Talk About Money

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indiana jones

Member
A guy I know in the midwest started running a PW company in 2000. He proudly told me he grossed $35,000 last year, working 9 months (due to the weather conditions). We figured that to be 180 days and he worked 6 hours per day on average.
Here's what his situation is: He spends,

$ 2,000 on advertising
$ 1,000 Insurance
$ 1,200 Accountant
$ 250 PWNA membership
$ 1,000 PWNA convention
$ 1,620 Gas
$ 540 Fuel
$ 500 Chemicals
$ 1,000 Maintenance ($100 per month X 10 months)
$ 8,640 Helper @ $8.00/hour (180 days X 6 hours=1080 hours)
$21,600 Himself @ $15.00/hour (240 days X 6 hours=1440 hours- he paid himself all year)


$39,350 Total cost of his business

He owns his home and his wife works fulltime. He also just realized he makes payments on the equipment as well. Another expense that should be added. What about sales taxes and income taxes. He is screwed because his wife is furious and now he has to try and sell the business and needs to find a job. The weird part is he was busy all 9 months. This thing turned into an expensive HOBBY for him and cost him at least $4,350.
 
Indiana, what’s your first name? I forgot sorry.

This subject is really a crazy one; I have been explaining for years that this is the definitions of a low-baller. A guy or gal spends his 401k money to compete with me or you. In the end he realized that his money is gone and he has been paying people to pressure wash.


Some feel that these BBS create more, I’m trying to make less by educating guys that they need to b competitive but make money. Some feel that telling these guys this info is bad; I do not feel that way. I believe it’s easier to compete with your friend on a level playing field.

Interesting at how you look at it. And expensive hobby and he busted his buns. LOL


Guys please don’t go down the road of the low-baller. This here is a lesson learned that you need to charge the correct amount. Expenses are sometimes higher than you think. Keep a spread sheet with your expenses daily or at least weekly.

I do mine daily and total my numbers daily, I don’t always look but sometime during the week I do. I also have alarms on my productions in case it falls from a certain number.

I remember when I was one man I ran a little looser. I didn’t have the time it took too follow the numbers. I gotta tell you, it’s the difference sometimes of growth. When you can control this tiger you can grow.
 
indiana

your list of costs is still way off.
phone,stationary,stamps,TRUCK,truck insurance,
billing time,wear and tear on truck[tires,oil changes,tune ups,ect...] That $8 per hour employee will cost you about $11 after you pay everything your supposed to pay, unless he work's under the table?[unemployment,fica,ss tax,ect...]
You cant work part time and have a short season if your going to make it in this buissness. Unless you dont do the right things.
As in no insurance,dont pay your tax's,think of useing your truck as NOT part of the work you do with it,use your reg. home phone,use cheap equipment,pay your brother in law under the table,ect.....
By the way according to the numbers you supplied here.
This guy has a hot water unit[you listed gas and fuel so ill guess he has a hot water rig] and only bill's out $30 per hour and pays out $8 per hour to his help.
What is it this guy wash's for $28.50 per hour that needs a $8 per hour helper?
A min of $80 per hour if i had to have a helper.
common sense would tell you you cant run a buissness like this at these prices. He did'nt have to wait a year to figure that out.
$500 in chem. thats about 2-55 gal. drums of truck wash/with shipping.
Maybe you should let him take a look at this site before he goes belly up?
 
I WISH I HAD HIS FUEL COSTS. I SPENT 6,000 LAST YEAR IN GAS AND KEROSINE ALONE AND WORKED ABOUT THE SAME AMOUNT OF HOURS. I'M NOW PAYING $ 1.60/GAL VERSUS 1.10 LAST YEAR AT THIS TIME.


I FEEL LIKE HIS SHIRT SOMETIMES...LOL...
 

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This is my biggest concern about going back into this business again. Here in Nashville I new what the goin rates were, I new alot of contractors, hell I just new alot of people in general, got a lot of good ole boy business from knowing the right people and my bid was always in line.'

Now I am moving to a new state where I really don't know alot of people and don't really know the going rates for the area. I know the cost of living is lower there and wages are lower so I would assume that prices charged for services are lower.

The only thing I know for sure is that I will strive to do quality work and only tackle things I know I can handle as a one man gang and hope like heck I come pretty close to my estimations in my business plan.
 
This guy has begun the process of unloading his equipment. He's totally bummed! He was convinced he was making a lot of money. His helper is/was an off-duty fireman who might end up buying the whole thing as a fire escape. The guy has one of everything, his equipment made ours look like junk (ours makes money!), he spared no expense getting started. He did some trucks but mainly houses, decks and flat concrete. What started out as a business venture ended up as a very expensive money sucking hobby. He was everyone's buddy, he often took work at the customer's price because he felt like something was better than nothing, even if he had to bust his ass to please that customer. He didn't think about lowballing, he just wanted people to like him. Now who are they going to like.
 
Ron:

I for one would like to say that the information you and others have provided, both in advice, technical information, and encouragement have done nothing but convince me that I don't want to be a lowballer, and that as long as I can do quality work, I can expect to receive fair payment. There's a lot of information here that you and others have taken the time to share, and I am sure that I am not the only guy just getting started who has taken a lot of inspiration from the accomplishments of you guys who have been in it a while.

Just wanted to say thanks, and don't think your efforts don't affect at least some of us.
 
thanks

I think one of the biggest hurdels in this buissness is something you cant learn here.
People can give you ideas about how to advertise,how to market,where to find,how to fix,ect....
but they cant teach you how to be a salesman!
Remember this,i have said it a ton of times.
Your mouth will make you more money then that PW ever will.
A pressure washer is just a tool. Just like a hammer.
YOU NEED TO BE ABLE TO SELL AND SELL WELL TO MAKE IT IN THIS BUISSNESS.
Say you look at that fed-x job or any contract.
In that short time spand you can make a lot of money or put yourself right out of buissness.
28 trucks 2 times a week year round
thats 56 wash's x 52 weeks that = allmost 3,000 wash's
So every $1 per wash is worth $3000 per year.
That $1 per wash could buy you all your soap and fuel for the whole year[washing at that location that is]
Second is you can all most teach a monkey to wash the same 28 trucks 3000 times. So this is where you can hire help and take a smaller piece of the pie, but have more time to do more selling and start a second rig. Maybe give you time to go to one of those classes and learn a new part of this trade. Like wood or hood's.
I am too big to do hood work but my goal is to learn how to wash darn near everything else and specialize in whatever pay's the best. If that turns out to be hoods then im just going to have to know all about it and hire someone to do it.
Here is my stupid secret for anyone that want's to learn but who allways makes up an exscuse not to read.
-----------------most books are out in CD or tape-----------------------
you can listen and drive,walk,whatever and you might not get everything as well as reading but you will be a lot further ahead then doing nothing.
They have a ton of tapes to learn sales,management,everything related to this buissness except how to actually do the labour.
Take this for what it's worth but the books on tape have helped me tremendusly.
[hey maybe if i took the time to read i could take some time to learn to spell lol]
 
I think this guy is giving up to fast. If I had to guess he probably realizes that this is hard hard work and to him maybe its just not worth it especially considering his bottom line which shows just about nothing even though his gross was $35,000.

He should look real hard at his above numbers and re-organze before giving up.

First off he should raise his prices drastically and then consider on keeping his part time worker. That accountant fee sounds like its at least $500 to much per year. I hate to say this but $250 for the PWNA may not be worth it at this time for this guy. He needs to slash were he can and more importantly he needs to remember what his top priority should be which is to make $$$$ and he still can be a nice guy.

IF he definitely wants out try to get him to put pictures of his set-up here and how much he wants for it instead of just unloading it to his part timer without any competive bids from others.(Once again this guy is not doing it right).
 
John,

I thought that way too, at first. Then when he started talking about the huge losses he ended up with I had to agree with his decision. It actually turned out to be a corporate decision, his wife told him no more! He is an early retired firefighter who used a minor injury settlement to fund the business in the beginning. This is such a great business he used to say, getting paid to squirt water, he thought anyone can get rich doing this. He was always busy and couldn't keep up the pace that's when the helper came on. Everyone wanted him to work for them, but they didn't want to pay the price so he made deals, cause he wanted to be a "nice" guy. Being grubby all the time started getting to him and he complained that at least firefighters got benefits for getting filthy. Nobody is more impressed with his equipment then he is, but he has come to the end of the line, he wants to flip the page and move on. He said if he had to do it all over again - he would have bought a sportscar.
 
OK , Lets see some good deals for his equipment. :)
 
Mark W,

I told him that you were interested in good deals, he said tell you he's done all the dealing he wants to do and his helper is buying the whole thing, with financing. So if it work outs and the guy makes it he gets an income from it. Otherwise the nightmare continues!
 
here is

a classic case of someone that has no buissnesss plan,no idea what he has to charge to stay in buissness,hired someone prob because he was bored and did'nt want to work alone, and started his buissness without checking out what the local market could bare.
Seem's that the helper might have a better insight.
 
Ron,

Did you ever run across somebody with a midas touch or charmed life? A likeable guy in every respect, everything my cousin touched turned into gold, from apartments to investments. He tried powerwashing cause it looked like easy money, no talking to him, when his mind was made up. He had hired companys to clean his properties in the past and said they were not charging him enough. So he was going into the business to show how it should be done. He was proud of the quality of his work and undoubtedly spent too much time on each job. That's why he hired the helper. He really enjoyed the work. He just couldn't get over the hump of $35,000 and that was not going to cut it, so they made a business decision to cut their losses and got out of the leaky boat before it sank. From what I have read on these boards a lot of guys are grossing around the $35,000 mark, they need to relook at their operations and don't settle for less than $70,000 next year, their boats are leaking and they don't realize it.
 
MY FIRST YEAR IN BUSINESS I ONLY GROSSED $40,000 AND WANTED TO GIVE UP BECAUSE MY EXPENCES WERE 38,000 BUT I DIDN,T AND IT GOT BETTER. IF YOU CAN'T AFFORD TO LIVE ON LITTLE OR NO INCOME FOR A YEAR OR TWO YOU SHOULDN'T START A BUSINESS, SO YOU HAVE TO SAVE AHEAD( OR HAVE A WIFE WITH A GOOD JOB...LOL...) BEFORE YOU GO FULL TIME. I THINK I WENT TO SOON BUT YOU LEARN THE BUSINESS SIDE QUICK WHEN YOU BUST YOUR *** FOR NOTHING, KINDA INSPIRES YOU TO...LOL...


TELL YOUR FRIEND NOT GIVE UP SO SOON AND JUST SCALE BACK NEXT YEAR AND PRAY FOR ALOT OF GOOD WEATHER.
 
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