Piggy backing on another company, should you build your business with an existing business? How do you establish credibility for your new cleaning business? And how do you decide if your company should be an LLC?
Expanding into new markets doesn’t need to be a difficult process. If you’re thinking about starting a second business, have a look at these tips.
Listen: Piggy Backing on Another Company
Watch: Piggy Backing on Another Company
Hey there, I’m Angela Brown, and this is Ask a House Cleaner. This is a show where you get to ask a house cleaning question, and I get to help you find an answer. You can find this and 400 other answered questions in this series on our YouTube channel.
What is Piggyback Credibility?
What is piggyback credibility, and should you build your business off of an existing business? Or should you spin out and start a second business if you’re expanding? We have a house cleaner that called in and asked this question.
“My husband has had his own carpet cleaning business for about 25 years. And we would like to expand into house cleaning, but he wanted me to start my own company with my adult daughter.
My question is this, would it be better for us to expand his carpet cleaning business to include house cleanings? Or should I go ahead and have a separate entity?”
Can You Piggyback off of an Existing Business?
This is interesting because you have an existing carpet cleaning business in the family, that you’ve been building for 25 years. Also, you have a lot of marketing, a lot of sales and a lot of clients. So, should you piggyback on the credibility of that business?
The answer is yes, you should. But should you keep your second company separate? The answer is yes, you should. So, what you can do is, and let’s say the name of your company was Happy Carpet Cleaning.
So, what you could do is you could have Happy Home Cleaning, which is like Happy Carpet Cleaning. But you could say brought to you by Happy Carpet Cleaning.
You Can Tag Into Your Existing Customer Base
And so what happens is you tap into your existing customer base. Then you talk about the same values that you share with a cleaning business for a carpet, now you share for homes.
Because there are two sides to cleaning and one is cleaning the house, and then the second part is cleaning the carpets. So, they do go hand in hand and as house cleaners, we get asked the question a lot, who do you know who cleans carpet?
So, it’s a nice segue into sharing this same clientele that your carpet cleaning business already has.
Create a Second Business if You Have a Partner
Now that said, you will want keep it separate for the fact that you said you’re starting the business with your daughter. So, what this does is as you set up your own separate business, it allows you to create an LLC that is independent of the carpet cleaning business.
So, the assets from the carpet cleaning business and the expenses are separate for the carpet cleaning business. Because as a house cleaning company, you’re not going to have all the same hoses, cleaning machines, extractors and fans and all that stuff.
So there’s going to be a lot more expensive over in the carpet cleaning business with the vans etc.
You Can Let Your Partner Take Over the House Cleaning Business
It also allows you, to create something that your daughter can take over without taking over the carpet cleaning business as well. Now, you may want her to do that in the end, but for right now, its for logistics.
That way you can keep it separate, it is better to create it as a separate business, have its own bank account, own LLC, and pay taxes separately.
This allows her to run an independent business. But yes, you can piggyback on the credibility of an existing business you’ve spent 25 years creating.
Keep the Businesses Separate for Search Engine Optimization
So the reason to keep it separate is for search engine optimization reasons. When the Google search engines are looking for a carpet cleaner, if it is a carpet cleaning, house cleaning company, the search engines are unsure which you do best.
The search engines don’t know that you’ve been in business for 25 years with one business and the other business is new. And so, they’re not going to recommend either one because they’re not sure.
The job of the search engines is to provide the best user experience.
Google Tries to Give the Best User Experience
Now, Google, for example, is a publicly-traded company. And so when people do a Google search, what makes Google so profound is that they have all the data and all the analytics. And that’s why they have all the algorithms, the search box and everything to connect all the dots.
They want to make sure that they are giving the best user experience, not just for their shareholders, but for the people that keep coming back. Because that’s how they make their money.
So you want to make sure that you have all things house cleaning as a separate search page, separate website and, separate key search engine terms. So that when you say we are house cleaning, it’s going to say house cleaning. And if it tags into and is connected to this carpet cleaning, they’re going to say it’s a separate business.
Keep the Two Separate for the Future
So,what you want to do is keep them completely separate. So, when it sends out carpet cleaning searches, it sends your carpet cleaning business. And when it sends out house cleaning searches, it sends your house cleaning searches.
Now the reason search engine optimization is so important is for the future. And so even though in the past, 25 years ago, when your husband started his carpet cleaning business, that was not the case.
You ran a yellow page ad, maybe you had a website, maybe you didn’t. But right now, we live in an era of social proof. It’s all about keywords. It’s all about search engine optimization. It’s about social media and it’s about the best user experience.
You Want Something That Says House Cleaning
So you want something that says all things house cleaning. And you want a separate business that says all things carpet cleaning, but you can say Happy Home Cleaning Service brought to you by the same company.
Or an established business that you’ve come to know and appreciate. Then your marketing becomes seamless because you recommend each other in each other’s businesses.
Expanding a New Business is Exciting
So, the idea is great and it’s exciting that you’re expanding. As when your business grows and as you advance through business you can expand into other markets.
That’s how wealthy people do it, they expand and they diversify, so they don’t have all their eggs in one basket. That way, if anything ever malfunctions, they’re not left stranded with no income.
They have a diversity of different portfolios, where they have money coming in on a regular basis from different things.
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