Why you need to start small THEN grow big (not the other way around).

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by Tom Watson on July 12, 2015

As I’m fond of telling everyone who will listen, when I first started my cleaning business my very first account was a small one.

It was a real estate office not too far from where I lived. It wasn’t a busy office so I only cleaned it every other week. The price… $60.00 per visit.

Pretty humble beginnings, but I was very happy to get the ball rolling on my new career. The fact it was small didn’t bother me at all. In fact, it was by design. I was (and still am) of the belief that when you start small not too much can go wrong.

After all if you make a mistake on a “small task”, odds are high it will only be a “small mistake”. But if you start on a larger task and you make a mistake, well… it could be a doozy as they say. This is why I think beginners need to start out on small accounts.

I mean, it just doesn’t make sense to risk making a giant mistake early on in the process of growing your business. Doing so could be fatal to your dream. I bring this topic up today because I talk to a lot of people who want to start at the top of the mountain so to speak.

They just want to bid all the big jobs, make the big money, and live the life they always wanted. While I admire that THINK BIG attitude, it generally doesn’t work out. I’m not saying it’s impossible. If you had prior experience running a business then perhaps you could pull it off. But most people who write me are first time business owners.

To drive this home, think about Hollywood for a moment. Movie stars don’t come out of the blue. Their first movie isn’t the starring role in some blockbuster with a big budget. Odds are they started doing local commercials, or minor bit type roles in small budget productions. From there they get noticed and grow into the stars we all know.

The same is true for the cleaning business. While that may sound pretty boring, that is how it’s done the vast majority of times. So for all you beginners, put your thoughts of cleaning that 20 story building on hold (just for a little bit). You need to work your way up to that.

For all of those that have been in business for a while, I would love to hear WHAT YOUR FIRST JOB WAS. Was it a little one, or did you roll the dice and bid something big and land it? I can’t wait to hear, so feel free to share your experiences in the comments below.

{ 8 comments… read them below or add one }

1 Quincy July 12, 2015 at 8:35 pm

Hello, this is good information. We started out with small but great accounts near our home and we were able to learn and grow slowly. Without those small accounts, we wouldn’t have been prepared for the larger ones…

Office MD’s of Atlanta

2 Tom Watson July 12, 2015 at 8:36 pm

Hi Quincy! The small accounts lay the foundation. THANKS for sharing that, much appreciated!

3 Alex July 12, 2015 at 10:18 pm

Another downfall of having those large accounts is RISK! When I first started out I had one account that was 80% of my gross. If this account went south, I would have been in trouble. When you’re in this situation, you’re only thought is to do everything you can to keep the golden goose alive, you’re mind isn’t on maximizing profits from that account.

Luckily, I was able grab a bunch of small accounts to balance this out, but it still took a while before this one big account was less than half of my gross.

4 Deb July 13, 2015 at 1:50 pm

Hi I’m starting up a cleaning business but mostly just want to deal in new apartments, home for sale, rentals and foreclosures. I have done the total so called trash outs but for now just the cleaning side of it. I’m not sure who to talk to for the new apartments I have the rest of them cover as far as who to talk to but the apartments have me stumped. Any suggestions for that? Also the insurance side of it.


5 Tom Watson July 13, 2015 at 1:55 pm

Hi Deb! The “Office Manager” is the person you need to get in front of. I normally sent a sales letter, biz card and flyer to every single one anywhere near me. You may have to send more than one out to each place (45 days after the first letter, send another one). Also… visit Realtors and do the same thing.

6 Tom Watson July 13, 2015 at 1:57 pm

Hi Alex! I agree, and have written on that quite a bit. You did the right thing by getting a bunch of other accounts to help fix that.

7 Denise July 28, 2015 at 11:59 pm

Hi Tom,

I first want to thank you for your information. I’m currently in Corporate America and HATE IT. My grandfather retired as a janitor and also told me it’s a great business to earn good money and take care of your family. He was certainly correct!!!

Against my husband better judgement I’m going to pursue my cleaning business. Thank you for your many suggestions about starting small and not big, and staying in front of potential clients.

I look forward to learning more from you. I would like to ask a few questions:

1. Is a $5,000 bond enough to insure against potential theft (if I would have an 1 or 2 employees)?
2. Would an insurance company such as State Farm be a good place to start with for liability insurance? What amount is a good amount to start off with for liability insurance?
3. How do you suggest I determine competitive fees (rates) to “out bid” a contract?

Thank you for all you do!

My Best,

8 Tom Watson August 1, 2015 at 4:06 pm

Hi Denise! Well… I’m happy to help. To your questions…

1 – Yes (probably). Unless you land a job that requires more (like a bank) then that should suffice. Bonding is cheap, so it’s not a big worry if you need more.

2 – Google “general liability insurance” plus your zip code and see what the results show. I don’t know if State Farm does that or not. I would visit at least 3 agents to get a feel for which one you feel comfortable with. As far as “how much”, that is up to you. There will be a minimum threshold that is required (probably different for each State). Talk to the agents about what is best for your situation.

3 – That is a BIG question. I can’t really sum that up in a paragraph. I have a whole chapter in my courses dedicated to that topic. Not sure I can give you a great answer in just a paragraph or two. This is my best answer… The more you bid… the better you will get. At the end of the day you need to charge at least twice as much as someone earns working for you.

So if you pay ten per hour for a cleaner, then you need to charge at least twenty per hour to the customer. The more you go above that ratio, the better (but you will lose some bids because of being high, but that is the price you pay for being profitable).

The above scenario was for a REGULAR RECURRING CUSTOMER (like a five day per week account). You may be able to go to 2.25 or 2.5 times what you pay someone, but you will risk not getting the job because you are too expensive.

Now if the job was a ONE TIME type job, then maybe you could charge 4 or five times your base employee pay. It REALLY DEPENDS on the situation. Too many variables to spell out. But think of it this way… the more you clean, the lower the hourly rate (wholesale pricing), the less you clean they get RETAIL pricing (more expensive).

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