A local company has just won a big account, leading to expansion into three new regions of the country. As the planning filters through different areas of the organization, the facility manager gives his building service contractor a call. “I’ve got to start staffing new campuses in Raleigh, Phoenix and Indianapolis in a few months, can you clean them for me since we already like how you guys operate? It would make my life much easier. Oh, and I think they might have a day care in one of them and a full-service cafeteria in the other, you guys can handle those too right?”

Before breaking into a rendition of “We’re in the Money,” BSCs need to make sure this dream-come-true scenario is the right growth path for them. Taking on too much just as easily could strain a perfectly loyal customer relationship.

Many industry experts argue the best growth is one dictated by the contractor. In essence, BSCs want to beat their customers to the punch, offering to expand services or to work in new facilities after they have taken the time to determine if they can accommodate such moves. When a customer has to ask, the BSC can be caught off-guard and may answer before truly thinking it through.

“Not only does it give you more time to plan, but suggesting new services to your customer adds value because you prove that you’re constantly looking out for the client’s facility, even before they think of things,” says Thom Collier, a BSC consultant who now is an Ohio state representative and chairs the Economic Development and Small Business Affairs committee.

But even the most planned out operations will have the occasional surprise, especially for smaller contractors who might not have thought much about their first big expansion. In these cases, there are a few things contractors should plan out, even if they only have a few days to respond to their customer.
Gathering the information
Preparing for sudden growth opportunities can be as simple as answering the grade-school combo of who, what, when, where, why and how.

What — As with any new venture, contractors should get all the facts about exactly what this customer is asking them to do. BSCs should treat a customer request just as they would a bid scenario and get as much detail as possible before determining if the job is manageable. If a contractor agrees too soon, it can be much harder to back out or to come back to the customer asking for more time or money.

If the move is into a new service, a BSC has to determine if he or she can bring on the needed expertise, hire the staff it requires and manage it in conjunction with other current work. If the move is geographic and requires new services, is the expansion too large to handle alone or can the company successfully provide new services in a new location?

Where — If a customer’s added facility is just slightly outside of a service area, a BSC might be able to justify taking it on. But if the work is too far away, contractors have to make sure that the profit margins are high enough to accommodate the added resources it could take to set up a remote account or even devote a branch to the area.
“We put a limit of at least 600,000 square feet before we would expand somewhere new, just so we knew we could afford on-site management in that region,” says Mack Wells, executive vice president of Red Coats Inc., Bethesda, Md.

Who — Learning what services are involved or where the new facility is located will help dictate who will do the work. Some contractors may not want to handle all of the tasks in-house, but could subcontract the work or share the contract with another service provider.

Many BSCs try to ally with peers in other cities or states to help ease the burden of future customer expansions into areas or services they don’t cover. Shamrock Building Services, Clearwater, Fla., allies with contractors in new areas local facility managers usually prefer to work with local vendors they’re familiar with, says president Carl Shanahan.

“You can’t just assume that if the corporate offices want you there that the local manager will accept you with open arms,” he says. “That’s why we make a point to work with their current provider, if possible, to keep both sides of the equation happy.”

Another alliance contractors should consider is with a supplier, says Jack O’Connor, a growth consultant and a volunteer for the Service Corps of Retired Executives.

“Include your distributors in all your plans just as you would wish your clients to include you,” he says. “they have a world of background with multiple contractor clients and can help you with a lot of start-up issues.”

National or regional distributors can offer a BSC the same service out of a different branch, or they can refer reliable subcontractors in the area, says Collier. Local suppliers also may find that they can expand with a contractor or at least can refer other distributors in that new area.

When — Some start-ups or new services can take effect immediately, while others provide some leeway. Contractors should be honest about needing whatever time the customer can give so the BSC can gather information and resources, but not to portray an image that the company is scrambling, says Collier.

BSCs should be realistic about what they can do immediately versus taking the new project on in increments, he adds. Sometimes crews can start on one aspect of a job and work up to full capacity in a short time much better than promising everything all at once, especially if the last contractor left in a rush.

How — New ventures will take money and contractors may want to evaluate their cash flow before accepting a project, says O’Connor. They also can attempt to adjust payments, such as billing on the first day of the month when starting, rather than at the end, so needed funds come in sooner.

Finding workers also can be done in many different ways. Contractors can work with temporary agencies to find recruits and company managers can travel to a new site to handle training. Sometimes supervisors are brought in permanently while other companies might hire someone local and just work closely with them to ensure consistency.
Lastly, contractors need to consider how they approach customers in the event they realize they can’t handle the new services requested.

“When we chose to pull back from some ventures, we personally visited the customers and told them what we’d been through and what wasn’t working for us,” says Wells. “Then we offered to find them someone else.”




POSTED ON: 10/1/2001