What will your market support?

apple

apple

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For you commercial guys.

First of all I know each area and part of the country is different. Is there an average or a rule of thumb to determine how much a population will support?

I am in the midst of focusing our business plan and haven't had the luxury of asking myself this question in the past. Basically it has always been this area is the hand we were dealt, so we'll take what we can get.

I would like to think that our area the (Little Rock MSA 699K) will support a solid 2 truck business, but I do not know because Ive yet to do it!
 
It depends on how much competition there is, and how competitive that they are. I know that in the phoenix area, just on this bulletin board, we have at least 5 contractors from the Mesa area, and that there are probably 5 times that in the area, overall. Mesa has a population of around 400k.

We are adjacent to Phoenix, though, and that is additional market to work with.
 
I am sure that your market will be big enough for several companies with multiple trucks.
 
In the franchise business that's called a market analysis.

It's tough in this industry. The ones I was doing before were car sales and air filter related and there was a lot of data to mine from.

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apple said:
For you commercial guys.

First of all I know each area and part of the country is different. Is there an average or a rule of thumb to determine how much a population will support?

I am in the midst of focusing our business plan and haven't had the luxury of asking myself this question in the past. Basically it has always been this area is the hand we were dealt, so we'll take what we can get.

I would like to think that our area the (Little Rock MSA 699K) will support a solid 2 truck business, but I do not know because Ive yet to do it!
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Good question Chris.

The population of your market is important, but you also have to factor in the economy of your market. If the population isn't making money they're not spending money. What drives the economy of your area? Are there multiple sources driving the economy?

Narrowing your focus is a good business move. Having the work to run 2 trucks depends on sales, marketing, visibility, & economy. IMHO


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Thanks for the replies guys.

Points well taken Guy.

To be even more clear on my point of this thread.

From the very beginning we have had small amounts of great success with property management and we intend to pour more and more focus into it every day. Im not sure how to judge what can be expected by rule of thumb from an area doing this kind of work.

I know there are no answers only more questions, but I am curious to see others thoughts.
 
I truly believe that you can make your business as large as you can imagine. All you have to do is get out there. Everyone needs exterior cleaning. 2 trucks should be no problem. You can do it. The more competition the better. More competition means more companies promoting your same service. More people thinking about pressure washing and more people knowledgeable about your industry.
 
AZ PowerWash Pros said:
I truly believe that you can make your business as large as you can imagine. All you have to do is get out there. Everyone needs exterior cleaning. 2 trucks should be no problem. You can do it. The more competition the better. More competition means more companies promoting your same service. More people thinking about pressure washing and more people knowledgeable about your industry.
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Great post Ty , we have 8 million possible customers here.

I know 20 companies in Phx with 4 or more trucks and three with 15.

Sunbelt is still around with 11 and I thought they had gone away. Ark and sunbelt used to be my only competitors 15 years ago. A guy called Hydroclean was a pain with service stations. Now the market is full of hundreds of single operators.

Getto wash is a funny name for a company but we have all seen his trucks.

We have rocky and Luke azproclean , bob at valley, John at premier.

The guys on google first page like you Ty I don't think they are even the size your headed too. You should be proud at what your doing. Keep it up and I see two more rigs in two years.

Good post,
 
outdoorprowash said:
Any thoughts on the Nashville market?
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I am in Rutherford county and don't do much up in Nashville, but you have some competition for sure.

The market analysis for you would depend on where you want to focus, if you want to focus at all.
Plenty of fleets of there, but do you have the equipment?
Plenty of government and corporate buildings, but do you have the up front operating capital?

And theres a bunch more questions, but it is all so relative.
 
AZ PowerWash Pros said:
I truly believe that you can make your business as large as you can imagine. All you have to do is get out there. Everyone needs exterior cleaning. 2 trucks should be no problem. You can do it. The more competition the better. More competition means more companies promoting your same service. More people thinking about pressure washing and more people knowledgeable about your industry.
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That post gets me pumped up Ty.

My biggest concern in our area is lack of targets.
 
apple said:
That post gets me pumped up Ty.

My biggest concern in our area is lack of targets.
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If you have buildings, concrete, gutters, patios, pools, and roofs out there then they need pressure washing. All I do is drive by properties all day in Phoenix thinking "that needs pressure washed." There is absolutely NO business that does not need your services. All you have to do is convince them of that. And I think it starts with believing it yourself. ( not trying to be a motivational speaker ) just know that every business that is in business needs pressure washing on something.

I guarantee you will have two or more rigs in the next couple years if you try. My only concern now is how to keep them up and running without everything breaking down on me and without killing my employees!
 
Ron Musgraves said:
Great post Ty , we have 8 million possible customers here.

I know 20 companies in Phx with 4 or more trucks and three with 15.

Sunbelt is still around with 11 and I thought they had gone away. Ark and sunbelt used to be my only competitors 15 years ago. A guy called Hydroclean was a pain with service stations. Now the market is full of hundreds of single operators.

Getto wash is a funny name for a company but we have all seen his trucks.

We have rocky and Luke azproclean , bob at valley, John at premier.

The guys on google first page like you Ty I don't think they are even the size your headed too. You should be proud at what your doing. Keep it up and I see two more rigs in two years.

Good post,
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Thanks Ron. Always respected what you do. Because of guys like you and other pressure washers in Phoenix that have been doing it for decades it is much easier for me to sell my services because everyone in Phoenix sees pressure washers driving around and cleaning all night. The more informed the public is the more work there is. There is always room for great competition in every city. Its the hacks you have to worry about...
 
Papa Johns Pizza will not enter a market until there are already three thriving competitors in that market. The strategy is that if the competitors have been there successfully operating within and developing the market then all they really have to do is come into that market and offer superior product and service.

Lets say you have 10 competitors in any given market. Lets also say they are doing $150,000.00 each in that market. Your goal would be to enter that market and develop through your own sales $75,000.00 immediately. Then focus on garnishing through offering superior product and service 10% of each of your competitors business away from them. That would give your new company a first years sales of $225,000.00 and make you the biggest company in your market.

However even with that push you still wouldnt have market share. This is because even with those companys sales being lowered to $135,000.00 each by you entering the market their combined market share would be $1,350,000.00 and you added to that would make the total market $1,575,000.00. Your company would only garnish 15% of the overall market.

Now if you understand marketing and economics you know that having 15% of the market also means that you are probably getting mostly customers that would buy from you because they like you at any price. This is called preference purchasing. You are their preference and that usually has little to do with price. So now about pricing...

If the majority of you small 15% of the market share is buying you as a preference and not a commodity you should be able to adjust your prices to allow for a nice 25 to 30% profit margin without loosing any more than 2 to 3% of your market.Usually that kind of adjustment allows you to make the same $225,000.00 total gross while doing as much as 30% less work. Less work for more profits, most business professionals are interested in that!

Hope this helps Chris,

AC
 
Thats all good info AC. It took me 3 years of apprenticeship under a man who started quite a few franchises to learn that information and how to put it to use.

I didn't realize they taught that in snake oil school. Furthermore, I didn't think they would teach you to even care about things like "sustainable" business there.

You learn something new every day

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25 to 30% profit? Man, would I ever be disappointed, especially in a low volume business like sole proprietor house washing.
 
AC Lockyer said:
Papa Johns Pizza will not enter a market until there are already three thriving competitors in that market. The strategy is that if the competitors have been there successfully operating within and developing the market then all they really have to do is come into that market and offer superior product and service.

Lets say you have 10 competitors in any given market. Lets also say they are doing $150,000.00 each in that market. Your goal would be to enter that market and develop through your own sales $75,000.00 immediately. Then focus on garnishing through offering superior product and service 10% of each of your competitors business away from them. That would give your new company a first years sales of $225,000.00 and make you the biggest company in your market.

However even with that push you still wouldnt have market share. This is because even with those companys sales being lowered to $135,000.00 each by you entering the market their combined market share would be $1,350,000.00 and you added to that would make the total market $1,575,000.00. Your company would only garnish 15% of the overall market.

Now if you understand marketing and economics you know that having 15% of the market also means that you are probably getting mostly customers that would buy from you because they like you at any price. This is called preference purchasing. You are their preference and that usually has little to do with price. So now about pricing...

If the majority of you small 15% of the market share is buying you as a preference and not a commodity you should be able to adjust your prices to allow for a nice 25 to 30% profit margin without loosing any more than 2 to 3% of your market.Usually that kind of adjustment allows you to make the same $225,000.00 total gross while doing as much as 30% less work. Less work for more profits, most business professionals are interested in that!

Hope this helps Chris,

AC
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All those numbers look good but this is not pizza. You are talking about a marketable product that everyone knows about and consumes. P/W is not that type of buisness, you need to work 10 times harder at selling something like P/W than just doing some marketing research. I know that Checkers Burgers does the same thing as you stated, they are built at a factory and then trucked in one piece to your location. All they do is let Mc Donalds & Burger King do all the demographics for the location, then they just plop their store down in the outparcel next to them.

This buisness has been around for many ,many years but it is no way as marketable as fast food so in my opinion your analogy is moot and means nothing. There are people who live in Bumf&%k nowhere and are profitable, then you have guy's in a heavy metropolitan area and do next to no buisness. I totally beleive that you can prosper in this buisness if you put your all into it, but you have to always be looking for work weather busy or not. So in closing I think that 15% of what you say is true but 85% is useless in this market.
 
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