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Three ways to remove costs
by Richard BodoI used to visit with a distributor who was very successful at growing his business.
In fact, this distributor built one of the most customer-centric organizations I have ever dealt with.
His employees had an uncanny ability to relate to their customers.
A weird signDuring one of my visits, as I was walking through the office, I noticed a white 8.5-by-11 sheet of paper taped to a door that simply stated in black and white, “It’s the labor, stupid.”
At first, I admit I was taken aback by the sign. It seemed out of place in such a professional environment.
What’s more, I began to notice the signs throughout the building: In stairwells, on cubicles, in bathrooms. They were everywhere.
I finally asked the owner what the deal was with all the signs, and he explained to me that it was to always remind his organization that the best way they could help their customers was by helping them to save on labor.
That was a very interesting concept, and one that I feel is generally misunderstood in the “cost-conscious” society we operate in today.
Do some serious analysisOften, we may look at our chemicals and purchase a lesser, cheaper brand to keep up with the job we are being asked to do — and to save a few bucks.
Or, perhaps, we have looked at equipment that would help us get the job done much faster and thought, “I just can’t afford that right now.”
I would propose that not only could you afford it, but more importantly, you can’t afford not to have it.
We must remember that, on average, chemicals only make up 10 percent of total cleaning cost, while the labor to clean makes up 90 percent.
If you save 10 percent on your chemical costs for the entire year, you just saved 1 percent of your entire budget.
However, if you save 10 percent on your labor costs, you just saved 9 percent of your entire budget.
What could you do with an extra 9 percent on the bottom line?
With those thoughts to hang your hat on, let’s look at three simple concepts you can incorporate into your business plan to help remove costs from your business, and make your business more profitable.
More effective cash-flow managementWe often think of leasing only for vehicles, but it is also an effective way for you to spread out your investment on equipment, and this will save you on labor costs.
While the types of leases that are available to you can vary dramatically, two of the most popular kinds of leases right now are 10 percent out and $1 out.
Here is how they generally work:
With a 10-percent-out lease, you have a fixed monthly payment and pay 10 percent of the initial value of the machine at the end of the lease, in order to assume ownership of the item.
With a $1-out lease, you have a fixed monthly payment and pay $1 at the end of the lease, in order to assume ownership of the item.
In addition, a lease is a fixed payment in your budget.
At the end of the lease, you may decide to buy out your equipment or acquire new equipment on a new lease to meet the needs of your business at that time.
The key here is that with a payment in your budget, it is much easier to manage your growth than having to pay lump sums for your equipment.
In short, you have a lot of flexibility with a budgeted payment.
When leasing, be sure to shop around to find the lease that is right for you.
And you may not have to shop very far. Your friendly local supplier might just be able to set up a lease package for you.
More effective equipmentFor today’s cleaning professional, there is a broad array of choices when it comes to equipment, much broader than just, “What color do I want?”
Today’s machines are being made to do more, such as scrub and polish in one pass on hard floors or extract and interim clean on carpet.
Moving from corded equipment to battery-powered equipment is also a labor-saving concept.
Typically, a battery-powered piece of equipment is 30 percent more productive than its corded counterpart.
Here are a few ideas.
On carpet, vacuuming is one of the most labor-intensive steps, as well as the key to a clean carpet.
For those who perform large amounts of commercial carpet cleaning, move from upright vacuums to wide area vacuums or even the new riding vacuums to increase productivity during this step.
For those who do large quantities of hard floor cleaning, battery-powered sweepers can replace manual dust mopping and scrubbers that combine polishing and scrubbing can consolidate two steps into one.
Additionally, wider scrubbers will give your productivity a boost.
While they cost more upfront, they could have a dramatic impact on your productivity when you consider employee fatigue.Think about it this way. If an employee operates a piece of equipment for four hours, moving at 2.5 mph, they just walked 10 miles, and they still have half a shift left.
How effective are they going to be?
With riding equipment, the fatigue factor is dramatically reduced, if not eliminated.
More effective processesDispensing stations that meter out chemicals and take the “glug” out of mixing are an effective way to be sure that chemicals are being mixed properly and quickly.
Proportioning your chemicals correctly cuts down not only on chemical costs, but also on labor.
When you use the correct amount of chemicals on each job, you do not have excess chemicals to remove during your cleaning application, thus cutting down on time spent removing chemicals you did not need in the first place.
Look for “interim cleaning methods” that can cut down on labor, while maintaining a high level of appearance and clean environment.
These methods are characterized by their high production and low cost of cleaning.
Often, we have the mentality that the floor needs to be stripped every time we clean or the carpet needs to be extracted every time we clean.
While both these processes need to take place, interim methods can help stretch the time between restorative cleanings, and cut down on your labor costs.
For example, when maintaining carpet you might utilize encapsulation or crystallizing technology that will allow you to quickly and effectively remove soils from the carpet.
This is an extremely effective way to clean carpet so that you can extend the time between labor-intensive extractions.
When maintaining finished surfaces, you might want to try a top scrub where you remove a few of the top layers of finish that have been exposed to a lot of traffic, and leave the rest of the finish in place.
This allows you to lay a few coats of finish and really freshen up the floor without all the time and labor of a full strip and wax.
It’s all about the dollarsSo there you have it: A quick look at three ways you can take labor cost out of your business.
Remember, in the cleaning business, it’s the labor that will have the biggest impact on your bottom line.
So it makes sense to re-evaluate how you are approaching your business in terms of equipment and labor. Go to http://www.advantagecleaningteam.com/ or http://www.janiservu.com/
