ICS Magazine

Controlling Costs

October 11, 2006

Obviously, there are two general avenues open to achieving this goal. One can either increase income or reduce expenses. Increased income can be achieved through increased sales from more business or higher pricing, and certainly involves a well-thought-out marketing plan. But it's the expense side of this issue I want to address.

Controlling expenses is critical to any business and requires careful and detailed planning. Controlling expenses does not necessarily mean always buying the cheapest product or contracting needed services to the lowest bidder. For example, with major equipment purchases it is often wiser to spend a little more up front to get the better quality and dependability than to save on the purchase price only to spend more than you saved on repairs and downtime later on.

In the case of chemical supplies, it has been my experience that, in most cases, planning ahead and buying larger quantities generally results in lower per-gallon prices than just buying chemistry as you use it one gallon at a time. Another good idea is to utilize the concept of concentrated products and figure your expenses on use dilutions. What appears to be a less expensive product in the price per gallon off the shelf may actually be more expensive in the ready-to-use form than a more-concentrated gallon that appears to cost more on the per gallon selling price. I have also learned that it is wise to periodically review diluting procedures with field technicians and make sure they are using proper measuring devices instead of the old "glug" or "eyeball" method of measuring.

Accessory equipment also plays a big part in controlling costs. Once again, by spending a little you might save a lot in the long run. For example, investing in an extra sprayer so there are two separate sprayers for pre-spray and protector will help prevent the likelihood of leftover protector being poured out at the end of the job so that pre-spray can be put into the sprayer for the next job. This also helps prevent unwanted mixtures of incompatible chemicals from occurring. The "designated sprayer" concept can also apply to deodorizing and sanitizing agents.

Controlling costs might have nothing to do with the price of a machine, chemical, or accessory. Think about the cost differences in terms of potential waste or damage through the incorrect use of equipment or supplies, and you begin to see one of the advantages of spending a little more on proper training of personnel. When you factor in the labor savings from a technician who "knows his stuff" and is able to complete the same amount of work in less time than his untrained counterpart, you will see that good training doesn't really cost; it will, in fact, save you money.

That brings me to that second goal of business, staying in business. In the cleaning-specialist service industry, we are dependent upon repeat and referral business; this is a proven fact. If you are in doubt, ask the next 25 successful cleaning company owners you meet, and I guarantee you will get the same answer from all of them. Well, repeat and referral business depends on customer satisfaction and what satisfies customers is good quality, excellent service, and something a little harder to measure that I will call the service attitude. The little extras such as offering a "Thank You" to your client; going above and beyond the minimum service; having clean, well-kept equipment and uniformed workers; easy-to-understand paperwork; and well-trained technicians are what lead to customer satisfaction. These things are sometimes even more important than simply providing the contracted service.

Certainly controlling costs is important to every business. Just keep in mind that in the Big Picture, controlling costs might mean investing in better equipment, more concentrated or more sophisticated chemistry, and certainly good quality training for those asked to provide the service. Sometimes you need to spend a little to save a lot.