My boys love to build Legos! It's one of their favorite things to do. You should see the look on their faces when they open a brand new 3-in-1 set on Christmas Day. It's even more awesome to see my 5-year-old building that same Christmas Lego set on the kitchen floor a few hours later while his brothers are working on theirs. Once and a while, I'll even help them if they let me. A few years ago, we got them Ikea furniture for Christmas. Boring, right? Nope. They each got 9 pull-out organizer bins with a table top for their Legos. Oh my, did they run with that one. They spend hours taking every Lego and carefully placing them into the right color-coded bin. It was a win for the boys as they could build their own projects easier with the organizer like a true Master Builder and it was a win for mom and dad as it kept their Legos in one place...sort of. Legos are kind of like a virus. They spread. Legos end up everywhere. Since getting them the Ikea organizers, my boys have used all available flat space on the family room hard floors, kitchen table, and certainly their bedroom tabletop areas and floors to construct massive Lego ciites. They combine other building materials like Duplo and wooden blocks from games we have like Giant Jenga and Kapla blocks. They bring their stuffed animals and plastic animal toys into the creation and then play for hours. It's mesmerizing. Boys love to build.
We went to Lego Land last year as well for a day. This was heaven on earth for a then 4, 8, and 10-year-old boys. The 4-D theatre, ride, and laser challenge were highlights. The part that I liked the best was the giant Legos. While the boys were playing in the 3-level playground, I found the pile of rubberized Legos in the parent waiting area. Each block is around 4-by-8 inches and they had a lot of them. I wanted to relive my Lego glory days and impress my sons when they got done in the playground. One thing or block lead to another. After 30 minutes I had constructed a 4-foot tall enclosed structure with entrance and roof. My boys saw it and immediately the youngest ran inside. "Wow, Dad. This is cool. Did you build this?" Oh yeah, my ego was satisfied. I got pictures of all 3 of my boys inside my castle. In fact, other kids were in line to do the same. They thought my house was part of Lego Land. "Actually, I built this."... "Really, you did this?"Oh yeah again, double boost to my ego.
This got me thinking about building. My Lego castle was merely a collection of smaller pieces that were all the same. A real house is a collection of standard building blocks that the builder puts together by the blueprint or strategy he's created. A finished house just doesn't appear or go from excavation to finishing on a whim. A mature business doesn't just hit a million dollars in revenue either. There is a blueprint or strategy for that house or business that is made up of smaller duplicatible units called building blocks. Intuitively, I've always known this. But recently, this concept and the analysis I'll share on the cleaning business I'm building has totally blown my mind. I was a solo cleaner for 15 years. That's a long time to clean houses and offices by yourself. I had a great gig though. I built a single building block 2 different times. The first building block in NY from 2005-2018 had 1 commercial customer, 16 residential customers, and 1 solo cleaner (me). It produced $70,000 revenue and $60,000 profit working solo 2 days per week. The second building block in PA from 2018-2021 had 8 commercial customers, 7 residential customers, and 1 solo cleaner. It produced $85,000 revenue and $70,000 profit working solo 2 days per week. These Solo Building Blocks are fully optimized. It's a great gig and I teach solo cleaners how to do this now through the Solo Elite Membership powered by the ISO Model. But by definition, a Solo Building Block is singular. You cannot scale it without other people.
I worked very hard in 2022 to create and build systems for our new brand, Carfagno Commercial Cleaning (C3). Coach Josh from the Six Figure Cleaner helped me the entire year to transform my once-solo company to a commercial cleaning company with amazing team members, customers, and systems. Since I haven't given many updates lately, let's do that. Here's a short 2022 summary. I started the year with 7 residential customers still that I cleaned solo, 8 commercial customers that I cleaned with my older kids, and 6 brand new commercial accounts that I was onboarding. We had zero team members. I cleaned Thursday, Friday, and Saturdays. We had just implemented our hiring and marketing systems. C3 did $7,000 per month in revenue. One year later, C3 has doubled! We do just under $14,000 per month in revenue. C3 has 16 commercial locations that are fully cleaned by 7 team members and 1 assistant team leader. We have 2 residential customers that my son cleans as a part-time side-gig job. We have systems and policies in place and improving every month. My main job is managing, selling, hiring, and training. We went to Florida in February 2022 to test what we were building and it worked. I learned a lot and made C3 stronger with Josh's help. We are going back to Florida! That's what happened in one year.
On a recent coaching call with Josh, he alluded to the concept of the building block and it hit me like a ton of bricks (pun intended). I had a building block I could scale. I pulled my numbers from my Quickbooks Online Profit & Loss Report for 2022. Then I separated every expense category into two groups like any good accountant will tell you - fixed and variable. I labeled the fixed expenses as "Overhead" and the variable expenses as "Building Blocks". I'm not going to give a full lesson on the difference, but I'll share this. Fixed expenses are part of the infrastructure of the company like the electricity of the building or salary to the office staff or insurances to operate. Variable expenses rise and fall with increasing and decreasing revenue. They are operating expenses. I then put my engineer's hat on and projected C3 after taking our first building block of 16 locations, 7 team members (cleaners), and 1 ATL (ops leader) and duplicating. I created building block 2 and 3 on a spreadsheet next to the current building block. I was so pumped. Here's why... because of what I didn't tell you
Our income dropped big time from solo cleaning in 2021 to a completed building block in 2022. I was earning $70.000 income solo a few days per week in mid 2021 before I started this process. By the end of 2022, I was only earning $40,000 income! That's a $30,000 drop in income, but I wasn't cleaning anymore. That's a giant win and loss at once. I was super excited about this new time freedom, but money was getting tight at home. We do earn income through other sources, so we were okay. Nevertheless, this is the solo cleaner's dilemma. You will earn less with more revenue. It's discouraging. When I saw that spreadsheet with 3 building blocks side-by-side, I was so excited. I saw a $500,000 commercial cleaning company with 20+ team members, and a small leadership team where I didn't clean and my family earned between $125,000 and $150,000 per year. I had done the hardest part and built the first building block. I created my 4-by-8 inch rubber Lego and it was time to impress the kids again! I could build a second and third upon the systems I'd already built to more than triple our income. By the way, this is a great place to mention two other Smart Cleaning School episodes that teaches a similar building approach. Check out 4 Scaling Struggles to 2 Million with Molly Moran and Dead Zones and Sweet Spots.
Let's look at the numbers so you can see how this could work for you. If you'd like to see my actual numbers by the block, make sure to check out the show notes for this episode. The first building block produces only $40,000 of income for my family on $166,000 of annual revenue. The operating expenses outside of me and my wife's salaries account for 19% of expenses while the building blocks accounted for 58% of expenses. When we add the second building block on paper, our revenue doubles to $332,000 and income increases by $75,000 to $115,000! That's a HUGE jump. The overhead (not including owner salaries) drops from 19% to 8% of expenses while the building blocks remains at 58%. This is showing that the second block still needs 58% of revenue to run, but the additional revenue puts C3 into a sweet spot where overhead and systems costs drop from 19% to 8%. This is why our income nearly triples by adding 1 block. Something to think about as I grow is the level of admin I want to do. I will have a lot more office work to do after block 2. That's why I decided to add admin help and outsource more in block 3. The revenue grows to $500,000 and our income grows to $145,000 on paper. The blocks require 62% of revenue to run because I am adding a layer of leadership and freedom for me. The overhead also bumps up from 8% to 9% because I'm adding a level of leadership in the office which also provides more freedom for me. Do you see how this works. Each building block requires more leaders to run the overall company. I can't be a solo running a million dollar company. Coach Josh has a $1M + company with over 75 cleaners and a full-time leadership team in their company office. This costs a lot in overhead, but Josh has a really nice level of freedom! This is where I want to go and grow in the future. For 2023, I'm keeping this simple. C3 will double and complete our second building block by December 31st, 2023! This will increase our family income by over $60,000 per year minimum!
The Smart Cleaning School Podcast helps cleaning business owners from start-up to the struggling solo to the striving seven-figure get SMARTER in their businesses, reshape their mindset, increase productivity, clear the overwhelm, and get clarity through SMART goal-setting & personal accountability. Ken Carfagno is a lifetime learner and teacher. His mission is to help visionaries make the impact they were meant to make.