Last Updated on August 21, 2023 by The ZenMaid Team
When Michelle Allegrezza started her maid service she had visions of becoming so successful she could run her business from a laptop on the beach. But when her payroll bounced in November 2019, she realized there were areas in her business that needed fixing.
In Spring of 2020, COVID-19 forced her to shut down for two and a half months, a period she calls her breakthrough. She used the time to switch up her systems and implement changes that allowed her to reach her goal of running a debt-free business. She’s now operating with a 20% profit.
For Michelle, being debt-free means that she doesn’t have to worry about payroll and her employees – and her clients – are happy.
How did she do it? Read on to learn about the areas of her business where she placed her focus and the key performance indicators (KPI) she tracked.
Where to focus your efforts to uplevel your business
To begin optimizing and improving the operations of her maid service, Michelle focused on the following three areas:
Michelle enrolled in a digital systems boot camp with Courtney Wisely where she learned how to automate key processes. Michelle took her training a step further by creating dashboards that helped her track different areas of her maid service.
To make managing money easier, Michelle switched from a bi-weekly to weekly payroll system. She also implemented many of the principles taught in the book “Profit First” by Mike Michalowicz. This included scouring her overhead costs for areas where she could make cuts and free up money for other things.
Michelle implemented lessons from the book “A Complaint is a Gift” by Janelle Barlow. This included embracing complaints as tools for growth and thanking people for their feedback to infuse positivity into difficult conversations.
How to measure the health of your finances, conversions, and happiness
Once you begin digging into the numbers and metrics of your maid service, here are some tips to keep in mind:
Track your finances
It’s not just about the money coming in, you also need to know what’s going out.
For instance, if you’re bringing in $100,000 a year, but you’re spending $120,000 a year, you can’t make a profit. You’re $20,000 in the hole.
Most people believe that sales minus your expenses equals profit. That’s the wrong way to look at it, says Michelle. Instead, think sales minus profit equals the funds available for your expenses.
Operating expenses: 25%
Operating expenses are the things you need to run your business. This includes office rental, software, supplies, and insurance. Here’s how to divide that 25%:
- Marketing: About 8% to 10% of operating expenses. This includes the cost of ads on Google and Facebook, flyers, and any other paid advertising.
- Admin: About 10% of the operating expenses. To stay within this percentage, consider whether you need to scale back hours, or whether your budget allows for a part-time employee instead of full-time.
- Supplies: About 4% of your operating expenses. You may have favorite cleaning products, but if the cost to use them is beyond your budget, consider different places to shop for a better deal. Or try limiting how much product can be used in each home. You can also consider alternative products that are more affordable.
Cost of goods sold: 55%
The cost of goods sold is the amount that you pay for payroll.
The cost of goods breakdown is payroll tax, workers compensation, and what you pay your employees. Keep in mind that the cost of workers compensation for each state is different so make sure you have accurate information.
Profit is the money that’s in your pocket. And anything that is over budget on your operating expenses or your cost of goods sold comes out of your profit.
Track your conversions
In order to grow your business, you need more clients coming in than leaving. To get an accurate sense of the flow of clients, track the following:
- Leads who schedule an initial cleaning (aim for about 40%)
- First-time clients who become recurring clients (aim for about 60%)
- Recurring clients who skip or cancel cleanings (aim for about 20%)
You may be surprised by what the data tells you. For instance, you may discover that your salesperson isn’t great at convincing leads to schedule initial appointments. Or maybe you learn that your cleaning staff is wowing clients and is the reason for recurring appointments.
The data should also tell you where your leads are coming from so that you know where to spend your marketing dollars. If your leads are coming mostly from Google or Facebook, you’ll know not to waste your budget on newspaper ads.
Track happiness and satisfaction
If your employees or clients are leaving your business, find out why. First, take some time to process hurt feelings so you can have a conversation without heavy emotions. When you’re ready to talk, begin by thanking them for being an employee or a client, or thank them for their honest feedback. This set a positive tone for the conversation. Offer a solution or brainstorm one together. Finally, follow up to ensure the solution was executed properly. Remember, complaints are gifts that can help you improve your maid service.
For more tips on how to monitor metrics to grow your maid service, watch Michelle’s full talk below.
About the presenter
This talk first aired at the 2021 Maid Service Success Summit.
The Maid Summit is an annual online event that brings together the most successful leaders in the cleaning industry, like Debbie Sardone, Angela Brown, Courtney Wisely, Amy Caris, Chris Schwab and more. Get free access to masterclasses and workshops that will help you to grow, scale and automate your cleaning business so you can get more leads and create more profit. Make sure you’re to find out how to get free tickets to the next event.
For more resources on how to grow and perfect your cleaning business, check out the replays from the 2021 Maid Summit, hosted by ZenMaid. The summit featured more than 60 presentations from other maid service owners who shared tools and strategies to help you achieve the highest levels of success in your business.
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