Wednesday, May 31, 2006

Don't Forget Your Mission

Useless information for many of our customers. But it's a reminder for me as an owner of multiple outlets.

Don't Forget Why You Opened Another Location

Tuesday, May 30, 2006

Weekly-Biweekly-Monthly

Those three words are in every advertisement for a maid service. Don't believe me. Open your area yellow pages.

You won't find those words in our ads. We'd rather use the space to tell you why we're the obvious choice. We talk about what we do while we're in your home. We talk about what makes us different. We talk about mistakes that other cleaning companies make. We tell you why we're better.

One other note about maid service advertisements. Everyone already knows that your estimates are free. Quit stating the obvious.

Quit making it so easy for us.

Friday, May 26, 2006

Focus

We have a new customer in Panama City. She's recently fired her other cleaning service. The other cleaning service showed up late too many times. The other cleaning service also sent people who couldn't communicate with our new customer. The other cleaning service didn't do many things right.

Turns out, the other cleaning service cleans all sorts of things. They clean carpets, condo rentals on the weekend, businesses at night, and homes during the day. They're the universal cleaning company. You can't be good at everything.

We concentrate on one thing. We clean homes. We'll clean your office if you want us to; but our focus is your home. Our employees are trained to clean your home. Our pay for performance program is designed for your home. Our focus is on your home.

And that's why people keep selecting us. We get to concentrate on one thing everyday. Meanwhile, the universal cleaning company can't concentrate on anything. They're too busy cleaning everything.

Wednesday, May 24, 2006

Bashing Pay For Performance

The pay for performance compensation plan is bashed everyday. Executives at public companies are reportedly making more money today because of new pay for performance guidelines. In Minnesota, pay for high level executives rose last year despite stock market declines for nearly half of the public companies. Here's a comment from the article.

"People who want to make the pay-for-performance argument are finding it harder and harder," said Robert Kennedy, professor of ethics and business law at the University of St. Thomas College of Business."

In order for pay for performance to work, you need to know how performance is measured. There is no mention of a measurement system. A measurement system for a CEO should be simple. Profits or cash flow. The more money the company makes, the more money the CEO makes.

In addition, pay for performance is at its best when 100% of your salary is dependent on your performance. Minnesota executives typical compensation structure includes a set salary, bonus, restricted stock grants and gains from previously issued stock options. The assumption is that the pay for performance plan determines the bonus and possibly the stock option grants. One CEO in Minnesota reported a set salary of $2.2 million. Is there any real reason to work hard when you know that you're guaranteed more than $2 million? (In fairness, this company earned more than $3 billion last year. The article, of course, didn't mention that.)

People could make an argument for the pay for performance system if executives were actually paid for performance.

Monday, May 22, 2006

The Average Cleaning Company

The average cleaning company is far from average. In fact, the average cleaning company is downright lousy.

We ask each of our prospective customers the same question. Have you ever hired a cleaning service before? If they say no, we're in trouble because our rates seem high to them. If they say yes.......

If the say yes, we get a new customer. We get a new customer because we have a remedy to just about every single complaint that a customer can have about their previous cleaning service.

The maids were always late. My maid just quit showing up. My maid got married and had to move out of town. My maid stole something from me. I never saw the same two maids. The service started out great, but got worse over time. Our maid became our friend so it was difficult to criticize her work. The maids missed the same things every time. I complained to the manager, but she didn't even acknowledge me. The maids only stay in my home for a short time. My maid used something and it ruined my wood table, or floor, or counter, or refrigerator, or just about anything else you can imagine in a home.

99% of our customers say one of these things. We learned a long time ago that fighting the problem was easier than being the problem. We're not perfect. Many of our customers will tell you that we make mistakes. We break things. We don't clean perfectly. We even send different people every now and then.

But we're better than the average cleaning company. Ask us how we fight the problems of the cleaning industry and you'll understand.

Friday, May 19, 2006

Microsoft's Pay For Performance Plan

Microsoft changed their pay for performance compensation plan yesterday. The old plan created employee resentment. You would resent it too if this is true.

"The existing system doles out bonuses and promotions based largely on a controversial numerical rating scale. The number of employees who can receive a top score is fixed, sometimes forcing managers to give a lower score to a worker even though he or she might have performed at the same level as a peer."


That system didn't reward performance. Here's the new system.

"This ranking will still have a forced distribution or curve, with 20 percent of employees in a peer group classified as "outstanding," 70 percent as "strong" and 10 percent as "limited."

This system won't work either. You can't put limitations on your employees. If you do, they will limit themselves.

What if every employee had the same right to a top score? Here's an example of a true pay for performance plan. You guessed it. It's the pay for performance plan for Two Maids & A Mop.

Thursday, May 18, 2006

The Reason Merry Maids Is For Sale

Merry Maids is for sale. It's for sale because it's losing money. Lots of it.

The most recent SEC filing stated that the combined operations of ServiceMaster and Merry Maids increased revenues by nearly 33%, with the revenues for the last three months totaling just over $55 million. That's a lot of customers if you ask me. But they lost money. Almost $12 million.

Think about that. Merry Maids and ServiceMaster are on pace to lose more than $45 million this year. So, that's why it's for sale.

Seems to me that Two Maids & A Mop is worth more money than Merry Maids. Would you rather purchase a business that loses nearly $50 million per year, or would you rather purchase a company with profits and unlimited potential?

Merry Maids is mature. They're dug in. It's possible that it's too late to revitalize the brand because it's so big. Two Maids & A Mop is young. We're far from dug in. We change something in our business everyday.

But we're not for sale. There's no reason to sale. Things are going too good and the future is very bright. Merry Maids may be making our ride to industry domination too easy.

Wednesday, May 17, 2006

Merry Maids Up For Sale

The CEO of Servicemaster recently resigned from his ivory tower. There was an interesting quote in the press release.

"ServiceMaster also said at the time it is exploring the sale of American Residential Services and American Mechanical Services businesses."

American Residential Services is the parent company of Merry Maids, the so called leader in residential cleaning in America. Industry leaders don't normally get sold unless there is a problem.

Have you ever tried to play a song with a broken record? That's what cleaning businesses do everyday. They fight the turnover problem with the same wrong solutions. And I guarantee you that turnover is the reason that Merry Maids is for sale. Turnover costs money. The more turnover you have, the more money you spend.

Two Maids & A Mop isn't for sale. In fact, we're growing at an exponential pace. The industry leader wants out of the business. Ironic don't you think?

Monday, May 15, 2006

Take This Job And Shove It

That's what two of our employees told us last week. They hated their job.

Cleaning homes for a living is not for everyone. It really does take a special person to do what we do. Think about it. Cleaning other people's toilets every day. Driving your own car to each work assignment. Bending, pulling, and scrubbing all day. It's not the easiest job in the world.

That's what our industry is up against when it fights the turnover battle. It's a tough battle to win. Working for Two Maids & A Mop is a little bit better.

You get to write your own paycheck. You get paid 30% more than the industry average. You get paid all day; but you only work 66% of the day (we pay for driving time). You work between 30-40 hours every week. You receive full medical/dental benefits immediately upon employment. And you have the opportunity to be promoted to as much as $12 per hour. No other cleaning service in our area can say these things about their employment package.

Yet, we still have to clean those toilets. We still have to rely on our employee's vehicle for logistics. And we still have to send two people into a home to clean. Cleaning is not fun for most people. If cleaning were fun, nobody would need to hire us.

Employee turnover in the cleaning industry will never vanish. It will always be the most pressing problem. We can't defeat turnover, so what can we do?

We can reward our loyal employees that don't quit. We can pat them on the back. We can thank them for their effort. We can provide them opportunities for advancement. Basically, we can make this job a lot better than their other options.

We can't make all of our employees happy. At some point, their job will get a little too dirty and a little too filthy. What we can do is give our loyal employees a reason to want to work for us.

Most cleaning business owners would never be so honest about staffing issues. In my opinion, admitting that you have a difficult challenge is half the battle.

Friday, May 12, 2006

Expanding The Business

Two Maids & A Mop is at a very important juncture. We can go in a lot of different directions. The most common method to open mass outlets is to franchise the business. In my opinion, franchising is not the way to go.

Paul Orfalea, the owner of Kinko's, sums up the idea of franchising.

"Franchising sets up an adversarial relationship. The franchisee has an expectation that the franchiser will make him successful. In a franchise relationship, the store manager is not a full partner."

What he's saying is that the franchise owner doesn't get to utilize his entrepreneurial skills fully. The franchiser sets policies and procedures that each franchisee must follow. The franchiser is responsible for making the franchise owner successful. This limits his true entrepreneurial skills.

If we were a franchise, we would have never devised the pay for performance program. We would have never created a customer advisory board. And we would have never been allowed to open other locations.

Each idea that we implement is born from our true entrepreneurial spirit. Our managers own 20% of their location. They are partners. THEY make the business successful, not me.

Partnering with other entrepreneurs is how we plan to expand in the future. We're not franchising or licensing. The partnership model for our expansion will be posted on our website in the next few weeks. It will be easy to understand, easy to join, and exciting to watch. Partnerships stakes will vary from 20% - 60%.

Every major cleaning company chain franchises their model. Like everything else, we're not going to do the same thing as everybody else. Stick around and watch David beat Goliath.

Tuesday, May 09, 2006

Profile Of A Customer

The first time cleaning service customer never hires Two Maids & A Mop. Never.

The reason is simple. Our rates are higher than everybody else. The first time cleaning service customer figures that anybody can clean a house, so why not select the least expensive option?

Of course, there are plenty of reasons why this customer is wrong. She'll probably find out soon enough. She'll be calling us back in a few weeks or months. She'll be frustrated that the maids never show up on time. She'll be frustrated that the same mistakes keep occurring time after time. And she'll be ready to pay a little more so that she doesn't have to worry about her new headache.

Almost all of our customers are seasoned cleaning service customers. They've experienced the problems and they're glad to be rid of them. That's the profile of our typical customer.

If this sounds like you, call us. You've found the remedy to your cleaning service headache.

Monday, May 08, 2006

The Oracle Speaks

This past weekend was my Super Bowl. Warren Buffett gathered his followers together again for the Berkshire Hathaway annual meeting.

Here's a recap of the meeting.

And here's why I admire Warren Buffett.

You can wake up now.

Friday, May 05, 2006

The Canadian Maid Speaks Again

Some of you may remember the Canadian maid that I discussed in an earlier post last month. Basically, she lived as a maid for one month and then proceeded to write about her experience. Of course, it wasn't good. She lived in terrible conditions, she worked for a unsympathetic boss, she was paid less than minimum wage, and she eventually developed carpet tunnel syndrome as a result of her work. What an awful picture this depicts of the housecleaning industry.

Recently, she chatted with some of her readers and allowed them to ask questions. There's a lot of things to discuss in this chat session. I don't want to bore you, so I'll just concentrate on one comment.

"Re: employment standards. It's interesting, but maids — cleaners in private homes — is one category specially exempted from typical labour standards in many provinces. I do not know why or how this happened. (It's something I need to look into.) As for organizing, I think that it would be very hard to organize maids. The entry point for companies is very low — you just need a webpage, rags and buckets. Anyone can start a maid service. And if one company's maids were to organize, the company would probably soon go out of business.

The problem is, the entire industry relies on low wages, a public that expects a house call and human labour for a low price, and a pool of women with few options."


We're in agreement here. I've been saying this since I entered the industry. That's why we don't rely on low wages or a public that expects a low price. You get what you pay for.

Read the rest of the chat session. There's some interesting questions. One things for sure, working for a Canadian maid service company sucks.

Tuesday, May 02, 2006

Looking In The Mirror

There's a tire company out west called Les Schwab. It started small, with just one location back in 1952. Since then, it has grown to more than 400 locations in seven states. Why I am talking about a tire company?

It's like looking in a mirror. Here's a company that has more than 50 years experience and $1.5 billion in sales annually. Yet, Les Schwab looks just like Two Maids & A Mop.

There's really only one similarity between the two companies, however. The parallel.....both companies give more power to its employees than any other related company in the industry.

Les Schwab empowers its employees by giving 49% of the profits back to the employees. You can manage the store or you can change a tire. Either way, you're getting part of the profits. Every single employee feels like they are part of something bigger. The actions of the employees matter because their actions determine the success of the business.

Two Maids & A Mop is a little different. Sure, our managers get 20% of each locations profits. But, our empowering stems from our pay for performance plan. Our employees get paid based on our customer's satisfaction level. The actions of our employees matter because their actions determine the success of our business.

Sometimes I get too excited. I see where we're headed and I can't wait to get there. But, it's hard to stay calm when you know something others don't. It's like owning next year's almanac. The future is right there in front of you.

If Les can do it, I can too.