Several years ago, a cleaning contractor in Northern California took some time off in December to evaluate his business. The business had grown during the course of the year, but he became concerned about the types of accounts that he seemed to be adding to his client roster. The bulk of the new clients were small accounts, usually serviced once or twice per week at most. Only two new clients—both fairly large facilities—were being serviced five nights per week.
This is not uncommon for the typical mom-and-pop (or bigger) cleaning service. The list of clients often looks like a pyramid, with a few large contracts at the top and smaller and smaller clients filling up the bulk of the pyramid as you drift down to the bottom. But the reason for his concern was this: It was the smaller customers that were often the most demanding, the most frequent complainers, the slowest paying, and the ones requesting special services above and beyond what they were paying for. By comparison, once an effective cleaning system was up and running with the two new large clients—as was the case with his company’s other large clients—they were not demanding, complaints were few and far between, the work moved along like clockwork, and if they requested special services, they paid appropriately.
The insight he gained into his business helped him strategize for the coming year. It also confirmed for him that the end (or beginning) of each calendar year is a good time for a business assessment. You also may want to reflect on your business at this time of year. As you do, ask yourself a few questions:
• Is the business growing?
• Is the business where you want it to be at this stage and time?
• Are you attracting the types of customers you want to attract?
• Is your marketing proving effective?
• Are you having more complaints or fewer complaints from customers, and where are they coming from?
• Do you have a profit margin for all accounts, and are all of your accounts meeting or exceeding this margin?
• Is your staff being adequately trained and knowledgeable of state-of-the-art cleaning methodologies?
• Are your cleaning tools and equipment the latest in technology to help increase worker productivity, improve cleaning performance, and protect occupant health?
When you sit down and begin a year-end evaluation of your business, it soon becomes clear that you may have many issues to examine. Do not rush this process. This is not something you do while you have a few minutes over a cup of coffee. Take the time to really think things through. In some cases, it may take a little time before these issues are addressed and clarified to your satisfaction.
In addition to the day-to-day considerations noted above, there are at least four “big-picture” items you should also evaluate.
1. Are You Happy with Your Business? According to a May 2014 study reported in Business News Daily, although there are a variety of aspects that entrepreneurs enjoy about owning a business, there are nearly as many things that they dislike. It is not uncommon for some business owners, including cleaning contractors, to reach a point after several years when the dislikes outnumber the likes. However, many business owners hold on to their businesses no matter what, because it is the only thing they know or they are anxious about starting a new business or career. And if the business is providing a comfortable living, it can be even harder to let it go. If you are unhappy running your business, you may need to come to terms with this issue. It does not necessarily mean giving up the business, but it might mean playing a different role. For instance, the California contractor mentioned earlier found he enjoyed the sales aspect of his business but not the day-to-day operations. So he hired someone to operate the business while he focused on what he enjoyed and did best: marketing for new customers.
2. What Is Your Business Progression? Take a look not only at the past year, but the past three or four years, and then ask yourself some questions: What do you see as the key accomplishment of your business in the past years? If you have goals for the business, are you accomplishing your goals? If not, which goals have not been attained and why? What skills have you learned interacting with your workers and your customers that can help you in the future? Where do you see opportunities for growth, and where did you miss opportunities that may still be available in the future? Do you believe you and your business are doing better today than was the case a few years back? As you are likely beginning to see, these are thought-provoking issues. Although you should consider all of them, you do not need to address them all at the same time. In addition, while many of these issues are for you alone to decide, in some cases it can be helpful to discuss them with a business coach or someone you believe understands you and your business.
3. Do You Have a One-Year and a Five-Year Plan? Former Yankees catcher Yogi Berra is famous for saying, “If you don’t know where you’re going, you’ll likely end up someplace else.” We’ve all heard of the importance of goals; however, many business owners do not take the time to develop goals for their businesses. One of the leading presenters at ISSA tradeshows starts each year by determining what his focus will be for that year, what ideas and concepts he wants to promote, and what he wants to accomplish. He then breaks these goals into segments. Some goals are to be accomplished in a few months, others in a year, and still others in the next few years. His goals are designed to take him where he wants to go—and so should yours.
4. What Is Your Career Vision? This consideration is related to all of the items we have just discussed but takes your business out of the picture. Ask yourself what you would do if you could do anything you wanted to do. You might very well find the answer is own your own contract cleaning company, but you might also find you have something else in mind. If this is the case for you and you want to make a career or business change, be reassured that you have some strengths working for you already. First of all, if you have operated your business for a number of years, you have proved to yourself and others that you know how to run a business—something many people cannot say about themselves. Second, you can view your business as an asset. Many contract cleaning companies run well more or less on their own, with enough money coming in to allow the business owner the time and resources to investigate and even start another business.
I hope that some of the issues here have expanded your view of your business and personal goals. Evaluating where we have been and where we are going is a valuable exercise we should perform every year. It can seem like a big undertaking, but as mentioned earlier, not every issue has to be addressed immediately. The important thing is to assess your business and your goals regularly so that you know you are always on the right track.
Michael Schaffer is a senior executive with Tacony’s Commercial Floor Care division. He is also president of Tornado Industries®, which manufacturers a full line of professional cleaning equipment and CFR® brand carpet extractors that recycle water and cleaning solution.