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My Company Survived Year 1 — Here’s What I Learned

By June 27, 2017Uncategorized

Exactly one year ago we began servicing customers as a residential cleaning company. We had a team of three part-time employees, my wife, and myself. I am personally stoked to say that in just 12 months we are now the same size as an average brand name M___ Maids franchise with five crews. We also won the award for the Sun-Gazette’s 2017 Best House Cleaning Service in Arlington.

I’ve noticed that, because of Shark Tank and other shows, people enjoy hearing how we’re doing as a business, so here you go!

Side note to all this — we are bootstrapped, not funded, and we do not have the advertising nor branding support of a franchise. This means we used our own money without any investors.

On market research leading up to launch…

We are numbers people so naturally we built a financial model and let the numbers do the talking. This took way too long, we should’ve just focused on establishing and running a test market. And three months after we launched, our beautiful model quickly became irrelevant when we pivoted markets.

What I learned — Get something out to market and see what works…carefully. Know and understand how your consumers will respond. When it comes to house cleaning (like laundry and other personal services), buyer emotions are sky high. Emotional buyers may or may not tell the world when they like you but will most definitely tell the world when they despise you. For us, a local test group of paying customers would’ve been smart.

On hiring a workforce on an idea alone…

In an hourly market, why would a legal worker with experience want to work for a company with no office and no actual work? We went guerrilla style for recruiting and it was amazing. We went to the parks, found the nannies and asked them to tell their family and friends about us. I still love / can’t believe that it actually worked. AND the referrals came from trustworthy sources (Arlington nannies) so we received a built-in added layer of diligence on our prospective employees. We did our own extensive interviewing, background checks, reference checks, etc. as well of course and had great success.

What I learned — Guerrilla marketing, when done properly, is outstanding. My thoughts were, “Is this normal? Are we freaks?” Yes, we were / are. But that’s the beauty. It captured attention and drove home that we were real. When you see someone live and in-person, wearing consistent uniforms with a consistent story, it builds trust.

 

On selling a brand new product / service (customer acquisition)…

We wanted to acquire market share quickly as we needed to get our team working.

What I learned — I had no idea the impact heavy discounting would have AFTER we got up and going. It did achieve our goal of getting our people working and testing our service. We started acquiring customers but they definitely wouldn’t be profitable until we could raise prices a few months later. We weren’t gaining traction in our target market like we anticipated because owners of bigger homes simply do not have the time nor energy to risk poor quality to save a few bucks. Interestingly enough, when we raised our prices consumer confidence surged.

The underlying lesson learned here is that every decision has a short-term AND a long-term impact. It’s very challenging to see beyond the short-term when you’re concerned about cash flow and employee morale. This is actually a major difference between funded start-ups and bootstrapped small businesses. The funded start-ups aren’t overly concerned with cash flow (yet) and have advisors who have already obsessed over the customer acquisition model.

On actually operating…!

This was all a blur. To be honest, I don’t remember much of the first few weeks but what I do know is I quickly learned how to clean a house.

What I learned — How to clean. Yep. I’m super glad I did because I learned so much about the industry and what clients truly want. Many of my assumptions were very wrong. More to come on this in part 2 of this blog series.

Part 2 is what I learned in the first 6 months as we figured out our operating model and had some intense growing pains.

Part 3 is what I learned in the second 6 months as we finalized our operating model, managed through growth spurts towards profitability, and I began the transition from working in the business to working on the business.

 

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