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Started a small company this winter break!

G_Alexander

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Hey everyone. I hope you all are settling into 2009 nicely. I created a small business during my last two weeks of winter break. It is not a multi-millionaire story...but I thought I would share it with all my great pals here at the Fastlane and maybe some of the other younger members here can get ideas from it.

I got off school on December 19th and I was given a month off (luxury of a Big Ten school) until January 20th. For most of the first half of the break, I was just relaxing. Sleeping in late, playing Call of Duty, reading the forums, and doing basically nothing. I woke up one morning (or should I say afternoon) and it suddenly hit me that I was being a lazy a$$. Even though I had worked hard last semester to get a 3.89 GPA...it doesn't mean I deserve to sit on my a$$!

With only two weeks of break left though, I could hardly go out and find a J.O.B. to make some money.

I was driving around later that night when it started snowing and it hit me.

When I was a kid, I had all types of odds and end businesses. One of them was walking door to door and shoveling driveways for $20. I would usually get about 3 driveways as a kid (probably just nice neighbors humoring me), but the $60 was huge to me!

So, as I said, I was driving around in the snow and it hit me. Take the childish door-to-door shoveling business model and revise it.

I immediately called my buddy and asked him if he was on board. He said of course!

I started doing some research on how landscaping companies and other companies go about running the snow plow end of their business during the winter.

At the moment, I had the funds to buy a snow plow truck, but not the time left to make it worthwhile (I would still need to bid jobs, get paperwork done, and then get out there and plow all with only two weeks of break left).

I wasn't about to give up on cashing in on all the "white gold" (not cocaine haha) that falls around here in Chicago.

I began looking into what my competition charges to do suburban driveways, and what edge I have over them that I could offer to my clients. (I knew getting contracts with commercial lots would be the best and biggest way to think...but keep in mind, I do not have a snowplow at this point.) I found both answers immediately and things were looking good for me. The other companies in the area charge outrageous prices starting at $20 for one car garage driveways. And the edge I have over these companies is that we would be using snow-blowers and shovels instead of plows that can potentially damage your driveway. To give myself and even better advantage over these companies I would only charge $15 for any driveway in the suburban area around me (1 person takes an average of 25 minutes to do a driveway...2 people takes about 15 minutes).

I made a quick post on craigslist.org that in short stated what we do and the advantages of using our services.

I was only half serious about the business, but figured I would get a few calls.

Later that after noon a winter storm warning for one of the "clipper" storms that came through last week went into effect. My phone began to BLOW UP!! I could not sit back on the couch after I had written information down without getting another call.

I set up an invoice in Excel and used my proposed REI corporation name. I had 18 driveways to do the next morning, I knew it would be a long day. I called my friend Chris and we would be using his industrial style snow-blower (26") and my smaller snow-blower and shovels. We also were able to use his dad's work van from his contracting company.

Long story short, we got the snow that night, headed out at 3:50AM, cleared all the driveways, left the invoices, collected cash from some, and felt great! We did another round later that day to make sure all the driveways still looked good, and touched up on the ones that didn't. I got more calls later in the day from others who wanted their driveways done when they had arrived home from work and they were covered.

In total we did 23 driveways x 15 = $345.00

Many of the customers were really excited about our prices (because while they ARE lower than the rest of the entire market, we didn't mind working quickly as a team for that price) and said they would recommend us to their friends.

Later that week when it snowed again, we did another:

21 driveways x 15 = $315.00

Total Revenue: $660.00
Total Expenses (Gas): $45.00
Net Profit: $615.00 (all for only two hard days work)

While I don't plan on making this a life-long business, the money we made this year will be great seed money to buy a plow truck next October and start bidding jobs to make some extra cash while I am home. We will also have return clients who we will call to set up contracts with during next fall. We will probably need to recruit more people because we can hardly keep up doing all these driveways on time in the morning and driving back around to check them all. Even if they are in the same residential area...logistics are not always perfect.

I will add things to this if I forgot anything.

Thanks for reading if you made it down here!! Happy 2009:smxA::yourock::smxF:

-Alex
 
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Nathan

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Keep that enthusiasm up and I'm sure you'll get where you want to be!

If your customers were REALLY excited about your prices - up them a bit. With your enthusiasm and willingness to seemingly do a good job with a good attitude, the higher price won't matter. Use the part about not using damaging equipment as a selling point.

On a side note - you're only 7 years younger than I, but just the thought of all that makes my back hurt. :D
 

G_Alexander

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Yes, I did forget to mention that we will up the prices next season. Currently, around here, $20 might get you a one car garage driveway done...the thing is most people around here have either 3 car garages or 2 car garages. No one wants to spend $30+ dollars on their driveway around here...and those who do...I have no idea what they are thinking.

I am going to set up good marketing for next season, up the prices to $20 a driveway (same method) and concentrate more on commercial lots with the plow or possibly working through a subcontractor until I can afford a second plow and do commercial lots on my own. Then I will sell the company when I graduate College and buy my first apartment building! lol

-Alex
 
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bflbob

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Why sell?

Why not market like crazy, try to find plenty of folks with snowblowers, create a call center, and just take 20-25% off the top.

Make a deal with local radio stations -- when snow is in the forecast, I'll sponsor 2 weather reports per hour. No snow, no ads.

Get a great "800" number that ties in easily (1-800-GOT-BLOW?) so people will hear it on their way home and be able to call from their cells.

You can charge extra for services -- salt & sand, de-icer, expedited service, etc.

Assign a block or two to each snow-blower guy, and handle payment via credit cards and direct deposit.

Then you can add in the slow-plow guys once you have a big enough customer base.

Then have a write-up down in the Tribune, telling how great business is.

Then sell.
 

G_Alexander

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I hadn't planned on expanding that much, but it is feasible. Very good recommendations as well. Thank you for those. Do you know how much it would cost to set up a call center + buy an 800 number?

We had planned to charge $5 extra to salt when we went out, but we didn't make it over to Home Depot or Ace Hardware in time the night before to buy the blocks of salt.

-Alex
 

CVentures1B12

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That is great stuff Alexander!

I really think that just nails down the idea that you don't have to think of something new at all. Take something that is currently being done and do it better. Google to the "T". Even though I don't know much about HOW to provide the scale and scope, I agree with bflbob.

You need to look into Sidney Torres: the owner of SDT LLC, a trash collection company in New Orleans. Great mentality, great stuff to learn from this guy. Did the exact same thing after Katrina hit. Took something that was being done and did it a TON better than the competition.

Thanks so much for this because it has now got me thinking about simple things like this. I am always trying to think outside the box of how I can take things that are currently being done and just do them better; however, now I see something as small as "better pricing" can be the ticket!

-Josh
 
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BryanC

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Really good mindset and excellent use of your resources.

This is about the same way I started a lawn mowing business, I just spotted that people needed it. Eventually I did have to sell it and built a small vending route which I am currently getting ready to expand.

You can probably turn this into a pretty decent size business if you do the right things. bflbob has some really good input too. :banana:
 

bflbob

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I hadn't planned on expanding that much, but it is feasible. Very good recommendations as well. Thank you for those. Do you know how much it would cost to set up a call center + buy an 800 number?

We had planned to charge $5 extra to salt when we went out, but we didn't make it over to Home Depot or Ace Hardware in time the night before to buy the blocks of salt.

-Alex

answering service 800 - Live Search
 

G_Alexander

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Thank you bflbob, I appreciate all the help! Speed++

-Alex
 
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TaxGuy

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So that's what you've been up to all break :smxB:

Anyways, what's stopping you from doing this in Iowa?

Or figuring out a similar service business you can do while you're in school, possibly set it up and find classmates/friends to help run it.

And oh yea, really wish I would've known this, we could've used a plow for our driveway a few times and we're practically neighbors here in Palatine :coolgleamA:
 

Yankees338

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Well done, Alex. Rep+++

Now that you have a customer base, I also definitely agree with your plan to raise prices. Not many people will back out if you raise prices a reasonable amount and still do a quality job.

How small are these driveways? Around here, I'd say the average resident pays about $60-65 to get their driveway plowed. Some are definitely way into the $100s, but those are more for circular driveways.

Great job, though.

Why not try to set one up at school in Iowa, too?
 

ramy98

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Great job, you are gaining great experience with your snow removal business. I would suggest providing promo material next season and develop those relationships. Business is all about relationships and it looks like you are heading in the right direction. Not to mention; the more you are out there the more exercise you are getting etc... Instead of staying at home spending money and playing xbox !

With your competitive advantage maybe next season you can have someone going door to door selling your firms services??? Cha Ching !!!
 
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White8

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Why not follow the example set by College Pro Painters and set up a small network of franchisees based on college campuses?

You would need to develop the marketing and training but it could be a very good niche.
 

G_Alexander

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Well done, Alex. Rep+++

Now that you have a customer base, I also definitely agree with your plan to raise prices. Not many people will back out if you raise prices a reasonable amount and still do a quality job.

How small are these driveways? Around here, I'd say the average resident pays about $60-65 to get their driveway plowed. Some are definitely way into the $100s, but those are more for circular driveways.

Great job, though.

Why not try to set one up at school in Iowa, too?

The driveways around here can fit about 8 or 9 cars on them (not length wise, parked in rows of 3). So they are not really all that HUGE. It is a very suburban area. People usually contract out their services at the beginning of the year. I would say for a 3 car garage driveway it would cost you roughly $35 per time.

Sounds like you have some monstrous driveways around you Ryan! haha

I am not sure if I would be able to set this up in Iowa, or have the time to keep up with running this while I try to maintain good grades. But expansion will definitely be happening here in Chicago next year.

Thank you everyone who has posted so far!! I really appreciate all of the advice :eusa_clap:

-Alex
 

MJ DeMarco

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Wow, I just love stories like this. Just more evidence that hard work and ingenuity conquers "I have no money" excuses. SpeeD+
 
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WinWin

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Great post by G_Alexander and great ideas and responses from everyone.

Why sell?

Why not market like crazy, try to find plenty of folks with snowblowers, create a call center, and just take 20-25% off the top.

Make a deal with local radio stations -- when snow is in the forecast, I'll sponsor 2 weather reports per hour. No snow, no ads.

Get a great "800" number that ties in easily (1-800-GOT-BLOW?) so people will hear it on their way home and be able to call from their cells.

You can charge extra for services -- salt & sand, de-icer, expedited service, etc.

Assign a block or two to each snow-blower guy, and handle payment via credit cards and direct deposit.

Then you can add in the slow-plow guys once you have a big enough customer base.

Then have a write-up down in the Tribune, telling how great business is.

Then sell.

Wonderful suggestions from bflbob. Once you sell it, don't forget to come here and post your success story.:hurray: :eusa_clap:
 

Yankees338

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The driveways around here can fit about 8 or 9 cars on them (not length wise, parked in rows of 3). So they are not really all that HUGE. It is a very suburban area. People usually contract out their services at the beginning of the year. I would say for a 3 car garage driveway it would cost you roughly $35 per time.

Sounds like you have some monstrous driveways around you Ryan! haha

I am not sure if I would be able to set this up in Iowa, or have the time to keep up with running this while I try to maintain good grades. But expansion will definitely be happening here in Chicago next year.

Thank you everyone who has posted so far!! I really appreciate all of the advice :eusa_clap:

-Alex
Haha...some of them are bigger than that, but I think those 8-9 car driveways would still easily get $40-50 around here. Maybe that's because we probably get a little less snow? Idk...interesting...
 

G_Alexander

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Thank you everyone for the kind words and advice!

I just recieved a few accounts receivable today in the mail. Three checks for a few driveways we had done very early in the morning.

Two of the checks had personal thank you letters for the extra care we took while working on the driveways (even shoveled the whole deck in the back yard while it wasn't part of the deal). Each customer only owed us $15...one check was for $15, one was for $20, and one was for $25. One lady named Mary said she would recommend us to all her friends. I had a few others tell me the same when they paid cash the day I was there.

I wish I didn't have to go back to school so soon! I need to start thinking about marketing this out there.

Website to come soon??

-Alex
 
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Rawr

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Around Montreal I've seen snowplow guys put their signs with #'s around the driveways they work with for more exposure. It takes a big rig about 10 seconds to clean the driveway too - unbelievable!

When I was reading your post I thought what you could do to go about getting leads and selling them to snowplow companies - but what bob proposed is even better!
 

bflbob

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Two of the checks had personal thank you letters for the extra care we took while working on the driveways (even shoveled the whole deck in the back yard while it wasn't part of the deal). Each customer only owed us $15...one check was for $15, one was for $20, and one was for $25. One lady named Mary said she would recommend us to all her friends. I had a few others tell me the same when they paid cash the day I was there.

Nice! Quality work pays off! Rep+
 

G_Alexander

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Nice! Quality work pays off! Rep+

Thanks bflbob! I had a meeting with VR4playa today. I wasn't orginally planning on scaling this business at all, but all of your suggestions got us talking about possibilities for next year. I should probably get started on a business plan! :coffee: :)

-Alex
 

G_Alexander

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Yahooooooooo!!! :smxG::hurray::smxG::hurray::smxG::hurray:

(Now bum a ride with him to the B & P.)


Haha I would love too. But I will be at school during the B & P and there is no way to know if my schedule will be clear at that time! I want to come really bad though. I will have to look at the thread and see how long registration will be open, maybe I can sign up last minute.

If anything...VR4playa can present the things we go over if we get everything together by that time. Maybe something a little more informal? Not sure yet. But I will keep you posted!

If anyone has any more suggestions at all, please feel free to share them.

-Alex
 
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hatterasguy

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Now here is a good old fashion entrepreneur! Good show, keep going!:cheers:
 

TaxGuy

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It was definitely a pleasure Alex!

Looking forward to not only this business, but what else we can do to help motivate each other towards getting our C-GT's ;)

Just keep in touch and don't lose focus towards the plan while away at school, one thing I forgot to mention is how easy it is to lose focus and as long as we can help each other set and achieve attainable goals then the sky is the limit :coolgleamA:

-Clint
 

G_Alexander

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Thanks everyone again! I just recently went through all of my owned web domains and cleaned things up and bought a few new ones. I am planning on starting a blog to help give more young entrepreneurs ideas to get financing and get the ball rolling on their ideas. Also good spending habits, first time credit building, and how to retire young. I will most likely give my real world applications of different businesses for examples. The blog will just be a fun way to keep me organized...I'll post the link.

-Alex
 

MJ DeMarco

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I reread this thread for inclusion in my book as an example how to conquer "I have no money". However what I found more impressive is that you now have the POWER to create money out of thin air (as long as it is winter and Craigslist exists.) Job market sucks? Don't matter! You now have a specific strategy that generates money. This story is an excellent example of creating a strategy which transcends into a real bonafide "safety net" ... very empowering!

You could probably apply the same techniques for weed pulling in the summer.
 

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