
From idea to replacing full-time salary in 4 months - instakill
http://www.reddit.com/r/Entrepreneur/comments/sblc6/from_an_idea_to_replacing_my_fulltime_salary_in_4/
======
edw519
This time next year on reddit:

"From working my ass off 90 hours per week running a business that wouldn't
scale to nice salary/benefits for 40 hours. I'm taking home the same net and I
feel like I'm on vacation."

I don't want to sound too snarky and I really admire OP's initiative and
ability to make things happen, but this just doesn't smell right. It's easy to
get excited by nice revenue in the beginning (as he should), but this new
business:

    
    
      - doesn't scale well
      - is notoriously difficult to get and keep good workers
      - is the first thing customers eliminate when times get tough
      - has minimal barriers to competition
      - is price sensitive
      - is difficult work
      - is almost 24/7 customer service
      - has major tax/liability/insurance issues
      - provides minor personal growth opportunity
    

It reminds me of growing up hearing the debate between 2 uncles at Grandma's
every month. One ran his own grocery store and the other worked 9 to 5 for
BigCo. Each thought the other had it made.

Uncle A said, "You get to go home every night at 5, never work weekends, get
benefits covered, and have a life.

Uncle B said, "But you can grow your income as big as you want and you don't
have to put up with an asshole boss."

Both were right.

OP is excited now, but I have a feeling that in about a year or so, he'll be
feeling a lot like Uncle A.

~~~
qeorge
Incoming anecdote..

My uncle, Peter Dussmann, started out cleaning offices, then started an office
cleaning company, than bought an office building...now he owns one of the
largest service companies in the world (50k+ employees).

<http://de.wikipedia.org/wiki/Dussmann>

When you make money it opens up other opportunities. How you leverage them is
what matters.

That said, I'm 1000% Uncle B.

~~~
mattmaroon
Too many people think of scaling too narrowly. They think it means doing more
of the same thing, which it can. Or it can mean something like this.

There's no reason a cleaning service can't scale very, very far. Look at Merry
Maids.

------
DanielBMarkham
Since everybody else is pointing out how poor his employee compliance is and
that he's picked a freaking hard row to hoe, I'll praise the guy. Awesome job!
This is the internet equivalent of going door-to-door. In fact, I bet you
could combine this with going door to door and see sales really take off :)

The scaling thing Edw brings up doesn't concern me right now: you are in the
throes of kicking ass. Later on reality will sink in. But he's right -- you
have some major changes to make if you really want to go long-term with this.

Patio has a more legal concern: that your cleaners are really workers. I'm not
so sure. I'd see a lawyer about this pronto. If these folks were already doing
some cleaning before you met them, and if you make it clear that there is no
office, there is no work hours, they are free to take or not take work, and
that their only obligation to you is completing each job they sign up for? I
think you might be fine. It's certainly a lot less control that software
contractors have over them, and they're contractors.

Instead of growing, I'd concentrate on making this thing hands-off. Hire a
temp to do the office work, etc. Even if it eats into most of your income,
once you are freed up then you'll be in a position to really expand. This
"make the business a machine" is your next step. At least according to
everybody I read.

I liked the post. We need reminding that a little bit of hussle and not over-
thinking things can take you a long ways.

~~~
tptacek
He has a "detaileddddddd" checklist of how he wants the work done and a
training program. His lawyer is going to tell him that they're employees.

What's worse is, the better he does, the more clear-cut this issue gets. His
key business metric is employee turnover, and anything he does to improve this
increases the likelihood that his employees will be relying on him for most of
their wages.

This is a "too good to be true" scenario. He's defined a fixed-price service
with rigorous standards to be delivered across a major metro area with 8
known-good workers and is making $1000/month on it. To be compliant, _some_ of
that has to give: his business will have to look more like a placement or
dispatch service, or he'll have to make _way_ less money.

The IRS reclassification thing will be painful.

~~~
DanielBMarkham
Thanks. I only read the initial post.

Yeah, you can't get into how to do the work. Also using anything called
employee turnover is a dead stop.

But I still think it's salvageable, simply because there are so many
independent cleaners out there already. This industry is heavily independent.
I think he really needs to look at his structure, pronto.

I'll play devil's advocate just a bit more for the crowd. Many times startups
skirt all sorts of rules and regulations when getting off the ground. I'm okay
with that -- startups are always a bit subversive, and if you listen to your
accountant and lawyer you'd never take any risk at all. But you can't go on
like that for very long.

EDIT: Here's a possible setup: place the jobs on cards and put on the wall.
Have the cleaners bid for the jobs. The checklist could just be the terms of
contract completion, and you'd have to make sure the checklist was not a job
description. Whether or not the contractors conspire to set the price or
anything is none of your concern. You're simply a clearing house for very
small cleaning contracts.

I think it's very doable. His business and income is really in chasing down
people who need cleaning and people who can provide it. That doesn't have to
have anything to do with employees. But it won't work as you've described it.

I was just blogging about this. Many times you find value and struggle with
the model. <http://news.ycombinator.com/item?id=3847651>

~~~
tptacek
This is not the good kind of subversive. This is the kind of subversive that
screws people who are making close to subsistence wages over on taxes. He
spends "an hour a day" on Maids In Black now and based on his pricing and the
prevailing take-home for housekeepers is taking more than half the gross from
the business. That doesn't seem particularly laudable (but maybe my math is
fucked up).

I don't think it's going to be easy to provide the service he wants to provide
(flat-rate book-online competitive-quality housecleaning on demand) profitably
under a 1099 structure.

~~~
DanielBMarkham
I'm unable to address this, as I'm not sure what you mean. I was simply saying
that from his vantage point, hooking up customers and vendors who were already
in the market can be a valid business model.

I believe you are talking about bringing new people into the market as vendors
and then treating them poorly. Hopefully we can agree that folks that are
already doing cleaning can continue doing it just using this guy's services to
find customers. If not,if the point is that all cleaners should be w-2
employees, then yes, no matter what he does it will not satisfy somebody with
that view. I do not believe all cleaners should be employees. It's perfectly
fine with me if you feel otherwise, but I don't think that's the way the IRS
sees things. (thankfully)

~~~
tptacek
_Someone_ is paying FICA taxes.

If the maids are 1099 employees, they're paying _both halves_ of it. That's
"self-employment tax". It's very expensive; around twice what employees pay.

The prevailing rate right now for "qualified" housekeepers in the DC metro
area is $9.80/hr. Even if he's "generously" giving them $20/hr (if a 1bdr
apartment takes 2 people 1 hour to clean, then according to his price list
that means he's keeping about 60% of the gross), he's still shifting around
$8000/yr to these workers _just in FICA._

I'm taking exception to the idea of cheering on as "getting-stuff-done
subversive" the business model that says "here, let me take a chunk of your
taxes and stick it in my own pocket".

Again: I don't think "all maids should be employees".

~~~
DanielBMarkham
_Someone is paying FICA taxes._

I think you're arguing semantics here. Yes, everybody pays FICA, but for most
people who are working their own business at a lower income FICA is offset
such that no taxes are owed at the end of the year. So while you "pay it",
it's not like that means much (insert long discussion here about complex tax
systems)

 _Even if he's "generously" giving them_

He doesn't have to give them anything.

I don't understand how you can separate "being subversive" from a discussion
of the underlying business model. It looks to me like you're weaseling out,
but that's fine. My point was that you must assume some kind of risk -- many
times a bushel barrel of risk -- when you are poor and just getting started.
It wasn't about labor laws. And whenever you assume risk, there's going to be
a bunch of characters coming out of the woodwork telling you how stupid you
are for taking on that risk.

As far as the model discussion, I think we've reached the point of diminishing
returns. Although you've re-phrased yourself, it appears to me that you are
describing some political argument and I am simply talking about business
opportunities. I don't think you're ever going to be able to see this business
model as anything but exploitative. I think once we mention the words
"cleaner" or "lawn care" it sets off a pre-canned argument, probably involving
immigrants and such, so this guy really never had much of a chance for
positive feedback. Thanks for the chat! Seems like we always get hung up on
self-employment, huh? Maybe one day I'll do a good enough job explaining
myself that it will click.

~~~
tptacek
Wait, what?

 _Someone is paying FICA taxes._

 _I think you're arguing semantics here. Yes, everybody pays FICA, but for
most people who are working their own business at a lower income FICA is
offset such that no taxes are owed at the end of the year. So while you "pay
it", it's not like that means much (insert long discussion here about complex
tax systems)_

What is the FICA/SECA offset you're talking about here? It is not my
impression that maid services don't pay FICA.

------
patio11
He's essentially figured out that cleaning is one of many services which would
have lower barrier to entry if it were not regulated. He is, of course, right.
I sincerely hope for his sake that he reinvests profits into bringing himself
into compliance with e.g. employment taxes, workers comp, etc.

~~~
chc
Are you saying you think it's illegal for the maids to be 1099 workers?

~~~
rsynnott
I'm not sure about America, but in most countries I'm familiar with, it is
ultimately the decision of the tax authorities whether people who work for a
company are employees or contractors. There's generally a well-specified test
for this.

Certainly, in this country, the maids would be unambiguously employees.

~~~
patio11
The US regulations are _terribly_ vague, depend heavily on facts-on-the-
ground, and can turn on minutiea like who gets cake on their birthday ( _so_
not making that up). That said, even for a law which has more edge cases than
a course on graph theory, this case is not a close call.

~~~
_sentient
It largely comes down to whether or not you direct and control the manner with
which these maids work, which he certainly does. He has his maids wear branded
uniforms, gives them a set checklist to follow, and has them bring a bottle of
wine to each first-time customer. The fact that his maids have their own
clients and use their own cleaning supplies does work in his favor, but
overall he's still on the wrong side of the divide.

I'm not an employment lawyer, but I have been through a state employment
classification audit, and I am pretty confident his maids would be
reclassified if he came under scrutiny.

The IRS has a 20 point "Independent Contractor vs Employee" checklist, and he
falls on the wrong side of a number of these items:
[http://www.webster.edu/about/policy/independent_contractor_c...](http://www.webster.edu/about/policy/independent_contractor_checklist.pdf)

------
runjake
"It's not scalable."

"He's going to burn out."

"Let's see what he has to say in a year."

Am I on HN?

It's interesting that what used to be a site full of risk-takers and
entrepreneurs is tearing every little detail of this guy down.

The gentleman _tells_ you it's a fly-by-the-seat-of-his-pants learning
experiment. He doesn't need you to tell him every little detail he's getting
wrong. He's learning by actually _doing_ it.

Further, it seems a lot of commenters aren't actually reading his posts and
comments -- a lot of the criticisms are already documented and addressed on
his posts. Even edw519 (who I love).

I was drawn to HN because of the risk-loving hackers who dared, not the
naysayers who only feed my internal risk-adverse naysaying thoughts.

Edit: Since I posted this comment, a large discussion around 1099s has
bloomed, and I'm not referring to this excellent discussion. I'm specifically
referring to the knee-jerk naysaying.

~~~
bhousel
You have a point. I think many of the criticisms you'll read here are coming
from people who have "been there, done that" with their own businesses.

The 1099 vs W2 issue is very real but (imo) totally fixable in a few days with
a decent accountant and a meeting with your staff and some paperwork.

He was _probably_ fine for FY2011 to pay his maids on a 1099 for work done
between when he started the business in November 3 and the end of the year.
(He even stated that doesn't still work with all of them, some really were
just temporary staff that didn't work out and weren't trained).

He _definitely_ needs to convert them to employees for FY2012, but it's only
April and these are relatively small amounts of money. I'm pretty sure he's
not _trying_ to stick his workers with a huge tax bill in 2012. People who are
suggesting that this is his "business model" are way off base.

The most interesting part of this story, which nobody is talking about, is how
he is using his website to allow clients to pick and choose these Godaddy-
style addons (cleaning refrigerator and closets and so on). It totally makes
sense for service-oriented business like cleaning and lawn care.

He could probably follow the Godaddy model and operate the rest of his
business at small margin and make the bulk of his money off those addons that
other cleaning businesses haven't yet thought to offer.

------
tptacek
He's not withholding. Chances are good his workers aren't paying taxes either.

 _According to the manual the IRS uses to train its worker classification
auditors, the three most important factors are:_

 _Instructions to workers: Your worker is probably an employee if you require
him or her to follow instructions on when, where, and how work is to be done.
This is a very important factor. However, if you tell your electrician you
want blue switch plate covers instead of white, you are not exercising control
to a degree that would make the person an employee._

 _Job training: If your company provides or arranges for training of any kind
for the worker, this is a sign you expect work to be performed in a certain
way; therefore, the worker is your employee. Training can be as informal as
requiring the worker to attend meetings or work along with someone who's more
experienced._

 _Worker's ability to make a profit or suffer a loss: An employee may be
rewarded, disciplined, demoted, or fired depending on job performance, but
only an independent contractor can realize a profit or incur a financial loss
from his or her work. In other words, an employee will always get paid; an
independent contractor, however, has a financial stake in his enterprise._

Also:

 _Importance of the worker's services: If a worker provides services that are
integral to the success of your business, the worker is likely your employee._

 _Personal performance of services: An independent contractor should have the
freedom to hire assistants or subcontract work to other workers or firms at
his or her expense (this is where profit or loss could enter the picture). If
you require the worker to perform the work personally, that's a sign of
control and therefore indicative of employee status._

Ouch.

This scheme is going to work until he starts issuing 1099s and the government
(maybe after months or years) notices them and goes after the workers for
their (extremely expensive) self-employment taxes. Which, because they're
probably making the prevailing rate for housekeepers (high teens per hour) is
going to threaten to drive them into bankruptcy and thus cause a stink.

~~~
bhousel
You are correct that the maids are employees, but since he only just started
this business, it seems like a very fixable problem to convert them to
employees.

I ran some numbers on a free paycheck calculator site (paycheckcity.com) and
assuming the following: Washington DC, wage of $20/hr, 30 hrs/week, married (2
exemptions), the numbers come out to:

    
    
      Weekly Gross Pay      $600.00
      Federal Withholding   $29.81
      Social Security       $25.20
      Medicare              $8.70
      Washington DC (ouch)  $28.00
      ---
      Net Pay               $508.29
    
    

So, he might need to set aside $100/employee/week.. The taxes aren't
necessarily a business-killer.

~~~
tptacek
If his current employees are 1099, they're paying SECA, and the numbers are 2x
this. If he switches to W2, he'll pay half of FICA, and the workers the other
half... but now his job offer is significantly less attractive.

He also owes $187/yr for uninsurance per employee.

Dealbreaker? No idea. Obviously people do make a living running housekeeping
services.

~~~
localcasestudy
Hi i'm only in a few months, none of this is a deal breaker. I've made
mistakes along the way, but I think everything is fixable, luckily I'm not in
year 6 or something lol

~~~
tptacek
"I wish you way more than luck."

~~~
localcasestudy
I don't need it, but thanks.

------
turkeyman
First of all, congratulations to him! Amazing success for 4 months work.

However, the issue with this is, there is no incentive for the cleaners to
stay with the company. My ex was with a company very similar to this one, she
signed up, but after she knew the clients for a while, she realised she could
cut out the middleman and increase her wages substantially. The company tried
to hit her with a 900$ bill for lost profit, their reasoning was "how can we
stay in business if our workers keep running of with the clients?" (what does
that say about the business model?). She convinced her favourite clients to
ditch the company, which allowed her to bring in more money and the clients
had a cheaper rate. Further clients were found by word of mouth at that point.
I think throwing up some ads in the local paper would be cheaper in the long
run than lost money from going with a company like this.

~~~
guynamedloren
Hmmm... that's an interesting (and scary) point. I wonder if it would make
sense, from the business owner's perspective, to shuffle the employees around
between clients to decrease the chances of this?

~~~
turkeyman
That seems like it would just delay the inevitable, he needs to find competent
cleaners that are unwilling to strike out on their own. If he manages to keep
the cleaners as contractors, then his future will be absolutedomestics.com.au.
They have done incredibly well for themselves and have set themselves up
exactly as this guy has.

I'm thinking it must be more profitable making a decent profit while losing
clients and cleaners, than taking a smaller profit and retaining clients and
cleaners.

~~~
pbhjpbhj
> _competent cleaners that are unwilling to strike out on their own_ //

Or get his subcontractors (ie the cleaners themselves) to accept a non-
compete, possibly with a specific figure attached should they jump ship.

~~~
wizzard
I don't sign non-competes as a developer, much less would I expect those in
the service industry to sign one. That would be taking away their livelihood.

Both of these suggestions sound like a form of slavery. Employees are free to
come and go as they choose. What they should not be able to do is poach
specific clients. It happens all the time, though, and what exactly is to be
gained from suing someone making $15/hour?

~~~
pbhjpbhj
> _What they should not be able to do is poach specific clients._ //

I find your indignation interesting as this is exactly what the non-compete
would be preventing - the subcontractor from working directly for the client
that you (the main contractor) introduced them to.

~~~
wizzard
I was thinking more about the main thrust of non-competes I've come across,
which is that you're not allowed to compete in the same industry. I read an
article a couple of years ago about hairstylists and other service industry
workers being out of a job for 12 months because they'd been forced to sign
non-competes.

Not poaching clients is a common clause though, apparently. I haven't really
run across that clause because I don't have to power to solicit clients for my
employers anyway.

------
ricardobeat
It's a nice personal achievement, but I can't help myself cringing at business
models of this kind. It's plain old extraction of surplus-value, adding very
little to the economy as a whole. The workers would be better off operating as
a cooperative, I wish they had the education to know that from the outset, and
the means to implement it.

~~~
cynicalkane
Be careful about confusing what you _want_ people to value with what they
_actually_ value because that's how you get Marxism.

I hired a cheap startup cleaning company (an internal startup within a larger
organization). Flaky, unprofessional management; cleaners who sucked at their
jobs... going by my and my friends' experiences, finding a good cleaner is
pretty hard and (this is a big 'in general') the more expensive ones are more
reliable. Information, quality assurance, and good management are all scarce--
a lot scarcer than most people tend to assume--and cost money.

The other part is that the employers aren't "extracting as much surplus value"
as you think from the sell side either. For instance, most programmers are
content to work for the Man, losing significant amounts of "surplus-value".
Independent contractors appreciate the freedom, the money, the flexibility,
the power to say no, but it's not for everyone, because managing yourself is
also a giant pain in the ass for a large number of reasons.

Finally, I think you're being down voted because all this is probably common
knowledge on a forum for smart, startup-minded hackers. When you talk about
"extracting surplus-value" there are prominent members of this community who
do that for a living.

~~~
ricardobeat
> that's how you get Marxism

Is it a disease? :)

Did you mean communism?

> Information, quality assurance, and good management are all scarce

I acknowledge that. Read my comment below - these skills are picked up on the
go by startup founders, the same way those in a cooperative could.
Professionalism is unrelated to having one head or twenty at the top.

> For instance, most programmers are content to work for the Man

Most workers in _any_ field are "working for the Man*, not just programmers.
The adoption of the agency model varies across the economy, but is less common
as you go higher (think doctors, lawyers, architects, etc). We could get into
a yearlong discussion about distribution (or concentration) of wealth, but I
don't think this is the place and I'm not that qualified.

> I think you're being down voted because all this is probably common
> knowledge on a forum for smart, startup-minded hackers.

Isn't almost everything common knowledge in a community like this? I don't
think that's the reason, downvoting for simply disagreeing is becoming
increasingly common.

> When you talk about "extracting surplus-value" there are prominent members
> of this community who do that for a living.

So? I'm not picking a fight or attacking anyone, just musing on capitalism. Is
it taboo? I'm sure they don't feel the need to justify what they do.

~~~
cynicalkane
>> Information, quality assurance, and good management are all scarce

>I acknowledge that. Read my comment below

Well, your surplus-value is everyone else's value-added. There are probably
more efficient ways to do things in the information age. I'd like to see a
smart bunch of hackers disrupt the maid service industry. But I don't think
the current method is unjustifiable and I don't think it's correct to question
someone doing things the old way in a good way.

~~~
ricardobeat
You might have missed the last line in that comment. I'll repeat: I'm not
questioning the validity of the business (that would be me against the world),
it's just wishful thinking.

------
maukdaddy
From a business standpoint this is absolutely brilliant. Everyone should be
doing this, doesn't matter if you're a SaaS or selling real-world goods &
services.

> 2) Having Extras at checkout. When we first started, you would checkout
> online and just order your home cleaning and pay. Then I had the brilliant
> idea (seems so basic now) to have other options for people to choose extra
> stuff at checkout like "cleaning inside the fridge", "cleaning inside the
> windows", "cleaning inside closets", it was just extra money that I was
> leaving on the table. It took my average profit from about $45 to closer to
> $60 per client.

~~~
toyg
As long as defaults are "honest" (i.e. not pre-selecting extras), sure. It's a
balance though: it gets really tiring to go through pages and pages of upsell
attempts whenever I buy a computer from certain vendors.

The real trick, I think, is to take some of the minor elements people would
expect without really thinking about it, and turn them into explicit extras.
It devalues the base price a little, but the gains are worth it in many cases
(like here).

~~~
binxbolling
You also have to take into account the customer's psychology and not press
them too hard. That is, they don't want to feel "nickel & dimed to death." Too
many extras, and they may start to resent that these things weren't just
included in the base package in the beginning. A load of extras thrown at them
at the end can sometimes be declined (e.g. out of resentment, frustration,
etc) when a higher price upfront that included those extras would've been
happily paid.

------
akg
An excellent example of a valuable product that was bootstrapped from the very
beginning. It's really a shame that news like this is not more prevalent. We
are so accustomed to seeing media highlights of highly glamorized "overnight
successes" that we forget that there are plenty of other founders out there
who are starting businesses and going through the same struggles and
accomplishments.

More importantly, stories like this make it seem that success is within reach
and not something achieved only by an elite few with well connected VCs in
some well-known startup hub.

------
robomartin
When someone suggests a business idea like this one I come back with this:

"It's a great business idea. It will provide you with the freedom to choose
which 20 hours of the day you want to work, including weekends."

Here's the reality: He gets huge points for going out and "getting into the
game". Who knows? This might be what he loves and ends-up thriving despite the
hard work and long hours. There are lots of businesses like that. And,
frankly, the fact that they don't scale matters not to a huge percentage of
business owners.

The greatest thing about this is that you have a (presumably) young man
learning about the realities of business. Succeed or fail, he will be better
for it. And, should he choose to move on and do something else he'll be a
million times better prepared to make the right decisions and do well. He will
succeed, regardless of whether this first venture does or not.

------
localcasestudy
Hi folks, OP from the reddit thread here. I'll answer questions. disclaimer:
This is my first time posting here.

Disclaimer #2: I'm no expert.

Disclaimer #3: See Disclaimer #2 again. I just tried something and it took
off. Will it work long term I have no idea. Where I am now is just the reality
of where I am now. Have I made mistakes, you bet your life on that! Okay, I'll
scroll through and try to respond to anything I can.

~~~
joering2
hi there. I dont even know your name, and reading thoroughly reddit, I couldnt
find it anywhere either.

my impression is you are extremely business-smart person that is just learning
business. You are not afraid of making mistakes knowing every mistake is an
opportunity to learn new things, plus most mistakes can be fixed. please write
a after-post about your financial situation after converting every emp into w2
as I think you are fully aware by now they would not pass "irs 20 questions to
be 1099" rule.

btw: too bad you are not located in the New York City. I have been let go my
work recently and thinking about doing something else than 8-5 w2. I read
between the lines reading you and felt chemistry that we both could learn alot
and accomplish alot business-wise (of course, I could be wrong...)

I would like to connect with you. would you please email me? (my address is in
my HN profile).

btw #2: thanks for sharing your story. I sure learnt new stuff today.

~~~
localcasestudy
Sory to hear about your work situation. Hope something pans out if you decide
to go back, but yeah in the meanwhile, it may be a good time to start
something.

Thanks for the kind words of encouragement. I tried to email you but didn't
see the link to do it after I got to your profile (not sure if it's because
I'm so new here or I'm just blind).

Please send me a message on the maid site and I'll respond right away.

~~~
joering2
I did send you an email last night to booking@... hope you got it!

------
AnthonyJoseph
This is scalable, I am not sure why people are saying it isn't. In its current
form, no, but if he puts it into high gear and takes it to the next level,
there is no reason he couldn't repeat this model, hire managers etc and be
completely hands off. But, that is not what I would do necessarily, I would
get my franchise papers in order ASAP, and start marketing this online, there
are a lot of good keywords to go after (how to start a cleaning company etc).
Get it to the point where he knows exactly how to repeat this in any city and
make XX,XXX$/yr for the "owner". Figure out a franchising model, where the
owner of the franchise can learn how to repeat your success, and you get part
of the profits/or a franchise fee (hell you could "loan" them the money at
interest). Nothing sells better than telling people that you can teach them
how to leave their job, make 60,000$/yr, and actually be able to do it.

------
dkrich
I can't help but think a lot of people find fault with this because they don't
want to believe that it could be possible to start a business this way because
they didn't think of it first. But you know full and well that whatever
employment law and tax compliance requirements exist can be overcome and
overcome fairly easily. Why look past the entire story to point out the few
things that could fuck him up?

And to those talking about the lack of scalability, etc. I ask you: how many
businesses have you started that employ people? How many businesses of this
kind have you run? If the answer is <1 you are not qualified to make those
assumptions.

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septerr
Some of the best things of MIB -

\-------

Organizing

We can organize your closet (in whatever way you would like), and thoroughly
clean and organize the items in your kitchen, or even spend time restoring
your china to their full glory.

Refrigerator / Freezer Cleaning We’ll dispose of expired items, & remove racks
and compartments to deep clean them as well as the walls of the fridge.

Errand Services

Need a personal assistant for the day or just need someone to drop your car to
the mechanic or to run to the mall for you? Name it and we’re there to take
care of any errands you may have. $60 for first two hours ($35 per hour
after).

\-------

Clean is something people like. To people like me it gives peace of mind and
freedom to think and work on other things. But cleaning is something a great
many of these people don't like to deal with. A cleaning service has to be a
moneymaker.

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bannerts
Has anyone tried to consider the numbers involved with this business?

About how long does it take for two maids to clean a house (or in other words,
how many houses can two maids clean in one 8-10 hour day?)? Also, about how
many maids do you have working for you?

In trying to come up with a ball-park figure: My guess would be that each pair
of maids could bring in about $600-800 a day in revenue (cleaning 4-5 homes).
Of this it would seem that about $400-500 goes to paying the maids (say ,
$200-250 per maid), with about $75 dollars going to daily expenses (gasoline,
cleaning materials, etc), leaving whatever remains going to other major
business expenses and profit. If his workers are busy 20 days a month, it
would seem that a bunch of the so-called monthly costs of being an employer
(say around $750 per month per employee) only comes out to be around $75
dollars a day (per pair of maids). I have no clue as to what this value
actually is (or how much of it would be part of their hourly wage), I'm just
guessing.

All in all though, I would guess that for each maid he has, on average it is
costing him around $275-325 per day while bringing in around $300-400 per day.
If their is any truth to the numbers above (which one number being off could
dramatically mess everything up), it would appear that he is bringing in about
$50-75 per maid. If he prices his service to keep that profit in mind (to make
at lease $50 per maid per day), then having a staff of 10 maids could end up
making around $100-150k a year. And I suppose the scaling would seem to work
pretty linearly; if he doubles the number of mades or how much he brings in
per maid, then his profit would double as such. Of course there are things
like insurance and training (perhaps those costs total 10% of each maids daily
wage and is included in that value)...

Based on these numbers though, having 10 maids would require having 25 homes
to clean each day (or about 500 per month). I see that he has given out 2254
lunches so far (if I really wanted to make an accurate estimate of the
business he is doing).

Anyhow, is there anything major that I'm missing in these numbers? I'm just
trying to make an estimation..

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pier0
It looks to me the idea may not be the best one and his success will not be
easy to replicate (for those that are thinking to do the same in their
cities), but the discussion the story generated is very interesting in two
ways:

1)there are bits of localcasestudy's experience that can be used by other
businesses irregardless of what sector they are

2)the moral of the story is that if you want to run your own business you can
do it. And it doesn't necessarily have to be a tech startup looking to raise
funds.

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sparknlaunch12
This is a really impressive story. Sure there are some obstacles and
challenges - but this is the fun of very real life business.

The guy has taken a traditional business and applied all the buzz of the web
(social media, lean, etc etc) to establish a profitable business in 4 months.

I would love to hear from others willing to share similar experiences of
turning an idea into one business (cleaning), then repeating the process again
(lawn services).

This kind of sharing is what makes these communities priceless.

~~~
localcasestudy
Thanks, if I duplicate it that would be crazy! We'll see, I'm excited!

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yeureka
My mom started a cleaning business some time ago. I wanted to try Javascript
and promote her business so I wrote a quote calculator that takes into account
number of rooms, number of bathrooms, area size, etc...

(shameless plug) If you understand portuguese have a go at:

<http://abelhinha.net/calculadora.html>

~~~
septerr
Nice.

