Clean It Up
UK Floor Cleaning Forum => Carpet Cleaning Forum => Topic started by: Rat-race on August 06, 2012, 09:43:08 pm
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Dear all
Thanks guys for unmeasureable advice and support you have provided in my previous threads, I also wish you are all well/enjoying the brilliant summer :) and huge bonus of having the olympics.
After a couple of threads in this forum, I have decided I will go on and take a risk to jump of the rat race by starting a small carpet/floor cleaning business, I have a bit of capital for startup, but I need to get a bit more to cover my wages while a graft/hassle (simply to cover the bills). However, the only way to do this is to get a start loan and they require a business plan showing projected cash flow, profit and loss.
(Currently our local government is giving an interest free loan for 7 years for startup and small businesses, which I am hoping I will be able to take advantage for).
My question is, in area with about 30,000 household and about 8 CC currently in yellow pages and internet, what can be a reasonable projection of sale if a elbow greese marketing is pertaken?
Although I have done a cleaning course, I haven't cleaned in reality.
Is it possible to clean more 5 household in a week and if so, what is the average gross turnover without undercutting anybody?
Apology in advance of been naive.
Thanks in advance and kid regards.
Ratrace
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There is absolutely NO projection.
You cannot project.
Even with your stats as it will depend on demographics and factors that cannot be projected.
Business plans are BS. How can you project what you don't know?
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It will also depend on the person, one of your 8 local c/cers might be doing well whilst 3 might be struggling. Which will you be? You don't know but most people are optimistic they be that one, but you really don't know.
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It also depends on how much capital you have for marketing. Are you a Salesperson.
Would you be happy door knocking to find customers or do you want to do it through adverts leaflets.
Do you have any idea what is involved.
I recentley bought a guide off Amazon which had a business plan cash flow projections etc quite honestly you might aswel p... in the dark for all the good it was and what it told you.
I buy these things because I am curious
But anybody following or borrowing on these projections would be on the way to loosing their possessions next year unless they are expectational which you may well be ;D ;D
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i got turned down for a business loan, they said i needed a busness plan, so i went away and did a business plan, when i went back they still said no, i asked why and the guy said, TBH, we always send people away who haven't got an income to cover the loan, the business plan is a smokescreen. so i went to the top honcho and complained that they had made me do all this work for nothing and they were a disgrace etc.. so they borrowed me half and gave me the other half as an overdraft fascility.
so there ya go, business plans are sheeeeyite and thats from the horses mouth, actually, from the black horses mouth, ha ha, dya get it, black horse? that bank with the horse? the black one? awwwwww forget it. ;D
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Banco di Ferrari ???
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Thank you guys,
Unfortunately the only way I can get that extra interest free loan is only by presenting the local gov with business plan.
I completely understand you can't predict the future, especially if you never being in the game before, but is there requirement.
Regards
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Hi Rat-race
We went down the bank route years ago they also said no..We just saved up a bit to get started.
Rat-race you can give me a call.
Richard & Tara
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whatever you think of business plans you will need one to get a loan from a bank
they want to see that you know what your doing,it is a bit of guesswork ,but month by month or 6 monthly,yearly etc they want to see projections.
if your plan looks mickey mouse they will not entertain you,have a meet with them ,ask them what is required
then sit down with an accountant who will lay it out correctly and professionally
you need to have a plan in the first place,its no use making it to get the money,you need to actually earn it
you need to know you can make it work otherwise you will get yourself in trouble,they will want security,they wont take a chance on you,whatever happens they will want security
do you know enough about the profession?
learn the game otherwise you will regret it,when you work out your fiqures,make sure you believe it can work
good luck
gary
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The bank wants to see that the guy has really thought about the business and the plan will show how much. I agree it's pointless if they were not going to lend in any case but surely everyone starting out should have a plan.
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Your local business gateway should run a course and give you software to put your business plan on
however I would start with a bit of paper and list all your outgoings including food and entertainment
also remember to add loan repayments and the cost of advertising and insurance if you cant cover
these costs for a least 6 months I would hold back until you have more savings or another income that
you can live on until you get established
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Although there can be a lot of guesswork involved when making any projections, if you do enough research - you can determine whether your business plan is likely to be viable. When somebody is interested in starting a carpet cleaning business, most people on these forums tend to recommend a carpet cleaning training course as a starting point. This is all well and good and I certainly would not discourage this - but on its own becoming a good carpet cleaner will not guarantee you success. I would focus my efforts on becoming a really good businessman first and a carpet cleaner second. If you have never run a business and don't know much about sales and marketing, I would certainly recommend you do a lot of reading and maybe take some relevant courses before you start your business. In truth, there are plenty of businesses, of all descriptions, that offer mediocre products or services - but are highly successful because they are really good at sales and marketing and they know how to run their operations efficiently.
If your town has 30,000 households, then in any given year probably not more than 10% will instruct a professional carpet cleaner. That's about 3000 cleans a year, or perhaps more realistically 1500-3000 per year. If the average ticket price for a clean is about £75 (it could be more), your total local domestic carpet cleaning market might be worth £115K - £225k per year. If you add on commercial carpet cleaning and upholstery - I would guestimate that you local market is worth £175k - £350k per year. These are just ballpark figures, but they do demonstrate that you local area might be able to support eight fulltime carpet cleaners.
If you are still unsure about carpet cleaning, there is no reason why you can't do some test marketing before you start. See what sort of response you get from 10,000 leaflets or perhaps classified newspaper ads. When you generate enquiries, just tell them you're fully booked. Bear in mind that all marketing can be a bit hit and miss, you need to run a campaign over a fairly long period to identity patterns and response rates. This is particularly true for leaflets - you might get nothing from your first 1000 and five or ten jobs from your second.
Provided you are proactive and determined, it shouldn't be too difficult to obtain at least five jobs per week in the very early months of your business. Although leaflets are not my favourite form of marketing, they can be a good option for a start-up because initially you will have plenty of time on your hands. If you delivered 10,000 leaflets per month - I would be pretty confident that you could generate 10-30 jobs (provided your leaflet was well designed). I would also try to develop a marketing mix rather than relying on one or two methods; for example networking, directories, classifieds, direct marketing, referral schemes, up-selling, internet etc. It is a sobering fact, but most new business fail within their first few years, I'm sure carpet cleaning is no exception. Many business fail, not because they do not know what they should do, but because they just don't carry out their plans due to procrastination or inefficiency.
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Very good post. I can verify that a lot of new starters we see do fold usually within their first year. Mainkly due to vastly inflated ideas of the amount of work they will recieve and secondly doing it too cheap.
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You could try contacting your local Job Centre.
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Very good post. I can verify that a lot of new starters we see do fold usually within their first year. Mainkly due to vastly inflated ideas of the amount of work they will recieve and secondly doing it too cheap.
Same here. We would advise if they are already in work at the moment to start off part time and build from there. Currently I have two guys who have been doing exactly this over the past year or so and are now finding that their original job is getting in the way and can comfortably shift over now they are starting to see some repeat business..
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Business plan is a useful tool to use to measure how far you have come over the year, simply by revisiting it and measuring your actuals against your projections.
I agree as far as the banks are concerned its pretty useless ( I was told this by my old business banking manager who has now retired) they like to make you jump through lots of hoops before refusing you, quite why they insist on one is beyond me but once done its done and you can update it as you go along for your won use and will have an up to date one ready for when the nazi's next demand one.
What is much more useful is a Marketing Plan.
Just for an example we recently asked for an uplift in our overdraft because we are currently expanding our operation and needed a safety net behind us, our bank demanded;
Accounts: 2010 -2011
Draft Accounts: 2011-2012
P&L 2011 -2012
Current P&L for month of June and July
Personal Guarantee on the overdraft
We have been trading many years, we are growing and we are profitable and as I pointed out to the spotty little oik they sent to my office, I have been lending them money for years with no return and with out demanding the banks past and current accounts and P&L along with any guarantee.
Of course he had no answer other than they have to measure risk, which is bollix they only measure profit.
Oh and extra overdraft we were asking for............. a massive £5k...
Quite how anyone gets any funding from the banks nowdays god only knows, this so called government lent them our money to lend only for the banks to hold it on reserve to cover their current liabilities and then stick two fingers up at Cameron and Osbourne who are powerless against the banks.
I'll stop or I will go on for ever >:(
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Thanks all for your advice.
You are all jewels of diamonds and deep down I really appreciate so many honest people opinions.
Wish you all the best.
Regards
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Hi Richard & Tara
Thanks for your consideration I will definate phone you for a chat as i believe you will be a gold mine of information to me, but am hanging a bit as I will like to call you when I am relax with a pen and a piece of paper to take note of the valuable info.
Graeme
I really appreciated your invaluable effort, you really gave me food for the though.
Kind regards and huge thank you.
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Thats ok Rat-race.
Where in East kent are you?
Richard & Tara
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Hi Richard and Tara
Yes I am in Broadstairs.
Regards
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i got turned down for a business loan, they said i needed a busness plan, so i went away and did a business plan, when i went back they still said no, i asked why and the guy said, TBH, we always send people away who haven't got an income to cover the loan, the business plan is a smokescreen. so i went to the top honcho and complained that they had made me do all this work for nothing and they were a disgrace etc.. so they borrowed me half and gave me the other half as an overdraft fascility.
so there ya go, business plans are sheeeeyite and thats from the horses mouth, actually, from the black horses mouth, ha ha, dya get it, black horse? that bank with the horse? the black one? awwwwww forget it. ;D
Yeah I know all about the black horse , When i had my retail empire it raised its leg and pooed all over me
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Yeah I know all about the black horse , When i had my retail empire it raised its leg and pooed all over me
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I know what you mean Ian, I too had a retail empire (5 shops) before the banks and Blair and he half-wits ruined it all, what sort of shops did you have.
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My wife & I , in 1980 started a business and we went to the bank for a loan. This was in the days when it was much easier.
Whenever we wanted a laugh in the following years when things were hard we just got out the business plan.
As for Blair & his crooked cronies- why do you think I am still working when I had two pension plans in place for a happy retirement at 65?? --- Half of it disappeared due to our last dear beloved leader's grubby fingers in the till.
.
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If you want to know how to run a simple 'man and a van' service type business (like carpet cleaning) here's a tip:
Go on some oven-cleaning franchising open days - you'll learn nothing about carpet cleaning, but a huge amount about running a small business
;)
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Ian - Richard
I too come from aRetail Empire destryed by Mr Blair and his crew allowing supermarkets to destroy small traders. I had 5 pound shops, also imported direct from The Far East and supplied other shops nationwide. Be interesting to know your stories.
Justin
07592898298
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Hi Justin
Along with my brother we owned 5 gift shops mainly aimed at American tourists in Stratford-upon-Avon, Windsor and Carmbridge but we lost 40% turnover overnight following 11/09/01, we tried to change our business to appeal to more local customers and also downsized over the following years but in 2004 the business was not big enough to support both myself and my brother so he brought me out. I then purchased a Post Office which I ran successfully for two years but even though it was my business and was self-employed it felt very much like i was an employee of the Post Office and they were closing branches left, right and center at the time. So selling mine at the begining of 2007 i retrained as a mortgage adviser only for the recession to completley destroyed the mortgage industry, at the age of 43 (at the time) and having been self-employed for around 20 years I found it impossible to find employed work, did some commission only sales roles until I started my carpet cleaning business in 2010, its been hard work but at least I'm self-employed and keeping a roof over my head, just :)