Cleaning Business Acquisition Strategy: How Buying Companies Built Ricardo’s Growing Service Empire

Buying an established business comes with an existing customer base, proven systems, and cashflow. Startups are riskier and require major effort to build trust and visibility.

John Clendenning [00:00:00]:

Hey everybody, welcome back to another exciting episode of the Carpet Cleaner Success Podcast. On this episode, we’re going to talk to Ricardo Torres. So I met Ricardo probably about a year ago, a little bit, a little bit less. He also knows a good friend of mine, Cohen, because Ricardo is not only a— has— was in the Marine Corps, I believe it was. We’re going to get into that a little bit. And then, but also has a, you know, regimented mind. We were just talking about this before we hopped on. And a business mind and that entrepreneurial mind.

John Clendenning [00:00:30]:

Really cool things to kind of dive into and how he’s thought through his business career, why the cleaning industry we’re going to get into and stuff like that. Why acquiring businesses versus maybe starting them up from scratch and all of that kind of, you know, get in and improve versus start from the beginning and those kinds of things. So, those are the kind of things we want to touch on with Ricardo. I thought he’d be a great guest to have on. So, welcome here to the podcast. I really appreciate having you.

Ricardo Torres [00:00:58]:

Thank you so much, Jon. It’s a pleasure to be here. I hate doing this. I have to start with a slight correction though. Air Force, not Marine Corps, only because of the inter-service rivalry that we always have.

John Clendenning [00:01:10]:

There is. Yeah, I should have double-checked.

Ricardo Torres [00:01:13]:

It’s okay though. And listen, it’s a pleasure to be here, Jon. I’ve been listening to your podcast for quite some time now, even before this whole brainchild of an idea that we would buy a carpet cleaning company ever occurred. But the tenets to and the foundation really started with your podcast. Cast and the many great, uh, members and, you know, uh, hosts that you’ve— or guests you’ve had on, rather. So thank you for that, and thank you for allowing me to be on the show with you. It’s a pleasure.

John Clendenning [00:01:40]:

Oh, I appreciate that. Uh, so yeah, so let’s— we kind of preempted a few of the things, and I got a few things wrong. That’s always good to be corrected, so I appreciate that. I will get better at my note-taking and teach my AI to help me better on those things. That’s right.

Ricardo Torres [00:01:52]:

Yeah, bad AI.

John Clendenning [00:01:53]:

Bad AI. Um, but Yeah. So, the story behind the business or the business career, like, obviously, if you’re going down the road of the Air Force and then businesses, that seems like an odd connection. Where did—

Ricardo Torres [00:02:07]:

Yeah.

John Clendenning [00:02:07]:

Like, tell a little story of sort of young Ricardo and how you got here.

Ricardo Torres [00:02:10]:

I’ll give you the Reader’s Digest because I can go long-winded sometimes. So, I will stop myself from doing that. I, in 2019, my business partner and I were interested in making more money. I just, it started with this velocity of capital and the Air Force. We were Air Force officers. We were both captains at the time, maybe about 5 years in. I’m an instructor pilot by trade. So I fly new student pilots in the Air Force.

Ricardo Torres [00:02:35]:

I teach them how to fly and they earn their wings through a very regimented pipeline that allows for them to fly with me for 100 and something hours. So we’ve achieved not complacency, but some level of like cruise control, if you will, which I think many business owners get to. And this is a bug that you have to be proactive about getting past. If you feel this, you need to get a little uncomfortable because you need growth. Anyways, so we’re sitting there and we thought, how could we make more money? How could we achieve wealth? You know, there’s no secret in the military. You’re not going to become wealthy.

John Clendenning [00:03:08]:

You can’t.

Ricardo Torres [00:03:09]:

There’s— they don’t— you don’t make enough money. Even if you’re a 4-star general, it takes you a long time to get there. But anyways, we, we had this idea that we would take out of our 401(k) equivalent, a TSP, Thrift Savings Plan. And so we did that. We took 50% of our money out along with some money we had made from a Tesla come up, which was kind of nice. Thank you, Elon Musk.

John Clendenning [00:03:29]:

Yeah.

Ricardo Torres [00:03:30]:

And so we were both liquid at like $240,000 and we didn’t know what to do with our money, man. This was like kids running with scissors. It was not good. And but, you know, fortune favors the bold sometimes. And so we had this idea that we would buy one single-family home every year for 20 years. And after the end of this, we would both be these lieutenant colonels that are retired. With 20 homes that we shared equity in, and we would be rich. And that was our plan.

Ricardo Torres [00:03:57]:

Well, that plan did not last. I’ll just put it that way. We eventually pivoted, pivoted, pivoted, and we found commercial multifamily to be an investment vehicle for us. We used every last dollar we had and we bought a 14-unit apartment complex. It was in the hood in Tucson, Arizona, real rough spot. Again, naivete was walking and it was acting and it was all, you know, but again, this was right before COVID hit and we just, our investment took off. We eventually sold that, made a lot of money on that deal, bought a bigger deal in South Carolina, a 25-unit. And we were kind of— we had a little bit of money left over and we figured, how do we continue to keep our money moving? Because we had all this equity but no cash.

Ricardo Torres [00:04:43]:

We were cash poor but equity rich, if you will. And I saw this little laundromat in Tucson that had caught my eye. It was called the Happy Laundry. And the laundromat— this is 2021-ish. It was always packed, man. There’s people there late at night, early in the morning. I thought, what in God’s name is happening in this laundromat? I need to go check it out. Throughout this period of time, from 2019 through around 2021, COVID occurred.

Ricardo Torres [00:05:10]:

The Air Force didn’t know what to do with me. They sent me home for long bouts of time because they had ABC shift. Everybody’s trying to mitigate distancing. You remember how it was. Yeah, weird time for us. Well, I devoured a lot of books. One of the books I devoured was called Buy Then Build by Walker Deibel. Excellent book.

Ricardo Torres [00:05:27]:

The premise of it is instead of creating your own business, which incurs a lot of risk in and of itself, how about you buy an existing business, one that has downside protection because you already have a book of business, perhaps documented SOPs of value to the business, the business valuation, whether seller discretionary earnings or EBITDA. And so strapped with a lot of that knowledge, conversations with folks like yourself, other business owners. I, you know, proximity is key. The people you’re surrounding yourself with. We talked briefly about Tony Robbins and Jim Rohn and all these folks. These are conversations. These are people I like to listen to. And the more you listen to this stuff, it’s a manifestation.

John Clendenning [00:06:06]:

It is.

Ricardo Torres [00:06:07]:

Long story short, I buy the Happy Laundry. I walked in, I knocked on the door, and I bought the laundromat. And I realized after a year it was a little too small for me. I sold it. And I upgraded in 2023 to Tiffany Couture Cleaners. And this is where the start of my carpet cleaning journey really begins, is we bought a luxury dry cleaner that was doing multimillion-dollar revenue generation. And so this was kind of the start for us in the textile and the cleaning industry, if you will.

John Clendenning [00:06:35]:

Yeah, very good. And there’s so many gold nuggets right there. So I started as a— as I told you a little bit ahead, and everybody knows my story— a punk kid, whatever. I had to bootstrap it. And my original reason to buy, to start a cleaning, the cleaning businesses I did was to buy rental property. Right. And it turned out to be the last thing I ended up doing. I own rental property now, but it was like I worked, worked my way up and then bought other cleaning businesses.

John Clendenning [00:07:02]:

Then, you know, so within a year and a half, I had expanded, bought another 2-truck operation. Over the years, I bought a bunch of, a bunch of, a bunch of Molly Maid franchises, all that kind of stuff. And there is when I When I unpack it, it was definitely listening to all those people, getting your head right, because we’re all going to have busy days and down days and things where things don’t go right. But, you know, if you can have the right momentum and the right future vision, um, where you’re trying to go— thing we talked about is manifesting— things just tend to lead you in that direction. And you buy a red car, all of a sudden every car you see is red. There’s a focus that happens without— and without it, you never get to that focus and you spin your wheels. And of the successful cleaners I know, the guys that are beyond half a million, making it to a million, $2 million, $5 million, and beyond, they acquire other companies as one of their foundational strategies. Even if they just stumbled backwards into it at first, they went, oh, wait a minute, I can buy a database.

John Clendenning [00:08:03]:

I can buy, you know, happy customers further down the journey. And quite frankly, in our industry, you can tend to buy it for less than maybe what other businesses, you know, multiples of EBITDA, because cleaning business owners at a smaller scale, like depending on what size you’re buying, multimillion-dollar Tiffany Couture cleaners aside, the carpet cleaning side of it, they don’t tend to know what they have. And they typically, unless it’s the best known cleaner in town running the highest prices to the ultra elite and they have all of their systems dialed in, if that’s the truth, chances are they just have an office manager running it and they’re, they’re on the golf course anyways and they don’t need to sell it. Right. Because it’s so when they are selling it, it’s usually because there’s a reason to get out. Right. And at that point, it’s— they’re not necessarily always finding— it sits on the market a little bit longer and things like that. So—

Ricardo Torres [00:09:02]:

or it could be a falling knife, you know?

John Clendenning [00:09:04]:

Yeah. Yeah, exactly. Yeah, yeah, yeah.

Ricardo Torres [00:09:06]:

A lot of business owners will list their business when it’s too late. Yes. And a lot of business owners conversely want to prematurely list their business, but it’s too early because you don’t have documented SOPs. You don’t have, you know, people can buy a business or you can buy a job is the way I look at it. Now, typically when you buy a job, it’s in the smaller revenue kind of arena, right? But if you go to a larger corporation and maybe there’s 30, 40 employees, you’re likely buying a business and that’s a really good thing. And so I’ll tell you a quick story of how the, the genesis of the Carpet Monkeys came about. You know, by the way, I’m going to give you a brief background on Tiffany Couture Cleaners. Tiffany Couture Cleaners is a high-end or a couture dry cleaner.

Ricardo Torres [00:09:50]:

So we do luxury dry cleaning. So the rich and famous that live in Las Vegas all come to us. They bring their Versace shirts, their Gucci pants, their Prada, their furs, and I’m not talking faux fur, I’m talking real chinchilla. PETA, don’t get upset at me. But, but so, you know, they, they, they go to a trusted name. And you and I had a conversation when, when I first onboarded and got to know you a little bit, John, and you said readers are leaders. And that resonated with me a lot. The affluent, wherever you’re at, are generally going to pursue education as a value.

Ricardo Torres [00:10:30]:

They’re going to pursue the efficiency of their time as a value that they hold near and dear. And And I recognized this as a business owner providing a service to the affluent. And I thought to myself, they’re looking for efficiency. They’re looking for a one-stop shop to get everything done. They don’t really ask questions as to whether you can or can’t get it done. They respect the reputation and the relationship. And so these things preceded and offered me the building block, if you will, for the growth of my business. So we do the shows in stores, all the— we have 103 retail stores that we do dry cleaning for.

Ricardo Torres [00:11:08]:

And so in Vegas, if you require that your employee wear a uniform, you are responsible for laundering that uniform. And not a lot of folks know this. No, I didn’t know that. So you have to find these little leverage points, especially if you’re looking at a business to buy. Anyways, what I’m getting at there is Chanel and Prada and Gucci, their uniforms are not average cotton uniform. They’re nice. So they need to be dry cleaned. And that requires a bit of a specialty in terms of how to do it.

Ricardo Torres [00:11:35]:

There’s some chemicals, there’s a little bit of chemistry to it.

John Clendenning [00:11:38]:

Yep.

Ricardo Torres [00:11:38]:

Anyways, so I walk into my plant one, one day. It’s, uh, 2024, uh, late, late ’24. And, uh, we, we have never cleaned rugs. We just don’t do it, you know? Yeah. Um, some people think that a dry cleaner can do all these other things, and well, one day we had a client who thought that. So Balmain, the store, had sent with our driver this big rug, 10 by 13 rug. The driver brings it back and says it’s a can-do attitude, which I prefer. And I love that, by the way.

Ricardo Torres [00:12:13]:

It’s like, you know, we can do it. We just got to figure out how we do it, right? So I walk into the plant on a plane trip or business trip from San Antonio, Texas to Las Vegas. So I’m an absentee owner. I’m not there on site with the business. And I see this really big rug. It’s like orange. It’s got some brown hues to it. Beautiful rug.

Ricardo Torres [00:12:30]:

It’s wrapped, it’s rolled up. And I asked my operations manager, I said, Julie, what’s this rug doing here? And she’s like, I don’t know, Balmond sent it in. And I said, well, we don’t clean rugs. She said, I know. And I said, well, what are you going to do with it? And she said, I was going to rent a rug doctor, clean it up, charge them, and send it back.

John Clendenning [00:12:48]:

Yeah.

Ricardo Torres [00:12:49]:

And I thought, oh no. But I thought, wow, what a, what a, what a great attitude. I was going to figure out how to make this happen. And that’s a tenet to a successful business owner or an employee is circumvent problems with solutions. Try to get to a solution any way you can. If you have that value— Naval Ravikant talks about this with a lot of folks— is how do you achieve wealth? You add value to the marketplace in some way, shape, or form. So many different avenues to add value with AI and stuff, but I know that’s a very hot topic for you. We won’t go into that right now.

Ricardo Torres [00:13:19]:

But anyways, so I said, well, hold on. I knew a buddy in Las Vegas who owned a carpet cleaning company, and I said, standby, Julie. I said, don’t clean the rug just yet. Let me make a phone call. So I call my buddy up and I said, hey, Rick, I said, I got this rug. I described the rug. I said, how much would you charge me to clean it? He had, he had an official truck mount. You know, he had a little business and he was going to do it the right way.

Ricardo Torres [00:13:45]:

And he said, for you, Ricardo? I said, no, no, no. I said, don’t give me the friend discount. I said, I want to know exactly what you would charge me as you would a regular consumer. Sent him a couple of pictures and he said, Ah, $200, $250, Ricardo. I said, all right. I didn’t know much at the time, John. I said, all right. I called Julie, or I called Julie over, and I said, Julie, I said, I’m gonna do a little bit of an economic experiment here.

Ricardo Torres [00:14:08]:

I said, uh, call Bauman, tell him we’ll clean the rug, but we’re going to charge $1,000. She said, $1,000? And I said, just do it, please. So she calls him, she says, hey, Bauman, We got the rug absolutely cleanable. We’ll make it look real good for you. It’s gonna be $1,000. They didn’t bat an eye, John.

John Clendenning [00:14:27]:

Yes.

Ricardo Torres [00:14:28]:

And I had an epiphany right then and there. And I said, I need a carpet cleaning company.

John Clendenning [00:14:34]:

There you go.

Ricardo Torres [00:14:36]:

Right. Well, it’s— well, and the pieces of the puzzle were coming together in my mind. And it wasn’t just that I needed a carpet cleaning company. It was that I needed to take advantage of this arbitrage opportunity that we had. And that was We have a captive audience that respects our reputation, that understands that we deliver quality, excellent customer service, and standardization of that quality in those operations over a period of time, which I think are 3 tenets to a really good business, right? If I go buy a Big Mac, I want to— I want the Big Mac to taste good, number 1. I want the customer service to be decent, and, and I want standardization of that Big Mac. If I go buy it in in Rhode Island or in Portland, Maine, or in Tampa, Florida, or Long Island, California, or Long Beach, California. I want it to taste the same.

Ricardo Torres [00:15:25]:

And so I think a business needs to make sure that it, that it, you know, kind of capitalizes on those. And so I wanted to leverage that arbitrage because I knew if our clients appreciate their garments being cleaned, they would likely appreciate their carpets and their rugs being cleaned. And so that was from that moment on, we got the carpet cleaned, we profited $750. And I was on the hunt for buying a carpet cleaning company that I could bolt on to my business. And just as you alluded to earlier, my philosophy is bolt-on and acquisitions. That’s a very, very key way for you to grow your business and to scale it.

John Clendenning [00:16:05]:

And then dial. And like, again, because even the stuff that you learned right there, it’s— so yeah, you can— you can cleaners go out and clean rugs for a discount. I’ve run an area rug cleaning division of our company until I sold it for decades. And we charged between $3 and $5 a square foot. So 8 by 10 wool rug minimum is, you know, you’re going to be looking at $240 to in the, in the, in the neighborhood of $400 up. If it’s silk, if it’s anything like that, $800, $900, $1,000 against guys that are doing it in a customer’s home for, $89 or whatever. But marketing is in a moment of inception. So, um, we get to create why we’re different, tell a better story, create the trust to the right crowd, uh, and that, that trust implies the— as we know, like, um, a Nicolas Cage of the world doesn’t care if he spends $500 or $2,500 to get some cleaning done.

John Clendenning [00:17:09]:

It’s the fact because the dollar value is so skewed out of proportion. It’s the fact that they understand that this is who everybody else is using. This is my house manager has found them the right way. It’s going to be bonded, insured. There’s not going to be tattoo-faced gentlemen showing up to do the cleaning. They’re not going to have their pants hanging down halfway down and all that kind of stuff. Like it’s going to look and feel right for the environment One of our good friends that runs Inlet Services, Tony, did a podcast with him recently. He calls it the hotel experience.

John Clendenning [00:17:42]:

I always just, you know, like the client experience, the Disney experience. I always called it teach our technicians how to provide onstage versus offstage moments and know what the difference is. And anytime you’re in the van, you’re not spitting out the window, you’re not vaping a cloud because you’re onstage. Even when you arrive to the house, even when— and if you think that way, the ideal crowd and you show that, you show up and you show that in your marketing and you talk about that and you get the best feedback and reviews that also talk about that. When you take pictures of on the job and the pictures in front of a grand foyer as you’re doing tile and grout cleaning in a house with a big staircase versus a rental unit, you know, in, you know, 2 blocks off the Strip in Vegas where the hallways are black because they had a keg party the night before. The audience that sees that knows, oh, I know where they fit in. So Inception is getting into that mind control and telling the right story. Good websites tell the right story.

John Clendenning [00:18:41]:

Good marketing tells the right story. And then when you’re already in an environment like Tiffany’s is, buying something that’s stable, good, great, like good brand, and then just starting to do that tweak up the ladder going, now we can get there. Now we can say, hey, While whether, you know, AI, the great equalizer, also, you know, going to be taking middle class white collar in front of computer jobs and stuff like that. It’s fastest moving technology.

Ricardo Torres [00:19:09]:

Cool.

John Clendenning [00:19:09]:

Okay, so the average middle class is doing this and it has been for years while the, the K-shaped economy, those with money are making more and more money. Their Tesla stocks are up, their SpaceX stocks when it IPOs are going to go up. Like there’s a crowd that is— has the resources to continue, but they don’t hire the 3 rooms in a hall for $99.

Ricardo Torres [00:19:33]:

No, no. And the flip side to that is— and this is for the listeners who are aspiring to own such a company, right? A company that has the price elasticity to say, I’m going to increase our prices 7% and I’m going to justify it with good quality, good service and excellent throughput. And the message there is if you are going to fetch those rates, you have to be a good fiduciary. You have to be able to recognize that the money that you bring in and those profits that you are making, you have to refortify the business for scale, for growth, and for consistency over a period of time. Because if there’s one thing that occurs as a business grows, inherently it’s gonna want to break. You have to get— a good business owner gets in front of what breaks. And, you know, I implore a lot of the listeners to ask this question, you know, if my business were to double overnight, what would break first? And write that down and attack that, the solution to that. So that way, by the time you do achieve that scale and growth, you’ve already implemented the fix for it.

Ricardo Torres [00:20:36]:

But because just as those consumers, John, recognize that they’re willing to pay whatever it takes so long as they get the quality of the product or the service and that it’s consistent over a period of time. So you can’t falter in that. And so Yeah, we, you know, and right now this is a good segue because so, you know, I’ve got this stood-up dry cleaner that’s been around since 1970.

John Clendenning [00:21:02]:

Wow.

Ricardo Torres [00:21:02]:

And I found the Carpet Monkeys. I, no kidding, I put into ChatGPT, John, I said, show me the top 10 carpet cleaning companies in Las Vegas, and I want this criteria to be met. I want the business to have been in business for over 10 years. I want it to be non-franchised, and I would like for their Google reviews or their Yelp combination of reviews to be at least over 4.6 stars because I don’t want a 3.1 or a 2.7. That’s going to be too much of a value add. I don’t want to reposition that. And I even threw into there, if you can identify any mom-and-pops type run businesses, show me those. So I’m sitting in Columbus, Mississippi.

Ricardo Torres [00:21:44]:

I’m having a beer. It was a day of flying and I was done flying and I’m in entrepreneur mode now. I go from instructor pilot to entrepreneur mode and how we can, you know, grow this beast, if you will. And I go down this list and I get to like number 4 and I find the Carpet Monkeys and I call and the owner picks up and he thought I wanted carpet cleaning. And I did want some form of it, but I wanted to own it, you know. And look, at the end of the day, closed mouths don’t get fed. And I said, look, my name is Ricardo. I read on your website that you’re veteran-owned.

Ricardo Torres [00:22:18]:

I too am a veteran. He was a Marine. And I think that’s where the dots were connected earlier. Yeah, he was a Marine. And I purchased and I said, look, I see your business. You have great reviews. I see the photos on your website. Can I meet you in person? And he said, you know, Ricardo, he said, this is so crazy, man, that I usually don’t pick up the phone calls.

Ricardo Torres [00:22:39]:

I usually have my girl, my CSR, pick up the phone calls. I picked them up because she called in sick. And it had been a long day. My wife and I were talking about our retirement plans in a vulnerable way. I don’t know how to— I don’t know how to piece this together. I said, listen, can you have coffee with me next week? Can we talk, man? We talked, John, and about 4 months later I owned the place and I structured a seller finance deal with him. There was a fair price based on what he was doing. And here’s the thing that I kind of wanted to capitalize on is when you already have a successful business and you have employees that are running it for you on your behalf, I was able to absorb the Carpet Monkeys team into my current team and I was able to essentially put the umbrella over both companies and my leadership team runs both of them and they report back up to me.

Ricardo Torres [00:23:28]:

I financially incentivize them to do this. And so now I’m stripping costs out of the Carpet Monkeys profit and loss statement and I’m bolstering the bottom line. You have those efficiencies of both of them Doing, yeah, 100% insurance, costs of goods sold. I now have— this was no longer running out of a, out of their home with drivers taking their vehicles home. They were, they were going back to my plant and parking their vehicles behind a locked gate. All of these things contribute to a better customer service experience, and all of these things contribute to a more professional image that ultimately justifies higher pricing, more education, more resources. So I was, I was very, very, um happy to have that realized for us and, and to now have Tiffany Couture Carpet Cleaners and the Carpet Monkeys. And I knew at the inception of all this, I wanted to break out the Carpet Monkeys.

Ricardo Torres [00:24:22]:

I wanted there to be a luxe or a luxury model. And we, effective last month, we rolled that out. Very proud to see that. And we’re starting marketing efforts towards really ensuring that we’re catering to our cross-pollinating our current clients in dry cleaning for carpet cleaning and rug cleaning services, uh, with—

John Clendenning [00:24:40]:

and that’s— and what you’ve stated there is, um, since I always talk, there is, um, the carpet cleaner that just happens to own a business and the business owner that just happens to be in the cleaning industry.

Ricardo Torres [00:24:51]:

Yes.

John Clendenning [00:24:52]:

And a lot of— and one, there’s nothing wrong with either. Know where you are. I was originally a carpet cleaner, but I— that didn’t just happen to own a business. The carpet cleaning was a vehicle that was going to do more stuff. I didn’t want to be the guy in the truck, right? So, everything was about how do I get out of the truck? How do I grow? How do I buy more? How do I expand this thing, right? So, any— and again, ups and downs and economies and stuff like that and employees that don’t show up and all of those. Again, that’s that operational thing that you— if you can plan ahead and solve, you know, I call it find it, fix it forever. It’s a framework. I work on frameworks, so we teach our entire team.

John Clendenning [00:25:34]:

I don’t care if the problem happened once. I prefer it didn’t. But if it happened once, came out of the blue, hit us in the back of the head, we didn’t notice it, it never happens again, right? Find it, fix it forever. And we also try and find it first as another framework. But it’s sort of like, so if it does show up, okay, what is the— I use EOS, Entrepreneurial Operating System, now running this. I never did with the old systems. But how are we going to level 10 this? How are we going to discuss it? IDS it, as they call it, identify, discuss, and solve the problem and put the roadmap in place that it gets solved right away. And there’s now triggers in place that it doesn’t show up again, right? So whatever that is, like, so as we market a business well, if somebody’s a carpet cleaner that happens to own a business, you get better at marketing, you’re starting, you have to start tying into all of these thought sources and, and use your driving time and window time to educate yourself as a university, because you got to start realizing you’re, you’re no longer going to be a carpet cleaner.

John Clendenning [00:26:32]:

The guy that’s a mechanic, um, should never own a shop because you shouldn’t be turning a wrench if you own a shop. You should be building the shop. You should be able to, like, and all that stuff, right? Same idea here. So you kind of went, hey, I do this, I’m going to be in the industry. But, you know, and the mindset, I think, like, a good portion of our listeners, we kind of have a good split of people that listen to the podcast. When we hear the comments, some of them are, oh my God, you, you opened my eyes to something brand new. I didn’t even think that way. And other ones are going, wow, that sits right in my wheelhouse because I’m just looking to get to $1 million, $2 million, $5 million, and I’m kind of stalled at $500,000 or $750,000.

John Clendenning [00:27:11]:

Um, I probably need to look for other opportunities where other people can run it for me because I’m too in the weeds., right? And you’ve kind of said, hey, I got a leadership team, we’re good at this, right?

Ricardo Torres [00:27:21]:

So yeah, and you know, when you’re too in the weeds, you don’t have the mindshare, you don’t have the bandwidth to focus on the real big muscle movements, as I like to call it. You know, you’re looking through a soda straw, you’re providing excellent service more than likely, but you’re probably pushing the wand and you can be the best and your business will still not grow.. But you can be mediocre and this is crazy, I’ve seen it happen firsthand. You can be mediocre and just work really hard at what that scale may look like and taking a more strategic approach and your business grow. But over a period of time, you continue to learn. So yeah, it’s about freeing up your mindshare and allowing you to take that 10,000-foot view to see everything to then say, hmm, we kind of suck in that department. We need to work on that as you alluded to, you know, make a mistake once, okay, that’s fine, don’t make it again. And how do you eat an elephant? Bit at a time.

Ricardo Torres [00:28:16]:

And so, yeah, we have taken that approach to what this looks like. We’re very happy, very proud of it. And, and it’s something that, that, you know, you work on very closely and it’s something that you work on on a daily basis. Just because I’m an absentee owner does not in any way, shape, or form mean I’m absent from the business and don’t know what happens.

John Clendenning [00:28:32]:

Uh, no, you’re direct, you’re driving the ship. It’s just other people get— it’s a who, not how kind of idea, right? And, and that kind of thing. So what is that? It’s like, you know, as we’re kind of tie this up, what is the direction next? So I love the fact that we’re, you know, we’re now targeting that, that higher-end luxury idea with, with the Carpet Monkeys. It ties into Tiffany’s. It’s, it’s moving forward. Where, where are we? Where, where are you planning to take what’s happening in Vegas? What are some of the next step ideas in your brain?

Ricardo Torres [00:29:01]:

Yeah, that’s a, that’s a great question, John. Right now, you know, I see a trifecta of dry cleaning, carpet, rugs, maid service, quite frankly.. And so if we’re able to hit home on all 3 of the points of the triangle there, I see ourselves being put in a very advantageous position for private equity later on down the line. And, you know, to be the leader in the textile industry in different categories with scale, you know, and with the appropriate numbers, we’re very attractive already. We’re just a little small for their minimum trigger. And so, For me, my efforts are squarely focused on how I continue to cross-pollinate the Tiffany Dry Cleaning clients to our new carpet and rug. We’re already seeing average jobs on the Carpet Monkey side of $240 a job change to $650 a job for Tiffany Couture Carpet Cleaners, and that’s probably the lower end, quite frankly. And so along with that, now we just need more concerted efforts towards marketing and making sure that our name gets out there very consistently over a period of time.

Ricardo Torres [00:30:12]:

We have the the, the, the, the wraps on the vehicles already. We have a lot of newer equipment we’re working with. I have currently 4 trucks on the road. And so once we are able to digest a little bit of this, I’m taking a page from my previous chapter of lessons learned in that before I move on to the maid service, I want to make sure that I get carpets and rugs more dialed in, at least to the 80% feel-good status before I move on to maid service. And then when you move on to maid service, think about this for a moment. We always talk about the idea of going for more volume, but instead of volume, what if we just put a magnifying glass over our current clients who are already telling us yes? Yeah, that is the key to success in my opinion. And so if, if, you know, one of my clients is telling me yes for dry cleaning, there’s a likelihood that they have carpets or tile. They’re going to tell me yes here.

Ricardo Torres [00:31:04]:

And if we have a reputation that precedes us in a very good way, they’re likely going to tell me yes to maid service because when they look at our our reputation, they’re gonna, they’re gonna assume that everything else exists within the same, the confines of the business, respect, trust, etc. And so we’ll start there and then we’ll begin exponential growth outside of that.

John Clendenning [00:31:24]:

I’m very excited about it. No, that is exciting. And I’ll give you a little caveat. We talked about the rugs. Yeah, there is, keep an eye out for what some of the high-end rug cleaners are doing. I’ll put you in touch with a couple of guys that, because back at the So back at the plant, creating the full proper, like a full pit wash system where people will pay $7, $8, $10 a square foot, thousands of dollars per rug because they’ve got the, you know, the letter of antiquity saying it’s a $50,000 heirloom rug or beyond, right? That was the highest price we’ve got. I know guys that have had rugs come in at $200,000 and $300,000 valuation and say, hey, I need this cleaned, you know, and maintained properly and you’re soaking it in a pit properly with a trained technician and then centrifuging it and drying it properly, having a camera on it where your clients can actually watch you during the time they’re cleaning it. They still have dogs.

John Clendenning [00:32:23]:

The dogs still peed on the rug. You still have to flush it for urine, but you also have to stabilize the natural vegetable dyes that came from the, the, you know, the, the neighborhood where it was made in Kazakhstan or whatever. Yeah, you’ve got to know that stuff. And there are people out there that run run really good businesses or have really good training, as you and I would know, where we don’t necessarily have to hire Tommy the tech and send them through years of training and hope he doesn’t screw up a rug. We can find somebody who’s got that artisan thing that maybe should— could probably have a better career not owning the business but managing the division. And now, now you’re pulling in $3,000, $5,000, $10,000 worth of rugs from a house to do a cleaning and bringing them back a week later. Maids in the interim clean the floors and get everything polished and buffed because the rugs are going to go back on the floors again and all that kind of stuff. And then the technicians bring it back, you know, the carpet cleaning technicians with the rug guy bring it back because they’re going to do all the upholstery in the, you know, the 27-foot sectional in the media room with the 250-inch screen TV that the kids still spill popcorn and pop on.

John Clendenning [00:33:27]:

And, you know, and, and now that is like one of our clients Mia and George, they have clients that in 15, 17 years or less have the lifetime values over $200,000 in a residential house. Lifetime value of a residential client north of Chicago. And they don’t have one. They have many. And they have lots over $100,000 when $5,000 or $10,000 is a high watermark for most carpet cleaners because they don’t even know how to stay in touch with their regular clientele. And these guys have made it so obvious. And they stay in touch so well that, yeah, they’re just— you’re back again and again and again.

Ricardo Torres [00:34:02]:

Yeah. The more touchpoints you have with the client, the more frequency of them seeing you, the more likely that they are going to be to continue to use you. Because think about it, once they say your name 3 or 4 times on 3 independent visits, they remember the carpet. Yes. They’re going to say— they’re not going to have to go Google anybody. They’re going to say, call them up. In fact, you don’t even need to call them, Ricardo. Just text their number.

Ricardo Torres [00:34:21]:

They’ll respond back immediately. Yes. And we make it so easy that way. And so those are—

John Clendenning [00:34:25]:

Have your bottle of Carbon Monkey Spot Remover underneath, like in their, in their laundry closet or whatever, so that if they have a spill, try this first, call us second. You get 2 or 3 free spotting visits, regular $125 free because you’re on our Luxe plan. So you get a couple of those a year, all that good stuff. And that, that rule of 3 is true. 80% of people that try a carpet cleaning company once won’t use them again. If you’re in the house a second time, it’s about 50%. If you’re in the house a third time, and again, all 3 experiences were great and delivered the same thing. Yep.

John Clendenning [00:34:53]:

You’re 80% likely that you’re locked in for life. Restaurants know it’s about 4 visits and you become a customer for life. The first visit, you probably never see them again. So is there the game you play to get in a second time? So follow up on the first cleaning, in-home savings, a reason to come back. And then we always had our Always Clean where they’d get a free traffic lane cleaning in 6 months. It’s $1.30 a square foot to do the first cleaning, minimum 500 square feet. So $750 job minimum. But we came back in 6 months and did a traffic lane touch-up for free.

John Clendenning [00:35:23]:

But they could also add on other things while we were there because we wanted to get into the house 3 times in 6 months. And our goal was any customer that we made, 30% of our clients were in the house 3 times in the first 6 months. When I sold the business, the business is— but when I sold the business, I had dozens and dozens and dozens of clients that they also get to grandfather in their current price this year as long as they book within their anniversary month, their next full cleaning. So, they were 20 years in and still making sure that during that 12th month somewhere, they maintained their Always Clean program so they could maintain their pricing that they started with. Yeah. And we became sticky. So, all our other services we provided went up, but that original core service, they always got at the grandfathered price and things like that. So, all these little programs are really cool once you’ve got the right clientele and you’re thinking as a marketer and a business builder.

John Clendenning [00:36:11]:

And not just, can I get pet urine out of the job? You know, the one I did yesterday, is it still going to smell today, or do I have to get the check to the bank before the customer calls and says it still stinks?

Ricardo Torres [00:36:21]:

Right? Yeah, exactly. It separates the good from the great.

John Clendenning [00:36:23]:

All those things you just talked about. Cool. So any quick parting advice? I know you’ve got to run. I got to run too as well. But any quick parting advice for the cleaners looking to stay relevant and grow in this climate and environment?

Ricardo Torres [00:36:35]:

Yeah, you got to loosen the grip as an owner, especially if you’re an active operator. And what I mean by that is take a step back for a moment, empower others to take the position that you think you were previously occupying and step up a notch or two. We could talk to her blue in the face about this, John, but, you know, the implementation of AI and what that means for the next 6 months or 1 year, if you’re not on that, that train, you need to go buy a ticket right now and you need to get close to the train because it’s moving, it’s moving quickly. And by the time it gets off on its next stop, it could be the difference between your business prospering fivefold or staying and stagnating. And stagnation in our industry, we know, means it’s a detriment to your business. It’s a falling knife. It’s a falling knife. You know, I can talk AI responding via voice or text on a quick callback or a quick text.

Ricardo Torres [00:37:30]:

Just the recognition of efficiencies in your business over a period of time. We can’t keep up with it, so we should just partner with it and hold its hand and try to keep up as best as we can. So what I mean when I say loosen the grip, I really mean challenge the norms and what you thought of your business previously, because it’s going to look different in the future. Those who embrace it, I think, are going to find a lot of success. Those who are, I still need to go provide that same exact service I provided a couple years ago, I think you’re going to find a detriment, and I encourage you to think otherwise.

John Clendenning [00:37:58]:

That is a great place to end it, my friend.

Ricardo Torres [00:38:00]:

I—

John Clendenning [00:38:00]:

you’re, you’re preaching to the choir and the message I’ve been trying to get out, and Yeah, the world’s running away from us and we just got to be faster than we’ve ever been before. But I thank you for your time. I know this is going to be a valuable episode. Any comments we get coming through, which we always do, I will pass them along to you as well. And anybody in the Las Vegas area, Tiffany Couture Cleaners, Carpet Monkeys, look them up, hire them. Ricardo is the, the best and his team is awesome.

Ricardo Torres [00:38:24]:

Yes, sir.

John Clendenning [00:38:25]:

Thank you, John.

Ricardo Torres [00:38:26]:

Hey, take care.