| Rolling out the Carpet:
Daniel Rodriguez started a new carpet
cleaning business when he and his partner amicably parted
ways after 16 years. Here's how he did it....
It's not easy
starting from scratch, even if you have almost two decades
of business experience under your belt.
That's what
Daniel Rodriguez, president of Albuquerque-based DanCare
Carpet Cleaning Inc., found out last year after launching
his own company, following a 16-year partnership with cousin
Richard Wright.
The pair, who
had launched D&R Carpet Cleaning Inc. when barely out of
high school, agreed in 2001 that it was time to part ways.
It couldn't have been a better breakup: The two split
everything, from employees to office assets to customer
lists, right down the middle. Using his share, Wright went
on to start Dr. Carpet Cleaning, while Rodriguez began
DanCare in early 2002.
Still,
Rodriguez, like Wright, was working with only half of what
he used to have: half the staff, half the equipment, half
the customer base.
Meanwhile, he
had signed a five-year lease on a 2,500-square-foot
office/warehouse space off Jefferson where he intended to
house his new business, thus increasing his overhead. And he
was also starting his endeavor during winter -- the height
of the industry's slow season.
The business
needed to get up and running -- and quickly. It did.
By rapidly
employing innovative advertising strategies, customer
discounts and promotional programs -- not to mention
investing time and energy toward keeping old customers while
gaining new ones -- DanCare Carpet Cleaning, in 18 months'
time, has increased its customer base to nearly 78 percent
of its prior capacity under the old business.
That should
increase to a full 100 percent by October, Rodriguez, 36,
predicts. The company declined to release annual revenues.
"We were
setting the foundation to have a bigger company," he
says of his start-up plans. "We felt real confident
we'd do fine."
Starting
over
That success
has come at a price. Rodriguez' wife, Julie, who is the
company's vice president and bookkeeper, estimates initial
start-up costs ran about $25,000 -- which mostly came from
credit cards and equity from their house.
The money
paid for everything from new stationary to logo development,
plus signage, computer systems and software, payroll,
lettering for its three vans, plus other costs.
It was also
used toward a down-payment on their building, which
Rodriguez financed through the property owner (as part of
their deal, Wright took D&R's tax I.D. number, which
meant Rodriguez' company was considered brand-new -- and a
high risk in the eyes of a bank).
About $2,000
of their start-up costs were dedicated to probably the most
important part of their launch: contacting old customers.
"We just
deluged them with material," says Linda Carlson, the
company's office manager and Rodriguez' mother-in-law.
DanCare sent
out notices to all of its customers -- the cousins had split
all of their residential clients equally, and divvied up the
commercial accounts by dollar amount -- informing them of
the new name.
Each client
also got a refrigerator magnet emblazoned with the moniker,
and a business card.
DanCare also
covered its bases with its phone system so neither Rodriguez
nor Wright would lose business during the transition. For a
year, DanCare kept the old D&R number active in case
clients hadn't heard of the name change.
When they'd
call, a DanCare receptionist would look up the client's name
in a database; if it was someone who had been assigned to
Wright's list, the call would be forwarded to him. If not,
it was taken by DanCare, which also had a separate line
dedicated to new DanCare customers.
"It made
it very equitable that way," Carlson says.
Carlson, who
worked for 20 years in direct mail and marketing for a
non-profit, also helped the company step up its public
profile. She created a simple newsletter with short,
general-interest feature stories; recipes, promotions,
contests and factoids, then mailed it out to the company's
650 residential customers.
The mailing
now goes out quarterly to almost 1,100 people.
The business,
additionally, launched a referral program that would offer
service discounts for passing along the DanCare name.
"We
decided to attack the [customer] base we had by having them
help us," Rodriguez says.
Customers who
refer others get mentioned in the newsletter -- at least 16
people are listed quarterly -- and can qualify for
occasional prizes, like spa treatments. And the business
also started sending thank you notes, reminder postcards and
personalized letters to clients.
"We
really stay in touch with our customers," Carlson says.
Rodriguez
also did his part. The owner invited all of his former
commercial clients, largely consisting of apartment managers
and maintenance supervisors, to lunch so he could tell them
about the new company. He also made the rounds, stopping in
at businesses and properties he hadn't yet worked with, to
land new accounts.
Tony
McConaghy, owner of Albuquerque-based Shamrock Supply, a
janitorial and carpet supply company, has known Rodriguez
since the mid-1980s. He's not surprised by DanCare's
success. "He's never been afraid to work. He's very
professional," McConaghy says of Rodriguez.
"There's nobody in this business I respect more. I feel
very confident recommending [DanCare] to any of my
friends."
A Head
Start
DanCare's
beginnings are far different from what Rodriguez and Wright
were working with when they launched D&R Carpet Cleaning
in 1986.
Back then,
the men were students at Albuquerque Technical Vocational
Institute where they were studying land surveying, a trade
career that never panned out for either. Instead, the pair
decided to start their own carpet cleaning business after
Wright picked up the experience working for a local company
one summer.
Working from
their homes, the cousins invested $2,500 in an
industrial-strength carpet cleaning machine they hauled
around in the trunk of Rodriguez' 1977 Cougar.
They were so
afraid clients wouldn't take them seriously, they'd park
around back of a business before approaching a manager at
the front door.
Cultivating a
growing list of contracts, the company incorporated in 1997.
By the end of 2001, it had seven employees, operated out of
a warehouse, and had 1,500 residential clients and about 40
commercial ones, although the latter brought in the bulk of
the company's revenues.
Still, by
that time, the men were ready for a change. They split the
company evenly and amicably, and went their separate ways.
That's not so unusual.
Only about 30
percent of all family-owned businesses survive into the
second generation, and 12 percent will be viable into the
third generation, according to the Family Business Forum,
based at the University of North Carolina-Asheville.
Today, both
are doing well. Wright's company, the smaller of the two,
still handles both commercial and residential carpet
cleaning accounts.
Rodriguez,
meanwhile, plans to keep expanding. After reaching his
client goal this fall, he'll start buying more vans to
increase his service potential. "I don't want to rush
it," he says. "I figure if I can get one van a
year, and keep it busy, we're doing great."
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