Task Force Entrepreneur
Task Force Entrepreneur (TFE) is a podcast for entrepreneurs interested in the service industry. It began as a way to document the creation of a new service-oriented business, and aims to provide a no-fluff narrative on all things entrepreneur!
Task Force Entrepreneur
Million-Dollar Milestone: How I Plan to Make $1M in Year 2 of My Cleaning Business
Hitting $1M in revenue per year is a big milestone for a business. It marks the transition from a business that has no idea, into one that has begun to flesh out processes, procedures, and figured out how to acquire customers. In my opinion, if you can do $1M in a year - you're doing at least one part of your business right. For this reason, my plan has been to bring my cleaning company to this magical mark, within 2 years of opening our doors. In this show, I detail my plan on accomplishing it, and illustrate how it's not that outrageous. I hope you find it inspiring enough to build something on your own! Originally aired 9/28/2023.
Hey everybody Mike here, and welcome to Task Force Entrepreneur. The podcast I started went from being a tech engineer to starting a house cleaning business. Yep, that's my story and I'm sticking to it. I hope you enjoy the show. Hey, what's up everybody Mike here?
Speaker 1:In today's show we're going to talk about my favorite thing numbers. Now, before you change the podcast, let me explain. We are going to talk about how we plan to get to the goal with my cleaning business of doing $1 million in business in our second year of operation. This is a goal I set from the beginning and it just sounds like a good goal to me. To be honest, I'll actually get to that in a minute. We'll talk about other goals later. The point is, this is a pretty lofty goal. I think anybody would agree with that. I want to explain to you guys how we're going to get there. This isn't really about me or my cleaning company. I'm doing this because I want you to realize how it's not that crazy. $1 million a year in business and revenue is not I mean, it's not anything outrageous. Right, I think it's great and it's a big milestone and you should absolutely celebrate it, but I'm not going to be driving around in a Lamborghini when we hit it, that's for sure. Hopefully you see where I'm going here. It's just about the art of the possibility. Let's get right to it. Let's take $1 million.
Speaker 1:If we throw $1 million into our calculator and if we say, out of that work, out of that $1 million number, 80% of our work is going to be recurring work. It's going to be customers that hire us to come out every week, every two weeks, every month. I would say 20% of that work, of that total million dollar number would probably be what I would consider one-off work. That's someone's moving out of their house that might be a property manager and eating an apartment cleaned, that type of thing. It's something we're going to do one time and then we're going to leave Now. Can that work convert to recurring work? Probably, which is why I'm estimating that 20% of our work will be one-off work and most of our business will be recurring work. So far that ratio has been true.
Speaker 1:Let's go with that. If we say that, let's start with the low number, 20% of a million dollars, which is $200,000 in a year in sales, that is going to be one-off work. That equates to 571 cleans per year. That's 571 houses, apartments, condos, whatever that we clean in a year and that's 47 in one month. If you break that down by weekly, and assuming we work Monday through Friday and we don't do weekends, that is only two to three houses per day. By the way, that means one cleaner. One cleaner could generate 20% of that business right there, or I should say, maintain that business. Maybe not generate it, but they should be able to maintain it.
Speaker 1:Now let's talk about the 80%, because that's the big number, right, that's $800,000 in sales in one year. So how do we get to that? I would estimate that our average and this is true so far, by the way, our average spend for customers that are reoccurring is around $350 per month. If you multiply that out over the year, that means each customer we have now is, on average, spending $4,200 per year with us. So to hit the number of $800,000 a year, we would need 190 customers. Now, right now I would say we're a little slower in terms of acquiring new customers, but we are steady. So I would say, being very, very conservative, if we acquire two customers per week, it will take us 95 weeks to get to 190 customers. And, by the way, one error I made there. In that calculation I didn't account for the customers we already have, so it's not going to take us 95 weeks, it'll be much less. Now, if we do the math again, there's 52 weeks in a year. Let's say it takes 80 weeks, right? We're basically saying it's going to take a year and a half to hit that number, that 800K per year for reoccurring work.
Speaker 1:So what this all comes down to is these are real numbers, these are, you know. This is not me saying oh well, what if we did this, this, this right, this is all real. I mean, this is actually backed by what we've already done. Now, the real, the real test is going to be can we maintain that and can we continue with that momentum for a year and a half? That I don't know, but we're definitely going to try. So the point to all of this, as I said in the beginning, is it's all possible. I mean, these aren't that crazy, right? These numbers that I've thrown out are not that crazy. Using two to three house cleanings per day, that's not that bad right. Obviously, we would need more than that. That number I threw out was only for our one off work, but the point is, with a team of, I would say, four cleaners, maybe five we should be able to actually hit a million dollars in revenue. Now what happens after that?
Speaker 1:At the beginning of this, I almost ruined it. I said you know, there are other goals, right? It's kind of interesting. I had a friend of mine reach out recently and he said, hey, how's the cleaning business going? And he asked a really interesting question. You know, after I said, yeah, it's going well, it's going well, he said are your goals now still the same as they were before you started? Which I think is such a great question.
Speaker 1:And I had to think about it a minute and I said, to be honest with you, I think my goals are actually bigger now that were in business than they were before, because now I've seen it's possible. Now I've seen how we can acquire customers through advertising, I've begun building partnerships, I have been working on acquiring commercial customers. So you know and, by the way, this million dollar calculation we did in this show does not at all take into account any commercial customers If we close one commercial customer, that is, you know, five grand a month, then these numbers are very much super conservative, right, because now it's going to happen much sooner. So anyway, I was kind of talking about those future goals and you know I can actually I personally believe that to take a cleaning business locally, you know, I would say to 1.5 million in sales per year, I think that's doable, I think that's absolutely doable. I think you could do two or three million potentially if you cover, you know, a pretty large city, but I don't know if you could really go much past that in one city or one kind of metro area.
Speaker 1:So, that said, I think my goal longer term will say you know, five year, ten year. I could actually see this going to five million dollars a year, ten million dollars a year if we branch out and I'll be honest with you guys, I don't know what that looks like. I don't know if that would be Franchising, I mean, because, heck, if you franchise and you do it right, you could be doing 50 million a year. I don't know if that's the right thing for us. I don't. To be honest, I don't Feel like that's what we will do, because I like the idea of maintaining our brand and I feel like the best way to do that is to have actual W2 employees that we can train and have some control over the process. But, all of that said, I don't know what that looks like as far as how we get to that, but I think I could see that in the future and that is something that I would have never said. You know, three months ago I would have never said that I thought a million dollars a year was absolutely insane. Now I don't think it's a matter of if, it's just a matter of when we will hit that number and and if I'm honest you know I said that a lot on this you know, this podcast Hitting it in a year and a half still sounds kind of crazy to me.
Speaker 1:But we're certainly gonna try, we're gonna do our best. And If you're thinking about starting a business, if you have a business, I Would encourage you to do some of these exercises and kind of figure out how crazy are those goals that you have? How are they really that crazy? Because I would probably guess that they're not that outrageous. You just need to work hard, do the right things and be super, super consistent. It doesn't have to be. You know, every day You're just absolutely killing it, firing on all cylinders. Some days you can fire on two cylinders, that's okay, but just keep moving forward every single day and it just it'll work out fine. Hey, if you enjoyed what you heard in this podcast or in my other shows, do me a favor and leave me a review. I still have a pretty brand new show, in the grand scheme of things, and every review counts. So, that said, thank you and have a great day.
