast, Player App.
Thank you so much for tuning in.
Until next time, let’s go out there and make something happen, and I’ll catch you in the
next edition of the Side Hustle Show.
I’ll see you then.
Hustle on.
This edition of the Side Hustle Show is sponsored by Squarespace.
One of the biggest obstacles I hear from Side Hustle Show listeners is simply dealing
with the technical frustrations of getting a site online and making it look the way you
want.
If that sounds familiar, I want to invite you to try Squarespace’s new AI-guided design
system called Squarespace Blueprint.
You can choose from professionally curated layout and styling options to build a unique
online presence from the ground up, and then tailor it to your brand or business and optimize
it for every device.
It makes it easy to launch your website and get discovered fast with integrated, optimized
SEO tools so you show up more often to more people and grow the way you want, whether
you sell physical or digital products or provide a service to clients.
Squarespace makes it easy to start selling online, and you can make it check out seamless
for your customers by accepting credit cards, PayPal and Apple Pay, and even offer customers
the option to buy now and pay later.
Head on over to squarespace.com for a free trial, and when you’re ready to launch, go
to squarespace.com/sidehustle to save 10% off your first purchase of a website or domain.
That’s squarespace.com/sidehustle.
It’s a chance to get over 60 products related to growing your business for less than $1 each.
The theme this year is growing your income, how to get more traffic, viewers, listeners,
customers, and sales, and it’s a chance to get my new Get Gigs course for half off, plus
you get access to the 60 plus other BC Stack products as a bonus.
If you want to look at it that way, Get Gigs highlights 11 of my favorite customer acquisition
strategies picked up over the last 11 years, over the last 600 episodes of The Side Hustle
Show.
It’s all about breaking through those no-like and trust barriers as quickly and as authentically
as possible so you can get more customers to pay you because after all, getting another
person or another business to pay you for something you already know how to do is probably
the fastest way to increase your income.
But in addition to that, there are resources on email marketing, social media, video, paid
ads, SEO, digital products, and tons more.
I end up ordering this thing every year.
I always pick up a few new ideas to test out.
Make sure to order today through my referral link at sidehustlenation.com/bcstack.
And that’s important because doing so makes your purchase 100% refundable through the
Side Hustle Nation satisfaction guarantee if you don’t find $49 worth of value in the
stack.
Again, that is sidehustlenation.com/bcstack for a great bundle of products on how to
grow your business.
But gotta hurry because this offer ends June 16th, midnight central.
Check it out today, sidehustlenation.com/bcstack and now on to the show.
Here’s an oldie but a goodie from the archives from the Side Hustle Show greatest hits collection.
A service business is one of the fastest side hustles to get off the ground and you can
scale it by hiring other people to deliver the work.
But is there an advantage to staying as a solo operator?
To find out, it’s time for another Side Hustle Showdown.
What’s up, what’s up, Nick Loper here.
Welcome to the Side Hustle Show because you don’t want to swim in a roped off sea.
And tipped to Jimmy Buffett for that one.
Today, we’re tackling freelancing versus building an agency and we’re doing this through the
lens of a couple friends of the show who both run cleaning companies, again, trying to find
guests in similar industries so they can speak each other’s language.
But keep in mind, the stuff that we’re about to cover applies to any service business,
online, offline.
On the agency side today is Chris Schwab from ThinkMade.com.
And when I say agency, I mean basically you’re running the show and other people are doing
the actual labor because you might remember Chris from episode 294, which was a couple
summers ago, discussing how he built the cleaning business to 60 grand a month in revenue without
ever doing any cleaning himself and had scaled back his own involvement to just 10 minutes
a day.
You can find more about Chris at localbusinessmba.com.
On the freelance side, on the solo side, I’m excited to introduce Ken Fagnow from SmartCleaningSchool.com.
Ken’s a former engineer and a father of five who’s got his cleaning business dialed in where
he can knock out the work himself in just a couple days and enjoy five-day weekends
with his family.
Stick around to hear the contrasts between these two entrepreneurs, find out which model
makes the most sense for you, and learn how to avoid the dreaded valley of despair that
often afflicts service businesses.
Notes and links for this one are at sidehustlenation.com/showdown3.
The first voice you hear will be Ken’s on what attracted him to cleaning in the first
place.
Ready?
Let’s do it.
We were just looking for some different options.
The engineering field was not the environment that I wanted to be in.
There was a lot of divorce in there where I was at, and we’re starting a family, and
it was working a ton.
I just saw great flexibility in a side hustle of a cleaning company.
My wife started it.
It was an opportunity to pursue our dream through entrepreneurship.
As you and her doing the work throughout?
In the beginning, it was her and I doing the work, and then she said, “Well, this is your
business now, so I’ll stay home.”
That’s what we always wanted.
We’re her to be stay-home mom, and we homeschooled the kids.
I took over the business 2005, 2006, and been at it ever since.
I’m in my second version of it, so I sold my first one, and we were able to relocate
to our hometown.
That’s a little bit of our story.
I don’t want to take up too much time with that.
Okay.
I’m sure we’ll dive into some of the different nuances there.
Chris, what inspired you to get into the cleaning business?
For me, it was right before my final semester at college at the time.
I was in this place of knowing I wanted to travel the world.
I was in an international relationship, so partly it was commitment to my significant
other, but it was partly that drive to see the world as well.
I knew I had to have some sort of job that would allow me to work remote, and I was deciding
between web development, which I’m not very good at, but at the time I thought I was,
and starting a business.
I decided that one more requirement would be that I don’t want a boss.
I obviously have a great respect for freelancers, but as I hadn’t been in the workforce that
long, I didn’t have much more of an in-depth understanding of how to be your own boss as
a freelancer, because it felt to me like with clients, it was more of a boss situation.
I drifted more towards a traditional entrepreneurship model than I did towards web development,
and I wasn’t super serious, if I’m honest.
I was serious about having something remote and paying me, but I wasn’t super serious
about the idea specifically, but I’d read about some guys on Reddit who had started their
own cleaning companies and had done kind of a follow along style thing.
This was many years ago, they did it now.
I figured that I could set aside $5,000 to $700 over the summer and just try it out as
a side hustle.
I wasn’t super committed to the idea, but it was local.
I felt that a lot of local cleaning companies weren’t marketing very well.
They could be fantastic at the cleaning.
They could be fantastic at customer service, but they weren’t getting enough customers.
I felt like I could do that part of the equation well.
I could market, I could do sales, I could do some of the other business side of things.
I figured if I could bring on some contractors from day one, I’d be able to, at least with
one team, provide them some jobs by the end of summer and earn a little bit back.
I started it kind of from the mindset of a side hustle, but with the intention to grow
it into its own thing where it’d be able to run itself.
That was the reason behind the why behind it.
That’s interesting.
I want something where I could be international or I could be remote.
I’m going to start a local, in-person, surface-based business.
I don’t know if my mind would have gone there, but you’ve figured out how to make it work,
and I think that’s really inspiring.
Chris, do you remember where those first customers came from?
You say, “Okay, this is what I’m going to do this summer.
I’m trying to get these first customers.”
I should add just an addendum to that.
The reason I liked the idea of local was I was so bored of Gary Vee and Grant Cardone
and these other types of, they’re very great entrepreneurs, but I was bored of that type
of business, the super hustle all the time type of business, and softwares of service
businesses.
You heard all the same thing.
In 2016, it was all the same stuff.
I just didn’t, that type of business didn’t appeal to me.
Little did I know it would come.
Local was just something different, and I figured I’d give it a try.
To answer your question, our first customers came from a combination of Craigslist and
Thumbtack, so I wouldn’t recommend Thumbtack in 2020, but back then it was an absolutely
fantastic place to get people, and we had a great follow-up sequence that other people
weren’t using, and it allowed us to get hired hundreds of times that first year.
It was a big source of, our main source, I would say, even of marketing initially.
Very nice.
Ken, what about you?
Where did these first customers come from?
We started our company, we were living at an apartment complex, newly married, we had
our first baby, and the apartment complex property manager, one day, this is how the
business started.
He sees my wife at the balcony, they were already friends, and he’s like, “Oh man,” and my
wife, Teresa, says, “What’s wrong, Brett?”
And she’s at the balcony talking down to him, and he goes, “The cleaners,” and then that
was implied that there’s a lot more to it.
And he just looks up, and he’s like, “Hey, Teresa, you’re at home, do you clean?
Would you like to clean?
If you go get insurance, I can give you some work at the apartment.”
She’s like, “I don’t clean, my husband does, though,” but she said, “I’ll do it,” so
she went and got insurance.
That’s how the business started.
But that’s where our company began with apartment complexes, ours that we got referred to others.
That same property manager connected me to Coal Banker real estate agent, which got me
into a preferred vendor network at Coal Banker, and access to 500 agents in my area.
And I just became a little whipping boy for the first year, like, “Can go here, can go
here,” and I just learned how to do the different aspects of cleaning myself, completely solo.
And from there, that started spawning into, like, it was all one-time jobs, and it led
into recurring jobs over time.
And I developed a little niche of what I would serve, but it started from apartment complexes.
As these apartments were turning over, or…?
Yes.
Okay.
Yes.
Move in, move out, cleanings for apartment complexes, and then that moved into real estate, what
I call presentation, sale-ready presentation cleaning, to get a house ready for sale.
And then those clients would move somewhere, and they wanted to hire me to where they were
moving into, “Hey, can you clean more than once?
Can you clean every two weeks?”
And then just kind of, it was very much a referral.
And like Chris, I didn’t use Thumbtack, but I was using Service Magic back in the late,
in the 2007 to 2013 range.
They were fantastic.
They turned in Home Advisor and Home, I don’t recommend Home Advisor in 2020, but Service
Magic in the beginning, they were fantastic, but that’s where I got my leads from.
Okay.
Are there any similar marketplaces that you see being that have a strong potential today
for somebody getting started?
I think Google My Business is very strong, and it’s free.
Sure.
Just like setting up a profile there.
A local, yeah, Google Local Business profile.
That’s a great way you can do it.
I know Chris probably has his list of them being the same industry.
I personally, since I’m small and work small, I like to develop relationships and go through
networking, connect with people, and get into different various Facebook groups.
I believe Facebook is tremendous, especially where there’s groups of people that might be
hovering in one place that are in a niche that you’d like to serve.
Find the people you’d like to serve, find out where they hang out, and then go hang
out there.
Just like this.
Side hustle nation, people that want to learn how to do a side hustle, they end up congregating
in this tribe.
I said to find where my ideal client hangs out and go serve them.
Yeah.
Chris, so Thumbtack isn’t so good in 2020 anymore.
Are you just relying on the existing customer base word of mouth at this point?
What are you doing proactive marketing on any other channels?
I’d say two things there, and I’ll give you my marketing list as well, what we’re doing
now.
First is, the list is always going to change.
Because of that, you have to build early on a very strong client retention system, because
if you’re always focused on one-time cleans and it keeps changing, you’re going to have
periods of droughts.
If you’re able to convert a significant number of one-time cleans into regular customers
and keep them, that’s where the magic is, and that’s what’s going to sustain you more
than any marketing ever will.
For me, we do residential primarily, but given the situation over the past few months, we’ve
drifted a little bit more into commercial by necessity.
It’s been interesting to note the marketing differences between commercial and residential.
For us though, the common ground between both commercial and residential is, as Ken said,
it’s Google My Business is huge.
It was big when it came out, but every year it’s even bigger.
I’d say in most cities now, Google My Business is more important than Yelp.
There’s still some cities where Yelp is super important, but no matter where you are in
the planet, you want to have a strong Google My Business profile with a lot of reviews
and have it consistently used and updated.
That’s important.
Local service ads, if you’re in North America, is very big.
It’s different than Google AdWords, but they give you a consistent price per call, and
it’s worth the quality of the leads.
Those are the two big ones for us.
Other than that, I would say outside of the Google ecosystem, Facebook ads was very strong
for a while, and then it stopped, but it’s starting to become effective again.
I couldn’t tell you why because I’m not an ads expert, but particularly around seasonal
holidays like Christmas or Thanksgiving, having a strong Facebook ads campaign is a great way
to get customers, and it doesn’t cost a lot.
Interesting.
I’m clean enough for a party or something.
Seeing that we’re both in the cleaning industry here, and you have an audience ranging that
is looking at all different types of businesses, or maybe already in them now, inside hustles,
what’s unique about the cleaning industry, and I’m sure, I know Chris, I’m sure this
is part of his decision process as it was for mine, I wanted to find a business model
that allowed me to build on something, to build a consistent level of recurring income.
It’s like a membership program.
There’s a lot of companies like, hey, plumbing, electricians, carpentry, there are one-offs
everything’s a one-off, unless you can get like a six-month service plan or something.
But with cleaning, they’re designed to be weekly, bi-weekly, every other week, monthly,
and they are fantastic because you can build a tremendous amount of stability in your profits
and make it predictable.
I could not have optimized my company on a one-time model.
The way I optimize it is because it’s recurring, it was predictable, and I recommend if anyone’s
choosing a side hustle, hey, not go pick cleaning, but find something that you have a recurring
model available.
Is it primarily residential for you two, Ken?
In my first business, it was 90-10, 90% residential.
In this business, I’m in the Philadelphia area now, I build it a little differently.
I’m 50-50.
I think it’s also important, a diversification within your own industry if you can find one
that’s more stable and hard times and one will get hit.
So it’s a good question.
I do like your point about recurring revenue, yes, it’s going to get dirty again, yes,
that grass is going to grow again if I’m in a lawn mowing service, yes, the dog is going
to keep pooping in the backyard if I’m in the pet waste removal business.
It’s like, yeah, this stuff makes a lot of sense.
Okay, it lends itself well to a recurring type of client.
Chris mentioned this $500 to $700 in startup costs.
Ken, you mentioned the insurance piece.
Was that the extent of the startup costs for you?
Can you give a sense of what that cost?
Yeah, this is probably one of the most inexpensive businesses that you can start in the planet.
I don’t know if many that are cheaper to do it legitimately, professionally.
The first differentiator, are you required to get insurance?
No, but it’s a major, major trust builder and differentiator for you.
And you’re looking at, like you said, probably $400 to $1,000 per year to get $2 million
of general liability insurance.
And that’s the basic foundation of what you need.
And then the rest of the startup fee or startup costs would just be getting, from my side,
from a solo side, would be the equipment, a vacuum cleaner, some cleaning supplies.
It’s helpful if you have a car that runs.
So those things, I mean, for $1,000, you’re ensuring to do a down payment on it, plus
your basic expenses to get started and equipment.
For $1,000 or less, you’re off and running, and you can make that back in a few jobs.
Chris, what about you, so the five to 700, is that insurance, website, initial marketing
for bidding for jobs, what was that, what did that go towards?
So I can give people some real numbers, because I still remember them.
Five to 700 was the super initial investment, kind of like the week one investments.
I did spend a little bit more that month, but that’s because I actually made some back.
So for us, the five to 700 covered really basic website, the domain name, insurance for
one team.
It’s an ever friendly residential cleaning association.
They’re not around anymore, but at the time they covered independent contractors so that
we use them.
They had cheap insurance for that type of agency that I was doing.
That was the main expenses.
The rest was all pushed towards paid marketing and paying the cleaning teams for trial cleans,
because I would have them come clean my apartment, but I would pay them for that as well.
They knew it was a trial clean, but they still did the work, so they still got paid for it.
If I were to start today though, I’d agree with Ken.
If you could put aside 1,000 to 1,200, that would be a much better place to be than five
to 700.
You could do it on that, but you never want to be that tight with a new business.
So for us, the first month, to give you guys kind of a rough estimate, that first month
when I didn’t know anything, I spent about 1,200 total at the end of that month.
So five to 700 the first week, but we made about 22 to $2,300 in revenue.
So we broke even by the end of the first month, just about.
So your initial investment, it’s going to come in two stages.
It’s going to be what you need to get up and running, but then it’s going to be the initial
funds that you need to actually market with as well.
So you can get jobs for free, especially on the solo side, but if you’re starting the
way I did, you’ll want at least a couple hundred bucks set aside for marketing.
More with Ken and Chris in just a moment, including Ken’s ISO model for service businesses
that’s initialize, stabilize, optimize, and how Chris fought his way through the valley
of despair to come out stronger on the other side right after this.
Are you struggling to close deals?
B2B selling is tougher than ever.
And that’s why I’m excited to partner with LinkedIn Sales Navigator for this episode.
LinkedIn’s Sales Navigator is a sales intelligence platform that helps professionals effectively
prospect and engage high value customers, drive higher revenue, and increase sales performance.
Sales Navigator helps you target the right buyers, surface key signals such as job changes
or which accounts you should prioritize, and shows you hidden allies.
So you can find those buyers that are most likely to convert.
Fueled by LinkedIn’s billion member platform, billion with a B, Sales Navigator gives you
the most up to date first party data, enabling you to unlock conversations with the people
that matter most.
Right now, side hustle show listeners can try LinkedIn Sales Navigator free for 60 days
at LinkedIn.com/SideHustleShow.
That’s LinkedIn.com/SideHustleShow for a 60 day free trial.
At LinkedIn Sales Navigator help you sell like a superstar today.
Just go to LinkedIn.com/SideHustleShow to get started.
This edition of the Side Hustle Show is sponsored by Squarespace.
One of the biggest obstacles I hear from side hustle show listeners is simply dealing with
the technical frustrations of getting a site online and making it look the way you want.
If that sounds familiar, I want to invite you to try Squarespace’s new AI guided design
system called Squarespace Blueprint.
You can choose from professionally curated layout and styling options to build a unique
online presence from the ground up and then tailor it to your brand or business and optimize
it for every device.
It makes it easy to launch your website and get discovered fast with integrated, optimized
SEO tools so you show up more often to more people and grow the way you want.
Whether you sell physical or digital products or provide a service to clients, Squarespace
makes it easy to start selling online and you can make a checkout seamless for your customers
by accepting credit cards, PayPal and Apple Pay and even offer customers the option to
buy now and pay later.
Head on over to Squarespace.com for a free trial and when you’re ready to launch, go
to Squarespace.com/SideHustle to save 10% off your first purchase of a website or domain.
That’s Squarespace.com/SideHustle.
Ken, is there a ceiling to how many new jobs you can take?
Like if your phone rings today, “Hey, I’ve got a new commercial office building.
I need you to come in,” or “I’d love to get a quote from you.
Are you saying, ‘Yeah, I’ll be there at three or I’m good now.'”
This would be the main, maybe one of the biggest cons of staying solo as a freelancer is, sure,
you are limited by your own ability to perform and so if you build a team, you can start
to scale that out.
You say, “Yes, there’s only so many houses or offices that I personally will take or
want to take.”
However, and this brings up a bigger point that I was hoping Chris and I could dive
into because I think it’d be a lot of fun, it’s called, “You’ve got to pick a side.”
There’s two ways you can do this.
You can go to the solo optimized route or you can go and you can build something big
and scale it and do it with teams and do it the way Chris has done it.
I love Chris’s term.
Maybe he can use it, but in the middle is where we all die.
What do you call that, Chris?
It’s coined by a friend of ours, Derek Christian, who’s also in the cleaning industry.
It’s called the Valley of Despair where you’re stuck between both stages.
It’s the adolescent stage in the EMF.
It’s not a good place to be.
Back to your question.
For me, in my solo cleaning school, I run my own solo cleaning company and I’m also
teaching others how to start a cleaning company and how to go through what I’ve built up called
the ISO model, initialize, stabilize, optimize.
There’s phases of growing a solo cleaning business, but always staying solo.
At the end of that rainbow, you have a business that is optimized, meaning you can clean houses
ultra efficient and make really, really good profit per house.
I’ve had over $100 per hour cleaning in solo cleaning and I was doing two days a week at
50 to 60,000 in profit back when I was fully optimized.
Now, I didn’t start that.
I didn’t start there.
It took me time to get there, but see your question, part one of the answer would be,
well, if you’re new, you just take whatever you can get and build your business out and
you work as much as you’re willing to work, and then over time, you start to implement
efficiency improvements, so you take less, you can build waiting lists of customers,
you can start charging more.
There’s lots of little things you can do to basically build this like Tetris-like schedule
that works for you and your family, but produces the goal of income that you’re looking to
produce.
That’s the strategy for you to stack up all the work on two days a week and just knock
it out.
That was what I chose to do in my old business.
My strategy this time around is a little bit different.
I’m probably going to stack up as much as I can on two or three days.
I’d like to get to 100,000 in income this time on two or three days, but I have online
business, so I’m looking to be at home a lot of the week too, and then we’ll see, I may
sell that again.
I don’t know.
If you ever get pushed back from a residential customer, you’re in and out of there in like
45 minutes and you’re like, “100 bucks, like what?”
I wish I was that fast.
Actually, it’s counterintuitive when you think, “Well, hey, you used to be here four
hours, but now you’re only here three.”
People that think that way have a by-the-hour mindset, but really what they really want
is this.
If you ask the customer the question, “I’m going to continue cleaning your house with
excellence.”
It’s going to look awesome.
If it’s anything missed, you let me know, but check this out.
I’m going to finish faster than I was, so I won’t be in your house as long.
You don’t have to worry about the cleaning person being there all day long.
I’m going to be in and out, and as long as I maintain the same level of excellence, wouldn’t
you be happier?
They’re always saying, “Yes, that would be awesome.”
You’re actually doing them a service by being out faster, but maintaining the level of excellence
and continuing to keep that level of trust high between you and the client.
Is that ever frustrate you to get a call?
I just don’t have the capacity to take this on right now.
It feels like I could turn money away, or I could hire somebody at even 25 bucks an
hour to go and do this work for me, a perfectly qualified cleaner to go do this for me and
just take my profit on the top.
I struggled with that for years, because I didn’t just make the decision to stay solo
from the very beginning.
I did have employees for about two years.
I wasn’t good at it.
I really wasn’t, because I was in the Valley of Despair, so I was there.
I experienced it.
Many times, I wondered, “Well, maybe I should dip my toe back in.”
Ultimately, in 2011, ’12, ’13, I decided to stay solo, because I had a big dream of something
I wanted to accomplish that wasn’t cleaning related.
I needed my cleaning business to do something for me.
It needed to be a certain amount of time and a certain amount of money, so that I could
go do another side hustle, ironically.
With that as a goal, I made a decision and say, “No, I’m not going to teeter with turning
down work.
No, I’m going to max out what I personally want to do, get the most I can per client,”
and I had a referral network.
I have friends that I could give other business to, and maybe I could take an affiliate on
that, a small commission on that, or it’s just good faith.
I send them business, and down the road, I get business from them, and so you can look
at it different ways.
I like that.
We had a guest in the SEO space who was booked up with his freelance SEO consulting, started
a very similar thing.
He was like, “Well, I got other people I trust.
I can’t take on your project, but let me send you to this guy.
Hey, would you pay a finder’s fee?”
He ended up building a whole side business just around that referral element.
I was like, “Oh, this is pretty cool.
Chris, what got you through that value of despair?”
Yeah, this is a fun little story time.
For me, it was October 2016.
In the middle of my final semester at university, I was very solidly in the value of despair,
also university of despair, I guess.
It was midterm time, so a lot of despair all around.
We’d grown very quickly from about zero to 20,000 a month in about 90 days, so it was
a ridiculous amount of growth.
What are you thinking at that time?
Are you thinking like, “I am this entrepreneurial alchemist.
I willed this into existence,” and now look at this thing.
It’s funny.
There was so little I understood about business.
A big part of it was luck.
My profit margins were low because I was reinvesting everything back into marketing, so I was barely
paying myself.
Obviously, that’s changed with time, but I was in this situation where I was studying
for exams.
I was answering the phone all day, handling cleaning teams, marketing, and doing everything.
I was really deeply unhappy, and it came to a climax Halloween week where I was booking
seven, eight people a day because it’s Halloween week, and everyone wants their house cleaned
before the party and after the party.
I made such a stupid mistake, and I didn’t ask my cleaning teams if they wanted time
off with their family for Halloween.
I just assumed they would want to work on Halloween day because it’s extra money.
It was just a grave mistake, so I scheduled them in, and then that morning, half my teams
called off, something like six teams called off that day, which is a lot of bookings that
are not getting done.
It was 10 or 12 bookings that were not going to get done, and every other cleaning I searched
for hours that day before calling customers, every other cleaning business in that city
was booked solid, or if they weren’t, they did not have a good reputation, and so I had
to call all my customers and let them know the cleaning that they booked a month ago
was not going to be happening, and so I wouldn’t call it a nervous breakdown, but it was on
the edge.
I had a dozen people screaming at me, and it was at this moment that I decided there’s
no way that I could possibly run this business, even if it makes me a lot of money.
There’s no way that I could deal with this every day for years.
It’s not a business.
It’s this soul-sucking job that I built into myself and called a business, and so for me,
the way that I really escaped it was, well, two things.
I’ll keep it to one, though.
I knew I needed an office manager, but I knew that I couldn’t afford an office manager
full-time.
I didn’t even have an office base, so there was nowhere for the office manager to go.
I’d read the four-hour work week by Tim Ferriss a few times, and he talks about virtual assistance
a lot, and so I thought, is there a way that I could find someone who used to work for a
family business based in the US who could do the majority of what I do, but they don’t
have to be in DC?
I started looking for someone who used to run a family business, and I found two people.
They agreed to try it out.
They’d never worked as VA’s before, but I trained them up to handle most of the office
tasks remotely besides the hiring, and this was another stupid mistake, but I ended up
working out.
A week after I trained them, I took off to Japan for a week, and I just basically ignored
my phone unless it was an emergency, and I just let them handle it.
I threw them in the deep end, and they handled things okay, and I came back, and my business
was still in one piece, and so this was the first inkling that I had that I could run
a business in a very minimal amount of time each day and have it function and not fall
apart.
So, over the next few months, I started to work on systems with them, started to teach
them how to do stuff more in depth, and started to remove myself bit by bit from each different
area of my business.
Okay, very nice.
So, they’re working from home.
They’re working remotely.
They’re fielding your phone calls.
They’re scheduling the different teams on the ground to go to the different addresses,
and you’re just paying them an hourly wage or a salary, but how does that work?
So in the VA industry, and you’re quite knowledgeable about this as well, Nick, we do it by the
minute basis, and so what I do is I have them track their time.
So in an eight hour day, for a cleaning company of my size, we didn’t need someone working
eight hours a day.
We needed someone working maybe two to three hours worth of time, but available for eight
hours a day for when things came in.
And so I worked out a higher rate that I would pay them, but with the agreement that they
would track their time, and instead of paying eight hours a day, it would be on a contract
basis for the amount of work done each week.
And so we paid them to be available during that time, but only to be paid for the minutes
they put in.
Okay.
Interesting.
So it was like based on whenever the phone rings, the clock starts precisely.
And so that was a good middle point that they were happy with because it meant that they
could take on other high paying clients as well during their day.
And they weren’t just beholden to one client because they were their own boss as well.
And so we found a happy medium between us where I could afford them and they could afford
to pay attention to us.
That was the second thing.
You get to use two things and then only give us the one.
The second thing for me was shifting how I thought about my business.
And the EMIF really is a big shift in how you think about your business too.
I hadn’t read the EMIF at this time, but the way I started thinking of my business was
I knew that I couldn’t remove myself from everything all at once because I tried that
initially after the Japan trip.
And there was a big drop in quality because I basically transferred 20 different hats
for myself to two other people.
And so they were overwhelmed.
So I wanted to find a way where I could only have them do working on the areas that they
were good at.
And so I started to look at how big businesses structure their business.
And the way any big or medium sized business structures their business is by having different
department heads for each department.
You have a sales head, you have a marketing head, you have a communications director,
right?
You have a customer service agent.
So I thought, could I outsource each area of my business as if it were a big business
and assign a department head to each one?
And so that’s what I did.
I assigned the customer support and the teams to, so the customer support to VA1 and the
teams to VA2.
So the front end was being handled by VA1 and the back end was being handled by VA2.
Then I outsourced the sales to someone.
Then I outsourced the marketing to someone as if they were a marketing head.
And so I started to think of my business as if it were a big business and how all the
different moving parts work together so that I could outsource them one by one instead of
just throwing it all on someone else.
And so that was the other big thing that really worked for me was finding a way for someone
to step up and take responsibility for each part that they were an expert at.
Were those hires similarly structured in terms of the payment or was it this sprint to get
to where revenue justified those hires?
So we tried a little bit of everything.
We’re pretty solid now, which I can explain, but we tried everything.
We tried salespeople on the ground.
We had people doing door hangers.
We had professional marketing agencies.
But what ended up working for us was finding an expert in their field and negotiating either
if it’s a sales or marketing job, a retainer fee plus ad spend so that they’re earning
something the better they perform for us, or if it’s an office or customer support job
offering them a higher pay rate, but for the minutes that they work instead of the full
day.
And so what I’m saying is there’s no standard pay structure.
It depends on the position that you’re outsourcing in your business at the time because there
are different pay structures that work better for different positions.
But the two most common were paying by the minute per work or coming to some sort of
commission agreement.
Okay.
Gotcha.
Like a performance basis on new business that you bring in for us.
Right.
And so one thing that did not work for us was I tried to have my VAs who were not salespeople.
I tried to entice them to become salespeople as well.
I was going to offer them a bonus for every person that they closed, for every good review
that they got.
But the problem was I was spreading them too thin and they were not salespeople.
They didn’t have years of sales experience.
And so I could have these bonuses in place, but they weren’t getting used that much because
that wasn’t where their strength was.
And so don’t try and fit a square peg into a round hole, right?
Don’t try and force a person that you hire to be something that they’re not.
Gotcha.
And that has been, I guess, a common mistake for people looking for outsourced help is
like, well, I’m doing all of these roles in my business.
Like, why can’t I hire somebody to do that?
It’s like, no, like you can compartmentalize, departmentalize that a little bit more.
You set everybody up for success.
Nick, I would even take that expression, that quote from Chris, the round square peg round
hole, whatever.
I think that applies to, in general, if you’re coming into a business, into a side hustle,
want to know yourself, know your personality, know your goals, what your dreams are.
Do you want to go through the route and become like Chris, or do you want to stay small?
Like I think you don’t have to start small and like there’s so many cleaners that come,
they start small, then they feel like they have to scale.
It’s like required.
Well, if I want to make more money, I have to scale.
And some people don’t want to.
Some, like I’ll stay at home mom, they want to start a side business.
They’re already good at cleaning.
There’s tremendous pros of cleaning.
They’re already good at it.
They can make great money and they can be flexible.
They’re scheduled.
They can clean when they want.
It’s very therapeutic for them.
It relieves their stress while they’re doing it.
And they can bring home great money.
And then I don’t want to hire people.
I don’t want to scale.
And down the road, they might want to, but it’s just, some people may just want to pick
one of these two sides as per the name of this particular podcast.
That’s a really good point, me and Ken were talking before as well, about it’s very easy
these days to be sold a dream that’s not yours.
And I think that’s always been a problem in business, but now, so more than ever with
movements like the digital nomad movement or becoming a virtual assistant, which the
term is always expanding.
It’s almost meaningless at this point.
You need to be very clear on what your end goal is very clear.
For me, when I started, my vision of what I want my business to be has changed quite
a few times over the years.
I have the lifestyle of what I originally wanted, but the vision of what it will be
at the end is very different than it was at the start.
And if you end up buying into a dream that’s not yours, it’s going to get you stuck.
And maybe you’ll do well for a year or two years or five years, but you’ll eventually
get stuck because you, you reach a stage where you hit the initial goal that you had in mind,
but you never have a bigger end goal.
And so you don’t, you can’t get unstuck unless you actually map that out.
And so mapping that out at the beginning is so important.
And with Ken, for example, in our industry, it’s very common now, and I talk about this
all the time, because this is the way I run my business.
It’s very common to push solo cleaners.
You’ll see it in every thread and every comment, a solo cleaner says they’re overwhelmed.
The second they say that there’s a hundred comments saying you need 10 systems in your
business.
You need two virtual assistants.
It’s the same advice all the time, but it’s not right for that person.
If you read what that person wrote and you listen to what they want out of their business,
you’re telling them very bad advice.
It’s good generic business advice, but it’s bad personalized advice.
And so you have to be very clear on what that person and you yourself went out of your business
before you can find a way to get to whatever the next stage is for you.
Yeah, I like that.
Don’t get sold a dream that’s not yours.
Kind of know where you’re going, know what you want to get out of this thing, and go
down that path.
Like even if it’s quote the slower path or if it’s going to lead you through this valley
of despair, whichever it is, like know where you want to take it.
And Nick, there’s, there’s so many people, I believe listening to this podcast, they’re
in a job that they don’t like.
How many people, I mean, they got a taste of this work from home freedom.
Oh man, I got to go back to that place at some point.
And maybe it rekindled the dream, the fire, like I want to get out, I want to get out.
And they make their dream, like I want to have my own business on the side.
And maybe you’ve seen this and people have you’ve interacted with and like the dream
becomes I want a side hustle.
That’s my dream.
And then they get a side hustle, they get out of their job and they’re doing their side
hustle, they’re doing their dream, but then they realized that the side hustle wasn’t
the dream.
They made it the dream and they become unhappy with what they’re doing.
And they don’t get themselves, they don’t attach their why to something that’s emotional
quickly with an end goal, they’re going to phase out and they’re going to end back up
at that desk they were just sitting at.
So that’s a good point, Ken.
I guess I would say then what we’re all saying here is you can transition later if you need
to because your goals and your life will be different.
But when you start your side and also your business, you want to start your business
as close to the stage you want to end up at as possible.
So day one, you want to be as close to that stage as possible, whether you want to be
a freelancer and optimize your income then, or you want to run an agency style business
where you’re not doing the work yourself.
As soon as you start your business, you have to be as close to that end stage as possible
because it’ll make everything easier if you can versus Chris, you going out and cleaning
in the early days, like, I want to test this out, I want to see how I like it.
And then I’m going to hire people later.
It’s like, no, I’m going to hire people from the very onset.
Right.
So this is like from my own personal stress and mistakes and breakdowns.
I knew I wanted to travel, but that was it.
It’s a very vague goal with business.
I want a business that lets me travel.
That’s the most generic business in the world these days.
And so I got stuck in this valley of despair, this adolescent stage in the emeth, as he
calls it, because I wasn’t clear on what I wanted.
And so I had a job that was 12 or 14 hours a day instead of seven or eight hours a day
because I was pedaling my feet.
I didn’t know where I was headed.
I didn’t have any road map towards any end goal.
The vague goal that I had was grow my business bigger and then somehow skip a stage and then
not have to run my business.
There wasn’t a path there.
So you have to have it mapped out.
Yeah, step one idea, step two, question mark, question mark, step three, profit.
More with Ken and Chris in just a moment, including how Chris runs ThinkMades in just
five to 10 minutes a day and how Ken sold his original cleaning business, even though
it was centered on him doing the work.
I never thought I’d say this, but another spreadsheet of mine has bit the dust.
It was my net worth and investment tracking spreadsheet where I would dutifully log into
a dozen different accounts every month to update it and see where we were at as a family.
And you know what killed it?
It was our sponsor, Monarch.
Monarch is the top rated all-in-one personal finance app.
It gives you a comprehensive view of all your accounts, investments, transactions, and more,
create custom budgets, track progress toward your financial goals, and collaborate with
your partner.
And now, at Side Hustle Show, listeners get an extended 30-day free trial when you go
to monarchmoney.com/hustle.
So on top of saving me a bunch of time every month from logging into all those different
accounts and copying in the numbers, the interface is way better and way more intuitive than
my old spreadsheet ever was or ever could be.
I love being able to customize my Monarch dashboard to highlight the stuff that’s most
important to me, monthly cash flow, net worth, investment performance, and you can also set
up automatic rules for transactions and notifications.
And finally, unlike other personal finance apps, Monarch doesn’t sell your data.
So after trying out Monarch for myself, I understand why it’s the top rated personal
finance app.
And right now, Side Hustle Show listeners get an extended 30-day free trial when you go
to monarchmoney.com/hustle.
It’s m-o-n-a-r-c-h-m-o-n-e-y.com/hustle for your extended 30-day free trial.
Did you know that roughly half of Side Hustle Nation hasn’t started their Side Hustle yet?
If that’s you, I get it.
Starting and building a business is tough.
It takes more than just an idea, there are tons of moving parts, and it’s a bit like
trying to assemble your airplane in the middle of takeoff.
Thankfully, our sponsor Taylor Brands is helping Side Hustle Show listeners make that leap
and make it all a lot easier.
Their comprehensive platform guides you through every step, making sure you have everything
you need all in one place.
Think of it like you’re behind-the-scenes partner for things like LLC formation, licenses
and permits, getting an EIN, setting up your business bank account, bookkeeping and invoicing,
insurance, logos, trademark protection, and a lot more.
Taylor Brands helps you handle it all seamlessly.
But to get you started, Side Hustle Show listeners get 35% off Taylor Brands LLC formation
plans when you use our link.
That’s TaylorBrands.com/SideHustle.
Taylor Brands like a Taylor for your clothes, T-A-I-L-O-R-B-R-A-N-D-S.com/SideHustle.
Start your business journey today with the help of Taylor Brands.
Chris, can you give a sense of the time that you’re putting into operations today?
Sure.
So these days, this is another funny story me and Ken have talked about.
You’re going to hear a lot of these stories.
So for me, I spend about five to 10 minutes a day on my cleaning business.
I work all day, but on my other businesses these days.
And it’s hard for people to believe that because it’s a business with people in it.
It’s a very people-intensive business, the cleaning industry.
And there’s a lot of moving parts.
But this is the power of having an agency-style business that you’ve learned to work well
with and that you have hired the people to be in the right places.
So for me, I have my office managers handling the office work.
I have a sales guy, a marketing guy, a bookkeeper handling those parts of the business.
So at the end of the day, the only thing that I actually need to do is check in with them.
And sometimes I’m bad at that too.
Sometimes I won’t check in with them for a couple of days, and then they get annoyed
at me, but I won’t check in with them.
But the only thing you really need to do is jump in and say, “Hey, how’s it going to
each person in your business in different areas?”
And if everything’s going well, you can log off.
And if it’s not, you can chat with them for a few minutes and come up with a solution.
Me and Ken, we’re talking, a lot of people get stuck with a mentality that business has
to be a lot of work.
And it does it first.
It does have to be a lot of work at first.
And if it doesn’t, you find a unicorn.
The first two to five years, your business will be a lot of work.
But I talked to people who’ve been in business since 1979 or 1985, and they’re still working
eight or 10 hours a day in their business.
They’re doing something wrong there if that’s the case.
There’s no judgment there, but they’ve had time where they should have been able to work
on each part and optimize it a little bit more.
What I guess I’m saying is you have to be able to measure your progress and you have
to see how other people who are a step or two ahead of you are operating their business
so that you know how to actually get to that stage as well.
So I was talking to a guy in one of the Facebook groups in the cleaning industry.
He will sit there, and he’s been in the group for years, and he’s never said a single positive
thing.
He calls everyone doing better than him a scam.
We’ve all seen these people, and it’s impossible to run a business in 10 minutes a day.
But I told them there are tens of millions of business owners who are not in their business
at all.
There are so many shopkeepers.
There are so many textile industry owners.
There are so many people in every industry imaginable who are business owners who haven’t
touched their business in years because they have the right people in place.
It’s a normal evolution in business to eventually have someone in place handling each part of
it for you so that you’re able to just oversee the big picture.
If you’re stuck in a mindset where you think business has to be work, take a step back and
look at what people who are a little bit ahead of you are doing.
And if they’re still working just as hard as because if they’re not, which I’d bet you
that they’re not, then this is a limitation that you’re facing yourself.
You need to reframe how you start working on your business again.
Now, Ken, 5 or 10 minutes a day, doesn’t that sound appealing?
Well, sure.
He chose that path and he has owned it and he’s optimized it and I applaud him for it.
I didn’t choose that path.
Now, what’s nice is if you are a freelance solo, you can choose that path at any point
if you want to.
You always have the option.
What Chris and I are both saying, it sounds like if you’re going to get started in this
business or any, go grab the e-myth book.
And that because you really, I’ll give an example too, of a company that didn’t grab
the e-myth book right away and I found another cleaning company, probably in the same group
that Chris found his gentleman and we got on a phone call and I was trying to help them
out and after just hearing their numbers, I cringe and I feel sorry for them.
And they have a good business.
It’s doing $400,000 in revenue, which is really good.
And digging in further, I find out, okay, so you’re in the office.
You’re working those eight hour, nine hour days handling everything, six days a week,
their husband and wife with kids, six days a week at the office, not seeing their kids
much.
And out of a $400,000 revenue, they’re pulling out $30,000 to $35,000, $30,000, $35,000
in a salary and the business is doing no profit.
And I just pause and I said, well, let me ask you a question, just a contrast really.
That’s your business, $400,000 in revenue.
You’re working six days a week, you’re hardworking and you’re keeping $30,000.
My business is just me and my revenue is not even $100,000, but yet my profit is double
yours at $60,000 and I’m only working two days a week, not six.
I’m working one-third of the time and making twice as much.
I said, so what do you think is wrong with that picture?
And just that same mindset that Chris was talking about, it just didn’t register, we
didn’t talk again, I wish them well and there’s a lot of that and that company, they started
off with a dream of growing and growing and they just, oh, I got too many clients, I need
to bring on some employees and it’s always the growth happens and then they try and fix
it with systems and then they’re supposed to lead with systems and then let the growth
fill in.
They do it backwards and they get themselves in that value of despair and I didn’t want
to go that route.
So yeah, Nick, five and 10 minutes does sound good, but I was perfectly happy with what
I had optimized, I mean, five-day weekends and still making enough money for my family
and it gave me other days of the week to work on my other side hustles to make other income,
which I was able to build up an online business during that time and I was with my kids.
So that was the path I chose.
So I’m not saying that I prefer Chris or Chris prefers mine, I think each of your listeners
will have to decide if they want to go into a side hustle.
They need to pick a side, that’s what the point is.
Go small and optimize and find your perfect business or go big and do it right, but don’t
get stuck in the middle.
Yeah, they bring up an important point about the profit margins and being able to pay yourself
and minding those.
Chris, is there a target margin that you’re shooting for on a per job or per month basis?
Okay, it’s a really good question.
It ties into exactly what Ken was saying with the guy he just talked to.
Profit margins, the more you outsource through your business, are going to be lower.
So you’re going to have to build a bigger business to get the same pay because you’re
paying everyone to do the work for you, right?
It’s not cheap to do that.
For us, we’re in an industry where there’s a big difference between profit margins with
employees versus contractors.
So it’s a little hard to generalize, but generally, because I work with painters and lawn care
guys too, I have some general knowledge of the local industry.
Generally in this industry, you want to aim for between 8% and 30% profit.
If you run a massage parlor, for example, and you have a physical location that you’re
paying for and beds and therapists, I know a guy who ran a $70,000 month massage parlor.
His profit was good in the industry and he was profiting 8% a month, but that was really
good for him.
Most people weren’t profiting anything at all in that industry.
In the cleaning industry for us, the way I’ve set up my business, if you really truly want
to do minimal work, the owner will pay themself between 10% and 17% of revenue by the end of
the day.
I’m closer to the 10% because I outsourced absolutely everything.
I think it works out to between 12% and 14%.
So if my revenue is $500,000 a year, I’m only going to be making $65,000 or so from that
business, for example.
But you’ll need to work 10 minutes a day, so trade off.
But you do have a lot more liability.
You have a lot more chances for one of your teams to screw up by accident or for a customer
to be unhappy.
So there is a lot more risk that you’re taking on.
If you’re doing 300 or 400 jobs a month versus 30 or 40, there’s a lot more stuff that can
go wrong as well at the bigger scale.
And so that’s a risk that I take, but it is a bigger risk.
Leave yourself more open.
Do you have any of those nightmare scenario stories outside of the Halloween episode,
where something bad happened with one of these crews or on somebody’s property?
This is a little specific to the cleaning industry.
I actually don’t know if I can say this one on there.
Is this a family-friendly show?
Keep it PG.
I’ll tell you after the call.
This is not a PG story.
Okay.
It’s not.
But we haven’t had too many bad ones.
One of the ones we did have, though, was a person who was selling their house.
And we take before and after pictures.
We ask people for permission to do that.
We clean their house very well.
It was actually our A team cleaning that house, and they really are a truly amazing cleaning
team.
And they did a great job.
And there was no scratches left.
Again, we had the before and after photos, and they must have forgotten that we took
those because they scratched up their marble surfaces, and they scratched up different
areas of their house, like the fan above the stove tops.
And then they sent that to us, and they said, “Our team damaged it.
They were going to sue us for the damage.”
They were trying to basically sell the house and make a lot of money out of us by damaging
their own equipment and their own household.
And luckily, we took the before and after photos, otherwise we probably would have been
screwed.
Oh, my gosh.
Yeah.
Was that something like a liability policy would typically cover if you hadn’t had that
backup?
Well, yes and no.
Yes, if it’s unintentional, which wasn’t our fault at all, but it would cover it was unintentional.
But the way they were describing it, I think they would have actually had a pretty compelling
case to make some money out of us.
So they were trying to hold this hostage from damage that they caused themselves.
So there are things like that.
There are typical things like people leaving money in weird spots to see if the cleaner
will take it.
Our cleaners always text us a picture of it and we laugh about it, but people will test
you in little ways.
So there’s always things like that.
That’s interesting.
I never, okay.
Yeah, like here’s the sock drawer.
That’s kind of funny.
Do you ever get the threat of, so you’re taking a margin on top of this labor, do customers
ever go like, “Why am I going through this company?
Why don’t I just work with this team directly and save money or pay them a little bit of
it more?
Like just cut out the middleman.”
Does that ever come up?
Sure.
Yeah.
Early on, before I knew how to deal with that, that hit us very hard.
The first year in business, a great team of ours was slowly siphoning off clients of
ours to build their own thing and they did successfully.
We basically did the marketing for them and they built their own cleaning business and
stole those clients.
It’s very rare.
I’ve talked to so many clean business owners.
It happens, but it’s so rare that this actually happens.
But there are occasions where cleaners will take customers’ years behind your back.
I was going to say, they need to have the mindset of an entrepreneur to be successful
with it.
There’s a lot of folks that work in team cleaning systems.
They just want to do the work.
They don’t want to do the business.
Then when they try, there’s a typical, “Oh, I’m good at the work.
I can make more money because I run the business,” but then they don’t know how to run a business.
They don’t have the mindset.
They haven’t read the books.
They haven’t listened to the podcast like this and they miserably fail and then they
end up, “Hey, can I have my little job back?”
It’s bad for everyone when that happens.
I know companies that when they see entrepreneur like Tendencies or Desire in their employees,
they’ll encourage them and say, “You know what?
You want to go out on your own?
I’ll help you.”
That’s totally fine.
You can help the community and provide another cleaning company in the area.
There’s enough houses, enough offices to be cleaned.
Trust me, we’re not that competitive.
We tend to help each other out a lot.
Look at me and Chris.
We’re in the same industry.
We’re friends.
We help each other.
Well, you’re in different cities.
That helps.
He’s in London.
But what he’s saying is absolutely true.
I’ve helped several people start a cleaning business in D.C. where we’re based.
It’s never been a problem.
I think we’ve ever once had a customer conflict between each other.
If you’re even in a medium-sized city, there’s so many people who need cleaning or so many
people who need a local service, there’s no way that you’re going to be interfering with
each other unless you’re really determined to.
Well, and this is one of those examples, too.
The pie just continues to get bigger as more and more people outsource this chore versus
it’s probably orders magnitude what it was 20, 25 years ago or something.
That’s a cool place to be in this rising tide.
Ken, early on you mentioned selling the original business.
I’m curious, if it’s you doing the work, what is the asset that you’re selling?
Just the customer list?
I’m curious how that works.
It was.
I went through a pretty tedious process with this.
There was lots of online resources I was able to find on how to evaluate your business.
I did so.
There was nine different points.
I honestly evaluated that and it became a profit multiplier.
The ones about, well, you doing the work, I got a low grade there, obviously.
But the ones on customer retention, when my average customers were five years and they
were totally loyal to the business, and yet to me, obviously, but I had to find the right
person to fit in to my spot.
Then things like keeping amazing books, keeping your numbers, those are so vital.
The brand that you had, there’s little factors on how the recurring model.
I had a really good multiplier, it was around three, and then I looked at some comps from
a Biz Buy/Sell website, and I was able to come up with a price that seemed reasonable.
You have to know how to shop it around.
I did not sell it to another cleaning business because that wasn’t going to be the max I
could get for it.
I sold the dream, not the business.
I found someone that was working $16, $17 an hour, that was a good friend of mine already,
that he was not happy with his job, he was 25 years old.
He just wanted something more.
He wanted his own business, flexibility, and he was hurting his body operating these machines
he was doing.
I just presented him a dream and said, “Here’s what I’ve been doing.
I’ve built a company 15 years.
I got all these little clients.
Here’s what it’s worth.
Here’s what it does.”
If you were to take this on, you could triple your income, and you could do it on a fraction
of the time you’re doing now.
That allows you to pursue the other things in your life that you’d like.
He was so excited.
We were sitting at Starbucks a few days later, talking about this for three hours.
Within two weeks, he’s going on his first airplane ride ever to go to a cleaning conference
with me in Dallas, and two months later, he’s got the down payment money to buy the business,
and I go through a process to train him and to go through all of my clients and work out
arrangements.
Some people didn’t take the transfer, and I worked that into the price.
People said no, but most of them did.
It was a wonderful transition.
You got to find the right person.
I’ll tell you, you can sell a solo business.
If you do it right, you have to sell the dream, like the dream of what the business can do
for him.
Here he is.
It’s two years later, Nick.
Everything I sold him would happen for him.
He has done it.
I’m so proud of him.
His name is Ian Trainor, Albany Pure Cleaning, and Albany, New York, where I used to be.
His business is cruising.
He’s getting clients on his own.
He’s fully trained.
He’s teaching me some things now, actually, but his income is triple what he used to be,
and he’s working the schedule he wants.
He’s achieved his dream, and he’s thankful.
All right.
That’s an important note, sell the dream, and not in a scammy, sleazy way, but because
a typical business buyer investor type is like, “I don’t want to touch this thing.
The owner was doing all the work.
I want to be more hands-off and just get a return on my money,” so it’s like, you got
to find a different type of buyer that’s still a sellable asset because of this recurring
nature, but just have to position it a little bit differently.
Chris, do you think, I mean, is that the end game for think-mades?
Like, you’re going to have a big exit down the road?
What do you want to take this thing?
No, and this is so controversial what I’m going to say, but I’m going to say it anyway.
It’s funny, again, me and Tim were talking about this, and you’re going to hear that
a lot.
I’ve really changed this past year and a half on what I want out of my businesses, and I’ve
become a lot more clear, precise than what I want.
For me, what’s important is giving back to my local communities, and there’s certain
ways that we’re doing that now that we weren’t financially capable of before.
So I’m starting not single-mindedly, but I’m starting to reposition the way I view my businesses
and the way they’re going to continue growing in the future towards community service.
So they’re not nonprofit, but they’re like a nonprofit type of situation where I’m guiding
them towards supporting organizations that are really important to me.
So that’s one thing, but the other thing is, I actually have reduced intentionally the
size of my business the past year and a half of think-mades.
We were breaking that seven-figure barrier, and I was reaching a point where there’s
a couple of different stages.
When you go from zero to six-figure business, that’s your first business usually.
That’s where you start to learn about systems, and you start to put them in place.
And then from low six figures to low seven figures, there’s a whole new set of systems
that you have to put in place, and a whole new set of people that you have to put in
place, and a whole new type of work that you have to learn.
And every big chunk of revenue that you add, you have to keep having your business evolve.
At one time, relearning and redoing all that appealed to me.
But these days, I actually am very comfortable with the way my business runs, where it’s
at, the profit margins it has, the client retention that it has.
And so I’ve come to a point where it’s actually not desirable to continue growing it, because
I’d have to sacrifice more in order for it to continue growing, both of my time and
my money.
And I’d have to ask more of my people.
For us, the company culture is very important.
I also run my VA agency.
And one of the big things for us when we hire our VAs is that they’re coming on because
they want their own life too.
They don’t just want to work from home job.
They want their own work life balance as well.
And we promise them that when they come on with us.
And that’s what I want for my cleaning teams as well.
And so if I were to continue growing bigger, I’d be pushing and pressuring my teams and
my managers more than maybe they’re capable of, or I’d be taking more away from their life
just to continue growing a little bit more.
And so now at the stage amount in my businesses, it’s all about balance, a balance between
giving back to my local communities, but also a balance not just for me as the owner, but
for the people who work for me.
And so we’re finding a sweet spot where we don’t actually need to grow too much more.
That’s awesome to hear.
I think that’s a good place to wrap this up as well with like finding that sweet spot.
Having the business support the lifestyle that you want, support people, support the
communities rather than having it just be a drain and something that you dread doing
and all the things that can go into that pursuing growth for the sake of growth.
Chris mentioned his VA company, that’s inovalocal.com, I-N-O-V-A local.com specifically built for
local service type of businesses like cleaning companies and localbusinessmba.com.
Like you said, hey, only 10 minutes a day on cleaning operation, but lots of other projects
in the fire.
I’m always excited to see what you’re up to.
Check it out, localbusinessmba.com.
Ken is over at Smart Cleaning School.
Any parting shots closing arguments before we wrap up here, Ken?
I would say this.
You need to really figure out why you’re starting a business and what you’re trying to accomplish
and take this podcast episode because we are two diverse and two contrasting models to
one industry, and I think this contrasting model could apply to other business models
out there.
I think it’ll be very similar, so figure out what kind of a business owner you’d like
to be.
Would you like to do the work because you love the kind of work, you could be therapeutic,
you love the feeling of it, and hey, you’d love to stay small and optimize and have four
or five-day weekends.
Or do you want to grow it big and go through that value to spare and push through it and
get to the other side where Chris is at and then be able to pursue that lifestyle and
freedom and the other end of it?
My biggest takeaway is what we talked about already is just pick a side, don’t get stuck
in the middle, and both Chris and I, I’m sure Chris would agree that both of us are available.
If you just want to bounce ideas off us, I have a podcast, Solar Cleaning School, you
could check that out.
Chris has plenty of resources.
I’m available, and so Nick, my takeaway is just pick a side and don’t question it.
Pick a side, set a goal, go after the goal, and make it happen.
I like it.
Chris, any closing arguments to add or are you good?
That was great advice.
I wish I had something profound to say, but I don’t.
I guess the only thing I’d say is it’s all about balance.
It’s easy when you start your business, whether it’s going to be a solo or an agency, whatever
stage you’re at.
It’s very easy to get consumed by it, but you have to put limits in place.
You have to have sacred time for exercise, for family, for other parts of your life.
Otherwise, it will become all about business, it will become all about money.
Even if you never intend that, it might be years before you get out of that trap.
All I’d say is go with the intention to work hard, and honestly, but make sure that you
have balance as well when you start your business.
Sounds good, guys.
Really appreciate you joining me.
Really appreciate your involvement and engagement inside the Sinocell Nation community, and
we’ll catch up with you soon.
Again, big thanks to Chris and Ken for sharing their hard-earned wisdom in today’s show.
Be sure to check out Chris’s stuff at localbusinessmba.com, and you can grab Ken’s solo cleaning
a quick start guide at smartcleaningschool.com.
That is it for me.
If you liked this conversation or any other Side Hustle Show episode, be sure to tell
a friend about it, and then hit the subscribe button in your podcast, Player App.
Thank you so much for tuning in.
Until next time, let’s go out there and make something happen, and I’ll catch you in the
next edition of the Side Hustle Show.
I’ll see you then.
Hustle on.
This edition of the Side Hustle Show is sponsored by Squarespace.
One of the biggest obstacles I hear from Side Hustle Show listeners is simply dealing
with the technical frustrations of getting a site online and making it look the way you
want.
If that sounds familiar, I want to invite you to try Squarespace’s new AI-guided design
system called Squarespace Blueprint.
You can choose from professionally curated layout and styling options to build a unique
online presence from the ground up, and then tailor it to your brand or business and optimize
it for every device.
It makes it easy to launch your website and get discovered fast with integrated, optimized
SEO tools so you show up more often to more people and grow the way you want, whether
you sell physical or digital products or provide a service to clients.
Squarespace makes it easy to start selling online, and you can make it check out seamless
for your customers by accepting credit cards, PayPal and Apple Pay, and even offer customers
the option to buy now and pay later.
Head on over to squarespace.com for a free trial, and when you’re ready to launch, go
to squarespace.com/sidehustle to save 10% off your first purchase of a website or domain.
That’s squarespace.com/sidehustle.
A service business is one of the fastest side hustles to get off the ground, and you can scale it by hiring other people to deliver the work.
But is there an advantage to staying a solo operator?
In this Side Hustle Showdown we’re looking at freelancing vs. building an agency.
For this debate, I invited a couple members of The Side Hustle Nation community who both run cleaning companies:
- Chris Schwab from ThinkMaids.com represented the agency side. We last heard from Chris in episode 294, where he talked about how he’d built his cleaning business to $60k a month in revenue, and scaled back his own involvement to just 10 minutes a day.
- Ken Carfango from SoloCleaningSchool.com represented the solo freelance side. Ken’s a former engineer and a father of 5 who’s got his cleaning business dialed in where he can knock out the work himself in just a couple days, and enjoy 5-day weekends with his family.
Tune in to hear both Chris and Ken discuss which business model is best for:
- Getting started
- Finding new clients
- Scaling
- Start-up costs
- How to exit
- And more
If you’re trying to decide which path you want to take, stick around to learn how to avoid the dreaded “valley of despair” that often afflicts service businesses, and how to get started on the right foot.
Full Show Notes: Should I Start a Freelance Business or Build an Agency?
