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Business owner finds help to clean up finances

By Hope Belli Tinney, Washington SBDC

McNulty-80OLYMPIA, Wash. – At the beginning of 2013 Scottiejo McNulty was running her company, Elite Cleaning of Washington, like most people run their households: money came in, bills got paid and she didn’t worry about the details.

Her business was successful—and growing—despite the fact that her financial records were inaccurate and incomplete.

Closing in on the end of 2013, not only does McNulty have her financial house in order, but she’s considering franchising her business.

Elite-Cleaning-logo-300Not bad considering she has only owned the business since June 2011 and when she took over she was the only full-time employee.

As she says, “I’m not a sit-around kind of person.”

Efficient cleaners, fast growth

Within 18 months of buying the business she had five employees and was on pace to bring in more than $100,000 in annual revenues as she stretched her service area from Thurston County to include Mason and Lewis counties as well.

Her cleaners are fast, efficient and thorough she said: “We don’t leave until it’s done and we come back if it’s not right.”

She was building her business with the same intensity that she attacked cleaning projects, but there was one area she avoided as much as a truck stop bathroom—financial records and bookkeeping.

If you are clutching your heart, know that McNulty’s heart raced whenever she thought about the numbers, too.

“Numbers are not my friend,” she said.

And she wasn’t sure how much they mattered, anyway. Business was going well. Her client list was growing, employees were happy and she had enough money to cover expenses.

Financial elbow grease

But there were a few bumps along the way. Then, in January, her bookkeeper sprung a $9,500 tax bill on her.

That’s when McNulty started meeting with Ron Nielsen, a certified business advisor with the Washington Small Business Development Center (SBDC).

The Washington SBDC Network includes more than two dozen certified business advisors working in community-based offices across the state. Washington State University and the U.S. Small Business Administration are the primary sponsors of the network, with additional support from other economic development agencies and institutions of higher education. The SBDC office in Olympia is hosted by South Puget Sound Community College.

Nielsen was “wonderful,” McNulty said, but going over her financial statements with him was difficult. The first two meetings she left with a headache and the third meeting she went home and cried.

“It was overwhelming,” she said. “It was too much, too fast.”

Multitasking star

McNulty isn’t easily overwhelmed. She’s used to juggling seven things at once. Even as she was cleaning houses, supervising employees, tripling her client base and finding her place in Olympia’s small business community, she joined the local chamber of commerce and began working with several other professional development organizations.

During a 30 minute phone interview she shopped for cleaning supplies, checked in with employees, confirmed appointments with prospective clients and responded to text messages – without losing her train of thought.

Grace under pressure is part of the job description when you’re the head of the escalation team in the claims department of a major insurance provider.

“I was the fixer,” she said, and laughed. “That’s what they called me.” But in February 2009 her position with Aetna insurance in Arizona was eliminated in a recession-related restructuring.

Ready for a change, she and her teenage son decided to give Washington state a try; several months later they were living with friends in Olympia while she continued to look for work. By December she was ready to take anything and that’s when a friend from church offered her three days a week cleaning houses. McNulty jumped at the chance.

‘No clue’ financially

She enjoyed cleaning and kept a spotless home, she said. Cleaning houses allowed her to bring order to a life in transition.

As other employees left, she picked up more hours until, in June 2011 when the family decided to sell the business, she was the only full-time employee. She bought the list of 30 clients and the company books for $20,000, payable $1,000 per month, no interest and nothing down.

She renamed the business Elite Cleaning of Washington and the company quickly began to grow. By late 2012 a business associate suggested she might want to talk with Nielsen about how to best manage that growth. Since SBDC advising is provided at no cost to small business owners, she decided to make the call.

“I was like a deer in the headlights,” she said. Often, you don’t know what you don’t know, and McNulty is amazed, in hindsight, by what she didn’t know.

“I had no clue how to read a financial statement,” she said. “I couldn’t tell you how much my supplies cost.”

Making friends with numbers

The first order of business was figuring out exactly what was coming into the business and where it was going, down to the penny. Nielsen and McNulty spent hours going over spreadsheets and financial statements together, and then she left their meetings with a “to do” list of additional information to track down.

Once she found the information, she said, she began to figure out why it was important and how she could use the information to make her business more efficient.

Nielsen also recommended she attend a profit mastery class through the SBDC, which she did. Slowly, she said, things began to click and she and Nielsen worked through a variety of issues.

“Ron is amazing,” she said. “I rely on him. I know I can call on him for anything and he’ll find an answer.”

Over the past year she has built a vocabulary and knowledge base that gives her a much better understanding of her company’s financial health.

“Numbers and I are not friends,” she said, “but thanks to Ron we are friendlier.”

Revenues nearly double

She now has an accountant, instead of a bookkeeper, but her crash course on financial records and bookkeeping has made a huge difference in her business and her life.

In October her mother suffered a major health crisis while on vacation in the Midwest. Within a day and a half McNulty was on her way to Iowa, where she stayed for nearly six weeks as her mother’s health gradually improved.

McNulty credits Cheryl Brown, a virtual assistant and her incredible cleaning crew with keeping the business running in her absence. But, she said, credit also goes to the financial systems that Nielsen helped her set up and learn to maintain.

Without them, she said, “I’m not sure I could have gone.”

As it is, even with that six-week disruption, her business is on track to bring in nearly $200,000 in revenues this year, nearly double what the business made last year. She hired three additional employees in 2013 and her client list grew by nearly 300 percent.

“Ron is my mentor and my advocate,” she said. “I know he is there for me.

“If you have Ron by your side you can do anything, but you have to do your homework,” she said. “He doesn’t do it for you.”

 

Contacts:

Scottiejo McNulty, Elite Cleaning of Washington, 360-529-2277

Ron Nielsen, Washington SBDC, 360-407-0014

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