Am I starting in the right direction?

[Josh Spoehr]

Hello to all,

My name is Josh and I have posted on this network a few times. I want to start off by saying that the information shared on this website has been helpful to say the least. I have been planning on starting a PW business for over a year now. I just wanted to run down a list of things that I will be purchasing in the next few weeks, so if there is anything at all that I am forgetting please tell me.

Starting Cash

$13,000-$3,000 truck= $10,000 - $4,000 hot water washer = $6,000 - $1,500 enclosed trailer = $4,500 - $500 water and chem tanks = $4,000 - $500 reels and hose = $3,500 - $1000 Surface cleaner/x-jet/24 ft wand = $2,500 - $500 advertising = $2,000 - Pre paid insurance 1 year ??? Est. $1,500 = $500 left


I know I need chemicals and I will need fittings to hook up the washer to the tank, sooo I really need more money or do I? If I go with a cold water machine I will save some money but will I reget it later, will quality suffer? I would like any advise that I can get.

Also I was wondering if anyone formed a C corp for their business. I did with the thought of paying myself a dividend each month according to my profits, therefore I would only be taxed at the 15% dividend rate and I would not have to pay unemployment tax, social secerity tax and medicare. Any thoughts.

Joshua Spoehr

Legacy Pressure Washing Inc.

www.legacywash.com

the website is a work in progress.

 

[PressurePros]

There is no one size-fits-all incorporation but I personally think a C corporation provides more tax breaks than an S corp. (shiftable income between personal and corporate tax rates by varying fiscal year end..you can't do this with an S) There are also big variations when providing benefits such as health plans and retirement plans for employees (such as yourself)

The thing that panics everyone with C corps is double taxation. In your begining years that is nothing to worry about as your expenses will easily drain dividends. I don't advise paying yourself dividends because they will be taxed at 15% then will also be taxed on your personal 1040. Get yourself a bold CPA that specializes in corporate tax law.

a little PS: I didn't see legal and accounting in your initial investment projection. Incorporating will set you back about $1200. Also, your website needs some re-thinking (imo) you are advertising blasting with heavy duty equipment and chemicals at rock bottom prices. All your planning can make you bankrupt real quick with a low price philosophy.

 

[Josh Spoehr]

thank you

I have already formed a C corp. and it wasn't very hard to do at all in florida, like 89 bucks. I do have to think about the accounting side, I'm not sure if I want to do it myself or not. Thank you for checking out the website, and there are some things I need to do with that. I am not going the low cost route as I thought I would do awhile ago. I have learned quite a bit from this board and other research that I will be applying to the business, Pricing being a big one. Thank you again

 

[Josh Spoehr]

forget what I wrote before,

I searched and found my answers, finally figured out how to pull up all the old posts. I will start out with a cold washer focusing on washing residential homes and decks. If I can succeed in that nitch I may upgrade my equipment. This way I can keep more cash in the bank. Cash is King!
Josh

 

[PressurePros]

I searched and found my answers, finally figured out how to pull up all the old posts. I will start out with a cold washer focusing on washing residential homes and decks. If I can succeed in that nitch I may upgrade my equipment. This way I can keep more cash in the bank. Cash is King!
Josh

Smart.. For what you are doing, cold water is all you'll need. If it were my budget I'd look into an 8 gpm machine and set it up dual gun. You'll cut deck and housewash time in half (even if you don't use a helper initially, the 8 gpm speeds everything)

If time is cash and cash is king, then saving time is the real king.

 

[Jeff Robison]

Ditto on the 8gpm machine. I just got one and the jobs go much quicker, even working by myself. When I have my helper it is great, he does the concrete, I do the house at the same time. Versus he would be watching me or I was watching him and just moving around hoses and such. I make more on every single job because of the time savings. It has also let me bid some commercial more competitively, I can lower the cost because I can do it faster.

Jeff Robison
Titan Exterior
678-360-2518

 

[Jon Fife]

Josh,

I'm not a good one to ask about machines, but my advice would be that your advertising budget is waaaaay low. $500 will only get you some biz cards, and a thousand brochures or so. Even at that, you have to distribute them somehow. If you are doing residental, I suggest direct mail. Expensive, but you'll get calls. You are probably too late for yellow pages, newspaper may take a few weeks, flyers taped to mailboxes works but look fly-by-night, so besides doorknocking (sold a 15K job the other day on the spot with a door knock) your best avenue is direct mail. Good luck,

 

[Josh Spoehr]

Good advice

I have to say that you are all right on, I would like to get a machine that is 8 gpm, but they cost about as much as the hot water machines that I was looking at earlier and Jon I'm glad someone chimed in on the advertising, I actually made an appointment yesterday to have a Valpak guy come over Friday. I would like to upgrade the washer but then that would leave me short changed on advertising, so I think what I really need now are coustomers, and I think that when I get the business running steady I will focus on upgrading my equipment...It's really a game of give and take, I've looked into leasing equipment but I would really like to use cash. The fears that I have with doing the direct mail is 1. I do it and nobody calls! or 2. way too many call!! I guess that wouldn't be a huge problem. I have three 10,000 house zones that I have in mind but is that too many? Is a response of one half of one percent to high to estimate? I really like the thought of direct mail, and I know there are alot of people that like postcards, I don't know kicking it all around now.

Josh Spoehr

Legacy Pressure Washing Inc.

www.legacywash.com

Site still under construction

 

[Jon Fife]

Josh, I normally don't do a lot of newbie helping, but I'm impressed with the fact that you really seem to be trying to move in the right direction and you've done your homework. As far as direct mail, I'd say .5-2% is average. Valpak will be on the low end, as opposed to sending postcards, but valpak is cheaper and requires less work of you. 30K houses is about right to get the phone ringing. Keep in mind, your closing rate will start out low due to inexperience, so you'll need to do a lot of estimates. Also remember, direct mail will pay off for about the next two months with sporatic calls. Regarding purchases, I'd even hold off until you line up jobs. Here's what I'd do:

Potential Customer (pc): Estimate sounds great! When can you start??

You: Soonest I can possibly get you in is second week of September, I'm full 'till then. Does that work for you??

PC: Kinda hoping to get it done by Sept. 1 for a birthday party......

You: Oh you have a party?? Okay, don't worry, I'll get someone out here going on it next week, even if it's me. It WILL be done by the party. Just sign here, and I'll call the day before to let you know exactly what day it will be, since we are squeezing it in.

At this point, I'd buy your equipment, and do some on a CC and pay for it after the jobs. You've GOT to have cash flow, that will put you under faster than anything. I HATE credit, but it is better than being cash broke, and a desparate salesman CANNOT sell. Also, who knows what you'll need?? Say you go door-to-door, the guy says, "I don't need my deck done, but i do own 10 convenience stores and we are looking for someone to wash them weekly. Do you have hotwater capability??"

Even if you do buy the equipment now, I'd still schedule work further away. You don't want to be desparate, and if you have someone on the hook, and they say it needs done FRIDAY, you can say you'll get it done.

 

[Jeff Robison]

You can buy a good used unit with open trailer for way less ($4000-5000total)than your budgeted amount. They are for sale all the time check ebay, these boards, or I have one for sale. Also on the insurance, don't pay all up front. I think we are set up quarterly.

I started out last year with a little less than half your budget and have done just fine. I am part time and looking to keep it that way, so if things are a little slow for me I do not sweat it one bit. Not sure of your situation.

The one thing I wish I had $ for in the beginning was advertising, so put your money aside from that. Yard signs at a completed job are good and follow up letters to the neighbors with a magnetic business card.

Jeff Robison
Titan Exterior
678-360-2518

 

[Josh Spoehr]

The idea of not buying the equipment until I have jobs lined up will not really work for me because I planned to get some experience under my belt working on my house and I have two decks and fencing to work on, I don't want to be clueless. My in-laws also have a deck that is in need of restoration and a roof that I can clean. I've also intentionally not washed my house in the back and have some serious mildew back there, the before and after shots are going to be worth the wait. Now if there is someone that needs some gas stations cleaned or if I'm asked if I have hot water, I'll have to cross that bridge when I get there. I'm not really desperate, just determined to succeed. I quit a government job last year to get into the business world; just thought there would be more opportunities. I'm going to school right now to get a degree in business, and collect my GI Bill benefits; all classes are online so it won't get in the way of pressure washing.

I finally decided to take the plunge after I went to a career fair last week I realized that no matter how I presented myself (suit), no matter how many bullets on my resume focused on management, training others, and all around how I've excelled at every job I've had. They all saw Aircraft Electrician, Aircraft Component technician.... I couldn't shake the job title. Everyone was willing to give me a shot at loading trucks for 8 bucks an hour, but nobody wanted to give me a second look for an assistant management position. So I said screw it, I have a good business mind, I have great work ethic, I'm trust worthy, and I have always produced quality work. What better thing to have on a resume 10 years from now than successful small business owner. Hell I may never want to do anything else. Blah....

Got a bit long winded there, sorry

Josh Spoehr

www.legacywash.com

Site still under construction

 

[Jon Fife]

Good for you. The idea of knowing I'd have to show up every day in a suit at 8:00 and leave at 6:00pm makes me want to vomit. I'd rather be a hobo, and I mean that, I'd rather just wander around and hop trains.

I see what you mean about getting practice. If I were you, i'd put out a request to contractors in ATL or Tampa and see if you could come and tail them for a few days, labor for free but they teach you tricks and let you take photos. Lots of guys would be happy to do that. Good luck on biz, this is a good one to be in, send me an email, I've got a couple suggestions I'll throw your way, but this board is odd about listing companies names,

jonathanmarkfife@hotmail.com

 

[Josh Spoehr]

O.K. I'm moving along getting things rolling to start for next month??? The only things I need to get done are, Insurance. The questions with insurance are, is the vehicle and equipment going to be covered under the policy? or is that completly seperate? Secondly I was wondering what you say the business is classified as?

I have a few questions about the equipment I should look at, please keep in mind that I will be focusing on residential, and deck work starting out. Should I a start out with a Hot washer that runs at 4GPM or should I buy a 8GPM cold water machine??? What size water tank should work? I will most likely be using the coustomers water. If I were to get the 8GPM would I need to haul water no mater what??? So many questions on the equipment sorry. I have searched and searched but I get so many boards popping up to look through that it is a bit overwhelming...

Thanks to all for their comments! [hello]

Josh Spoehr

Jacksonville, FL (Northside)

 

[CCPC]

O.K. I'm moving along getting things rolling to start for next month??? The only things I need to get done are, Insurance. The questions with insurance are, is the vehicle and equipment going to be covered under the policy? or is that completly seperate? Secondly I was wondering what you say the business is classified as?

I have a few questions about the equipment I should look at, please keep in mind that I will be focusing on residential, and deck work starting out. Should I a start out with a Hot washer that runs at 4GPM or should I buy a 8GPM cold water machine??? What size water tank should work? I will most likely be using the coustomers water. If I were to get the 8GPM would I need to haul water no mater what??? So many questions on the equipment sorry. I have searched and searched but I get so many boards popping up to look through that it is a bit overwhelming...

Thanks to all for their comments! [hello]

Josh Spoehr

Jacksonville, FL (Northside)

Go with the high gpm cold. If your focus is going to be on residental in the begining, the hot water isn't neccessary. In all honesty, you really don't even need an 8 gpm. It would speed things up a bit, but just starting out with little experience, you can get into troulbe with that much water flow and you will have to have a rather large back up tank. I've been in business for just shy of 3 years, and I still don't have hot water, don't need it at this point. 90% of my work is residential and I pick and choose the commercial jobs that I know I can handle with just cold water, which is usually office buildings and such. If you plan to look into resturarnts and gas stations, the hot water is a must. I use a 5.5 gpm machine and I chose that size simply for the convience of only requiring a small back up water tank of which a rarly have to use. Most hose bibs in this area supply enough gpm to support the 5.5 . 6gpm would begin to push it, 8gpm you will probably always have to use a back up float tank.

 

[CCPC]

Oh yeah, don't forget that you can always buy a hot box down the road that you can add to your existing cold machine.

 

[Josh Spoehr]

Thanks alot for the imput, Are there people in this area that insure pressure washers?

 

[CCPC]

I live in Orange Park, and I go through a local agent. I pay around $800 a year for 2,000,000 agg. and 1,000,000 each occurence. As far as specifics about my policy, I know this is going to sound bad, but I haven't looked at it in a while and haven't a clue. I can tell you off the top of my head that my policy covers me to up to three stories and covers roof cleaning, whick is somthing you will want to be sure your policy covers if you ever have plans to do roof cleaning, and in this area you will find out very quickly that roof cleaning can add up to about 30-40% of your total sales.

 

[Josh Spoehr]

Thank you again, so business is going well in OP? I am on the northside of town, and will be focusing here and arlington area, lots of older established neiborhoods there, not so much where I live cuz everything is new, but I can see mildew everywhere on these. Thats where I got this crazy idea to start this business, I had to was my house every six months and saw about 70 other houses in my neiborhood that needed to be washed so here I am. I worked at Nadep before I left to persue this. I your insurance carrier a well know company that I may find on my side of town?

 

[Josh Spoehr]

i just got off the phone with one guy that offered 1mil insure for 725, ask if it included roof cleaning, oh no no no, roof cleaning bad! that will cost you at least three times as much??? Any number that anyone can throw my way would be appreciated

josh

 

[Josh Spoehr]

I found one for about 800 that allows roof tops, but is there any other verbage that i should be aware of when looking at a policy?

Josh