Starting a Small Home Business

Bundling Services for Employees at Large Corporations

November 11th, 2007 Filed under: Uncategorized — Small Home Business Author

Does it make sense to start a service business, which provides things for people while they work? Things like dry-cleaning, coffee, car detailing, mobile oil changes, sandwiches, etc? What if the service list was quite large, surely the corporation would be happy as you are making their employees happy right? Sounds like a good business indeed – ah but wait a minute, easier said than done.

Having been in the mobile oil change and mobile car wash business for many years, I see some challenges, as there are some problems with this plan that should be considered. Our company was never interested in being involved with anything like this or contracting with a company that bundled services, because we do not allow anyone to get between us and our customers, ever; but here are some thoughts:

1. MyLacky.com tried this and failed, burned thru some 12 million dollars in Venture Capital (18 months), you might wish to look them up.

2. There have been a number of such companies fail at this, some with huge Corporate Partners like American Express.

3. Medical Professionals are really slow to pay their bills.

4. Many Parking Companies offer Amenity Services, competition or they want a cut.

5. Hiring outside service companies and bundling is problematic, during complaints (one complaint deletes a customer of all the services).

6. You might be surprised that the car wash ratios are only 8 per 1,000 for nurses and 4 per 100 for doctors; Oil Changes are only needed once per month, ratios worse.

7. The Bundling has advantages when you first start, each individual service can command a higher price – captured market, but

8. Labor in Florida sucks big time, college kids are good but command higher rates.

9. Employees who have friends who are competitors work as guerillas against you from the inside attempting to unbundle and cause problems.

10. Service Companies, look to unbundle and do not like waiting for money from your receivables, start to complain as there is other work, better work for them elsewhere that will pay them on-time, if you pay them upfront, they cause cashflow issues for you.

11. Service Companies get upset when you ask them to bid on the account for price and then control their schedule and are more demanding due to the customer yelling in your ears.

12. The larger the list of services and the more independents the more problems for all, as everyone stands on each others reputation, one company doing it in-house will piss off all the customers over time.

If you decide to try a service bundling business like this for large corporations or office parks, then you may find service companies who will go for it in the short term, but eventually will quit for the reasons above. At that point you will have to eliminate services, that upsets customers or change vendors and that disrupts your reputation, customer loyalty and building of your brand name.

If other companies tell you to go jump in the lake, realize they have plenty of business, do not need anymore and do not take kindly to some young hotshot telling them what to do or being a professional parasite middle man. Most service companies like this are independent and they do business a completely different way.

In theory, the idea and concept are nice, but in reality, it does not work well. Additionally, it is best to start out with a few services and add, than to take one away, it leaves a bad taste in their mouths. If you go into this line of work, it is important not to come off as arrogant to the small service businesses that you contract with – think on this, and good luck.

L. Winslow is an Economic, Political and Technology Advisor to the Online Think Tank, a Futurist and retired entrepreneur http://www.worldthinktank.net Mr. Winslow’s motto in life is; “Work Hard, Work Smart, Make Lots of Friends and Never Give Up!” Lance’s future challenges include bicycling across the US and writing 100 eBooks, he has written 10 so far, even considering co-authors for a few, perhaps you wish to write a book too?