Had a blast talking with Ken and his Cleaning Tribe group about how to buy a house cleaning business. If you are buying or selling your maid service, here’s my article on how I’ve done it:

https://emilysmaids.com/how-to-buy-a-cleaning-business/

We also touched upon several other topics during the talk. Here are a few helpful resources for the listeners.

1) I recommended charging what you are worth. From my experience, low pricing leads to a race to the bottom and out: https://emilysmaids.com/cleaning-companies-go-business/

2) One of the reasons I am able to provide more value at a discounted rate at Dallas Maids is leveraging over seas talent: https://www.dallasmaids.com/the-ultimate-guide-on-how-to-hire-a-virtual-workers-for-your-cleaning-business/

3) Tying your employees’ pay to performance is one of the secrets how my companies mop up the competition: https://www.dallasmaids.com/employee-bonus-based-on-performance-plan/

4) Your competition are your friends. Help each other become better house cleaning business: https://www.dallasmaids.com/maid-services-working-competition/

Here is a summary of listener’s questions and answers:

The Cleaning Tribe Q&A

Q 1.What should you expect to pay per client when purchasing? (Michelle)

Your cost of client acquisition is the baseline I determine how much to pay for customer accounts. After all, why pay more than what you would normally pay through your marketing?

Q 2. Do you just get the client list or can we expect employees and systems as well?  (Michelle) 

Client list is the primary focus. Acquiring employees seems desirable but rarely works out. The workers tend to be be mediocre because former owner didn’t have the cash flow to pay for exceptional talent.

You systems are probably superior so no need to purchase the sellers system unless you are new to the industry. And you must consider systems because the closer the system is to yours, the smoother the transfer process.

Q 3. When selling, how much do systems add to the value? I feel like it would make sense for me to purchase a client list but I want to make sure I am setting my business up for the best possible value even if I am not selling?  (Michelle)

When selling, systems are everything. Systems allows for automating and automation is important because a) it allows for freedom. If your business can’t run without you for 6 months, you don’t own a business, you own a job. b) A good system that automates business operations lessens risk because the business has a proven system that works.

Q 4. What are the benefits of setting your business up for sale even if you don’t plan on selling? (Michelle) 

No reason other than knowing how much our business is actually worth. This may be important for situations you need knowledge of your net worth such as acquiring loans.

Q 5, 6, 7. What can I do to ensure I get top dollar? (Michelle); How can we get the most $$ when selling a business, and does owning an actual building add value? (Ellen); What things can we have in place or be doing to make it more valuable? What things shouldn’t we do? (Kate)

Assets

• Revenue – Bigger companies command higher revenue. The more revenue lessens risk.
• Cash Flow – Higher profit translates to less risk of going into the red
• Automobiles – Wrapped automobiles provides advertising
• Staff – Quality staff provides the better service. Better service lessens the risk of customer attrition.

Intangibles

• Turn key – Can the business mostly run by itself? This lessens the risk for the new owner. Worse case is the company requires the owner to survive so the new owner is not buying a business, they are buying a job!
• Reputation – Does the company have a good reputation? Have they garnered a high rating online such as Google My Business and Yelp? If so, this lessens the risk by ensuring a flow of customers.
• Employee Turnover – Less turnover with employees lessens disruptions to business which lessens risk.
• Customer Attrition – Low attrition lessens the risk of losing business.
• Established – Older, established companies are less risky because they have a proven system, reputation, staff, etc.

Risk = Selling Price

Price is related to risk. Lower risk results in higher price.  If you are able to transfer a profitable business to the new owner with minimal risk, you will command a better asking price.

Ultimately, the value of your business is what someone is willing to pay for it.

Q 8, 9. Same Questions: How do you value your business, how do you know what it’s worth? (Kate); What is the average sale price? (Michelle)

The average selling price is 2 to 4 times earnings based on what I have heard from other cleaning service business owners. The most was 4.5 x but it was with a broker and the business has a solid system and great reviews.

Bank is the perfect litmus test! If they approve the loan, then you are good. If they do not approve the loan, you need to reevaluate your business’s worth.

Q 10. With regard to no selling but stepping away totally (ie. residual income), how does one ensure that those who are running the business don’t run it into the ground? (Ellen)

First, write an easy-to-understand handbook of your business processes and procedures so you staff know how to do their job.

Second, hiring the right people. Doesn’t matter how good your handbooks are, if you don’t hire the right people things won’t get done.

Q 11. What financials are needed when selling and how far back do they need to go? (Ellen) 

At least 2 years. Three to 4 years preferable.

Q 12, 13. Where do we advertise our business?  (Kate); Are there any services that will help us sell, like a small biz realtor?

1. Network – this is how I found the majority myself – owners would approach me because they already knew me
2. Online
   • bizbuysell.com
   • bizquest.com
   • craigslist
   • Facebook marketplace (haven’t had experience but good option. Best to post anywhere online you can)
3. Broker – Business brokers. Expensive but if you have a good business, well worth it. The highest I heard a business going for was 4.5 times earnings and they sold via broker.

Thanks to Ken for having me on the Cleaning Tribe Expert Q & A. Ken is the master of the solo cleaning business, pulling in amazing profits while working only 2 days a week! Visit him at https://www.solocleaningschool.com/solo_teams.html and https://www.youtube.com/channel/UC4mCcXOu8t9hLX5XK-iuYrg

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David Spoon interview with Mr. Shepard, the President and Founder of Dallas Maids. This episode of The David Spoon’s Experience aired on KAAM 770 radio in Dallas on July 30th, 2019.

In this interview, Greg Shepard shared why he left the High Tech world of IBM and Bank of America to found Dallas Maids and how he came up with the idea of starting a maid service.

Greg spills the beans about everything from his background to the process of brainstorming, coming up with the right business, the reasons why people hire a cleaning service, the busiest and least busy time of the year, and even running across bizarre stuff during cleaning!

Greg also mentions he is looking for house cleaners to work with Dallas Maids. So if you are or know of an excellent house cleaning professional, don’t forget to apply using the “Join the Crew” form, or you can contact us for more information.

And of course, remember you can hire our professional home cleaning service if you need extra help for taking care of your home.

The post David Spoon Radio Interview on KAAM 770 Radio appeared first on Dallas Maids® | Maid Service & House Cleaning Services Voted #1 for a Reason.

Welcome to the 016 Podcast!

In this Podcast, Tom and Greg discuss:

How to use SEO tools to increase your reach.

How to expand your business.

The importance of finding quality employees.

Simple steps to build your business from the ground up.

Key Takeaways:

Treat your employees with respect and reward their services.

Don’t be afraid to go for the “dull” business idea.

Your people are your biggest asset.

Expect to pay more for mistakes early on when starting your business.

“Try to figure out all of your costs of starting and maintaining your business for the first year…once you figure out all of the costs, write that number down, then multiply that by two- that’ll be your REAL cost- and then add a quarter for your mistakes.” – Greg Shepard

In 2004 Greg left the high tech world to start a maid service.

Why a Maid Service?

A question he is often asked. After all, he had an amazing career in high tech working at fortune 500 companies. What was he thinking?… A thought that often crossed his mind those first couples of years after starting Dallas Maids. Anyway, to answer that question… Building a business was what Greg wanted to do. He wanted to create something of value. And he wanted to see people, both customers and employees, benefit from that value. This was much more fulfilling than hacking away behind a glowing computer screen all day.

And it was the best business decision he ever made.

Connect with Greg Shepard, CEO & Founder, Dallas Maids: Website: www.dallasmaids.com/contact

Greg’s programming skills easily transferred to starting a cleaning service company: Building a business is like writing code: You write the code (i.e. business’s operation manual) then continually debug it until you have a program (cleaning service system) that produces the same quality results (housecleaning) for the user (customer). And it worked well… Today Dallas Maids is not only one of the largest maid services in Dallas, but no other services have won as many awards as Dallas Maids have for their cleaning service.

Source: DFW Business Culture

The post Podcast 016: Cleaning Up Your Business! appeared first on Dallas Maids® | Maid Service & House Cleaning Services Voted #1 for a Reason.