Latest / Built by Margin with Laurie Chen / Building Trust and Community: The Secrets Behind Let Kelly's Success with Kelly Jedele

Transcript

Building Trust and Community: The Secrets Behind Let Kelly's Success with Kelly Jedele · Built by Margin with Laurie Chen

• 0:04
  Welcome to Built by Margin, the podcast where strategy meets the spreadsheet. I'm your host, Laurie Chen, fractional CFO and tax strategist, here to help you make smarter financial decisions, build a profitable business, and keep more of what you earn. Let's dive into the numbers that actually move the needle. Kelly Jadele is a high-energy, active entrepreneur that started her current business 16 years ago, a residential cleaning and organizing company. She now has 45 employees and does $2.4 million in sales annually. Helping mom founders is really a true passion of Kelly's. She believes with the right support, women don't have to choose between themselves, their families, and their business. Kelly has a talented 23 year old daughter living in New Jersey and enjoys being outside or on the dance floor. Welcome to the show, Kelly. Well, Laurie, thank you so much. Thanks for having me. It's good to see you. Good to see you.
• 1:04
  So you're the owner of Let Kelly. You've been 16 years in business. You have 45 employees doing over two million dollars of revenue. Tell us what inspired you to start your business 16 years ago and for it to keep going now. Oh, my gosh, the story is I will say when I immediately initially started my business is because I got fired 2009. You know, there's a lot going on. And I was in medical sales and my boss made me go away and I decided to start my own business. My daughter was going into first grade at the time, and I wanted to have something where I could have time, flexibility and and grow And what is one belief or mindset about yourself that you had to change to become the owner or CEO of Yeah, when I when I started my business, I knew I had work ethic. I knew like in my mind, I was like, I know I will work the hardest for myself. And it was around year four when I had to start seeing myself more as a leader and a actual owner of a business. Like I was the worker bee, and then I was a manager. And then around year four or five is when I wanted capital. And I was reaching out to different organizations for money. And I was like, I have to step into bigger shoes.
• 2:32
  And so that was the first mindset shift So we were just talking before the show started. So over two million revenue. You weren't always at that million dollar mark. Tell us about what the growth looked like, especially Yeah, so I've had my business for 16 years now. And the first, so 2009, 2019, so 10 years in, we hit our first million dollar year. And it was really, my goal was to grow steady. strong and steady so that my leadership could grow, my teams could grow, the brand could grow, and we could just, you know, take it along the road with us. And grow by, you know, also raise my daughter. My daughter's a musical theater kid, so she sings dance acts, she's in shows and very busy. I was stage mom on the side and running the business. And so it was just very much just head down, keep going, keep going, keep going, and then build this systems as we went. So 2009 was our 1st million dollar year revenue. And then 2022 was our our. we hit 2 million. So we, it took us quite a while to get the first and then boom, boom, boom, um, through COVID and a bunch of the staffing issues and all that. And, and that was, we were able to get our second million and then have been growing ever since. So each year, this year we're, we're growing again. So it's, it's a, it's a steady climb and just working on systems and working on profitability, working on, you know, where we can, um, take things to shrink this cost and grow here and, you know, tweak these things to make it just more and more and more efficient every Yeah, we're definitely going to talk more about the financial mechanics behind your business, because especially at $2 million revenue, you know, you have quite a bit of OPEX, you know, you've got payroll, you've got your own owner salary or draw, however you're structured. One thing I do want to mention is that you're also based in Austin, Texas, We got to meet live in person. I love that. And also both Texas Longhorn alumni. That's right.
• 4:57
  Yes. I love it. Yeah. Is there a particular area that you're focused on in Austin? Like, do you only go to We are in the southwest corner of Austin. So in Austin, we'll say like we're south of the river. So the kind of north of the river, we'll go just a little bit. If you pay us enough, we'll go farther for a one-off. But we pretty much stay in the southwest corner of Austin. And then even to the west and the south is Dripping Springs and then Kyle and Buda.
• 5:28
  We'll go into those areas if it's not more than 30 minutes away from our Okay, so and that's that's the strategic for you, right? Like you're focused on that area because it lowers your costs, but also maximizes your your revenue, Yeah, and I in the beginning, I chose to have employees instead of contractors. And so that was a big decision in how I manage my teams. And so we meet in the morning at the office every morning and we have a fleet of cars. And so they go out from our office and then come back at the end of the day. And so all of that time is paid. And so it just makes more sense to be as What is your best customer acquisition channel? Is it referrals or is it advertising, Very little online advertising. It's really word of mouth and referrals and the cars we get a lot. I mean, when your neighbor has a let Kelly car every other Tuesday at their house, it kind of makes an impact. So the cars have been huge. We've had those since 2016. And so, but word of mouth and we do a lot of goodwill advertising as well. Like, I support a lot of the schools in the area. It's just a heart and a passion of mine. And it just makes me feel good to support the theater and the dance and the volleyball and lacrosse and basketball.
• 6:59
  All of you know, and then some small nonprofit organizations. And so we give money into those organizations and then they advertise in their communities and social media. And so it kind of is a win, win, win also. So in that, you know, small little piece of money that we do for marketing, it's not a lot, but it does. I That's amazing. Yeah, tell me more about the cars and how they're useful for your business. Do you own them or We buy them, so we own them. They're all Chevy Sparks, so they're the little tiny matchbox cars.
• 7:39
  We have the decals that are on all the sides of the cars. I started buying them in 2016 because we couldn't rely on the employees' cars. We had had employees' cars for seven years. they're either leaking oil or they have a broken whatever, you know, they couldn't get it to work or the driver couldn't show up or whatever. And there was a lot of lost revenue and just just morale based on their cars. And so the company car just allowed an opportunity to have a car that we can rely on, that I can kind of make that I can pay for the maintenance and make sure it's taken care of. It's clean. And everyone involved in the car is taking care of it and making sure that it works for the for the company. And it's it's Yeah, and you must get some tax benefits too from owning the cars versus My bookkeeper and my CPA keep me very much on task with Yeah. Do you, are you planning to update your fleet or do you, do you have like the fleet that you bought, like that's going to last a long time or are you planning to add more depending on like if you need to hire new employees or get new business?
• 8:56
  So around, I think, car 10 or 11, we added on an extra vehicle. So we have 20 teams and 21 cars. So we always have an extra car for, like, oil changes or maintenance or whatever we need and. The, so the cars we bought in 2016 are now about to be, they're about to be 10 years old now, because we don't run them 7 days a week. And we are strategic in our area of where we are in Austin. We're not putting a lot of miles on the car. So the oldest cars have 60,000. Maybe 80,000 on one of them 80,000 miles so which isn't a lot for a 10 year old car so and because we're you know maintaining them as well and keeping an eye on them all the time and it's not they're they're not needing yet to be. Any any change over updating of the cars yet I will keep an eye on that and we'll start changing. We had 1 of our earlier cars now is the extra car. And so 1 of the new cars is now for 1 of that replaced 1 of the older cars just because of mileage. It made more sense to do that. So we are kind of thinking about them. and taking care of just where the mileage is on the cars so that they last longer, long enough for us just being Yeah, that's, yeah, that's smart. Definitely. Let's talk a little bit about risk. As you know, I'm working on a book called Riskworthy. Yes. Yeah, you are. Yeah. Yeah.
• 10:26
  So it's talking about, you know, taking big risks, making decisions, giving yourself a decision making framework. In your business over the last 16 years, what do you think is the biggest risk Well, as a business owner, you pretty much work on 100% commission. So that's just the nature of what we do. I get a paycheck, but if we run out of money, I don't get a paycheck. And there were several years in the beginning when I didn't. So I would say one of the biggest risks is just starting and planning. And every time that there's a, a choice to be made, whether it's workers comp, hiring, firing, creating policies, adding on like clients, like firing a client feels so risky sometimes this day and age with all the reviews and onsites, online stuff, caring for employees, how far you go with caring, where's the line when you're caring for employees. All Absolutely. Is there anything that your 80 year old self would regret not doing today or in Oh man, I've asked myself that recently. I think there's a part of me that wishes like in the early years, I would have just really pushed for it, like gone harder. Because I really let it grow organically and didn't. didn't really push for a lot of momentum in the beginning because I wanted to make sure that I was ready for that change and that growth. And I think I was scared. I think I was holding back from what my potential was. And if someone else was in my shoes now currently, like I talked to other new business owners, I'm just like, go for it. Just like, go for it. You're you're you're betting on yourself. You're not going to lose. Like, go for it. And I think I would have I think I would have done that. So that's that's in the back of my head about like what I'm doing now in my life. I'm like, oh, am I really am I showing up for myself?
• 12:52
  You know, I called myself out yesterday. It's like I got it. I got to get back on track. I got to do this thing now. Be my 100 percent. You know, our coach says, you know, you're 10 X self like show up for myself. That's who I want to be. And my 80 year old Yeah, absolutely. But it's hard, you know, in the day in and day out, it's hard because in the short term, you feel the pain of not having something, right? But then when you zoom out into the larger scheme of life over multiple years, then it makes you think differently about your choices versus if you were just looking at the next month, what bills I got to pay this month, what bills I got to pay this year versus what am I doing over 60 years, you know, it's a very different way to think about things. So I think that's why risk, you have to think about in certain time horizons and think about it from your 80 year old self versus your 40 year old self, you make very different Well, and I started my business 16 years ago. So I mean, I was a totally different woman back then. And my my girl was my baby girl was five, six years old.
• 14:08
  So she's now 23. Like it's I'm a different person. She's so it's really not fair to look at myself, you know, judge that earlier version of myself because I didn't know, you know, I was just trying to do the best I could with all of the things I was managing. So But I do kind of wonder, I do wonder like, what would have been like, you know, if I would have pushed a little harder but I think I was, you know, you know, I work with a lot of startups as a fractional CFO and CPA.
• 14:41
  So I'm working with people that just start out. So they're taking big risks, putting their own money into their company, putting tons of time, maybe sacrificing their W2 job.
• 14:53
  And so I work with a lot of a lot of startups. But then I I love your perspective because you've had your company for 16 years. You know, you didn't always you weren't always at that million dollar mark.
• 15:03
  But once you hit that million dollar mark, you grew really fast. And that's the result of sticking with what you're doing. And I'm sure you love what you're doing. You know, you love. Yeah. I love what you're doing.
• 15:14
  You have employees and you're doing it for 16 years. That's very different than a startup that is just trying to make it and trying to build a new product, something that may not even work, right?
• 15:28
  But you're providing a service that is very necessary, whether you're in a recession or not, people need your Yeah. Yeah. Yeah. Thank you for that. I appreciate it. Yeah. It's the longer, the longer you're at it, the more it we've, we've gotten it to where we've really narrowed down the scope of what we do. So it can be very repetitive. The daily tasks can be very repetitive and you know, it's like, it's almost like we're just managing the things that are different at this point. Cause all the systems just go. So it's just everything works. And so now we just manage what's different each Hmm. Got it. Well, one of my favorite books is the 80-20 principle. I believe it applies to all areas of life. What are, let's say three of the smallest daily behaviors that move 80% of results for you as the owner of Let Kelly? Three different One thing that I, very much stay true to is saying hi to every person. Like I truly believe looking at my employees in the eyes and recognizing them in the morning when they're here, when I'm here is important. I think that validation when you're there's many videos I've seen where, you know, little kids are coming across the stage at school and they they find their parent in the in the audience and their whole eyes light up and.
• 17:01
  That that moment of having someone's eyes light up when you walk in the room is so powerful. And so I want to be that person for them as much as I can be. So I always love to say hello and goodbye to them. It's a big habit of mine. Just that very basic thing. And I also. just the basics of all of the details of our cleaning and making sure that the teams know what is supposed to happen for the day and that we're communicating all of that from the clients. Those details are very important. Most of them, just like I said before, everything's systemized. Most clients get their house cleaned every other week or once a month, and so it's very routine. It's in the calendar recurring.
• 17:47
  And there are differences and when the differences happen, we want to make sure that the client is communicating to us and we're communicating to the team. And that's that's that makes a huge difference in the day. And then also, I would say very much keeping track of. what my team needs, you know, what my assistant, you know, how's my assistant doing? Does she have questions? Is there anything that I can, you know, support be there for? Is there anything that are just me kind of managing the whole vision and scope and feel of the company is what I focus on now. I'm not needed in the day to day tasks so much, but keeping my pulse on what is happening big and like the vision and what's happening in the face of the company and how it feels, the morale and all of that. And with the holidays coming and Thanksgiving and, you know, the scheduling and what the clients need and all, I think it's very important to me. It makes a big difference, just caring for the people.
• 18:58
  We're working in people's private homes, so it's very personal. There's a lot of confidence, a lot of trust that they have for us inside of their homes, and I value that honesty and the integrity that we have going in these homes and doing the best that we can and caring for them. Inside their personal space, a lot of people work from home and they are home and they have their families there Yeah, yeah, there's a lot of trust that they instill in you and your employees to come and do their cleaning every month or every 2 weeks or whatever it is. Let's talk finances, because as I mentioned before, over $2 million annual revenue, you've got 45 employees on payroll, so you've got profit to think about, you've got operating expenses, cash flow, it all matters to you, especially. So you mentioned you work with a CPA and a bookkeeper. How does that help you focus more on the business so Yeah. So my bookkeeper and I have worked together for eight years. And so we, we meet like 45 minutes once a month. It's, it's, it's so dialed in at this point. Um, like last we're, we're talking about our kids more than we actually talk about the, the books. So we'll just, we'll kind of like look down, look down, this is different. This is different. What's this, what's this. And then, you know, we're done, you know, it's, it's really quick. Um, But having my having my bookkeeper understand my business. So she has a just in QuickBooks, she just has one little file that says don't know or questions for Kelly. And so she'll just tag stuff. And so those are the differences that we go through. Everything else is really consistent in the business. And I've got specific credit cards that I use. I've got specific accounts that I use. And I'm very much. very specific with how I handle all of that and very detailed with keeping track of finances and how I spend money. Got it.
• 21:15
  Yeah, the CPA, we talk a few times a year, but mainly just he's just mainly taxes and big purchases. You know, if I'm if I'm coming up against a deadline about, you know, end of the quarter, end of the year, and I want to buy another car or something, I Yeah, I was just about to ask about tax strategy because you have to think a lot about how do I, how do I maximize my tax savings? Just curious if there are any strategies that you've used in the past year that have really helped you minimize Well, I will say in 2023, 2022, 2023, my CPA said, you need to, you need to take more money out of your, out of your business. Like, um, it was, it was, it was that when we were talking, um, I was. I guess in scarcity mentality. And so I was, you know, just worried that, you know, all the, because I, the bills at this point are huge payroll, you know, like these numbers are ginormous, you know, and so to me, and so I get a little bit scared and he was like, no, no, no, you've got, you know, you got to spend this, you know, to make it and then I'll be darned if spending that money didn't allow me to open up into an abundance mentality and continue to grow the business. It was remarkable. 22, 23, in that time frame, that's when I bought my house. Just phenomenal, the way that he pushed me and helped me. And I don't really know the CPA part of it, the tax part of it, but I know that he was encouraging me. because of the way that the taxes were going. And I don't really know the behinds the seams of that. But I know that he was he was saying it just made more Are you in LLC? Corporation.
• 23:08
  S-Corporation or C-Corporation? S-Corp. Okay. Yeah, that makes sense. Okay. Yeah, because you need, with an S-Corporation, you have your salary, your set salary, and then you also have owner distributions. And so there's usually an optimal mix. between owner distributions and salary. It's usually around 60-40, 60% being salary. So that's probably why he was encouraging you to take more distributions because then you maximize the tax Yeah, the tax benefits and what I'm supposed to take, what makes sense, like you have to take a certain amount or else the company doesn't look I'm like, okay, twist my arm. Great.
• 23:51
  Well, I'm glad you're an escort because that's usually I would say 70, 75% of the time I would recommend a company that be an S corporation. You know, if you're not a high growth startup, you're not venture backed. Those should be C-corporations, but if you're like a service business like yourself, very profitable, bootstrapped, you should be an S-corporation most of the time in most situations. So you're set up well. It sounds like from both CPA and bookkeeping standpoint, you have a good setup, you have good cadence, you have good relationship with your accountants and tax people. So that's Well, I tell you, I have some amazing people in my life.
• 24:34
  I mean, it's so funny at this stage of the game. I know that I could not be where I'm at without this team. I mean, it's I'm the face of the company, but holy cow, it takes a team to get this thing going. I mean, it's just it.
• 24:49
  It was me in the beginning. And then I added all these smart people. And I had the lawyer that helped me put all of the foundation documents together is the one that suggested the S Corp and I and told me why and I absolutely I told him the vision that I had and this is what we did and so yeah it's. Smart Great, let's talk about revenue model and pricing. Because I'm not familiar with your industry, it's service industry, but specifically you're going to people's houses and cleaning. Do you charge them on a monthly basis? Do you charge them hourly? How do you think about pricing and has that changed over the past few So what I've seen with people in general, and then this, our industry is that we charge hourly for the first time cleaning, because we don't really know what we're getting into when we're walking into a home. We have an estimate. And then after that, after we do the first time cleaning, we have a set rate.
• 25:58
  And that set rate is based on how often they want the cleaning and what they want done. So is it weekly, every other week, once a month, or is it, you know, Um, and then do they want, like, a full detail cleaning with dishes and sheets and baseboards?
• 26:11
  Or is it just a quick clean of the downstairs kind of thing? And so and and for me, what I have understand with most people of the general public is that. finances are just tight for people. And so they can fit more budget when something is charged a little at a time than it is like one lump sum every month. And so I have chosen to invoice every day. And so the clients in it for me, it's a push of a button. It's not a, it's not more than 10 minutes. Um, not even that long, five minutes every day to charge the card. And so the clients just get their, like their cleaning, if they're every other week, they get charged twice a month for their cleaning, on their cleaning days. And I think most people I would say probably kind of like budget better that way, little chunks at a time. But that's just my take on the Well, sounds like you have a good sustainable model. What does the renewal rate look like with your customers? I would imagine it'd be pretty high because people need these services on a monthly basis or a very regular basis. Is your retention rate where you would like it to be? And what is the typical industry average look like?
• 27:37
  I don't know the industry average on that. I would be curious to see I don't monitor our fall off as well as I should have. That's that's been something that's not. I don't I don't inspect that as much as I should. but I do know that we don't have, most of our clients we lose because they move or budget issues is what I find. So they lose a job or, you know, Teresa starts dance class and so they have to use that money for, you know, it's something, you know, they're moving money around and then they'll come back. We don't have contracts. I've found that in my experience that people, Service industry, they want to keep us around when we do a good job. And so there's the contract kind of makes them feel like they're kind of stuck into something that they don't want to do. They want us to earn that. And I'm happy to earn that. So we don't do contracts and we just tell them our policies up front for for payment and for breakages and things like that. And then we raise rates. Every two years. You know, just a little bit to, you know, to keep things going so that, you know, with the, we had a huge jump in supplies for cobit and then in 2022, like those those years. the increase in our supply costs were just astronomical. And so we've had to, and then 2021 was the staffing year crisis in Austin. And so we had to raise rates again for that, for some of our clients. We did it incrementally. So some it was 20, some of it was 21, some of it was 22. And I made sure that we balanced Okay, so it seems like you are tracking your pricing and I don't have percentages, but yeah, because I would, I would love to nerd out and just go down the rabbit hole and say, you know, this is our retention rate. And we've had how we've increased it year over year during that. And I think. The, I think I'm limited a little bit by the software that we have chosen to use at this point, and just the way that they onboard and off board clients with this particular software, the website we use doesn't monitor that as well. So we'd have to have a separate spreadsheet, which is. In the land of spreadsheets that we're in would be just a little too much for the staff. I don't have an Is your is the system that referring to is it specific to your industry or is It's actually, ironically, it's a landscaping software that they realized after they launched it, that it works really well for the inside of the house too, for housekeeping. So it's very specific to what we do for calendaring, invoicing, and then a little bit of like CRM client management. And then invoicing, it syncs with QuickBooks, which Yeah. So you have QuickBooks online for your accounting? I actually have QuickBooks My bookkeeper is a desktop fan and we'll probably change that pretty soon just because QuickBooks really wants us to Yes. I was actually just looking at the pricing this morning on QuickBooks Desktop. Yeah, it's how much is it? It's like a thousand dollars a year. Yeah, it's over. It's it's between I think I remember it was like a little bit under 2000. So it's like, yeah.
• 31:24
  Yeah, it was. It's a lot. And the last time it hits me in April and this past year when they charged my card, I thought it was a mistake. And I asked my bookkeeper, I was like, what's going on? Did they charge me twice? And she goes, no, that's Yeah. Okay. So what about future growth and strategy? What are your, what are your plans and ideas for growth? What do you want to continue doing with your business over the next 10 years, 10 plus years? Where do you see yourself going I will say, Laurie, this is this is the talk of the town right now for me. I, my daughter just graduated college. And so I'm in a transition space in my life, and I am just looking at what I want to do next in my life, like, for for what would, you know. Warm my spirit and speak to my soul as far as like, what I do in life and so I haven't really thought too much about the cleaning business for the 10 year mark out there. I know for for 5 years, it's it's really just really making this the.
• 32:36
  The system's efficient and really just the quality that we have is really, really important and really coming up with new ways of training and supporting the teams to raise quality is something that really, really is important. And then me personally, I really love helping mom founders. And so I just, I really want to come up with systems and community and ways to support them so they don't have to choose between home, family and business and really put something together for I have not. I have, I've started working on coaching and looking into therapy and things like that to really kind of focus my brain to see what's important to me and what I value at this point in my life.
• 33:29
  And this, this Oh, so transitional space that I'm in, and see where where I might be launched. And hopefully something will stick for me because I would love that.
• 33:40
  I really feel like there's a whole nother passion in there for something else to continue on, to add on to the cleaning business.
• 33:49
  Yeah, that sounds great. We'd love to see what you do next. Thank you.
• 33:52
  Thank you. All right. So last round, this is rapid fire questions just to get to know you better. Okay. What is one book or idea that has most shaped who you I'm a huge reader, so choosing one is really difficult, but I will say one that I go back to time and time again is The One Thing by Gary Keller and Jay Papasan.
• 34:17
  I've read that book probably five times in the last 10 years and I love it. That's Yeah, it's very practical. And I get something every time I read it.
• 34:30
  I'm a different person. You never step in the you know, the same river twice. And it's got like, little post it notes and underlines and Yeah, that one. But it's so true. What is that one thing that will move the needle? I all you know, whenever I get uh, what's the word whenever I get, um, stress with a lot of things going on multiple priorities, I'm like, what's the one thing I could do that can be Exactly. What, what am I, what am I like pretending like I don't know, or what do I actually need to just focus on right now? Like what would actually make today successful? What would I actually get me to where I want to be tomorrow if I just did this right now? Yeah.
• 35:16
  What is your go-to 15 minute gym workout?
• 35:21
  My 15 minute, I love, you'll see me on the treadmill all the time. I've got these little bands and weights around my treadmill. And so I just have a whole like HIIT workout with like running, walking, stair, I raise the incline up. I've got weights when I do all over my head. It's like a whole, it's like an orange theory, I feel so discombobulated when I do rowing. I don't know what it like, what my body's supposed to be doing. I do I yeah, I always either sign up for the treadmill or the weights first and is like the last one I want to What is your favorite breakfast before you go I cycle through different ones. I'm on an egg kick right now. And so I do two eggs with either some black beans or a little piece of low carb toast and some salsa. I'm Lastly, I saw that you have a dog. What's your dog's name? Oh, She's a 50 pound beach and she just turned three. I've had her a year and a half. I got her from a rescue and I don't know who rescued who. She's just the most precious snuggle bear. High energy, active, loves to walk, loves people. She's fantastic. That's Lastly, how can people find you and learn more about your company? And especially if you're in the Austin area, you should hire Kelly. Yes, Let Kelly is the company name. We have a website, letkelly.com, where there's a form to fill out if you want to do cleaning or organizing on there. And then Instagram. So Kelly Yately is my personal Instagram. You can follow me there or you can follow the company at Let Kelly. And I love that. I love Instagram. It's really fun. I'm having a Great. Well, we're going to link everything into the show notes so that people can connect with you. Kelly, thank you so much for being here, sharing your experience and growing and scaling your company.
• 37:44
  It's awesome. You've given us some really good insight into the financials of running a $2 million company. So that's awesome too.
• 37:53
  And thank you everyone for tuning in to another episode of Built by Margin. Don't forget to subscribe and share. Until next time. Thanks for tuning in to Built by Margin. If you're ready to turn insights into income, subscribe and join me each week as we break down the numbers behind smart business growth. I'm