launch27 27 weeks coaching

to Building a BUSINESS Once and for All

Week 1 - Tue - Competition

Rohan Gilkes’ 27 Days to Building a Business Once and For All: Day 2- Choosing Your Industry

rohanMay 31, 2016 by rohan

DAY 2: Figuring out the industry and competition

First a quick word on how we chose our industry…

So for this project Dara has chosen to build a simple internet-based service business: home cleaning.

Why service instead of a product company?

I’ve built both service and product businesses and have found that service companies are easier to build from a cash flow perspective.

Product vs Service cash flows

Screenshot 2016-05-31 10.06.00 Hat tip: http://www.wix.com/

Service cash flows look like this:

Perform service  -> Get paid -> Pay the service providers

So with a service company, you get paid first, and then pay out.

Product on the other hand looks like this:

Pay for product -> Sell it -> Get Paid

With a product company, you pay money first, and then take on the risk of not getting paid…ie not selling anything.

This may seem like a minor difference, but even successful product companies can have cashflow issues because it becomes increasingly difficult to cover inventory cost the faster you grow with a bootstrapped product company.

Product is great, don’t get me wrong, I have just found that if cash is low, a service business requires the least startup capital to ramp up because of the directionality of cash flows.

With this being said, we like the home cleaning industry because it has good recurring revenue, a high price point, and we will have certain advantages over the competition that we’ll chat about in upcoming days.  However, there are a host of local service businesses this could work for…

Other local Service business ideas

Screenshot 2016-05-31 09.42.39

So there are a ton of people right now in your city that are looking for various services to make their lives easier.  For them, time is the most precious commodity and they’re actively looking for ways to buy back that time.

Here are some ideas that might work well with this model. Basically anything where you can go (or send a representative) to a client’s home to perform a simple service. Here goes:

home cleaning
carpet cleaning
moving service
lawncare
painting service
handyman services
power washing
dry cleaning pickup
window washing
mobile car wash/detailing
pet sitting/grooming/walking
house sitting
grocery delivery
Errand running
baby sitting
pool cleaning
home entertainment installation
mobile massage
personal chef
diaper delivery
In home tutoring
plumbing service
electrician service

 Finding out how the competition sucks using Yelp

So once we’ve figured out our industry, we just need to take a day or so looking at the competition. It’s worth the effort. This is short video of Dara taking action on this today. I’ll detail the process below as well:

The goal here is to head to Yelp and find as many 1 star reviews as you can find.

It doesn’t matter if it’s in your city or not. The goal is to hunt down 1 star reviews and read them, laugh your ass off, and write down all the things clients complain about over and over again.

You’ll soon see that city makes no difference. You’ll find the complaints are the same over and over again. Those ones that keep repeating from company to company and city to city are the industry-wide problems.

Hidden in these one star Yelp reviews you’ll find the dark underbelly of your industry.  The things that businesses fail on over and over regardless of city.  We’re going to pay attention and take notes.

Once we know how our competition is failing their customers we’ll be able to use that information to present a better offering!

When we gather these pain points, one of the ways we’re going to dominate the market is to flip those pain points and use them to craft our unique selling proposition.

Tomorrow we’ll show you exactly how this is done!

Action Steps Today

Choose an industry from the list above.  Our recommended service is home cleaning because we have found this to be the most lucrative on the list, but anything on the list would be solid. Our goal is something with high price points (more than $100 per transaction) and recurring service where you go back to the same customer multiple times per month.  Home cleaning fits perfectly and is one way folks are making millions right in your city. Why not you?

Tomorrow will be interesting…

 

 


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rohan
About the Author

Startup entrepreneur , writer, and local brand builder. I’ve launched and grown several companies, generated millions in revenue, and along the way allowed thousands of people to peek over my shoulder to see what works. What follows is the 80/20 approach to building a successful business.