Competition: what gives?

[RyanH 14]

Unlike many users on this board, I am not in the situation of having an overabundance of pressure washing competition in my area. Most competition is in the form of part-timers, not full time companies. Currently, I would still consider myself to be part-time, but am quickly working to change that. I have only had a few dozen residential and a few commercial jobs, but have spent almost every dollar I have earned to put back into my setup. I have invested hundreds of hours experimenting with various pieces of equipment, reading up on other techniques, buying / building better equipment, etc. I am still using an off-the-shelf commercial pressure washer (around $1100 new), but manage quite well.

All of that for this: why does it seem that the competition I see on the streets pulling their trailers around do not use many of the tools I consider to be necessary to do a good job? For example, most cleaners I see have a fresh water tank, a pressure washer, some high pressure hoses, and not much more? In addition to these things, I carry extension lances, a ladder (rarely used, though), dedicated backpack sprayers for various purposes, extra water and pressure hose, various boxes of chemicals, an assortment of tools, stuff to clean windows (chemical, squeegee, sponges, extensions, etc.). Am I overdoing it? Are there ways of doing jobs without all of the stuff I use? My customers have been extremely impressed with my setup, and it doesn't even look as neat and professional as the competition carrying only a washer and some water, but I seem to have everything on hand to do a very good job everytime.

What gives? Are they, despite the nice washers and trailers, not as "professional" as I aspire to be?

I would appreciate in help, encouragement, opinions, etc. on this. Am I trying to reinvent the wheel with all the stuff I use, or am I just more thorough?

Thanks very much.

Ryan Holbird

[Guest rfitz]

Lou that is not meant to be depressing, I said you wont get wealthy, being in this biz, but you can make a decent living, I didnt mean to say you will barely scrap by, you have to realize I have alot of wealthy people in my family, and I am comparing myself to them, not the ordinary joe, Yes you can make good money in this business or any business for that matter, you just have to plan ahead, and have a big cushion for hard times, I would say approx. $25K to start a PW biz and another $25K in the bank for slow times etc.. and that is cheap compared to alot of other business's, but this is no easy biz, you will bust your butt daily phsyically, mentally, etc.. but if you work real hard I think one could earn a 6 figure income within 5 years, not bad for only having $50K invested, if you want a good degree now adays it cost over $100K and you might make $50-$60K in 5-10 years so it is all how you look at it, I never said I was almost poverty level, sorry for the misunderstanding

[John T 744]

Lou,

You can make a ton of money in this business as in most any other business. I do this business partime and I am starting to catch my salary that I make from my fulltime job which pays me 6 figures. So even doing this partime you can do well if you head alot of the above advice from others in this post.

I will admit that I'm lucky with my fulltime job that I pretty much can make my own schedule. Even with this set-up I still may walk away from my fulltime job(Retire) and go fullout in the Powerwashing field.

What it comes down to if you think you can most likely...you can. Only you know the true answer to this.

Good luck

[Lou Beach 14]

Thank you again for very good responses. I feel much better now!

One thing I have noticed so far in talking to people in this industry is that everyone is friendly and helpful with advice. It's appreciated...

[Mike Williamson 198]

Lou:

It all depends, too, on your definition of "wealthy". I know rob sounds like he's one step from poverty, but if you read many of his other posts, you can see that he's doing very very well. Will you make hundreds of thousands of dollars/year? Not likely. Can it be done? Absolutely. Can you make a very nice comfortable living? Definitely. This is my first year at this, and I've been full time for 2 months. I've made more in the past 2 months than I would have made in 5 months at my old job.

I disagree with rob that it takes 25k to start a PW company...It takes time and initiative more than anything. You don't have to have a top of the line rig to get going...You could easily set yourself up with all the equipment and supplies you need for less than 10k, and in some cases, a good bit less than that.

It would be nice to have that cash available, but for most of us, it is unrealistic to expect that we'll ever be able to save $50k. That's one reason many of us get into this, because the money suck working for someone else (for most of us). Sure, some get rich, some CEO's make millions, etc, but MOST of us are scraping by.

Don't worry about making it...if you really want to, you'll find a way to stick it out and make it work. Stay on the boards and learn as much as you can, and always realize you'll never know enough!

[RyanH 14]

Oneness:

You are right about being able to start out at a low price. I started out with a $1000 unit from Home Depot and a borrowed trailer from a friend. I reinvested every dollar I earned from cleaning and bought some things to speed up my time (extension wands instead of having to climb ladders, back-pack sprayers to apply chemicals full strength to high places, more hoses so I didn't have to drag the unit around, etc.). I currently have around $1900 invested in my setup. Personally, I don't think it looks extremely professional because my trailer is only a 4x8 and I have a 275 gallon tote in it, but my customers are thrilled with my work and I am currently bringing in around (average) $800 per week, part time (around 15-20 hours per week). As I earn more and can invest in better products, I predict this income will increase dramatically.

But, like it has been said previously in this thread, it took time and initiative to make it happen. I jumped in with both feet without knowing if it would work or not. I spent MANY hours reading information on fine boards such as this one to learn as many tips / necessities as possible to do a good job.

I have one semester of college left and have people asking me "what will do when graduate?" I usually say something along the lines of "improve and increase my business." And with the great individuals here whom have helped me thus far, I have no doubt that I can make it happen!

[Guest rfitz]

I think both of you totally miss the point, when I said $25000 that means you do nothing else, no school, no other jobs, nothing but advertise your business, operate your business, and thats it , on a professional level, if you want a serious business you have to treat it as such, I mean professional vehicle with lettering, professional equip. uniforms, professional proposals,

contracts, etc.. I cant tell you the amount of jobs I got this year just because of how professional my business looks compared to the other 99% of the competetion, and $25000 to start a REAL business is very very cheap, I suggest you go yo your local SCORE chapter for a free consultation on how to start and run a professional business.... Professional business's get the real money, and the real jobs, Just a decent vehicle with lettering is $10,000 and a total unit set up is $5-10,000 and you will need capital to grow your business, unless your selling lemonade on a corner, under $25K is a joke of a business

[squirtgun 122]

Wow Rob,it's kind of harsh calling someone elses business a joke,because they didn't start up with $25k.I know when we started our biz,we set aside $10k,for equipment,advertising,uniforms,and signage((it takes planning and research,and we have made our budget)We have a consistant theme with our logo,that follows through on our signs,trailer,shirts etc etc.

We are far from being lowballers,or weekend beer money people,and I agree that it cost money to run a biz(insurance advertising etc.)but that is part of the game for all of us.

I'm not saying that you don't have valid points but how about remembering that what works for you may be totally different for someone else.

[Mike Williamson 198]

Rob:

No, I didn't miss the point, and I don't need a lesson on starting a "REAL" business. Every industry is different, and what it takes to start a "REAL" business in on industry is going to be VASTLY different from what it takes to start a "REAL" business in another industry. The things you mentioned certainly don't total up to $25,000.00. You can easily put together a very professional rig for around $6-$8k. CAN you spend more? SURE. You could spend $50k putting your rig together if you have the funds. My point is that it doesn't take $25k to start up. You CAN do is much cheaper, and that is without cutting corners on the professionality of your company in appearance, equipment, or performance.

Truck and trailer lettering? less than $1000.00, and you can certainly have it done a good bit cheaper, depending on the size, type, style etc of your graphics. Uniforms? $25.00 each for shirts, how many do you need to start up? 5? 10? Advertising? An ad in the paper? Business cards? Even a small ad in the phone book? None of this comes close to totalling $25k. As far as vehicle cost, most of us have a vehicle already, and if not, you certainly don't have to pay cash for it. You don't have to have a 2003 Dodge 3500 Dually to look professional. All you need is a clean looking, professionally lettered truck. That can be a 2003 Dodge or a 1985 Ford.

I started my company for way less than $25k. I suppose I'm a joke. I'm damn glad my customers don't think like you do. I started with a $7500 rig, a $2000 truck, and have put maybe another $4,000 into it in equipment, advertising, etc. I could have started for quite a bit less had I not wanted hot water and an enclosed trailer.

The whole point I'm trying to make is there are way too many variables in all businesses, and in this business, to be able to say that it takes $XXXX to start a business and anything less is a joke. I'd be willing to be that most of the companies on the boards didn't start up with anything close to $25k.

You keep mentioning "professional" businesses, and that they get all the work and all the money, etc. I don't disagree with that, but I disagree that you have to spend lots of money to be professional.

[Guest rfitz]

No mike you are right, you dont need 25K all at once, but I do believe in your first year you will spend 25K on your business, being under capitialized is the number 1 reason business's fail

[Jon 533]

Rob how about posting pictures of all your professionally lettered vehicles?

Your comment about getting business if one's vehicle is professionally done and in the yellow pages is wrong.

As someone else said early on in this thread not all advertise, I don't, word of mouth and quality work do the advertising for me.

I used to have my other truck lettered, I got a total of ONE call from that in 3 years so that shoots that remark down the drain.

I can't count on my hands and feet how many unlicenesed, uninsured PWers live in my town.

I have seen your picture of the Delco unit fo sale inside your van and would like to see a picture of all your vehicles lined up together, must be very impressive.

Jon

[Mike Williamson 198]

rob:

I agree, given all the expenses of starting and running a pressure washing business, that you easily spend $25k in the first year, including equipment, supplies, insurance, uniforms, advertising, lettering, etc etc. Even then, that type of money isn't a must, depending on the type and amount of work you're doing, depending on how you're advertising, etc. Once you have your equipment (and you can put together a nice, fully functional rig for $10k), your insurance ($1200 or less?), your lettering ($1000 at the most?), your uniforms ($200?), all you have left is operating expenses (gas, diesel, chems, vehicle insurance,), maybe a truck payment, and maintenance/repairs on your equipment. I still don't see $25k going back in, unless you're using a whole lot of chems and buying a whole lot of expensive accessory equipment.

Let's say I'm just getting into this business, and I want to start out with a fully functional professional rig. I can put together a hot water rig in a 7x14 enclosed trailer with all the accessories I may need for $10,000. ($3200 for the trailer, $3800 for the skid, $400.00 for hose reels, $500 for hoses, $300 for a water tank, $250 for an extension wand, $800.00 for a good surfacer, $300 for enough chems to start with, and say another $1000 for plumbing, misc. parts, ladders, tool boxes, brushes, wands, tips, etc.) Next, I need to set up the company legally. Here that will cost $250.00 to incorporate or $50.00 for a fictitious name filing, $200.00 for a good business accounting package (Quickbooks), $50.00 for a workman's comp exemption filing, and $100.00 for a county license. I also need insurance, which will cost me $1200/year (or less). If I opt for uniforms, I can get 10 shirts and pants for $500.00. I also need my truck lettered, or a good quality set of magnets. The magnets will run me $100.00/set, or lettering the truck will run me around $250.00. Lettering the trailer could run me $200 on up, depending on the complexity of my lettering. Let's say I have it done nicely, and it costs me $1000.00 for the truck and trailer. Now I need to advertise. Let's say I go all out, and decide to go with a display ad in the phone book. A moderately sized ad (1/8 of a page?) will run me about $3000.00/year here. I also need business cards. I had mine designed by Keith with KB Graphics for $50.00, and it cost me $125.00 to print 5000. I'll also want some type of mailer. I opted for a postcard sized two-sided mailer. It cost $100.00 to designe (Keith) and $200.00 to print 5000. Last, I'll want to run an ad in the paper. Let's say it's going to cost $150.00/month for that ad. That's $1800/year. The last thing I can think of that I need to spend to get started out is postage for the mailers. If I went crazy and chose to mail out all 5000 at one time, the postage and label cost will be $1400.00.

Total cost to get me from the starting point to being ready to go wash is $20k. That's going all out from the get-go. Most don't do that. There's a good bit of that 20k that is optional, and will depend a lot on your location and the type of business you're going after. You may not need a yellow page ad, you may not need a newspaper ad. You may opt to go with printed T-shirts and jeans rather than uniforms. You may not spend $1000.00 to letter your vehicles. You may not need a $3200 enclosed trailer, or you may opt to buy a used rig cheaper, as I did. You may not need a hot water skid. You may get a much better insurance rate. You may not decide to do mail-outs.

My whole point to all this is that there's no way to say you need XYZ to start a successful PW business. You could go get a $1200.00 cold water machine and another $1000.00 in hoses and reels and maybe a surfacer, and that may be all you need for the type of work you're doing. You may have a van that you're going to use rather than a trailer, or you may operate out of the back of your truck. There's just too damn many variables.

I agree that being underfunded for any endeavor you take on can be disasterous. What underfunded means will be different in every situation. To tell someone just starting to look into this business that you need $25k to start out may be the thing that makes them decide that getting into this business just won't work for them. Many of us who have gotten into this did so because we weren't happy making little money working for someone else, and the very nature of that situation means we don't have $25k to start up.

However, this is just my $.02 worth.... :)

[Guest rfitz]

Mike, just to give you a couple expenses of mine so far, I have bought in excess of $5000 in stain, now that leaves me $20K right, ? so say you go through $100 a week in chems and fuel that is another $5000 that leaves me $15K right ? now say you spend $100 a week on advertising which we both know it cost alot more than that, but lets just use that to make it easy, now that is another $5000, so that leaves $10,000 right ? so to keep this short I think you see the real deal, you have $10K left and you have no vehicle, no equipment, no uniforms, no insurance, no accesseries which you know each you alive, ladders, brushes, wands, ext wands, hoses, hose reels, etc..

You know you will spend another $5,000 on insurance, vehicle, biz, health, life, dental you get the point, now you have $5K left for all the above,

Now you can see why 25K is very conservative figure, but lets remember this for someone who is serious and will do this and this alone 12 hours a day 6 days a week for the first 5 years, at least that is what I do, or anyone will do when they start a biz of any sort, anyway I think now you see why even $50K is conservative...

[Rick G 14]

I was under the impression that it was bad business to keep large amounts of inventory on the shelf when that money could be directed to other needs or stay in the bank to collect interest. It is bad business to buy $5000 in stain and another $5000 in chems before you need it. Part of being in business is being able to balance these things so you can make your money work for you. I started my business with $5000.00- strait to full time. That was three years ago. I had more money to put in at that time but it was not necessary for my goals. That 5g's included a 4x6 open trailer, cold water 3500psi @4.5, 250 gal tank, surface cleaner, yellow extension wand, two summit hose reels, 200 ft of hose each kind, Briggs generator, roto max, gas can, one box of delcos red truck wash, one box of dbn 1433, one gal of wax concentrate, several gallons of pool chlorine, business license, liability insurance, cards, shirts, yellow book ad, my first direct mailer, and a ton of misc. car detailing items. All of this was new. I was just targeting residential so I did not get hot water. I have grown from that to what I have now so are you saying I was not a “serious business” at that time? Newbees don’t listen to this man regarding this point. Rick G

[Guest rfitz]

Rick who said I bought that stuff up front..? I buy supplies usually 2 week cycles, so I only stay ahead by 2 weeks that isnt much, when you started your biz on 5K did you bill over 75K your first year ? Basically people have 2 options they can start small or start big, I know a guy that just started his wood restoration business in June, and started with $80K upfront invested, now there is a serious business person, and realizes what is needed to start a biz, there are several franchises in this biz that start at $50K and that doesnt include your vehicle....? They know what it takes to start a real business....

[Lou Beach 14]

:goodgrief

[Paul B. 523]

Rick,

At todays bank rates of 1/4% a year, it's not where I would keep my money.

As for start-up costs:

It is a given that different people need different amounts for a business start-up. However, if you are going full time from day one, you SHOULD have enough income from another source or money in the bank to be able to pay a MINIMUM of 1 year worth of your personal bills (mortgage, electric, water, insurances, etc.) and your start-up costs be it $5K or $20K plus emergency funds for the business for equipment breakdowns (your truck, your P/W, etc.). You should not expect your business to turn a profit the very first year, at least on the books and as taxes are concerned (whether it does or not is something else).

If you remember earlier this year we had about 8-10 weeks of rainy weather in some parts of the country. Made for a very slow start for some new businesses as well as some existing ones.

If a person starts in April, they have about 7 months of productive time before winter sets in (if you live in the south this does not apply to you). You have 3-4 cold months that work is minimal or non-existent for certain type of business, so you better have a plan for that too.

[Paul B. 523]

Lot of my customers do not see me or our equipment when I look at their house or deck or driveway for the estimate (they are usually at work). The company car, trucks or rigs do not impact how many jobs we get. However, estimate presentation, word of mouth about our quality and follow-up calls on the phone have MADE most of my sales. When I meet face to face with the customer, they never ask what type of equipment I have, I'm only asked for references about once a year and proof of insurance about once a year (other than builders requiring workers comp and proof of insurance). I do treat them like people not as prospects which closes more sale than even good pricing.

I always ask how the customer found out about my company and not one has found us because of truck signage or lettering.

Here is a rough breakdown of where our work comes from:

- 18% Referrals

- 15% Newspaper ads

- 15% Repeat business

- 12% Commissioned sales (non-employee)

- 11% Direct marketing flyers

- 11% Local business (muffler shops, transmission shops, hair salons, masonry supply houses, pool supply stores, etc.)

- 9% Other contractors (deck builders, painters, handy men, etc.)

- 5% Cold calls

- 4% Other (employee sales, walk-ups, etc.)

[John T 744]

Paul B.,

I agree with everything your saying except for one thing. I(my opinion only) believe that your trucks and rigs should look good. I am a believer in wearing my comapny Polo shirts and caps when doing estimates so to radiate more of my business presence.

Also when I'm doing some residential work and always when doing commercial work I wear a company t-shirt. Anybody who works with me do the same since I have extra shirts.

Along with producing high quality of work I think my appearance should reflect that.

It might be my Military background that has me thinking like this but I feel that being completely squared away with work and appearance I give myself the utmost edge in this forever highball/lowball competition where in.

Also it makes me feel good that I am giving it my best. Sure there are some days that I stray from this but most of the times this is the way I operate my business.

ITs dog eat dog out there and this dog like to eat:p :p :p

[Aplus 525]

Rob,

You're mixing startup costs with operating costs. You don't figure in your annual costs for chems/stains, adv costs, insurance etc... for a start-up. Those are paid for as you go along, out of your revenues.

It's good you're gathering data, and thinking about numbers, and building your strategies. Just make sure you use the data correctly.

Interpreting and portraying data incorrectly can make it look like.........

Notice it's Thick Sliced.

[Mike Williamson 198]

Sigh.....

Rob, you seem to think that the more money you put in up-front, the more "serious" you are about starting a "REAL" business. So, if I put $200,000.00 up front into my pressure washing business, whether I need it or not, then I'm a real, serious businessman? I'm sorry, but I just don't buy that.

You say you spent $5k in stain. That's wonderful, that means you had enough work to use $5k in stain. That means you had that $5k covered by the income generated by that work. Had you not gotten those jobs, you'd have no need for the stain, and thus no need for the $5k to be figured into your start-up costs. The expenses for each job you get shouldn't be figured into your initial start up funds.

I agree with Paul that it is a good idea to have sufficient money to cover down-time, whether it be from equipment failure, weather, or just the off-season. That will vary depending on where you live. That's my whole point to all this. While a guy in upper Michigan will need to have enough cash to cover bills for 4 months, a guy here will not have to deal with that. There is no off-season here. I disagree that you need a year's salary, unless you're jumping in full time and don't expect to generate much business for the first year.

How a person can spend $80k in start up for a wood restoration business is beyond me, unless they started out big, with multiple rigs and employees etc. If that's the case, then sure. I mean, why stop there? Let's spend $500,000.00. Let's buy 20 rigs, hire 40 guys, etc etc. Then we'll get ALL the business because everyone will know that we're the only "real", "serious" business in town!!!!! Woohoo.

[Mike Williamson 198]

As far as buying a franchise, that's a whole different story. You're paying for a lot more than equipment and other start up costs, you're paying for the name, access to the franchise's methods of operation, etc., and everything else related to owning a franchise.

I know of one rather large company who sells franchise rights a whole lot cheaper than $50k., and that INCLUDES the vehicle. Are they just stupid? Don't know what it takes to own/run a "real", "successful" business (despite being very successful for many years)???

[Paul B. 523]

Mike,

A years salary would be for start-up - a part timer would not need that as they would have a primary income to live off of.

John,

I agree that you should have clean and nice looking trucks, rigs, equipment and wear company logo'd shirts / t-shirts, etc.

I wear oxford shirt w/company logo, clean jeans, and new looking work boots when going on estimates. We have several types of logo'd shirts (polo and t-shirts) for working.

My statement was that we get a lot of work "sight unseen". Also seeing most of my full time competition's dress, equipment, etc. leads me to believe that those items are less valued by the majority of customers.

Tony,

For anyone starting full time, insurances, advertising, etc. should be considered part of the 1 st year / start-up cost. You may end up paying as you go. I believe that is part of the reason why there are so many uninsured contractors out there because that is the first thing they drop when cash flow gets tight. Also as cash flow gets tight, you wouldn't want to stop advertising.

As for chemicals/stains, some amount should be put aside or at least have credit available. If you do commercial work, you may not be paid for up to 30 days after you complete the work (some lag even longer if you put up with it). I never ask for up-front money (that's always an option - but I think it makes you look less professional) to fund chemicals or supplies for a job. I had several jobs my first year that each required $400-600 worth of supplies.

None of this is a HAVE TO DO (there are always other options), but a full time start-ups success and smooth operation depends on how well it is funded (up front) and how good the plan is.

Along with that, if you were to go after a SB loan, if you didn't have these (insurance/advertising) in your plan/budget, you would (most likely) not be granted a loan.

[Jon 533]

Rob perhaps you missed my asking you to post some pictures of your rigs with the company lettering etc. on them.

You do have several rigs I take it, I mean you are in so many words saying that.

Let's take someone who went to college and got a PHd,(any field) ok super he has all those years of schooling and book knowledge, right?

Good we all agree, BUT what hands on experience does he have?

NONE

Point is you can spend all the money you want on equipment, advertising, vehicles, going to SCORE, taking classes etc. and have the best of everything yet still have NO EXPERIENCE.

You can work for another company and learn their way, then step out on your own BUT again that does not make you an experienced business person does it Rob?

Is that how you learned Rob?

Is there a difference learning that way then starting and learning ON YOUR OWN from day one?

Now back to posting that picture of your sharp vehicles, how soon can we expect to see them?

[Rick G 14]

I have to say I am much prouder of this business because I grew it to where it is now using my brain and hard work, not just throwing money at it, and you cant put a price on that!

[Guest rfitz]

Jon, I only have one vehicle now, maybe 2 for sure next year, and learning biz all of these, schooling, owning, running, consulting, buying, selling, I think Im qualified..? Im not sure what your question was again..?