You Can't Afford Employees

I've told this story for years. Teresa and I were in the Amway business from 2002 to 2012. While we were there, we were blessed with incredible friends and mentors. One of those men is Herb Eplee. He build his Amway business to 6-figures and residual income in the early 90's and retired from corporate America at 37 years old. Herb is a self-acclaimed Kentucky redneck. He had a retirement party that literally made the Spartanburg, SC newspapers as he set 5 alarm clocks in a field. He labeled them Monday through Friday and blew them up one by one with a shotgun. All of his friends in the Amway business celebrated with American flags as he quit his job. I met Herb 10 years later. He was my Amway Upline and helped Teresa and I in so many ways along with our other upline mentor Joe Schirripa. These two men, whom I'll share more about in future podcasts taught us business owner mentality and mentored us in business, marriage, and faith. 

In July 2008, Teresa and I were fed up with our cleaning business. We had 3 part time employees. I was pulling in $5,000 to $6,000 per month, but kept less than $2,000 in profit. We were starving and full of debt and stress. Our tea kettle was past the whistle; check out "The Whistle is a Warning". We got on this coaching call with Herb wanting help on fixing our cleaning business, so we could be more effective in our Amway business. Well, good ol' Herb gave us some advice we did NOT want to hear. Here are some of the highlights on this call:

• I knew my numbers. This coaching call could NOT have happened if I didn't know my numbers. At the time of this call, I was in business full-time for 2 1/2 years. I've always tracked and known my numbers. This is huge!
• I wasn't able to be a giver. Herb wanted us prospering in our main source of income so we could be a giver and greater benefit to our community. We were so broke that we couldn't even help ourselves. "Ken can do without, but I don't like seeing Teresa and Kenny doing without."
• I was such an over-optimist. My response to Herb's first question, "how are you doin'", was "I'm doing awesome! We definitely could use some more money coming though." I was NOT doing awesome!
• I was employee top-heavy. You have to move yourself into the employee game very slowly. You have to work yourself up until you're very busy, then you bring on someone very slowly so it takes a little pressure off of you. It's a cash flow game. Herb perceived that we needed the entire $5,000 to $6,000 per month for ourselves after taxes to make it. He said, "with 3 employees and paying them, you're way-bad not making it!" This was a super simple way of testing if I could afford employees. Herb said. "Ken, you can afford to pay employees everything over and above what it takes you to float your budget." I wasn't even close! He made one exception. If I couldn't handle my full family budget cleaning solo, then I'd have to make due with employees and fight through with aggressive marketing. 
• I wasn't disciplined to marketing daily. I was not marketing to a level that would create new clients fast enough to keep the employees I had. Herb laid out the strategy to grow our business (in 2008) and how I could get my wife Teresa involved as a business partner. Teresa would need 2 hours per day to make 20 phone calls, which would create 1 new client per day and 5 new clients per week. I would need 2 hours per day around my cleaning to complete the estimates and proposals to close the deals.

Read the rest of this article at the Solo Cleaning School website