One of the biggest questions people ask before starting a business is: “How soon will I start making money?”
It’s a fair question. After all, launching a business is about supporting you and your loved ones, just as much as it’s about freedom and ambition. Bills still need paying, and if you’re leaving a job with a stable salary, the pressure to replace that income can quickly be felt.
Reaching profitability can be one of the biggest unknowns in business, as it can vary due to a wide range of factors. In this article, we break down the journey to profitability for cleaning business owners.
What is Profitability in Business?
If you’re completely new to the world of business and financial management, you might have no idea about revenue and profits. However, it’s important to understand profitability as a business owner so you know how to measure it, along with what actions will help make it a profitable business.
Profitability isn’t just about how to increase business revenue; it encompasses overall financial gain, which also takes outgoings into account. For example:
Business Sales – Business Expenses = Profit
Profits can be calculated over certain time frames to allow you to track changes in profits over time. The goal should be to increase profits over time, although this can be challenging as business growth often leads to greater costs. When we talk about ‘breaking even’, this is the point at which your total revenue and costs are equal, and beyond this point, all revenue is profit.
When will my cleaning business become profitable?
The short answer: it depends. Every business will be affected by the following factors when determining whether it’s profitable. This includes:
- Startup costs – how much does a cleaning franchise cost? The size of your initial investment depends on the cost of assets like cleaning equipment, branding, insurance, training, and cleaning products. This will affect how long it takes the business to break even. Additionally, any revenue will be offset by operational costs when calculating monthly or quarterly profits. That being said, cleaning businesses have relatively low operational costs.
- Customer acquisition – a common way in which profits can be delayed is through slow customer acquisition. A recognised brand like Ovenu helps to create trust immediately and win over new customers.
- Reach – the effectiveness of your business marketing and how much local awareness there is around your offering. If you’re starting from scratch, establishing your business can take months and requires regular input.
- Work ethic – make no mistake, all profitable businesses require a great deal of effort to build, and the more you commit to your goals, the faster they will be achieved. The first step here is to create an in-depth business plan, which you can always refer to when in doubt.
Strategies to Increase Business Profitability
In the early days of Ovenu, before we became a franchise, it was very important that we could demonstrate the success of our business model through consistent profits year after year. In my case, that was a five-year pilot scheme to prove that our oven cleaning business model was successful. Our tried and tested profitability strategies include:
- Increase sales volume – the number of jobs you complete per week will directly correlate to your profitability. We recommend creating an efficient system that allows you to complete more jobs without impacting your work/life balance.
- Reduce overheads – the regular costs associated with your business’s operations influence how difficult it is to break even. Making internal processes more efficient, buying in bulk, and outsourcing are just some of the measures you can take to reduce operational costs.
- Raise prices – while increasing prices for customers might not be a realistic option right away, over time, this can be a viable strategy to generate greater revenue.
- Expand customer base – this can be done in various ways, such as through marketing efforts, advertising, encouraging customer referrals, and by delivering consistent high-quality services.
Paul Bernard, Ovenu Chestnut, – ”With hard work and dedication, the earning potential is significant. The satisfaction of building a successful venture adds to the financial rewards.”.
Example timeline for our franchise cleaning businesses
- Week 1-3: start generating income.
- Months 1-3: expand customer base and become established as a service provider in your area.
- Months 3-6: reach breakeven within this timeframe.
- First 12 months: achieve consistent profitability.
This is what our franchisees have come to expect, although for many independent businesses it can take longer to turn a profit.
Profit Faster with an Ovenu Franchise
As a new business owner, becoming profitable can be a big source of anxiety. The longer it takes, the more you can worry if you made the right decision. The bottom line is that the quicker your business starts making money, the more secure you’ll be in your position, both mentally and financially.
When you join an established, professional franchise like Ovenu, everything is already in place to support your business in growing and achieving strong revenue. Get in touch if you have any questions about our franchise opportunity and/or the financial support available.