Expensive cities have the best opportunities

Expensive cities with high cost of living have amazing opportunities for service based entrepreneurs. NYC, DC, Boston, all of Cali, all of Canada, all of Europe. Anywhere where hourly labor is in low supply.

Here is why:

First of all there is a huge demand for services in expensive cities because people and companies are earning more money and specializing more. People are getting really good at one thing, earning a bunch of money doing that and outsourcing everything else. Nobody is bothering with their lawn, cleaning, basic maintenance, etc. 20 years ago 5% of homeowners outsourced lawn care. Today 40% do. That number is higher in expensive cities and will only grow over the next 10 years.

The second one is the big one. Labor is expensive. Not many people are willing to work in hourly positions. This makes it hard for MOST service companies because they have trouble staffing, keeping up with demand and maintaining a consistent workforce and a consistent service to the consumers. They end up offering a very slow service because they are always 2 or 3 employees shorthanded. Most owners run around saying “I can’t hire anyone worth a damn.” or “I have to pay my employees too much to make any money.”

This sounds like a reason to avoid major cities but its not. This is your opportunity. This is where a good operator can win.

Stop looking for better people and start simplifying your operations so normal moderately trained employees can thrive. Take as much off their plate as possible. Build a streamlined training process. Implement tech into your day to day operations.

If you do this you can offer a more consistent service, you can offer it to the consumer much faster and you can basically name your price. You can charge a higher price and thus pay employees better to keep them around. You can stop competing with the providers on craigslist.

You can grow a viable scalable company.

January 9, 2019 11:02 am