I started a home cleaning business 3 years ago and it’s not profitable. It’s an easy entry business so there is too much competition and it’s difficult to differentiate in this type of business. Everyone claims they provide a quality service. The worst part is that most competitors are using low prices to compete-so a race to the bottom. Looking for advice on how to salvage this?

  • MoneyGrinch@alien.topBEnglish
    1·
    1 year ago

    There are 7 levers you can pull to make your business more profitable and increase your cash flow.

    Here they are.

    1. Increase your price. Less customers higher rates is way better then low rates lots of customers. This was the single greatest lever i pulled. Got rid of the deadwood customers and it goes straight to the bottom line.
    2. Increase your sales volume ie more jobs
    3. Decrease you cost of goods. By cheaper cleaning products.
    4. Decrease your overheads. I.e negotiate cheaper rent or if you’re paying a loan for van negotiate cheaper rates.
    5. Decrease the time it takes to collect money.
    6. Decrease the amount of inventory you have on hand. Ie less cleaning product untill you need it
    7. Increase the average time to pay supliers. Ie if you could negotiate 30 to 60 day terms where you buy your cleaning products.

    If you can move each of these up or down 1% you would not recognise your business in 1 year…