Business owners face multiple challenges related to the uncertainty and tight credit policies that are a result of the economic downturn and insolvency of the worldwide banking system.
Although most people and businesses have gotten over the initial shock of a recession and the decline in real estate values, business and consumer confidence have yet to return to pre-recession levels.
Everyone is more cautious and insecure today compared to several years ago.
Prices, sales, inventory and hiring are down, while unemployment, interest rates and bankruptcies are up.
As a cleaning business owner, you need to be extra diligent in finding more efficient ways to run your operation and meet the changing needs of your customers.
The margin for error is minimal — from little to none.
You no longer have the luxury of floating on past performance or your existing customer base.
To survive, or better yet to thrive, in a marketplace that is developing, you must pay close attention to the details of operating every aspect of your business as efficiently as possible.
This is no easy task, but it is possible to accomplish; more importantly, it is a requirement for success in today''s ever-changing business climate.
If you don''t learn to adapt and move quickly in a changing marketplace, the chances are good that your business will not survive.
It is more than likely that the financial turbulence of today will become the norm of tomorrow.
Adjust, get used to it and go forward.
It is a different way of doing business and a reality that we must face in order to prosper.
What''s Needed For Success
It all starts with the owner or manager having the "right" overriding attitude and philosophy about business operations and management.
Specifically, a willingness to embrace, live by and promote within all areas of the business the concept of "Continuous Process Improvement."
The idea being that you should never be satisfied with the status quo.
A critical part of the manager''s or owner''s job is to find and encourage others to look for ways to improve the way the business operates each day.
There also needs to be a sense of urgency and a willingness to quickly analyze and take action in order to gain and maintain a competitive edge over the competition.
The difficult part is that this may require a leap of faith on your part.
You must firmly believe that you know what you are doing and are making the right decisions, even when you can''t prove it and when others question your actions — and your sanity.
A primary goal of the business owner or manager must be the desire to gain and maintain a competitive edge over your competition.
Write it down, read it daily, develop an action plan with due dates and make it happen.
Obvious Places To Look For Improvement
Look at management.
Are you utilizing computerization in as many aspects of your business as possible?
Are letters, proposals and bids standardized?
Do you have written policies, procedures and checklists that outline and help assure that things will get done the way they are supposed to be done?
Do you get regular financial reports and are you using them to determine how to operate your business?
Do you receive and review a monthly or quarterly balance sheet, profit and loss statement, along with income and expense projections?
Have you updated your credit line and credit cards to see if a lower rate is available?
Are your credit line and cards secured?
Many companies are being notified by their banks and credit card companies that limits have been lowered, rates have increased or accounts have been cancelled.
It is also a good idea to audit your state and federal tax reports to make sure that you are taking advantage of all the programs and deductions that are available.
This includes looking for ways to reduce unemployment and worker''s compensation rates and claims.
Review insurance policies as well as phone, cable and Internet service provider (ISP) contracts and put these out for competitive bid.
You may be surprised at how much you can save in these areas, especially if you haven''t gotten quotes in a couple of years.
Some business owners suggest raising your prices to cover higher costs.
This may be a risky option as it encourages your customers to put your account out to bid.
What if you lower your prices?
Well, you control your costs; you don''t control your customers'' budgets.
Therefore, it makes sense to deal with what you do control rather than what you don''t control.
If you want a price increase, reduce your labor costs internally instead of asking the customer for more money.
Many contractors report that they are getting cancellation notices from some of their customers who are facing hard times.
Take a proactive approach and talk to your customers to let them know that you value their business and will do whatever it takes to retain them as a customer.
Let each customer know that you will be taking a close look at their account in an effort to find cost savings without reducing the quality of service provided. Then, pass the savings on to the customer.
This will go a long way in cementing your relationship with each customer and will help you avoid unexpected cancellation notices.
Look at cleaning specifications for cost savings.
Specifications are often excessive because they are added to over time in an effort to improve quality.
Look at cutting in half the frequencies for burnishing, stripping, scrubbing and recoating hard floors.
Frequencies are often based on the type of floor covering and not the needs of each area in a building or facility.
Do the same for carpet cleaning: Will low-moisture interim cleaning allow you to delay the need for more expensive deep cleaning?
Another area to look at is window cleaning.
Can frequencies be cut in half without a significant loss of appearance, or can you schedule only the most visible glass and delay the cleaning of less visible areas?
Can you reduce an eight-hour position to seven hours per day? Chances are that doing so will have no impact on quality in most locations.
Realizing that the cost of cleaning is all about production rates, don''t overlook the value of and the need to provide ongoing training and upward mobility for your staff, especially during times of financial uncertainty.
The reality is that you are going to pay a fair cost for labor one way or the other.
You can develop your staff and increase production and reduce turnover, or you can pay higher costs for supervision, employee turnover, account cancellations and hiring costs.
We are often so busy selling and servicing our accounts that we don''t take the time to develop the employees who make it all happen.
Marketing And Sales
This is another area where backing off substantially would be a mistake.
New business is the lifeblood of the future.
Accounts will always come and go, but if you don''t take steps to bring in new business on a regular basis, you''ll end up losing accounts and not replacing them — which means your business will shrink in income, profit and opportunity over time.
Instead of cutting back on sales, take a more proactive approach; get involved, monitor and guide sales and marketing on a daily basis.
Start by setting goals for the sales staff, getting and reviewing daily reports and holding people accountable for creating the activities that will bring inquiries, bid opportunities and sales.
The art of sales is truly a combination of physics and mathematics.
It''s a numbers game — the more action you create, the more reaction you get.
It''s a law of physics that will repeat itself over and over again — if you just create the action, you''ll get the reaction.
Equipment, chemicals and procedures play a key role here.
Technology is changing quickly in the cleaning industry, and with it comes opportunities to improve the quality of the services provided while reducing labor costs.
The list of emerging technologies is growing rapidly with such products as diamond impregnated floor pads, vapor cleaning, electrolyzed water autoscrubbers and foam cleaners that reduce labor by 70 percent.
Push your local suppliers to bring you the latest technology that will reduce labor.
If they won''t or can''t, search the Internet for what you need and buy it online.
Monitor your supply usage closely at each account.
Don''t overstock or leave closets unlocked or supplies out in the open with uncontrolled access.
Seeing The Future And Reacting
To gain a competitive edge and hold on to it, you must make an extra effort to watch for trends that will impact not only your business, but that of the customers you serve.
The cutting edge is constantly evolving and moving or it wouldn''t be the cutting edge, it would be old news.
To stay on top of what''s happening today and where things will be going tomorrow, you will need to monitor and use what
you learn on Internet forums and discussion boards, watch the nightly news, read the newspaper, study trade magazines and talk to your customers, suppliers and competition.
Proactive in-house cleaning employees and building service contractors also attend trade shows, seminars, webinars and other educational events.
These are the actions that will help you gain a competitive edge and will enable you to prosper, even in tough economic times.
Wm R. Griffin is the president of Cleaning Consultant Services Inc. For more information, please visit www.cleaningconsultants.com.