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Sunday, May 20, 2012

Bad News at Sunday Dinner


I hate liars. I feel sorry for the victims of liars. I have been lied to and those were among the worst moments of my life, finding out I had been lied to. Love songs are lies; no one “accidentally” falls in love like stepping in hot bubble gum in a parking lot. Another lie is that we all “live happily ever after” and this is the great lie in the janitorial business.

Commercial cleaning is based on commercial real estate development and occupancy of commercial space, which is finite. Your “dreams of success” do not change the amount of existing commercial space requiring cleaning. Do not believe the lies.

I got this note this morning;
Ed,

I started a commercial cleaning business last year and I failed. I could not attract enough commercial accounts to even cover expenses, regardless of what I did.

Its Sunday dinner and the bad news is there are only so many pieces of chicken to go around. There are 1,200 new cleaning services started every month and every one already seated at the table is still hungry. There is not one single cleaning service owner that does not want more accounts, not one. It does not matter how many they have, they want more.

The bad news is someone is going to go hungry. It does not matter how much you wish, there are only two thighs, two legs and two breasts and someone is going to get the neck and a couple will get the wings.

The dream peddlers are liars and seek only to take what little money you have and tell you there is no end to that plate of chicken.

Someone has to tell you the truth and I just did.

The cleaning business is a war just like the whole world of business. There are winners and losers. The losers will not live happily ever after.

Now what?

10 comments:

  1. I have to agree, be very watchful with "those that "promise" sure ways of getting more leads, or accounts. May out there are just making money off from you. I think the important thing is, yes there might be many new janitorial cleaning business's starting each month, but many have NO idea how to run a business, and many will run it into ground. Also, at some point QUALITY will come in. Many "think" they can clean........I have seen
    "their cleaning"..... These will aventually fall to the wayside.

    ReplyDelete
  2. Absolutely spot on Ed, this is not an easy business to be in and if you think it is you will probably fail.

    Gary

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  3. Cleaning companies have to be very careful in who they hire. My company has lost a lot of money due to cleaning crews stealing property that does not belong to them even if they work for the building manager it still happens. If you hire a cleaning company interview them very well and check out all permits and paperwork.

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  4. Ed, your passion for exposing janitorial scammers, combined with your eyes wide open experience are fantastic. Sounds like a web service to me ;) Keep it up.

    ReplyDelete
  5. Friday, I met with friends and business was discussed. One congratulated me on being in a recession proof business, "even in bad times, people still need their sites cleaned."

    What is wrong with this picture? In bad times you lose customers (consolidation, closure) your best customers cut back and the unemployed and underemployed become your competitors. Our sales are down 15%, but our margins are down more than 30%. Last year I paid $50,000 to have a job I did not enjoy.

    What can we celebrate? Coming into the recession, I had a profitable one man band. I ran Operations and Sales and my wife ran the office. I was fat and happy, but the company had plateaued at $1million. Bad times hit and I am now in a buyer's market for the Team I never had. Today, we are doing our Branding, have a professional sales program (the # 1 salesman from a National Brand is on my team) and we have a functional office (I can get a P & L and job costing in minute, without tears). When the recovery hits, we stand ready and expect to double sales in a short time.

    Smart Owners are doing the same. Thursday, I had a walk through on a portfolio of Class C see throughs that had been taken back by the bank. Rather than book the loss, the bank (M&T Bank) took advantage of the 28% occupancy rate and renovated the properties to meet LEED Silver Rating and stand to take full advantage of a hot leasing market in Portland. No one is building here, full floors in clean renovations of historic properties are in demand.

    There is no more chicken left on the table. But, there is plenty more coming from those who didn't give up and went back to the farm to raise more.

    ReplyDelete
  6. Friday, I met with friends and business was discussed. One congratulated me on being in a recession proof business, "even in bad times, people still need their sites cleaned."

    What is wrong with this picture? In bad times you lose customers (consolidation, closure) your best customers cut back and the unemployed and underemployed become your competitors. Our sales are down 15%, but our margins are down more than 30%. Last year I paid $50,000 to have a job I did not enjoy.

    What can we celebrate? Coming into the recession, I had a profitable one man band. I ran Operations and Sales and my wife ran the office. I was fat and happy, but the company had plateaued at $1million. Bad times hit and I am now in a buyer's market for the Team I never had. Today, we are doing our Branding, have a professional sales program (the # 1 salesman from a National Brand is on my team) and we have a functional office (I can get a P & L and job costing in minute, without tears). When the recovery hits, we stand ready and expect to double sales in a short time.

    Smart Owners are doing the same. Thursday, I had a walk through on a portfolio of Class C see throughs that had been taken back by the bank. Rather than book the loss, the bank (M&T Bank) took advantage of the 28% occupancy rate and renovated the properties to meet LEED Silver Rating and stand to take full advantage of a hot leasing market in Portland. No one is building here, full floors in clean renovations of historic properties are in demand.

    There is no more chicken left on the table. But, there is plenty more coming from those who didn't give up and went back to the farm to raise more.

    ReplyDelete
  7. Yes it is a war. And for many businesses making a profit is getting harder and harder. We have launched a new commercial grade multi-purpose cleaner called CleanSense that we believe will reduce cleaning supply costs as far as commercial cleaners go. We believe this product can make new janitorial cleaning businesses more competitive in today's market. I hope you will drop by www.cleansense.us for more information as I would value your opinion.

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  8. Have to tell you my philosophy: The good companies will stay in business and become successful, and the bad ones will fail. It's that simple.

    Common sense and good business practices have to prevail.

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  9. Yeah , I also agree with you, business battles are a tough one especially for beginners, and even janitorial and cleaning services are considered by many as an inferior job... they play an important role in a successful business, a clean surrounding is IMPORTANT in every establishment...

    You have said 'Losers will not live happily ever after', but for me, perhaps on a certain part Yes, but there are many options for you to choose from, and maybe in other business category you might excel, djust on't lose hope...

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  10. Now you find a service that you know no one else

    can do like you and you sell that. you have to relate to the

    customer and give him a good firm price. don't sell them make

    them want you and no one else.

    ReplyDelete