Things I wish I knew. Have you ever had this
moment where there are things you wish you knew before you started your business because
you would have done a whole lot of things differently or you would have done them a
lot sooner? That’s what we’re going to talk about today. Hi there. I’m Angela Brown and
this is Ask a House Cleaner. This is a show where you get to ask a house
cleaning question and I get to help you find an answer. Now today’s show is brought to us by Savvy Cleaner Training. Savvy Cleaner Training is an online
program. It’s a membership program that has courses and group coaching and it’s for employees
and employers. There are two separate programs and it’s really exciting because right now
we have a bunch of people that are going through the courses and they’re learning now the things
they wish they knew when they started their cleaning business. So it’s a really perfect
time for us to have our guest speaker on today and talk to us about things he wishes he knew.
So with the help of Savvy Cleaner, you can check it out, SavvyCleaner.com today we are
bringing you Mike Callahan from Simple Growth Systems. He’s back by popular demand. He’s
a repeat guest on our show and today he’s going to share with us things he wishes he
knew. Please help me welcome Mike Callahan. Mike Callahan: Mike Callahan been in the service
industry now for about 25 years. Basically started from the trenches in high school all
the way up through having several crews on the road in college. And then we made that
a leap of faith into, instead of the corporate route, into self-employment and along the
way a lot of things we got lucky enough to know we got right. And then some things, obviously
we got wrong and kind of today’s topic, Angela is the things I wish I knew before I actually
got into business. And unfortunately there’s really no manual. So that’s why I love hopping
on here with you and getting into the actual truth of how other service business owners
can help other service business owners learn from the mistakes they made in the past.
Angela Brown: Well, I’m so glad you joined us today, Mike, because I know that you were
on our show before and I know you’re back by popular demand today, which is awesome.
But you shared with us on our other podcast that it wasn’t all roses for you and I hate
that for you, but what do you wish you knew that you didn’t know then?
Mike Callahan: Yes, absolutely not on a pedestal here preaching by any means. I think that
the mindset of abundance is the way to go here and share kind of some of the trials
and tribulations. So the biggest thing that I think that in my business 100% that I wish
I knew was how to actually go out and create a budget and how to actually go out and estimate
a job in the service industry. So I think there’s basically three types of estimating
that we see, especially in the cleaning industry. The first is you go into a home, you’re new,
you’re cutting your teeth and you look at the home and you go, okay based on my market,
maybe this original top to bottom clean is going for around $225 to $230 so we don’t
know any better. We quoted for that $220 or
$230 because that’s what we think the market’s going to bear. Obviously we wise up a little
bit, especially like I did in my company, and within a year or two, maybe three years
later, pricing at market price, really applicable because everybody has different overhead and
production rates. So we would go out and say, okay, if my goal is $45 per man hour to actually
go out and perform the service such as that top to bottom, I’m going to look at it and
say, okay, if this is potentially 10 hours to do the job based on my production and my
guys and girls on my cleaning team, I’m going to take the 10 hours times my $50 an hour
and that’s a $500 top to bottom to deluxe. Obvious a little bit better. It takes the
emotion out. We have a budget at time per accountability.
The 30 equation to that is we go in and actually create a production rate based on the livable
square footage of the home based off Zillow or the actual square footage from the consumer
and we may be talking about certain things as a number of bathrooms, number of pets,
number of people living in there and create some kind of non-emotional standardized production
rate based on the historical times. So I think if someone had actually sat down and showed
me how to actually go in and non-emotionally creative production rate with a set process
and system that actually lined up to that production rate because your estimating system
is only as good as the process and system in the actual home cleaning it. The combination
of those two and going to market with that knowledge originally would have been a game
changer in my business. I think it would have cut nine to 10 years
of pain and suffering out of the evolution of that business.
Angela Brown: It’s interesting you explained that that way because you talk about the pain
and the struggling of pricing jobs and then you also use taking out the emotional equation
a couple of times. So tell me what kind of emotional equation was there in the beginning
that you didn’t know you needed to remove? Mike Callahan: Well, I guess the old saying
is if you can’t track it, you can’t build upon it. And if you don’t have data coming
in, you don’t have data coming out. So you need good data and good data out. The way
we tackle in our business we ran something called a job costing reports. Every time the
teams went out, we track the non-billable drive time. Originally hard copy paper, but
then in a mobile application. So, we had our non-billable drive time associated
with each job and then the start and stop time of every job we did and the type and
the square footage, how many team members were on there. So we had a non-emotional point
of every six months we could run this report and literally dial into each and every home
or lawn that we’re doing in the lawn care industry and literally say, based on $50 an
hour, are we hitting that threshold? And if we’re not, it would literally go down to maybe
$2.67 cents per visit that we had to charge more to hit our hourly goal. But the idea
is we’d export that from our CRM our Customer Relationship Management Software into an Excel
sheet or Google sheet and literally run this formula. And when I did it all, there’s some
Facebook videos or YouTube videos out there how we did it, but I actually blacked out
the client’s name and addresses, so I literally double check the formula, dragged it down
and the computer told me what I needed to charge.
Then at that point I delegated it to my office staff. So really, it was not emotional, so
if Mrs. Smith had been with me since literally when I was 16 walking around doing lawn and
landscape maintenance. If we weren’t making money on her house emotionally I probably
would not have changed her price. But if something in your yard or home changed where the production
got significantly inefficient outside of our control, this was a non-emotional way to make
sure we’re making money. And I think the biggest mistake in the service industry, and I see
it on all different industry, Facebook groups and YouTube channels, are people talking about
I’m going to raise my price by percent across the board today or an extra $10 per weekly
cleaning or biweekly clean. In my opinion. That’s probably the craziest thing you could
do because you’ve got some clients who are making over a hundred dollars an hour on.
If your goal is $50 an hour, why would you go out and purposely or un-purposely price
out your most profitable clients. So by tracking the numbers and having a sound foundational
understanding of the numbers, it’s that non-emotional approach, Angela, that I really love because
now I can just run it and this is it. You’re going to find that some of those homes that
you may be cleaning is, it may be cheaper to go and literally drop off a hundred dollar
bill because that’s literally what you’re losing every time you were there. So why continue
the bleeding financially unless we’re hitting that financial threshold?
Angela Brown: I don’t think we’ve ever talked on this show about the emotional pricing before.
And that’s really an interesting concept for this reason. You’re correct, you’re a hundred
percent correct in that there are a bunch of house cleaners that show up to bid a job
and they wing it, if you will, because they look around and they say, well, this lady
has five kids and so I’m going to give her a break because I know she’s got mouths to
feed and she’s got shoes to put on the kids and this is going to be expensive for her.
And I know she’s going out of her comfort zone to hire me and whatever. And so they
cut some kind of an emotional unconscious discount to that person without actually running
the facts and figures. And then like you said, when it comes time
to raise the price, they’re basing that on, well, this customer has been with me for a
long time, or they’re getting elderly or they’re on a fixed income or what have you. And they
start making exceptions for their pricing. And I don’t think anybody’s ever really talked
about that on this show. And so I’m really glad that you brought that up because that
is something I wish all house cleaners knew before they started bidding jobs.
Mike Callahan: And that’s the biggest mistake in business. And like I said, there’s not
a handbook how to do this. And that’s the human thing. We ultimately want to give the
best service. And I think one of the other biggest issues is we may go up and beyond
what the actual scope of service is and that’s not a repeatable business. So I’ll give an
example is maybe part of your weekly or biweekly cleaning isn’t taking the trash outside of
the actual home or all the way to the dumpster on the other side of the townhouse complex.
But once we go out and actually perform that act, we’ve set an unrealistic expectation
and all a consumer really is expecting is consistent, reliable, good service. When we
give them 120, 130% if we’re not the operator, as the business owner, they’re cleaning and
doing that. When we go to delegate that to someone else, and that doesn’t happen consistently.
You haven’t not provided the service or great service, but what happens now is there’s an
expectation drop. Now the service isn’t as good because they didn’t do all the extra
things you were not charging. So I think that’s the other biggest mistake,
at least in my business, that when I was still on the crews and out in the teams working,
that I would actually inadvertently set ourselves up for failure because I would go up and beyond
the scope of work and set an realistic expectation. And most of it’s in our owner’s head. So we
have that knowledge that we are not sharing it across the organization, but the person
that takes your position doesn’t know that you went the extra step to take the garbage
out. If it’s not documented, it’s not going to happen. Now you’ve got an expectation and
quality perceived at least issued. So the two kind of go hand in hand as well as we
scale these businesses. Angela Brown: Well, and like you said, it’s
really interesting because starting out, most house cleaners start out solo and so because
they really want the job, they are people-pleasers and they go to great lengths to provide, I
don’t know, I’m just going to make this up like a little special flower on the toilet
paper so that it’s all decorative when the homeowner comes home. Well that is not replicable.
It’s not duplicatable, it’s not scalable. And then what happens when you hire a team
and you’ve got 30 people out in the field and they’re doing 12 toilets a day, each of
them, they don’t have time to each make a rose for the toilet paper. So a simple fold
in a triangle shape is all you get because that’s what we’ve now been trained to do.
And then the homeowner’s like, well, I don’t want them, I only want you. And so they’ve
trapped themselves in this really narrow unrealistic, “I’m going to provide you so much more than
what they’re paying for” like you said. Then they can’t scale it because it just doesn’t
make sense from a financial standpoint. Mike Callahan: So it was interesting. So we
had the head cleaner with one of the local companies that we work with, do our home,
and then when that had cleaner left, she knew my relationship with the owner. So she set
that unrealistic expectation. And the first time that new cleaner came in, my wife and
I came home and I’m like, it’s good, but it’s not the same. But then I started to thinking
like, wait a minute. She went up and above way beyond what she should have been doing
for that weekly clean. And the new cleaner was doing it to the spec, but she had no idea
that those other things were supposed to be done because they weren’t part of the service.
So I’ve seen it firsthand, but I mean the new cleaner we have now is phenomenal. I’m
really happy with her, but she’s just, she had no idea of that extra expectation.
Mike Callahan: So it’s interesting to see it firsthand as a consumer as well, because
it doesn’t matter. It’s just like, “Oh, wait a minute”.
Angela Brown: Well, Mike, every time we talked to you, you just share with us these brilliant
ideas and I know that you help cleaning business owners automate their businesses so that a
lot of these expectations are documented and they’re systematized and they’re automated. Tell our listeners where they can go to find you. Mike Callahan: Yeah, absolutely. The website is SimpleGrowthSystems.com with an s dot com.
Also, on Facebook, YouTube, Facebook’s probably got 300, 400 videos of literally if you’re
looking to do it yourself, it’s literally in abundance. We show you how to do it if
you need some help. We’re here, but it’s been evolutionary in my business. Everything that
we actually provide is what was my own journey to kind of take my life back to my business.
And these are, I think the times where we need to go online and share these pitfalls
that all business owners, if they’re not aware of it, can fall into when they first start
out or as they’re starting to scale that business to those, half million, quarter million or
million beyond because those are the roadblocks that are really going to hit you head on if
you don’t overcome them ahead of time. Angela Brown: Alrighty, and that is Mike Callahan
with Simple Growth Systems and I’m going to leave the links so that you can find him and
hire him in the show notes today so that you can get to know him. And also he didn’t tell
you this, really kind hinted to it, but he’s got this enormous YouTube channel with a whole
bunch of different tips and hints and different ways to automate your business of things that
you will wish you knew when you started your business.
All right, there you go. If you found this helpful, please pass it on to a friend. If
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leave the world a cleaner place than when you found it.