Chris Robinson Posted October 4, 2006 Author Share Posted October 4, 2006 [. We're trying to get the business to a breakeven. n. However, it's been over a year since a paycheck from anywhere and we've pumped about $130K in the business, including franchise and territory fees. Most of the investments are behind us and we just want to get the business to start generating some cash. The emotional and physical toll have been high. Carrie and I just look at ourselves some nights and say, "Man, this is waaaaaaaaay too hard ..." you can tell me to piss off ... but let me offer the following business critique............. franchises are a boner, you can't "buy" a business, .......and what are you going to get for your hard work ..?? a silent "partner".....who's already got a Fee, and want's part of your profit's .. forever get the biz profitable, show projected growth and sell it ... fast ... at least you can recover your $130 grand........you both have lost a years income it's a very poor business plan, these day's , to think you are going to make money selling Labor i am certain you are realizing now the employee problems will never stop in a low tech, high turn-over biz like cleaning houses sorry to be a dream squasher, but it is reality, far as i can see go back to work that you know best.... perhaps a job, at least it will come with benefits... Duke, Yeah, you're probably right ... but I met a lot of folks in this franchise who have done very well ... and some who have struggled. My neighbor to he north of us in Charleston is two years old and is just nailing it. We, however, are a different market. We'll see how it goes. We have a six month timeline to get the house fixed up and see where the biz is. Hence the whole point of this thread ... We are mobile and can fix this. I'm 51 with a background in high-tech (semiconductors, all gone to China) and an MBA in marketing (NYU, with honors). Carrie's smart and well educated, 17 years with Liberty Mutual (via acquisitions) Would be nice to find a city where jobs can be had and employers exist ... Chris Quote Link to comment Share on other sites More sharing options...
Duke Spinner Posted October 4, 2006 Share Posted October 4, 2006 . While you think "selling labor" is not worth it, think again....it's everywhere....and growing! doesn't mean it's profitable .....[:|] .. if you sell Widget X for 40% gross profit .. you recieve ... well, 40% gross profit if you charge $80 to clean someones house, figgering it'll take 4 man hours... and one person doesn't feel like working very hard that day... it takes ..longer, or, you go back and re-do.... or .... Dufuss don't show, now the crew is short .. maybe only do 4 houses this day, instead of 6 ... where ya goin' ...?? you tried to net $10 / hr/ employee....and ya still got overhead to pay, lost time, transportation, etc but your gross isn't what it was projected to be .... .... selling Labor... is not a good way to profit's i don't think that business will support an adaquate margin, of say, 5-6 times actual labor cost .....[8-|] Quote Link to comment Share on other sites More sharing options...
Duke Spinner Posted October 4, 2006 Share Posted October 4, 2006 Would be nice to find a city where jobs can be had and employers exist ... I can tell ya ...it ain't in New York State........[] Quote Link to comment Share on other sites More sharing options...
Clarence Posted October 4, 2006 Share Posted October 4, 2006 1. Jay, you sold me, I'm moving to NJ. [] 2. If somebody REALLY lives in eutopia, I need to know about it. I hate detroit metro. Getting ready to make a lifestyle change. 3. Turnover? try the car buisness...... in Detroit. [] Quote Link to comment Share on other sites More sharing options...
PhilMays Posted October 4, 2006 Share Posted October 4, 2006 . While you think "selling labor" is not worth it, think again....it's everywhere....and growing! doesn't mean it's profitable .....[:|] .. if you sell Widget X for 40% gross profit .. you recieve ... well, 40% gross profit if you charge $80 to clean someones house, figgering it'll take 4 man hours... and one person doesn't feel like working very hard that day... it takes ..longer, or, you go back and re-do.... or .... Dufuss don't show, now the crew is short .. maybe only do 4 houses this day, instead of 6 ... where ya goin' ...?? you tried to gross $10 / hr....and ya still got overhead to pay, lost time, transportation, etc .... selling Labor... is not a good way to profit's Well, perhaps one persons idea of profit is very different from anothers. My wife is in the medical field and makes stupid money working for people that sell her labor,,,Deal is...In this day and age more and more companies are out sourcing...I.E. No payroll taxes, benifits, etc. My lawn service sure does drive big and fancy trucks...he also always complains about labor but he still finds the time to vacation in only the best spots. Of course I'm not talking about a one man show....oh yea...that's how he started. He now has 30 employee's Quote Link to comment Share on other sites More sharing options...
Duke Spinner Posted October 4, 2006 Share Posted October 4, 2006 . My wife is in the medical field and makes stupid money working for people that sell her labor,,, Yea, Phil...but that's not cleaning houses.... how much do you think you can realistically charge for a low-tech,mostly labor service..??? would you pay $75/ man/ hr ... to have your house cleaned...??? Hell, I charge $160/ hr ...... and ..I'm not really making money due to overhead cost's.....it's killing me, esp. gas ...and insurance... ..I.E. No payroll taxes, benifits, etc. Somebody's gotta pay those pesky goverment mandated things like Workman's Comp, Payroll Taxes, etc .. they just don't go away .... Quote Link to comment Share on other sites More sharing options...
Jay481985 Posted October 4, 2006 Share Posted October 4, 2006 Although the cost of living here is expensive, NJ is not so bad. Can commute to NYC or work there or here. The weather is temperate, 4 seasons it can get hot and it can get cold. Right now is nice........ The schools in some suburbs are the best you can send private or public (this is public I am talking about) Housing costs alot or alittle. Its not so bad here (just hold your nose, just kidding) BTW there are lots of people looking for jobs and with your wife's masters and your MBA you should have no problem if you want to get back into the non franchise world Jay, my Dad lived in Toms River for close to 20 years +/- and I never heard much complaining, except that it wasn't Texas. When he finally retired they moved back down here to be close to the grandkids. They also used the term it's not so bad, or even it's pretty nice up here. I do hear that there is freaky deliverance type stuff deep in the Pines....... what is this freaky deliverance type stuff??? BTW Tom's River....... get you dad check for all cancers, seriously..... I believe it has the highest rate of cancer in the US for some really unknown reason. Quote Link to comment Share on other sites More sharing options...
PhilMays Posted October 4, 2006 Share Posted October 4, 2006 . My wife is in the medical field and makes stupid money working for people that sell her labor,,, Yea, Phil...but that's not cleaning houses.... how much do you think you can realistically charge for a low-tech,mostly labor service..??? would you pay $75/ hr ... to have your house cleaned...??? That's true...but as I said before..one mans idea of profit may not be anothers....If I can make $5 an hour on 20 employees then perhaps I have done well with volume....Of course overhead is always an issue...but that's why people need to understand their demographic and have a business model that can change for the times. I pay my housekeeper $55 per week and I have no idea how long she takes, but were both happy. She has no overhead except gas to get here. I provide all of her supplies. I pay my lawn service $45 per week and he takes about 1 1/2 hours and were both happy. In the hotel business if I use an outside service it will run me about $15 per hour and the laborer will get about half that...again volume. ..I.E. No payroll taxes, benifits, etc. Somebody's gotta pay those pesky goverment mandated things like Workman's Comp, Payroll Taxes, etc .. they just don't go away .... No one said it was fair...It's just how things are going these days...and for the record, I agree with you. All I am saying is that external outsourced labor is on the rise. We actually saw somewhat of a decrease after the economy slide post 9/11....but it's back as labor shortages rear it's ugly head again in low unemployment markets where our economy is starting to "tick" again. Quote Link to comment Share on other sites More sharing options...
Marvel Posted October 4, 2006 Share Posted October 4, 2006 Best place is where I am, even if it's an empty house right now. It is PAID for, and has been for a number of years. Foothills of the Smokies. Not much snow, but we do have some sort of seasonal change in the weather. Quote Link to comment Share on other sites More sharing options...
pauln Posted October 4, 2006 Share Posted October 4, 2006 Houston is great! Texas is great (only state that used to be its own independant country - hence the pride and ever-present sense of being a Texan in Texas). Low prices for housing, alcohol, gasoline, and full of pretty women... nice weather and lots of opportunity, no state income tax, business friendly - Houston is also a very international city with lots of diverse cultures all around. In the last few years the inner city of Houston has bloomed with infrastructure supportive of people living, working, and enjoying life there. Much more is on the way in the years ahead. The only real 'problem' in Houston is that it is huge and the long distances from place to place are designed to be traversed in cars, but that can work to advantage when visiting your girlfriends..."Oh you really don't want to drive across town tonight...". Quote Link to comment Share on other sites More sharing options...
sunburnwilly Posted October 5, 2006 Share Posted October 5, 2006 And the Kin Folk said , Charleston is the place you wanna be . So they packed up the Klipsch and they moved to West Ashley . Swimming Pools , 400k , lots of jobs , no problems that I can foresee . Quote Link to comment Share on other sites More sharing options...
sunburnwilly Posted October 5, 2006 Share Posted October 5, 2006 Oh yeah , Texas has got NOTHING on us when it come to eye candy !!! And just for you Jeff , there are more lawyers and doctors here per capita than anywhere else in the good ole' US of A !!! Quote Link to comment Share on other sites More sharing options...
PhilMays Posted October 5, 2006 Share Posted October 5, 2006 Oh yeah , Texas has got NOTHING on us when it come to eye candy !!! And just for you Jeff , there are more lawyers and doctors here per capita than anywhere else in the good ole' US of A !!! MORE LAWYERS? Well I guess I have to cross SC off the short list! Quote Link to comment Share on other sites More sharing options...
PhilMays Posted October 5, 2006 Share Posted October 5, 2006 Hi Marvel, Are you in Nouth West Georgia? I've not been there but I have been in the NC side as well as Chattanooga area. Those areas are beautiful. Quote Link to comment Share on other sites More sharing options...
Chris Robinson Posted October 5, 2006 Author Share Posted October 5, 2006 . My wife is in the medical field and makes stupid money working for people that sell her labor,,, Yea, Phil...but that's not cleaning houses.... how much do you think you can realistically charge for a low-tech,mostly labor service..??? would you pay $75/ hr ... to have your house cleaned...??? That's true...but as I said before..one mans idea of profit may not be anothers....If I can make $5 an hour on 20 employees then perhaps I have done well with volume....Of course overhead is always an issue...but that's why people need to understand their demographic and have a business model that can change for the times. I pay my housekeeper $55 per week and I have no idea how long she takes, but were both happy. She has no overhead except gas to get here. I provide all of her supplies. I pay my lawn service $45 per week and he takes about 1 1/2 hours and were both happy. In the hotel business if I use an outside service it will run me about $15 per hour and the laborer will get about half that...again volume. ..I.E. No payroll taxes, benifits, etc. Somebody's gotta pay those pesky goverment mandated things like Workman's Comp, Payroll Taxes, etc .. they just don't go away .... No one said it was fair...It's just how things are going these days...and for the record, I agree with you. All I am saying is that external outsourced labor is on the rise. We actually saw somewhat of a decrease after the economy slide post 9/11....but it's back as labor shortages rear it's ugly head again in low unemployment markets where our economy is starting to "tick" again. Not that I wanted to go down the franchise thread, but Service Brands Inc is a realy great, supportive outfit with really good values and people. They're not fat, they're not lean. Just right. I never thought of house cleaning as a business but it's basically finding good labor and following a model. Our current sales are running at $4500 per week and $6150 is our break-even. We should be there soon. The Charleston owner opened two years ago this coming Christmas and has 48 employees. His working rate is very good and as Phil points out, everybody's happy. He's barely scratched the surface up there. Beaufort County here is exploding. I bought a mid-sized territory (<30K homes for a buck apiece for 10 years) but in reality, we're marketing to 40K homes and have another 15K homes we haven't touched yet. Houses are going in at 10K per year so if we have good labor, we should do fine. The question is ... do we have the patience and belief set to get there. I bought a franchise because it reduces the rate of business failure significantly, the royalty rates are among the lowest, and the brand name is strong. The business is very, very scalable. Just didn't want to don the tie and go back working for the man on this particular lap. Chris Quote Link to comment Share on other sites More sharing options...
boom3 Posted October 5, 2006 Share Posted October 5, 2006 Just a factual observation here...on our storm ravaged Gulf Coast, there are large numbers of Latino workers doing rebuilding. Nobody is asking them for green cards. We're just grateful for the help. Quote Link to comment Share on other sites More sharing options...
PhilMays Posted October 5, 2006 Share Posted October 5, 2006 Good for you Chris! It sounds like a great oppertunity if you can hang in there. I am in the hotel business and I can say that a Franchise hurts only when you pay the royalty or if the flag becomes stale or a stigma become attached to the flag. Many people I see that complain about the franchise (those that own one) are those people that do not fully utilize their support. I have found that the franchise will not came to you offering help, but when asked are there for you as much as needed, for the most part. Like in any business, those first few years are lean. Sounds like you know your break even point and your target market. With those behind you it sounds like it comes down to capital and determination.....of course I have seen capital exhausted before determination Quote Link to comment Share on other sites More sharing options...
Jeff Matthews Posted October 5, 2006 Share Posted October 5, 2006 Willy, I might agree about the lawyers per capita, but not about there being more eye candy. No way! Since we're off on the franchise kick, here's my take - and being a lawyer, I've seen a good handful of franchisees. First, you must always factor in how important is name recognition. McDonald's vs. Ozzie's Dairy Q is a different market. You stick your nuts on the table to get into a McDonalds, but the idea is that raw volume pays off. Of course, this does not always work. Then, you have all the other franchises. Just open the paper. Everyone wants to sell you a "how to." They call it a franchise or a "secret" to wealth. Many service businesses (almost all of them) are not dominated by franchises. IMHO, these "lower level" franchises are just a few goons that tell you how to do something, and you pay them to do it. Totally not worth it. In the service sector, you will especially find that word of mouth is the absolute best advertising and source of new business. Client refers client, and so on.... 'til you have a pretty sound base and lots of referrals. The trick is to function with the least amount of overhead possible. The person whose house you are cleaning will likely not care to come to your office and see Remingtons on the wall and granite conference tables. Most people seem to sport the idea that it takes money to make money. This is so untrue in the service business. That's why I like what I do. Very minimal capital investment and very good hourly rates. You will find out later (with more experience behind you) that the franchise cleaning thing was a waste, and it unecessarily cut into your profits. You will know that to be true when you have plenty of clients that like you and your service and that don't know anything or care about the goons that sold you their name. If you have an exit right out of the payment of royalties or whatever you are paying, I would definitely explore it. You can grow your business on your own. Quote Link to comment Share on other sites More sharing options...
picky Posted October 5, 2006 Share Posted October 5, 2006 ..best place? "In a VAN down by the RIVER!" [] Quote Link to comment Share on other sites More sharing options...
PhilMays Posted October 5, 2006 Share Posted October 5, 2006 I would suspect that in his franchise he may have signed a "no compete" clause in his gegraphic teritory and that he may have some liquidated damages for breaking the agreement. However if their is a performance clause as to what the franchise is susposed to do then I think that would be the road to go down, of course with all the legal i's dotted and t's crossed in regards to "notice". I would tend to agree that when dealing with this that word of mouth can make you sink or swim. Quote Link to comment Share on other sites More sharing options...
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