Episode 199 – Cleaning Business Partnership Success
How to pay cleaning employees
Episode 199 Boris Vujanovic West Maids
Today’ Mike coaches Boris Vujanovic on how to take their new cleaning business to the next level with his cleaning business partnership.
KEY POINT: Having a partner can be a tricky relationship, make sure you both have the same goals
Many new cleaning business partnerships go in with a faulty notion. If you partner up you will grow twice as fast. You split the profit as you both share the work. That’s essentially the same as doing it on your own! Only with a partner you risk all the problems of not agreeing on what directions you want to go. You need to make sure that there is enough synergy with that partnership to warrant the financial split. 1+1 shouldn’t equal 2 it should equal 5!
KEY POINT: Your partnership should be clearly and legally written out
Create a plan to multiply your efforts to make the partnership worthwhile. Then, make a very firm agreement on who does what.
You want to build your foundation first. So many people who have partners just want to say “forget it, let’s just build and get the customers and the employees and build, build, build.” That is really step 2.
If you start building your cleaning business on a weak foundation you are setting yourself up for HUGE problems. You need to make sure you’re clear on the direction you want to go, the roles each of you play, how the profits are split and so on, are completely written out in a legally binding document.
Here are a couple of very common scenarios you may go through if you decide to forgo a legally binding agreement:
A few months/years down the road the business isn’t making enough money. One or both of you may have to kick in money to keep it afloat. One of you might complain they work too hard and they shouldn’t have to put in money, it’s your job to make sure he can make at least x amount each month, he has a boat payment to cover…etc. And then it blows up the partnership.
OR… the business does amazing! When you first started you had an agreement to take care of one another and treat each other fairly. As soon as you start adding zeros to that income and the value of the company, you would be shocked at how quickly your partner can get crazy. Or you go crazy and it becomes a circus and the partnership blows up.
RESOURCE ALERT: Learn more about keeping your cleaning business profitable HERE
When writing out your partnership agreement you want to have 3 things clearly lined out:
Money in/ Money out
Ask yourselves some of the following questions:
If I put in more money do I get more ownership
If you take a thousand dollars out do I get to take a thousand dollars out?
What if you want to take a bunch of money out and I want it to stay in the company?
If you take money out, do I get to take my money out?
What is the ownership % for each of us?
Do we have to work 40 hours a week? Can I take a week/month off?
So When (not if) you have conflict in the future you can refer back to that agreement before things get out of hand.
CLEANING BUSINESS PARTNERSHIP FOR SUCCESS: One person is in charge with sales, marketing and admin and the other person is all about the cleaning.
The person responsible for the cleaning would hire all the cleaners, set the schedules and make sure all the customers are happy. The person responsible for marketing would handle all of the collections and making sure you are charging enough for the cleanings to be profitable.
Once you have those clearly defined jobs lined out you can easily make decisions later. If a problem falls within the realm of quality control, hiring/firing or cleaning in general the partner who deals with the cleaning side would have the final say. The same would go for the administrative partner. Anything that has to do with marketing, money and sales would ultimately be up to him/her.
Now how do you use that to go to the next level with your company and your cleaning business partnership?
Clarity. Be very clear on the goal for where you want to be. Let say you want to make $5k and you have a 20% profit margin which means you need $25k a month in sales, if an average customer is $250 you would need 100 customers.
So if you need to pick up 100 customers, would you do that in the next month, 6 months 5 years? And then decide between the two of you how many customers you can attain and hire accordingly to make sure your quality standards are being met and you aren’t over/under hiring.
Break it down into the following steps:
Quantify how much money you both need to make personally
Calculate how much profit you will need to reach that goal
Break that down into how many customers you are going to need accounting for some customer that may quit (around 10% a year)
Break that down by month
Decide on a budget
RESOURCE ALERT: Get the most out of your marketing budget! Check out this Marketing Playlist
Then both or all of you in your cleaning business partnership can agree on the rate of growth. If you need 3 new customers a month at $250 (or 4 new at $1000) then at 4 months you will be at the $10K mark and so on.
When it comes to marketing you both need to decide on a budget. Often times the guy doing production will just want the other partner to go out there and “just get us new customers” Which might be doable if you only need 1 or 2 customers a month. But getting 20 new customers is impossible. Or if the one partner is getting more customers than the production guy can handle, you are going to have issues that way.
Once you have that solid foundation, you can grow your company with minimal conflict within your cleaning business partnership and maximizing both partners strengths.
As always our fantastic guest Boris brings the heat in the…
Best advice you’ve received either personally or professionally?
What’s the biggest mistake you’ve made in the cleaning business we can all learn from?
Make sure you have expectations for the jobs that are being performed.