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Management And Training

Diversifying for successful growth

September 19, 2010
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Go to the bank, pick up the dry cleaning, stop at the post office, find the time to get a haircut.

It is Saturday morning and you have a laundry list of places to go and things you want to get done by noon.

And, you think to yourself, I wish I could go to just one place —with people that I know and trust — to get all of my needs taken care of at once.

In relation to building services, a company that services commercial properties throughout the same area does just that.

A family of companies can be the ultimate resource for all of your building services needs, such as cleaning and maintenance, security and surveillance, messenger centers, metal/stone restoration, and painting.

Rather than be concerned with having only one vendor, clients will appreciate the savings and attention they receive through these services being bundled from a single provider.

In fact, a collective building service provider can help consolidate contracts, improve services, and maximize profits.

Check out the competition and need for service
Anytime you can provide both superior quality and lower pricing is a great opportunity to expand your services.

Once your building service company is stable and you are looking to grow, you should do what the experts call “benchmarking.”

Find a few other building service providers similar to you and see how they are organizing their staff, obtaining supplies, and researching the growth of new marketplaces.

You can then analyze your strengths and weaknesses and compare them with those of your competitors.

Assessing value, technology, and employee developments can also help you determine your next step.

Awareness of market trends should play a vital role in your decision to diversify your services.

Target areas where resources are not being utilized or could be in the future as a result of industry trends and changes in supply–and–demand needs.

Getting this information can give you an edge above the rest, as it can show ways in which your service company can benefit the client and be unique.

For instance, after reviewing commercial building crime statistics in your area, you may find it beneficial to add a security component to your business.

Another way to expand your company’s services is by cross-selling.

Cross-selling is defined as “the action or practice of selling among or between established clients, markets, traders, etc.” or “that of selling an additional product or service to an existing customer.”

In other words, because your client receives your services, you could offer them a reason to buy an additional service and/or product.

For example, if you provide metal and marble restoration services to a building, you could sell a polishing or buffing product as a follow-up to the restoration service.

Some benefits to the customer include the efficiency and control that result from using a single provider for multiple services and products.

For the vendor, the benefits are also substantial.

Revenues go up and efficiency benefits in servicing one account rather than several.

In addition, service providers that sell more services to a client are harder for a competitor to replace.

The more services that a client receives from your company, the higher the cost to replace you becomes.

Another benefit to this is that your customers already know and trust you because you have a history of doing business with them.

According to Alan M. Davis, a principal with Revitalization Partners, a Seattle-based consulting firm specializing in business turnarounds: “Exploiting a trend is tempting, but acquiring new customers is less revenue-savvy then squeezing more from existing customers. The more you can put through the same sales channel, the more cost-effective it is.”

Merger or acquisition
As a mid– to large–sized building service contractor looking to expand services, you should also consider merging with or acquiring another company.

This can enhance customer base, increase intellectual capital, and offer efficient operational activity.

However, it is important to note that acquiring a nearly bankrupt company is normally an action performed by more established businesses.

You should only expand when there are undiscovered opportunities that can be beneficial to your business.

But, you should be cautious when deciding to extend your services.

Adding new divisions with little or no connection to your company can be hazardous and end up inhibiting growth.

For example, a catering business would not complement a building maintenance service, but a painting or electrical company would be a logical fit.

While divisions of a company may provide different services, they should share one vision: Treating employees and clients in the best possible way.

Employee feedbackand customer service
Before you decide to expand services, effectively communicate with your employees for fresh and creative ideas.

Think of your employees’ needs as much as your own.

For you to expect your staff to be on your team, you have to be on theirs.

Talk to your sales and/or marketing departments to find out what your customers think about your services, products, procedures, capability, etc.

More specifically, by changing the business practices of the building service industry, think like an owner and provide clients with a combination of hands-on experience and high-caliber expertise in all of your services.

You should not be in business only to make money, but to further your customer service goals.

Most mid– to large–size building service contractors have options available to them to grow their companies.

The choice to expand services must be a result of thoughtful consideration of factors, such as finances, logistics, and even emotional willingness to expand.

However, the process of deciding on a business strategy is continuous and the decisions that result can be critical to the future success and growth of any service provider company.

The right choices can plausibly have a large impact on a business’ growth as well as its bottom line.

Choosing poorly, or deciding to remain stagnant when an opportunity comes about, can lead to decreased potential growth, declining sales, and low profitability.

Actions should be based on objective financial data, consisting of relevant estimates and forecasts.

It is important to keep in mind that not every strategy can be expected to impact your business in the same manner and over the same period of time.

Your ability to compare options is vital because that is the best way to make informed decisions regarding expansion.

Gary Green is chief executive officer of Alliance Building Services. In addition to First Quality Maintenance, one of the New York metropolitan area’s leading building service contractors, the Alliance family includes: Classic Security, Bright Star Messenger Centers, and Onyx Restoration & Painting. ABS clients include: Commerce Bank, The Moinian Group, Swig Equities, Murray Hill Properties, SL Green, Newmark & Co., and Cushman & Wakefield.
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