Episode 980 – The Importance of Getting Paid Upfront in your Cleaning Company
In this episode, Mike and his guest, Nik, discussed the significance of recurring revenue and getting paid in advance in the cleaning industry. Nik shared his journey of starting a window cleaning company and eventually expanding into a full-fledged cleaning service. The conversation highlighted the challenges of seasonal businesses like landscaping and window cleaning, and the benefits of having consistent and predictable revenue streams in the cleaning industry.
The Path to the Cleaning Business:
Nik began his entrepreneurial journey by starting a landscaping company. However, he soon realized the potential in window cleaning and decided to focus on that niche. Over time, his business evolved, and he expanded into other cleaning services, including janitorial cleaning.
The Power of Recurring Revenue:
The podcast emphasized the importance of recurring revenue for sustainable growth and success in the cleaning industry. Unlike businesses that rely on one-off projects or seasonal work, cleaning companies with recurring contracts benefit from steady cash flow and predictable income. This stability allows for better financial planning and business expansion.
Challenges of Seasonal Businesses:
The conversation touched upon the challenges faced by businesses that are heavily influenced by seasonal factors. Landscaping and window cleaning were cited as examples, as they often depend on favorable weather conditions. Nik shared how he dealt with the seasonal nature of his landscaping business by offering winter contracts. However, he also acknowledged the unpredictability of such arrangements.
The Beauty of Residential and Commercial Cleaning:
Residential and commercial cleaning services were highlighted as ideal for generating recurring revenue. Unlike seasonal businesses, cleaning companies can provide services throughout the year, as long as they can physically access the premises. The conversation emphasized that these types of cleaning services offer greater potential for long-term contracts and higher client lifetime value.
The Financial Benefits:
The podcast stressed the financial advantages of recurring revenue in the cleaning business. By securing clients on long-term contracts, cleaning companies can avoid the constant need to sell and resell their services. This steady income allows for better cash flow management, improved profitability, and the ability to invest in growth opportunities.
Overcoming Resistance to Getting Paid in Advance:
Mike and Nik discussed the challenges of convincing both clients and team members to embrace clients paying in advance. Some clients may be hesitant to commit to paying in advance. The podcast explored strategies for instilling the value and convenience of paying in advance in clients’ minds.
In summary, the podcast highlighted the significance of recurring revenue and getting paid in advance in the cleaning industry. The conversation shed light on the challenges faced by seasonal businesses and the advantages of offering residential and commercial cleaning services. By prioritizing recurring contracts and having clients pay in advance, cleaning companies can enjoy stable cash flow, improved profitability, and long-term business growth.