Minimum Wage Work as an Entrepreneur

Here’s a little lesson I picked up from my parents about doing high-value work.  As you may know, my parents are entrepreneurs.  About ten years ago they founded Evening Janitorial, which is a commercial janitorial business based in the Bay Area – mostly the East Bay.  Their janitors clean local small businesses- think car dealerships, small retail shops and schools, but not restaurants and bars (post on why not later…). 

Watching them run their business has taught me a lot and here’s one of my favorite stories:

My mom is the face of Evening Janitorial.  She kills it in sales and customer service. Cleaning services are super commoditized: labor is cheap, in massive supply, and generally unskilled, so you need a schtick, or else you’ll never survive.  High-touch is where my parents have found their niche.

A few years ago, my mom wanted to make baskets of cookies for all of her clients (several dozen clients at the time).  They have 2 ovens, so this would have taken my mom and a few of her girlfriends a solid day to shop, make the cookies, let them cool, wrap them up and get them prepped for hand-delivery. 

My dad, the savvy, Wharton-educated COO, couldn’t believe his ears.  She wanted to throw away a work day to make cookies?  It was one thing to make cookies all day for fun, for her friends, or for her kids.  But when doing work-related stuff, baking is a total waste of time and resources. 

His argument goes something like this: if you’re on the clock, even if you’re an entrepreneur setting your own hours, you need to work on real problems.  His suggestion was to hire some high school kid to make the hundreds of cookies at $8.50 an hour, or go buy them from Costco.

For their business, an average sale means a couple hundred or a thousand bucks in MRR (there’s a ton of variability obviously so bear with me).  But closing a sale takes a lot of work; every single step in the funnel (except of some SEM and referrals at the very top) requires hands-on, high touch, persistent sales effort.  My mom’s best value add is being in front of clients.  Therefore, her opportunity cost is super high- literally anything else she does (baking cookies, writing emails, processing payroll, checking the mail, etc etc) is time she isn’t spending in front of clients.

As an entrepreneur, why do minimum wage work when you can be in front of customers selling?

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