The Story of our Service Business

[wanttogofaster]

I introduced myself a while ago, back then, I had not read TMF . However, what I expressed in that first post, or at least what inspired it, are basically the reasons the book gives to go on your own.

After years of thinking of starting my own business, in 2017 we left our jobs at a Fortune 500 company and decided to launch a service business.
Our main focus is home organization, as in Storage Cabinets, Shelving, Custom Closets, and such. We felt, and to a certain extend, still feel that it is a good niche.

Anyway, four years into it, it definitely hasn't been what we expected.

When we first started, we tried different marketing options.
Google Adwords, Facebook, Craigslist, Nextdoor.com, Direct Mail, Google Search/Maps, and somehow even got an article at a local newspaper.

The results were/are:
Google Adwords: Lots of clicks, zero calls, as far as I can tell.
Facebook: Lots of clicks, a handful of calls, and jobs.
Craigslist: Absolutely Nothing.
Nextdoor.com: Some calls, and jobs, even now.
Direct Mail: Some calls, jobs, even now, years after the first mailings went out.
Google Search & Maps: Have provided the highest amount of leads/jobs so far.
Newspaper Article: Lots of clicks and a couple of jobs.

When we go out to people's homes, they all love what they see on our website and are excited about us helping them out. The excitement apparently ends when they see our estimates.
I haven't really come up with any statistics, but it is obvious to me that we only get a fraction of the jobs we bid out.

This may sound like an easy fix, drop prices a bit, and soon enough we'll be booked for the next few months, right? Not really! We feel our prices are totally reasonable based on the materials and amount of work most projects involve. On some of them, we would not be making that much, to begin with. So lowering our rates is definitely not an option.

We're not even advertising at this point, the few calls/jobs we get, are mostly through Google search as I mentioned before. It doesn't cost us anything to have the business, so I've told my wife that I'm just going to let it die. Then we get another call lol, and most often than not, another disappointment after we send out the estimate.

Fortunately, we have other income streams, so we kind of can wait it out while I either come up with other business ideas or somehow get this one to take off.

Anyway, the reason for my post is to get some encouragement to either shut it down for good or get ideas to somehow get more leads/jobs and finally get it off the ground.

Thanks a lot!

 

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[Johnny boy]

What testing did you do in the beginning that made you say "holy shit, I see a huge opportunity here"?

If you didn't, then maybe you wasted 4 years which could've been entirely avoided if you advertised a bit and found out that there's not a ton of demand.

The first thing I did when starting my business was get customers and gauge how much demand there was. I didn't see a big opportunity until we had more people than we could respond to, and we could turn a 50% profit as long as we had people out there working. Once I saw the demand, did the math, and got proof of concept, then I got excited and committed myself to the business.

I worked at a fortune 500 company too. I was a products and logistics specialist. (Courtesy clerk at safeway)

 

[Brrr]

Have you tried repackaging your product sale as a "Home Office Specialists", I couldn't imagine a better time to be doing what you are doing! My guess would be that there is poor communication of what your work will do for your customer's life and you may be struggling to really justify your value or understanding the kind of customers that have a high % receptiveness to what you are offering.

For practical things, most people make an ROI decision, I need to update my execution thread, but I just have assigned a company to do the flooring in my commercial kitchen that quoted me twice as much as a competitor. These guys were leagues more professional and actually took the time to understand my needs and concerns and actually addressed them. TWICE AS MUCH! Doesn't matter, I'm not (super)price-sensitive, I'm headache sensitive and I'm the kind of client that you should be focusing on and the offer needs to match.

People don't want nice shelving or personal storage because they want to put their stuff on a rack they want to "create an environment where they are happy to work" or "Create order and a sense of control for your life, starting with your home ". You need to show that you understand the customer's pain point and are addressing it, not just doing a job.

People need to think, "Yes this will cost me more, but just think how at peace I will be for the 8 hours I have to be at home" or "You spend 60% of your waking day in this environment, is it not worth paying for quality". Get more creative with this and then I believe it will snowball.

It seems like it is a marketing exercise and just a question of re-adjusting a bit the presentation rather than just shotgunning various platforms and hoping it sticks.

 

[Kevin88660]

I introduced myself a while ago, back then, I had not read TMF . However, what I expressed in that first post, or at least what inspired it, are basically the reasons the book gives to go on your own.

After years of thinking of starting my own business, in 2017 we left our jobs at a Fortune 500 company and decided to launch a service business.
Our main focus is home organization, as in Storage Cabinets, Shelving, Custom Closets, and such. We felt, and to a certain extend, still feel that it is a good niche.

Anyway, four years into it, it definitely hasn't been what we expected.

When we first started, we tried different marketing options.
Google Adwords, Facebook, Craigslist, Nextdoor.com, Direct Mail, Google Search/Maps, and somehow even got an article at a local newspaper.

The results were/are:
Google Adwords: Lots of clicks, zero calls, as far as I can tell.
Facebook: Lots of clicks, a handful of calls, and jobs.
Craigslist: Absolutely Nothing.
Nextdoor.com: Some calls, and jobs, even now.
Direct Mail: Some calls, jobs, even now, years after the first mailings went out.
Google Search & Maps: Have provided the highest amount of leads/jobs so far.
Newspaper Article: Lots of clicks and a couple of jobs.

When we go out to people's homes, they all love what they see on our website and are excited about us helping them out. The excitement apparently ends when they see our estimates.
I haven't really come up with any statistics, but it is obvious to me that we only get a fraction of the jobs we bid out.

This may sound like an easy fix, drop prices a bit, and soon enough we'll be booked for the next few months, right? Not really! We feel our prices are totally reasonable based on the materials and amount of work most projects involve. On some of them, we would not be making that much, to begin with. So lowering our rates is definitely not an option.

We're not even advertising at this point, the few calls/jobs we get, are mostly through Google search as I mentioned before. It doesn't cost us anything to have the business, so I've told my wife that I'm just going to let it die. Then we get another call lol, and most often than not, another disappointment after we send out the estimate.

Fortunately, we have other income streams, so we kind of can wait it out while I either come up with other business ideas or somehow get this one to take off.

Anyway, the reason for my post is to get some encouragement to either shut it down for good or get ideas to somehow get more leads/jobs and finally get it off the ground.

Thanks a lot!

Dropping price wont help much. It’s the same reason why people cant afford a Ferrari, on a smaller scale.

Only very few segment of needs consumers are willing to pay for a premium (Education, Healthcare, Beauty for example) and for the rest of the needs people are looking a cheap solution to fulfill the bare necessary. We are still living in post-2008.

 

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[wanttogofaster]

What testing did you do in the beginning that made you say "holy shit, I see a huge opportunity here"?

If you didn't, then maybe you wasted 4 years which could've been entirely avoided if you advertised a bit and found out that there's not a ton of demand.

The first thing I did when starting my business was get customers and gauge how much demand there was. I didn't see a big opportunity until we had more people than we could respond to, and we could turn a 50% profit as long as we had people out there working. Once I saw the demand, did the math, and got proof of concept, then I got excited and committed myself to the business.

I worked at a fortune 500 company too. I was a products and logistics specialist. (Courtesy clerk at safeway)

Thanks for your input.

Everyone loved our business idea, almost everyone needs more storage in their homes, and we did a few jobs just starting out, so we figured the demand was there.

Obviously, we never got to that point where we had more calls/jobs lined up than we could handle.

Back then, I never really wanted the business to be super busy. But now, knowing that I can have employees (we have one part time, or more like a per diem one) doing most of the work while I focus on other things, make me look at things from a different perspective.

Perhaps the reason why we didn't shut it down right away was because we didn't need the business making any profit to keep a roof over our heads. And it was making us money anyway, even if it was not a lot... We looked at it like a lifestyle business of sorts. Not super busy, I could schedule the jobs when I wanted (within reason), etc, etc.

Well, we had "well paid" positions at said company, but you're totally right. I didn't say it trying to brag about it or anything, I was just basically trying to make the point that we left the comfort of our well paying careers, because we couldn't take it anymore.

 

[Johnny boy]

Buy a phone list of everyone in your state for $250.

Create an account with Slybroadcast

Follow this post

GOLD! - MARKETING - A new marketing tool I'm using with ridiculous ROI

I've tried door-to-door sales, door hangers, sending physical mail, email marketing, PPC ads, Facebook ads, cold calling, craigslist, etc... All of it "kinda" works. It's either too expensive, too inefficient, too tedious, too something. I have a lawn care company and I've been doing some real...

www.thefastlaneforum.com

come up with the same type of script that I used. Make them think you're a real person actually leaving a voicemail and you got their number from a neighbor and when they call back pretend it was a wrong number but you'll do it anyways. Feel free to message me if you need help with it.

Send out voicemails to everyone in your city or state or wherever your service area is. The numbers don't need to be super high quality since you only pay for delivered voicemails.

I can tell you where I bought my list.

 

[wanttogofaster]

Have you tried repackaging your product sale as a "Home Office Specialists", I couldn't imagine a better time to be doing what you are doing! My guess would be that there is poor communication of what your work will do for your customer's life and you may be struggling to really justify your value or understanding the kind of customers that have a high % receptiveness to what you are offering.

For practical things, most people make an ROI decision, I need to update my execution thread, but I just have assigned a company to do the flooring in my commercial kitchen that quoted me twice as much as a competitor. These guys were leagues more professional and actually took the time to understand my needs and concerns and actually addressed them. TWICE AS MUCH! Doesn't matter, I'm not (super)price-sensitive, I'm headache sensitive and I'm the kind of client that you should be focusing on and the offer needs to match.

People don't want nice shelving or personal storage because they want to put their stuff on a rack they want to "create an environment where they are happy to work" or "Create order and a sense of control for your life, starting with your home ". You need to show that you understand the customer's pain point and are addressing it, not just doing a job.

People need to think, "Yes this will cost me more, but just think how at peace I will be for the 8 hours I have to be at home" or "You spend 60% of your waking day in this environment, is it not worth paying for quality". Get more creative with this and then I believe it will snowball.

It seems like it is a marketing exercise and just a question of re-adjusting a bit the presentation rather than just shotgunning various platforms and hoping it sticks.

Great points!

We can help with the home office and everything else you mention.

We've definitely had some homeowners like you, willing to pay more, etc. I think that is the issue.

Perhaps they all think: should I pay these guys $1,500 to put together an office space or should I go to IKEA and spend $200 on a new desk?

Some people definitely see the value and spend the $1,500, but the vast majority would rather spend (or can only afford) the $200.

Now the question is: how do we "mostly" reach the ones that want to spend the $1,500? I say mostly because not all the solutions we offer are that expensive, we can definitely help others with lower budgets.

Not $200, though, I certainly don't want to be wasting time working on estimates for those homeowners.

Thanks!

 

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[Andy Black]

Do you put your price range in your ads or discuss them prior to going on-site? Would that help to screen folks?

 

[Andy Black]

Our main focus is home organization, as in Storage Cabinets, Shelving, Custom Closets, and such.

I’ve been curious about these wall-mounted folding desks for a while. They seem like a great idea for home offices or studying when there’s not a lot of room. What if you picked something that wasn’t too custom?

wall mounted folding desk - Google Shopping

www.google.ie

 

[wanttogofaster]

Buy a phone list of everyone in your state for $250.

Create an account with Slybroadcast

Follow this post

GOLD! - MARKETING - A new marketing tool I'm using with ridiculous ROI

I've tried door-to-door sales, door hangers, sending physical mail, email marketing, PPC ads, Facebook ads, cold calling, craigslist, etc... All of it "kinda" works. It's either too expensive, too inefficient, too tedious, too something. I have a lawn care company and I've been doing some real...

www.thefastlaneforum.com

come up with the same type of script that I used. Make them think you're a real person actually leaving a voicemail and you got their number from a neighbor and when they call back pretend it was a wrong number but you'll do it anyways. Feel free to message me if you need help with it.

Send out voicemails to everyone in your city or state or wherever your service area is. The numbers don't need to be super high quality since you only pay for delivered voicemails.

I can tell you where I bought my list.

For that price, it sounds like something I would like to try.

Is it possible to get a list by zip codes/income levels?

Although I've found that the people I consider less likely to do the projects move forward with them. The flashy ones that live in expensive neighborhoods don't.

Do you put your price range in your ads or discuss them prior to going on-site? Would that help to screen folks?

We don't, because we can do a small closet with lots of hanging for $500 or the same small closet with lots of drawers for $2500.
Just to give you an example.

 

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[wanttogofaster]

I’ve been curious about these wall-mounted folding desks for a while. They seem like a great idea for home offices or studying when there’s not a lot of room. What if you picked something that wasn’t too custom?

wall mounted folding desk - Google Shopping

www.google.ie

View attachment 38609

We can go as custom as the homeowner wants/needs. If they want a lot of drawers we let them know that they are more expensive than doors or open shelving, for example. We usually give them ideas to keep costs down a bit.

A desk like that one would be cheap, but I can see homeowners saying that they need some drawers, more storage, etc (US vs European standards!).

 

[sap_LA]

For that price, it sounds like something I would like to try.

Is it possible to get a list by zip codes/income levels?

A

Yes it is, Go here zoom in on the map and the average income is listed by route based on census data

Every Door Direct Mail | USPS

eddm.usps.com

learned this from a thread by @IceCreamKid

 

[Andy Black]

we can do a small closet with lots of hanging for $500 or the same small closet with lots of drawers for $2500.
Just to give you an example.

That’s a price range. Maybe try something like that? Do you tell people anything like that before you come out to them?

 

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[wanttogofaster]

That’s a price range. Maybe try something like that? Do you tell people anything like that before you come out to them?

More often than not I'd say, when they ask for a ballpark of how much it would be to do this or that. Sometimes on the phone, Sometimes while we're there.

Many times I give them examples from our website and say, this was X amount, but if you do something like this, it is about X amount.

I will definitely start asking before we even go out to their homes. Now that you say it, not too long ago, I called someone to get a quote for a project in our home and the guy said: something like that would between X and Y, would that work for you?

 

[wanttogofaster]

Yes it is, Go here zoom in on the map and the average income is listed by route based on census data

Every Door Direct Mail | USPS

eddm.usps.com

learned this from a thread by @IceCreamKid

Thanks, I know you can do that with EDDM, but he is talking about buying phone lists to leave voicemails.

I shared the results of our mailings. Some people save them and call even years after we mailed them out. But it seems that unless they think they will need our services in the future they just go in the trash (which is what I do).

Those that need and want to do something, go on Google and give us a call (which is also what I do most of the time).

We'll try (because it is not always easy) giving out ballpark estimates in advance to avoid wasting time going to their houses and working on estimates.

We still need to find a way to mostly reach the homeowners that see value in what we do, and are willing and able to pay the premium.

 

[Andy Black]

Thanks, I know you can do that with EDDM, but he is talking about buying phone lists to leave voicemails.

I shared the results of our mailings. Some people save them and call even years after we mailed them out. But it seems that unless they think they will need our services in the future they just go in the trash (which is what I do).

Those that need and want to do something, go on Google and give us a call (which is also what I do most of the time).

We'll try (because it is not always easy) giving out ballpark estimates in advance to avoid wasting time going to their houses and working on estimates.

We still need to find a way to mostly reach the homeowners that see value in what we do, and are willing and able to pay the premium.

Seems like this is a marketing exercise:

1. Find out what people want to buy.
2. Find out how to sell it to them.
3. Find out if you can make a profit.
4. Do it.

What's selling a lot at the moment that you can build?

What marketing channel that will work for you. Maybe test Google Ads, and also posting images up on Facebook, Instagram, etc ... maybe with ad spend behind them?

 

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[BD64]

I've been looking to increase storage in my house. The current closets and pantry were designed poorly. I've gotten quotes from 3 national players (closets by design, california closets and home depot) and several independent contractors from Thumbtack.

They all took over a week to schedule a consult with and have lead times where the earliest I can get serviced would be late August.

All the big companies seemed cookie-cutter, I can hardly tell the difference between them and the little guys were unresponsive and unprofessional.

@wanttogofaster Not sure what your close rate is on projects you quote but the people I talked to gave me a range of 5-20%. The people on the higher range of that spectrum were the ones who designed and quoted me in the initial consult, before they left. Price was all over the place. Everyone has done a poor job of following up with me so far.

Ultimately I'm going to DIY this project with easy track systems from build.com but in my market (Denver) there is definitely room for more players here.

 

[wanttogofaster]

I've been looking to increase storage in my house. The current closets and pantry were designed poorly. I've gotten quotes from 3 national players (closets by design, california closets and home depot) and several independent contractors from Thumbtack.

They all took over a week to schedule a consult with and have lead times where the earliest I can get serviced would be late August.

All the big companies seemed cookie-cutter, I can hardly tell the difference between them and the little guys were unresponsive and unprofessional.

@wanttogofaster Not sure what your close rate is on projects you quote but the people I talked to gave me a range of 5-20%. The people on the higher range of that spectrum were the ones who designed and quoted me in the initial consult, before they left. Price was all over the place. Everyone has done a poor job of following up with me so far.

Ultimately I'm going to DIY this project with easy track systems from build.com but in my market (Denver) there is definitely room for more players here.

If it is taking them that long to go take a look, I would assume they are busy. The close rate is higher for us, but we definitely don't have as much volume if they cannot install until August.

We don't quote right then but if we tell the homeowners we'll have the quote in about 3 days, let's say Friday if we go meet them on a Tuesday, we always send it, at least, a day earlier.

You decided to DIY the project. I wonder if some of the homeowners that never get back to us after getting the estimates are doing the same thing. Some may not have the means or whatever.
Did you let any of them know about your decision?

Most of the time we follow up to make sure the quote is not in their junk mail folder. It rarely is, but after they confirm they have it we once again remind them that we are happy to answer any questions, make changes, etc.

Some homeowners are pretty straightforward and just tell us that "they will let us know", or that they got a better quote (not necessarily for a custom closet), which is totally fine with us.

 

[Tiago]

Is there any business in your area, doing something very similar, that is killing it?

Also, how is your referral network? This seems like a business that relies heavily on joint venture partnerships. Take a look at this video:

View: https://www.youtube.com/watch?v=dTE9HFYoCDc

 

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[BD64]

If it is taking them that long to go take a look, I would assume they are busy. The close rate is higher for us, but we definitely don't have as much volume if they cannot install until August.

We don't quote right then but if we tell the homeowners we'll have the quote in about 3 days, let's say Friday if we go meet them on a Tuesday, we always send it, at least, a day earlier.

You decided to DIY the project. I wonder if some of the homeowners that never get back to us after getting the estimates are doing the same thing. Some may not have the means or whatever.
Did you let any of them know about your decision?

Most of the time we follow up to make sure the quote is not in their junk mail folder. It rarely is, but after they confirm they have it we once again remind them that we are happy to answer any questions, make changes, etc.

Some homeowners are pretty straightforward and just tell us that "they will let us know", or that they got a better quote (not necessarily for a custom closet), which is totally fine with us.

I decided to DIY because I'm not interested in living out of a box for the next 2 months. If they follow up with me then I tell them what I've decided. If they don't follow up then I don't tell them because they don't seem to care anyway.

California closet emails all end up in my spam folder. I actually missed my initial appointment because I booked weeks in advance and the event invite/reminder did not end up going to either my calendar or inbox.

 

[wanttogofaster]

What's selling a lot at the moment that you can build?

That's definitely something I need to determine and perhaps push the one or two most popular solutions.
Here's where I may need to change my expectations, I want a product or service that sells by itself
I see a bunch of people asking for landscapers recommendations on nextdoor.com, for example (for the very same reasons that have been discussed on the forum many times).

Is there any business in your area, doing something very similar, that is killing it?

Also, how is your referral network?

There's another main player (other than HD, etc). I see their trucks around from time to time, I couldn't tell you if they're killing it, though.

I've worked with a few contractors, but we haven't received the first call from a referral, so it's non existent at this point.

 

[wanttogofaster]

I decided to DIY because I'm not interested in living out of a box for the next 2 months. If they follow up with me then I tell them what I've decided. If they don't follow up then I don't tell them because they don't seem to care anyway.

I understand, so mostly because they cannot install it soon enough for you. We definitely don't have that "issue"

 

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