Dead Zones and Sweet Spots
I'll never forget a coaching call I did with a cleaning company owner doing $400k in revenue. I was an optimized solo cleaner and new in coaching. My view of the cleaning business landscapte was very narrow and I had a bit of pride to contend with. Here's the scenario. The co-owners, a husband and wife team, were both working 6 days per week in this $400k revenue company. They weren't cleaning, but lived in their office managing the business. That was foreign to me. Then I heard this part. "Ken, we are profiting $35,000 per year for the family." I clarified by asking how much owner's compensation they pulled. I was assuming they had a salary of $35k and then kept the bottom line profit as well. "$35,000 is our everything." I was floored. How could this possibly be? I responded with snark. "I'm a solo cleaner with 1/6 of your revenue. I work 1/3 as much as you and keep almost double what you do. Something is badly off with the math at your company." I was sharing truth and they knew it. Nevertheless, they didn't like my answer and we never talked again. In "A Buffalo Charges the Storm with Debbie Sardone", Debbie gives this a name. It's called the "Valley of Despair". I did not realize such a valley existed in my narrow view of cleaning business growth curves. I had read the "E-Myth Revisted" and "Clockwork", which are 2 amazing books on developing business systems to scale your company. Yet, I didn't know these valleys existed until an expert series I facilitated on my Smart Cleaning Tribe called "The 7-Figure Series". I interviewed 4 recent 7-figure cleaning business owners in 2021 with questions from the Tribe with the goal of deconstructing the million dollar cleaning company. Each of these experts have allowed me to share snippets of their calls on my podcast. Here are the episodes
Part 1 with Kevin Smith - "It's Grace for a Reason with Kevin Smith"
Part 2 with Juan Chaparro - "Million Dollar Milestones with Juan Chaparro"
Part 3 with Josh Melton - "The Cleaning Road to Nineveh with Josh Melton"
Part 4 with Molly Moran - "4 Scaling Struggles to 2 Million with Molly Moran"
This was totally unplanned, but it turns out that 3 of my 4 experts with new 7-figure businesses are all Cleaning Business Fundamentals students with Debbie Sardone. The 4th is my personal commercial cleaning coach, Josh Melton.
I studied these 4 calls along with the wisdom I've collected from Josh Melton, Debbie Sardone, Ricky Regalado, Crystal Hamm, and others I've been fortunate to study along the way. I don't have these numbers down, nor is this an exact road map. However, I have noticed that the path to 7-figures and beyond is filled with many dead zones aka "Valleys of Despair" and sweet spots. Why do we start a cleaning company? Most of say that we want more time and money. We want more freedom in our lives to make the choices we want to make when we want to make them. I have noticed many $2 million plus company owners living large in income and time to pursue their passions outside of cleaning. Their business becomes so large and systemitized that they are no longer needed. Many in our industry call this an absentee business. These cleaning company owners have achieved the ultimate freedom. I know some that earn over $300k per year and work less than 10 hours per month, while others earn $500k and work less than that. Believe me, it's possible and it's the ultimate freedom. I think this is why so many cleaning company owners are fixated on the 7-figure business. It represents freedom of the first real milestone on the way to freedom. I agree. The 1 million dollar mark is on the path to freedom. It is a milestone. You can earn $200k - $250k income at a million dollars and many can work less than 20 hours per week. That's pretty amazing!
Here's my question. Is 1 million the first milestone to freedom? Let me lay out a case for you from the above-mentioned interviews and my many conversations with those that have actually done what I'm teaching. I propose that there are multiple plateaus, peaks, and valleys in your business. I propose that you can build hard for a time to reach a freedom plateau where you can rest like an oasis and enjoy the new level of freedom in your life. It starts when you say yes to a new cleaning business. Before I go through these various peaks and valleys, please keep in mind that the various numbers I share are for educational purposes only. They will not be exactly the same for you as you grow, but they serve as an example. The purpose of this episode is to show you that you can enjoy freedom at every level and milestone to and past 7 figures.
1st Freedom Plateau: The Optimized Solo Cleaner
Have you ever listened to this podcast? Do you know what I've personally accomplished twice? I have started, grown, and optimized 2 solo cleaning companies to the first freedom plateau. I grew my first solo business to $55,000 profit cleaning 2 days per week without any employees. I had a schedule working Tuesday to Friday every other week. That means I had 10 days off of cleaning followed by 4 days of cleaning every 14 days. This was bliss. My kids were young and I had a ton of time with them. We could take local day trips and overnights with family at distance for multiple days. We could venture on homeschooling trips during the week when everyone else was at work. We didn't have a ton of money, but we were content as I valued time more than anything. We sold this solo business for $80,000 in 2018. We built a 2nd optimized solo business using my ISO Model to $70,000 profit cleaning 2 days per week with only 2 kids helping me on weekends. I still had tons of time with my family and had time with my older kids while cleaning. Our income was better so we were able to rent beach houses during the summer for a week. We could travel up to 7 days at a time to explore. This was equally awesome. Our cleaning revenue was between $70,000 and $90,000 per year. This is the first freedom plateau. I was still cleaning, but I had control over my time and money. The optimized solo cleaner is the first sweet spot to enjoy a freedom plateau. I enjoyed multiple years at this plateau.
2nd Freedom Plateau: Out of the Field
I could have grown to $100k at any point in my solo journey, but I'd have to sacrifice money or time. I could clean more and sacrifice time. I wasn't interested. I could hire and sacrifice money. I wasn't interested for many years. Many cleaners share goals with me and I hear this one a lot. "Ken, I want to get out of the field." They are tired of cleaning and want the freedom of not having to clean. In fact, getting out of the field moves you into a location-free business. How would I know. I accomplished it in 2022 when we fulfilled our New Freedom Vision. We hired Coach Josh to help us make the jump from solo cleaner to a month in Florida with our family. This was achieved in February. Our commercial cleaning revenue has doubled from November 2021 at $5,300 per month to May 2022 at $10,500 per month! We went from my older kids helping me to a team of 7 part time cleaners and systems to manage them. This is staggering to me. I no longer had to clean. Our family was earning more money and we were able to take a month in Florida. This was a trip of a lifetime for us and we can't wait to do it again next year. When we got back, we lost some team members and had to rebuild. That's part of the process, but it was worth it! At this point, our revenue is just shy of $150,000 per year with mostly commercial customers. We earn $60,000 - $70,000 profit (which includes owner's comp) off this revenue. It's not life changing money. In fact, our business is twice the solo business we ran a year ago but we earn a pinch less. The reason is obvious. Employees and additional fixed expenses eats profits. But I prefer making $60k - $70k and not cleaning at all verses cleaning as I was last summer. I mean... I took my family to Florida for a month! That's pretty epic! I would call $80k- $120k a dead zone because I earned less than I did as an optimized solo. I know from the likes of Debbie Sardone that the next dead zone is between $300k - $400k. Coach Josh also recommends hiring my first manager at $300k. Therefore, I know that I can grow this business to $250k - $300k without having to hire any managers. I can manage the business remotely without having to clean. I already shared that $150k in revenue earns us $60k - $70k in profit. Did you know that $250k - $300k will earn us $100k - $150k in income? Oh yeah, you heard me. This is why our goal to close 2022 is to hit $250k in commercial cleaning revenue. This is a BHAG, but doable! We'd go back to Florida with the same time freedom with me managing the business with systems while I'm gone. Our income would be nearly double what it was this past trip to Florida. Do you see how creating a systems-based company with a team cleaning between $250k - $300k is the next sweet spot to enjoy the 2nd freedom plateau? Coach Josh told me that I could hit this plateau and hang there for a while if I'd like. It's possible to even stay there. I would just remain the marketing & sales director along with the HR, operations, and office manager.
3rd Freedom Plateau: Out of the Office, Out of Management
The journey from here is murky. There are so many ways to do this. Michael Gerber teaches in "The E-Myth Revisited" that we serve all 3 roles of Technician, Manager, and Entrepreneur early in our business. The Optimized Solo Cleaner is all 3. Getting out of the field moves the business owner up the organization chart to fully delegate the Technician role (cleaning). The next move for the business owner is to build systems for each spot on the organizational chart and hire a management team to run these systems. This moves the business owner to the sole role of Entrepreneur, which is their greatest point of contribution for their families and communities. Here's the math. Let's look at the "Out of the Field" business serving the roles of Manager and Entrepreneur. They are bringing in $300k in revenue and $125k in profit as an example. They want to hire an office manager or a field manager or scheduler. These hires will want to be paid. If the business owner hires them at $300k revenue and stays, their profit drops from $125k to $75k with a single hire. If they hire multiple managers, they may experience the example I started this podcast with. They would enter the Valley of Despair or another dead zone and life would suck! Therefore, the business owner must follow Molly Moran's advice to grow by another $250k - $300k to the next sweet spot. I thought Molly's teaching as she looked back from her $2 million dollar business was brilliant. She said this. "You're at $300k - $400k with 8 people and field staff. You're working your face off in your business and you can't afford to hire someone in the office." She advised to grow to $500k - $600k revenue. You can then hire an entire management staff to move you out of more organizational chart boxes. You will have a lot more free time and likely work under 20 hours in your business per week. You will keep 25%, which is between $125k - $150k. Interesting, huh? You're back to the income from the 2nd freedom plateau except you have a lot less management responsibility. This is the 3rd sweet spot and place you can camp out for as long as you want.
4th Freedom Plateau: 7-Figure Business & Beyond
Molly went on to warn us that another Valley of Despair or dead zone occurs right after the sweet spot. If you grow past $600k with the same staff, you'll stretch them thin and you'll be stepping back into your business as they get stressed and quit. You will need to hire more office and field staff. Plus, you'll need to add the next $250k - $300k of revenue to enter the next sweet spot. This is around the million dollar mark. Congratulations! You made it. My friends at this level that are successful are definitely working, but not nearly like they were. You can earn between 15-25% off your million dollar business, which translates to $150k - $250k income. That's amazing. You can maintain a healthy work - life balance and choose to be more top heavy in admin if you want more time to yourself. This is the 4th sweet spot.
This process continues on and on as you grow your business past $2 million, $5 million, $10 million, and even $100 million for some. A business is not built on a straight line sloped upward. It is more like the stock market and you can time the market to enjoy seasons of freedom along the way. This excites me. I don't have to strive for $1 million in business or bust and neither do you. We can simply choose the next sweet spot and set our goals to reach it. Here's the pivotal part. When you get there... celebrate your achivement. Our family is celebrating with annual freedom trips to Florida for a month. Who knows? Maybe we'll do 2 months, maybe 3? Maybe we'll do something else.
Again, I would like to thank those that have taught me to plan for these sweet spots. Thank you Debbie Sardone, Josh Melton, Juan Chaparro, Molly Moran, and Kevin Smith. And remember, your path will be different from the numbers I've quoted. There are SO many ways to grow your cleaning business and so many niches to serve. This episode was designed to encourage you to find your next sweet spot and go for it!
Would you like more information on CBF and the potential of growing your residential cleaning business beyond 7 figures? Check out my interview with the CBF Founder, entitled "A Buffalo Charges the Storm with Debbie Sardone". Debbie is offering free consultations to listeners of this show through the Smart Cleaning School Resources Page to see if CBF could be the right solution for you.
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