Question

A better route for a carpet cleaning company to take?

I worked as a technician for 3+ years before starting my own company last January. I live and work in an area of suburban NYC that has communities that are 100% Orthodox and/or Hassidic Jews. Talk about busy... Let's just say as an employee and an owner, I worked 12 hours a day, 7 days per week for two weeks taking care of these customers and the money is very good. Spring is good for other customers not of the Jewish faith. I had a really good start.
I was very encouraged last March-April-May. As expected, June-July-August slowed down quite a bit. Normally, September-October pick up a bit. Not for me this year. Then came Sandy. I am not insured in NJ or NYC, but still found some water damage work.
Sandy wasn't bad for me, but not great. Equipment limitations and insurance limitations hurt, but late October and early November were right on target.
Now it is post Sandy. Mid November to mid December are supposed to be like Passover. 12 hours a day, 7 days a week. Not for me. Not this year. I am slower now than the dog days of summer. I'm spending more on advertising than I am doing in gross sales. I am dumbfounded. After 3 weeks of heavy advertising in the paper, on the radio and online, I cancelled everything. I can't put out this kind of money and get no results at all.
I'm thinking there are several problems. First the local economy is not so good. Fuel prices are too high. Heating oil has never been higher. People don't have money because of fuel prices.
Another problem, households think they can save a lot of money doing the work themselves. They buy a $100-150 Hoover cleaner and are convinced they will do as good of a job as I will with the $1,800 electric machine that I started with or the $8,000 machine that has to stay on my trailer and is powered by a 26 hp 2 cylinder tractor motor. I know that is not true.
I can't convince Sally House Wife otherwise. Eventually she makes her carpet moldy and buys new carpet or switches to "hardwood" floors. She calls them hardwood, because they look like hardwood, but they cost less per square foot than any carpet or vinyl flooring because they are laminate junk from China. But Sally House Wife and her "hardwood" floor is a dead end.
Nope a lot of consumers have "all the angles" and see no value in what I do. They only call when they are screwed up and need a pro.
On the other hand, a diner who just got in trouble with the health department probably understands that greasy mess in his dining room is not going to come clean with a $150 Hoover, he may have tried. It isn't going to come clean with a small "pro machine" perhaps a smidgen better than the Rug Doctor. He knows he needs me. He knows if he wants to get the Health Department off his back, he has to pay me.
Same with the office building manager. He has 50,000 square feet of carpet to clean. He uses a low bidder janitorial service to clean his property. These people lack the skill and equipment to do a good job with daily vacuuming, let alone more intensive carpet cleaning. He may or may not know it, but eventually he figures it out.
So insurance work and commercial work are not too bad, but not always easy to get. Residential work used to be OK, but right now I have no idea what is going wrong. I think I will give up all residential work except for that of my Jewish friends. Is this a mistake? Walking away from a big part of my market and concentrate on something harder to get but more rewarding?
Thanks for reading this super long post and your comments.

1 year ago - 2 answers

Best Answer

Chosen by Asker

OK I read all of this. Firstly let me introduce myself, I'm a business student doing management at one of the UK's top 5 universities (Manchester). I also got an A* in my A-level business, I know that is all theory but it really can be applied to the real world if you cherry pick the best bits.

So lets start with the adverts, adverts take a long time to have an effect, when was the last time that you heard and advert and immediately brought the item? People put it to the back of their mind and when/if they need your service, you should come into their heads (or so the advertisers hope). Your right to cut the adverts, if you don't have the cash flowing into the business try to keep outflows to a minimum. Try to look for cost saving, its early days to be thinking about staff lay offs (if you have any) but think what else can go. There was probably nothing, that a good sign- your work effectively, but keep thinking.

Essentially what happening here is your key market has died, people no longer feel they need your service. Your only a small firm so you can't change that, don't even try- its a waste of time. That said don't stop offering your domestic services to Jewish or non-Jewish (revenue is revenue) households but don't keep chasing contracts with these customers. Look elsewhere but accept that you need to find other sources of revenue. That said the market may pick up, give it time and don't despair. Don't stop offering a domestic service, just don't put all your eggs in one basket.

So these other contracts are harder to get, that almost to be expected, the more reward the more people chasing them, the harder they are to find. That is just the world over. Think how you come by these contacts. The business contacts only contact you because they finally have to. They feel they have no choice anymore. But what if you could network with them first, maybe think about contacting one of these low bidding janitorial companies and starting an agreement. They can say to their potential and current customers "now we can also offer you this intense cleaning service when you think you need it", it makes them more attractive and you get a reliable custom flow. This way you have what know as the 'first mover advantage', the janitor company passes on your details when someone needs you (maybe you give them 5% of the contact value or something like that? (but also remind them it makes them more competitive)) and you get the business before anyone else even gets a look in.

If its the same as the UK (which I'm guessing it is) you can't do the same for the health departments. But as with everything in business, you can do something! The types of place that are failing these health inspections you could probably guess from a mile off, cheap kind of places (maybe not but I'm guessing) so why don't you knock on their doors first? Ask them if they need cleaning, don't wait for them to come to you. Also think about offering contracts (contracts are everything- they guarantee you bookings and payments). A contract where you clean for them every month or whatever it is for a discounted rate. Maybe do a refer a 'friend' thing as well, offering a discount to them next time if they pass on your details and from this you get more work? Also think about doing the refer a friend thing with domestic business as well (word of mouth here may work better than adverts).

So I hope I've covered all the options, but there is one more thing I think you could think about doing. You should think, what are these business/ household people doing at the same time as getting their carpets done. What has made the householders redoing their carpets, what else are they redoing as well? Think what contracts you as a business could enter with other business's, or what other similar services to carpet cleaning you could offer. For example (might not work) but if you equipment could be used to clean car/ bus insides/seats/ home sofas , could you maybe offer this to a small bus/ car rental company? Maybe that is a stupid idea but its got to be worth a think. What else can you do, at very little/no extra investment or cost?

Also don't forget to do the obvious, a website, network online IE website that help people find trades men etc... Its cheap/ free and gets you business. I hope business picks up and even if none of my ideas work at least I have tried to help you. Wish you the best of luck, F

1 year ago

Other Answers

Do you market to your former customers? Repeat business for a business like yours should be very important. Also, ask former customers for referrals and offer them a discount if they do. Leave flyer's or magnets with your phone number after every residential job. Have you tracked your advertising in the past to know what worked and what didn't?

by Steve - 1 year ago