—–Original Message—–
From: M
Sent: Friday, June 25, 2004 12:58 PM
Subject: how do I change?

Hi! I have had a small cleaning business for the past 14 years. I clean houses myself but I would like to expand and hire some employees, but I have a fear. I am trusted by all of my clients and don’t want to take the chance that I would send someone into their home and they would steal from them. I would like some information on how to go about expanding my business. I want to be able to stop cleaning and just supervise my employees. I would appreciate any information you can give me. Thank you.


26 June 2004
Dear M:

Thank you for your inquiry. So far, you have been successful because you clean well, are adept at managing client relationships, and have managed to grow through referrals. If you intend to expand, you are moving into waters which for you are uncharted; your success in your new role will depend on your commitment to change, your financial resources, and your personal management and marketing skills. Firstly, you have to find a new way to add clients to compensate for lost accounts during the transition, and find new work from the outset to accommodate three persons, not just one. Secondly, you will have to demonstrate an ability to manage employees. If you fail on either count, then your new endeavor is sure to fail.

One advantage you have is that it sounds as though you intend to continue to clean for the first two months, and that you can train the first several new hires yourself during that two-month transition. Whatever you do, do not find one employee and send them around alone to clean houses which you once cleaned. The employee will either do a perfect job and steal the clients, or do a lousy job and lose the clients. Team cleaning represents a sustainable way for you to control quality, protect your accounts, and safeguard clients’ belongings and keys.

Once you have decided to scale your business, then be patient and opportunistic in hiring your first two employees. You can afford to make a mistake now and then in hiring, if you already have ten employees, but for the first several employees, a mistake is more painful. We have always had lousy luck advertising for employees. Instead, if I were you, I would begin searching ads for employees seeking house cleaning positions. Don’t pay a fee to any service–you are not hiring a CEO; you are hiring a maid. Don’t hire someone with your own skills-you need them to work hard and clean perfectly, not manage client relationships. You have worked for yourself, because you don’t like taking orders. You will hire them based on them not minding taking orders. Do you know what your competitors are paying? You have to find this out and offer market wages. Denver Concierge has positioned itself as being the best paying maid service in our market-we pay a tad over market to those starting out, but significantly more to our Team Leaders. I recommend an hourly wage, until you have 10 employees; then you’ll need to employ incentive-based systems.

Hire your employees on a one- or two-week trial basis, in order to give you an easy way to dump duds. We have improved significantly in this respect. It’s not that we have become significantly smarter at hiring, but rather that we have developed incredibly effective systems for evaluating and sorting employees very quickly after they are hired. We ruthlessly cull and enthusiastically promote. If someone cleans poorly, let them go do it for a less exacting competitor. Find and promote your first star, and you have a foundation from which to grow.

Do not at first hire together two employees who know one another. Once you find the first employee, continue searching for the second; hire the second as soon as possible, to diversify your risk of hiring duds. You can’t hand the houses over and fully commit your time to marketing and managing until you have two trained employees. Even if you do not increase prices, you should still expect to lose some clients when you switch to team cleaning. I would recommend that you make the change coincident with some service upgrade. The most obvious upgrade is to begin washing floors by hand, if you don’t already do so. Another would be to switch to using your own supplies and equipment. Promise your clients that the changes will improve quality and dependability. This worked quite well for us last year, when we bought Basisk Home Cleaning. We managed to switch a very high percentage of the customers from Basisk’s system of having one cleaner, over to being cleaned by our teams. We did this by significantly improving the quality of service and using our supplies and equipment when we made the change. During the first visit with the new person, make sure the employee spends most of her time washing baseboards, vacuuming corners, cleaning doors, etc. This demonstrates to both the client and the employee your commitment to providing perfect service.

I would also recommend that you go down to the secretary of state and register a company, so that you can use it for paying taxes and insurance, and opening a bank account. Walk in alone and someone there will tell you for free how to do it yourself. Buy two used vehicles and have them lettered. Have your company logo printed on some shirts with collars-loan these to employees (for security reasons, recover them as you hand them their final checks). If you intend to switch to team cleaning, you’ll have to develop a system for controlling keys-whatever you do, do not allow employees to take keys home at night under any circumstances. Doing so not only involves you in the risk of the key being copied, but also represents an invitation for cleaners to bypass you and begin dealing with clients directly. We check keys out on paddles with numerically controlled seals.

In terms of stealing from houses, using teams of three persons with no more than one unproven person per team is the best way to mitigate this. Nobody wants to work with a thief-your trusted employees will rat them out immediately for any suspicious behavior. We have been very lucky in our five years to have avoided any significant problems in this respect. In fact, the only problem we have ever had reported by a client is with one of the individual Basisk cleaners whom we inherited when we bought that company (she stole earrings-we recovered and returned them). Protect your clients by buying fidelity bonding and liability insurance before you hire your first employee. Tell your clients about the new insurance.

Regarding marketing, we are presently adding each week 6 new customers from referrals and vans, 3 from our website, and 1 from other sources. We offer on lease state-of-the-art industry-specific websites for as cheaply as $350 down and $50 per month. The price includes the minimum necessary development costs, and all hosting costs. If you like the Denver Concierge website, a thinner version is available to you immediately on this basis. We are also presently developing 9 additional design alternatives. Also, in the next several weeks we will make available certification exams, and study material for use by companies like yours. We have been using these exams in-house for two years. Our cleaners pass the exams or are asked to leave. The study material, employee training records, and exams will be available online in August 2004 for $50 per employee.

I’m concerned about your prices. If you charge only $15 per hour now, and pay no salary taxes, worker’s compensation and insurance, then you will find it difficult to make this change. If you hire your first employee on a cash basis, then you will be on the slippery slope from the outset, and will never scale your business. Based on our experiences with price changes, increasing your clients prices from $15 to $25 per hour will cause you to lose 90% of them. If your prices for your existing clients are too low, then I would recommend that you raise them significantly now before you hire employees, so that you will be prepared to pay full costs once you do hire. If your clients are going to leave you for the price increase, it is better that they do so now rather than during your transition.

Be sure you have some money in the bank when you embark on this transition, as you won’t be paying yourself for awhile. Are you really sure you are ready to bite the bullet?

I hope this has been helpful.



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