*NEW* here and thinking about a cleaning agency

[ormes21]

Big hello to everyone!

I want to be realistic and honest with everyone so we hopefully get a direct honest response back from experienced people like yourselves.

There are two of us thinking of starting up a cleaning business. Im looking at it from an entrepreneur type view and can imagine (i know its easy to imagine!!) earning alot of money from making a cleaning agency. I myself have no experience what so ever within the cleaning industry, I just read alot of books about business/investing and waiting for a good business opportunity.

My cousin who would be working along side myself currently works for a office company where he handles transactions of some cleaning contracts and is familiar with all the documents needed. This was his idea after realising they were charging alot p/h for 9 month contracts.

We are young 22/23. I know we will be working by ourselves to begin but hope to quickly take on two people and gradually build contracts and take it on from there. At the moment I would think to aim at office cleaning.

What I would like to ask everyone reading this....

1) Have you started a cleaning agency?

2) How long did it take to get reliable cleaners?

3) How many people have you taken on?

4) Do you use your own equipment? (I hear of offices that supply their own equipment!)

5) How many years was it until you made reasonable profit?

6) Have you made bucketloads out of cleaning i.e 100k+ after five-ten year input?

I know this is cheeky and direct but I would like to get some feedback on what we are about to embark on and how realistic our thinking is.

I know almost everyone reading this will probably be banging their head against a computer screen thinking WAKE UP or ITS NOT EASY. So please tell us why, I would like to take your advice on board.

BTW our budget atm is roughly about £1000 lol so guess we would require financial backing from somewhere aswell.

Thanks so much in advance, your advice could shape our future!!


Andy

 

[Cornish Steve]

If you don't mind, I'd respond with a series of additional questions for you:

1) Which of you will be in charge? Don't split ownership 50:50; make it 51:49

2) Do you have the contacts needed to win business from existing companies?

3) What will make you different? If you don't offer added value, you'll soon be competing on price

4) Have you put together a detailed business plan? It forces you to think everything through

5) How will you find the right people to work for you? How can you win their loyalty?

In fact, one book comes to mind immediately regarding hiring the right people and keeping them enthused: "The Three Signs of a Miserable Job" by Pat Lencioni. It's easy reading (written in the form of a story), but it makes some interesting points.

Sorry I didn't answer your questions, but hopefully this feedback is helpful.

 

[ormes21]

Thanks steve,

We have only started researching this week which has mostly consisted of what other companies rates are around London.

answer to your questions;

1) We have not discussed this yet, but I would say on the basis that it was my cousins idea he can/will own the majority of the company. I dont think im an egotistical kind of person so being majority owner or not, higher or lower (as long as im part owner ) wont bother me.

2) Nope, we have no contacts to win business from other companies. Atm all I have thought about is direct marketing. Do you have any suggestions?

3) Hmm we only just started our research..so theres the answer to that question! Il just say that the potential profit that we thought we can make stole my heart so now its time to think about this stuff.

4) We have both put down a rough business plan. We have given ourselves 2 months to research and get stuff like this together...Then we will make a final decision to go forward.

5)This is where I hope reading books like "how to win friends and influence people" will come in handy lol. Our basic thinking atm is advertise for a cleaner with experience and interview them.

Thank you for the reply, it has opened my eyes to things we have not thought about yet!! As for the book I looked it up on amazon and added it to items to buy later.

Thanks,

Andy

 

[Deliberator]

Cleaning is, well massively competitive in and around London, or at least I would think it was ! However, you need to find either a niche or a unique reason why a business would want to use you as opposed to the next person, so think carefully about what you can offer that others are not, or at least along those lines.

There are two of you; now just because the other fella had the idea, doesn't automatically entitle him to more of the company. I would suggest, unlike the poster above, that you do split everything down the middle from the off. That way you are both equally responsible for finance, costs, profits, effort, hours worked, everything. One thing to consider very carfeully is that many start up partnerships fail quickly because one partner puts more hours in, or works harder than the other, which will cause a big rift, so ensure before you go any further, that you draw up a partnership agreement, sign it and get a solicitor to witness it so that it's water tight.

The initial marketing ( I would suggest that it's you both who need to call, visit, sell etc...) will be difficult because of the massive competition, but with motivation and belief in yourselves, you will make progress albeit small to start with. Once you get started, it will grow from there if you do a good job continually.

Hiring staff will also be extremely difficult, to find good staff that is !! Play it by ear at first. Get to know your job intimately b4 taking on anyone else otherwise you won't know what to expect of your staff.

Work hard, keep focused and work hard ! You'll get there I'm sure

Good luck

 

[SRD]

Hi Andy,

I own a cleaning company in London.
As the above poster said, it is a very competitive industry, and an extremely volatile one too.

You do not, however, need to find a niche. Companies will always chop and change their cleaning contractors if the price and service is right (these days it's more and more coming down to price).
You HAVE to be a good salesman, and really, you've got to get out there and see people, spend lots of time on the phone etc.
Try and talk to the right people. For example, try and get in with facilities management companies, they are the sort of people who can provide you with regular work and when you've proved yourselves to them, can reward you with entire buildings etc.
So, while I would say you have to work hard, you also have to work smart.

To answer your questions:

1. Yes, I have started a cleaning company.

2. Unfortunately, you never really know if the cleaners are going to be reliable. You have to keep on their backs at all times.

3. We have over a hundred cleaners on the books. A 4 person operations team, and 4 person sales team.

4. If you are going to be a professional outfit, supply your own equipment (this can be costed into the contracts).

5. I made a reasonable profit in my first year.

6. There is 'bucketloads' of money in cleaning I promise you!

I've consulted for a couple of start up cleaning companies, If you want to chat drop me a PM.

 

[Deliberator]

^^^ SRD, that's an incredibly generous offer of assistance there

 

[SRD]

^^^ SRD, that's an incredibly generous offer of assistance there

I am an incredibly generous man! Just ask my staff!! Haha!

Also worth pointing out to Andy, you mentioned you would require additional financial backing... I started my company with no financial backing of any sort! Just enough money to get some business cards and letterheads done! Negotiate with your suppliers and try to get 60 days terms with them at first! It's hard, especially now, but it can be done!

 

[ormes21]

WOW RPD you are inspiring and making me optimistic - Exciting stuff, thank you alot for replying to this thread. This is exactly the kind of person I was hoping to hear from.

Thank you for your help and advice. Will take on board the advice for getting 60 day terms as this would help out alot. Will definately PM you

Sorry for not replying deliberator. Thank you for your input we will discuss things you have mentioned such as a partnership agreement, this is all new to us. If you have any other thoughts please let us know

Thanks again,

Andy

 

[graemepirie]

Andy, I own one of the largest domestic cleaning agencies in the country. I'm a franchisee and the answer to your question (6) is yes.

Domestic & commercial cleaning are very different, but as a starting point you will need more than £1000 just to do some decent marketing.

If you want to consider a franchise drop me a PM & I'll put you in touch.

 

[SRD]

Andy, I own one of the largest domestic cleaning agencies in the country. I'm a franchisee and the answer to your question (6) is yes.

Domestic & commercial cleaning are very different, but as a starting point you will need more than £1000 just to do some decent marketing.

If you want to consider a franchise drop me a PM & I'll put you in touch.

Yes, domestic and commercial are extremely different. Good commercial firms don't advertise. The general consensus in the commercial world is that the more advertising a cleaning company does, the likelyhood is, it isn't a very good company.
I started with next to nothing, and have grown mainly organically.

I doubt a franchise would be right for the original poster, as he said he's looking to make serious money from it in the long run.

 

[graemepirie]

I doubt a franchise would be right for the original poster, as he said he's looking to make serious money from it in the long run.

Why do you say this?

 

[ormes21]

Hey graemepirie,

Just out of curiosity what could your franchise offer?

If im being honest we would not want to invest into a franchise because we want to start our own business and not expand someone elses.
However, any info you could offer or why it would be a good choice could be helpful

What SRD has said in his previous posts is more along the lines of what we had in mind.

Since last week we have signed up to some really good seminars, the bstartup one in particular for this week which looks great. There are alot of free ones around atm that look really good.
Not really got anything else to add since last week, will try to keep the thread up to date .

If anyone else has any thoughts on starting a cleaning agency please share them!

thanks for your help,

Andy

 

[graemepirie]

Hey graemepirie,

Just out of curiosity what could your franchise offer?

If im being honest we would not want to invest into a franchise because we want to start our own business and not expand someone elses.
However, any info you could offer or why it would be a good choice could be helpful

What SRD has said in his previous posts is more along the lines of what we had in mind.

Since last week we have signed up to some really good seminars, the bstartup one in particular for this week which looks great. There are alot of free ones around atm that look really good.
Not really got anything else to add since last week, will try to keep the thread up to date .

If anyone else has any thoughts on starting a cleaning agency please share them!

thanks for your help,

Andy

Hi,

Well the biggest thing I guess is that you don't have to ask questions on forums like this! A franchise would provide you with all the knowledge you need, a proven system, all initial documentation and lots of similar people to share ideas with.

 

[RLD Plastering and Tiling Services]

Hi I have recently started an oven cleaning business in the birmingham area and the one thing I will say is that I believe you will need more than £1000 to start up, although you can get some really good deals from people on this forum which will save you money but I started with more than £1000 and it was scary how quick it disappeared.

• business cards
• website
• flyers/leaflets
• brochures
• equipment

These are all business tools that you will need or be expected to supply, as most people will probably tell you one of the most important things when starting a business is brand awareness which means money spent on marketing. However I targeted mainly domestic which meant local press advertising so my costs were probably higher than yours maybe. As for making lots of money only time will tell for me.

Thanks
Jason

 

[Peter1972]

Adding to Graeme's insights above, looking at a franchise might be a reasonable idea. There is a significant danger if you jump in the deep end of a pool without learning how to swim first! You would need a system, training and support, unless you are prepared to endure a huge amount of stress and financial loss.

I have seen a lot of new business owners start up in the spirit of reckless adventure, only to disappear quietly later. Around 90% of new businesses go under in the first 5 years. They all thought they would be successful. Beware of some of the advice you will get on forums, as some of it is idiocy, whilst some is beneficial. Unfortunately, you will not have the experience to differentiate, so I hope you are feeling lucky!

I am a franchisor in cleaning management, offering a proven business model that would take you years to develop by yourself and all the help you will need for £1,999.

nationwidecleaners (dot) co (dot) uk - listen to the 5 minute audio presentation for an outline of how it works.

Did you pay for driving lessons before driving by yourself?

 

[chrisinit]

If your looking to make loads of money, aren't you better off with a different and original idea? If you just another cleaning business, i don't think you will makes huge amounts of money, which is the impression i am getting from the original post. Correct me if i am wrong though.

Have a think about one particular thing that will make you different from everyone else, quite a significant one. If you come up with something then your on for a winner. Not sure how adventurous you can be with cleaning.

Good Luck!

 

[||MARK||]

Although you are looking at mainly offices to clean, i would suggest that you should consider residences also, as many have factors or property management companies who organize the likes of cleaning contracts...just a suggestion.

 

[Chris34]

I worked in the cleaning industry for 12 years, I started off as a cleaner working part time and when I finished I was an area supervisor working full time. I have worked for about 15 different cleaning companies around manchester and have worked at over 200 different sites. I regard myself as being one of the best cleaners in Manchester, and know the operations side through and through.

The last job I had was working for somebody who was a franchisee of a franchise cleaning company, which I finished in April 2008.

My boss (the franchisee) decided he wanted out and decided to sell, he had about 18 contracts and the turnover was about £150K. He wanted £15K for the business. I looked into buying the business and studied the figures over several months and visited the banks and discussed getting a loan to buy the business. I also spent a day down in London meeting the franchisor and listened to what they expected from myself and what they would do for me.

I ended up not purchasing because after looking into all the accounts for months and constantly requesting for figures that were not in the accounts provided, it turned out that once I had all the figures the business was not making a profit as had been stated by my boss and was infact making a loss and once new legislation kicked in within months after the sale the loss would be quite large.

Anyway that's all now in the past but what I learned was invaluable and I believe is very useful to yourself. Here is a short list that will get you thinking along the right lines of the main problems you will come accross.

1. If it's a franchise you choose they will have rules that you have to work to. Some of these rules incur financial penalties if you break them. These can be quite large.

2. Cash Flow - if you have 30 day credit terms then you will not see any income from the contract until about 45 days, however your cleaners will still need paying before the 45 days. If you have a one cleaner contract doing 10 hours a week on minimum wage then their wages per 30 days will cost £228 for the 30 days if it's a 3 cleaner job then you triple that figure to give you £684 per 30 days, if your client is late paying and rolls over to the next month then you double these figures. Add cleaning materials on top of this and you can see that the costs rise quickly, you also have the employers NI to pay for these workers and you have to insure them. One 3 cleaner contract doing 10 hours each a week can easily be costing you nearly a £1,000 per month, if your client doesn't pay that's £1,000 per month you have to cough up to pay for costs you can't avoid paying.

3. Business expansion limited by lack of money - Because you are always waiting to get paid (larger contracts expect 90 day terms) you are always playing catch up with the figures so the contract you win today will only start making you money after about 6 months, up until that point you will be funding the contract out of your own funds to cover for costs. It's difficult to explain but on a cashflow forecast you can see it hurting the figures very clearly.

4. Operating times - Cleaning is a 24 hour, 7 day 365 day a year business. You will get days where you have to get up at 5 a.m and won't get home until 10 p.m, you also will get calls at 5 a.m (if your lucky) from cleaners telling you they are too sick to go into work which starts at 6 a.m, however you cannot just leave that job, there will be bins overflowing, toilets full of sh*t, no paper hand towels, conference rooms full of left over sandwiches, coffee, milk from the day befores big meeting buffet and last but not least your clients coffee machine not emptied or cleaned and his/her desk not cleaned, bin overflowing... you get the picture? If this job is not done that client will ring you up at 9.30 a.m and NOT politely inform you that the cleaner hasn't been in and done the work, it's the opposite you are the person they will vent off all their anger against and they will also dig the knife in further and say that the standards have been slipping for a while and they have had a cheaper quote from another company. Honestly I can't tell how bad they are it's unbelievable.

4. Don't expect a thank you - Clients only ring you up to complain, they very very rarely ring you up and say thank you for doing a really good service.

5. Standards - don't promise the earth, you will make mistakes and things will not get done, if you tell the client they will never ever run out of toilet roll or soap and they do run out they will remember what you said. Clients do check your work, I have had clients write dates in dust that has been left on ledges, fortunately I have always spotted them but that's only because I have vast cleaning experience, somebody new would miss it and... yes you guessed it the angry client having a bad day at the office decideds to ring you up to point out that a window ledge hasn't been cleaned for three months.

6. Holidays - Remember to price in holidays with the price of the contract, if you don't it will completely mess your figures up when it comes to the holiday season and you are paying double wages while your cleaners are on holiday and you have a stand in cleaner.

7. Transport - You will do lots and lots of driving (I was doing 500 miles a week just around manchester), a lot of this time will be in heavey traffic, unfortunately your vehicle has to be a mobile office and you will be constantly on the hands free kit receiving calls and making calls with the operation side of the business.


That lot's just a taster of what to expect and I will leave it at that but I can tell you this if it was easy I would be setting up a cleaning business myself because I know all I need to know but for me it's not worth the effort, I am now an online trader and find it a doddle compared to cleaning, infact it doesn't even feel like work it's that easy in comparison.

There will be successful cleaning companies but even the successfull one's still have to deal with all of the problems listed so to say it's easy money is very far from the truth and in my opinion the profits that can be made are very small for the amount of effort.


Good luck with it,



Chris.

 

[ormes21]

Thank you everyone for the replies -

The main cost would be marketing for us. We spoke 121 to a marketing advisor at this business startup seminar who did bring us down to earth about costs what we will need and then you go and listen to Doug Richard and other speakers who say spend little as possible. So you have to balance it out.

We have contacted other cleaning businesses and become good friends with the owner of a cleaning company who has shared/sharing great advice and answers our questions about costs/supplies/staff etc AND he started a year ago doing quite well in these hard times. As for a website I will be making that, the only thing im not looking forward to is research for SEO.

Graemepirie and Peter1972 - If im honest I never knew alot about franchises when I first started this thread but its amazing how much information books can provide. When the subject of franchising came up I had just started reading a very popular book called "The E Myth." Which basicly goes through why businesses failes and how franchises have a 75% success rate which obviously intrigued me. So I do now understand the message you guys are trying to get through to us.
The book basicly gets you to understand how franchises work, realise all parts of your business, break down your business to a simple model and produce a simple system for each part of the business. When its put together it operates efficiently, anyone brought into the business can learn the system because it is simple and everything is in place.

It is appealing to think about a franchise but at the same I feel the urge just to attempt getting our own name out there while as we develop, we develop a franchise prototype NOT selling a franchise but basing our company with a franchise system.

I also feel like its not just the money....its the whole goal of getting your own business together, getting it out there and seeing your own thought turn into something amazing. Yes its just a vision but without it were not entrepreneurs! So thanks alot for your advice and we will keep you in mind over the next few weeks because we are stil deciding what to do but atm our headspace is still on trying to make something that is our own.

Mark, thank you for the suggestion...we are considering offices as you said but are also considering other areas we could work in.
Atm our research and what we are developing our product from are other office cleaning companies and potential office customers.

I was thinking to target one spacific sector in one area, not to give ourself too much of a target. We could still decide to change our route, domestic cleaning was another routh but we have not looked at property management companies which is definately something to consider, so thanks mate.

-

Just as im about to submit a reply post I see Chris43's post LOL what a kick in the ribs!!!

This is when its annoying...(not in a bad way) We have people on one side, people we got to know, saying you can make alot out of it, its not that hard and then we have people on the opposite curve saying DONT or how hard it is.

I guess you have to expect this from both sides, and it is good to think about this stuff and hear the advice. Its why I am resisting diving into a business I know little about and am really thinking about what to do.

Thanks for the post Chris, I will read over it alot so it sinks in and will continue weighing out pros and cons of our feedback. It definately brought to light some realities we will have to face.

Thanks,

Andy

 

[Peter1972]

Andy

I agree that Michael Gerber's "The E-Myth" series, as in (confusingly) the "E" being "Entrepreneur" is excellent. The audio version is perhaps better than the book, as he's a great speaker. I've listened to several of the "E-Myth" series, though he does seem to lose his fire inside as he reaches pensionable age in the last ones!

Peter