Looking for input to startup on a budget.

[Desk Jockey]

I was on a non-compete working outside of this industry for up to 1 year and 50 miles. Stopped me. How do you prevent that top technician from doing just that though? You give him classes on ethical behavior? I don't understand how someone would think this would not happen. Not is it just life, its reality.

If you would have checked with an attorney he'd have laughed it off and said go ahead and start up on your own.

It will happen to you if you're in business long enough. I think Tom is just saying why encourage someone to do it.

What keeps most from doing it is funding, if they could swing the funding most would do it. The thinkers will realize how hard ownership is and feel the time trade off is better than sinking there life into a business.

 

[Ron K]

Isn't that the same thing but different industry? I may have missed your point but it does sound like you're stealing customers as you change employment.

Maybe its easier to see if its closer to home.

So lets say your top technician has amazing skills, both customer relationships and technical ability. He's your right hand man, he's been working for you since you opened up and you give him all the prized jobs. The big accounts, the real bread and butter money makers. Great guy, always on time, always presentable and he just over all cares about his craft.

Monday he walks in with his clothes and company cell phone. He tells you he really appreciates all you have done for him but his father inlaw just loaned him 100K and he's going out on his own. You're disappointed but you'll move up another tech to his spot and begin the search for another tech.

Problem....you don't grasp the reality of the situation.

He has your top clients now as his data base, not only does he have their contact info BUT he has the relationship. He is offering to do the same work he did while your employee but now at a better price, since he doesn't have the overhead you have.

Did he steal your book of business or is this real life?

Noncompetes are not worth the expense you pay to have them drawn up.

Sounds Personal ! Ouch!

 

[WillS]

Doc I should have mentioned the non compete I signed was when I was in sales for the casino industry. No sales person left, even after consulting an attorney, the property would go after you no matter what. I had to move to Vegas from Lake Tahoe because of not being able to get out of it. Vegas was out of the 150 miles non compete.

Sorry I didn't mean to encourage it for someone looking to start as a way to build customers, but it truley can't be ignored that this happens.

 

[Desk Jockey]

Sounds Personal ! Ouch!

Yes it happened to us before but not nearly as bad as I described but it could happen that way.

In our case the guy wasn't that bright. He would write down the contact info of all jobs and call and offer to clean at half price. We had clients call us back telling us you have a problem, someone contacted me about carpet cleaning. At first we thought they were nuts but then it happened to often.

What finally gave it away was a complaint on his work. They called us to complain about his work.

We canned him but there was NO justice. He collected unemployment all the while competing against us.

I tried fighting it but to no avail, we subsidized him to compete against us.

In 47-years he's been the only one......so far.

 

[WillS]

He was still working for you and calling customers on the side? Damn. Was he using your equipment or his own?

 

[Shane Deubell]

I'm not justifying it, simply stating this is what happens and works in every industry. Have you worked in sales before? Let's say you hire a sales person to to out and get you commercial business. This person is the contact most of the time for those accounts, builds a relationship. Another company comes along and offers this sales rep more money. What's gonna happen? This is unfortunately what takes place in every industry. That is why you need employees you can trust, even then, piss them off it's another story, therefore a non compete never hurts.

YES and sadly you are mistaken and/or confused.
In our industry a non-compete is useless because we do not deal with proprietary information. All of this is public and/or well known information.

We can implement and enforce a non-solicit agreement which means an employee cannot steal customer information and use it for a practical period of time.
2 Years is practical for our industry.

The reason we don't see it happen often is because the screw ups who usually do this end up with $20k a year or less in sales. Not enough for me or anyone else to waste time/money on.
That number is normal customer attrition do to illness, death, moving, lost of job, etc.

Now if someone stole $200k a year in sales or more, well i would come out with guns a blazing.
and WIN pretty easily, hopefully bankrupting the rat.

 

[Greg Cole]

YES and sadly you are mistaken and/or confused.
In our industry a non-compete is useless because we do not deal with proprietary information. All of this is public and/or well known information.

We can implement and enforce a non-solicit agreement which means an employee cannot steal customer information and use it for a practical period of time.
2 Years is practical for our industry.

The reason we don't see it happen often is because the screw ups who usually do this end up with $20k a year or less in sales. Not enough for me or anyone else to waste time/money on.
That number is normal customer attrition do to illness, death, moving, lost of job, etc.

Now if someone stole $200k a year in sales or more, well i would come out with guns a blazing.
and WIN pretty easily, hopefully bankrupting the rat.

non compete is only as good as the lawyer you can afford to enforce it. In GA a one year is customary and enforceable. You don't sue the sales rep. You put the company on npotice that yu have a non-compete. A smart owner will walk away. If he doesn't, you can sue and win. Sadly it's only the lawyers that win when its all said and done
A

 

[renegade_cowboy]

I'm not justifying it, simply stating this is what happens and works in every industry. Have you worked in sales before? Let's say you hire a sales person to to out and get you commercial business. This person is the contact most of the time for those accounts, builds a relationship. Another company comes along and offers this sales rep more money. What's gonna happen? This is unfortunately what takes place in every industry. That is why you need employees you can trust, even then, piss them off it's another story, therefore a non compete never hurts.

Of course it happens in all industries and what are to think of people who think its okay to steal customers from your previous employer? An employee doesn't own the company and doesn't own those relationships.. If I had a new hire that would come to me and say.. "I have all these clients from my previous job I can port over" .. I would not have him be on the team. Its like getting into a relationship with a girl where both of you cheated on your ex's when you first got together.. how can you trust a person who is capable of shady actions.

Good thing you're not into that kinky shady stuff huh..

 

[Willy P]

Years ago, I used to subcontract with a local specialized company. They could get lots of jobs but they didn't want to do them. It made good filler work, they took 30% and I did the work. My own business grew to the point that I couldn't handle what they wanted me to do, so I parted ways amicably. I made contact with the companies of theirs that I'd worked for , explained and said my goodbyes. A few months later I got a call from one of the managers saying they had fired the other company and would I consider taking the properties work over.Didn't show up, rude and short on the phone, crappy work..... A little while later, same thing from another company. They'd tried a few other cleaners, but it didn't work out. 3 times this happened. At no point did I solicit or make any form of contact other than to tell them to call the office directly as I was no longer doing the other companies work. I agonized a little bit, but if they chose to toss good customers aside, who am I to argue with a spot of good luck. I called the other guys and explained what happened, they weren't doing cartwheels, but it wasn't me who didn't meet the other guys needs and they sorta understood that. We still talk, I give them referrals, they shoot me the odd job.

 

[Stoneface]

Thanks for all the advice, folks.

 

[Shane Deubell]

non compete is only as good as the lawyer you can afford to enforce it. In GA a one year is customary and enforceable. You don't sue the sales rep. You put the company on npotice that yu have a non-compete. A smart owner will walk away. If he doesn't, you can sue and win. Sadly it's only the lawyers that win when its all said and done
A

True.

But maybe 40 contractors in the country can afford that kind of representation.

Much easier to stop a former employee from working directly off of your customer list then stopping them from working in your county (territory) for a year.
I would be pretty shocked if a judge ever ordered something like that, ever but agree if you have more money then you can bully them into it.

 

[Bill Morgan]

just because you CAN get started in this industry for $1,500 doesn't mean you SHOULD. those are some pretty long odds that you will be successful. limping into any business on the cheap usually spells disaster. of course, there are those rare exceptions but see that for what it is and don't kid yourself into believing it's the rule.

If possible, work for a cleaning company for a while and get some sound technical skills and save your money so that if and when you decide this is what you want to do you can buy the best equipment you can afford. I'm not say new but there are some very good slightly used pieces of equpment available on the market because of people who made poor decisions based on what someone suggested (sort of like you are doing) to do and not really knowing a lot about it.

As Ofer said, technical skills are good to have but people skills will trump technical skills every time.
When I started, I felt very insecure at times about my technical knowledge even though I had worked for a cleaner and knew what I was doing. Only difference was now I was in charge and doing it for myself. I spent a lot of money on equipment and chemicals I really didn't need but thought I did to try to get an artificial edge.

Spend some time finding a business Mentor throught S.C.O.R.E., do a business plan and learn the numbers of the business so that you know what its going to take to make money. don't guess.. you will fail and nobody what that.

Good Luck,
Bill