Diversification: The Market Is Ready, But Are You?

Last month’s cover story, “Fundamental Shift,” described the changing janitorial landscape. Commercial, industrial and financial facilities have been hit hardest by the recession, forcing facility managers to severely reduce their cleaning frequencies. This month, we continue our look at the new terrain and address how building service contractors are still finding opportunities for growth, despite the recession (See “Game Plan For Growth”).

One trend that is primed to accelerate in this economy is diversified services. For years BSCs have used this strategy to expand profits — after all, it’s easier to earn additional business from existing customers than it is to find an entirely new client. In addition to janitorial, BSCs offered grounds care, snow and ice removal, HVAC cleaning, pest control and security services, to name a few examples. Diversifying works because customers appreciate the opportunity to pare down their list of service providers.

But now with the recession, diversifying is not just a way to add revenue, it’s a way to make up for lost business. With cleaning being reduced, why not spend that time servicing other areas of the building? Customers still get the satisfaction of working with a contractor they trust, plus there are fewer vendors to work with, fewer invoices to handle and fewer checks to cut.

If BSCs don’t have the expertise on staff to offer these specialized services, they can subcontract the work. But be careful: it’s important to know who you are hiring. This company is considered an extension of your business and represents you in front of customers. Jim Peduto offers tips for subcontracting the right way in his “Contracting Insights” column.