I've always wanted to retire early. Always.
I remember straight out of college I wanted to start a business that would allow me to be a stay at home mom one day while still generating a lot of income. That business, whatever it would end up being, needed to be
self sufficient within 5 years of its start date
a sell-able asset for when I am ready to make an exit
able to weather economic downturns
and require only a few hours of my time each week as the owner
Well, I never did end up having any kids (...yet) but I sure enjoy the lifestyle of being a stay at home mom of 2 cats! Hahaha.
If you've been following me, you know I started out by opening a house cleaning business in 2011 with employees and ran that for 4 years before I realized it wasn't helping me accomplish the goals I had originally set out for myself. Then in 2015, I converted my business to a Domestic Referral Agency where I worked with experienced independent contractors in the cleaning industry and rapidly saw my dreams come to life.
You can check out my story here: https://www.cleaningcashflow.com/blog/categories/diem-s-story
Now, I LOVE MY LIFE. I absolutely freakin' love my life! My boyfriend Jake and I always talk about how much less stress we have individually and how many fewer arguments/struggles we have as a couple because of the lifestyle we've created for ourselves. This next year, we plan to retire Jake completely (he comes from a 9 to 5 employee world) and take 2 years to travel before settling down and starting a family. That means we would have already lived out a short retirement and we'll both be stay-at-home parents by the time we have kids. I will share how we are able to accomplish that in a future article, but it all started with a vision of how it would all end up: early retirement.
If you are newly embarking on your own journey to start a Referral Agency and wondering where the hell to start, I say start with the end in mind.
1. Set a Vision. Start with the End in Mind.
Why do you want to start a Referral Agency business? What do you hope it will bring you? What kind of lifestyle will it lead to? How much income will you earn? What will it be worth if you will sell it one day? How much free time do you want it to offer you?
Having an end game or a vision will help guide you in all your decisions. If you can define what this business will do for you, you can use that as a compass every single day. In the beginning, I envisioned that my Domestic Referral Agency would allow me to:
work just a few hours a week
travel without limitations (remote work)
outsource any workload that I do not enjoy doing
generate at least $100K in net income
be a sell-able asset so I can transition to retirement easily.
With that in mind, I was able to easily make decisions such as: when to hire a Virtual Assistant, how many recurring clients should I target, what profit margin should I aim for, what processes can I accomplish in the cloud/digitally, what tasks should I have my VA take over, should I expand my services or service location, etc. Whenever a big decision came up, I would ask myself- What will get me closer to my vision quickly and effectively? That was the path that I would take.
TIP: It's best to make your vision list in order of priority. This will help you make decisions when the outcome could conflict between 2 or more points.
2. Do It Right, Right Now.
A beautiful skyscraper built on a weak foundation will not last. It will crumble and fall at the first sign of threat, and all that it took to build will have gone to waste.
If you're going to do this thing, do it right! Once you've set a vision for the end goal, you can confidently invest in setting up the foundations of your business properly so you do not have to go back and waste time, reworking things you've already established. Granted, you may encounter some learning curves that will force you to go back and fix some mistakes. That's why I created the Complete Program on how to Start and Run a Domestic Referral Agency. Don't reinvent the wheel if you don't have to and learn from others' mistakes so you can take the fast track to your achieving your vision.
Some of the key things to get right from the beginning is setting up your legal business entity properly, selecting the software programs to use (scheduling software, email marketing software, bookkeeping software, phone system, etc), website development and automating emails & workflow. Failure to do these things right could lead to a lot of wasted time and money.
CCF members often seek my advice or recommendation before making a sizeable financial/time investment. I find that if you are certain about your path because you have a vision with the end in mind, you should make any reasonable investment if it will help you achieve your goals efficiently. Keep in mind that you should consider all your your vision points. For example, if I was considering investing in hiring a VA vision point #3, I have to ensure that somehow it won't delay me too long from accomplishing vision point #4. That's also why it's important to list your points in order of priority
However, if you're uncertain...if you think you want to try out this business but you're not necessarily committed to success, if you're just dipping your toes in but you have a full time job to fall back on that you don't mind continuing, then my recommendation is always to start small. This path could still lead to success but would take longer and you might lose steam.
Success is in the hands of the beholder.
3. Use Your Network
There are hundreds of business owners who were once in your shoes. Engage them in your learning process by getting involved in discussion groups such as Cleaning Cash Flow's Facebook Group and ask questions. Be sure to use the "search" function in case your topic has been discussed before.
You can contact other Agency owners to see if they are willing to answer questions or offer guidance to you. Be sure to respect their time and thank them. You'd be surprised how many calls I've been on (at no charge) where the caller comes off entitled to my time and knowledge. My first mentors received a nice gift basket from me after our first major phone call. I wanted them to know I appreciate and value their time. I also wanted them to welcome my calls in the future. Recently, I got on a call with a member. At the end of the call he thanked me and asked what he could do to help me. What?! Amazing.
A word of caution. While I doubt anyone ever intends to give bad advice, it happens from time to time. Perhaps people have the wrong information or do not know specifics that apply to your market. Be sure to fact check, especially on legal or tax topics. Many people simply repeat what they hear and it may not be true for you or your location of business.
4. Don't Be Too Creative
This probably sounds like a funny tip. But I have to say, when I first started my business I wanted to try so many different things! Parties for cleaners, anniversary gifts for clients, client appreciation events, a gift with every door hanger flyer, gift drop offs for fist time clients...and so much more. Do you know what that all sounds like to me now? MONEY and time!
I'm not just referring to gift ideas only. I wanted to be creative with referral programs, operation systems, commission incentives, report and data tracking, how to creatively use various software to achieve one goal, etc. Looking back, I realize that creative could sometimes be synonymous with complicated.
I realized that these things didn't always align with my vision. Granted, they were fun! However, they actually took me further from achieving my vision rather than closer. Unless being creative or having a lot of fun in your business is part of your vision, I would be careful of how creative you want to be. It could derail you from your end goal.
Stay focused. Keep your processes as streamlined and as efficient as possible. As the old saying goes "Keep it simple, stupid!"
5. Track Your Sources
Be sure to add a "How did you hear about us?" field to all your booking forms for new clients and all your job applications for new cleaners.
I often get asked what I recommend as a good source to get leads for clients and for cleaners. It varies so much from market to market. Here in Sonoma County California I have found care.com and craiglist.org to be great for acquiring cleaners, and Yelp and Google Maps to be the best for acquiring clients. That is not true for every region.
When you find a source is working well, you can feel comfortable investing more money. On the other hand, you can also tell when you need to stop investing if you aren't seeing the return.
TIP: Avoid making annual premium commitments unless you've tested and verified that a source works for you. Pay extra for a one month access if you can, at first. I know it costs more, but you'll waste even more money on an annual commitment that you cannot get out of, if you find the product/service does not work well for you.
These 5 tips are pretty simple, I know. But sometimes simple is exactly what you need. Don't overthink it. Take these 5 tips and run with it. They will help guide you to making the right decisions consistently for you and your vision.
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