Main Street Makers

#2: Christine Hodge: Building your business to run without you

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In this episode of Main Street Makers, Christine Hodge shares her inspiring journey from being a paralegal to becoming the co-owner of a successful family window cleaning business. With over 21 years in the industry and a revenue of $2 million, Christine discusses the importance of systems for pricing and cash flow management, and the significance of building a community with other like-minded small business owners.

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I want to retire at a young age and I want to enjoy everything that life has to bring. I feel like I can do that through entrepreneurship. feel like if we work really, really hard right now, there's a light at the end of the tunnel and that tunnel is just not going to be too long. I want to be able to pick up and go on vacation with my kids and pull out my laptop if I have to, but... I just want the flexibility and the freedom to do my own thing. Christine, we're so excited to have you on our podcast, Main Street Makers. I understand that you have a window cleaning business and it's been a very successful business, $2 million business. You've been in business for 21 years. So I'm really excited for us to dive in and learn more about how you built that. Thanks for having me. Yeah. So my first question for you is tell me that story. How did you leave your job as a paralegal and kind of join up with your husband to start this business? Sure. So my husband started the business as kind of like a college project. He was studying entrepreneurship at Rowan University and his parents hired a window washing company to clean their windows one weekend and that window washing company never showed up. So my husband wrote a business plan for class about window washing and kind of created a real business around a problem that occurred with his parents' house. Fast forward, I guess about 13, 14 years later, he and I got married and we had our first child and I was a corporate paralegal. And I wanted to leave my job to stay home and just be a stay at home mom. And he fully supported that. I kind of organically became really involved in the day to day, just hearing the things that were going on with his company. And I would almost go in a problem solving mode with my corporate experience. And I kind of wanted to bring that to his company. So organically, I became very involved. And here I am seven years later as the CEO. That's wonderful. I love that. So what were your first few years like? Like, how did you manage your finances? What was your focus for those first few years? The first few years I spent getting really organized. So the company ran on paper. There was no CRM. There was no accounting software. There really was no technology in place to help organize and drive the business forward. So I kind of backtracked. gathered all of their papers, client lists, services, pricing, and all of that. And I entered it into a CRM. And that's when I got QuickBooks, merged it with my CRM Jobber. And we really run the entire business off of QuickBooks and Jobber. QuickBooks for the financial component, though. Yeah. So it sounds like getting those systems together and operations were like a really big focus in your first. few years. Yeah, it was necessary because you really don't know what you're making until you see it in black and white. So like if his business was generating, I don't know, $300,000 a year at that time, he really had no idea what his net was, what his net margins were, what the percentages were. He didn't know what he was spending in each category of the business. So It was really interesting because getting onto QuickBooks, we really had an understanding, I would say, after like two to three years of, so this is what we spend on average on, you know, to pay our employees. And this is what we spend on average on supplies and materials. So it was pretty cool to see the trend over the course of a few years because you really are flying blind unless you're looking at those numbers in black and white. You could be growing your gross revenue, but That doesn't really matter at the end of the day if you're at a break even or even at a loss at the end of the year. And a lot of companies don't really know that they're trending towards a loss until tax time. And at that point, it's just too late. So, yeah, it was really helpful and really eye opening to see this is how an exterior cleaning company operates. And these are the numbers that you should be at. And that's kind of we still just base our numbers off of that. It's the same percentage in payroll, same percentage in supplies and materials, insurances, and all of that. Yeah. Wow. So it sounds like the first couple of years, you were really just trying to learn what was going on in the business. So from those learnings, then, how did you start to think about profitability and increasing your revenue? So I was able to follow the trends in terms of spending. And a lot of spending categories are out of your control because you are growing a business. You have to pay your employees. You need these supplies and materials. You need the insurance. You really need all of these expenses. So what can we control? We can control how much we charge our customers. Now, before we had that accounting software, there were no real price increases. I mean, we didn't even know how we were pricing jobs. we use a program called Responsibid now for pricing, and that also merges with our CRM Jobber. But at that time, if I were to go price a power wash on a house, we've grown from, we're all exterior cleaning now, not just window washing. So if I were to price a power wash, my husband were to price a power wash, and my father-in-law were to price a power wash, we would all give different prices. So we were able to streamline our pricing per square footage with this software. And now we can look at our numbers from the previous year and say, okay, our net margins were 9%, for example, we really want to raise them. So what categories on our P &L can we, do we have control over reducing those expenses and really watching them for the upcoming year? Most of that is marketing. And then what else can we control? We can raise our prices. So, you know, two years ago we did a pretty large price increase because our margins were not so great that previous year. Last year, we didn't raise them that much. We were good. We were flying steady. This year, I also implemented a price increase. what's interesting about seeing everything in black and white and on paper is you take what you can control, which categories you have control over, and you use that to tweak your business in order to generate a success. Yeah, I love that. That's super interesting. I kind of want to go deeper into pricing. What is your pricing strategy? Are you able to walk us through how you actually determined the prices that you wanted to set? Yeah, so everything is there's pretty much a base price for every service category. And then there are like these little like check boxes and when you check those off, they would increase or decrease a price. So we were able to go with, so we tested like for my house, for example, if we set the price per square foot to X amount and I'm just in a two story, know, 1800 square foot home, this is what we come up with. Well, that price is pretty reasonable. Now, if you take a home that has a walkout basement, that makes it three stories in the back. So if you have a walkout basement, there's a price increase of 10%. So you take these different variables. If you're doing a roof cleaning or a gutter cleaning and the home is heavily shaded with trees, there are trees fully surrounding the home. Not only is there more obstacles in terms of cleaning, but there's going to be more debris in the gutter. So there's a percentage increase for that. Strategy wise, it's best to select a base price and anything that you can base off of just the basic square footage of the home. That's what we use. don't, we don't measure cleaning surface area because we want to simplify our process. My saying with my company is simplify, systemize, succeed. So like if I'm going to create a system, I'm going to make it a simpler system. So Anything that can go based off of square footage, you set a base price, and then there could be variables which would increase or decrease that price. But once you get that technical, I do recommend a software to support that. Yeah. And could you remind us which software you use? We actually use Responsibid. OK. And it integrates with our CRM Jobber. It integrates with a lot of CRMs, which is really helpful. Awesome. I love how there's a really simple formula that people can kind of take because pricing can really feel like woo woo sometimes, like people don't really know how to set their prices. I also wonder about competitors. How do you make sure that you're staying competitive within your market? That's a great question. We don't really worry about our competition. Our goal is, and that's actually strange to say out loud because I've never really thought of it, but We don't focus on our competition because we have something. It's through my business coaching program that I created something called a client avatar. And it's basically who is your target client? Our target client, we're going for commercial clients, multi-unit, know, apartment complexes, condos, townhomes, and any commercial building as well as high-end luxury residential in New Jersey. So if I'm going with that's my client avatar. What do we have to do in order to provide services to that high end luxury and high paying client? Well, we have to communicate effectively. We have to be responsible. We need a clean appearance. We have to be consistent. We have to be professional, well spoken. The actual job, I feel like any of our competitors could do. I think that if someone calls for a soft wash or a power wash of their home, they're going to get it from us and they're going to get it from somebody else. But for us to prove our value, you're getting so much more. You're getting what else can we do that would complement those services? We can maintain the entire siding of your home. So when it comes to competition, we're not too concerned. We're just concerned with how can we grow to be the best version of ourselves for our client avatar? Yeah, that's a great that's a really interesting way to think about. pricing that you're really thinking about it terms of your client and your service. Yeah, I love that. Kind of on that topic, what is your sales process? How do you find new clients? How do you upsell them? Can you walk me through that? Absolutely. So lead generation, we invest heavily into Google. So Google is our number one lead source generator. It generates 53 % of our revenue. After that comes referrals. And then after that comes clients find us on Facebook. And we don't actually pay for Facebook ads. This is through just joining town pages and just commenting, call Clearview, call Clearview. So that being said, we do put a lot of money into the SEO of our website and our Google My Business page and all of that. We also invest into organizations that support property managers. So we are invested into CAI, it's community associations, institute or something, and a few like apartment and JAA. There are like a few like multi-unit community property management groups that we are a huge part of. We measure our return on investment. So as long as the return on investment is five to one. That's how we continue to put money into those categories, like Google and all of those associations. So that's from a lead perspective. And then once the lead comes in, we do now have a sales team that takes the lead in from a customer service perspective, an education perspective. educate the client. And we always say, which response of it is able to do this for us, is we train everybody to It's not just an upsell, but because we can maintain the entire exterior of a property, we want to cross-sell. So what is a complimentary service that goes along with the requested service? Well, if the requested service is a roof cleaning, we recommend you get your gutters clean. The cleaning's gonna go a lot smoother and you need to have clean gutters, you know. It's just a part of the process. So we do things like that. If you're getting your windows washed, we should clean your screens as well. We should take them out, clean them, wipe the sills. We have to do all of that. So we do a lot of if you're doing the soft wash of your home and your front walkway is dirty, we would cross sell. We would say, you know, if we're doing the soft wash, we also recommend you saw you power wash your front walkway as well, because that would go really nicely with a nice clean home. So there are different techniques in sales like that. where it's not always about an upsell. You have to be strategic and make sure that you're offering a service that really complements what they really wanted to get done. it sounds like it really just all comes back to that idea of servicing your client to the best of your ability. Yeah, I love that. So you've talked to us before about the importance of networking. You've said that that's like one of some of your top advice for new business owners that they build their network. How do you actually do that? We try to make sure that we're being very cost effective and cost conscious. But if you join local networking groups, like we would always coach our clients, like make sure this is from like the for the coaching business is join networking groups that have other blue collar businesses in the group. So if you join a networking group that's more white collar, you might not benefit from it. So join a group that has landscapers and arborists and like other exterior services or home maintenance services, plumbers, because we're all kind of the same, you know? And those groups are generally pretty low cost. So it's worth it. And what's nice about those groups is social media has a pretty large impact on people. And so in the social media world, if you're a part of a networking group like this, it's really nice because if someone in a local town page said, hey, I'm looking for Power Wash recommendations, we actually see the names of everyone in our networking group saying, call Clearview Washington, call Clearview Washington. And we do the same for them. So it really is a nice referral partnership group. And the other thing is to really take advantage of Facebook and the local town pages. Like we have joined every high-end town in New Jersey. And during this time of year, all the way through the fall, almost daily, you'll see somebody, as soon as you log in, your algorithm changes. So it's like, as soon as you log in, you see someone saying, hey, looking for recommendations for a window washer. And then we would say, I'd be happy to give you a... an estimate for that. So and then you get enough people doing that. You get your employees, your family members, the people in your networking group all saying, call Clearview, call Clearview, call Clearview. They're going to call your company. So they really go hand in hand, the networking group and social media. Yeah, that's awesome. I think that there are some really great pieces of wisdom in there for not even just small business owners, just for anyone who's trying to. get involved in their community or network. So I do want to go back into what we were talking about before, cashflow management. A lot of businesses struggle with cashflow management, especially in those early days. I'm wondering, what were some of your challenges and how did you solve them? Cashflow was a huge pain point for us. And we only resolved it about two years ago, which is Pretty cool, because now we can share what we did. we do have employees in the field. So if we did a residential job or 10 residential jobs and then a very large commercial project, commercial projects or multifamily, they take quite some time to pay. So as a result, we would be paying out payroll for one or two weeks, but we hadn't collected the money. Even from a residential standpoint, people will say, we'll leave you a check or we'll leave you cash or whatever the case may be. And it's just not there and they might not be home. And now you're chasing money for work that was already completed. And our example for other home service business owners is when you go eat at a restaurant, whether you are happy with the food or not, you pay the bill as soon as you're finished with the meal. You don't go home, talk about how great or horrible it was, and then they send you an invoice. So we deserve to be paid upon completion of the project. So two years ago, we implemented that for residential customers in order to even get on our calendar, they have to leave a credit card number on file and we are not going to charge it. They can go ahead and pay us while we're there. But if they don't pay us while we're there, the crew, when they get into the truck, they do automatically charge the credit card on file. And that alleviated so much with the cashflow issues from a residential perspective. Then from the commercial side, commercial clients, regardless of even if you have a 30 or 60 day payment agreement, they just really pay whenever they want. You can't really fight that battle. It's just inevitable. They would, if we did like a 80 or $90,000 project, it would take a long time to get paid. So what we did is we implemented a 50 % deposit policy. So they actually have to pay 50 % of the project up to one week before we start the job. And then once we get that payment, we can start the project and then the remaining 50 % is due upon, you know. whenever they decide to pay it, but 30, 60, 90 days. So taking the deposit on commercial projects and really we say anything over $5,000 and then requiring a credit card on file for anything under $5,000 has alleviated all of our cash flow concerns. If you're collecting on time the way we are and there are still cash flow issues, it means you have to cut expenses and raise your prices. Because now it's like you're doing everything right. Now this is a pricing and a spend issue. Yeah, that's really great. It sounds like just fixing the billing has done wonders for your business. What about using tools like business credit, financing, supplier credit? Have you leveraged any of those to basically make cash flow management even easier? We have a line of credit through our business banking and we can borrow from it, pay that back. But in terms of taking out bulk loans, we don't really do that. We have business credit cards for the sales reps and for our field operations team through AMX. But aside from that, we haven't really utilized any type of loans. How has that line of credit and the credit cards helped you run your business? The credit cards are great. We have the Amex Blue, so we are able to have our employees, when they spend, upload a copy of the receipt with a note so that we can manage their spending. And we've also given them budgets. So that's really helpful. We wanted to almost micromanage the spending, but as you grow, you do have to empower your employees to be able to strategically spend in the areas that they need to. And the line of credit is great because if there are times of year like last year, it was an investment year for us. So we invested in sales vehicles, an additional truck, we rebranded. So if there were, I wouldn't even call it cash flow issues, but if we needed to borrow for a week or two until a big check came in, we were able to utilize the credit line, take out 10, 15 grand, use it, and then just pay it back when the check came through. That's great. I have so many follow up questions for you about that. I'm going to start with one. Do you have any agreements with vendors or other small businesses that kind of let you pay on a net 30 basis or anything like that? We're pretty good about paying on time and a bulk, I'm trying to think of our vendors, many of them like Bleach Supply and all of that, they're just kind of by default a net 30. Yeah. OK. It sounds like you do a lot of bootstrapping and you just kind of deal in cash. You have a line of credit that you can pull on when you need it, but you're not really dependent upon it. How did you actually start the business then? Oh, for my husband? How did you fund the initial business? So the reason he started with window washing is because you really don't need many supplies. So he was able to buy the bucket. microfiber cloths, the Dawn dish soap, the squeegee, and a ladder from Home Depot. And that's really what he started with. I believe he was asked this on a podcast before, and I think he spent under $500 to start the window washing company. And then everything that came in, he just put it back into the company. He didn't even have a truck. had... we're looking for this photo, actually, he had his ladder on like a Ford Taurus sedan or something. Like it wasn't even on a truck. So if anyone were looking to start something low cost in the exterior cleaning space, window washing is it. I mean, you can go into power washing, but a power washer, you're going to spend a little more money on it, even if it is from Home Depot. And then it just becomes more sophisticated. You're not really pressure washing. the side of a house or a roof, you're soft washing. So you do have to invest in the bleach and whatever equipment they use to mix the bleach in the water and all of that fancy equipment. So window washing is a really low startup company. Yeah, it sounds like it. It sounds like you just you started really, really small, as small as you could, made sure that it was working and then kind of kept building from there. And also you mentioned this earlier that you went through an investment year. How do you think about investment years? Our plan long term is growth. So we want to grow this business as big as we can. So what we've been doing, I would say since I joined, like around the last seven years, is we alternate years of investment. So. If 2024 was an investment year, we took a lot of the money, a lot of our net profits, and we reinvested it back into the business. So we were left with not very much at the end of the year. So this year, since we're alternating, this year, my quote is, we're going to protect the net. So this year we watch our finances. We're not reinvesting. We're not buying any new trucks. We're not hiring any new employees. We are now going to make sure that our prices align with our expenses and that we are profitable this year. And then once I see that we're profitable next year, we do it again. Let's let's invest. Let's take some of that profit, put it back into the business, add on two or three trucks, bring on more crews, maybe hire one or two additional sales reps and then invest. then the following year. protect the net, let's reel it in. Because I don't want the company to go into debt because of investment years. And I've seen that happen. Even if we're over $2 million right now, you can be a pretty large company and just go into debt because you just keep investing, but you're not watching your money. That sounds like a really smart way to play the long game and make sure that your business is sustainable. It sounds like you just have a wealth of knowledge and you mentioned that you also have a coaching business. How did you start that business? How did it come about? I started it because I have become really excited about sharing everything that we've learned. like, Freddie, my husband, used to go to these conferences and shows and he would like come back with like, I have like his old school notebook somewhere over here on my bookshelf actually. Like he would come back with this notebook of all of these things he learned and we would split it up and he'd say, you handle this and I'll handle this. And that's how we learned how to manage our company. So we are at the point now where the company is running really well and we are involved, but we're not as involved as we used to be. So we want to kind of pay it forward. So we created, I created the Process CEO and I wanted to document systems because I find that business owners are so busy and frazzled and just trying to get through the day and putting out fires. And even when they systemize something, it's never documented and scalable. So I'm documenting all of our systems and then sharing them on my platform. I have a website called theprocessceo.com. And there I have like some free resources, my client avatar form, my employee avatar form. I have an ebook on how to hire rock star field technicians. We have the best field technicians in the world, I'm convinced. So I like wrote down like how, like what my scripts are, how I hired them, what our job posting looks like and all of that. that now has evolved where people are asking us to coach. So we have a few individual clients, but in order to scale that, we just created the Process CEO's School Community, and it's on School.com. And there, it's a group coaching program. So I'm posting all of my systems and processes, but we can also collaborate with other business owners and have like large weekly group calls to share all of that information and kind of coach as many people as we can. That's amazing. You run such a successful business and people can kind of just take your blueprint and apply it to their businesses. That's a wonderful way to pay it forward. Thank you. I'm hoping that's what's happening. yeah, that's great. So how do you actually then kind of manage your time between the window washing business and the coaching business? So I've block scheduled my calendar where every morning I give Clearview washing two hours. And then in the afternoon, I give the process CEO two hours. And then I take an hour of personal time in the morning for the gym and an hour of personal time after the process CEO before I go get the kids from school just for my own sanity to kind of like unwind and plan the rest of the night. So I'm splitting it that way. And we're going to continue to make that Clearview Washing Time smaller and smaller. Not for any reason other than in order to scale, we have to be less involved. Like if we're the only key decision makers, there's a break in the process or something is not systemized. So like right now, we're actually in the process of building a system for callbacks where if a client calls back usually and says, you know, there's still something on my window or there's a streak or. there's a little patch of grass that's dead and like that stuff happens. Everything's usually escalated to me and my husband. We are now creating a page of if then scenarios. So that way, like, can we take 90 % of these and they're all fixable. You guys handle that. If this is the complaint, then do this, this and this. And then I understand if there are like that 10 % where an owner really needs to be involved, that's fine. Let me know. So We're still continuing to systemize, but the less time we spend putting out fires, the more time we can spend on the growth strategy for Clearview, our targets for the year, and are we meeting them? And we kind of then touch base with all of our departments to make sure we're staying on track. That's great that you're able to kind of build those systems and push responsibility further down the chain as you scale. What kind of instigated that? Was there a time where a system was breaking down and you realized that you needed to start writing stuff down. How did you start getting into that? We felt like we were spending too much time in the weeds. And if we were to write down, OK, this is what I worked on for 30 minutes. How much could I pay somebody to do this? And if those tasks were like $20, like I could pay someone $20 per hour to sort my email and organize my day and make sure that we're on track, then I shouldn't be doing it. If I can pay somebody to answer the phones, like I have a Clearview phone here at home. This is my home office and I don't even turn it on anymore, but I used to have it on. And if I heard that it rang more than three times, I would take the call. And now I'm doing customer service. But if I'm doing that, I can't grow the company. So we really wrote down what are the things that we're doing and how can we put them in other buckets? Like this one is administrative. We have two admins. They can handle this. This one is field operations. We have a field operations manager. I don't have to speak to our crews directly. They can go directly to him and then escalate if there's a real issue. What triggered it is, I would say in like 2023, We were like, we're doing too much. We're spread too thin. We're business owners. We're parents. You know, we, we're married. We, this is not our, we have to realign our priorities here. Our family comes first. Our sanity is, is pretty high up there too. And what can we do to continue to grow strategically and feel really good about it, but get rid of all these things that are weighing us down. And I think that was the pivotal point for us. You are so systematic about how you think through everything. It's amazing. I have to be. I feel like otherwise I just spiral. Love it. So many great tips in here. My last question for you is, why are you an entrepreneur? What's kind of your driving force? I think it's like there are two parts. I think it's like nature and nurture. parents were entrepreneurs, my grandparents were entrepreneurs, all of my aunts and uncles are entrepreneurs. I think it's just in my blood. My family is from the Middle East and when they came over to the US, I'm first generation born here. they just worked really, really hard and continue to work really, really hard. And so that part of me is just in my blood. I think that's why I was drawn to my husband. And then the other part is I want to retire at a young age and I want to enjoy everything that life has to bring. I feel like I can do that through entrepreneurship. feel like if we work really, really hard right now, there's a light at the end of the tunnel and that tunnel is just not going to be too long. think that it's going to be within the next, hopefully, five to 10 years. And we'll have some freedom and flexibility to do whatever we want. I want to be able to pick up and go on vacation with my kids and pull out my laptop if I have to. But I just want the flexibility and the freedom to do my own thing. That's wonderful. What a wonderful reason to start a business, to spend more time with family and enjoy all that life has to offer. Yep. Well, thank you so much, Christine, for joining us. I think that... There are so many wonderful takeaways. I've learned so much from you. I just really appreciate you taking the time to join us and share all of your wisdom. Thank you. Thank you so much for having me. It's been a pleasure, and I just hope that I can continue to pay it forward for others.