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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 taki

by edw519 15y ago

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.

neonkiwi 15y ago
It does seem to be generally true that running a business has a worse payout than a normal job, but in this case, the OP says he's spending seven hours a week on the maid business: http://www.reddit.com/r/Entrepreneur/comments/sblc6/from_an_idea_to_replacing_my_fulltime_salary_in_4/c4cqoxf http://www.reddit.com/r/Entrepreneur/comments/sblc6/from_an_...
- personlurking 15y ago
  Interesting because my ex-girlfriend basically did what the OP did and she worked like a crazy woman from 7AM to 8PM with no days off, dealing with her team, clients, etc.
  - localcasestudy 15y ago
    I have a full time job.
    - personlurking 15y ago
      I understand, though I'm merely stating that from firsthand experience seeing my ex work, she was going at it like crazy just to get it up and running smoothly. Hard to understand the difference between 7h vs. 90h per week for two successful people who had never worked in the cleaning biz before.
      - grey-area 15y ago
        Perhaps the difference can be explained by this guy's employees - sounds like he started with exactly the right person as contractor No. 1 (or employee No. 1, given the other discussions on this thread). That has allowed the company to scale and train others to the same high standards.
tbergeron 15y ago
I understand the train of thought you're having. It may not be the best kind of business scaling-wise but if done right he could open some more somewhere else and horizontally scale that way. Everything can be scalable when pushed into the right direction. More branches = more employees = almost automatic administration = more money. Those are only my opinions, therefore not facts.
- asmithmd1 15y ago
  Another point why this result may not be typical of attempts to duplicate this business in other parts of the country is that he is doing this in Washington DC, the epicenter of where cash is being artificially injected into the economy by defecit spending. Silicon Valley, DC, and NYC exist in a different world from the rest of the US
  - achompas 15y ago
    You're right about DC having a regional effect, but wrong about "cash being artificially injected," especially since deficit spending has very little impact on DC's economy (think lobbying and consulting). I lived in DC for a few years and there's a strong work + happy hour culture for young professionals. It's pretty standard to hit the bar after work and get home at 9-10pm on any weeknight. The result: a group of tired young professionals who have zero desire to clean up their apartments.
    - asmithmd1 15y ago
      Government spending IS spent in the DC area. Every government contractor has major offices if not outright headquartered in DC area. For example: Northrop Grumman, CSC, Lockheed Martin, and General Dynamics are all headquartered there. Any new bureaucracy finds offices in the region - TSA's 4000+ headquarters employees are in Northern VA. I know I am going off on a tangent but since 2008 the US government has been spending $1,300 billion more than it collects each year! Instead of spending that in the DC area why not just send a check for $10,000 to each and every household in the US. Of course these numbers do not include the TARP cash that is deluging Wall St.
mtrimpe 15y ago
Isn't the real message here that we shouldn't forget that many of us startup geeks can completely out-design and -SEO virtually any local service provider out there and that there might just be big money in doing so? It is indeed important for him to realize that he'll be 'just an another agency' though and needs to start acting like one. That doesn't negate the fact that a properly-SEO'd site which outperforms local agencies can be tremendously valuable and achievable.
- localcasestudy 15y ago
  >Isn't the real message here that we shouldn't forget that many of us startup geeks can completely out-design and -SEO virtually any local service provider out there and that there might just be big money in doing so? THAT'S IT! I don't think what I did was that difficult (I had luck along the way, and went over the top in some ways,yes) but at the end of the day, I think this is the main takeaway from this experiment.
grimatongueworm 15y ago
Does it have to scale to national or global size? No. The guy covers a sizeable metropolitan area with an abundant potential client base. Does he have to scale up to 500 employees? No. He can keep his business small and profitable.
ma2rten 15y ago
I does not scale well compared to what? I might scale poorly compared to your average social network silicon valley mobile app startup, but it scales well compared to any other small business. He does not need a physical space and there are almost no other fixed costs. Also I feel he is using his "computer skills" to gain a competitive advantage by doing SEO and he also has an original brand. If he was able to replace his full time job in 4 month, he should be able to grow enough in a year time to hire someone to do most of the annoying administrative work for him. Sure building a photo app and selling to Facebook would be cooler. I guess everyone has to figure out for themselves what they want from life.
- localcasestudy 15y ago
  Yeah we'll see. I don't even know if I want to scale at all. Seriously if I could double current earnings within this year, quit my job, help my family, (use some extra money to diversify a bit) I'm good.
- sopooneo 15y ago
  I agree with your sentiment. I feel that a massive part of the potential for startups is in doing boring, everyday things much better. If there are already lots of providers that means there are already lots of potential customers.
qeorge 15y ago
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 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 15y ago
  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.
- thisismyname 15y ago
  Great points. Also allows him to learn, grow (both in business and to look for new opportunities), and adapt. Plus, its pretty easy to just "get a job". Creating a job or a business is much trickier. Kudos to your uncle!
enjo 15y ago
I think you are being a bit harsh on his ability so cale. Anecdote time: I own a lead-generation business. We focus primarily on home services, and over the last couple of years I've gotten to see a lot of businesses on this guys scale operate. My favorite is an air-duct cleaning company that we work with out of Colorado Springs. When they started working with us they were brand new. A single truck that was just trying to make ends meet. However, one of the owners is a natural on the phone. When we provide a phone call she closes that business something like 80% of the time. Over a two year period they've grown to 10 trucks, and 15 employees. They are providing service 7 days a week. They are turning a solid profit per truck, and the owners are really happy. Yes it's a long ways away from being a billion dollar company, but that's not to say it never will be. They've cracked the sales cycle and their growth is only going to continue as the push out into more and more areas. They won't be huge overnight, but over a 10-15 year period there is no reason to think that they won't grow into a hugely profitable business that makes their owners very rich. It'll be hard work, and they have a lot of hurdles ahead (learning to manage a larger business) but that doesn't mean it's not rewarding or worth their time to try.
infinite8s 15y ago
Based on the labor discussions here and on reddit, next time this year might be more like: "I thought I had a good thing going paying my workers as 1099s, but then I was audited and all my workers were reclassified, the IRS went after back taxes and my workers sued for benefits, and the fact that I incorporated as an LLC didn't matter (since an LLC offers no protection against IRS recovery of back-taxes due to reclassification)." I strongly recommend he seek out the services of an employment lawyer.
- localcasestudy 15y ago
  I will, this week. Luckily if I have to fix this I don't need to go that far back, I'm only in a couple months.
frogpelt 15y ago
I hate to rain on your cold shower but... - doesn't scale well Who said he wanted it to "scale"? If he has already replaced his income he may not need much "scaling". Nice buzzword though. - is the first thing customers eliminate when times get tough Times are tough now and he is growing his business (or "scaling" if you prefer buzzwords). I'm interested to know what kind of business you're running and how well it is performing.
- PagingCraig 15y ago
  I agree, who says he has to scale? He can get to comfortable position and stay there with loyal customers.
localcasestudy 15y ago
<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. you could be right my man. I'm not looking at this through rose colored glasses at all. I'm a realistic ^ 2. Thanks.
mattmaroon 15y ago
I think you're wrong on almost every point. Seems like it can scale quite well. Look at Merry Maids and Jani-king. It wouldn't surprise me if a more modern maid service that was entirely corporate-owned (rather than a franchise) supplanted the current leaders at some point. The margins seem high enough that layers of management could work. Difficulty in keeping good employees hasn't stopped Wal-Mart or McDonald's. Times are tougher than most people alive can remember, so if it's working at all now, it probably can only get better. There may be a solid first-mover advantage, so barriers to entry that are non-financial may exist. It sounds like his part of the work isn't difficult. I don't know if I'd define what a maid does as difficult either. It just sucks. Running a business of any size is a major personal growth opportunity. My guess is customer service calls will happen at reasonable hours. Nobody wakes up at 4 am to decide their maids did a bad job. I can't comment on taxes. He claims to be insured/bonded. I don't know much about that for that sort of business though.
Maascamp 15y ago
Interesting that all of these points apply equally to Exec (a ycombinator startup), but everybody had nothing but praise for them.
- dkrich 15y ago
  I agree and would argue that these points apply even more to Exec because at least with this idea, you are only handling a single task (cleaning people's houses).
jefft 15y ago
The comments here are really hitting home to me how self-aggrandizing and toxic hacker news is becoming. This guy got off his ass and started a real business. How about a pat on the back or words of encouragement? Here's a dose of optimism for you, OP: Good for you. You got this far, you will figure out the challenges ahead of you. “It is not the critic who counts" has never been more true.
- huggyface 15y ago
  Aside from the fact that this simply links to a Reddit story, I don't at all subscribe to the "only say nice things" philosophy. HN is about sober reality. It should be about people rationally checking ideas. The alternative is that we all essentially engage in fantasy, which is the sort of (failing to find any other term) masturbatory circle-jerk that does nothing but inflate foolish ideas. I'm not saying that the GP is right or wrong: I actually haven't read the linked story. But the notion that only positive responses are acceptable rubs me the wrong way.
- localcasestudy 15y ago
  Wow this means a lot, thank you very much!

by edw519 15y ago

neonkiwi 15y ago

It does seem to be generally true that running a business has a worse payout than a normal job, but in this case, the OP says he's spending seven hours a week on the maid business: http://www.reddit.com/r/Entrepreneur/comments/sblc6/from_an_idea_to_replacing_my_fulltime_salary_in_4/c4cqoxf http://www.reddit.com/r/Entrepreneur/comments/sblc6/from_an_...

personlurking 15y ago
Interesting because my ex-girlfriend basically did what the OP did and she worked like a crazy woman from 7AM to 8PM with no days off, dealing with her team, clients, etc.
- localcasestudy 15y ago
  I have a full time job.
  - personlurking 15y ago
    I understand, though I'm merely stating that from firsthand experience seeing my ex work, she was going at it like crazy just to get it up and running smoothly. Hard to understand the difference between 7h vs. 90h per week for two successful people who had never worked in the cleaning biz before.
    - grey-area 15y ago
      Perhaps the difference can be explained by this guy's employees - sounds like he started with exactly the right person as contractor No. 1 (or employee No. 1, given the other discussions on this thread). That has allowed the company to scale and train others to the same high standards.

tbergeron 15y ago

I understand the train of thought you're having. It may not be the best kind of business scaling-wise but if done right he could open some more somewhere else and horizontally scale that way. Everything can be scalable when pushed into the right direction. More branches = more employees = almost automatic administration = more money. Those are only my opinions, therefore not facts.

asmithmd1 15y ago
Another point why this result may not be typical of attempts to duplicate this business in other parts of the country is that he is doing this in Washington DC, the epicenter of where cash is being artificially injected into the economy by defecit spending. Silicon Valley, DC, and NYC exist in a different world from the rest of the US
- achompas 15y ago
  You're right about DC having a regional effect, but wrong about "cash being artificially injected," especially since deficit spending has very little impact on DC's economy (think lobbying and consulting). I lived in DC for a few years and there's a strong work + happy hour culture for young professionals. It's pretty standard to hit the bar after work and get home at 9-10pm on any weeknight. The result: a group of tired young professionals who have zero desire to clean up their apartments.
  - asmithmd1 15y ago
    Government spending IS spent in the DC area. Every government contractor has major offices if not outright headquartered in DC area. For example: Northrop Grumman, CSC, Lockheed Martin, and General Dynamics are all headquartered there. Any new bureaucracy finds offices in the region - TSA's 4000+ headquarters employees are in Northern VA. I know I am going off on a tangent but since 2008 the US government has been spending $1,300 billion more than it collects each year! Instead of spending that in the DC area why not just send a check for $10,000 to each and every household in the US. Of course these numbers do not include the TARP cash that is deluging Wall St.

mtrimpe 15y ago

Isn't the real message here that we shouldn't forget that many of us startup geeks can completely out-design and -SEO virtually any local service provider out there and that there might just be big money in doing so? It is indeed important for him to realize that he'll be 'just an another agency' though and needs to start acting like one. That doesn't negate the fact that a properly-SEO'd site which outperforms local agencies can be tremendously valuable and achievable.

localcasestudy 15y ago
>Isn't the real message here that we shouldn't forget that many of us startup geeks can completely out-design and -SEO virtually any local service provider out there and that there might just be big money in doing so? THAT'S IT! I don't think what I did was that difficult (I had luck along the way, and went over the top in some ways,yes) but at the end of the day, I think this is the main takeaway from this experiment.

grimatongueworm 15y ago

Does it have to scale to national or global size? No. The guy covers a sizeable metropolitan area with an abundant potential client base. Does he have to scale up to 500 employees? No. He can keep his business small and profitable.

ma2rten 15y ago

I does not scale well compared to what? I might scale poorly compared to your average social network silicon valley mobile app startup, but it scales well compared to any other small business. He does not need a physical space and there are almost no other fixed costs. Also I feel he is using his "computer skills" to gain a competitive advantage by doing SEO and he also has an original brand. If he was able to replace his full time job in 4 month, he should be able to grow enough in a year time to hire someone to do most of the annoying administrative work for him. Sure building a photo app and selling to Facebook would be cooler. I guess everyone has to figure out for themselves what they want from life.

localcasestudy 15y ago
Yeah we'll see. I don't even know if I want to scale at all. Seriously if I could double current earnings within this year, quit my job, help my family, (use some extra money to diversify a bit) I'm good.
sopooneo 15y ago
I agree with your sentiment. I feel that a massive part of the potential for startups is in doing boring, everyday things much better. If there are already lots of providers that means there are already lots of potential customers.

qeorge 15y ago

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 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 15y ago
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.
thisismyname 15y ago
Great points. Also allows him to learn, grow (both in business and to look for new opportunities), and adapt. Plus, its pretty easy to just "get a job". Creating a job or a business is much trickier. Kudos to your uncle!

enjo 15y ago

I think you are being a bit harsh on his ability so cale. Anecdote time: I own a lead-generation business. We focus primarily on home services, and over the last couple of years I've gotten to see a lot of businesses on this guys scale operate. My favorite is an air-duct cleaning company that we work with out of Colorado Springs. When they started working with us they were brand new. A single truck that was just trying to make ends meet. However, one of the owners is a natural on the phone. When we provide a phone call she closes that business something like 80% of the time. Over a two year period they've grown to 10 trucks, and 15 employees. They are providing service 7 days a week. They are turning a solid profit per truck, and the owners are really happy. Yes it's a long ways away from being a billion dollar company, but that's not to say it never will be. They've cracked the sales cycle and their growth is only going to continue as the push out into more and more areas. They won't be huge overnight, but over a 10-15 year period there is no reason to think that they won't grow into a hugely profitable business that makes their owners very rich. It'll be hard work, and they have a lot of hurdles ahead (learning to manage a larger business) but that doesn't mean it's not rewarding or worth their time to try.

infinite8s 15y ago

Based on the labor discussions here and on reddit, next time this year might be more like: "I thought I had a good thing going paying my workers as 1099s, but then I was audited and all my workers were reclassified, the IRS went after back taxes and my workers sued for benefits, and the fact that I incorporated as an LLC didn't matter (since an LLC offers no protection against IRS recovery of back-taxes due to reclassification)." I strongly recommend he seek out the services of an employment lawyer.

localcasestudy 15y ago
I will, this week. Luckily if I have to fix this I don't need to go that far back, I'm only in a couple months.

frogpelt 15y ago

I hate to rain on your cold shower but... - doesn't scale well Who said he wanted it to "scale"? If he has already replaced his income he may not need much "scaling". Nice buzzword though. - is the first thing customers eliminate when times get tough Times are tough now and he is growing his business (or "scaling" if you prefer buzzwords). I'm interested to know what kind of business you're running and how well it is performing.

PagingCraig 15y ago
I agree, who says he has to scale? He can get to comfortable position and stay there with loyal customers.

localcasestudy 15y ago

<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. you could be right my man. I'm not looking at this through rose colored glasses at all. I'm a realistic ^ 2. Thanks.

mattmaroon 15y ago

I think you're wrong on almost every point. Seems like it can scale quite well. Look at Merry Maids and Jani-king. It wouldn't surprise me if a more modern maid service that was entirely corporate-owned (rather than a franchise) supplanted the current leaders at some point. The margins seem high enough that layers of management could work. Difficulty in keeping good employees hasn't stopped Wal-Mart or McDonald's. Times are tougher than most people alive can remember, so if it's working at all now, it probably can only get better. There may be a solid first-mover advantage, so barriers to entry that are non-financial may exist. It sounds like his part of the work isn't difficult. I don't know if I'd define what a maid does as difficult either. It just sucks. Running a business of any size is a major personal growth opportunity. My guess is customer service calls will happen at reasonable hours. Nobody wakes up at 4 am to decide their maids did a bad job. I can't comment on taxes. He claims to be insured/bonded. I don't know much about that for that sort of business though.

Maascamp 15y ago

Interesting that all of these points apply equally to Exec (a ycombinator startup), but everybody had nothing but praise for them.

dkrich 15y ago
I agree and would argue that these points apply even more to Exec because at least with this idea, you are only handling a single task (cleaning people's houses).

jefft 15y ago

The comments here are really hitting home to me how self-aggrandizing and toxic hacker news is becoming. This guy got off his ass and started a real business. How about a pat on the back or words of encouragement? Here's a dose of optimism for you, OP: Good for you. You got this far, you will figure out the challenges ahead of you. “It is not the critic who counts" has never been more true.

huggyface 15y ago
Aside from the fact that this simply links to a Reddit story, I don't at all subscribe to the "only say nice things" philosophy. HN is about sober reality. It should be about people rationally checking ideas. The alternative is that we all essentially engage in fantasy, which is the sort of (failing to find any other term) masturbatory circle-jerk that does nothing but inflate foolish ideas. I'm not saying that the GP is right or wrong: I actually haven't read the linked story. But the notion that only positive responses are acceptable rubs me the wrong way.
localcasestudy 15y ago
Wow this means a lot, thank you very much!