BiggerPockets Business Podcast

BiggerPockets Business Podcast 16: Mastering Cash Flow and Finding Riches in “Headache” Jobs with 3Point Cleaning CEO Jesse McCue

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Jesse McCue’s property management company had a problem: Try as they might, they just couldn’t find a thorough, reliable cleaning crew.

So, what did Jesse do? He threw up his hands and went back to “Dancing with the Stars.” Duh.

Kidding!

Jesse took matters into his own hands. What started as a singles-and-doubles operation has grown into a thriving, 100-employee enterprise based in Bangor, Maine. 

In this episode, Jesse maps out a battle plan YOU can use to start a service business. From creating a website to getting insured, he guides us through exactly how to get started making profits by solving someone else’s No. 1 problem. 

Jesse breaks down how he multiplied his client base while barely spending anything on marketing, how he uses high-tech systems to monitor the performance of his night-shift employees, and how he uses checklists to systemize his hiring process so he’s not just relying on his gut. Plus, he shares how he navigated a tough transition around the 30-employee mark. AND he warns us about a danger facing every small business owner: a cash flow management trap that’s always lurking—even if business is booming!

Listen to this episode today. Be sure to check out our back catalogue, as well, and subscribe using your favorite podcast app so you won’t miss any future shows!

Click here to listen on iTunes.

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Read the Transcript Here

J: Welcome to the BiggerPockets Business Podcast, show number 16.

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Carol: And it was at the time so easy because I handpicked every employee. I could literally do my own quality control. I could stop in. I could meet with the customers. I could inspect the buildings. Everything went perfect. And then I don’t know maybe around, I’m going to guess employee 30, it started getting hard.

J: Welcome to a real-world MBA from the school of hard knocks where entrepreneurs reveal what it really takes to make it. Whether you’re already in business or you’re on your way there, this show is for you. This is BiggerPockets Business.

J: Hey, there everybody. It’s J Scott here with my co-host in red or maybe that’s pink, Mrs.-

Carol: Pink. It’s always pink.

J: Always pink.

Carol: This is not hard. It’s always pink.

J: Mrs. Carol. How are you doing today, Mrs. Carol?

Carol: Awesome, awesome day. But more importantly how are you after your awesome weekend?

J: I had an amazing weekend. So I spent the weekend with the hosts of the BiggerPockets Real Estate Podcast, and one of the hosts of the BiggerPockets Money Podcast. I was with Brandon, David Greene and Scott Trench this weekend. We were all at the conference together, and it was awesome. It’s actually a really great conference. We were in Seattle. We drank a little bit too much, and we ate a little bit too much. And yeah, it was super fun. How was your weekend?

Carol: Not as fun as that. Mine was great, but I know you had so much fun. Guys, I’ve got to tell you Jay came home more energized than I’ve seen him in months. We’ve had so much good stuff going on, but I’ll tell you what, all that was eclipsed by the awesome weekend he had. So thanks for spending some great time with him. I know he’d love the conversations and it’s just really exciting stuff. We’re really proud to be part of your community.

J: Yeah, it was a great weekend. Okay, we have a really great show today. Our guest today is Jesse. For those of you who listen to the BiggerPockets Real Estate Podcast, you’ve probably heard him before. He’s been on that show talking about his property management company. But today, he’s going to talk about another company he owns.

Carol: Yeah. You see we are not focusing on property management today. What happened with his property management business is he kept getting all these phone calls that the cleaning was just not up to par. He called company after company, tried them all out and then said, “Forget it. I’m just starting my own cleaning business.” So that’s what we’re going to talk about.

J: Yeah, that was back in 2012 and since 2012, he’s grown that cleaning business from no employees to over 130 employees. And in this episode he’s going to tell us all about how he did that by spending essentially no money on marketing. He’s going to give us tips for how he’s managed his cash flow in that business. And if you listen to the end, he’s going to give us his number one secret for how he build strong relationships with his customers.

Carol: Yeah. He’s going to tell us what he feels is the number one secret ingredient to maintaining and growing a service business no matter what kind of service business it is. So make sure you listen all the way until the end. But before we jump in let’s listen to a word from our sponsor.

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J: I own a bunch of rental property, and if you do as well then this probably sounds familiar. You’ve got a vacancy so your list your place on a bunch of websites, Craigslist, PadMapper, Zillow, Facebook. Then you get a bunch of applications for your property via email. Then you use yet another website to screen the applicants and that’s before you even have a tenant in the property. Well, here’s a great way to keep everything in one place. Cozy provides property management tools to help you save time. So there’s no need for keeping 20 tabs open in your browser. You can list, screen, collect rent and track expenses and maintenance requests online.

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Carol: So without further delay let’s bring on Jesse McCue from 3Point Cleaning.

J: Welcome to the show Mr. Jesse McCue. How you doing today, Jesse?

Jesse: Good. Thanks for having me on.

J: Awesome.

Carol: So good to have you here, Jesse. I’m so excited to hear your story and you have so many different facets of so many different things that you’ve done, and I want everyone to hear some really great stuff. So let’s skip like a formal introduction, okay?

Jesse: Okay.

Carol: I’m going to go right to a question that’s going to kind of lead us to your whole story, okay?

Jesse: Okay.

Carol: I want to know Jesse when was it that you first discovered that you had an entrepreneurial itch, and what you do about it?

Jesse: I’d say the moment that is most clear to me looking back was when I was working… Like a lot of people, I’d worked a lot of different jobs, but when I was working for a resort management company and was kind of working my way up that career path. And after I think the 90th day I had worked in a row with no time off, my girlfriend, wife now, former girlfriend had a family event, some people coming in town that she wanted me to be a part of. It was a busy week at the hotel and there was no way I could get it off, and I just remember thinking there’s got to be a different way to do this.

Jesse: I didn’t mind working a lot. I always enjoyed working, but I think that was the moment I started just looking at things differently that I wanted to be a little more in control of my, not only my financial destiny, but my scheduling too. And it just-

Carol: I could imagine.

Jesse: Yeah. I never really had the itch as a kid. I don’t have some fancy story of selling baseball cards or lemonade stand or anything, it just… Both my parents were self-employed and I never really appreciated it probably as a kid, and then when I started going in my own career path and I started looking back at the lifestyle they were able to live, and they weren’t rich and famous by any means but I just remember whether we were traveling or if I had basketball tournaments as a kid that they could always go to those things and do those things.

Jesse: And I started just looking at my… I was in my mid-20s and was just looking down the road saying, “This is this how it’s going to be forever even if the money keeps getting better in this career path I was in, my control of my time is never going to really change.” So that was it, yeah.

J: So you decided you were ready to control your own destiny. So what was the first venture you attempted at that point?

Carol: It just started with… When I planted the seed that I just knew I want to do something different, I didn’t have any big idea, and I didn’t have some creative invention or anything like that, I just remember talking about it with family and friends all the time that I’d rather do something more on my own. And I think that was this first step is just putting it out there. And it was actually my dad who mutual acquaintance of ours, a friend of his and somebody who actually been my basketball coach as a kid, and then coached my brother too. He had a small property management company.

Carol: It was him and one other person in the office basically doing his own stuff, and a few other clients. And he put us in touch saying he was looking to transition out and was looking to take on a younger person to take over his third party stuff, and just basically concentrate on his own stuff. All it was, was that was the first opportunity that I had come across my path. Now, he’s my current business partner. His name is Paul Cook. Interesting guy, a lot of funny stories I could go into about him. But that was just the first opportunity and him and I talked about it on and off. And what ended up happening was through the course of him and I trying to negotiate something… So I came on and worked for him as an employee.

Carol: And then we were working on a transition plan of how it would work for me to leave and do this on my own. And in that time we just had a good time working together, and what was a small company at the time, and I won’t take all the credit. I think I kind of woke something up in him too that he was out there bringing in more business and doing things like that too, and the two of us just started all of a sudden in the frame of our negotiations. We had 200 more units that we’re managing in a short time. And it was like, okay, maybe we should talk about doing this together long-term. So that’s how it happened.

J: So give us some context. What year was this? How old were you? I know I think we didn’t mention it, but this was in Maine correct?

Carol: Yup. Up in Maine, and it was a big move. I was living in South Florida at the time. I went to college down in South Florida, graduated in 2005 and was living down there, met my wife down there. I had a good job down there, but the opportunity that presented itself was all the way where I was born in Maine, but I hadn’t been there since 2000. And it was all the way was 2009 when this opportunity came. And you know I just kind of said, “What the heck.” So the story I always tell everybody is I asked my wife, girlfriend at the time, I asked her, “How do you feel about moving to Maine?”

Carol: I remember she just kind of looked at me and paused, and because we had lived in the city and I never wanted to get a pet living in the city, she said, “Can we get a dog?” I said-

Carol: This was your first date. I love it.

Jesse: That was it. Can she get a dog? And I said…

Carol: Done and done.

Jesse: “Yeah, we can get a dog.” That was 2009. I moved from South Florida all the way back up to Maine and started working as an employee at the time. And yeah, that’s when it began.

J: So what was the transition plan from employee to owner of the business?

Jesse: It was really just going to be at the time like an owner finance situation where basically… Because I didn't have any funding at the time. I didn't have a loan that I could go and just write them a big check. So it was going to be… We were just kind of negotiating back and forth in a very friendly manner because it was mutually beneficial at the time. He had some other things he wanted to do, and this was a good opportunity for him to sell the business. And it was really just owner financed terms we were working out but those terms kept getting more complex when, hey, we just have another 50 units that are coming on to the business. So it was a moving target.

J: So you mentioned owner financing, and so for the listeners that aren’t familiar with that that basically means that you work with the seller of the business essentially acts as the bank.

Jesse: Correct.

J: So they provide you a loan and you pay off the purchase price for some period of time. Can you talk a bit about how that was structured specifically? You don't have to get on to numbers obviously, but just a little bit about how the owner financing piece was structured.

Jesse: Yeah, the way it was supposed to work was that he just wouldn’t have to work anymore and would still receive payments. So just like if you were buying real estate, if you were selling real estate you don’t have to be involved with the real estate anymore. And he was going to be hands-off not have to take any maintenance calls, not have to worry about leasing buildings, not worry about financials anything and would still receive a guaranteed monthly payment. And that would be the mutually beneficial arrangement would be then from there I would have something to build from. And rather than just starting from scratch I’d have a better platform to continue to grow from. And then what I do with it from there would be mine.

Jesse: And like I said that was still very much on the table. But what happened is we both started rapidly growing the business to where we saw… And I think he saw a vision for the first time as well that we would have more employees and this would be to some extent a little more passive to both of us to where we could both be working entrepreneurially rather than running around changing ceiling tiles, leasing apartments on our own and doing all that stuff. So we both just kind of saw that and it worked out well. So still together to this day actually.

Carol: I love it. So it sounds to me like you mentioned earlier, Paul is your partner, right>

Jesse: Yes.

Carol: I love this journey already how I think it’s fascinating that it was… I don’t want to say it was as simple as because nothing is ever as simple as, but I think you said something really powerful as far as you decided you want to do something different to control your destiny. You were tired of working 90 days in a row and not seeing your girlfriend, now wife, et cetera, and you did one simple act which was saying it out loud and putting it out there, right? So I think that’s just a really powerful thing to kind of take away from that, which led you to Paul. And then tell us more about maybe a couple interesting stories or even the fact that Paul suddenly became more energized, right?

Jesse: Yeah.

Carol: What you’re talking about just now really, really speaks to that, I think, that he was really at first thinking it was going to be very passive for him. But then you came onboard. It sounds like he got energized and fired up again. So talk more about some of those things that you saw him doing that really that when you came on board it really kind of lit a spark and really got your business going that much more.

Jesse: Yeah. I think the biggest thing is when he had me around he saw somebody else with the same level of commitment and energy. That’s something I like to talk about a lot is making yourself invaluable, irreplaceable to somebody. And I think he saw somebody who I was out trying to grow the business and I was taking on responsibility… I would meet with people that usually in the past it would always be things he would have to do or he didn’t have somebody that he trusted to handle that situation, and I would do it. And then it would go well. What I saw him start to do which he hadn’t been doing at the time was just really generating business, and he had been around in the community much longer than me.

Jesse: And I think he had the ability all along to do more of it but maybe he didn’t have the motivation of somebody else who would help carry the load in an entrepreneurial manner meaning 24/7. Him and I were both taking calls at midnight in the early days or meeting with clients on a Sunday, all the things that may not every nine-to-five employee had done for him in the past. So really where I give him a lot of credit is he just started, whether it was making phone calls or… And I remember… I’ll give him a lot of credit.

Jesse: We even have gotten now into some government contracting where we have some pretty large property management contracts with state facilities, and he saw an RFP in the paper, and was all the sudden saying, “Hey, we got to go do this.” And I’m like okay. So really the biggest difference was he… When I say energized, he was never lazy before, he was energized to take the business and continue to double it each rather than just keep it what it was doing. He was energized to continue to grow it which was fun.

Carol: That’s awesome.

J: You guys were basically pushing each other to grow the business so you came in, you sparked something and then he took the gauntlet and then ran with it. So together you just made a good team that actually drove the business forward.

Jesse: Yes.

J: When you first came in how big was the business? How many employees? How many units did you have under management, and then where did that grow to

Jesse: When we started it was probably close to 200 units with half of them being his, so maybe a hundred third-party management. We had one administrative employee, and one or one-and-a-half maintenance people helping out. That was really it. Now, today it’s grown, the property management side. We’ve got eight people in our office doing administrative work, probably 10 maintenance people, plethora of independent contractors that work for us regularly and then we’ve also started, I’m sure which we’ll dive into more what’s spun off from the management business is a commercial cleaning business which has well over a hundred… Somewhere between 100 to 130 employees now.

J: Wow.

Carol: That’s huge. That’s huge.

J: I know we’ve talked a good bit, and anybody that’s interested in hearing more about the property management business, there was a great episode on the BiggerPockets Real Estate Podcast where you talked about your property management business but now that you mentioned the cleaning business, I think I’m a little bit intrigued. So can you tell us a little bit about how the property management business led you to start the cleaning business? What was the impetus there?

Carol: I would say property management is a great springboard for any of the kind of blue-collar, physical labor industries. I mean, you’re in control of eating, plumbing, lawn care, snow removal, janitorial. So as much of it is you want to dive in and do, you can do. So me being young and just trying to do as much as I can, I was dabbling with a little bit of all of that. We were hiring our own maintenance guys. We were doing more of our own lawn care, snow removal, and then I think after… The way it really began was when you’re in charge of a… So we managed some commercial space.

Carol: So when you’re in charge of a commercial building, the complaints come to you. If it’s too hot, if it’s too cold they’re going to call you, and the one thing that we were having the biggest headache with was cleaning. So if you lease an office space sometimes the common areas have restrooms, the hallways, the lobby and if you have a nice, say, law firm paying say 6-$7,000 a month rent, they get tired of complaining about the cleaning, and they call you which then my model at the time was I call whoever, ABC Cleaners, and I just let them know about it, and then I pray that it gets better.

J: And so for these commercial cleaning jobs, these are the people that come in after hours, the business locks up at night, and the cleaning people come in late at night or the middle of the night, and they do that basically five days a week or maybe seven days a week depending on the business, right?

Jesse: Absolutely. And-

Carol: I’m sorry. One more question on that to verify. So it was like the ABC Cleaners that you called that they basically just didn’t do that good of a job is what it all boil down to.

Jesse: Correct.

Carol: Frankly, I guess I’m a bit surprised to hear… And I guess you go into different office buildings, and yeah, ladies rooms certainly are not where they need to be so I can totally get that. That said overall I guess I was just surprised to find that that was such a common complaint among so many different tenants. So it was realistically that these third-party companies just weren’t doing that good of a job at the end of the day?

Jesse: I’d say sometimes but also it’s a hard business to monitor when it’s a third-party. It’s constant.

Carol: Got it.

Jesse: Cleaning is always… I mean it’s every day. So unlike, say heating-cooling issue, typically you fix and it’s fixed for a long time. If there’s a cleaning issue that building is dirty again, and when it’s not you or your people a lot of times it’s hard to figure out what’s going on. I mean sometimes there’s logistical things where there’s complaints because the cleaner is coming in at 5:00 and you don’t even know it but people are coming in later at 7:00 or 8:00 and still tracking up the lobby.

Carol: Sure.

Jesse: There’s all these things that you’re trying to dive into and figure out what’s going on. And the first time that I just said, “Okay, screw it. I’m going to just hire a one cleaning person and take care of this building. That’s how it began. Yeah, that’s how it began.

Carol: How did you find that one person?

Jesse: Back then I think like… Way back then it was just Craigslist. I had no idea what I was doing and my interview was just pretty laid back and hire somebody. So not much to it. Back then I was winging it. Now, there’s a whole you know system in process and we use Applicant Tracking Software, and onboarding, and human capital management and all sorts of stuff now.

J: I assume that first person was just a contractor. They came in with their own tools, they came in with their own cleaning supplies and basically the relationship was they came into the job and you handed them a check?

Jesse: No. Actually the first time we did it was I wanted my own employee.

J: Oh, okay.

Carol: No kidding?

Jesse: No, had our own employee. We had a little bit of experience with having our own maintenance people. At the time we only had a few maintenance people. So we had some basically more like handymen that worked for us. So if you called us on an apartment with an issue, we could send a guy over and fix it. We had a payroll so at the time it seemed like a natural progression. Let’s hire you know a cleaning person, put them on the payroll. And then it was better to me. I could say you’re hired to be in this building from 5:00 to 7:00 pm. Back then we would just trust that they did it or I would spy on them, and things like that. Now, you use things like technology, apps on their phone with geofencing. We know where all our people are at all times. The whole situation now.

Carol: Okay. So you had this one person, and this one person was your employee cleaning from 5:00 to 7:00 pm. Did that person work out?

Jesse: Yeah, it did. I mean in the beginning where I was the manager of it myself and there was no middle management, everything worked out great. And this is probably a story a lot of entrepreneurs have experienced where I don’t know what employee number it was, but word of mouth would kind of spread. If you’re doing a good job somebody else would say, “Hey, I heard you guys do some cleaning.” And in a community where you’re already doing property management you have a lot of contacts anyway.

Jesse: So you go from one office to two office to three offices and then and it was at the time so easy because I handpicked every employee. I could literally do my own quality control. I could stop in, I could meet with the customers. I could inspect the buildings and everything was easy. Everything went perfect, and then I don’t know, maybe around, I’m going to guess employee 30, it started getting hard.

Carol: Okay. I would suspect so.

J: And so you’re talking about 30 employees here. So give me an idea. So typical employee is going to work how many different buildings in a night? And so 30 employees is going to cover how many different properties?

Carol: Yeah. And this is something that’s changed over the years. In the beginning I would take on pretty much anything. So if it was a building that got cleaned twice a week, if it was something that we went in once a week and just shampooed carpets or whatever it was, I would do it. That was part of the journey of a lot of stress. Now, we’ve really figured out our niche and our business model where 90% of our properties that we provide cleaning for are more five nights a week. So people that want nightly cleaning.

Carol: And that makes a lot easier to manage your staff into schedule and put supervision in place instead of we don’t have a fleet of vans that are coming and going all the time. We now have mostly larger facilities anything from medical facilities, schools, courthouses and airport, all sorts of stuff where people have to show up to the job site every night and clean.

J: Got it.

Carol: So that’s what we’ve moved it towards now.

J: They have on-site supply closets and things like that so basically for you it’s centralizing the cleaning in each of the buildings and then just sending people to different places. Like you said you don’t just send vans of cleaning supplies and equipment to different buildings.

Jesse: Yeah, absolutely. And I used to do a little more of that. I mean we still do have a warehouse with supplies and all that, but way less of that now. So if somebody calls me now and says, “Hey, can you give me a price to wash our windows?” The answer now is no unless you’re interested in regular services.

Carol: Okay. So I have a question. So you mentioned it was around employee number 30 that things began to get hard, right? What was it around… Was there a tipping point when you realized, “Whoa, we’re in just some type of critical mass now. I can’t run all these places at the same time.” How did you start thinking differently about your business, and what kind of stuff did you put in place to start streamlining?

Jesse: I think it started being… I couldn’t keep my hand on the pulse of where everybody was all the time. I couldn’t supervise it all. And so what I started learning to do… I mean we used to back then people would literally sign a paper log when they came and left the building and we’d collect the paper logs and that’s how we pay them. You can imagine some people started to learn to lie on that.

Carol: Stop right there. Give me a good story. Tell me a good story about someone learning to lie.

Jesse: Oh, someone learning to lie. I call them when I’m standing in my car asking them what they’re doing and they say, “Oh, I’m just finishing up the vacuum right now.” And I’m watching them out in their car smoking something maybe illegal, maybe not illegal. That type of stuff.

Carol: Wow, that’s fun. That’s fun stuff.

J: So I imagine a lot of this a lot of these types of issues can be mitigated by hiring, and I know you’ve talked a little bit in the past on the real estate podcast a little bit about your hiring practices and how important hiring is to you. Can you talk a little bit about that?

Jesse: Yeah. I mean I’d say that’s everything especially in a tight labor market right now where everybody’s fighting for hands-on labor. I would say the thing we do the most right now is we spend a little more money advertising and we’re going through even for an entry-level custodial job, we will interview six, seven, eight people before we hire one.

J: Wow.

Jesse: And I don’t think most people do that. So we will do that. We’ll spend a little more money running thorough background checks on everybody. The simple step of calling references it’s amazing what you find out. I mean, that’s probably one of my favorite stories. I had somebody who I thought was a perfect candidate and I almost just said, “Hey, can you start tomorrow?” Middle-aged lady, very pleasant, had a good resume, and I think we ran her background check it came fine.

Jesse: But one of her references she had put that the business had sold and the woman that she used to work for passed away, so you couldn’t get a hold of her. I said, “Oh, that’s terrible.” But for whatever reason, we did our due diligence and we called the company she used to work for, and they verified, “Yeah, the business did sell, but no she’s alive. I can give you her number if you want.” I’m like, “What?”

Carol: Oh, boy. This is going to get really good.
Jesse: I’m like, “What?” So we called the lady and she didn’t want to talk too much about it. She said, “I’d rather not talk about the employee.” And she said, “But I would just tell you that drugs are a problem in our community.”

Carol: Wow.

Jesse: Ad I said, “Whoa, whoa.”

Carol: Wow.

Jesse: You can’t trust people in an interview. It’s like a real estate deal. You can’t just go off a gut, you got to go back to the numbers. And that’s what he learned in the hiring practice is you go back to the data. So now we have a hiring checklist where they check off the boxes, and before you just hire somebody.

J: So what kind of turnover do you have for your cleaning employees these days?

Jesse: It’s not too bad. I think the industry in general is going to be higher than most. You get a lot of good people who want to do it as a second job, but people don’t necessarily do something as a second job forever. There is I would say more turnover than a regular business but at least through a little more screening of people we don’t have people that quit with no notice as much, so you have a little better clientele of employees who will at least give you proper notice and things like that, but it is common unfortunately in the cleaning business where somebody will take maybe a part-time evening job for five or six months, and then give their notice. And then we’ve had a lot of repeat hires too though. I’ve had people that have worked for me three times.

Carol: Ohm, wow.

Jesse: Everybody’s got their own stuff going on so life throws them curveballs and as long as they are respectful to us as employers, and they leave on good terms we’ve got some good employees that will get a call and haven’t heard from him in a year and we’ll say, “Yeah, come on back. When can you work?”

J: Awesome. So what year was it you hired your first cleaning employee?

Jesse: It probably was until around 2012 really, about 2012 it was small. One or two people back then.

J: Okay. So you started in 2012, here we are seven years later you said you’re up to about 130 people. Presumably somewhere in there you stopped going from just hiring cleaning people to putting some type of structure in place, a management structure. So can you talk about at what point the business grew to a size where you had to start putting in managers or maybe managers of managers? And what does your organization look like over the years through today?

Jesse: Yeah. Probably it always happened. I don’t know if this is the best advice for the listeners, but this is the truth that it always happened too late. I didn’t have the crystal ball to say this is what we should do. It was always after things were too stressful and then something went wrong that we realized, “I bet a human resource person would be a great idea.” Now, we have an operations manager that oversees the day-to-day. He’s there in the day. His title is operations manager, probably more of a general manager at this point. We have a human resource person. And what’s nice about having a property management business is I can share some of the admin in the accounting backside so that is the one-

Carol: That’s nice.

Jesse: That is the one overlap answering the phone, taking messages. At this point it is two separate businesses completely, but having multiple businesses, there is an upside to that where the accounting team can be helpful. Because there is a lot that goes into the backend where we’re tracking how much we’re spending on the labor very closely and materials. A lot of our contracts I supply, chemicals and equipment. Some of our contracts, I mean, I supply all the toilet paper. So you have to have some accounting systems in place where I know exactly what we spend on paper towels every month or you’ll get burned.

Carol: Certainly.

Jesse: And I have. So I share a little bit of the accounting in the admin, but on the cleaning side there’s human resources, there’s operations. And then because 90 plus percent of our force is working at night, we have multiple supervisors on at night is how we do it. Some of the sites are large enough, and this is a little bit like real estate where things tend to multiply. If somebody can go from owning a duplex they go to then owning 10 units where we went from cleaning a building that had one person in it to all of a sudden the reason it grows exponentially is you’re cleaning a building that has 10 people in it every night. We’ve cleaned a school that had 10 full-time employees, 10 full-time people every night in it.

Carol: That’s a huge job.

Jesse: So all the sudden that sight alone warrants its own on-site supervisor. So we have some sites that are big enough that there’s a site supervisor, and then we have some kind of roaming, we call them field supervisors at night that they have… And now we use a lot of technology, a lot of software. We use like a work order software that monitors where all the employees are. It does quality control inspections. Employees can communicate back when they’re short on supplies. You can pre-program the job for the whole year of everything that needs to get done and they can close out the jobs as they go.

Jesse: So much like the property management business I’ve really leaned on technology to scale, and I think both those fields not enough people in my area anyway do that. It was the same with property management where there wasn’t a lot of competition in this area, people using modern property management software that gives the proper transparency. So I kind of took what I learned from there and did the same thing with janitorial. I mean, our customers can submit work orders themselves and see when they get closed out. So it’s nice.

Carol: Excellent, excellent. So it sounds like through the growth from 2012 until now in these seven years, these 135 employees, putting in different layers of people it sounds like internally as well as at the job sites. You take that, you combine it with systems and processes and technology. It sounds like your role has probably changed a lot, your personal role. It sounds like you’re much more involved in the beginning. How did that change over time, and what is your role now? How did that all evolve?

J: Yeah, I mean my role now I’m still… I like to work so I went to Florida last week and everybody in the office told me that it was nice not having me around, so I think that’s a good thing. Like I’ve talked about in the property manager business, I’ve been really fortunate to just hire really good people. I mean the leadership team that I have. I mean there’s some turnover of course on the entry-level labor market, but the management team that we’ve put around us we’ve had very low turnover. So I’ve been lucky that way. I like to come to the office every day. I’m still very involved. But now what I’ve learned is through using technology is to have the right reporting.

J: So there’s things that we look at is daily reports, weekly reports, and on the cleaning side it’s everything from punch variances. So I can get a report of every employee, the ones that are red flagged that if they were scheduled to work three hours, but they only work two hours and 15 minutes it hits my report, and I can see it, and I can pass along to the right supervisors to figure out what’s going on. So it’s a lot of looking at reports. I think like a lot of business owners if something grows you end up looking at data all the time.

Carol: Sure.

Jesse: It’s what a lot of it is.

J: So are all of your cleaning customers coming through your property management business or you doing marketing for cleaning customers outside a property management? Are you taking on customers that are not necessarily in your property management portfolio?

Jesse: Good question. That’s certainly how it grew. That was the bulk of our business was people that we were already involved with somehow and now the cleaning business has become its whole own thing. We had to start a new company we call it 3Point Cleaning. That’s just kind of a reference to my partner and I both really liked basketball. So that was pretty simple. We’re big basketball fans. And now it comes through mostly word-of-mouth, honestly. I hate to say it the only marketing budget we have right now is through more like charitable events. So we’ll sponsor things that get your name on things.

Carol: Wonderful.

Jesse: But other than that… We do a lot of things for… Like we’re talking earlier we do things for the local YMCA. So we just do lots of charitable events where we sponsor things that our name is out there, but other than that we really don’t have a marketing budget. And to be honest if we’re still taking on business as fast as I feel like we can handle it, and we’ve been lucky to… One of the things I’ve learned, one of the biggest things I’ve learned from cleaning is, and I’ve learned this the hard way is to only take on business if it makes sense, numbers wise. Sometimes you can have that competitive edge to just do it so that you can say that you do it. You want to brag and say that school is cleaned by me, but I’ve learned to just take the accounts that make financial sense, and now we’ve gotten ourselves into a place where we have some leverage.

Jesse: We just started an account last month where they told us we were the highest bid, but that they really wanted to work with us because so could we come back in and negotiate a little bit and get down to the real nitty-gritty on it, and we were able to work something out. So, yeah, we’re taking on accounts right now. I truly feel right now that the opportunity is there for any of these industries like I said whether it was heating, plumbing, lawn care, snow removal, anybody that wants to be an entrepreneur and dig in, and provide a good service, and communicate back to the customer regularly, I think it’s endless what you can do. I mean, there’s really no barrier to entry for that type of market.

J: That’s interesting. And I know you mentioned financial sense. So for those of our listeners that are like thinking about starting a cleaning business or thinking about starting other service business maybe in the real estate or contracting world or any service business in any world can you walk us through what the economics of your business look like? From an income standpoint basically these companies are paying you probably either hourly, or weekly, or monthly, or annually depending I guess on the contract to come in and clean their building or buildings some number of times.

J: And then on the expense side. So what are we looking at on an expense side? You obviously have employee salaries, you have cleaning equipment and tools, and materials. Are you providing cars or vans? Are you providing… What other types of expenses do you have typically?

Jesse: Good questions. The first part of it I’ve learned the bigger customers. When you start off with some of the smaller ones they’re okay with maybe hourly rates or weekly rates. What I learned the hard way is when you get in with the big customers they really like to set their budgets for the year. So they want to know this is my line item for cleaning for the year and they want it billed monthly. So you really need to know what you’re doing when you get into that type of arrangement because you’re going to send your invoice out at the end of the month and most people are net thirty. So they’re not going to just turn around and cut you a check tomorrow. So you’ve paid all of your expenses for the month.

Carol: Sure.

Jesse: And then even a good customer, they’re probably going to take 20 to 30 days to pay. It’s not because they can’t, but because they’re busy, and they’ve got it sitting in a stack of 500 other invoices to get paid. So meanwhile by the time that next invoice… By the time that first invoice hits your bank account and you’ve been paid, you’ve already done another 30 days of expenses. So you have all those things like you nailed it. Labor is the biggest thing. And then payroll, taxes, fees, workers comp, training. And then whatever overhead you have which anybody who’s starting out that’s your competitive advantage is you don’t have the overhead. You don’t have the office space that we have now and you don’t have the layers of management.

Jesse: And you should be able to make that line item smaller, but we have a little more overhead. And then based on the contract you’re going to have sometimes… Typically, you’re always going to supply the equipment and then sometimes you supply the chemicals and sometimes they do, and same thing. Some people want you to include the paper towels and toilet paper just because they like to make that your problem. They want to… If somebody runs out of paper towels they want a number to call. So it becomes your problem.

Carol: Sure. They don’t to run over to Costco on their own. It’s like call them up and make it happen.

Jesse: Yeah, make it happen. Make it the janitor’s fault. So that’s what we do.

J: Before we move on to the next part of our show, let’s hear from one of our show sponsors.

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J: So I’m curious, and I’m not going to ask you about personal financial numbers, but from a high level perspective, so you get income in, you pay expenses, and then you have your bottom line. Your income minus your expenses, and generally speaking that bottom line is some percentage of your income. We call that the margin, your operating margin. So for every thousand dollars you take in, you might make $100 or $200 or $500. So in the cleaning business, what are typical margins like for every dollar you take in how many cents is actually going to end up flowing into your pocket?

Jesse: Yeah, good question. I mean when you’re doing like a bid sheet the last line item you always put in when you’re playing with your numbers is going to be your profit, your anticipated profit there. And it’s usually done on a percentage. So most people, I think depending on how hungry you are, you’re anywhere from 10 to 30% is where you usually see it, and it’s usually the larger the job the more you’ll bring those margins down .Because if it’s a million dollar a year job you might do it at 10%, you might do that for $100,000 a year.

Jesse: It really comes down to… It’s a lot like the construction business where it can depend on how busy you are. You find that sometimes I’m sure. I know you’ve done a lot of with construction. You get bids from people, you can tell they’ve already got five jobs lined up so they throw you the big one.

J: Yup.

Jesse: I’m guilty of doing that too sometimes. It’s similar. I’ve got three big jobs I’m starting and we’re trying to hire four, and staff. So I throw out a crazy number to somebody. If you’re busy that’s how you do it. If you’re not busy then you probably go down to that 10% range. The thing that I think a lot of people make the mistake of when they’re starting out though is not understanding that cash flow part of it though, that although on an Excel spreadsheet… And this is true for probably a lot of small business owners go through this.

Jesse: I know this was my real education is you’re looking at your checking account in the early stages and there’s not enough money in there but you say, “Well, everything is going according to plan, and I bid this at 25%. Why don’t I have all this money there?” And that’s one of the things you have to make sure that you do bid it at enough of a profit margin, that you calculate how fast that money goes out versus how fast it comes in because the expenses are always there.

J: Yeah. That’s a really good point. You mentioned earlier about the fact that you’re going to be paying for your cleaning supplies, and you’re going to be paying for your health insurance, and you’re going to be paying your employee salaries. You’re going to be paying that let’s say in March, but you’re not actually going to be collecting a check from your customer until mid-April, late April. So you’re putting that money out. If you have one job, you may be out $1,000, $1,500, $2,000 for the month and a lot of people think well if I scale, if I can get a hundred jobs or a thousand jobs that’s going to make my business a lot more profitable. But the problem that comes is that with a hundred jobs or a thousand jobs instead of being out $2,000 for a month, you’re now $200,000 for a month.

Jesse: And then you throw in growth with that. It can be a problem if you stay with what you’re doing, but if you go land, we landed a large job that I spent $25,000 in equipment, bang, just like that.

J: Right off the bat.

Jesse: I mean a nice commercial vacuum is $500. So if you need five of them you got to go give five of them. And then there’s some other equipment that you get into. I mean there’s some floor machines, and there’s window cleaning equipment and all this stuff that you can spend the money quick and then… But those people, your vendors that you buy stuff from, they want to get paid right away. So if you keep adding new business and the old business doesn’t have big enough margins you can be in trouble pretty quick and that’s just something I think a lot of people that are in the early stages of being small business should really think about. It doesn’t mean that they shouldn’t do it, it just means you should plan for it.

Jesse: I didn’t always plan for that, but I will say I’m very fortunate that the property management company and then some other real estate investments at the same time we’re going well. So at the same time I was very much so into real estate. So I had this other cash flow machine that could help fund a new business too. If I didn’t have those things going I probably would have been at the bank in the early stages looking for help on the cleaning business. Again, I’m sure a lot of you know small business owners have been through that same stuff. They don’t teach you that in college.

Carol: That’s right.

J: Absolutely. Cash flow management is one of those things that way too many entrepreneurs and business owners don’t think about until it’s actually biting them in the butt.

Jesse: I mean, we get into government work and it’s happened a couple times that a large state facility that we were cleaning, they had some issues on their end whether it was politics or somebody got fired, I don’t know. But we’ve had them take four to five months to pay us on something. And then it all comes in at once. But there’s not a lot of complaining you can do to the government when they haven’t paid you yet.

Carol: You just got to kind of deal with, right?

Jesse: And your employees, you’re not going to go to your employees and say, “Hey, guys. Sorry, we’re all going to clean for free tonight because there’s some issues going on at the Capitol.”

Carol: Yeah, that’s not going to fly. Not by any stretch. Not by any stretch. So you’re 130 people now in your cleaning business. What are your goals from here?

Jesse: That’s a great question. I’m probably guilty of not being good enough as some of these people that really look and plan five-year plans. It’s something I’m trying to get better at. I mean business books. I think I’m 80% through Traction. I bumped into your friend Brandon Turner at one of the real estate events I went to and he was telling me to read Traction.

J: Yeah, it’s a great book.

Carol: You’re reading that.

Jesse: I’m 80% through. And that stuff, I honestly should get better at. I’m much more of just a go, go, go, go and make it work. But right now, I’ve got a nice balance of I enjoy what I’m doing, I enjoy the cleaning business because it keeps growing, so it’s fun to keep having these challenges. One thing about cleaning is you make relationships with other businesses in the community. The big businesses in the community all need it. It’s a service everybody needs. It’s a service you can be somebody’s hero at. So I’ve made a lot of nice relationships with other business owners in the community that way. And to be honest every dime that I make from cleaning if it doesn’t get reinvested into the cleaning business, it just goes right into real estate.

Carol: There you go. So it comes full circle.

Jesse: It just keeps going into the next real estate deal.

Carol: Hey, love that. And I want to touch just a bit more on… You mentioned earlier your marketing budget is essentially zero, and that’s a beautiful thing especially like near and dear to my heart, I love the fact that the things you are spending money on is sponsoring charitable things and sponsoring a team at the Y and that type of thing. And it sounds like you’re saying that you feel like you need to plan better, you need to read more, et cetera. But it really sounds to me that your secret sauce is simply building relationships and just talking to people, right?

Jesse: Oh, absolutely. Yeah.

Carol: Which I also find really refreshing now because I know so many people who are afraid to just pick up that phone. So many people are so email dependent. So I’m going to shoot them a note on Facebook or whatever. Can you give our listeners some tips around why that’s so important and how you really think that’s set you apart and made a big difference for your business?

Jesse: People in the office would tell me it’s like my weirdest quality that I just love to need to call people because other people especially some of the younger people that work for me don’t think you need to call anybody. But a lot of our customers have dealt with cleaning issues for a long time and a lot of our customers have even hired their own cleaning staff and it didn’t go well. So it’s amazing how understandable people are when you have a relationship. I mean, I have picked up the phone before and called somebody and said, “Hey, I got to apologize. You wouldn’t believe what happened last night.” And just told him the truth.

Carol: Sure.

Jesse: “We had somebody quit on us last night, had a bit of a meltdown and the job didn’t get finished. We’re sorry. We’re going to make it up to you this weekend.” And they’re like, “Oh, I really appreciate you calling. That’s great.” I don’t think enough people do that to just call and talk, check in with the customers. You have to make people feel comfortable to tell you the truth. The accounts that we worry about are the ones you never hear from. The ones that people call and complain a lot are the ones I like because clearly they feel comfortable to talk to us.

J: They’re engaged.

Jesse: Yeah, they’re engaged, they trust you, they think you’re going to be responsive. So those are the customers I like, and I have to remind our staff that sometimes who will just say, “Oh, this customer over here is whiny and high-maintenance.” And I’m like, “No, I love that guy. He’s always calling. He’s telling us what’s going on.”
Carol: That’s right. You’re going to get whatever information you needed. I think there’s a lot of power too, and you’re just talking about you’re not only willing, but you’re happy to pick up the phone and just full-on admit your mistakes. I think that means so much as far as the customer experience and they love the transparency and they know that you’re going to always take ownership of everything that’s happening.

Jesse: Yeah. I had a recent story I just thought of that your listeners might like. I had to speak to the relationships. One of these insurance offices, insurance agency that we clean and I built a good relationship with their owners talk to them, they forwarded me an email with an attachment of a voice mail and the text in the email was, “Man, where did you find this guy. This is gold.” I listen to the voice mail. The guy is not gold but he left a voicemail to my customer telling him how much I’m paying him, and that if they gave him a dollar raise, he would go work for them directly and cut me out.

Carol: No.

Jesse: Yeah.

Carol: No.

Jesse: Yeah.

Carol: Wow.

Jesse: So I like to share the bad stories on these podcasts too.

Carol: Yes. We need those.

J: And let me tell you something. This is where having a good relationship with your customers is so important because if you didn’t have that relationship with your customer, well, one they might actually take him up on that offer, but two who knows how many other customers he’s doing the same thing to and you may never have known.

Jesse: Right. So he forwards it to me with just a funny remark of, “Man, this guy is gold. Where did you find him or something?” And I’m like, you know.

Carol: Wow.

Jesse: So it’s about relationships.

Carol: That’s right.

Jesse: People know that we’re not perfect but as long as we own it and just fix it.

J: That’s awesome. Okay. So you have the property management company and that is a great lead generation source for your cleaning company. Have you started any other businesses in the space using either your cleaning business or your property management business as a lead gen source?

Jesse: We’ve dabbled a little bit of lawn care and snow removal. We still do some of it to just kind of cherry-pick a few good accounts, a few large complexes that we do the snow removal ourselves. Because I’m up here in Maine so there’s some money in snow removal. The only other business that we’ve done… I mean honestly, the cleaning has been so fast growing. That has taken most of our attention in terms of growth that way. The property management company is also still growing. So those two are both growing. I mean, the management company is over 2,000 units now.

Jesse: And the third business that we do have which I guess did spin off, I talked about it when I was on the real-estate show was the motel that we purchased is going pretty well. So that is technically a whole separate business. It’s only got three employees. It’s a 67 room motel, but it does have three full-time people that all are on-site every day. And that is a good example of a spinoff from a property management company because we actually a little unconventional, even use our property management software. We tweaked it a little bit to run the motel which I don’t think most people would do, but I wanted to so that we could just keep it all in-house so that my same administrative team here, the accounting folk here can look at it, and I can look at it right in-house. So I can pull up the app. I use run manager. I can use the app on my phone, and I can see who’s checked in or checked out of the motel right from the phone, so it’s pretty cool.

Carol: All right.

J: That’s awesome. Okay. So let me ask you a question. We have a number of listeners who may be thinking about starting new businesses or maybe they’re in the real-estate world and they’re thinking about expanding into their next business. And after listening to you maybe they’re now thinking a cleaning company might be a reasonable business to go after. So let’s say I wanted to start a cleaning business tomorrow, what are some tips that would help me kind of get started and get my first customers. What are the first steps I should be taking if I want to start my own cleaning business?

Jesse: Any small business what I would do is I would definitely create a nice professional website because that’s so simple now. I mean everybody should be able to do that. And it doesn’t need to be a $10,000 website with tons of search engine optimization money thrown at it, but number one I would just look professional. I would get yourself insurance. Even if it’s literally just you cleaning. I mean, you still show that you’re insured so if something happens.

J: And this is light liability insurance?

Jesse: Yeah, liability insurance. Some people will ask you to be bonded and it’s just you. It’s not very expensive, but get some business cards, get a little website, and then step one start you know doing some door knocking some cold calling. I mean, it’s pretty easy to… At this point I probably turn down one to two leads a week and I’m completely fine with that. I mean that’s kind of one of those lessons I’ve learned to say no. We get a lot of calls of people saying they want once a week service, once a month come clean our office. We’re not doing that. But that’s a whole field that somebody just starting could do tomorrow easily.

Jesse: So I’ve seen people put little door hangers on offices go through office buildings and put Jay’s cleaning service with a number, a business card, fully insured and a link to your website, and free estimate. I think if you walked around office complexes and drop those off, your phone would probably ring.

Carol: It’s great.

J: If I were to walk into a business who am I talking to? Am I talking to the CEO? Am I talking to an HR person?

Jesse: That’s a funny question.

J: It’s probably not a head of cleaning.

Jesse: No. That’s a funny question. That is a million dollar question because we’ve learned that cleaning is a little sensitive subject in everybody’s office like who’s in charge of it, and it is different. I mean, sometimes you do have to talk to the business owner but most of the time you don’t. Most the time there’s just somebody in the office that that’s their thing. I would talk to whoever you get on the phone first, and just say, “Hey, I’m Jay’s cleaning, and I want to give you guys a free estimate anytime. I love to just give you guys a quote. No obligations.” And then it just it’s like everything. It would be a ripple effect. I wouldn’t mislead people and say you could go and make a million dollars in the first six months. That’s going to be tough, but it would be easy to pick up small business at first and then it’s amazing some of these small businesses know a lot of other people.

Jesse: You might have a small business that is only two hours a night of cleaning, but they’re in engineering. They’re a small engineering firm and they know some other really big companies and this is what’s happened with us as the phone rings to us and it’s a large construction company. Like, “How did you hear about us? Oh, so-and-so engineering said that they use you and they’re happy.” Like, “Oh, okay. Excellent.”

Carol: It’s wonderful. So back to that just importance of giving a good service, being professional, building those relationships talking to people and it just keeps on going. I love it.

Jesse: Absolutely.

Carol: Great. Well, thank you. These are all excellent tips and I really appreciate the step by step breaking it down for new people on what they should be doing. I think that’s going to provide a ton of value. So now we’d like to take you to the part of our podcast Jesse that we call Four More.

Jesse: Oh, great.

Carol: I know. You got to love it. So what we’re going to do is we’re going to ask you four questions and then at the end we’re going to talk about more, and the more is where we can find out more about you, all right?

Jesse: Okay.

Carol: Okay. So Jay, you take the first question.

J: Okay. Question number one, tell us about your absolute worst job and what lessons did you learn from that job that you’re using today?

Jesse: I would probably say because we touched on earlier, probably where I got one of my strengths of being willing to talk to people on the phone, cold calling people, one summer when I was home from college I went back home after my freshman year of college and stayed with my parents, and I had to get a job. I sold credit cards over the phone all summer. And the only reason I took that job at the time there was two girls I went to high school with that were very cute, and they were working there, so I worked with them.

Carol: Why not?

Jesse: And we used to carpool. Neither of them ended up dating me but I did learn to talk on the phone. So you kind of get forced in that role. I mean, it was awful. I hated it. They monitor what you do. My numbers were good but I used to get in trouble for cutting the conversations short because I knew that it wasn’t going to be a sale because you’d make commission. So when I’d have somebody on the phone that wasn’t interested you’re supposed to keep going through the prompts, and I wouldn’t do it, but then like a voice would come on over my other headset and somebody who’s listening to me maybe one of my boss is saying you’re doing it again. Oh, yeah.

Carol: They would want you to just keep on going even though you got it done through science where you knew they weren’t going to engage like just keep going?

Jesse: They want you to exhaust every lead. They pay for those leads.

Carol: Oh, that must made you crazy.

Jesse: Yeah, and they could track everything. When the phone ended the next call would just take. When the call ended I mean, the next one just began. It’s ringing. And then so-and-so would answer and the script would be in front of you. And you just do that like a machine all night. It was awful.

Carol: It sounds awful.

Jesse: It was brutal.

Carol: But you got good at talking on the phone and that became a beautiful thing so that’s awesome.

Jesse: You learn to not feel uncomfortable on the phone because you have to be able to just breakthrough and talk to people.

Carol: And the worst they can do is say no. That’s always the worst case scenario, right?

Jesse: Absolutely.

Carol: So speaking of saying no, our second question is what is some big opportunity that you said no to at some point, and in retrospect do you think it was the right decision to do that?

Jesse: Probably when I was working for the resort management company, they’ve kind of been grooming me through the management path. They had made me work in every asset of the hotel. So I had been a food and beverage manager. I’d been a front office manager, and this is right around the time I was trying to make a decision whether I was going to leave beautiful Florida to go try to take this other opportunity up in Maine. One of my boss has called me into the office and said that he came from a meeting with his bosses and that the company it was buying a big resort in New York and there was a promotion available and they wanted to send me there. So it was tempting. But again it kind of reinforced that even with that company which was a good company your destiny is going to be based on where they send you.

Jesse: So to go make more money, I’m going to have to go to New York even though I liked Florida. So that was a good opportunity that came my way. in my career path but I said no, and I’m happy. I think it was the right thing.

Carol: Totally the right to say it.

Jesse: Yeah, definitely.

J: Okay. Question number three, what’s the worst advice you’ve been given or worst advice that’s common in your industry and how would you change that into good advice?

Jesse: I’m not sure about my industry specifically, but I think in business in general I had a lot of people when I was kind of starting to grow the business that some of the things I was doing whether it was other colleagues or friends or family that would tell me to stay small to not become so reliant on other people that it’s going to become stressful because I was doing so much hiring. And yeah, there’s truth to that, but there’s some people that… I mean if you go into an open mind to know that eventually somebody is going to let you down, but you get through it and you hire somebody else and you learn from it.

Jesse: I just remember lots of conversation about that, about you’re better off whether it’s in management or cleaning staying at the right number where you can control things. But to me you’re always just going to be doing the same thing and having a job. And I think that’s the biggest challenge for everybody who has an entrepreneurial spirit is trusting other people to do something for you. So I just remember that being a big hurdle. And something that a lot of the naysayers I would or people that had a little more negative attitude, we would talk about but I would just keep hiring, and I’m glad I did because eventually you get through it and you learn from it, and you hire better people.

Carol: That’s right. And you optimize and systematize and look where you are now so that’s awesome.

Jesse: Yeah, exactly.

Carol: Okay. So my fourth question is what is something, Jesse that you’ve splurged on that was entirely worth it?

Jesse: So you mean like selfishly not business-wise just for myself?

Carol: Anything, for yourself, for your business, whatever, wherever, however, whoever. A big old splurge.

Jesse: A big old splurge. Well, the biggest thing is my business partner he’s a lot more old-school and even though he has probably more money than me still, he’s more conservative. He likes to make fun of me because I do have a pretty big house now, I will admit that I, you know, guilty-pleasure. The house is bigger than I need, but it’s nice when I drive in everyday. I like it. So I was always… But I really do come from the mindset of always living well below your means. My friends do call me cheap to be honest. I’m more of the frugal type. When my wife and I were first starting doing this, people will be like, that know me now don’t believe us, but we lived in half a mobile home. Not a mobile home, but it was even cheaper.

Carol: Half?

Jesse: Somebody chopped it half. So you just rented half of it. All utilities included. It was like 500 bucks.

Carol: Oh, it’s a deal.

Jesse: Oh, it’s great. And we stayed there.

Carol: But isn’t that amazing, you can learn. If ever need to you can learn in such a small space. And then it makes your mansion that much sweeter now, right? So that’s no so bad.

Jesse: It makes it so much better. Sometimes I purposely will take the route to my office past the old mobile home. It’s right there. Somebody actually still has the same curtains that we left there because they were terrible. It was like 10 years ago now. So we left them there and they’re still there. So we laugh.

Carol: Decade like you’re collecting dust.

Jesse: But other than that, the only splurge is… I’m not very materialistic other than the house. We like to vacation. So if we get free time now when we do vacation we stay at nice places. We just got back from Clearwater Beach last week and it was beautiful.

J: Nice.

Carol: Wonderful.

J: Awesome. Okay. So that was the four. Let’s jump into the more. So for our listeners that want to find out more about you how can they find out more about you, how can they contact you?

Jesse: If you’re listening to this you might be a fan of the BiggerPockets website. So I’m on there quite a bit. I tend to respond to those direct messages a little more because I tend to maybe like the people that are on that site more than some of the random emails I get. But I’m not a LinkedIn person that’s kind of obnoxious. But I like BiggerPockets. So you can find me, I think it’s just Jesse. You can find me at our property management website which is mainrem.com or 3pointcleaning.com is my cleaning company’s website. I think it has my email address on there and everything. Somebody can reach out to me there.

Carol: Wonderful. Jesse, thank you so much. It has been absolutely awesome chatting with you. And just thank you for your time, I learned a ton. Thank you.

J: Thank so much, Jesse.

Jesse: Thanks for having me.

J: Wow. That was an awesome show. I love how in seven years he’s grown a business to a 130 plus employees. I love the fact that he was able to take his property management business and basically use it as a lead gen site to generate all these customers for his cleaning business, how he’s actually… Not just his cleaning business he’s doing it for his snow removal business and his landscaping business. It’s really cool.

Carol: I agree. I also love how he was really able to break it down and say, “Hey, well, labor is good out there right now. If you need cleaning, just go start a cleaning business. If you need a landscaper, just go start a landscaping business.” He really breaks it down and shows manageable steps on how to make it happen, and how to keep it going by providing a good service and just continuing to talk to people.

J: Yup. And those tips for anybody out there who might want to start their own service business, he really made it sound easy. I don’t think it’s that easy but-

Carol: Definitely doable though, right? It seems achievable.

J: Absolutely. I feel like I want to go out and kind of start my own cleaning business right now.

Carol: Yeah. I suspect it’s going to happen. I can just see the writing on the wall. All right, baby. Let’s wrap this up.

J: All righty. Well, we are Carol and Jay.

Carol: Now, go pick up that phone and call someone today. Woo-hoo.

Watch the Podcast Here

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In This Episode We Cover:

  • The event that launched Jesse’s entrepreneurial journey
  • How he bought into business with “owner financing
  • Using apps to monitor his team’s performance
  • Why 30 employees seem to be a tough barrier for many companies
  • Due diligence in hiring (even for entry-level positions!)
  • Low-cost marketing techniques
  • The cash flow trap that trips up so many small business owners  
  • Why he worries about the clients he doesn’t hear from
  • Using one business as a lead gen tool for another 
  • His top tips for getting started in any kind of business
  • And SO much more!

Links from the Show

Books Mentioned in this Show

Tweetable Topics:

  • “Cleaning is always. I mean, it’s every day.” (Tweet This!)
  • “When hiring, you go back to the data.” (Tweet This!)
  • “Only take on business if it makes sense number-wise.” (Tweet This!)
  • “Bid with enough profit margin because the expenses are always there.” (Tweet This!)
  • “The accounts we worry about are the ones we never hear from.” (Tweet This!)
  • “The ones who complain a lot are the ones I like because they’re engaged.” (Tweet This!)

Connect with Jesse

What does it take to start, scale, and sell your own business? Every Tuesday, J and Carol Scott ask this question to entrepreneurs of all stripes and delve into stories that go beyond the launch. From hiring and firing to marketing and raising capital, this podcast takes an honest look at the triumphs and stumbles of entrepreneurship. Whether you’re looking to sustain a startup or bring an idea to life, you’ll come away inspired. Tune in—and learn how to treat your business like a business.

    James Wilson Investor from Portsmouth, NH
    Replied 4 months ago
    What a great show! It is nice to see a fellow Mainer generate a successful business.