- The Horrors Of Investing Too Much In One Customer
- Client Portfolio Diversification Makes Business Safer
Getting A Handle On Operating Costs
With so much private equity money and tech-driven companies entering the contract cleaning space, BSCs need to focus on continuously improving every aspect of how they deliver their services if they want to remain competitive. Make the commitment to regularly review financial statements. Continuously look for ways to reduce operating costs and stay lean. If there is a major shift in business with lost revenue, cut overhead that can’t be supported immediately.
Getting a handle on operating costs begins with knowing the numbers. The cycle starts with bidding, moves to how well one manages every aspect of the operation and ends with the customer. Simply put: How efficiently can a company convert revenue into profits?
Take the time to establish a well-crafted bidding process or pricing model. If BSCs are just plugging numbers or using “an industry standard” percentage, it’ll come back to bite them. If BSCs haven’t updated things like workers’ compensation rates on bid sheets in a few years, they could be in for a wake-up call. Stay current, ask quality questions and continuously seek out new insights.
When gathering input, if people are saying, “That’s the way we’ve always done it,” take the time to understand why it’s being said and challenge it immediately. There’s always opportunity for improvement. Most people, especially owners, are conditioned to look at their business in a certain way. It’s how they’ve been trained. Things seem fine if the profits are decent and customer complaints are minimal. Kill the monsters when they’re small. Take the time to ask quality questions about the organization’s performance and develop a culture of continuous improvement.
It’s the leader’s job to stand guard at the door of the business. Most people got into this industry because they wanted to make a difference, not because they wanted to be in an office reviewing spreadsheets. Owners have a vision for how the business should be run and how services are delivered. Unfortunately, too many business owners get more excited about the details of running an operation than they do about protecting and ensuring the financial health of their organization. Anybody can steer the ship when times are good, or even when they are mediocre. Being in a position of leadership is an absolute privilege. Leaders are there to serve and add value to employees, clients, stakeholders and vendors.
Whenever a leader feels stuck or feels like their business has hit a plateau, seek out help. Being a BSC can be an extremely rewarding and lucrative career, but it’s critical to ensure that time and energy is focused in the right places. The only way a business is going to get better is when its leader gets better. Here’s the good news: It’s never too late to get on the right track.
Gregory Montesano is owner of The Prevailing Group in Stamford, Connecticut. The advisory firm works exclusively with service providers and contractors to uncover strategies that will save money and time, as well as boost the bottom line. He can be reached at firstname.lastname@example.org. Learn more at www.prevailinggroup.com.
Client Portfolio Diversification Makes Business Safer
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