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From idea to replacing full-time salary in 4 months

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Re: From idea to replacing full-time salary in 4 months

#51

Post by radicalbyte »

gexla wrote: post #33
ricardobeat wrote: post #7

It's a nice personal achievement, but I can't help myself cringing at business models of this kind. It's plain old extraction of surplus-value, adding very little to the economy as a whole. The workers would be better off operating as a cooperative, I wish they had the education to know that from the outset, and the means to implement it.

I'm sure they realize at this point that they could be running the same model. The profits at this point probably aren't even enough to cover the salary for one person to be doing everything this guy is doing. The cleaners could do these things themselves, but they would still need to compensate themselves for their time. So, the profits would just go to more hours worked rather than going towards everyone getting a…

> The cleaners could do these things themselves

Why do you assume that? There are plenty of people doing those kind of jobs who can't read or can't handle basic arithmetic.

It's not a given that they'll be able to set themselves up as this guy has done.

Re: From idea to replacing full-time salary in 4 months

#52

Post by pbhjpbhj »

turkeyman wrote: post #39
guynamedloren wrote: post #32

Earlier quoted context omitted.

Hmmm... that's an interesting (and scary) point. I wonder if it would make sense, from the business owner's perspective, to shuffle the employees around between clients to decrease the chances of this?

That seems like it would just delay the inevitable, he needs to find competent cleaners that are unwilling to strike out on their own. If he manages to keep the cleaners as contractors, then his future will be absolutedomestics.com.au. They have done incredibly well for themselves and have set themselves up exactly as this guy has. I'm thinking it must be more profitable making a decent profit while losing clients an…

>competent cleaners that are unwilling to strike out on their own //

Or get his subcontractors (ie the cleaners themselves) to accept a non-compete, possibly with a specific figure attached should they jump ship.

Re: From idea to replacing full-time salary in 4 months

#53

Post by edw519 »

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.

Re: From idea to replacing full-time salary in 4 months

#54

Post by mseebach »

ricardobeat wrote: post #50
mseebach wrote: post #48

Earlier quoted context omitted.

Cleaning a one bedroom flat in one hour to a standard that people will pay well over $100 for is a specific skill set. Building, marketing and running a company is a different specific skill set. How is that not division of labour? > so no, that doesn't sound easy to me ;) Presumably a lot easier than building a vacuum cleaner.

The main difference between a standard business and a cooperative would be the sharing of profits - there's still the need for management/marketing/etc, which can either be done by one of the cooperatives or subcontracted, it doesn't disappear. That the maids don't have the skill set or the means to acquire it is exactly what I commented on originally. That is the gap. The extraction of surplus-value comes from havin…

Yes, I understand the principle. But deciding to form a coop, hiring a manager/marketer and being a partner in a company are all skills, and while valuable, they're just just as arbitrary to decide to teach in schools as knowing how to build a vacuum cleaner.

Also, where is the evidence of exploitation? Does this guy make more money than he would if there was profit-sharing? Paying a salary is profit sharing.

Re: From idea to replacing full-time salary in 4 months

#55

Post by cynicalkane »

ricardobeat wrote: post #41
cynicalkane wrote: post #35

Earlier quoted context omitted.

Be careful about confusing what you want people to value with what they actually value because that's how you get Marxism. I hired a cheap startup cleaning company (an internal startup within a larger organization). Flaky, unprofessional management; cleaners who sucked at their jobs... going by my and my friends' experiences, finding a good cleaner is pretty hard and (this is a big 'in general') the more expensive on…

> that's how you get Marxism Is it a disease? :) Did you mean communism? > Information, quality assurance, and good management are all scarce I acknowledge that. Read my comment below - these skills are picked up on the go by startup founders, the same way those in a cooperative could. Professionalism is unrelated to having one head or twenty at the top. > For instance, most programmers are content to work for the Ma…

>> Information, quality assurance, and good management are all scarce

>I acknowledge that. Read my comment below

Well, your surplus-value is everyone else's value-added. There are probably more efficient ways to do things in the information age. I'd like to see a smart bunch of hackers disrupt the maid service industry. But I don't think the current method is unjustifiable and I don't think it's correct to question someone doing things the old way in a good way.

Re: From idea to replacing full-time salary in 4 months

#56

Post by neonkiwi »

edw519 wrote: post #53

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 sh…

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_...

Re: From idea to replacing full-time salary in 4 months

#57

Post by silverlake »

ricardobeat wrote: post #26
robryan wrote: post #25

Earlier quoted context omitted.

The workers may not be any good at marketing or any of the organization and running a business stuff, they are probably happy just to stick to the cleaning and get a constant stream of jobs given to them.

That's exactly what my last sentence is about. The extraction of surplus-value comes from having an economical/power/knowledge advantage: in my pretty ideal world the workers should have enough of those skills, or the ability to subcontract them. If everyone was well educated and had the means to set up a business they wouldn't need someone else to seize the opportunity for them. The whole startup spirit is that of g…

This is way too idealistic for any adult to believe. Coops didn't even work in China[1]. In Brooklyn, NY there's a food coop [2](grocery store) run by people in the neighborhood. I believe the group has naturally separated in a minority of pushy organizers (i.e. managers) and the majority who put in their hours and go home. Coops could work if it didn't involve human beings.

[1] http://www.npr.org/blogs/money/2012/01/20/145360447/the-secr... [2] http://en.wikipedia.org/wiki/Park_Slope_Food_Coop

Re: From idea to replacing full-time salary in 4 months

#58

Post by courtewing »

gojomo wrote: post #9
patio11 wrote: post #4

He's essentially figured out that cleaning is one of many services which would have lower barrier to entry if it were not regulated. He is, of course, right. I sincerely hope for his sake that he reinvests profits into bringing himself into compliance with e.g. employment taxes, workers comp, etc.

Also... • he seems to be comparing his prior 'take-home' (after-tax) pay with his new venture 'profits' (monthly pre-tax). • as another redditor points out, he may be in for a painful 1099-reclassified-as-employee showdown with the tax and employment authorities And yet, good on him. He's found a niche and will now rapidly get to learn the tax & employment law details.

It was refreshing to see how receptive he was to that feedback, though. Based on his responses, it seems like he is going to take an active look at how he handles employment status.

It by no means signifies a guaranteed success, but it is definitely a good sign when an entrepreneur recognizes legitimate criticism about issues that could make or break his business and actively seeks to address them.

Re: From idea to replacing full-time salary in 4 months

#59

Post by DanielBMarkham »

Since everybody else is pointing out how poor his employee compliance is and that he's picked a freaking hard row to hoe, I'll praise the guy. Awesome job! This is the internet equivalent of going door-to-door. In fact, I bet you could combine this with going door to door and see sales really take off :)

The scaling thing Edw brings up doesn't concern me right now: you are in the throes of kicking ass. Later on reality will sink in. But he's right -- you have some major changes to make if you really want to go long-term with this.

Patio has a more legal concern: that your cleaners are really workers. I'm not so sure. I'd see a lawyer about this pronto. If these folks were already doing some cleaning before you met them, and if you make it clear that there is no office, there is no work hours, they are free to take or not take work, and that their only obligation to you is completing each job they sign up for? I think you might be fine. It's certainly a lot less control that software contractors have over them, and they're contractors.

Instead of growing, I'd concentrate on making this thing hands-off. Hire a temp to do the office work, etc. Even if it eats into most of your income, once you are freed up then you'll be in a position to really expand. This "make the business a machine" is your next step. At least according to everybody I read.

I liked the post. We need reminding that a little bit of hussle and not over-thinking things can take you a long ways.

Re: From idea to replacing full-time salary in 4 months

#60

Post by mgkimsal »

ricardobeat wrote: post #26
robryan wrote: post #25

Earlier quoted context omitted.

The workers may not be any good at marketing or any of the organization and running a business stuff, they are probably happy just to stick to the cleaning and get a constant stream of jobs given to them.

That's exactly what my last sentence is about. The extraction of surplus-value comes from having an economical/power/knowledge advantage: in my pretty ideal world the workers should have enough of those skills, or the ability to subcontract them. If everyone was well educated and had the means to set up a business they wouldn't need someone else to seize the opportunity for them. The whole startup spirit is that of g…

"in my pretty ideal world the workers should have enough of those skills, or the ability to subcontract them."

They are subcontracting those skills out to the person who is marketing and getting them the jobs.

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