Want to maximize the control, profit and financial security of your cleaning business?
If so, aim to be the janitorial business owner who holds the cleaning contract with and works directly for the building owner – rather than a sub-contractor who simply performs the service for a large regional cleaning service or national maintenance management company.
Learn from the lobster.
You know which lobster – the unlucky, unwary one.
The unsuspecting crustacean, aka lobster, was placed into a pot of what was at first – lukewarm water, but soon met his unfortunate fate ; being out-smarted by the experienced cook who slowly but steadily increased the temperature of the water, one degree at a time – until boiling.
Result? One cooked lobster who didn’t recognize what was happening until it was too late.
Many of today’s janitorial businesses can be a lot like the unfortunate lobster in our story, only in this case, rather than a pot of water, these cleaning companies are lured into accepting one poorly structured sub-contracting agreement after another – until they’re financially ‘boiling’.
It’s true – an inexperienced or struggling cleaning business owners desperate to find more work, can quickly find they’re signing deals which consistently leave them on the ‘short end of the financial stick’.
That’s right, by accepting low profit, low control, high-frustration sub-contracting arrangements where the work is done for a large, often distant 3rd party middleman, local cleaning business owners can begin to wonder why they’re working harder than ever – but without ever seeming to get anywhere financially.
In many cases, fear is the culprit.
Uncertain how to find or land new accounts on their own, janitorial businesses may find themselves reluctantly but repeatedly agreeing to deliver cleaning services as a sub-contractor – falling into the easy trap of thinking ‘any work is better than no work – a misguided philosophy at best; and one with potentially devastating consequences.
So, what’s so wrong with sub contracted cleaning jobs anyway?
Well, maybe nothing, maybe a lot. Let’s say a 3rd party national maintenance management outfit calls and asks a local janitorial business to work for them as a subcontractor at three nearby bank branches. And, let’s further say these branches are just a few of more than 350 located nationwide the management company has signed on to manage for the customer (the party who signed the national deal with the building(s) owner).
If the agreement provides for enough travel, cleaning and supervisory time to reasonably and consistently deliver professional cleaning and at a price that not only covers all expenses, but provides for a reasonable profit for the nature and difficulty of the work as well, then there’s nothing necessarily wrong – if the cleaning business sub contractor doesn’t mind the lack of first position, direct contractual connection with the customer (the party who signed the deal with the management company).
That’s right, if they’re willing to play by the rules required by the 3rd party middleman and are comfortable accepting the terms of the subcontract agreement, then the arrangement, while not ideal, may be acceptable.
However, the problem occurs when the subcontracting agreement doesn’t provide the local cleaning business with either 1.) a sufficient amount of cleaning time (labor hours) to personally clean the building or to assign to an employee to properly clean or 2.) an adequate profit after expenses.
If either one of these two conditions occurs, the problem of having to take a virtual ‘back seat’ position in the deal (low-control) can quickly fade in comparison to the service and financial pressures of – too little time (cleaning) or too little money (profit).
It serves as another reminder that – busy does not necessarily equal profitable.
Unfortunately, this truth, which seems so reasonable and easy to understand, can quickly get lost in the rush or at times, near panic of a local cleaning business owner desperate to find new cleaning jobs.
These cleaning contractors can in some ways be compared to sailors lost at sea in a life raft, who after days of dehydration find themselves desperately, mindlessly drinking ocean water – satisfying their momentary thirst but while often creating even bigger, more dire consequences.
In a similar way, commercial cleaning companies who decide to grow by carrying out the ‘heavy lifting’ of performing the actual cleaning for a larger and/or more experience national cleaning or management companies – might soon find they’ve paid a high, long term price for a short term convenience.
Let’s look at an example NOT in cleaning – specifically, the difference between buying and leasing a car. There is always a price to pay for something done for you.
Don’t want to deal with the hassle of finding a buyer for your old car? No problem, the dealership will deal with that hassle so you don’t have to – for a price.
Don’t want to deal with having to do the homework of shopping around to compare lenders and rates for a loan? No problem, the dealership will help you there too by arranging for financing for you as you sit in a comfy chair in the shiny showroom – for a price.
So it is with all things – there is a price to be paid for every convenience, every hassle eliminated, any responsibility moved from your lap to someone else’s.
You don’t have to find the lead. You don’t have to attract the lead. You don’t have to make the sales presentation. These functions can be taken over by a 3rd party like a large regional cleaning business or national management maintenance company – but not without a cost.
On the other hand, being the contract holder – the party who holds the signed bid proposal and agreement with the actual owner of the building or buildings to be cleaned has a number of advantages including – not having to share profit dollars with an additional 3rd party, as well as, regular, direct contact with the customer.
If after thorough review a local cleaning business can find profitable subcontracting opportunities offered by reputable management companies; structured in a way that allows for adequate cleaning hours, profit as well as wage rate to keep the account consistently clean and staffed – then, taking a controlled percentage of these kinds of accounts, while not ideal, may be acceptable.
However, in general, we suggest independent janitorial business owners build their companies by learning how to find, land and keep cleaning accounts by and for themselves – rather than having to turn to outside, 3rd party national cleaning or management companies for work.