I've been researching the industry, and I'm having a difficult time finding larger non-franchised operators. It seems like franchising is the only way to become a larger operator. Also I haven't really found any large "regional" operators that dominate their area. For example, when someone in Chicago says "carpet cleaner", no one company comes to mind. Ask 10 different people, get 10 different company names. Does this industry just not support larger non-franchised operators? Thanks!
Large Non-Franchised Operators?
- Thread starter FireDude174
- Start date
They are out there but it's a difficult operation to maintain. Much much easier in HVAC, plumbing, etc. because those industries are regulated and techs must be certified through a school of some sort in most states, also pricing is for the most part regulated.
Pricing and training is not at all regulated in carpet cleaning and technician turnover is extremely high, the larger operations are literally a revolving door with entry level techs.
Several other factors.... lots of DIY options for carpet cleaning, many switching to other types of very low maintenance flooring, and the influx of new 1 man show (not charging enough but motivated) companies that pop up every single spring.
Pricing and training is not at all regulated in carpet cleaning and technician turnover is extremely high, the larger operations are literally a revolving door with entry level techs.
Several other factors.... lots of DIY options for carpet cleaning, many switching to other types of very low maintenance flooring, and the influx of new 1 man show (not charging enough but motivated) companies that pop up every single spring.
Another thought.... carpet cleaning is an extremely competitive industry, easily as competitive as landscaping
But unlike landscaping there is rarely if ever maintenance contracts signed with residential customers.. only commercial.
The pricing is relatively close for hours spent but you need a much larger customer database because many of them you'll only visit every 2-3yrs, the good customers every year or even 6 months
Your employees also will need to be "country club" dressed and presentable as I like to call it. This is difficult with the pay scale you can offer. They are inside customers homes around their personal items, in their closets etc. You need them to be very comfortable with your techs
But unlike landscaping there is rarely if ever maintenance contracts signed with residential customers.. only commercial.
The pricing is relatively close for hours spent but you need a much larger customer database because many of them you'll only visit every 2-3yrs, the good customers every year or even 6 months
Your employees also will need to be "country club" dressed and presentable as I like to call it. This is difficult with the pay scale you can offer. They are inside customers homes around their personal items, in their closets etc. You need them to be very comfortable with your techs
I
Here in nz the franchise guys were dominating my areas , but the prices they charged were putting a lot of people off , just not being able to afford it so rang them all , got all of their prices and a cut about $80 off per whole house , I can now tell you after 2 , 1/2 years I’m busier than they are. We average 6 to 7 homes a day six days a week. It was tough to start and I went In very cheap very very cheap and did fabulous work , word got out and I quietly upped the prices to meet my margins and now I don’t have to do much advertising , I have all of the major real estate contracts and most of the schools in the area , around 5 big schools , and all with my trusty ninja 500 porty . It can be easily done , just takes patience and time
Here in nz the franchise guys were dominating my areas , but the prices they charged were putting a lot of people off , just not being able to afford it so rang them all , got all of their prices and a cut about $80 off per whole house , I can now tell you after 2 , 1/2 years I’m busier than they are. We average 6 to 7 homes a day six days a week. It was tough to start and I went In very cheap very very cheap and did fabulous work , word got out and I quietly upped the prices to meet my margins and now I don’t have to do much advertising , I have all of the major real estate contracts and most of the schools in the area , around 5 big schools , and all with my trusty ninja 500 porty . It can be easily done , just takes patience and time
OxiFreshGuy
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7 homes a day is a good number but wouldnt qualify as a large operator.
Dont worry about being large, bigger isnt necessarily safer.
You'd be surprised someone like a ZeroRez loses money the first few years in a new market.
The OxiFresh franchise I ran had 10 trucks and only made a 10% profit margin due to high marketing costs and franchise fees.
The stress that comes with a larger operation isnt generally worth it.
For a larger operation to be successful you essentially need a manager who can help you run it. If he has the skills to operate a large franchise he essentially has the skill to start and own his company so why would he work for you ?
3-5 trucks is the sweet spot and highly profitable for most.
Dont worry about being large, bigger isnt necessarily safer.
You'd be surprised someone like a ZeroRez loses money the first few years in a new market.
The OxiFresh franchise I ran had 10 trucks and only made a 10% profit margin due to high marketing costs and franchise fees.
The stress that comes with a larger operation isnt generally worth it.
For a larger operation to be successful you essentially need a manager who can help you run it. If he has the skills to operate a large franchise he essentially has the skill to start and own his company so why would he work for you ?
3-5 trucks is the sweet spot and highly profitable for most.
Can confirm.
ZeroRez corporate told my higher ups they needed 3 trucks and 5 employees right off the bat in a fairly fixed market. It did nothing but bleed money for 5 years until they shut it down due to high losses.
Meanwhile after 30 years my previous employer is doing a pretty brisk business with 5-6 carpet trucks, 3 hvac/kitchen hood trucks, and a pair of empty box trucks for all his flood hauling. In the summer we would be averaging 16-20 houses a day plus 2-3 commercial jobs a night just for carpets. You can dominate independently it just takes a while.
OxiFreshGuy
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I am literally within my 1st year. Honestly the 1st year is kind of a wash, even for a guy like me who was already established. Granted the way I started was with much higher debt equivalents but that was a lot less risky for me due to my contacts.
Here's how it broke down for my 1st year:
Initial Investment $45,000 cash (all manner of things to pay for, insurance $3,800 for the year, HCP $1,400 for the year, attorney fees, accountant fees, etc)
Van + Truckmount + Operating Equipment: $55,000 (keep in mind I put $25,000 cash down see above)
To keep it simple, I spent $45,000 just to open my doors. My monthly bills breakdown as follows: (keep in mind I pay my insurance and HCP yearly so I just add it in to keep my monthly costs true)
Shop: $360 a month
Van payment: $1,000 a month
Cell phones: $200 a month
HCP: $108 a month
Insurance: $316 a month
So $2,000 a month just in equipment and shop fees basically
Marketing is going to be your next huge cost - and it is variable. Right now I'm running about a 11% marketing cost. That means every $100 I bring in, $11 goes to marketing.
Then your operating expenses, maintenance, supplies, chemicals etc.
I know a lot of guys trash me for sharing numbers, but for someone really looking to get started this helps you make an educated decision.
It took me about 6 months to start averaging $20,000 in sales from ONE truck. This was pre-Covid though so time will tell.
That is the POWER of a truck mount. If you are savvy, educated, good with customers you can hit $20,000 by yourself, with a truck mount. A portable isn't going to do $20,000 in a month.
On the flip side, truck mount is bigger bills and bigger risks. With a portable, you only really need about $15,000 to get started in the business.
Usually my advice to guys is, if you're JUST starting out, do portable work for apartment complexes. You'll get good at cleaning dirty carpets, removing stains, practice your patch work.
Make your mistakes on cheap apartment complexes. Then, if you really like the industry, look into buying a truck mount. Your efficiency goes way up. I can do a $1,000 on a truck mount and be pretty tired, but ready to go the next day. I can't do that with a portable.
Here's how it broke down for my 1st year:
Initial Investment $45,000 cash (all manner of things to pay for, insurance $3,800 for the year, HCP $1,400 for the year, attorney fees, accountant fees, etc)
Van + Truckmount + Operating Equipment: $55,000 (keep in mind I put $25,000 cash down see above)
To keep it simple, I spent $45,000 just to open my doors. My monthly bills breakdown as follows: (keep in mind I pay my insurance and HCP yearly so I just add it in to keep my monthly costs true)
Shop: $360 a month
Van payment: $1,000 a month
Cell phones: $200 a month
HCP: $108 a month
Insurance: $316 a month
So $2,000 a month just in equipment and shop fees basically
Marketing is going to be your next huge cost - and it is variable. Right now I'm running about a 11% marketing cost. That means every $100 I bring in, $11 goes to marketing.
Then your operating expenses, maintenance, supplies, chemicals etc.
I know a lot of guys trash me for sharing numbers, but for someone really looking to get started this helps you make an educated decision.
It took me about 6 months to start averaging $20,000 in sales from ONE truck. This was pre-Covid though so time will tell.
That is the POWER of a truck mount. If you are savvy, educated, good with customers you can hit $20,000 by yourself, with a truck mount. A portable isn't going to do $20,000 in a month.
On the flip side, truck mount is bigger bills and bigger risks. With a portable, you only really need about $15,000 to get started in the business.
Usually my advice to guys is, if you're JUST starting out, do portable work for apartment complexes. You'll get good at cleaning dirty carpets, removing stains, practice your patch work.
Make your mistakes on cheap apartment complexes. Then, if you really like the industry, look into buying a truck mount. Your efficiency goes way up. I can do a $1,000 on a truck mount and be pretty tired, but ready to go the next day. I can't do that with a portable.
Imagine the difference in training new techs too.... CRB cleaning vs trusting them with a 40k truckmount. LOL
Worst they can do with a CRB is probably strip the gears or drop it down a flight of stairs.
The biggest problem with the revolving door in this industry is having to teach each new person how to operate big equipment. You can always have a lead tech and hopefully they stay longer
In our area the pay working for a carpet cleaning company is pathetic, not even remotely enough $ to survive. Basically your employees will either be driving in from far away or living in their parent's basement
OxiFreshGuy
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Agreed ACP, I feel ashamed I worked for Oxi Fresh. I knew nothing about carpet cleaning and was simply bored, took it as a job to have some social interaction.
No idea why but found I really enjoyed it. Oxi fresh did everything they could to hide the use of portables and truckmounts.
That being said I learned a valuable lesson...customer service is the #1 key factor, followed very closely by the cleaning as #2.
It grew into a $1.2 million dollar operation within 3 years.
Not bad for CRB only cleaning! My final straw was the way owners treated the technicians. They had no interest in the well being of customers or the technicians.
They try to make you drink the kool aid during your interview.
No idea why but found I really enjoyed it. Oxi fresh did everything they could to hide the use of portables and truckmounts.
That being said I learned a valuable lesson...customer service is the #1 key factor, followed very closely by the cleaning as #2.
It grew into a $1.2 million dollar operation within 3 years.
Not bad for CRB only cleaning! My final straw was the way owners treated the technicians. They had no interest in the well being of customers or the technicians.
They try to make you drink the kool aid during your interview.
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