What cash-strapped start-ups do right
BECAUSE OF MY INVOLVEMENT with a number of cleaning industry associations, I meet many business owners including those just starting out. I’ve noticed an interesting trend. The most successful entrepreneurs are often those who started with the least amount of funding. Those with plenty of capital often spend their time and money on the wrong things early on. They pick a name, design a logo and website, order business cards, set up a business line and even rent an office. All of these things make the owner feel like he or she has a real business. They mistakenly think they can’t begin selling until these items are in place. I find the most successful cleaning business start ups normally start with very little funding.
[EasyDNNnewsToken:Left Justify Embed 300 x 250]Cash-strapped entrepreneurs, on the other hand, are forced to focus from day one on what really matters – sales! You do not have a real business until you actually sell a product or service to someone. Whether you have cash or not, here are some tips for getting your start-up primed for success.
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Ask people to pay
You never know what your customers really want until you try to sell something to them. Selling forces you to learn the needs of the client. Many people will say you have a great idea, but when you ask them to pay you quickly learn what they really value. More than a few entrepreneurs have discovered their initial idea was wrong.
Imagine if you had spent substantial time and money on marketing materials only to discover you were targeting the wrong customer with the wrong product or service.
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Develop systems
Starting with one customer at a time gives an entrepreneur a chance to build systems and processes. Sell your product or services to a few clients. Then, build and test your systems, such as cleaning procedures, customer service agreements, quoting and scheduling. You need to learn how to deliver your service as consistently and efficiently as possible. With each new customer, you’ll learn what works and what doesn’t. This way, you can make adjustments before putting too much pressure on your systems.
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Keep overhead low
Keeping overhead low allows you to turn a profit quickly and eliminates the pressure to make money at all costs. The expensive investment in trucks for new carpet cleaning businesses is a perfect example of what happens when the initial overhead is high. New entrants in this industry often sell at ridiculously low prices under pressure to make enough cash to pay the debt service on the vehicle. Over the long term, this can be a recipe for failure. Better to keep overhead low so as not to be forced into bad business decisions.
If you want to be successful as a startup in our industry, I encourage you to get out there and sell. Use your personal network. Make some cold calls. If customers aren’t buying what you’re selling, change it until you find the winning formula. Then spend time making that formula as efficient as possible. Only then should you spend money on marketing and overhead items like rent and a website.
Derek Christian is the owner of My Maid Service with locations in Cincinnati, OH and Dallas, TX, as well as a business coach through Cleaning Business Builders and publisher of CleaningBusinessToday.com. Derek is now an investor in several cleaning companies including My Maid Service Dayton and Real World Services Columbus. Derek is also a consultant for industry leaders Marvelous Maids and Castle Keepers.
