Rune Sovndahl: How I made a million with happy cleaners

Rune Sovndahl's “360 degree happiness philosophy” boosted morale and customer satisfaction at his fledgling cleaning company, and turned it into firm turning over nearly £30m a year.


Rune Sovndahl of Fantastic Services

For most people, the collapse of Lehman Brothers in September 2008 signalled the start of the global financial crisis. But it also indirectly led to the transformation of the cleaning industry. Rune Sovndahl (now 40) was working for a dotcom firm when he met Anton Skarlatov at a party. Skarlatov's cleaning firm had just lost a lucrative contract with the doomed investment bank and Sovndahl agreed to help out with his website. Sovndahl rapidly realised that technology that he had developed to match music teachers with pupils could also make the cleaning industry far more efficient.

In 2009 the duo pooled their savings to set up domestic services company Fantastic Services. They recognised that one problem with the industry is that cleaning is seen as a low-paid, dull job, leading to low staff morale and a poor quality of service. Sovndahl devised a "360 degree happiness philosophy" aiming to treat everyone as a partner in the business, from staff to customers which succeeded in boosting both morale and customer satisfaction, earning the fledgling company lots of repeat business.

This success didn't go down well with rival firms, who were feeling the effects of the recession. The pair repeatedly had to deal with having their tyres slashed, says Sovndahl, "making me understand what competition really means". Yet somewhat ironically, the hostility ended up helping the fledgling firm. When one of its vans was stolen, the company was forced to overhaul its system for dealing with orders. Despite the short-term upheaval, the incident was instrumental in"turning us from a cleaning company into a tech firm".

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Demand for cleaning services is seasonal, with markedly fewer customers in the first two months of the year. To combat this seasonal lull, Sovndahl branched out into offering odd jobs for handymen and pest control. However, he made sure that the company would be able to manage the extra work. "There's no point in generating demand if you can't deliver the service," he notes something that helped Fantastic to avoid the fate of one rival, who went out of business after expanding too quickly.

As investors wake up to the potential of web-based service companies, Fantastic has received regular offers from larger companies interested in buying the firm. But Sovndahl wants to continue to grow the firm's turnover, which is expected to reach £30m this year, and to expand its reach from its current focus on London to the rest of the UK. He is also thinking about franchising the Fantastic model to other countries and already has offices in America, Australia and Germany.

Sovndahl believes there are three keys to success. First, individuals need to be emotionally ready for the demands of becoming an entrepreneur, especially the time commitments involved. Secondly, leaders should "never be too proud to get their hands dirty by being directly involved". Indeed, although Sovndahl is the chief executive, he is deeply involved with Fantastic's day-to-day operations, including software and logistics development. Finally, in recognition of the key role that his co-founder Skarlatov has played, Sovndahl points out that the right business partners can enhance each others' productivity, especially when their skills complement one another.

Dr Matthew Partridge

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

Follow Matthew on Twitter: @DrMatthewPartri