Expand your footprint cautiously and for the right reasons.
Growth is central to the success of any business, but all too often owners confuse growth with size. They’re not the same. I’ve built five businesses from scratch, all in some way connected to the cleaning and maintenance industry. I could write a book about the do’s and don’ts of growing a company, but let me boil it down to the most important points. Big is not always what it’s cracked up to be. It doesn’t always mean better or more profitable. Quality service will always trump size and deliver real business growth and profits.
Footprint Folly
Let me share my own story about the shortcomings of “big.” One way to define big is through your company’s footprint. This means how geographically spread out your client base is. Stretching past my own good judgment, I ultimately expanded the footprint of my company to all fifty states and Canada. Some of this expansion benefitted my business; most did not. We lost money on many jobs and had trouble focusing on our biggest and best accounts as we juggled the inevitable problems that come with expansion.
We initially justified our decision to expand by saying it would improve our professional footprint. Really, it was more about ego than strategic growth. The creep started small, but was a slippery slope. We were cleaning in Idaho and Wyoming for the giant Ma Bell system. It was exciting working with such an iconic company, but it wasn’t enough. We wanted to be able to boast on our trucks that we were cleaning in three states, so we took on a tiny job cleaning a building and a couple of toll booths in extreme southern Utah, in a town called Kanab. We stretched our resources for little more than bragging rights.
Next, we took on a lonely telephone booth, for a mere $1.50 per cleaning. It was twelve miles across the Arizona border, in a tiny town called Fredonia. The project was a complete loss of time and money, but now we could claim that we were cleaning in four states.
Distance from a company’s home base is a metric that needs to be assessed in taking on a new client. Driving a hundred miles for a $75 job will eventually break you personally and professionally. Expand your footprint cautiously and for the right reasons. Vanity is the poorest of partners in business, especially ours.
Take a Pass on Bad Accounts
The second mistake new owners make when “big” is their primary goal is taking ANY job, even one where it’s clear that the building being cleaned is in terrible disrepair. When the floors haven’t been stripped for five years, there is a lot of damage. It’s easy to blame the janitors when these floors don’t look clean. Or think about that building where the restrooms have not been maintained and fixtures have unbelievable mineral buildup. You know how this story ends. A building in bad repair – with worn carpets, peeling paint and damaged walls – will make even a superior cleaning look careless.
Wanting as many contracts as possible, young owners too often say to the customer, “Don’t worry, we’ll take care of it.” They spend huge amounts of time and money to bring the facility up to some standard of clean. This might lead to a quick thank you, but then the customer expects continued miracles on the cleaning company’s dime. Instead, tell these clients you are bidding to initiate a contract, not restore their facility. If you’re determined to take on this type of risky account, at least propose a start bid. Almost everyone will agree to this if you ask. Doing so allows you to start out even. The new job will still require an investment on your part, but at least you’re not working completely for free or at a loss.
You can also take a pass on these bad accounts. Ultimately, bad accounts infect the good ones and damage your company’s reputation. I once lost a major client, a contract for $8,000 a month, where my profit margin was huge. I was too busy struggling to manage an account where I was losing money and the client constantly complained. Finally, the big account fired our company for not showing up. I should have dropped the smaller, bad account, but that would have made my company smaller when big was really important. What was I thinking!
Put your ego on the shelf. Don’t grow big; grow smart. Make quality service your primary goal, and real growth will happen for your company!
