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GOLD Making Money For Dummies (And In a Crowded Market)

Discussion in 'The Unscripted Entrepreneurial Mind' started by IceCreamKid, Oct 4, 2015.

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  1. IceCreamKid
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    IceCreamKid With Great Power Comes Great Electricity Bill Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    My primary goal for this thread is to hopefully open your eyes to the fact that although everyone is jumping on the online entrepreneur bandwagon, there is still plenty of money to be made in the offline world. Hopefully it helps somebody out.

    You can take almost any old school biz and apply basic direct response marketing principles to the advertising to scale it to a very good 6-figure income. I'm guessing you can scale it to 7-figures as well, but I haven't done that myself nor am I going to pretend that I have.

    The Details

    Why carpet cleaning?

    -Solid profit margins. A $300 job will require $10 worth of cleaning solution. There's also the cost of gas, insurance, etc but the profit margins still remain good if you apply the proper tweaks to the biz. If you play the bait n' switch game like a lot of the competition then you won't last long.

    -Recurring revenue. IMO, the greatest benefit of recurring revenue is that it gives you the opportunity to acquire customers at breakeven or even a loss in some cases. I try not to take an upfront loss on a customer though.

    -Any ordinary man can learn to clean carpets. It takes plumbers and electricians months or years to get certified, but you can learn to clean carpets in a weekend.

    -Low start up cost. If you know where to look and buy used stuff, I'd estimate that you can start the biz for around $1k. As you scale up, you'd want to buy better equipment and a nicer van/truck.

    -Unsophisticated competition. It's quite easy to gain traction in this niche because the competition mostly hasn't spent any time learning marketing. Most will just say stuff in their ads like, "XYZ Carpet Cleaning. Call us for the best price". My prices are in the top 10% most expensive for the area. Positioning, positioning, positioning.

    -SIMPLE. SIMPLE. SIMPLE. No fancy knowledge needed. EPC, CPC, CPA, none of that.

    The Story

    I took over the steering wheel of a carpet cleaning biz earlier this year. For years, it was struggling with approximately $50k annual profit. Where I live, you're poor if you make $50k.

    I immediately began implementing marketing systems for customer acquisition and customer retention. I never changed the website simply because I'm lazy and running 3 other businesses alongside the carpet cleaning biz. I'll get around to it one day.

    There are 2 types of entrepreneurs: the Elon Musk types who create brand new innovative products. They don't need to spend any money advertising because their products are so unique and attention grabbing. Then there's everyone else...the guys who cast a wide net selling many ordinary things. They need to advertise.

    The biggest help was that I started using a service called Every Door Direct Mail. This allows you to send postcards to entire zip codes at nearly half the normal postage rate. The postcards had all of the classic elements of direct response marketing.

    -Stating the problem

    -Addressing objections

    -Establishing credibility

    -Testimonials

    -Risk Reversals

    -Described what was unique about our service/product

    -Call to action

    What I found is that depending on the zip code, I would get back $3-7 for every $1 spent on advertising. Neat. Scaled it like a kid in a candy store once I knew the metrics.

    You are literally one direct response marketing campaign away from making a cool 6-figures, perhaps 7-figs...even if you're in a boring niche like carpet cleaning. Study direct response marketing. Once you have the direct response skills embedded into your brain, you can go into almost any niche and make a very good 6-figure income. Or you can just keep it simple and jump straight into carpet cleaning. It's not sexy, but it just plain works.

    Here's the YouTube vid that inspired me to jump in. Last I heard, the guy was doing $3M/year in carpet cleaning.



    Ask me anything about direct response marketing, the pitfalls of this niche, the process of cleaning, or just anything in general. There are a lot of details I left out simply because it would be too much to type in this already long post.

    Jump in. Take action today. Success loves speed.
     
  2. holmzee
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    holmzee Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    Hey there IceCreamKid, quality post.

    I'm posting because my father owns a small contracting company and has been doing work on people's houses for over 30 years. Lately I've been trying to convince him to scale it up but he always becomes hesitant when I bring that up because he is afraid of losing control.

    The company is just him and another guy who do small jobs for loyal customers. He does no advertising, has no online presense, and gets ALL of his customers by word of mouth. He is a very personable guy and does an amazing job every time, which is why he doesn't want to give up control by scaling the business. That's also why people keep coming back for repeat business.

    The only issue I have with this is that he is getting old and has some health problems, yet he continues to do brutal manual work all day rather than hiring out the work, scaling, and managing. Additionally, if he or his partner can't make it to the job or are having health problems then there is only one person there to get the job done which in my opinion is an unreliable way to go about the business.

    He says that he wants to pass the business down to me when he retires, in which case I would work on scaling the business while leveraging his existing customers.

    I just want to hear your opinions/thoughts on the control issue that he is worried about, and how you might go about avoiding any issues with this in the long-term if you were to scale up a manual labor business such as this.

    Thanks!
     
  3. Valor
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    Valor Silver Contributor FASTLANE INSIDER Speedway Pass

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    I'd imagine you don't do the carpet cleaning yourself....how much do employees affect your "$300" profit margin? I'd imagine employees in most general skilled labor companies would come at a similar cost.

    Also, do you have many businesses for clients? Or mostly residential? Businesses would probably be a lot larger clients and be more likely to become recurring customers.

    Do you have separate ad campaigns for businesses? I feel like you'd have to target them a little differently (other than postcards), but the profit potential would definitely be much larger than residential clients.

    Painting is another industry with huge profit margin - even with the cost of employees and supplies and everything, that still leaves a huge margin to use for direct response ads.
     
  4. IceCreamKid
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    IceCreamKid With Great Power Comes Great Electricity Bill Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    Your dad's fears about losing control by hiring employees and scaling up is a very valid concern. One thing that you must understand is that each individual has their own temperament and if he is the type of guy who prefers to keep it small then give him the opportunity to be who he is.

    Perhaps he would be interested in learning how to roll profits over into passive investments. In a few months I'll start a progress thread outlining how I invest in stock options for monthly cash flow. Stock options are fucking phenomenal bro. They give you so much control if you know how to adjust your portfolio correctly.

    I maintain quality control by turning my clients into my secret shoppers. After each client is cleaned, they receive a survey in the mail along with a testimonial form. If I receive a survey back, I reward them with 1 free room of cleaning on their next appointment.
     
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  5. IceCreamKid
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    IceCreamKid With Great Power Comes Great Electricity Bill Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    I pay employees $20/hour. On average, the cleaning comes to $150/hour. If they choose to add ScotachGuard to the carpets then it bumps the average up higher.

    On Saturdays I'll often come along for the actual cleaning. Believe it or not, I actually enjoy it. It's really satisfying when you see a carpet that formerly had coffee stains all over suddenly look brand new.

    I have a small handful of businesses for clients, but I prefer residential. I positioned the company as premium which means premium employees, premium carpet cleaning, premium customer service, premium everything. That also comes at a premium cost. I am one of the most expensive in the area.

    Businesses tend to only care about the rock bottom price when it comes down to carpet cleaning. They tend to have zero loyalty for this service and there's always another guy willing to do the work for cheaper. If you compete by price, you will die by price because there is always some other dude willing to do the work for cheaper.
     
  6. Valor
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    Valor Silver Contributor FASTLANE INSIDER Speedway Pass

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    Makes sense - shows what I know about the industry :)

    Couple other questions I came up with here....

    1. What kind of call to action are you using in your post cards? Sending them to a website or having them call a number? Are you taking the calls yourself or do you hire this out?

    2. What plans do you have for scaling this? What do you think is your biggest obstacle in scaling? The direct response end? Or the managing employees/customer relations end?

    3. Do you currently have a long waiting list of clients from your ad campaigns? Or do you intentionally only do smaller campaigns whenever you need to line up some clients?

    Btw, checking out Every Door Direct Mail now....looks like an awesome tool!
     
    Last edited: Oct 4, 2015
  7. IceCreamKid
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    IceCreamKid With Great Power Comes Great Electricity Bill Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    1. I have both my website and a number written on the postcards. The secret sauce of the postcard is that I offer a free room of carpet cleaning. No obligations. No purchase necessary. No hard upsells. It's just my way of saying hey we believe in the quality of our work so much that we're willing to give you a free test drive. All of the calls are hired out. I don't want to deal with that stuff.

    2. I currently have 2 vans driving around 6 days a week. I don't plan to scale any further because then I'd have to rent a warehouse, deal with motivating a large fleet of employees, meh. That just doesn't excite me. I'm currently just stacking my cash and slowly moving myself 100% into the investor quadrant. If I were to scale to more than 2 vans, my biggest obstacle would probably be staying excited about the project long term. I know my personality well enough to understand that if I stay deeply involved in a biz for too long, things start to go downhill. My expertise is in putting all of the systems in place so that the biz has its own "legs" to run on its own without me. If I stay involved on a daily basis then I go crazy.

    3. Yes it's a long waiting list. People usually have to schedule 1-2 weeks in advance unless they're what I consider an A+ customer. An A+ customer is someone whose bill comes to $1k or more. They live in huge homes with a zillion rooms and most of the carpets are already pretty clean.

    One of the biggest lessons I learned is to never say no to a customer. If you say no to them then they get angry and never call you again because you were unwilling to accommodate their demands. Get them to say no to you. For example, if a customer needs a cleaning done within 24 hours we'll tell them, "We don't have an opening tomorrow until 7pm. Would that work for you?". Most will say no thanks, but perhaps will call you in the future since you were nice enough to at least attempt to help them.

    EDDM is a beast of a service because it allows you to tailor down all the way to household size, income, ethnicity, vehicles driven, it's wild.
     
  8. Sebastya
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    Sebastya Bronze Contributor Speedway Pass

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    So how much are you making now?
     
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  9. CPisHere
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    CPisHere Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    Great thread.

    How did you come to take over this company? Did you evaluate competition before-hand, if so, how?

    Have you considered offering similar services as cross-sells? I see some local companies also offer A/C duct cleaning, etc.
    Is Scotchgard the only up-sell you offer?
     
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  10. MoneyDoc
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    Another quality thread from a quality poster. Thanks a lot IceCreamKid!

    This niche/business model seems very interesting. Might give it a shot.

    Just a question regarding the vans, do you rent them or own them?

    Cheers.
     
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  11. Weaponize
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    Weaponize Workin on it! Read Millionaire Fastlane Speedway Pass

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    Thanks for sharing your experience and taking the time to answer questions!

    Curious about your thoughts... With direct marketing I've always read that you should be sending mail via first class postage as anything less, in bulk, runs the risk of getting dumped in the trash bin by the mail carriers. Curious about your thoughts/experience with that using EDDM?
     
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  12. RahKnee
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    Thanks for the post OP. Seems like something that would scale well in areas with large rental markets. Apartment complexes would no doubt rather spend a little $ making carpets look new for new tenants than spend a lot more ripping them out and replacing them.
     
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  13. Andy Black
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    Andy Black Any colour, as long as it's red. Staff Member Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    Ooo. Nice tip about getting the customer to say no. I will have to digest that.

    Great thread @IceCreamKid. Plenty of breadcrumbs for people to follow.

    Thanks.

    (Oh, and I had a chuckle at your tags.)
     
  14. BlakeIC
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    BlakeIC Silver Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass

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    Correct me if I am wrong, once you make X amount of money, are you letting others take over and run the business?
     
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  15. Five Star
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    Five Star Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    Always assumed you were in some hi tech, uber fastlane, exciting start-up. Never imagined it would be carpet cleaning.
    Just proves that some people can make anything work with the right attitude! <<<Gotta get me some of that! :tiphat:
     
  16. IceCreamKid
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    IceCreamKid With Great Power Comes Great Electricity Bill Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    I have no interest in divulging specific financials to thousands of anonymous eyeballs and lurkers. If I ever meet you in person I'll fill you in.

    The purpose of this thread is to help others learn the skills of entrepreneurship so that they can go into almost any niche that they want and make some decent coin. That's what matters.

    The quality of your life is directly correlated to the quality of your questions. Don't worry man I still love you.
     
  17. IceCreamKid
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    IceCreamKid With Great Power Comes Great Electricity Bill Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    A friend who is very close to my heart wanted to retire from the biz. I asked him to give me a shot at taking it to the next level.

    I did a very brief evaluation of competition using some simple tactics. Entrepreneurs tend to over-complicate things in their mind, but things can really be simple if you want it to be.

    The best way to evaluate competition is this: park outside of their warehouse and just watch. How many vans do they have? How many go out each day? When do they leave and come back?

    Then call them up and make an appointment for a carpet cleaning. I'll go deeper into this when I have some time, but buying someone else's service/product can expose you to their entire marketing campaign which they've tested and optimized. I'm not saying to steal their marketing word for word, but use it as a baseline that you can work from.

    I offer multiple cross-sells such as upholstery cleaning, tile & grout, and wood polishing. The only one that's actively advertised is the carpet cleaning though because that's where the most profit is.

    I also looked into mold remediation companies and fire restoration, but opted out because it was too complicated and I like simple businesses that crank out recurring revenue. I'm more of a lifestyle entrepreneur and value my free time more than having a Lambo to impress the middle class with.

    As for upsells in addition to Scotchguard, there are a couple: deodorizer, pet urine de-sanitizer, option to subscribe to 50% semi-annual cleanings. Scotchguard by far gives the most profit boost with zero extra labor. Sometimes we'll have Scotchguard thrown in for free without even telling the customer because they might really need it.
     
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  18. IceCreamKid
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    IceCreamKid With Great Power Comes Great Electricity Bill Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    Own. If you are starting out though I'd recommend renting first to lower your risk. The 2nd van is a 2005 GMC Safari that was purchased for $10k cash. It's a solid vehicle that can easily hit 300k miles or more.
     
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  19. IceCreamKid
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    IceCreamKid With Great Power Comes Great Electricity Bill Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    This was one of my biggest concerns when dipping my toes into the EDDM water.

    Ice Cream Playboy tip: If you have a solid relationship with a printing/mailing company that does large numbers with the Post Office, you'll actually be able to individually address each post card to each recipient but still get the EDDM rates. This means that when Mrs. Jones receives an EDDM postcard in the mail from me, it will actually have her name on it instead of "Current Resident". By doing this, you discourage the mail carriers from dumping all of your mail in the trash bin. I double check this by contacting customers every so often to make sure that they received their EDDM mail piece.

    It is essential to have systems in place for everything otherwise you risk trading time for money.
     
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  20. IceCreamKid
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    IceCreamKid With Great Power Comes Great Electricity Bill Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    Once the biz has "legs" to run on its own without me, that's when I start scaling further. Just because a biz makes X dollars doesn't necessarily mean it's ready to let others take over.

    Hope that makes sense. Put the systems in place to run without you having to be there every second of the day.
     
  21. IceCreamKid
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    IceCreamKid With Great Power Comes Great Electricity Bill Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    The driver of the vehicle is a more important factor for determining success than the vehicle. Don't get me wrong the vehicle is very important too, but I'm pretty sure that if you put Bill Gates in charge of opening up a hot dog stand he'll probably scale it into one of the greatest hot dog empires the world has ever known.

    I don't like hi tech, super sexy businesses. I like simple, tried and true, with high probability of success businesses. That's just my temperament. Amazon drives me nuts with how they can blacklist their sellers over something stupid. That's not to say Amazon is a bad route to take though. Some guys are crushing it on there.

    It's only a matter of time before the Chinese learn to write good copy, descriptions, and take good photos. That'll be the time when a lot of private label guys on Amazon get crushed.
     
  22. Five Star
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    Lol, nice way to soften the blow.

    ^^I guess I knew this, it's different though when you see it in plain black and white. Perhaps I need to focus more on me and not trying to find the next big opportunity.

    Would never have thought of this! Great point.
     
  23. FreshStart87
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    FreshStart87 Bronze Contributor Read Millionaire Fastlane Speedway Pass

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    Never thought that carpet cleaning was a fastlane venture. I had a friend that worked for a franchise carpet cleaning company, got trained and secretly stole their clients as he had his own business on the side. I called him to know a little more about what this business entails as he quit doing it to join the navy. He was clearing 60k a year with no marketing, stolen clients and word of mouth.
     
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  24. IceCreamKid
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    IceCreamKid With Great Power Comes Great Electricity Bill Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    This is why I keep stressing to you guys to learn the skills of entrepreneurship. After you sharpen the skills, you can go into whatever niche you want and make money. Take some time to learn psychology and direct response marketing. That's what brings you customers. Then learn a bit about branding.

    It's all in the mindset. The mindset is the limit.

    1st Grade Mindset
    1. What product can I buy and re-sell? Usually a one-time sale. No recurring revenue. Doesn't really see the bigger picture such as upsells, cross-sells, and lifetime value of the customer. Constantly hustling for the next sale because there's usually no recurring revenue aspect to the biz.

    2nd Grade Mindset
    1. Who is my ideal customer? High profit margin, easy to deal with, recurring revenue

    2. Where do they hang out? How can I reach them? How much does it cost to reach them? EDDM

    3. What bait can I use to get their attention and build credibility? Free room of carpet cleaning. No obligations. No hard upsells.

    4. How do I make the product/service phenomenal so that they love it? High quality everything. Put booties on shoes before entering the house, wear clean white gloves when picking up furniture, phone call 30 min before arrival, follow up call a few days later to make sure they loved the service, and of course offer a better product than everyone else

    5. How do I get them coming back for more? Enroll them in semi-annual cleaning program, send out monthly specials(New Year special, Valentine's Day special, St. Patrick's Day special, Tax Day special, Mother's Day special, and so forth). Keep the marketing machine moving.

    6. How do I get referrals? Referral rewards program, charity events, customer appreciation events
     
  25. IceCreamKid
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    IceCreamKid With Great Power Comes Great Electricity Bill Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    Holy shnykies that's a lot of stolen clients. Geez. I had one competitor that would follow my vans around and take note of the houses that were being cleaned. A few months later they would send the homes a postcard saying, "We miss you! It's been a while since we last cleaned your carpets and it's time to bring them back to life!"

    They run a large operation with 8 vans. Extremely aggressive marketing.
     
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