When we calculate a bid, we add up all our costs, add a percentage for profit and come up with a magic number that we hope will get us the job.
Challenges include knowing what our costs are and being able to control those costs.
In April, I attended the World Federation of Building Service Contractors Convention (WFBSC) in New York City.
Mary Miller, one of speakers, caught my attention as her topic was how to eliminate employee turnover.
Going beyond that, how do we get our employees to do the best possible job they can each day.
First, she was talking about reducing the cost of finding, screening, hiring, training and firing employees.
High employee turnover rates are something we take for granted in the cleaning industry.
Studies indicate industry turnover rates from 75 percent to 300 percent or more.
We often don’t realize how much these high rates of turnover cost us.
The numbers I see range from $100 to $500 per employee who leaves your employment.
If you can reduce turnover, then overhead costs are reduced, and you can submit a more competitive bid and still earn the profit needed.
Second, Miller asked how we get employees to be productive and motivated when completing assigned tasks?
This has always been a problem for the cleaning industry as most people don’t select or see the cleaning industry as a career path or goal.
They end up here because they need a job and for one reason or another, they never left.
Our challenge becomes one of getting and keeping people excited about cleaning toilets, sweeping floors and dumping trash cans.
Good luck with that.
My theory is that when we hire people, we say the wrong things.
We talk about the toilets we want cleaned (the job) and instead we should be talking about what we offer (the opportunity).
Back to Miller, her concept is to help each employee identify their personal dreams and then come up with a plan and support system to reach them.
This is powerful stuff and I think she is on to something that we need to pay attention to.
I have long promoted the idea that we need an upward mobility ladder in the cleaning industry, and we need goals to focus our lives and energy.
Miller’s “Dream Manager” is a way to do that.
I truly believe she is offering us one of the key pieces to the puzzle of building a successful business and industry.
Establish a program to help people identify and reach their dreams, and they will provide the motivation to do the best job possible in the least amount of time.
This will reduce costs and allow operations to be more profitable and more competitive.
Check it out, read the book, apply the concept and replace your turnover problem with one of figuring out how to deal with rapid growth and higher profit.
Google The Dream Manager; it costs about $20 on Amazon.
Gary Clipperton and Lynn Krafft have been answering questions on the ICAN/ATEX website in conjunction with CMM for going on 10 years now.
We get all kinds of questions, but the number one question is: How much should I charge?
And our answer remains the same: There is no magic number.
You have to collect the basic information you need about the job you are bidding on, and you have to know what your costs are.
Once you have these two sets of figures, you can begin to calculate a realistic price.
Doing it any other way is a total shot in the dark and may have nothing to do with what you should charge in order to provide quality service, pay your bills and turn a profit.
At ISSA/INTERCLEAN Amsterdam, I attended a keynote presentation for the Young Cleaning Professionals group, all under 35 years old.
Yes, there are some, but only about 10 showed up.
The presentation was by a local cleaning contractor who has been experimenting with a new customer service and business model.
His concept is to use self-directed employee teams and total open transparency with the customer.
All the numbers are on the table, and after costs, the agreement is that he gets to add 5 percent profit.
If the company earns more profit it is returned to the customer and or shared with the employees.
After three years, his division has roughly 350 employees and does about 10 million Euros in business per year.
An interesting concept; my disappointment was that only a handful of young people showed up to hear the presentation, yet in the show hall at least 30 percent of attendees were under 35 years of age.
For some reason the organizers are not reaching these people.
Maybe they need some gray beards as mentors to help them with the process.