Getting Spread Too Thin

This subject is one I feel I have become a master at, and not proudly.  

And notice I said subject, and not a skill.  This is a blog that will be helpful for the new guy to prevent themself from taking on too much.  This will be more beneficial however, for the guy that has been in business for over 5 years and has found themselves taking on too much.

For people who know me, I am extremely ADHD and tend to have to do multiple things at once just to function properly.  But with that being said, I have a history of taking on way too much, thinking it will satisfy my disorder, and in the process create more chaos than solutions.  I still have this problem to this day.  

When you begin your business you may find yourself putting on a flier things like “we will wash anything!” or “we have the best price in town!” or… “both!”.  Being willing to do anything isn't necessarily a good thing.

When I began my wash business I actually was pretty focused.  I ONLY did driveways, and I wanted to be the best at cleaning driveways.  Then I learned how to clean houses and I wanted to just do houses, and driveways.  Then I began cleaning garbage trucks and I wanted to just do houses, driveways and garbage trucks.  Then I began cleaning restaurant parking lots and dumpster pads.  Then I began cleaning driveways, houses, garbage trucks and restaurants.

To make this less redundant, between 2014 and 2018 I went from only cleaning driveways, to cleaning driveways, houses, garbage trucks, restaurants, Hydrovac trucks, tankers, kitchen exhaust hoods, roofs, windows, windmill turbines, oilfield equipment, shopping center cleaning, parking lot striping, graffiti abatement, wood restoration, concrete sealing, running a rental equipment company, online store, chemical blending(yes we make some of our own soaps from raw material), building pressure washer trailers, offering training, webpage content(Google), Linkedin Marketing, a repair center, equipment fabrication and the list still continues, but you get the point.

Where should I have drawn the line?

A problem I have is I became a jack of all trades and master of none.  To this day, I am still feeling the repercussions of this as I am slowly shrinking that list down.  Am I delegating many of these tasks to employees?  Absolutely!  But even with a staff of 10 people, this is an overwhelming amount of items that we cover.  I have preached that if something isn’t working, try something else.  But I don’t recommend taking it to the extreme that I have.  I have created so much stress for myself, that it has been difficult to dig myself out. 

So one of the things I have done that has “lowered” my stress levels, is subbing out work that I no longer want to do.  From that list I have taken many things off of what I do.  Kitchen Exhaust Hoods was probably the first one I crossed off.  Why?  Because it was the least aligned service with what I do.  The equipment we used for it was entirely different, and so was the insurance.  It requires more attention to detail and isn’t just a “spray and forget” kind of work.  There is a lot of documentation involved, and it requires being organized to be successful at that business.  KEC (Kitchen Exhaust Cleaning) requires a lot of focus and really shouldn’t be something I added on my plate just to “give my guys more hours”.  

I have for the past 5 years added, and removed things that I do.  We have gravitated from selling equipment to EVERYONE, to being more selective on who we sell equipment to.  We have discovered who our real client base is, and is supposed to be.  It isn’t a bad thing to assess later that you made a mistake and need to reevaluate your business.

Ok so we have established I have a serious problem, now what do I do?

1. The first thing that needs to be assessed is what is not making you profit?  That answer should not take long.  

1. What service do you least look forward to completing.
   
   
2. What service demands too much time from your personal life.

1. Can you see a vision of doing this 10,000 more times?

1. Does your market share make it possible to hit your goals? (what I mean by this, is if you want to clean oilfield equipment, and you are in Miami Florida, you may want to reevaluate your market share).

For me KEC was the first revenue stream that I felt wasn’t profitable enough to maintain.  My insurance on top of my already existing insurance was 135$ a month.  I spent 2800$ on going to the training to get certified.  I had to purchase 2500$ on equipment outside of my already existing hot water pressure washer equipment, just to find out my already existing pressure washer equipment wasn’t “quite” the optimal equipment for the job.  I was running 3000 PSI at 6 GPM and I had issues with producing too much water.  I found that 3000 PSI at 4 GPM is the magic combo, and it was something I didn’t want to invest in.  That should have been the first clue right?  I didn’t want to invest in more equipment, because deep down I didn’t see this as a great revenue stream for me.

So once a week we had a “KEC” night.  I went with 2 of my guys and we would wash hoods.  We made anywhere from 500 to 1200$ a night.  So in a month I basically made 3000-4500$ from adding KEC to my belt (and keep in mind my profit is roughly 45% after operational cost, not including “constant costs”).  What does this mean?  I became a master of nothing.  I did this just because my guys cleaned trucks every Saturday and Sunday.  I wanted to get them a guaranteed 40 hours a week, and adding KEC seemed like it made sense just to “get my guys their hours”.  But the profitability was so insignificant that it lowered my drive to sell these accounts.  I mentally got annoyed when someone called me to ask for a quote on a vent hood. 

That should have been my message right?

Well wait, it gets worse.  In 2018 I acquired a new customer who had a “dump” for a restaurant.  They had no running water (so I had to fill my tank prior to arrival).  The customer freaked out when I quoted him 450$ for 1 fan (that looked like it hadn’t been cleaned forever).  He told me he used to get it done for 200$.  I left it at that.  A month later I am assuming he was under pressure from an official (it would be either their insurance company, Health Department, OSHA or the fire marshall) and contacted me again and agreed to pay 450$.

So instead of reading between the lines, I was greedy and took a job I didn’t want.  It took me 7 hours to clean this KEC.  The customer then complained about every step of the way and ultimately only wanted to pay 390$ and refused to pay until I agreed on the price.  In my world fighting over 60 dollars is an extreme waste of time.

6 months later the customer calls me back asking if I could clean his system again.  My stomach cringed and I told him absolutely not.  I told him that I don’t offer the service anymore.

After I said that, I felt a sense of peace within myself.  Then I called my Chik Fil A account and said “hey sorry!  We no longer clean vent hoods!”.

Then I called Dickey’s BBQ in a cheerful mode and said “hey sorry!  We no longer offer vent hood cleaning!”.

Within 2 days I fired the customers I had and had nothing but relief.  This was an expensive, frustrating chapter of my business life.  And closing it cleared my stress more than nearly any move in my career.

Now I covered the first 4 things in this section.  What I didn’t cover is that I am in Houston, and there is a HUGE market share for kitchen exhaust cleaning.  I just don’t want to do it 10,000 more times.  I shouldn’t do it.

Now let’s go over market share.  When I was new in my business I thought residential cleaning was going to be the ticket.  But I realized one really important detail, in my area there is a power washing company every 2 square miles.  That is an astoundingly large number of contract cleaners when you factor Harris County is 1778 square miles.

There are a few red flags I saw in our residential market that made me realize having it as a full time gig was senseless.  When you try to schedule a wash job 3 weeks away from now, 9 times out of 10 they will get impatient and use someone else before you get to the 21st day.  The other red flag is when you get a call from Facebook or Google, they are looking for 2 to 4 more quotes (which is ridiculous for a 400 dollar service).

What I discovered is when I solicited a trucking company in my area, 9 times out of 10 no one was washing their trucks.  I found a huge hole in the fleet washing market.  And I found out why, no one wants to wash trucks!  Everyone wants to wash houses with bleach!  Waiting 60 days to get paid is not something a lot of contract cleaners signed up for, and  that is why many of them don’t grow.

What is Net 60?  It means the trucking company owned by a billion dollar corporation doesn’t give 2 shits if you go out of business or not.  This policy makes it to where if you go out of business and they haven’t paid you, they will find a way to not pay you.  Or they will make it as difficult as possible to collect.  This is something that is easy to enter the danger zone on.  What else does net 60 mean?  It means if you don’t call and nag, they will pay you in 90 days.

Before you go and think doing commercial or fleet washing will be easy, you need to make sure you have about 20,000$ in your POSSESSION, so that you can float the bills while waiting on getting paid.

If you are paycheck to paycheck, or 2 residential jobs from falling behind on your rent, then you CANNOT afford to do a net60 term with a large fleet account.

If you are planning on washing a large building for Exxon and you are needing to rent a lift for 2 weeks (which will cost anywhere from 1000-5000$) you will have a large expense at the front end.  You will also need more than just you and 1 day laborer to finish the job, likely you will need to bring on 1 to 3 sub contractors to complete this job in a timely manner.  Plan on spending 5 to 10 grand on this labor up front.  If you cannot pay your subs within 30 days (regardless of when you get paid), you have no business subbing work out.  Now imagine being out 15,000$ to wash a building that you charge 36,000$ to wash for 60, maybe even 90 days!  Can you afford that?  If you can’t, then go back to washing houses.  

There is only one answer to this question: if you are serious about your business, you will find out HOW to make that happen.

Let me give you another story of one of my extra large failures.  I love sharing my fail stories, even more than my success stories!

Once upon a time I had quoted a large building and a ton of flat work.  I bid it at 12,000$ because I looked at it thinking “I can get this done in 7 days no problem”.  

I was 2 years into the industry and “overly” confident in what I was capable of.  After 5 days I was only 40% done with the job.  I ended up having to spend 4000$ on sub contractors to complete the job in a timely manner.  I spent $2000 on the lift that was required for the job.  I spent an additional 300$ for an umbrella insurance policy just to cover this one unusual job.  I spent about 800 dollars on chemicals and another 400 dollars on fuel.  I also spent roughly $1000 dollars on in house labor.

All in all I was out nearly 9000$ for a 12,000$ job.  But wait, it gets better!

After 45 days I am still waiting on payment.  I am out 9000$ for 45 days, waiting on my 3500$ profit segment, still waiting on it.  I didn’t get this payment until nearly 90 days, when I was told I would get paid within 30 days.  This is a scary reality for all you guys who want to “go big”.  I have heard horror stories where people would clean and stripe a 35,000$ job and never get paid.  Can you afford to be out 20,000$ doing a job that you have to fight to get paid for nearly a year?  Probably not.  But this is the reality of the realm of business we are in.  If you are not comfortable with this type of work, you may want to work as a subcontractor with a solid pay structure that allots timely guaranteed pay with a reputable contractor.

On fleet washing currently (as of 6/6/23) I have been washing 1 fleet account for over a month and have already paid our subcontractors.  We are out roughly 3,000$ still waiting on our first 800$ check.  So once we get our first 800$ check we may be out 4,000$.  And we have to wait 2 months before we are at the “break even point”.  

If you are going into the mindset you will change a multi million dollar industrial companies mind on how and when they will pay you, you may want to enter a different business.

What does this have to do with getting spread too thin?  Everything.

Imagine the stress of trying to collect on these accounts that are taking forever, while trying to manage what little liquid you have left from doing this work.  Now you need to feed your marketing budget, come up with marketing ideas, find more work to fulfill your employees payroll, balance your work life with your personal life (a lot of us struggle with this one) and make moves that are aligned with your company.  This can become too much and send many people to their breaking point.  

If there is anything you need to remember, it should be this phrase.  It is ok to be employed.