Transitioning a 7-Year-Old Cleaning Company into a Tech-Based Venture in the U.K

[maccazan]

I've been running a cleaning company for the past 7 years and I've been striving to revolutionize the home cleaning industry for the last 3 years.

However, I haven't received funding nor have I really pursued it, but it has always been on my mind.

My ultimate goal is to transform my current business into a technology-driven company. But I've been facing difficulties in generating the necessary capital from the existing business. I'm at a crossroads and need your guidance.

Is it still feasible to attract investment for my current business, considering its history? Or should I consider setting up a completely new venture and migrate all customers and assets as my initial investment for the first round of funding?

Furthermore, the current company operates and appears as a traditional cleaning service, while a new venture could start off as a tech-based cleaning company. This transition might address some of the challenges I'm currently facing.
I would greatly appreciate your insights, experiences, and advice on which path I should pursue. Thank you!

 

[survivor1288]

@maccazan I'm not a startup expert, but whether you keep it under the current entity or a new one, I think that having run a business operating for 7 years is only a +, even if it wasn't a tech startup.

Most of tech bros are only focused on raising funds and then a good part of them run those funds into the ground. You'll have the image advantage of someone who knows how to keep things sustainable and market fit.

Now, the challenge will probably be showing how you'd go about transforming a conventional model to a highly scalable one. Again, if you have the solution, you should have a better credibility due to running one for 7 years.

Cheers

 

[maccazan]

@survivor1288 Interesting perspective, much appreciated

 

[survivor1288]

@maccazan btw, reading your post it reminded me of this Russian company - Dodo Pizza, who were/are positioning themselves as a tech-driven company in a old-fashion industry

idk how well they're doing now, but there was a lot of hype around them a couple of years ago in Eastern Europe / Central Asia

maybe you can draw some inspiration from them, as I see a similarity to what you're trying to do

 

[maccazan]

@survivor1288 Going back a few years ago I was planning on leaving my industry and pursuing another idea, that was inspired by analysing lots of other companies, that reinvented an industry that was old fashioned or had stayed the same for many years.

Before I packed up my industry I applied the same philosophy within the cleaning industry, which then led to what I’ve been working on for the last 3 years, as I felt like I had a better chance of success doing something I was familiar with.

So it’s interesting you mention Dodo Pizza, recently there’s been some hype around - Blank street coffee who are a tech based coffee company going up against Starbucks. A really saturated market yet they’ve raised over 100m, because what they’re doing actually makes sense in this day and age.

 

[leonsarahh]

@maccazan Without knowing the context of what the overlap of the two businesses no-one can give you good advice, eg will they share any assets, etc any transactions between them will be related entity transactions which can have accounting consequences.

 

[maccazan]

@leonsarahh The model is working but expanding is slow due to the fact I haven’t got financial backing, all profits are reinvested. Integrating tech into the business is what requires a lot of money which I haven’t got, because I started out as a cleaning company that’s what my business is perceived as, which has a direct impact on what I’m trying to achieve as people don’t know any different. So positioning myself as a tech company with a SAS product to make onboarding easier, right now it’s done verbally as that’s all I can do. Which isn’t scalable.

So the question being, do I go out and get funding for my existing company… or set up a new venture?
There’s going to be pros and cons to each, I can think of a few but posting to this subreddit I thought someone would have a more technical approach as to which route to take that would produce a better result, that I’m unaware of.

 

[rahenson]

@maccazan Are there other onboarding products out there for other services that can be easily adapted to cleaning?

Might not need to go in your own if you can adapt other products. Just talk to the company they’ll usually be happy to make tweaks for a customer. Depending on the size

I’m curious what tech enablement is going to do to scale the business so much. What step are you reducing friction

 

[leonsarahh]

@maccazan What kind of cleaning do you do and how will the tech improve it?

 

[maccazan]

@leonsarahh Thanks for your reply, the question wasn’t whether the idea is any good and if it would work… it’s do I seek investment for my current company or set up a new venture?

The reason I have never pursued investment is I didn’t know what I know now when initially starting the company.

This question could apply to any industry; someone sets up a conventional business to later develop something with more value to the industry, do they build on the current business or set up something brand new, for the sole purpose of attracting investment easier, as it’s a startup?

 

[livingbyfaith1]

@maccazan I would recommend setting up a business plan for your new idea so people can se the specifics of what you are trying to do. Also take a look at pre accelerators as they can help you learn how to developer your business and eventually attract investment.

When you say tech based are you just simply talking about somehow adding an app to it of some kind?

 

[maccazan]

@livingbyfaith1 Thanks for that, I’ll look into pre accelerators for sure!
It’s SAS for the B2C market

 

[kulionline]

@maccazan Might not be as technical as you want but data Center cleaning cost huge. Ensuring the cable racks and air quality is within spec seemed to net an alright amount. I didn’t pay for it for a data Center I worked at but I heard it was really expensive.

 

[1peter318]

@maccazan Are you sure you need investment / what is it you need capital for?

 

[catherineone]

@maccazan This is fairly easy.
1) Set up a new business (Business B) with an exclusive focus on building the SaaS tools you want to use for Business A (current business). Don't mess with your existing business, there are random legal implications that tech companies face.

2) Depending on how ambitious you are: find a tech cofounder for business B (have a shotgun clause with a 4-year vesting schedule and a 1-year cliff). The goal is to build products for Businesses similar to A

3) Fundraise. Your quick pitch is: I a leader with "x" years of experience faced "y" issues. I partnered with my amazing cofounder "z", and together we built {comapny name} to help us solve {list of issues}. We want to sell to other cleaning businesses: {market size, TAM, etc} this is the subscription price of {price}, we can reach {timeboxed goals}. We need {$ amount} to achieve {current goals}

4) sell tech to other cleaning companies. Pith: I am not a salesperson, but a fellow founder. Speaking owner to owner I built this product to solve my needs. This is what it can do for you. You in?

Ps. I did something similar for laundrymats. Best bet I ever made.