Back to Basics

Review the building blocks of a sound equipment and chemical program

/DECK--> It’s time. It’s definitely time. There are a few key principles of contracting that demand to be pulled down off our educational shelves on a regular basis, dusted off and used to reevaluate the current state of our businesses. These key principles can be called “the cornerstones of profitability.”

Profitability is, after all, the key measurement of financial success for any firm. Corporations large and small have to make a profit to continue to provide products and services. It also is clear that the “trending” of profitability has much to do with ensuring a positive cash flow position, responsible payable management, necessary future reinvestment and determining the speed of growth. To win the profitability game, your business needs to sustain consistent, above market average margins, at a minimum. The big win is when your business can post consistent increases in profitability that gradually place it in the “margin elite” of your market niche.

So what are these “cornerstones of profitability”? There will be unique differences for every contractor in the priority of these elements, but each element exists to some degree in the daily operations of all janitorial contractors. I liken these elements to a building’s foundation. Without any one cornerstone the building may still stand but will certainly not be as strong. Like a quality foundation, the building blocks are intertwined, with each having decisive effects on the strength of the others.

In the coming months, we will discuss key measurement tips that can aid BSCs in evaluating each of these operational building blocks. I have divided them into four cornerstones: Equipment, chemicals and supplies; labor and human resources; sales and marketing; and administration and finance.

This month, we’ll begin with equipment, chemicals and supplies, an area that can be straightforward and easy to quantify. It also tends to be an area in which costs are undervalued and taken for granted.

When is the last time you determined your exact, per-account cost in this area? Think about your present systems and processes in place for equipment, chemicals and supplies. Now ask yourself if these systems and processes are truly as efficient as you wish them to be. If not, what are you doing to strengthen your processes?

Find efficient tools
Labor may be the greatest single expense to building service contractors, but the supplies you use can have a great impact on productivity, and consequently, labor expense. Tools that help you maximize labor productivity; improve the quality of the work performed; keep accidents in check; and present the most professional business image; each will assist you in growing your business profitably.

To figure out what works and what doesn’t, try using some of these assessment tools:

• Keep up to date monthly physical inventories of all equipment and cleaning supplies aligned to each account or service competency.
• Maintain records of life expectancy, maintenance and warranties.
• Include in your quarterly labor management, regular training time performed by competent in-house technicians or outside equipment manufacturers or distributors.
• Put a plan in place to re-tool each account or service by completing time and work studies.
• Determine the maximum productivity potential for all existing equipment and supplies within these studies. Compare your productivity on these products to industry averages using tools such as the International Sanitary Supply Association’s 358 Cleaning Times.
• Keep up to date with advances in technology by attending trade shows, subscribing to e-mail newsletters, or reading trade publications.
• Perform side-by-side comparisons of equipment and supplies where productivity isn’t meeting expectations.
• Encourage all line employees to ask equipment and supply questions. Challenge them to raise the bar on productivity.