Filthy Rich Cleaners Podcast E11: Turning a Local Cleaning Business into a National Franchise with Neel Parekh

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Introduction

Coming up next on the Filthy Rich Cleaners podcast: “We’re the best of the best in our area, and the reason that is reliability, which is we show up when we say we’re going to show up and we’re not going to be, you know, messing with their with their life that much.”

From your first dollar to your first million, welcome to the Filthy Rich Cleaners podcast presented by ZenMaid. Join your host, Stephanie Pipkin, founder of Serene Clean as she shares proven tips, tricks and hard earned lessons. Whether you’re just starting out or ready to scale, get ready to discover how to build your own cleaning empire. Let’s roll up our sleeves and dive in.

Meeting Neel Parekh

Stephanie: Hello everyone, and welcome back to Filthy Rich Cleaners. I am your host, Stephanie Pipkin, and today’s special guest is Neel Parekh, and he is the owner of a very interesting business model, which is a franchise model focused on mostly vacation rentals. So Neel, can you please tell us your elevator pitch background story? Coming from a very corporate background, it’s so fascinating to jump into the cleaning company.

The Journey from Corporate to Cleaning

Neel: Definitely, and first of all, thanks for having me on. Currently I am living in Rwanda, in East Africa. I got here like couple weeks ago. I’ll be here for six months. My business is fully remote, and it’s been like that for a while.

I originally started my career not as a cleaner – I was working in corporate finance and wanted to find a way of escaping the rat race working for myself. Tried a bunch of different things. The one thing which worked really, really well was house cleaning. This was 2013-2014ish.

I realized looking into the industry, the reason why it was so awesome – you have a lot of recurring customers, things get dirty all the time. Many times the competitors aren’t as tech savvy or sophisticated, so you could do some marketing which will let you leapfrog the competition.

I quit that job in 2015, started traveling and growing my cleaning business. Got it to around maybe $2 million or so by 2019 and around that time, decided to franchise the business. So trying to figure out how to expand, and decided on the franchise model to award franchises.

Now people can buy rights to the franchise. These are typically either people starting from scratch, and we also have our first conversion franchises – people who have an existing cleaning company who want all the bells and whistles of our franchise system. They can join as well and convert to have their own MaidThis location. Now our franchises are in about 30 locations across the US. It’s a fully remote maid service franchise focused on both residential cleaning as well as Airbnb cleanings.

Early Days and the First Booking

Stephanie: When you started out originally, was it specifically residential or was it immediately like, “Oh, there’s a market for vacation rentals?” Back then, was Airbnb just getting started? I’m intrigued by that.

Neel: It first was definitely residential. Like, you don’t know what you’re doing at the beginning. I had a website I created myself – it was terrible. I made my logo in Microsoft Word. And I was like, “Alright, what does this Google Adwords thing?” Let me just turn it on. Back then, you could do that. Now you can’t really do that. But back then I just flipped it on and someone booked online.

I remember I was so freaking excited, I went outside my corporate building. I was dancing. Didn’t realize that everyone in the building could see me because it was like a two-way mirror type of deal – had no clue.

At the beginning, it was kind of like you get what you can. For us, that was residential. I remember I got a call from a guy who said, “Hey, I have an Airbnb and I need to clean it.” This was like 2014 or so, right when Airbnb started. I said, “No, sorry, we only do residential.”

Then I started looking into it and realized it’s significantly higher volume. Normally regular cleaning maybe at best weekly – Airbnbs could be eight to nine times per month for one property. I realized no one was really tackling that niche, and the owner wanted more of a tech-forward company to work with.

Growing into Vacation Rentals

Neel: Back then, I was going on Airbnb.com and messaging people, which you can’t do anymore. I got so many accounts banned on Airbnb just doing that kind of scrappy stuff. We started to grow that pretty rapidly.

Now we still do a lot of residential. I love residential almost probably even more than Airbnb because it’s so consistent. But with Airbnb you can get one customer and add two-three grand in revenue per month immediately.

Managing Vacation Rental Challenges

Stephanie: For us, after COVID or during COVID, we had none before. I mean, I was only a year old when COVID hit in business, and then it just skyrocketed because nobody wanted to stay at hotels. Everybody wanted vacation rentals.

Where my business is, which is very rural western Wisconsin, it’s very beautiful lakes. Lots of people have cabins that are their second homes and they want to rent them out to pay off the mortgage basically.

It was a bit of the Wild West for us. I just kept saying yes to everybody because like, okay, we need business – it’s COVID. We got a lot of very not ideal clients when it came to the houses and how they were running them. Some didn’t have laundry in place, they didn’t even have a dumpster in place. My cleaners are hauling garbage in the back of their cars to our office dumpster.

We ended up dropping probably half of our vacation rentals. Now we’re highly particular about which ones we take on because I find them quite a headache to manage.

Horror Stories and Learning Experiences

Stephanie: Do you have any particular horror stories that stand out of like, we really screwed this up, or something horrific happened at a vacation rental?

Neel: So many! My business is based in Los Angeles, so you get a lot of parties, celebrity parties. There were multiple times where cleaners would walk in and say, “Hey, it was a party, everyone’s still passed out on the floor. Should I just clean around them?” Or “Hey, I found this bag of needles, what do you want me to do?”

I completely agree with you – with Airbnb hosts, over time you start to be more particular. At the beginning when you first start your business, you don’t – you just want business. Eventually you run into what we call “psycho Sandras.” Psycho Sandras are the super hosts, super picky with their home. They want you to fold the toilet paper in a certain way, they want the towel in a unicorn format, they want you to water the plants, they want you to replace the light bulbs.

Setting Boundaries with Clients

Neel: It’s very tough because you have to say no for certain things which maybe sound easy. An example would be a homeowner says, “Hey, can you water my plant real quick?” Now knowing what I know, we say no. They’ll be like “Well why not? It takes literally one minute.”

The problem is, if you take that on, it’s now your responsibility. Even though it’s not cleaning, if you mess up, you’ve agreed to that and that’s your responsibility versus it being a bonus.

There’s a lot of pros with Airbnbs – highly recurring business, set it and forget it. Sometimes our software could actually hook into Airbnb platform and reservation calendar so anytime there’s a guest checkout, it’s scheduled clean with us. Very sticky as well.

The downsides are it’s always high stakes. If there’s a same-day check-in and a cleaner calls out, you better get that solved. In a normal cleaning, if you forget to take out the trash maybe it’s okay. In an Airbnb with new guests coming in, that’s not okay. The stakes are higher – that’s the biggest difference to my mind.

Finding the Right Balance

Stephanie: You have pretty much one shot to nail it, and the guests don’t care. As opposed to the owner, where they may be a little bit more lenient, but it is their reputation on the line. This is their business.

When they’re hard on us, it’s like, well, this is their income and their business so we have to keep that in mind. We definitely had owners expecting property management behavior. It’s definitely something almost every person is going to experience when they get into vacation rentals because it’s that scope creep.

Setting Professional Boundaries

Stephanie: Looking back, there’s so many tasks I’m like, gosh, we never should have said yes. But like you said, it’s a fine line because you want to keep the owner happy but you also don’t want to get walked all over, especially in the beginning where you feel like you can’t say no because you don’t want to lose that business. Do you have any tips for our listeners when it comes to professionally and gently setting those boundaries and kind of sticking to your guns?

Neel: First of all, if you’re just starting off and you want to get into Airbnbs, it’s okay to accept clients just to try it out, just like Stephanie did. Eventually, you could say, this is not an ideal client – let’s remove it. But it’s better just to get those reps in so you can understand how this actually works.

Over time, definitely become more strict with Airbnbs you’re letting in. We have one client, Stephen, been with us for like seven years. He has four units, a quad, and probably pays us $48-50,000 a year. Pretty set on autopilot because we have a primary cleaner so things just work out really well.

The Importance of Clear Communication

Neel: When someone asks us to do additional tasks, my message back is pretty much this: “Hey, the cleaners can only focus on cleaning related duties. Typically anything which falls under property management, we can’t handle. I just don’t want us to go outside our business model and maybe set you up for disappointment. So I’d rather the cleaners just focus on what they’re really good at.”

What I always teach my customer service team and sales reps – the “No, but” – whenever you have to say no to a customer, always offer a solution. If someone says “Can you do light bulbs?” you don’t say “No, period.” You could say “Hey, I’m sorry, we really can’t do it, but if you want, we could have our cleaners text your property manager in case we notice anything wrong.” There’s never ever a sentence that ends with just “No” – it’s always “no, but blank.”

Managing Seasonal Business

Stephanie: What I see when I do consulting and talk to folks who focus heavily on vacation rentals – it is highly seasonal in their area. Do you think that a lot of your success comes from location? Is it more location dependent than perhaps other cleaning business models because it’s vacation rentals?

Neel: In LA my location, we’re actually probably 70% residential, 30% Airbnb. We have franchises in markets like Myrtle Beach – they’re probably 90% Airbnbs and 10% residential, and they’re highly seasonal. There’s other markets which are 50-50, there’s other markets where maybe it should be vacation rental but they just like residential so they focus on that.

When it comes to seasonality, if whoever’s listening is in a market that’s highly seasonal, my recommendation is find out how you could have some more stable income in addition to Airbnb income. If you’re in a heavily vacation rental market, it would almost be foolish not to do vacation rentals because it’d be so easy to do it.

Staffing and Seasonal Fluctuations

Stephanie: I’m curious how you handle those fluctuations when it comes to staffing. I know based on the interviews I’ve seen you do before, you’re a fan of group interviews, virtual interviews. Is that still the case?

Neel: It depends more on the state and labor laws for the franchise locations. We have some franchisees who are in states where they have to do employees, and they do that. Some are in states where it’s totally fine to do either or, so a lot of them opt for the 1099 model. Most of them, I’d say, are on the contractor model.

For seasonality, typically I recommend you ramp up hiring one to two months beforehand. If high season is going to be May and June, you better start aggressively recruiting in April. If you’re using the contractor model, you could find people who are part-timers, and that’s fine. You can find people who are full-timers, that’s fine.

Technology and Software Solutions

Stephanie: You are so automated, you have utilized softwares from the beginning. Can you tell me what that looked like in the beginning and how that slowly evolved over time? How do people discern what softwares to choose when money is tight?

Neel: If you’re starting out and you just want to get started with software, sign up for ZenMaid – that will take you very far. You probably could have multiple hundreds of thousands of dollars just from one piece of software.

The next thing I’ll probably layer on top of that is some sort of marketing software – something where you could email your past clients. For all of our franchisees, we set them up with Go High Level and we manage all of the emails for them.

With just ZenMaid, with just some sort of marketing email platform, and then some sort of thing to do your books on the back end like QuickBooks, you could have a million dollar business. Just start there. Then you could start layering other stuff on top of that.

The Evolution as a Business Owner

Stephanie: What kind of changes did you yourself go through throughout this journey? Looking back at Neel when you started to you now, can you talk about that?

Neel: So many. I think that’s the coolest part about being a business owner – the more you level yourself up, there is a direct impact on your bank balance. For me, oddly it was just being more okay with spending money because of confidence that I’m going to get it back.

At the very beginning, I didn’t want to spend any money. SEO? Are you kidding me? You want me to wait six months for a return? What I would do is kind of squirrel away money. Now I know what sophisticated business owners think is pay for speed. If I could pay someone to get there way faster, not just with coaching but let’s say marketing – normally back then I’d say “Hey, I’ll try out $500 a month on Facebook ads.” Now I’d say “Let’s spend $4000 in the first month” because if it doesn’t work, I don’t want to drag this on for six months.

Making Decisions and Taking Action

Neel: Velocity of decision making is a big factor of growth. When you’re new in business, you’re overwhelmed. Many times it’s easier to just not do anything, be stuck in analysis paralysis, listen to podcasts, feel like you’re being very productive. The truth is, the business owners who make the most money make decisions and mistakes fast, and it’s okay to make mistakes because you’re just gonna keep going.

Handling Customer Service and Refunds

Neel: Especially when it comes to refunds – sometimes it can be so personal. Someone asks you for a refund and you’re like “I know I did this right, I don’t want to give you a refund.” It becomes you versus me, such an emotionally charged thing.

I realized by looking at my numbers the last 11 years of us in business, the amount of money we’ve saved from not giving a refund is so minuscule compared to just focusing on recurring customers. The sole business model premise is the big money comes later – the more you get happy customers and they repeat, that’s where the real money comes from.

Now I tell my team “Hey, your budget is $1,000 per month for refunds. You don’t have to use it – I prefer you don’t, but if it comes to it, you have bigger and better things to do. Let it go and go take care of a customer who’s already happy.”

Closing Thoughts

Stephanie: This has been fabulous, Neel. We’re coming up on our hour, so I’d love to hear where everybody can find you. I know you yourself have a podcast – I’ve been binging all of the episodes.

Neel: You could go to MaidThis Franchise (M-A-I-D-T-H-I-S franchise.com) if you’re interested to either convert to a franchise. Mention you came from the podcast – we have some promos and discounts for converting franchises. I’m also probably the most active on Twitter – Twitter: Neel B Parekh. Lastly, I do have a podcast called The Freedom Formula. It’s about how to achieve time, location and financial freedom to do whatever you want in life.

Stephanie: Well, awesome Neel, this has been so insightful. What an interesting and unique story you have. I really appreciate your time. And for all of our listeners, thank you for watching. Definitely hit that subscribe button, give us a little review on any listening devices or listening platforms that you have, and we’ll see you in the next episode.

If you enjoyed this episode of The Filthy Rich Cleaners podcast, please be sure to leave us a five star review so we can reach more cleaners like you. Until next time, keep your work clean and your business filthy rich.

Note: This transcript has been edited for clarity and readability.

Resources Mentioned in This Episode

• ZenMaid
• Go High Level
• Google Ads
• QuickBooks
• Slack
• Breezy HR
• The Freedom Formula Podcast
• MaidThis Franchise
• Twitter: Neel B Parekh
• Dialpad
• Aircall

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