Cleaning & Restoration Association News

Building a Business Plan: Getting Started

Every endeavor, great or small, has a much higher chance of succeeding if it is working from a carefully thought out plan. Your business is no different, yet many professionals in the cleaning and restoration service industry forge ahead without any plan in place. Often times the biggest obstacle to overcome in creating a business plan is just getting started.

All business plans start with goals. Before any calculations or plans can be made regarding your business, you must first decide, in as much detail as possible, where you want your business to take you. Do you want your business to be large or small? Diversified or specialized? Budget- or quality-oriented? These decisions are made in consideration with an analysis of your available market area.

Once you have determined the nature of your business and the size you would like it to be, you must decide how much time to allow for it to reach that size. For example, if your goal is to double your business in five years, then you need to grow your business at a rate of just under 20 percent a year. You can figure out what that is in dollars by taking your current gross income and multiplying it by 20 percent. For example, if your current gross income is $100,000, then you need to increase your gross by $20,000 annually to double your gross income in five years.

Now you have to ask yourself, “How am I going to generate that extra income?” There are three basic ways you can get this growth:

  • You can do 20 percent more jobs.
  • Increase your average job ticket by 20 percent (raise your price).
  • Diversify and add a new service that will bring in 20 percent more business.

    In reality, it will probably be a combination of all three. The exact combination depends on your market, the nature of your business and your overall business philosophy. For purposes of our discussion here let’s say that you plan to raise your prices 10 percent, identify and service 5 percent more clients, and sell 5 percent more in additional services such as upholstery cleaning.

    Now you have enough information to begin putting some specifics in your plan. Your marketing efforts should be sufficient to add the 5 percent new business, introduce the new diversification, and replace any clients you might lose due to your price increase or natural attrition. It has been my experience that a 10 percent price increase does not generally result in any loss of satisfied customers. A similar plan and breakdown should be figured out for years two, three, four and five.

    Assuming the plan is successful, at some point you will need to add additional equipment and crews. Based on your estimate of the production coming in from one crew at optimum volume, you can figure when you need to bring that second crew on line. I recommend that, when Crew No.1 is at 75 percent to 80 percent capacity, you acquire the new equipment and hire the needed employee. This gives you time to train the new crew, and allows for them to be a little slower than optimum as they learn the ropes.

    When Crew No.1 is at capacity and Crew No.2 is at 75 percent to 80 percent capacity, add the third crew, and so on. Don’t wait until everyone is “maxed out” before taking steps to add the next crew. That usually results in a poorly trained crew being thrown into the field before they are ready.

    Based on this plan, you can estimate when you will need that next machine or major piece of equipment. You can minimize the financial impact of this purchase by building an equipment fund into your budget wherein you set aside a small amount each month from income to be used toward that major purchase. For example, if your plan shows that you will need to add a truckmount in 18 months, by setting aside $300 per month you will have more than $5,000 for a down payment when the time arrives. In a company with an annual gross income of $100,000, an equipment fund equal to 5 percent of gross sales will accumulate just over $400 each month; in 18 months that will result in a savings of $7,500 toward that equipment purchase.

    All it takes to create a good business plan is a goal, a time frame, and a good understanding of your market. This basic structure, and a little time to work through the numbers, can be used to help your plan begin to take shape. The key is to get started. Set aside a block of time each week to work uninterrupted on the business, as opposed to working in the business.

    Establishing the plan is important. After all, if you don’t know where you are going, how will you know when you get there?

  • Did you enjoy this article? Click here to subscribe to i Cleaning Specialist Magazine.

    Recent Articles by Tom Hill

    You must login or register in order to post a comment.



    Image Galleries

    The 2014 Experience Conference and Exhibition

    A look in photos at the 2014 Experience Conference and Exhibition, which was held from April 24-26 at the Embassy Suites Convention Center and Spa in Frisco, Texas.


    Beginning April 21, Google will start judging websites based on their mobile friendliness. What exactly does this mean to you cleaning website? Find out in the latest edition of The Hitman Advertising Show, which will also cover tips and suggestions on getting mobile compliant.
    More Podcasts

    ICS Cleaning Specialist Magazine


    2015 April

    The April ICS issue features content on concrete polishing, green cleaning, air duct cleaning, injection sprayers and new products.

    Table Of Contents Subscribe

    Janitorial Work

    In addition to residential and commercial carpet cleaning, do you do any janitorial work on the side?
    View Results Poll Archive


    The Carpet Cleaner's Book of Unlimited Success! (ebook)

    Don’t worry about the recession or about your competition.  Now you can be the owner of over 400 ways for carpet cleaning professionals to make more money and get more jobs!

    More Products


    Director_Buyer.jpgThe premier resource and reference guide for the cleaning and restoration industries.

    Click here to view


    facebook_40.png twitter_40px.png youtube_40px.png


    Truckmount.jpgEquipment listings and specifications from the leading industry manufacturers.

    Click here to view