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Old 04-20-2011, 08:09 PM
C&S C&S started this thread
 
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Hey guys. Thanks for the great forum and the great posters here. We are moving from Dallas to Colorado this week. Yes, I know, we are completely crazy but we have packed up the little bit of stuff we are going to take, sold/gave away the rest and we're heading out to Colorado.

Here, I run a carpet cleaning and flood business that's pretty much gone down hill for the past year to the point where it would take just as much work to build it back up as it would to start fresh in another city so this seems like the perfect time. This will be my main bread and butter but we have a few other sources of income coming in so hopefully we'll have income coming in from a few different places and I can eventually back off of the carpet cleaning/flood business. I'm not looking for a job as I've been self employed for the last 10 years and I LOVE IT so that's really not a factor, but the employment rate WOULD be a factor since my customers have to be able to afford these services.

So, we're trying to decide between Colorado Springs and Denver (like everyone else seems to be). It's just two of us and I've already been through the huge house payment, car payments to "keep up with the Jones'" but we're both past that. What we're looking for is a cheap place to live in a good neighborhood but close enough to upper middle class neighborhoods where I can do a little carpet cleaning and flood restoration. Here in Texas, my primary customers are homeowners with homes 200,000 and up, family people with kids, white picket fence, 2 cars in the garage, etc. etc. The multimillion dollar homes are OOOOK, but I find business works better in homes around the $400,000-$600,000 range.

What we dream of is a nice little home next to the mountains. The mountain view and air is the main reason we choose Colorado. I'd love to be close to bike trails and hiking trails so we can spend a lot of time outside with nature. These are "wants" but not "needs".

We're not really "clubbers" and prefer the country life, grow our own garden, purify our own water, eat our own fish, etc. etc. The city life is eh... had enough of it. But the catch of course is I have to be pretty close, especially for those emergency flood calls that require immediate response.

And by floods I mean everything from frozen pipes to washing machines overflowing and mild flooding from rain, etc. So it doesn't necessarily have to be a "flood zone".

So, over the next 10 days or so we'll be driving through all of the different cities and towns to check out the landscape, the distance between there and the areas where my business would be the most needed and of course the view. I was wondering, considering all of this, if you guys had any suggestions for areas we should DEFINITELY have a look at. Or places that would fit the bill!

I noticed the houses are pretty nicely priced in Colorado Springs - $700-$1000 a month for homes that would be perfect for us (3 bedrooms, backyard, etc.). In Denver it seems to be a lot more expensive. But on the flip side to that, I'm wondering if I can find the type of clients I mentioned above in Colorado Springs... or enough of them to make a business grow anyway. Colorado Springs seems to have a much nicer view too!! And of course, Denver is a metroplex... no need to explain the benefits of that one.

Thank you so much!!!
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Old 04-20-2011, 08:27 PM
 
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Not much flooding in COLO except for plumbing backups. More money and jobs in Denver, but cost of living is higher. By all means rent to start with and see how it goes. Remember, via I-25 it's only 90 minutes between the two cities, i.e., advertise in both and see what shakes out.
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Old 04-20-2011, 09:11 PM
 
Location: Na'alehu Hawaii/Buena Vista Colorado
4,623 posts, read 9,109,755 times
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I don't know what you consider “cheap”, but I suggest you check out some of the patio homes and townhomes on E. Peakview Avenue just north of Arapahoe Road and west of Havana Street (this is in Denver, just east of I25). North of this area there are many neighborhoods of homes priced $400,000 to $600,000 and up.
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Old 04-21-2011, 12:56 AM
 
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I'd suggest renting halfway between Denver and CO SPNGS.....cuts down on drive time and still lets you hit both areas.....

Flooding may be rare, altho if you have some fire restoration talents that may help.....

It's nice to see someone coming to CO to try and start a new business....rather than looking for a job (along with a herd of other people)....Good Luck to you, I hope it all works out for you
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Old 04-21-2011, 04:21 PM
 
10,869 posts, read 41,139,178 times
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Interesting to see this thread come up ...

as my son is in the midst of buying out a national franchise service such as you describe, based in the South Denver metro area and servicing the $400,000 (and up) homes in that area and extending down to CSprings. The business has been established for 10 years, and has a proven track record, workers, long term service contracts, the works ....

He tells me that the seller's books show doing about $300K in sales for the last few years, with a net in the $100K area for the owner. Pretty good numbers for the work involved if my son's report is correct, although I have my doubts.

But I've looked in the area, and there's a whole bunch of similar businesses ... either local mom and pop's, or national affiliate franchise services. The competition is fierce, and I wonder if what he's buying is not much more than a lot of blue sky and a possible job opportunity. Fortunately, he's got in-laws that will fund him to get into the venture at a price point which I thought was exhorbitant given the meager assets that the business owned and the ability of the service contracts to be cancelled on 30 days notice.

Keep in mind that the population centers with the houses that will be potential customer base are not in the mountain communities, which aren't very densely populated areas. You cannot have the mountain housing that you dream of and have ready access to your client base. Moreover, in the mountain resort communities, these are well served already by a workforce that will work for a wage which will not come close to supporting your dream house/yard, let alone access to outdoor recreation in a low-key remote area for you to enjoy.

I know one lady who runs a crew of up to 30 workers in the Vail Valley doing this type of business, and she employs a workforce of immigrant laborers to do the work. She cannot afford to live in the area where she works, she commutes in quite some distance with several vans for her workers each day. Please note that she is keeping a crew of 30 busy ... and just barely able to afford to live up in the mountains herself. There's no way that a mom and pop two person outfit can even begin to compete with her gross sales ....

I wish you luck with your venture, but I do wonder if you've looked at the demographics, the cost of living, and your established competitors in the area. What do you bring that will allow you to outcompete those established businesses in this marketplace?

PS: I just did an on-line search for similar businesses and see that there's about 30 existing outfits in the area you're looking at ... ranging from Stanley Steemer to Sears to a whole host of other national franchise carpet cleaning outfits as well as the mom and pop's. That's a lot of competition dividing up a rather limited pie .....
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Old 04-21-2011, 06:21 PM
C&S C&S started this thread
 
2 posts, read 2,662 times
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Quote:
Originally Posted by sunsprit View Post
Interesting to see this thread come up ...

as my son is in the midst of buying out a national franchise service such as you describe, based in the South Denver metro area and servicing the $400,000 (and up) homes in that area and extending down to CSprings. The business has been established for 10 years, and has a proven track record, workers, long term service contracts, the works ....

He tells me that the seller's books show doing about $300K in sales for the last few years, with a net in the $100K area for the owner. Pretty good numbers for the work involved if my son's report is correct, although I have my doubts.

But I've looked in the area, and there's a whole bunch of similar businesses ... either local mom and pop's, or national affiliate franchise services. The competition is fierce, and I wonder if what he's buying is not much more than a lot of blue sky and a possible job opportunity. Fortunately, he's got in-laws that will fund him to get into the venture at a price point which I thought was exhorbitant given the meager assets that the business owned and the ability of the service contracts to be cancelled on 30 days notice.

Keep in mind that the population centers with the houses that will be potential customer base are not in the mountain communities, which aren't very densely populated areas. You cannot have the mountain housing that you dream of and have ready access to your client base. Moreover, in the mountain resort communities, these are well served already by a workforce that will work for a wage which will not come close to supporting your dream house/yard, let alone access to outdoor recreation in a low-key remote area for you to enjoy.

I know one lady who runs a crew of up to 30 workers in the Vail Valley doing this type of business, and she employs a workforce of immigrant laborers to do the work. She cannot afford to live in the area where she works, she commutes in quite some distance with several vans for her workers each day. Please note that she is keeping a crew of 30 busy ... and just barely able to afford to live up in the mountains herself. There's no way that a mom and pop two person outfit can even begin to compete with her gross sales ....

I wish you luck with your venture, but I do wonder if you've looked at the demographics, the cost of living, and your established competitors in the area. What do you bring that will allow you to outcompete those established businesses in this marketplace?

PS: I just did an on-line search for similar businesses and see that there's about 30 existing outfits in the area you're looking at ... ranging from Stanley Steemer to Sears to a whole host of other national franchise carpet cleaning outfits as well as the mom and pop's. That's a lot of competition dividing up a rather limited pie .....

Thank you for the great reply and thank you everyone else for the great replies too!

To address this one particular issue. I would seriously talk your son out of something like that. From personal experience I can tell you that I've never stuck around more than a month with a company where the owner has not done the work (in the little bit of time I contracted with companies). There is nothing worse than working for someone who has no experience out in the field. Take anything in life, sex for instance, you can read all the books in the world but nothing is the same as real time experience. Food, you can read about all of the different ways to cook it but if you don't do it yourself, it's useless. Same with everything else. It's going to be hard for your son to gain the respect of his workers if he doesn't have the experience.

That being said, nobody does a better job than yourself! That is why the guys who go solo do much better than people trying to manage a business like this. How can they train workers? How can they problem solve when needed? How do they know how much the work is even worth if they've never done it. Pay a guy too much and he won't work as hard. Pay him too little and he'll steal from you. It's really a delicate balance.

I can tell you this. While I was working on my own I was booked solid, 5, 6, 7 jobs a day at top dollar prices. When I started hiring people the business went so down hill it wasn't even funny.

I'm not trying to discourage your son at all. But honestly, he's better off getting a truck mount, working for a company for a year or so and figuring out how the business operates. It's not brain surgery but it's not maid service either. Use the wrong product, wrong mixture, wrong temp, etc. etc. and you can find yourself with a huge lawsuit on your hands. That is where the experience comes in. There are thousands of dangerously wrong combinations with the hundreds of chemicals and fiber types/colors his guys will encounter. And if someone screws something up, the boss should know how to fix it. Trust me.... it's not as simple as it's made out to be. Unless he wants to run it as a $6 per room, "in and out express" as we call it.... min wage workers, 1 chemical, carpets only, etc. etc. But then he's leaving a lot of money on the table.

Either way it goes, best of luck to him!
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Old 04-21-2011, 08:23 PM
 
10,869 posts, read 41,139,178 times
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Quote:
Originally Posted by C&S View Post
Thank you for the great reply and thank you everyone else for the great replies too!

To address this one particular issue. I would seriously talk your son out of something like that. From personal experience I can tell you that I've never stuck around more than a month with a company where the owner has not done the work (in the little bit of time I contracted with companies). There is nothing worse than working for someone who has no experience out in the field. Take anything in life, sex for instance, you can read all the books in the world but nothing is the same as real time experience. Food, you can read about all of the different ways to cook it but if you don't do it yourself, it's useless. Same with everything else. It's going to be hard for your son to gain the respect of his workers if he doesn't have the experience.

That being said, nobody does a better job than yourself! That is why the guys who go solo do much better than people trying to manage a business like this. How can they train workers? How can they problem solve when needed? How do they know how much the work is even worth if they've never done it. Pay a guy too much and he won't work as hard. Pay him too little and he'll steal from you. It's really a delicate balance.

I can tell you this. While I was working on my own I was booked solid, 5, 6, 7 jobs a day at top dollar prices. When I started hiring people the business went so down hill it wasn't even funny.

I'm not trying to discourage your son at all. But honestly, he's better off getting a truck mount, working for a company for a year or so and figuring out how the business operates. It's not brain surgery but it's not maid service either. Use the wrong product, wrong mixture, wrong temp, etc. etc. and you can find yourself with a huge lawsuit on your hands. That is where the experience comes in. There are thousands of dangerously wrong combinations with the hundreds of chemicals and fiber types/colors his guys will encounter. And if someone screws something up, the boss should know how to fix it. Trust me.... it's not as simple as it's made out to be. Unless he wants to run it as a $6 per room, "in and out express" as we call it.... min wage workers, 1 chemical, carpets only, etc. etc. But then he's leaving a lot of money on the table.

Either way it goes, best of luck to him!
C&S, we are on the same page with this. As a small business owner myself who could and did do any task asked of my employees, which set the standard of performance in my shops ....

I know that my son is walking in to a situation set up for failure unless he can learn how to manage people resources as well as know what it is that they need to do for proper performance of their tasks.

However, I'm on the outside of the loop here. My son tests well on IQ exams and is book learning "bright" .... so he thinks that he knows it all and what he doesn't know about business isn't worth knowing. His role model is a brilliant uncle who is a multi-zillionaire from the computer biz with patents and major programs he wrote to his credit, and he makes it look easy to have made that kind of money. But both of these people are functionally stupid when it comes to common sense, and they exude an attitude that anything related to menial tasks is beneath their dignity. That's an attitude which will go over well, I'm sure, with his employees doing manual work. The kid has advised me that this business is so easy to do that he'll be able to quote new business without even touring the facilities ... simply stay at his home office and write BIDS and get the contracts and dispatch the workers.

I think you and I know there might be more to it than that if you're planning on being successful and surviving in the current economy.

But, hey ... the kid was employed by the biggest software company in the USA as a Financial Analyst, a job assignment he got before he even had a degree. Says a lot about his ability to BS a corporate structure, to even get a job with them at all without a degree (which they subsequently paid for him to get) and to be trusted with handling their clients. A real ego trip for him, with a six-figure salary and major bene's for several years.

The saving grace for him is that he's got carte blanche from his in-laws to go find a business that he can run and make a six-figure income at. With no personal funds at risk (he's already pis*ed away the substantial income he used to make), he's looked at several businesses through brokers in the area. So far, after his initial enthusiasm about the opportunity and dismissing the cost of acquisition as trivial ... none of them so far has reached the closing table. All have had some fatal flaw which precluded him from closing on the business.

It must be nice to have married in to a family of such affluence and disposable capital that it doesn't matter if he succeeds or not. Nor do I believe that the kid would be able to learn how to do this business properly under the guidance of the franchisor, who's seeking 8% monthly royalties on the gross. With a protected territory, they'd want to see the cash flow continue ... and I believe you are right, he won't be able to attract or keep good quality employees.

The numbers he's given me for this business don't compute with what I know about small service businesses, so I highly doubt the potential income he claims from a substantial six-figure business purchase.

All I can do is watch the puzzle go together as far as it might before it comes apart. I don't expect it to last for any real period of time without capital assistance from his in-laws. At one point or another, the well may run dry there ... and there's no possibility of assistance from me. Someday the kid may actually have to get a real job again instead of sitting around as a house husband (or heading out to ski or bicycle race in season) ... and he doesn't even have to watch their kids, they've got nannies to do that for him.

In the meantime, I wish you all the best of luck with your move to the Denver area and the prospects ahead for your business.
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Old 04-21-2011, 10:33 PM
 
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Probably the reality you are going to find is you will be living in a city, with variable air quality with a view of the mountains that may or may not be clear due to air pollution.

I think a lot of people have visions of skipping thru a meadow with clear mountain air and sunbeams and rainbows and that is life in Colorado. 90% of people in Colorado live in the I-25 corridor Population Blob which runs from Pueblo to Fort Collins. And it is mostly flat prairie with some hills. Life in that corridor is where the money is, but it's not going to be that different from Dallas. In fact I find Denver and Dallas to be very similar to one another.

There is potential in everything, but you've got a task ahead of you as Colorado, IMHO is overflowing with service businesses.
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Old 04-22-2011, 03:38 PM
 
331 posts, read 866,774 times
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Originally Posted by wanneroo View Post
I think a lot of people have visions of skipping thru a meadow with clear mountain air and sunbeams and rainbows and that is life in Colorado.
Last time I went skipping through a meadow, I got my foot stuck in a prairie dog hole.

OP, the way I see it, if there is room for 30+ businesses doing what you're doing and they're surviving, why can't you? Just find something to set yourself apart from the rest, realize that you'll need to start small and work your way up, and you'll be fine if you market yourself appropriately. I've lived in a large city that was over-saturated with massage therapists, running a 1-man show in my own massage studio. I was usually booked for a month out solid, and I was 19 years old. If a kid can do it, I'm sure you'll handle yourself appropriately.

How close do you need to be to each city? Have you looked at Castle Rock to live? They've got some beautiful views and fun hikes, and less than an hour away to Denver. Never made the trip from there to COSprings, but probably isn't much further away.
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