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Episode 694

How to Structure a Wage Model for Your Cleaning Company: Episode 694


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Episode 694 – How to Structure a Wage Model for Your Cleaning Company

Today we will discuss Jess and Natasha’s entrepreneurial venture in the cleaning business industry. The motto of the duo is to help women find work opportunities and thrive in society like a boss.

Jess’s Cleaning Company – The Story Behind Its Existenc

In 2018, Jess and Natasha started their cleaning company in Indianapolis, Indiana, after their lives got hit by a major roadblock. They both lost their jobs in sales and had monetary responsibilities. So, Jess started her cleaning job in a college and started putting out residential cleaning services in the neighborhood. She initially thought that she would do it for a couple of months until she managed to stabilize her income. Soon after, Natasha decided to go back to her school and pursue her dreams. So, she also joined her friend Jess on evenings and weekends for cleaning. And that’s how their cleaning company came into existence.

A Company For Women By Women

As of now, the company has 12 female employees, including Natasha and Jess as business partners sharing profits equally. Generally, Natasha and Jess focus on the administrative part of business, while the employees take care of the cleaning duties. And most importantly, both Natasha and Jess are equally passionate about women’s empowerment. So, they provide opportunities to women to maintain their work-life balance while still earning enough to make their ends meet. They usually pay the girls, on average, between $18 to $26 per hour.

Going Ahead With the Business and a Massive Problem

However, there was a massive problem with their ongoing business structure. According to Jess, the company had a 40% to 50% profit margin. But with marketing, supplies, and other systems that they use for business operation, Jess and Natasha were barely making more money than their employees. Basically, Jess and Natasha were struggling with their business. So, they wanted to know how they could manage to pay decent wages to their employees and make a difference in the women community while still earning enough money for themselves.

Looking For a Solution in the Wage Structure

As the solution for this, Mike’s primary advice is to reframe the wage structure of their business. The following points cover Mike’s overall take on their business module based on his experience and facts.

  • According to Mike’s tak, those who handle the cleaning job on the spot, are not going to be good at other responsibilities. Thus, a good cleaner might not be a good salesperson. Job distribution is crucial.
  • Secondly, one should pay wages based on the worth of the worker. Paying people more than the value they are bringing is not going to help a business.
  • One can only serve the poor when he/she has enough resources to distribute. In simple words, you cannot serve the poor if you’re poor yourself. So, if the company really wants to help women, it needs to make big numbers. 
  • According to Mike, they could follow the 50-30-20 module to divide the business revenue. So, 50% for the main expenses, 30% for overhead expenses, and 20% for the business owners.  

Jess’s Takeaway On Investment

From the session with Grow My Cleaning Company, Jess understood that there was a huge drawback in their approach to the cleaning business. It calls for a shift in their business module. She further added that there are different ways to invest in a business team and add value instead of assigning the job and paying hourly with tips.

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