Bluegrass Game

Growth Versus Profits in the Small Business World

The daunting task in 2016 for owners of Handy, a house-cleaning startup with headquarters in New York City, was to rethink how they were to remain profitable in a changing small business world. CEO Oisin Hanrahan, and his co-founder, Umang Dua, decided to try an online application for finding home cleaners in their 28 of their markets. As this plan dwindled and profits fell, they had to reconsider how much they focused on their growth and more on how to keep future funding. They initially thought that implementing the online on boarding strategy for new cleaners in all of the company would save them millions in the long run. However, less cleaners were coming on board with the team and there was still high demand for the service. After cutting their spending habits, laying off workers, and weighing the pros and cons of using automated machines versus humans, the company finally started to see some progress. They had to pull back from expanding to more markets, and focus instead on strengthening the assets they already had. To their advantage, one of their competitors went out of business, removing the competition as they maneuvered through their transition. With the removal of a competitor Handy.com did not have to focus on expanding their service across more markets and this helped them to focus more internally.  In the end, Handy was able to find the cleaners more jobs, the customers had less complaints, and there was less need for recruiting more cleaners. It may have been a difficult way to switch from growth to profitability, but Handy came out on top, and perhaps learned a valuable lesson.

 

 

1 comment

Comments are closed.