Customers continue to seek budgetary cuts in the wake of the recession, which means they often want to pay less for cleaning and maintenance services. But rather than slashing rates and doing more for less, savvy building service contractors are offering value-added services, such as subcontracting pest control, to keep existing clients and attract new ones.

One area getting serious consideration is pest control. But it’s a service cleaning consultants recommend wading into with caution.

“It’s not something that’s easy to get into,” says Bill Griffin, owner of Cleaning Consultant Services Inc., Seattle. He explains licensing and certification requirements and the potential liability incurred when using hazardous substances to kill pests create obstacles that may be difficult to overcome.

There’s more to adding pest control than just expanding a company’s service offerings, agrees Ron Segura, president of San Francisco-based Segura & Associates.

“Unless a company has tons of dollars to spend it’s not cost efficient to bring pest control in-house,” he says. “You might have better control in-house but it’s going to cost more money.”

Finding a subcontracting partner

“If you have a pest control company in your area, you may want to form a partnership with them,” says Segura. “You can bundle their services within your own contract. Bundling services is financially advantageous for customers. It’s also beneficial because they can deal with one vendor for all their facility services. Adding pest control is also advantageous for you because it makes you more valuable to the customer.”

However, partnering with subcontractors requires due diligence. BSCs must do their homework to find pest control contractors with good service records. Operations can tap into local Chambers of Commerce and other business groups for this information. Or building service contractors may be able to partner with a pest control company already working in some of their accounts.

“The main thing is to research who is available, who is reliable, how long they’ve been in business, and whether or not they’ve been sued,” says Griffin. “Then talk to them about the confidentiality issue. Are they comfortable working as a subcontractor? Make sure they won’t go after the business themselves.”

Agreements with subcontractors require a non-compete clause. They also need to include a markup on the business. While BSCs typically include a 30 to 40 percent markup on services, Griffin says their cut will be less when subcontracting the work. Typically that percentage is around 10 percent to cover billing, reporting and work inspection costs. However, in the case of pest control, Griffin recommends BSCs receive at least 20 percent to cover their liability.

“If there’s a lawsuit down the road, the BSC is going to be sued, too,” Griffin says. “Whether or not you did the work you are part of the equation.”  

While pest control may not be an area all BSCs can realistically tread into by themselves, it’s still a service worth consideration.

“In order to be successful in today’s economic climate, BSCs need to be creative and think outside the box,” says Segura, “Although you may not have the services in-house, the more services you can offer through partnerships you bring to the table, the more value you bring to your customers.”

Ronnie Garrett is a freelance writer based in Fort Atkinson, Wis.




POSTED ON: 5/29/2012