BiggerPockets Business Podcast

BiggerPockets Business Podcast 45: From Scrubbing Toilets to a $4M Business on Autopilot with Michelle Reed-Spitzer

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Do you dream of the day you can be your own boss? Wish you could generate full-time income from your side hustle passion project? Or do you have a small business that you want to expand to something BIG, while simultaneously allowing you the time and financial freedom you crave? Becoming a franchise owner can be an effective path to make that happen!

Michelle Reed-Spitzer, owner of SIX MaidPro franchises, including the No. 1 MaidPro franchise in existence—runs her team from one central location. Meanwhile she has the freedom to travel, spend time on her boat, and zip around the Gulf Coast of sunny Florida in her shiny red convertible.

In this episode, Michelle teaches us what a successful franchise model has done for her in terms of scaling a business to the next level.

She tells us the story of her early days working hard cleaning houses, building up a client base, and hiring a few people to help. After "secret shopping" some new competition in town, she ultimately became a franchisee of that company, paying an initial franchise fee of just ONE DOLLAR since she brought an already-successful business to the table. Implementing MaidPro's training, systems, and processes, she has mastered the formula to grow and expand with the help of an exceptional team.

Whether you’ve already explored the concept of franchising or know nothing about it, Michelle shares her expertise with one actionable tip after another. She fills us in on how franchises work, recommends items to think about before making the leap, and discusses the advantages—as well as potential pitfalls to avoid. And perhaps most importantly, Michelle is living proof that with hard work, focus, and determination, ordinary people can do extraordinary things.

Check her out, and subscribe to the BiggerPockets Business Podcast so you won’t miss our next show!

Click here to listen on iTunes.

Listen to the Podcast Here

Read the Transcript Here

J:
Let’s welcome Michelle to the show. How you doing today, Michelle?

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Michelle:
I’m great. Thank you for having me.

Carol:
Thank you so much for being here. J, look at that I cut you off already. It’s like, What? I’m just so good at that, it’s awful. But Michelle, we are so excited that you’re here with us. You have such a great story and you have so much to teach our listeners. Thank you for joining us today.

Michelle:
I’m thrilled to be here.

J:
I know. We have a lot of listeners. I’ve gotten a lot of requests over the last few months about hey, you need to talk about franchising and you need to have somebody on that can help us figure out how this whole franchising thing works. Today is the first episode in a couple that we’re going to have about franchising. You can provide just a great perspective. I’m not going to spoil the story, I’m going to let you start at the beginning. Tell us a little bit about how you got into the business you’re in and how you got to the point where you were ready to start a franchise.

Michelle:
Wow, well, how it all started, the beginning. Well, it started where I actually moved from Champaign, Illinois. I used to work for Blue Cross Blue Shield of Illinois, and they had made some changes and my position was eliminated. I had to make some changes. I decided to relocate to Florida, Naples area, because that’s where my family had moved prior. There were… I had already visited the area quite frequently, and decided to make a new start.

Michelle:
With my mom’s encouragement, she encouraged me to finish my stop and start college program. I decided to enroll at International College at the time, now known as Hajus University to finish my college program. While doing so, my brother had a girlfriend that was cleaning houses, and he would tell me how she was doing very well and making some pretty nice cash. I thought, well, maybe I could figure out how to do that and make a little extra spending money while I’m going to school.

Michelle:
I bought a book called speed cleaning 101. My mom thought I was absolutely crazy, because I had the world’s messiest bedroom growing up as a teenager. But I taught myself how to clean. That book had little diagrams and things like that to show you how to move through the house efficiently et cetera, and that’s how I began. I began cleaning house independently while going to school.

Michelle:
Now at the time, I had the wonderful opportunity to have a professor by the name of Dr. Jean Landrum. I don't know if you know who he is, but he was actually the original founder of the Chucky cheese franchise. He quickly became my first mentor. He wanted us to learn about real life experiences outside of a textbook. He didn't want us to memorize terms of definitions. As matter of fact, the first homework assignment he gave us was to actually write a business plan.

Michelle:
I decided to write my plan on actually having a real cleaning company. As I’m writing this plan, I’m thinking wow, I might be onto something because obviously cleaning house on my own, if I were to want to go on vacation, I wouldn’t be able to earn any money. If I were sick, I wouldn’t be earning any money. It just became a natural idea of hey, let’s turn this into something.

Michelle:
I decided to start with an investment of $300 to get my liability insurance to protect myself and whatever else I needed to create with the fictitious name et cetera to make myself a legal entity and became Michelle’s Classic Cleaning. Of course through trial and error literally, not having a clue as to what I was doing, I developed a nice little size cleaning business. Started adding employees. Just four years later another opportunity came my way.

Carol:
That is a great intro. Thank you Michelle. I love that and there are so many things that I want to dig into in there. There’s one in particular that I think… There are so many in particular but what I want to dig into right now, you mentioned that you had a mentor who was… Sounds like the founder of Chucky Cheese, did I capture that correctly?

Michelle:
Yes. That is correct.

Carol:
I’ve learned, and several other of our guests have talked about how crucially important it is to find that right mentor. How did you find this person? Can you give some tips to our listeners about how they go about doing that. Finding the right mentor that’s going to steer you in the right direction to really put your entrepreneurial journey where you need it to be?

Michelle:
Absolutely, well, I was fortunate that in my college experience that it just happened to be fate, I guess, that he was my professor. Just in the classroom alone. Always, when I look for opportunities, I always look up to people that are successful, that have done things that you want to learn, surround yourself with those types of people because you’ll just learn like a sponge from them. Don’t be shy about… There’s a lot of mentors that can come along the way. Another mentor is my parents.

Michelle:
My parents have always been entrepreneurs themselves. They've had construction businesses, real Estate businesses. I worked alongside with them on many of those adventures. There's been a lot of mentors along the way.

Carol:
That’s just wonderful. Go ahead J.

J:
I love that. I love the fact and this is a common thing for a lot of entrepreneurs on this show. You started your business with $300. I just want to reiterate that. You didn’t go in there with a 10,000 or 100,000 or a million dollar investment. You weren’t going around raising capital. You weren’t putting on a dog and pony venture capital show to raise venture capital money. You literally started your business with $300.

J:
You had a plan. You put together a plan that allowed you to get from a one person business that you started for a couple hundred bucks to a business, and you said it yourself, a business that would allow you to go on vacation. That would allow you to take time off. That would allow the business to run and thrive and continue to operate without you there day in and day out.

J:
I think that’s just a great reminder to our listeners that when you start a business, it really… It doesn’t have to be 80 hours a week. It doesn’t have to be $100,000 investment, you can start small and you can get big over time.

Michelle:
Yes, I started very small. It started with just me, myself and I. That $300 investment, I just kept reinvesting my earnings to continue to build upon the business to the point where… We’re really a large organization today. It can be done with a small investment.

J:
That’s great. We can talk about that business in a whole lot more detail, but there’s a chapter two and three and four to the story. I’d love to get there because I think that’s what I think is tremendously interesting here. Tell us about the next chapter. How you took your business from your business to the next step, to a franchise business.

Michelle:
Well, Michelle’s Classic Cleaning back in 1999. I started in 95, in 99 I had a nice little sized business. I probably had maybe six employees at the time. I had an office in my garage, which was [inaudible 00:08:14]my house in the middle of the woods believe it or nor. I remember sitting in my office and received a postcard in the mail. That postcard said, “Look who’s coming to town Maidpro.”

Michelle:
I thought, who’s my new competition in town? Who is Maidpro? What are these guys all about? Literally, my competitive nature took over and I decided that I was going to secret shop them. I wanted to know what they were charging. How many people did they send into the home? Did they provide the supplies, the equipment. What are they all about? I had my list of questions ready to go and I was going to pretend to be a potential customer and ask my questions.

Michelle:
Well, to my surprise, I was literally talking to the founder of Maidpro who is a franchisor. They really caught my attention. They were actually looking or soliciting existing cleaning companies to become part of their franchise opportunity. At the time, they were fairly new at franchising. They caught my attention based on the conversation that we had over the phone. They invited me to come up to Boston, Massachusetts, where their headquarters is to meet with them.

Michelle:
Now, at the time, I was three months pregnant with my first child, Zoe. I bought a little black dress because I wanted to try to hide the fact that I was pregnant just in case they might turn me down if I were interested. That’s how I was thinking at the time. But I went and I made that trip. I was very impressed. They were young, they were progressive. They were fun. They were just really inspiring.

Michelle:
I just knew, my gut told me that this is the right opportunity. They accepted me. They invited me to join their organization. Because I had an existing cleaning business and they were new at franchising, my investment was a big huge dollar to make it legal.

J:
$1.

Michelle:
$1 and that’s when the conversion began. I literally converted Michelle’s Classic Cleaning into the Maidpro franchise.

J:
That’s awesome. Okay, I want to stop here and I want to revisit a couple things. One, I love the fact that a few minutes ago, you were talking about secret shopping your competition. You just glossed over that like this is obvious and it’s just something you do. But this is something that I think a lot of entrepreneurs don’t think about. It’s such a great opportunity to go out there and figure out what you need to do to differentiate. To figure out what you need to do to get an advantage over your competitors.

J:
So many of us like to avoid our competition or just be mad at our competition. Few of us like to say, okay, let’s… There’s a saying, I mean, keep your friends close and your enemies closer. Very much that’s what you were doing. You were trying to get to know your competition as much as possible.

Michelle:
Of course. Absolutely. We still do this today, especially if we’re going to open up a new market. What we found is it’s very important to be aware of your competition. Who are they shopping you against? You’d be surprised. There are a lot of cleaning companies out there that are really lacking the professionalism that Maidpro has. It really is an eye awakening experience to know what others are charging, how they present themselves over the telephone and making sure that your 10 steps ahead of them.

J:
That’s great.

Michelle:
Also, I should add as well, I’m sorry to interrupt. It also helps you in establishing your pricing.

J:
That is a fantastic point. I love that. I want to discuss one other thing because I think this is something that may be confusing to some of our listeners who aren’t familiar with franchising, but you mentioned that you turned your company into a Maidpro franchise for $1. That doesn’t mean that you spent $1 and now you’re making all the money. Can you talk a little bit about just how a franchise works, where you’re paying the franchise or the mother company, the headquarter company? What that dollar meant in the scheme of what you’re paying overall?

Michelle:
Yes, now, of course, usually when you join a franchise, there is an initial startup fee. I was just in a unique situation or had a unique opportunity with that original investment was only $1. That’s very rare. However, there is a monthly royalty, that is invoice based on the revenues that you’re producing. In my franchise, and this is something to look for if you are looking for a franchise to participate with. The higher the volume that we do in revenue, the lower my royalty percentage is so there’s incentive to grow.

Michelle:
Our royalty structure is actually tiered based on your revenue size. What you’re paying for, every dollar of royalty I pay in my franchise is worth every penny because they provide me an invaluable amount of support and coaching. They provide me with the branding, the marketing, the online presence, which is huge and making sure that we have the most up to date websites and landing pages and we can be found through SEO. They even manage our online presence and reputation, et cetera. The royalty dollars are very worth every penny that I pay.

Carol:
Excellent. Just to clarify, as a franchisor, you brought to the table and this is why you only had to pay the dollar instead of an initial upfront fee. You brought an established business, so you brought your client base, you brought your employees, but what the franchise provides to you is the marketing, the branding, the online presence, the ongoing trainings, ongoing support, the reputation management, all those more high level things. They provide almost… Almost if you look at it, they provide the CEO piece of the organization. Then you are the day to day management and operations of your franchise. Is that a good way to establish that?

Michelle:
That is correct. One additional value that they bring is our operating system. That is huge because having the technology, having the reporting, having the infrastructure to manage your client base, to be able to do your… To manage your key metrics and your key ratios and know exactly the dollars behind your organization that is a huge value add as well.

Carol:
Excellent. It sounds like there are a tonne of value adds to being a franchisee. Are there any downsides to being a franchisee versus just having your own business? Are there any negatives that people should potentially look out for?

Michelle:
Well, in my particular franchise, they provide a lot of flexibility for us to be individual owners, but still have all of the benefits that they offer. Some franchises, this is something to watch for, they may be much more strict on where you buy your supplies. Who you buy them from. Things like that. My particular franchise offers a whole lot more flexibility, which is an advantage. I personally do not have any downsides that I have experienced.

Carol:
Excellent. It just sounds yours in particular Maidpro is a really well run franchise that offers you that autonomy to run the business the way you want to within their guidelines, within their parameters, within their overall brand.

Michelle:
That’s correct.

Carol:
That’s fantastic.

J:
Basically, you’re paying a percentage of your monthly revenue, for them to provide the systems the processes, the software, the branding, some marketing. It’s like just taking a percentage of your revenue and outsourcing all that work to somebody else.

Michelle:
That is correct.

J:
That’s great. Love that. Okay, now you have this Maidpro franchise, you’re in Naples, and you’re growing your business. I want to talk a little bit about what that transition was like. How did you… There’s work that I assume that goes into having to change your branding. You have customers who know you as your old company and now they have to learn about you as a new company. You have to change your website. You have to wrap your vehicles perhaps or decal your vehicles. There’s a whole bunch of transition there. What was that transition like going from you being the CEO of your own company to now you’re underneath another brand?

Michelle:
Well, looking back, it was a little scary at first because I’m thinking, oh my gosh, what have I done? Everyone knows me as Michelle’s Classic Cleaning and now all of a sudden I’m presenting Maidpro. I was a little afraid that people might start canceling but to my surprise, no one did. It was actually a smooth transition. It was basically putting all of the data into the operating system to begin with and building the schedules and the operating system.

Michelle:
That was step number one, and then of course, back then it was previous to having all of the online email and so forth. It was more of sending out a letter in the mail back in 1999 just introducing the transition and introducing the brand. Then from there, it was actually setting up a marketing plan. For the first time having a real marketing plan and just kicking it off with a bang and it was great.

Carol:
That is awesome. It sounds like again… We’re just going to follow the steps there. You started in 1995. By 1999 you were Michelle’s Classic Cleaning. You had six employees, but how many clients were you cleaning for at that point?

Michelle:
I really don’t recall.

Carol:
So you had bunch, and then 1999 you went on, you became a Maidpro franchisee. You then grew the business. You put together your marketing plan. You executed on that marketing plan. It’s been up and running smoothly. It’s growing consistently. You’re hiring more employees, you’re getting more clients. But you didn’t want to stop there. right?

Michelle:
Oh no.

Carol:
You decided you had to acquire even more franchise locations. Two pieces, number one, the why and number two, just tell us about how you made that happen?

Michelle:
Well, of course, one of the reasons why I decided to join Maidpro is because I knew that they had what I needed to take my business to the next level. That infrastructure, the branding, the marketing, the employee manual that we never had. I mean, just all of the operational things that I needed to have in place to take the company to the next level. I started with Naples. We build out Naples to a mature office. I ended up dividing Naples into adding a second location in Fort Myers, which was just a natural gravitation.

Michelle:
Then we added a third location in Marco Island. Today we have six locations across Southwest Florida.

Carol:
That is so cool. Go ahead J.

J:
For those that don’t know, Naples, Fort Myers, Marco Island it’s all in the same three, four county area. Probably about an hour and a half, two hours driving distance, right?

Michelle:
Yes, Fort Myers is about 30 to 45 minutes away. Marco is about 45 minutes away. Those three markets were all part of my initial dollar investment.

J:
Got it. But the nice thing here is that you’re running multiple locations, multiple cities, but everything is pretty well accessible to you in terms of driving. So if you need to go and work at one of your offices, you can be there in a couple hours. It’s not like you have to get on a plane and fly to another state.

Michelle:
Right. That is correct. It’s very easy for me to get to my locations within just a short drive.

J:
Let’s talk about that growth process. I think you were just about to say, and I apologize I cut you off, you were just about to say that the cost of those franchises, at least a couple of them was part of your initial franchise fee. When you were growing, was your thought I’m going to grow two, three, four, five, six locations, or was it, okay today you wake up and you say I think I’m ready for another location. Was this well planned or was it more seat of the pants? From a financial perspective, how did you grow? How did you come up with the franchise fee for the next location and the development piece for the next location?

Michelle:
Well, what happened is, when I was well established with my Naples office and Fort Myers office, I actually had a phone call from a Maidpro corporate telling me that I had… They had someone that was interested in buying the Sarasota territory. I always had my eye on Sarasota because I thought it would be a great market. Very similar to the Naples area and quite honestly, has potential to do even more than the Naples, more of a volume in Naples because there’s even more people in the demographic that we service.

Michelle:
I exercised my first right of refusal, and I bought the territory, probably sometime around 2004, 2005. I took advantage of at least buying the zip codes is what I did. You buy a certain number of qualified households within those zip codes to secure my interest. Now, I didn't open that office right away. I sat on it for a while. I'm actually glad I did, because that's when we ended up going through that big recession. That happened shortly after I made that investment into the Sarasota area.

J:
Okay, so just to translate to make sure I understand it. First you had what’s called a right of first refusal, which means when Maidpro decides they want to expand into a new area that’s near you, they have to come to you first. You can say either I want it and if you want it, it’s yours, or I don’t want it, in which case they can sell it to somebody else.

Michelle:
That is correct.

J:
Okay, so that’s the first piece, that right of first refusal. They did that. You said, I want Sarasota. I want that. Then they allocate to you, you said a certain number of households. The way the franchise defines it, your location, your territory, isn’t necessarily based on geographic boundaries. It’s not based on zip code. It’s not based on city lines anything like that. It’s based on a certain number of households in a certain area.

Michelle:
The fee is based on a number of qualified households-

J:
I understand.

Michelle:
… within those specific zip codes.

J:
Got it. So if the city were bigger, you’d pay more. If the city were smaller, you’d paid less. Basically, your potential opportunity defines the cost of you buying that franchise.

Michelle:
That is correct.

J:
Got it. Thank you for that. But then you decided to wait on Sarasota, you locked it up, you said I’m going to pay for it. I’m going to hold on to it. It’s a longer term investment. I’m not going to open it yet, but you definitely want to have it under your control.

Michelle:
Yes, that is correct. So, the day came when I was ready to make that office. I opened an office. I hired a branch manager. Basically took everything I knew from the other three locations and just duplicated it into the Sarasota area. Everything looks the same. The same office layout, the same infrastructure. As a matter of fact, what makes this whole thing work so well is all of the phone calls for all of my customers are all in my call center in the Naples area.

Michelle:
My branches are really just dispatch facilities. There’s a branch manager, and they dispatch all of the pros from those locations, each and every day. But everything’s controlled in the Naples call center with customer service and sales. That’s what’s made it work for me. But then I did end up opening the Sarasota branch office and it’s growing very nicely.

Michelle:
Then I realized I have a hole because you’ve got Marco Island for the South. Then you have Naples, which is just north of that and just north of Naples is Fort Myers. Then we skipped over Punta Gorda and Port Charlotte and went right into Sarasota. It was just natural for me to say we’re missing out on this little hole in the map and decided to open up the Port Charlotte office literally just two years ago. Actually two weeks before hurricane Irma came through.

Carol:
Oh my goodness, that’s some crazy timing right there.

Michelle:
Yes.

Carol:
That is seriously, good timing.

Michelle:
That was crazy. That opportunity is growing very well. Again just duplicated what we did in all other four locations. Hired a branch manager, is just a dispatch facility, all the customer service and sales is ran through our Naples call center so it works beautifully. It’s really like a cookie cutter process.

Carol:
It really is. Sounds like you’ve just done a beautiful job figuring out how to scale rapidly and thoughtfully and strategically, like you said, by having these processes, having these systems, having your centralized sales, marketing, dispatch, et cetera in each of your locations. Which by the way, I think that’s a really good tip to our listeners is be really thoughtful and mindful, especially when it comes to geographic considerations.

Carol:
I mean, you saw that geographic gap and it just made perfect sense, it sounds like, to fill in that hole, right?

Michelle:
Yes.

Carol:
And you’re able to do that strategically. I don’t want to say easily because starting anything is not easy, but I would suspect as you go on and you open up new location after new location, it becomes a little bit easier because you repeat the same process over and over and over. You’re following your same system, correct?

Michelle:
It just all about creating that system and duplicating it. Now we’ve duplicated that system five times. Then my franchisor approached me about acquiring an existing Maidpro office, which was the first in the Fort Lauderdale market. There was actually an existing previous owner who was actually struggling. He had actually made… This is something I would advise as well when you’re wanting to grow your business, is try not to grow it too fast. You do want to be strategic. You don’t want to implode.

Michelle:
You want to make sure that you’ve built a successful market that has a foundation before you go open up another new market. Well, there is another Maidpro owner that I think was really hungry and really was extremely aggressive. Grew too fast. He was actually running multiple locations in different states. I think he got in trouble financially. They asked me if I would be interested in taking over that office and so I did. I went and I bought it. I called it a Maidpro rescue. Went in, fixed it and had to make a lot of infrastructure changes and just duplicate again all the systems and put the systems in place in that Fort Lauderdale office that were in all other five markets.

Michelle:
That office I acquired over a year ago and it’s doing very well. That market alone is a huge opportunity because we service all of Broward County and even some of Dade County as well.

J:
Okay, this actually brings to mind the question that goes back to what we were talking about. You had five locations that were all contiguous. They were attached areas you could drive from one place in the south to two and a half hours north. Every place you were driving, you had locations. But now you’re moving to Fort Lauderdale. Again, for those who aren’t familiar with Florida geography, Fort Lauderdale is on the other side of the state. The other coast and it’s a good hour and a half from where your home base is and in between there is basically swamp land.

J:
You can’t really acquire the area in between. You now have a gap between your five other locations and now this location that’s separate and on its own. Its own little island in a way. What challenges do that provide in terms of getting that one up and running? Were there any challenges just based on the physical location of that not being contiguous with the rest of your locations?

Michelle:
Actually, to get to my Fort Lauderdale office is just really a hop on alligator alley and I can be there in an hour and 45 minutes. Basically the same distance between here and my Sarasota location is an hour and 45 minutes. It’s just a different direction. I can still get there in. If I leave early in the morning, I could be there by eight o’clock if I needed to be.

Michelle:
I usually… How I’ve set up my infrastructure is I do a lot of zoom video conference calls with my managers. On a regular basis, we’re always meeting through video conference, which is love technology today. You don’t actually have to be in that physical location to be able to provide great value and great support to your management team. But then I make my rounds every three months to each location.

Michelle:
I personally will show up every three months and we do pro recognition breakfasts on a quarterly basis. We will give away prizes, recognize the team for their great performance. They win gift cards and cash money and we make it a lot of fun. That’s my chance to check in as well on the physical location, make my presence known and of course, recognize my team.

Carol:
Excellent, as you’re talking about recognizing your teams in each of these different locations and being integrally involved through zoom and through your every three months breakfasts and visits and so on. You mentioned the managers at each of these office. It sounds like, you said… What do you have? A GM or a branch manager at each location or exactly how does that organization work out within each individual location?

Michelle:
Yes, each location has a branch manager that actually is in charge of dispatching pros. They’re in charge of all the operations within that branch, including recruiting employees, employee retention, and they’re also in charge of quality control. Making sure that the work that we’re doing out in the field, the services that we’re providing to our customers are meeting our expectations.

Carol:
Beautiful. Go ahead J.

J:
So basically at this point, you’re a general manager or what’s called a regional manager. Basically, you oversee all the individual locations, but in theory, they can run without you for a day, a week, a month, maybe even a couple months. You could go on vacation for the next three months, you can come talk to us on this podcast and you don’t have to worry about somebody handing you some emergency issue in one of your day to day operations that you have to deal with anymore.

Michelle:
Well, I travel a lot. I could go away. I don’t have to be here. My business will run without me. I have an excellent management team including a great management team within my call center in the Naples office. It really takes a team of great people to allow you to be successful because you cannot do it yourself. Absolutely not. But what’s nice is I can go to a whole nother country. I can be out of town and all of our operating systems are all cloud based so I can check in remotely. I can work from anywhere in the world if I wanted to. But I can completely check out the same time and know that things are running the way I expect them to run.

J:
Awesome. Can you talk to us a little bit about what your financials look like? I don’t want you to go into any more detail than you’re comfortable with. But to whatever degree you’re comfortable, can you talk a little bit about how big each of these units are? Which ones performing the best, what the revenue might look like? Also, I know our listeners are probably interested, what does a typical revenue model for a franchisor look like? How much you paying of your monthly revenue to the franchise or how much you keeping? How does that whole thing look and structured?

Michelle:
Sure, lots of great questions. Well, first of all, if you don’t mind, I’m just going to pull up on my other screen, my key ratios report so I have some numbers to look at. First of all with the six locations, we did over $4 million in revenue in 2019. That’s the biggest amount of revenue that we’ve done. It’s a new milestone that we met. I’m super proud of our team for accomplishing that.

Michelle:
Now we’re ready to hit our next… The next goal is to hit 4.5 million for 2020. There’s always goals being set. We have a vision, we have something to work towards. One of the great things about my franchisor and the operating software that they provide us is we have tools, which we call our key ratios reports that will tell me what our benchmarks are and if they’re healthy. If I pull up numbers…

J:
This is actually one of the benefits of a franchise it sounds like. In a typical industry, I might have to go out because I own a company that its on my own. Carol owns a company, it’s on its own. We’re not franchisees. We need to go out and figure out ourselves what typical margins are in an industry, how much our competitors are charging, what we should be spending on on various expenses, what our expense ratio should be.

J:
We don’t know necessarily what 100 other companies in this space are, what their numbers look like. We don’t have those benchmarks. We don’t know are we doing a better job than our competition or are we doing a worse job than our competition? I guess the nice thing about a franchise is if they have… I don’t know how many locations Maidpro has, but if they have 100 locations or 200 locations, that’s basically 100 or 200 other companies that you can look at their number, you can look at their operating margins. You can look at their expenses, you can look at their revenue, and you can say how am I doing compared to 100 or 200 other companies that are exactly like mine, which is actually really cool.

Michelle:
Well, what’s awesome is I can see the revenue of every single office in the entire nation. We have actually aggregates so we can see… We can actually see the numbers of all the other locations so we can compare ourselves. If I want to compare myself with all the Maidpros in Florida, I can just pull up those aggregate numbers just for Florida and know how I’m comparing to them.

Michelle:
If I just want to look up different… Let’s say, if I look up revenue rank, I want to see how I compare with the top 10 franchises in the nation. I’m pulling up my numbers right now for January of 2020. It’s doing this little thinking job here. I can probably say that for January, out of my six locations, we did over $395,000 in revenue. The second franchise that I won’t mention where they’re located but they did $283,000 in monthly revenue. You can see-

Carol:
Just in January.

Michelle:
Just in January alone. I can compare myself to other franchises to see how we’re doing. They also gave us key metrics to watch. One of the biggest things that we watch for to measure the health of the business is your attrition. Are you keeping your clients? We have certain measurements that we watch for that are provided by our franchisor to determine what is a healthy number.

Carol:
Very cool.

J:
That’s great. They take over the MBA piece of being a business owner as a franchisee.

Michelle:
That’s correct.

Carol:
Michelle, I don’t want to gloss over. As you’re looking at everybody else’s numbers and you are comparing yourself to all of these other franchises across the nation. You did say earlier that once in a while your competitive nature kicks in, which is a beautiful thing. Just out of curiosity, where do your franchises line up as compared to everybody else across the country?

Michelle:
Well, we’re the number one largest revenue producing office out of over 250 locations nationwide, including in Canada. That can only be accomplished by having the support of my franchisor and the amazing team that we have within our own organization here [inaudible 00:38:30].

J:
That’s awesome.

Michelle:
Really awesome.

J:
How many employees do you have across all your locations?

Michelle:
Between six locations, there’s over 130 Plus, and we need more.

J:
So if anybody is looking for a job in the Southwest Florida area, there you go.

Michelle:
Yes.

J:
Let's talk a little bit in more general terms now. Let's say we have, and I'm sure we do have some listeners out there who are thinking, okay, this whole franchise thing sounds like it would be for me. Let's say they're going out and they're looking for a franchise and they have to go through their due diligence. Is this a good one? This is a bad one? What are some things that they should be looking for when doing their due diligence on a particular franchise?

Michelle:
I’d say first of all, find out what is your passion? What is your love? What do you really want out of life and pursue your passion to begin with. For me, my passion is we’ve decided that we’re a whole lot more than just an average cleaning company out there cleaning toilets, and scrubbing floors. What we’re really all about is improving the quality of people’s lives. We see that every day. That’s become my personal passion. Because I see ourselves as doing a whole lot more than just cleaning houses.

Michelle:
First, find out what your passion is, and then make sure that the franchise that you decide to pursue, what lifestyle do you want? How many hours do you want to work a day? How many days a week do you want to work? You’re in the restaurant business, you might be open seven days a week and that’s mostly evenings and weekends. Gauge up your passion but also determine what kind of lifestyle you want to have.

J:
That is an excellent tip. That’s great. I’d never even consider that even within franchises, they’re going to afford you very different work hours and like you said lifestyle. That’s a fantastic tip.

Michelle:
The second tip that I would have in looking for the right opportunity is having a recurring revenue stream. Unlike having a product, I had to find… If I had a product to sell, I’d have to find a new customer every day. Especially if that product had a long shelf life. Well, in my business, it’s recurring. I have weekly customers. I have bi weekly customers. I have monthly customers and I have thousands of one time occasional use customers.

Michelle:
I think we have probably close to 1500 active recurring clients. There’s a consistent income and consistent revenue coming in each and every month that we can build upon. If I’m monitoring my attrition and making sure my attrition is as low as possible, that means I’m keeping my clients, then my game builds over time. Looking for something that provides a recurring revenue source is probably another big factor that I would suggest that you look for.

J:
That’s great. Any red flags that we should be concerned about when we’re looking at a franchise?

Michelle:
One of the things, do your due diligence. How many turnovers do they have? Do they have long term franchise owners, franchisees? Or are they having their own trician problems? Are they turning over franchise owners and if they are, why? That might be some things to look at to see if there’s any red flags.

J:
That’s great. Love that.

Carol:
Excellent. I’m curious, is there a path to truly being completely passive in the business, in the industry that you’re in, in the franchise world? Could you essentially put someone else in charge and you basically retire and travel the world with your grown children and take care of your dogs and just do all that fun stuff and just make it truly passive? Or will this be a business just for as long as you’re really integrally involved? How does that work?

Michelle:
It can. Of course, I’ve been deciding what is my exit strategy going to look like. With thinking of exit strategies that takes planning and that takes time too. There’s a couple different ways of looking at it. Do I want to have my grown kids when they’re adults one day. Do I want them to take over? Or do I want to sell it? Or do I want to put the infrastructure in place, so it continues to run and generate an income source for me.

Michelle:
All three are true. All three can be done. Yes, it could truly be a passive income source with the right team in place. I have some personal decisions that I need to make over the course of the next few years.

Carol:
Excellent.

J:
That’s awesome. Do you have any major plans at this point? Are you going to acquire more locations? Are you going to sit back and enjoy your success? What’s the plan from here on out?

Michelle:
Well, my goal right now is I have six locations. The Fort Myers location generates well over $100,000 in revenue, it’s a mature location. The Naples office is doing close to 150,000 in revenue so that’s a mature location. Marco Island is an island, it’s a mature location, and it’s going to be more limited in the amount of revenue it can generate. However, my three new markets that’s my focus right now. Sarasota, Port Charlotte, and Fort Lauderdale. Those three locations, I want to turn them into mature locations generating over $100,000 in revenue. Then once they are at those levels, then I could start thinking about adding another location.

J:
That’s a great tip right there. I think a lot of us we get so excited about I’m going to get 50 locations. Or maybe it’s just I’m going to get two or three or four locations, whatever that number is for you. You’re so excited about building more locations and saying I have X number of locations that maybe you don’t spend enough time actually worrying about the maturity of those locations and growing those locations and making sure each one is really standalone.

J:
I think you saw that or you gave us an example of that with the Fort Lauderdale location that another owner came in, bought a bunch of locations in different states and basically couldn’t manage it. Got in over his head. It sounds like you’re more focused or at least enough focused on maturing each location before you grow too quickly. That’s a great [crosstalk 00:45:02]as well.

Michelle:
That’s correct.

J:
Awesome. Any other tips that you can provide for our listeners that we haven’t touched on yet?

Michelle:
I just encourage those that are if they’re thinking of starting their own business, or they’re thinking about exploring a franchise opportunity. A lot of people will spend a lot of time just getting ready and they just never get started. You’ve heard that saying, get Ready, aim, fire. Well, my philosophy is just fire, and then get ready along the way, and then do your aiming.

Michelle:
Just get started. Take action. The other bit of advice that I’d like to share just to give a little inspiration is really all it takes to be a successful person is just to be an average ordinary person with an extra ordinary amount of determination.

J:
Love that. That is… I love the way you just said that.

Carol:
I do to. Michelle, this has been so Great. Now we would like to pop into the segment of our show that we call four more. These are four rapid fire style questions. We’re going to ask you four questions, don’t think too hard, just tell us the first thing that comes to mind. Then the more segment, you’re going to tell us more about where we can find out even more about you, about your business and how people can connect. Okay?

Michelle:
All right. I’m ready.

Carol:
Okay, J, take the first question.

J:
Okay. Michelle, what was your very first or your very worst, I’ll let you decide, job and what did you learn from it?

Michelle:
Okay, wow, I got one. My very first cleaning job. This was before I was actually Michelle’s Classic Cleaning. My sister in law was going to help me. She was thinking about going into business with me. We had bid or I had bid on this old abandoned convenient mart down in Marco Island. I bid 75 for five hours worth of work. That’s man hours. That’s one person for five hours, two people for two and a half hours each.

Michelle:
We were so excited about that first little cleaning job. We had packed up my little Toyota black Celica convertible with all the mops and tools and cleaning supplies. We were just super psyched. Got in there and started scrubbing and cleaning. It turned out that the place was really cruddy. It was bad. Bad, bad, bad. It didn’t take me long to realize that I had seriously underbid that job. But we finished what seemed 40 man hours later. We were exhausted. I went to go get paid my $75 and the owners didn’t want to pay me.

Carol:
No.

Michelle:
They wanted me to do the windows too. Now at a convenience store you can imagine that’s all glass. That was not part of my written proposal. All I could do with the time is cry. They must have felt bad enough for me that they went ahead and gave me my $75 and my sister in law and I left. We packed the car back up. My sister in law looked at me and said, I’m done. No more. I’m not ever doing this again. I had to humble my pride and say, “Okay, well, now I know what not to do next time.”

Carol:
What a great lesson to learn. What a perfect way to turn that around into something useful and informative.

Michelle:
Thank God I didn’t quit that day, myself, because I would never have been able to touch so many lives today.

Carol:
That is great. Awesome. Okay, Michelle, I would like to know what is the first time you realized you truly had an entrepreneurial itch?

Michelle:
To tell you the truth when I was a little girl, I used to sell greeting cards door to door and I didn’t even do it for money. They gave you a catalog of prizes that you could earn depending on how many greeting cards you sold. I would pick out my prize that I wanted and I had to go out and figure out how to sell X number of greeting cards to get enough points to get that prize. That was my first opportunity.

Michelle:
Oh, the other one was my grandparents had a farm. They used to let me sell the sweet corn in bushels and I would sit on the corner of the yard and instead of selling lemonade, I was selling corn by the bushels.

Carol:
I love it. That is so cool. PS, I have not thought about the greeting card catalog in years. Oh my gosh, I totally remember that. That’s so cool.

J:
Okay, question number three. This is an easy one. What’s your favorite business book or book that you’ve read recently that our listeners should be reading if they aren’t already?

Michelle:
Oh my gosh. E Myth.

J:
E Myth revisited. Yes. One of my favorite books. For those who haven’t read it, it’s basically how to put your business on autopilot. If anybody’s ever heard the quote, you should be working on your business not in it. That’s where it comes from.

Michelle:
Yes, there you go.

J:
Great recommendation.

Carol:
Excellent. Okay, and our fourth question Michelle is, this is one of my favorites. What is something in either your personal or your professional life that you’ve splurged on along the way that was totally worth it?

Michelle:
Well, I absolutely love my Audi S5 red convertible. It is so fun to drive. That was a big splurge and I also splurged on my boat because I love going out on the boat.

Carol:
Those are two awesome Florida Gulf Coast splurges for you right there, love it.

J:
Best way to get to the island.

Michelle:
That’s right.

J:
Awesome. Michelle, this has been absolutely fantastic. Before we go, I want to get to the more part of the four more and I want to give you an opportunity to tell our listeners where they can find out more about you. Where they can find out more about your business. Where potentially they can connect with you, and anything else you want to tell us.

Michelle:
Well, you can find us online at Maidpro.com. Real simple way to find us. You can also find us on Facebook, Maidpro of Southwest Florida. You can find us there on. Definitely reach out to us. We’d love to be able to share further words of wisdom and inspiration.

J:
Awesome.

Carol:
Outstanding.

J:
Michelle, thank you so much. This was absolutely amazing. So helpful. I know all of our listeners that have thought about franchising or franchises in the past are really going to love this episode. Thank you again for being here with us.

Michelle:
Well, thank you for having me. It’s been a true honor.

Carol:
It was awesome Michelle. Thanks so much. We’ll see you soon.

J:
We’ll talk to you soon.

Michelle:
Thank you. Bye bye.

Watch the Podcast Here

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In This Episode We Cover:

  • Why you should surround yourself with the right people
  • How to “secret shop” your competition
  • How franchises work
  • What Right of First Refusal means
  • Finding the right location for your franchise
  • Finding your passion and figuring out the lifestyle you want
  • The importance of focusing on recurring revenue streams
  • How to do due diligence on the other franchisees
  • And SO much more!

Links from the Show

Books Mentioned in this Show

Tweetable Topics:

  • “Always look up to people who are successful that have done things that you want to learn.” (Tweet This!)
  • “It really takes a team of great people to allow you to be successful, because you cannot do it yourself.” (Tweet This!)
  • “Gauge your passion and determine what kind of lifestyle you want to have.” (Tweet This!)
  • “Just be an average, ordinary person with an extraordinary amount of determination.” (Tweet This!)

Connect with Michelle

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. F...
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