I’ve found that one of the first questions carpet cleaners ask other carpet cleaners is “How much do you charge per square foot or per square metre?†along with “What are you turning over at the moment?†as though this is a measure of success.
I come across cleaners who are turning over £50,000, £100,000 and above. Maybe even £200,000. But does that mean that they are successful? The answer has to do with how much are they taking home? And how much do they have to do to get it?
It’s amazing how many small business owners are simply unaware of the cost of running their business. It reminds me of the old sales story that’s done the rounds for many years and goes something like this: A lady buys apples at 10p each and sells them at £1 a dozen. When asked how that works she explains “I make it up in volume!â€
But business is not all about volume...it’s about margins and profit.
Strangely enough, many carpet cleaners think it’s all about volume. If only their business was systemised, they would know that they might be better off dealing only with high-end clients who are prepared to pay for high quality work. It’s far easier to make money by selling half as much but at double the price.
One of the interesting statistics to come out of my ‘numbers’ over the last year has been that my sales are down by about 10% but profit has risen. This has been accomplished largely by ‘qualifying’ people who enquire about my service. In other words, I’m not wasting as much time and money as before dealing with unqualified prospects. Our policy is to get phone enquirers to ‘prove’ that they are worthy of us giving them our time before we ever decide to give them a quotation. In other words, they have to qualify themselves first.
I’m amazed at how many carpet cleaners are very busy but are absolutely wearing themselves out. Several jobs a day then coming home to pick up enquiries then off to do in home quotations. Many cleaners would be better off with a job getting over 4 weeks holiday every year and being able to forget the job when you leave at the end of the day.
My advice? Concentrate on the profit not the gross sales! Work out exactly how much you are making on each job (that means ‘knowing your numbers’). Business is all about margins not gross sales. What’s important is not gross sales or price per sq ft but what you’re left with at the end of the day. Provide a high quality service to those who want and are prepared to pay more for it. Don’t meet with anyone who is not a good quality prospect. And use phone scripts with questions that filter out all the time-wasters (ie the ‘price shoppers’).