PressurePros

Dan, I know you majored in math but all I can tell you is that you are still incorrect. As a final dilution, a ratio is a percentage. 1:4 = 1/4th 1/4th = 25% You can contest it a hundred ways from Sunday but 1/4th will never equal 20%. You do not add both sides of a proportion formula, you divide them.

When diluting two separate times, you multiply the two ratios together. 4:1 mixed down again to 10:1 = 40:1 Expressed as a fraction: 1/4 x 1/10 = 1/40

Dan, that is not correct. A ratio is expressed as a whole. 1:5 (chemical:water) would be one part chemical to four parts water. Think about in terms of a fraction.

I have had this problem often enough and 90% of the time, its fuel related. Drain the fuel completely and try fresh gas. I also spray some starter fluid onto the air filter.

Dan, this is his statement: "Simply, with 5 men working a 50/50 ratio, you’re grossing more dollars (more overhead and profit money) per year…based on the same man hours." I am not understanding how more overhead is beneficial. Maybe just a mistake in terminology used? "based on the same man hours". This is where he is correct as long as we are talking about identical install times AND the market can bear a higher markup. His theories are based on his comparison to painter's labor rates which are generally what? $35/mhr? I see where your logic is on the $100 gallon of stain. Keep in mind the higher the price, generally the lower the margin. So right now lets say a woodie marks up his stain 35%. The owner profits $14/gallon. On a job that uses 7 galllons that's $98 profit above the labor markup profits. A typical job that size costs the homeowner $1200. At $100 per gallon, you may only be able to markup 20%. So on the above example you will now profit $140. Except, now the same job costs the homeowner $1,767.00. What do you think that would do to your closing ratio? Do you think you would have to increase your advertising budget to compensate for the loss in sales? Maybe the extra $42 you made on the stain would cover your extra costs, maybe it wouldn't. But let's pretend it does. In 2009 you did exactly 100 jobs at $1200. $120,000 gross sales. In 2010, with the stain at $100, you did the same amount of jobs at $1767. $176,700 gross sales. An increase of 33% ! Look great on paper. Oops, we forgot about the added advertising expense. Its a zero sum gain. Except for one critical fact.. Every other expense was the same (labor, direct and indirect costs) and since the advertising killed the extra gross dollars, your salary stays the same. In terms of percentage, you would actually take a loss in salary. Like I said, there is a line you can cross where your guy is correct. If you can sell something that costs $200, sell it for $300 and charge $300 to install it, you have a much better profit generator. Even that is a broad statement. How long does that $300 install take? What skillset (labor cost) is needed to install it? What tool/machinery cost is involved? Profit margin is king in small business. Until you break about the $2M mark, gross dollars are nowhere near as important as maintaining margin.

Dan's guy is saying that if labor costs constitute the majority of your sale, you are dead in the water. There is logic to that if what you are selling is high dollar and has good margin (lets say Pella Windows at a 40% markup). I thinks Dan's guy is a bit caught up in gross dollars. I agree that gross dollars is one of the high functions of business. That's why I sell decks versus driveways or $200 house washes. This is from the email Dan sent to me. Dan asked the guy what he meant by saying that if labor represents 85% of your business, you can get in trouble quick. This was the reply. The simple answer is a question…how many jobs can you do a year with 5 men if your labor is 85% VS how many jobs if your labor is 50% ? Simply, with 5 men working a 50/50 ratio, you’re grossing more dollars (more overhead and profit money) per year…based on the same man hours. Ponder it and run some numbers. I'd like to see what others think about that statement. -KF

Dan, his thinking is based on gross dollars and is not only too simplified, its flawed. I'll email my response to you.

LOL.. Dan absorbs this stuff like a sponge.

Mathew, Dan is asking about loss in sales. The simple answer to every question is "generate more leads". I broke it down to show that what many think is the solution in a downed economy, lower prices, is not the answer. You need to know lead costs and acquisition costs to adjust your rates.

What if I told you the solution in a downed economy is to raise prices? What?? Do I have three heads? Here is why I say raise 'em. Advertising ROI is still predictable. If your close ratio falls in a downed economy, you need to compensate by increasing leads. (yes, you do need to know all of your numbers) Let me use some round numbers to keep things relatively simple. I'll also eliminate the other aspects factored in job acquisition cost. Before slowdown: Gross Sales: $100,000 (100 jobs at $1000 each) Advertising/Job Acquistion Cost: $10,000 ($100 per job) Job Leads: 200 of them (5% or $50 per job) Note: Job lead cost and job acquisition costs are two different numbers Sales Closing Ratio: 50% During Slowdown (you are down 20%) Gross Sales: $80,000 (80 jobs at $1000 each) Advertising/Job Acquisition Cost: $10,000 Leads: 200 (6.25% or $62.50 per job) Sales Closing Ratio: 40% (this is where you are down 20%) Solution • You have to make up $20,000 in sales. (20 more jobs) • To get 20 more jobs at your lower closing ratio, you need 50 more leads. • Factoring an average cost per lead of $56 you need to spend an additional $2,800 in advertising. I would up that number to $4000 to compensate for the possibility of less response on your advertising than you may have been used to. So now in 2010 you will gross $100,000 and spend 14% on advertising. That's 4% more than before the economic downturn. To keep your margins the same, you will need to raise your prices at least 4%. That $1000 job is now $1040. Someone that was going to hire you at $1000 is not going to not do so because of the extra $40. Note: If you are a motivated person and on your game, you would increase your low cost lead generation.. networking with business groups and orgs, call old customers, put out door hangers, etc.

Jeff, that is one of the caveats of you sharing so much good information on these bulletin boards. Lots of leaches with no experience and no selling skills. "So I call, write, and fax, throw some bleach and Dawn together and that's all there is to it? If Jeff is getting $8,000 for a four day job, I only need to charge $3K. I don't have Jeff's overhead." I feel your pain.

Just remember that customers buy products and services based solely on benefits to them. Think of ways owning a deck benefits a homeowner. A place for kids to be safe while mom is cooking, a gathering place for entertaining, an extension of living space, and added property value. Jut try to think what would catch your attention. I threw together a quick one to to get your ideas flowing.

A perfect summation.

Good advice above from Jim. Deck restoration is not pressure washing. Longer learning curve. I agree about the regional aspect of what to target. I often say that I could run a one line ad in the phone book that says "pressure washing" and 80% of my calls would still be for decks. I've also found that you get a better return if you separate services and run campaigns. If you want the best lead generator in today's market, build a website and work hard on the SEO to get it ranked. Use postcards to get people to your website by using effective calls to action. An example would be "Download a FREE report on How Roof Cleaning Can Cut Your Energy Bills." Maybe support that with "Find out how to your roof cleaned for FREE". I'm going to run a program next year offering a free roof cleaning to every 25th person that requests an estimate. The only rule is they have to keep up a yard sign for 30 days.

:cheers:

I don't want to shoot down your aspirations to start a business. The issue that is staring us that have been in business for awhile is that you have too many of the criteria that cause failure. You've heard the expression "throwing good money after bad"? Here is the reality of what's going on with your business plan. 1. You need insurance to do this work. 2. Your market is notorious for low pricing. 3. You don't know what you are doing. 4. You are woefully undercapitalized. Yes, some have started on a shoestring budget, but I don't think anyone started with a Honda Civic as a vehicle. 5. Even if you buy a super cheap homeowner grade machine and lift it in and out of your trunk/hatch, that doesn't mean anyone will hire you. 6. You have no experience in business and as such you will not understand your numbers and probably way underprice your service. 7. You have no way of generating leads other than to jump in the pool with the hundreds of guys that probably roam Miami with the same capital reserves. That means hand printed flyers and CraigsList for your job leads. You'd be lucky to make yourself $150/wk for 40+ hours of effort. Save your $500 and find a company from these boards and see if they are hiring helpers. Trust me on this, you'll make more money than if you try to start this thing on your own.

As long as you don't go any finer than 60 grit you will be fine. Blow it off with a leaf blower and go to town.

Your best bet is to get a job with a PW'ing company and learn the trade while finishing school. Insurance alone will tap your entire budget. I doubt many people here will actively jump in to help you when you make no mention of getting insured. Best wishes and good luck in school!

The "Great Monsoon" was our biggest profit killer. Leads were up 20% or so with almost zero print advertising. I think I ran a classifieds ad for about a month and then pulled it. Dan, take this lesson with you through the remainder of your years. Economic slowdowns come and go. Flues come and go.. housing bubbles, market fluctuations, etc. Every one of those is always predicted to be the "worst one yet". In the end it is a natural ebb and flow cycle that repeats consistently. You already mentioned why a recession is a good thing for a business. It makes you tighten ship. Capitalism runs and corrects itself. That is why I remain in awe of it.

The surfactant in HD-80 is perfect. Adding NP-9 and factoring what F-18 has in it, its not surprising you spent a long time rinsing.

Very sweet.. you do some nice work, Mike.

Celeste humbly didn't give her qualifications. She went to school to install and has experience with it. I'd follow her advice, John.

Roberta please fill out your signature line though there is little doubt whom you represent. We are not opposed to intelligent presentation of facts. Through the years many products have been presented to wood professionals that had great science.. on paper. What the scientists and wood preservation experts fail to address is the aesthetics of the wood. The wood can be dimensionally stable 100%.. a fine feature. But homeowners also want their deck to look good. Please correct me if I am wrong. There is no pigment that is not sacrificial to UV. ie at some point the pigment will be history and the wood will turn gray. Many people can accept that in a fence.. not their deck though. One outstanding question with these types of products has been the ability to apply a pigmented sealer over them. If you have further data and evidence in the form of real world pictures of decks that have been both chemically petrified AND stained consistently with a pigmented product, that would go a long towards convincing wood professionals of the efficacy of the product.

Yes, please do.

Yeahhhh buddyyy.. much better.