Episode 376 – Expanding to New Cities
Today we are talking with Boris Vujanovic with West Maids Cleaning Services, in Calgary, Canada.
Boris is wondering how to expand his company into new cities outside of Calgary.
As always, we’re going to analyze this question from the foundation up. If you’re reading this, then there is a good chance that you also are thinking about expanding into new cities. But have you considered why you’ve been wanting to expand? The first thing we need to establish is your goals.
Before we move on, we would like to point out that If you want to expand solely because you want to be in more cities, or for any other personal reasons, than more power to you. One of the beautiful things about owning a company is the freedom to do things that you want to. Mike himself has often made decisions because he wanted to or thought it would be fun, rather than just for profit. That being said, it’s important to really know what your goals are.
Oftentimes people will confuse their goals and start doing things that are actually counterintuitive to what they’re actually trying to achieve. You can save your future self a lot of headaches just by getting a clearer idea of what you’re really trying to achieve. If your goals are to hit a certain point of profit, expanding may actually not be the best path to pursue.
Let’s do some math. Your numbers may not match up with Boris’, but the principle is still the same.
Boris’ goal is to hit one million a year in revenue.
1 Million / Year = $82,222 / Month.
Right now he is roughly 20-25% short of his goal, putting him in the $60-70k monthly range currently.
Using this in conjunction with his prices, we can deduct that he is about 150 cleanings/month away from his goal, and while expanding into a new city may seem like the best idea to get more customers, you’ll want to make sure you’re hitting at least 10% of your market share in your own area first. Many business owners try to expand before they even fully know what their goals are, or how to achieve them.
The other thing you’ll want to make sure you’ve got down is your systems. All business follow the same model. Sell -> Deliver -> Account. Translated into systems, you’re going to want to have solid Employee, Client and Accounting systems. Your systems are going to be one of the most important parts of expanding your business. It should not only help a lot with your base business, but also help you lots when/if you decide to expand.
And with that greatness, let’s head on to the…
Best advice you’ve received either personally or professionally?
Commit and get started sooner rather than later.
What’s the biggest mistake you’ve made in the cleaning business we can all learn from?
Lowering your prices for certain customers, and not sticking to my systems.