Starting Out: 12 Steps to Success

February 8, 2010
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“In the past we said to employees, ‘Do as you are told and you will have a job for life.’ Then we betrayed them.”
- AT&T executive

It seems like just yesterday when I first went into business for myself. The sheer joy and excitement of starting my very own company still overwhelms me with nostalgia. And making more money than a lowly high school graduate with mediocre grades ever believed possible was just frosting on the cake!

The romance and thrill of being a lone entrepreneur has been celebrated for years. But it isn’t all fun, glamour and big visions. Instead, I am seeing increasing numbers of recession-era business start-ups motivated by simple desperation: “If nobody will hire me, then I guess I’ll just have to hire myself!”

There is nothing wrong with this leap of faith. In fact, I applaud these reluctant entrepreneurs. These plucky survivors are almost inadvertently part of our economic recovery based solely on their burning desire to feed their families.

Many of these “accidental start-ups” are refugees from corporate downsizing. The ax has either swung on them or they’ve seen the handwriting on the wall and decided to take the future in their own hands. However, while they are hard workers (remember, they used to be “employed”), the rules in their new profession as carpet cleaners are very different.

Let’s see how we can help this current crop of newbies and, in the process, refocus ourselves on our own companies with these 12 “Starting Out” Steps to Success …

1. Determine What You Want to be "When You Grow Up"

I know, right now, as a “reluctant entrepreneur” all you want to do is to survive and pay your mortgage, both of which are actually pretty good goals! But take some quiet time this weekend to talk with your loved ones. Analyze where you want your business (and your lives) to be in 5 years. Then look forward 20 years.

Be specific. Write it down. You do not have to get big to be successful, even though it certainly can help. But no matter how big you plan to grow, to be successful in the carpet cleaning industry you will absolutely have to...

2. Change Your Mindset

Numerous studies have shown that the failure rate of new start-ups climbs exponentially with increasing non-industry business experience on the part of the owner. Why? Because a new entrepreneur inevitably brings his or her previous history, beliefs and knowledge to the table.

Your previous business experience may be of value. However, more often it can lead to complacency and/or arrogance, which may doom your new venture in an unfamiliar industry. Remember that a residential services business like carpet cleaning is a totally different game. In fact, you are dealing with a totally different set of “Unspoken Questions” from the homeowner, and many of your preconceived notions about business need to be thrown out the window.

3. See If You Can "Double Dip" For a While

Carpet cleaning offers you a great part-time option of cleaning after work and on the weekends. This schedule allows you to gain experience, develop your business, add equipment from cash flow and build a small clientele while still pulling down a regular pay check. Both your sleep and your family time may suffer, but nobody said becoming an entrepreneur was going to be easy!

However, sooner or later you will be facing a choice on when to “pull the trigger” and go full time. My advice is…

4. Do It Sooner Rather Than Later

No sane business consultant would counsel an impulsive departure from a stable and lucrative job. However, don’t live in denial either. If you see your career path stalled (or even in doubt) why not take the bull by the horns and negotiate an orderly, even profitable, departure from your job?

Living in denial is just prolonging the agony and postponing your success in business. Plus, if you are sure you are cut out to be an entrepreneur, every day/month/year you waste working for a big corporation is just that much less time invested in your family’s future.

However, building a successful business likely will mean sacrificing now, which means you should…

5. Cut Your Personal Overhead

Today’s Americans have been called the “Entitled Generation,” as in “We deserve it all – no matter what!” Therefore, even during one of the worst recessions this country has ever known, restaurants are packed and shopping malls are still full, while credit card debt continues to climb. In other words, our state of denial can also extend to our personal spending.

If you are going to make it as a recession-era start up you must seriously throttle back your personal spending and cut your debt load. With the right attitude of shared sacrifice this can even be fun. I know that 35 years ago Sioux and I cultivated a fun approach to “frugality as a game” that endures to this day. For example, we’ll drop $10,000 without blinking on a foreign vacation, but we still bring in empty water bottles through security and then fill them at the water fountain to avoid paying for that overpriced airport water!

Remember, though…

Ready to take the industry by storm

6. Getting Big is Not Necessarily the Best Way

Uncontrolled growth has destroyed more businesses than lack of growth. Plus remember that with most customers you only get one chance. Being late, rushed work, missed appointments and lack of controls on your employees can definitely hurt those essential future referrals. So what to do?

Simple. You’ll have to – at least some of the time – learn how to say “No.” This is an excruciating process for most start-up entrepreneurs, so let me give you an easy and profitable way to say it without verbalizing it to your prospective customers …

7. Charge More Than the Competition Right Out of the Gate

The easiest and most lucrative way to put some gentle brakes on uncontrolled growth is to raise your prices. Even a modest increase will have a huge effect on your bottom line. In attendee surveys in our Strategies for Success seminar, we find that over 90 percent of our members need to raise their prices just to become profitable.

Even apparently successful carpet cleaners seldom grasp the true costs of doing business and, sadly, allow their competitors to determine their pricing! Plus, no matter what you decide on the “getting big” point above, money in your pocket always helps! Now once you have that extra money…

8. Start a Personal Investment Plan (PIP)

No one, especially a small-business owner, should depend exclusively on the success and/or sale of their company to fund their comfortable retirement. And what if you as the sole business “employee” are injured or sick for a substantial period?

Deal with these challenges in four ways:
  1. Keep 6 months family living expenses in a safe and liquid money market fund.
  2. Once you’ve fully funded Step A, start sweeping 5 percent (10 percent is even better) into your PIP. These are long-range personal investments that you don’t touch – period. For more on the PIP concept go to http://tiny.cc/SFS661; for your free download click on “Cleaning Up: Building Personal Wealth in the Cleaning Industry”
  3. Look into long-term disability insurance that will provide a base income for your family if you are incapacitated.
  4. Buy good term-life insurance.
Now to accomplish these four goals you must have money coming in (duh!), which means…

9. The Phone Has to Ring

Here you are, faced with the business equivalent of “all dressed up and nowhere to go.” You have your equipment, your technical training, and you are even dressed up in a sparkling new uniform. However, you now find yourself picking up that silent phone every hour just to check if it has a dial tone.

Remember that in your old job, all you had to do was show up. Now it is up to you to make the phone ring! As Chuck Violand, is fond of saying, “Luck favors a body in motion!” So get moving and remember this: the single best use of your time as a start-up is face-to-face selling.

However, you can’t be two places at one time so if you are going to successfully sell work you must…

10. Get Off the Truck at Least Some of the Time

I know that in the beginning you will probably love cleaning carpet. I did too. But a wise man told me once, “Steve, buy time.” So always ask yourself, “Is what I am doing right now the highest and best use of my time?”

Assuming you have decided that you want to grow out of the owner-operator level (nothing wrong with staying small if you are funding your PIP), if you can hire an employee at 15 or 20 bucks an hour to do what you are doing at this instant, and you could be out selling more work during this hour that will net a clear profit of $200 or more, then you are losing money!

Yes, I know this is an over-simplification but you get the idea. Train your employee(s) to run without you and get him or her an assistant. Why? Because you need to…

Get off the truck and put in the face-to-face sales time

11. Get a Back-up Truck as Soon as Possible

I’m always amazed at how few carpet cleaners keep a truck sitting in reserve to pick up urgent, extra work and be a back-up for their other machine. If you buy a new truckmount and van and only use it ten hours a month to do work you would otherwise have lost, the investment will pay for itself. Everything over that is gravy.

When I sold my business, we were consistently running three truckmounts but kept a fourth, older truck “in reserve” for breakdowns and those sweet last minute jobs where the customer needed it done right now! Far too many carpet cleaners run without any equipment/employees in reserve which in turn adds enormous pressure to their life and cuts their potential profits.

So, do these 11 steps sound simple and easy? Simple yes, easy no! Therefore your last assignment is to…

12. Reach Out to Others for Help and Support

Starting and growing a business today “down in the trenches” can be a tough and lonely job. But it doesn’t have to be.

Local and national groups such as trade associations, business referral networks and yes, even your carpet cleaning distributor should all be sources of logistical help and emotional support. And of course don’t forget internet discussion forums (such as www.i-boards.com/ics) which will give you a valuable “shoulder to cry on”!

If you are a new start-up in this business, congratulations! The carpet cleaning industry can bring you joy, satisfaction, wealth and success beyond your dreams; it can also become “hell on earth.” What will make the difference for you? Doing it right with these 12 steps.

Simply put, what do you really enjoy and where do you want to go? Trust me, if you don’t get a handle on what you and your loved ones want out of life you will not be having fun, and life is way too short for that!

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