Q & A
The Problem Solver
Q: Mr. Griffin,
I have a small but gradually growing cleaning business. How about some ideas on increasing my profits?
Thanks, Gurf Blenson, Sploogelville, Wisconsin
A: If you're like most small business owners you want to make more money. At first glance we usually equate this to mean more customers and more work. A closer look will reveal that another possibility existsto generate more income and profit from each account you have or job you do. This in fact is much easier to do and a better way to earn more money. New customers, although a good source of more income, also come with increased costs of marketing and more time and effort on your part.
Let's take a look at several ways you can increase income and profit without much additional cost or work:
1. Raise Your Price.
This is the most obvious option. Many cleaners are afraid to charge more because they believe the price will be too high and they won't get the job. In some cases this may be true, especially on larger commercial projects and if you are bidding competitively against several other companies. At the same time, in many situations the real challenge is to present yourself and your service package in such a positive manner that the customer is willing to pay a higher rate because of the perceived value of the services they will receive. This is the difference between bidding and selling. All too often we are the ones who keep our prices low because we have convinced ourselves we can't charge more. This is the wrong approach. This is one decision that you should not make for the customer. And it's one of the reasons you don't make as much money as you would like to or could. You can rest assured that right now in your area another small business like yourself is charging and getting more than you are.
2. Be More Productive.
This means getting more work done in less time. Usually the response is "I'm working as fast as I can now. There is no way I can do more and still do quality work." That statement may make you feel good about the work you do, but it won't increase your profit and it's the wrong attitude for a professional cleaner. It's possible that you're right, but to make more money you need to develop an "I can do that" attitude and constantly be on the look out for new and better ways of doing things that will increase your production and reduce the time it takes to do the work and to get between jobs. The mind set we need to have is known as "Continuous Quality Improvement." Every day in every way we challenge ourselves to not only improve the quality of the service we offer but also to find ways to reduce the time it takes to get the work done. Some possibilities may include the use of different equipment, tools, and scheduling. You have to keep in mind that if you keep doing things the way you have always done them you will get the same results. To get different results you have to change the way you do things. This will take a conscious effort on your part. You'll have to think through the processes that you use and experiment with different methods and equipment. Talk with friendly competitors, they probably have some tips you can use. Read industry publications and attend industry trade shows where you can spend days meeting and talking with others who face the same challenges that you do. And, of course, order educational and training material from us here at CCS, Inc.
3. More Income From Each Customer.
Are you selling related add-on services? If not, someone else is getting money for which you probably wouldn't have to do much more than ask for the work to get it. Some possible examples include pressure washing driveways, sidewalks, building exteriors, roofs and eves. How about cleaning awnings, shutters and screens? Replacing damaged or missing screens and broken windows? What else does a small business or home owner have that needs cleaning or that they now purchase from someone else that you could, with a little imagination and effort, provide that would increase the size of the check that they write to you? I'm sure some will say. "I'm a window cleaner not a pressure washer or a gardener. There is no way I'm going to do that kind of work." That may be and that is your right to decide. At the same time the world we live and work in is changing around us. You can change and grow with it or perish.
4. Reduce Your Costs.
Another option is to reduce your costs. To be effective you need to concentrate on reducing your largest expenses. In a small service business this is usually the labor category, with supplies, chemicals, equipment and overhead accounting for the rest of your costs. What are the options here? Any time we can utilize a piece of equipment or process that reduces labor it is usually a good investment. As we all find out in business, it is real easy to spend money and much more difficult to make and keep it. The primary question to ask when looking at expenses is, do I need this to make money and how much is it generating right now? Sure, you like to have an office and a shop. But could you operate out of a van, your garage and a kitchen drawer? If you can and that's money you could use to build the business or you could put in your pocket, it should be given serious consideration. Such decisions are difficult to make, but necessary if push comes to shove and the survival of your business depends on it. There a lot of things that you think you have to have but would quickly find out you can do with out.
Good Luck and Keep it Clean.
Wm R. Griffin
Q: Besides the yellow pages, how can I market my janitorial service?
Joel Schmenge
Beaver Creek, OK
A: Dear Mr. Schmenge:
There is no one best way to find new customers for a cleaning business. Your pre-start up planning process should include in-depth research. This will help identify your best possible customers and what other similar businesses are doing to market their services. As you market your services, gather information you can use to develop a data base of potential customers. It is important to understand the realities of the marketing process so you don't become frustrated and give up.
1. Marketing is a numbers game. The more you do of the right things, the more inquiries you will generate. The more bids you submit, the more jobs you will get.
2. Marketing takes time. Just because you're selling today doesn't mean the potential customer is buying today. Selling cleaning services is like farming. You have to clear the land, plant the seeds, water the sprouts, prune the bush and over time your efforts will blossom. Finally, if the sun shines, you will have an opportunity to pick the fruits of your labor. However, don't expect a lot of sales for six months to a year.
3. There are no guarantees. Business and marketing are both a form of gambling. The key is to do everything you can to improve your odds before you place your bet. That's what a business plan and marketing research are all about.
4. Do the basics. Some good places to start include: cold calls, on the phone and walking in the door; mail personal letters with a business card and brochure; run small ads in local newspapers; tell everybody you know and ask for referrals. And most importantly, keep accurate records and follow up every 4 to 6 weeks with each potential customer.
5. Be a specialist. Start with a small geographic area and concentrate on getting every customer within three miles before you offer service to the entire county. Find a service that is needed, is profitable and not already overcrowded. You will see results if you specialize in the type of business, size of account and the type of service you offer. Examples include: janitorial services, on-site upholstery and drapery cleaning, window washing, high-pressure washing, wood floor care, house cleaning, or hood and duct cleaning. Account types include: doctors' offices, attorneys, grocery stores, small office buildings, large office buildings, homes, apartments, industrial, schools, hotels, and restaurants, etc.
6. Keep accurate records. Know where your inquiries and customers come from and continue with those methods that work best.
7. Never stop selling. New sales are the lifeblood of every business. To grow and replace lost accounts you must generate new business. The only way to get new business is to continue your marketing program.
Lack of sales is a major problem for most small businesses. Once they get money in the bank and a few regular customers, many small business owners stop marketing. When you lose customers then income shrinks; then it's difficult and takes time to get the new business coming in again. All too often, the business goes broke first. As the income increases so do your expenses, which are not as easy to cut back when the income is reduced.
Good Luck and Keep it Clean.
