Question: Will my carpet cleaning business ever let me retire?
Steve’s answer: MAYBE… if you focus on the difference between “want to” and “have to”!
I’m thinking about how I’m eventually going to get out of my carpet cleaning business. (I think you call it an “exit strategy”.) I wonder just how many carpet cleaners that have been in the business for say, 15 years or more could walk away now and be fine financially? Or do they find themselves kind of living paycheck to paycheck? Or job to job like me?
Seems like most of the cleaners that I meet have very expensive equipment but can’t afford to take a vacation or even buy a decent car! Is this just bad money management or is there something wrong with our industry? I don’t mind cleaning carpets but only want to be doing this another 15 years tops. (Or maybe my boys will want to take over the business in ten years or so.)
Down in Alabama, Thinking About the Future
Thanks for writing, Thinking, and it is great that you are pondering the future now. I think it comes down to the incredible difference between “have to” (bad) and “want to”. (Good) Nobody should “have to” work as a greeter at Wal-Mart just to put dog food on the table after a so-called “successful” carpet cleaning career. And yet … some do.
On the other hand, “want to” is wonderful. As in I “want to” keep working with Jon-Don consulting for our SFS members for a long time to come. And trust me, when the “Godfather” of Jon-Don, “Papa Nick” Paolella, comes to serve our attendees food at every SFS it is because he “wants to”, not because he “has to”!
I think many carpet cleaners are seduced by the “easy big money” found in this profession and live in the “here and now”. They have all the “toys” (nothing wrong with that!) but they never build a substantial net worth/cash flow for retirement NOR do they ever build a real business that is an “appreciating asset”.
However, just an editorial comment on not “keeping all your eggs in one basket”. IF you can pass your business to your sons this CAN be a great exit strategy. BUT a large percentage of the second generation do NOT want anything to do with the cleaning industry. All the more reason to make your business “turn-key” and so simple anyone can run it … so you can sell it to anyone!
However, you need to diversify your investments and your risk. For example, both Sioux and I have substantial IRA’s… now. But when IRA’s were first introduced we didn’t jump on them right away but instead putzed around for 5 or 6 years. Don’t let this happen to you.
Never depend solely on the sale of your company to provide for your retirement. You should also have an aggressive and regular Personal Investment Program. Pay yourself first! If you need motivation, just remember that when you “have to” do anything it is a bummer.
P.S: So really you need a three-pronged attack, Thinking. A) A regular and aggressive Personal Investment Program, B) a growing and profitable company and C) a Business Infrastructure that will let your company continue growing without YOU! (This makes your business into a valuable asset that is an essential component of your retirement planning.) Also a degree of frugality in your current lifestyle wouldn’t hurt either but don’t get me started on this spoiled “Entitled Generation”!