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Discussion Starter #1 (Edited)
Hey guys,

Maybe you can help me with this. I have the idea in my head but I am not good at putting it down on paper in a way that is concise and to the point. I will be dealing with high end realtors and their clients so I would like to sound halfway intelligent.

I am currently working with one of my realtors to establish a plan that will allow his clients to have minor handyman work and power washing services done now and not have to pay until the closing date. After 4 months or if the home is taken off the market the money will be due.

On the closing date Abstract Title will cut the check directly to my company as part of the closing costs. This is currently the way realtors in my area are marketing the home warranties which sell for $500. Since it is not paid until closing almost every home seller (including me) does this.

This plan will be for realtors only and the realtor must initiate the service for the client thru e-mail or a phone call, after that we will deal with the home owner directly or thru the realtor. I believe this will greatly add to the realtors services to their clients. #1 the clients do not know who to trust for small type repairs #2 they trust their realtor #3 they can buy now pay later to help increase the curb appeal and sell the home faster. A faster selling home = less payments

I plan on bringing pastries and pitching this idea to the different realty companies at their weekly meetings. I am trying to put together a good letter in a nice folder along with a list of services that they can leave with each home seller.

Are any of you currently doing this? If so is it going as well as I think it will? I have had a great response to the realtors that I have worked with in the past and they are looking forward to seeing my proposal.

Thanks for your help,

Jesse R. Kirchhoff
Advanced Power Washing and Restoration Services LLC
Professional Products ~ Professional Service ~ Professional Results
www.advancedpw.com

Kirchhoff Handyman Solutions LLC
“Making Your Life A Lot Less Complicated”
www.midmohandyman.com
 

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Jesse, it sounds like you have it all worked out already you just need to write it down.

An aside to your direct question - I have been approached by friends of mine who are realtors who want to do a service similar to yours but for their buyers. These guys want to diffrentiate themselves from the herd by offering their clients some free value added services in order to attract more customers. They want me to provide them with some amount of handyman services to give to their buyers of a new house, based on the fact that just about anybody moving into a new house needs something done. The idea is I would simply bill the realtor for a few hours and it would look like the realtor is providing this service for his customer. Of course the hook for me is supposed to be the potential of future business or the upsell.

I haven't pursued any of this because I am still looking at putting together some sort of handyman service in addition to what I do and haven't yet.

But that is also a techinque you might want to offer for realtors who see the value. I guess a lot of realtors do things along this line, such as a house warming gift, a free warranty or some sort of perk for working with them, so it just becomes a matter of the realtor spending dollars on one thing or another and seeing the value of something like this helping set them apart from their competition.
 

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Jess... I sort of do this already, but it's not really my idea. It's usually initiated by the realtor. I only do electrical. Generally the phone call is something like, "Hi, I have this client with a home for sale and the old knob and tube and the antique 60 amp service is keeping the home from selling. Would you consider doing the service upgrade and removing the K&T in the basement and attic and wait to be paid when the house sells?". I generally bite, since waiting for a small deal like this isn't the end of the world. I relate my story because I think that since realtors already wish that a service like yours existed, and they sometimes ask people like me to do just as you propose. I suspect that you won't have to bring pastries... they might buy you breakfast. I think you'll be well received. A little bit of good will with a realtor (as in waiting for payment) goes a long way, in my opinion. Realtors can be a steady source of gravy work.
 

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I used to do a similar job, prepping homes for inspection. The part that I don't understand is waiting for 4 mos. to get paid. For my regulars on big ticket items I'll go 30-60-90. Maybe I don't understand your operation.
 

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Discussion Starter #5
Thanks guys,

I have been dumping a lot of money into advertising the last few years, post cards, door hangers, newspaper ads, homebuilder’s publication.... I even did a home show a few months back with disappointing results.

I am ready to try something different this year. Referrals have always been a sure thing for me so I figure that’s the way to go. The good thing is that with all my past advertising I have excellent name and logo recognition now.

“I used to do a similar job, prepping homes for inspection. The part that I don't understand is waiting for 4 mos. to get paid. For my regulars on big ticket items I'll go 30-60-90. Maybe I don't understand your operation.”

Teeter,

I normally get paid upon completion of services rendered, except on commercial or governmental jobs. My regular clients, which call every couple of months or so, just send a check in the mail.

The proposal that I am trying to work out for Realtors will provide a service that they can offer to their clients which will translate into faster sales and higher offers. Buy my services now now ….and pay later, which will be the date of closing or 120 days whichever comes first. Most sellers do not want to dump money into a home they are selling even though they know that it will be beneficial to them.

With my idea they can get everything fixed and cleaned up without worrying about paying for it, the Abstract Title Company will cut me a check as part of the closing costs on the date of closing. If the home owner wants to pay upon completion of services rendered it will save them 10%.


Advanced Power Washing and Restoration Services LLC
Professional Products ~ Professional Service ~ Professional Results
www.advancedpw.com

Kirchhoff Handyman Solutions LLC
“Making Your Life A Lot Less Complicated”
www.midmohandyman.com
 

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Discussion Starter #6
“These guys want to diffrentiate themselves from the herd by offering their clients some free value added services in order to attract more customers.”

Mike,

This is exactly what I was told. I think this will take off in a big way just like the “$500 buy now pay later home warranty” I may even set it up so that the seller can purchase a set amount of labor at the same time to transfer over to the new owner. Kind of like a Handyman Warranty of some kind. This would be a good bargaining tool to get a better price.


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• Gutters
The black streaks that form on your exterior gutters are a type of oil that rainwater leaches out of your shingles. There is no way to prevent these black streaks from forming, but you can slow the process down by keeping your gutters clean. These oil streaks are very difficult to remove, and the chemicals required to remove them successfully are not available to the general public.
Fortunately, a regular cleaning by a qualified pressure washing contractor will remove them quickly. However, if you have ignored your gutters so long they are already a consistent shade of gray be aware that your first cleaning may require tedious and expensive hand scrubbing.

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• Decks
Pressure washing wood without causing damage takes skill, experience, and the right tools. The last place to learn how to use a pressure washer is on your wood deck. If you have no experience working with a pressure washer, you can do a great deal of damage quickly. Professional deck washing is not cheap, but if you consider the years it adds to the life of your deck it is a tremendous value.


Advanced Power Washing and Restoration Services LLC
Professional Products ~ Professional Service ~ Professional Results
www.advancedpw.com

Kirchhoff Handyman Solutions LLC
“Making Your Life A Lot Less Complicated”
www.midmohandyman.com
 

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Mike Finley said:
I have been approached by friends of mine who are realtors who want to do a service similar to yours but for their buyers. These guys want to diffrentiate themselves from the herd by offering their clients some free value added services in order to attract more customers.
I have to wonder why this isn't widespread already. There are many simple, relatively inexpensive things that homeowners universally want done - it seems like a no brainer. Change locks; clean the house prior to move in; paint a room; minor yard maintenance; paint the front door; power wash a driveway, sidewalk or deck; window washing. It seems to me an unneccesary aggravation to take this kind of thing up to the level of providing some sort of tailored handyman service.
 

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Discussion Starter #8
It seems to me an unneccesary aggravation to take this kind of thing up to the level of providing some sort of tailored handyman service.

The same thing used to be said about lawn care guys, maid services, oil change shops ect.... But they all saw the need and filled a nitch market with sucess.

"Dirty Joe Handyman from down the block" is a thing of the past. We are now a brand name / service based society. The "do it yourselfers" are a dying breed. It wont be long and the baby boomers will be retired and there will be a major void in all of the skilled trades.

I think the franchises like Mr. Handyman and Case Handyman Services are really going to take off and raise the bar of service and respect. I have modeled my company after these companies to an extent and things are going well. It is a lot less stressful than when I did homeimprovement only, but this is just my opinion.

Best of Luck,

Jesse R. Kirchhoff
Advanced Power Washing and Restoration Services LLC
Professional Products ~ Professional Service ~ Professional Results
www.advancedpw.com

Kirchhoff Handyman Solutions LLC
“Making Your Life A Lot Less Complicated”
www.midmohandyman.com
 

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Jesse,

Another thing I am seeing now is the idea of an equity split with remodeling just for resale.

In the Denver market homes that need work sit on the market for a long time, homes that are move in condition sell within days.

The idea is you do a remodel to somebodies house in order to get it to sell and improve the price and split the difference with the owner. We have a company here in Denver that is doing this with pretty good success. One example they give is a guy had a 500,000 house on the market for 15 months, couldn't sell it. They offered to do the remodel and front the cost until closing. They spent $30,000 on paint, kitchen and bath upgrades and landscaping and put the house on the market for close to $600,000 and sold it within a week.
 

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Jesse Kirchhoff said:
The same thing used to be said about lawn care guys, maid services, oil change shops ect.... We are now a brand name / service based society. It wont be long and the baby boomers will be retired and there will be a major void]
There's gonna' be a void allright - in your wallet and mine.

I agree with some of your points. I'm simply not as optimistic about the long term prospects for what I perceive as 'luxury' service businesses. I think we're all in for some major belt tightening over the next 10 - 20 years.

Over the last 15 - 20 years I've watched an awful lot of people ('boomers' with parents born roughly between 1920 and 1935) relying on consumer credit to take annual cruises, spending $50 a week having their shirts done and leveraging their mortgages like there's no tommorow so they could hire contractors to upgrade their homes to the most expensive in the neighborhood. It's hard to find someone around here that doesn't spend $1,000 a summer paying someone to cut the grass. Once these people turned 30 years old they spent more time dreaming about retirement then they did putting in an honest day's work. They complain ad nauseum that they don't have any savings and that they still have to work - all the while driving a leased BMW.

These same people feel they're entitled to free health care coverage until they're in the ground and have the nerve to advocate for expanding the health care benefits of municipalities to include coverage for 'domestic partners'.

I know two people in their mid-fifties who damn near keep a bankruptcy lawyer on retainer all the while continuing to live the life of Reilly. Now I'm watching them leverage their inflated home values to buy luxury condos as fast as they can be built. I shudder to think how we'll be paying for the needs of 'generation me' in another 15 years.

Sorry for the rant. I'll do better next time.
 

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Discussion Starter #11
Mike Finley said:
Jesse,

Another thing I am seeing now is the idea of an equity split with remodeling just for resale.

In the Denver market homes that need work sit on the market for a long time, homes that are move in condition sell within days.

The idea is you do a remodel to somebodies house in order to get it to sell and improve the price and split the difference with the owner. We have a company here in Denver that is doing this with pretty good success. One example they give is a guy had a 500,000 house on the market for 15 months, couldn't sell it. They offered to do the remodel and front the cost until closing. They spent $30,000 on paint, kitchen and bath upgrades and landscaping and put the house on the market for close to $600,000 and sold it within a week.
Mike,

That is one hell of an idea if you have the cash to back you up. I have heard that prices are really soaring in Denver.


Pipe Guy,

I see the same type of crowd around here. Credit cards are ruining my generation. It took a while but I finally got smart after listening to Dave Ramsey and using his program. Now CASH IS KING and I refuse to be a slave to the lenders any longer. 2 more years and I will be totaly debt free except for the house...that will take another 10.

Thanks for your input guys,

Best of Luck,

Jesse R. Kirchhoff
Advanced Power Washing and Restoration Services LLC
Professional Products ~ Professional Service ~ Professional Results
www.advancedpw.com

Kirchhoff Handyman Solutions LLC
“Making Your Life A Lot Less Complicated”
www.midmohandyman.com
Jesse Kirchhoff is offline Edit/Delete Message
 

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Jesse Kirchhoff said:
Mike,

That is one hell of an idea if you have the cash to back you up. I have heard that prices are really soaring in Denver.


Pipe Guy,

I see the same type of crowd around here. Credit cards are ruining my generation. It took a while but I finally got smart after listening to Dave Ramsey and using his program. Now CASH IS KING and I refuse to be a slave to the lenders any longer. 2 more years and I will be totaly debt free except for the house...that will take another 10.

Thanks for your input guys,

Best of Luck,

Jesse R. Kirchhoff
Advanced Power Washing and Restoration Services LLC
Professional Products ~ Professional Service ~ Professional Results
www.advancedpw.com

Kirchhoff Handyman Solutions LLC
“Making Your Life A Lot Less Complicated”
www.midmohandyman.com
Jesse Kirchhoff is offline Edit/Delete Message
As the owner of Mr. handyman in Northern New Jersey I can tell you that the shift is already starting. the days of he non-branded Handyman in a truck are numbered. As insurance rates skyrocket and people wise up to the risk they put themselves in with uninsured and unregistered men working in their homes more momentum will develope.

There will always be quality contractors who operate small companies with one or two employees, however there will also be those who get a truck and go in and out of business. This hurts all legimate contractors who are just a bit larger and do a quality job. When Burger King and McDonalds started 50 years ago, everyone thought it was nuts to brand a hamburger; and while it is true that you can get a better hamburger anywhere, 25000 store between the two brands say that it works.

Change is the only constant. The truth is that if anyone in this business doesn't realize the fear in most consumers due to those unmentionables they have been burned by then they aren't listening. The people on this board obviously are a different breed, however for every one of us who cares about quality workmanship there are 15 who just care to make a buck and drink a beer not worrying about what to do when they are 50 and the hands don't work they way the used to. These 15 guys are the same ones who drive our prices down to the bone because they don't run legimate companies with real overhead. Most of them are out of business before they realize tey were losing money on every job they undercut you on.

The industry is changing fast. Insurance rates are through the roof and the only way to survive is to grow larger or do without. Our service industry society demands a brand name behind the product. Create the impression yourself and grow larger or find someone to align with. In the mean time, refuse to compromise your standards or your rates and educate every consumer about the great risk they put their single largest investment in by using unqualified, untrained and uninsured help.
 

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You are a franchise convert, no doubt, however I have never seen a single franchise that couldn't be duplicated privately without having to paying for a franchise and the ongoing royalties. The only benefit I have ever seen to a franchise is brand recognition or the ability of great hand-holding for less than business savvy people trying to start a business, with the downside of a life-long deal with the devil after becoming proficient in your business and no longer needing the handholding. Being capable of the latter the only appeal and/or benefit is brand recognition. With the market currently being saturated with every Tom, ******************** and Harry franchise handyman service I currently see zero benefit of brand recognition in a handyman franchise currently - this is at least true in my location and may not be so elsewhere. The current frenzy of everybody and his brother buying one of the dozens and dozens of handyman franchises available is actually working in reverse as far a brand recognition goes with a flooding and diluting of the market of any brand leader.

This could change with a consolidation of the national franchises with a few developing mass and market share to actually offer brand as a benefit but there are really zero case studies that show that happening in other franchised businesses. Every franchised business I can think of in the last 20 years has not displayed any franchise that has dominated their brand or been able to be more successful when measured as an actual owner of a franchised brand of that category or a private un-franchised version of that category. Remember the true success of a franchise is not the number of franshises nationwide or thier market share, but the true measure is how much is the individual owner benefiting financially as a franchisee vs a non-franchisee owner! Unless you are a master developer with a regional license to develop multiple territories you are just an owner of a single small business, no different then a franchisee or non-franchisee and the true measure is profitablility. When you truly measure using those standards most franchises come up WAY short compared to identical run businesses that are not franchises. The corporate body of a franchise can boast astronomical sales figures as a whole but they are meaningless to an owner where he judges his success on his individual pay check and return on his investment.

The disgusting lack of territorial protections that almost all franchises are guilty of is a huge detriment, pitting often multiple individual owners of the same franchise concept against each other within a few square miles.

Of course the arguments can be made about consumers wanting a recognized brand for all the warm fuzzies, but the same arguement can be made for an unfranchised business being well run and being able to dominate the local market just as well if not better. This becomes even more apparant when you are trying to franchise a concept that resists the cookie cutter style that franchises require to be successful. Home repair/improvement is a category that no matter how you try to systemize and standardize the solutions, often the problems encountered on each project require custom solutions that don't fit the operating manual's pre-written set of steps for solution.

I have never accepted anybody selling franchises pointing to Mcdonalds as an example for anything, as they invented the franchise model and have little to do with today's franchise concepts and would positively if started today be a failure. (Can you think of any burger franchise started in the last 10 years that even has 5% of the market?) Being a early adopter has a lot more to do with Mcdonalds success than the fact that they are a franchise.
 

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The main difference between what I did before and what I do now is that soon I will be able to have the business run without my presence. After only a few years we are in 7 figure sales volume level and the business is scalable allowing me to focus on other businesses or other facets of this business.

The employees will always think they can compete and some may try. However the barriers to entry are very expensive and you still have to be a businessman. Most of my employees already had their own and were great craftsman but lousy businessmen.

I don't disagree that the success of McDonalds is due to early adoption of the franchise model and that is the point. This industry will undergo the same consolidation. The hundreds of millionares who started McDonalds in the early days were on to something.

So the branding of the construction industry will continue. Look at the large homebuilders. There will always be room for local craftsman who figure out how to be businessmen and there will also be lots of franchisees who will make alot of money. I don't care how I get there and I don't ever have to worry about swinging a hammer when I'm 50. Remember for every great craftsman running a good company there will be 10 contractors taking advantage of people. My bet is it will come down to trust. Establish it locally or hook your wagon to a rising star.

•More than 75 % of American homes are over 25 years old, creating a growing need for companies that provide professional home repair services.

•Industry experts believe that for the first time, more money will be spent on home improvements than on new home construction.

•Few remodelers are meeting the demand for smaller home improvement projects.

This business does not compete with the remodeler or contractor the same way the McDonalds was not created to compete with the local restaurant. Our plan is to put the local "Chuck in a Truck" out of business and professionalize our industry. The home improvement industry is a 200 billion dollar industry. Small repairs and maintenence make up about 35 billion of that total. You can have the rest and I'll stake out my own claim.
 

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Discussion Starter #15
Bob,

There will always be room for “Chuck in the truck” and “Dirty Joe Handyman”. They cater to a completely different clientele (which I avoid like the plague) than what we cater to and stay quite busy doing it……. while they are struggling to survive on $20 an hour.

The sad thing is no matter how much they low ball there will still be those tire kickers (and apartment complex owners) telling them they are priced to high. I will not allow the customer to dictate my price. Let them call the low price man Dirty Joe, with a shady past and his “freak show” looking helper, to work inside their home around their wife and daughters………

Best of Luck,

Jesse R. Kirchhoff
Advanced Power Washing and Restoration Services LLC
Professional Products ~ Professional Service ~ Professional Results
www.advancedpw.com

Kirchhoff Handyman Solutions LLC
“Making Your Life A Lot Less Complicated”
www.midmohandyman.com
 

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Discussion Starter #16 (Edited)
Teetorbilt said:
I used to do a similar job, prepping homes for inspection. The part that I don't understand is waiting for 4 mos. to get paid. For my regulars on big ticket items I'll go 30-60-90. Maybe I don't understand your operation.

I went to a Realtors Forum and this is the only response I got.

"That has been a standard practice in most areas I have worked in Florida. It is standard for Surveyors, pest/ termite treatment, roof and siding repairs and other services including more extensive repairs.

Think you will probably find most agents already have similar relationships in place with selected providers... it isn't new... at least in areas I know of."


I figured the Realtors would be all over this putting in thier .02 I guess it is no big deal except in my area.
 

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Jesse Kirchhoff said:
Bob,

There will always be room for “Chuck in the truck” and “Dirty Joe Handyman”. They cater to a completely different clientele (which I avoid like the plague) than what we cater to and stay quite busy doing it……. while they are struggling to survive on $20 an hour.

The sad thing is no matter how much they low ball there will still be those tire kickers (and apartment complex owners) telling them they are priced to high. I will not allow the customer to dictate my price. Let them call the low price man Dirty Joe, with a shady past and his “freak show” looking helper, to work inside their home around their wife and daughters………

Best of Luck,

Jesse R. Kirchhoff
Advanced Power Washing and Restoration Services LLC
Professional Products ~ Professional Service ~ Professional Results
www.advancedpw.com

Kirchhoff Handyman Solutions LLC
“Making Your Life A Lot Less Complicated”
www.midmohandyman.com
I couldn't agree more. We like to use the line" our service is not for everyone" and it seems to make some people mad. LOL :D Oh well! The good news for us in New Jersey is the new "Contractors Registration Law". Effective Dec 31 anyone who tightens one screw or does any work for pay in a home in NJ must register with the state and show proof of a minimum 500,000 liability insurance. $10,000 fine first offense doing unregistered work. A view of future things to come. Check out the laws in CA and NY. That is the future. "Chuck in a Truck" better keep his head down.
 

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About six years ago a "Certa-Pro" franchise came to town. They had four trucks and 15 employees. They were the talk of the town. Every contractor in town had them under a microscope. This town in saturated with painting contractors. They seemed to do ok their first year out, the owner bought two more trucks and hired some more help. I was called to qoute the price on two homes that had also called CertaPro, they mentioned this to me and I asked to see the qoute. It was outrageous, and this coming from someone that ain't cheap.

I heard from several well established contractors just how expensive their services were as well. I don't low ball my prices, but I don't gouge either. I got the job on both those homes. I have heard that a franchise fee for CertaPro is 80K start up capital. Then a chucnk toward national ads as well as a % of gross sales. It takes an extremly savvy businessman to pull it off here even with "brand recogniton".

Two years later a friend and co-worker of mine decided he was going to start his own business. He wrote a business plan, and went to the bank for a SBA loan. Hios intial investment was 30K. He started with two used van, which he had painted a bright red with nice lettering. He had tees printed for his men, required all his men to be clean shaven. He dictated when new whites were required. He required random drug testing. And he paid a very nice wage to attract the talent.

Three years later he has 8 trucks, about 30 employees, and does very well. I can't remember the last time I saw that CertaPro truck. Me thinks the "trick" is to establish your own name recognition by doing a quality job at a fair price, and keeping the books straight. :Thumbs:
 

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There will always be bad businessmen. It doesn't matter if it's a franchised business or not. Reality is that the world is changing. No one ever believed that people would pay $150 for a pair of sneakers, but Nike begs to differ. Have you seen Footlocker's stock lately??

I am not the customer for $150 sneakers and you may not be either, but there are enough of them to give footlocker record profits. There are also enough customers who have been burned by contractors who are not as good as you. That pause allows the opportunity for brands to grow.

I don't want to own the whole piece of a small pie: but a small piece of the whole pie.

Follow this link to some more reading...

http://www.gazette.net/200452/business/pglocal/252339-1.html
 

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The side discussion that has developed along this thread is quite interesting, and I certainly don't want to do anything to stop it. I just wanted to briefly respond to the original thread.

While I too felt that the "idea" was not necessarily new, the more I think about it the more I don't think that it makes good business sense for the contractor. Why would you want to have your time AND materials hanging on the line for so long? You're basically extending credit to people who otherwise could not afford to pay you NOW. I'm not sure that that's the group that a person should be targeting for new business. The group I try to target are the ones who want to or will pay the moment you are done (or on a regular basis for longer jobs).
 
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