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Janitorial Bid Analysis: At-a-Glance

CleanlyRun Bidware Features

From time to time, we like to highlight some of the system features of CleanlyRun (aka CleanGuidePro) Janitorial Bidware.

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The At-a-Glance button:  CleanlyRun‘s Janitorial Bidware includes a speedy — and color-coded — way to spot any high-level bid issues as you navigate the system’s bid creation process.   Specifically, the At-a-Glance button for each bid will turn either Red, Yellow or Green based on step-by-step analysis.

 

 Bid Status: Good – The At-a-Glance Bid Analysis detected no problems.

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 Bid Status: Warning – The At-a-Glance Bid Analysis detected one or more issues that were flagged as Warnings.

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 Bid Status: Error – The At-a-Glance Bid Analysis detected one or more Errors.

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Good to Know:  The way to make the At-a-Glance button “go green” is for a proposal to pass all of the Bidware’s standard checks.  However, any Warning/Error flags are for your eyes only — they’re not included on the final proposal — so you are free to proceed with a “flagged” bid as you see fit.

For example, the system might flag a bid for having a low Profit Margin, which means that you’d be – statistically speaking – leaving money on the table. (More about Profit Margin here.) You can then choose to edit this flagged bid, or move forward without changing anything; the At-a-Glance button is just there to “offer its opinion”.

Just a little help, at a glance… CleanGuidePro Successful bidder

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Janitorial Profit Margin versus Janitorial Cost Markup. Which to choose?

Not understanding the difference between Janitorial Profit Margin and Janitorial Cost Markup is one of the most common pricing mistakes in the cleaning industry.  I’ve seen way too many new business owners decide to price their janitorial bids solely on Markup – “I’d like to make $500 on this job” – rather consider the Margin of Profitability for the work…

Both terms – Margin and Markup – help you calculate profit, but prioritizing the wrong one could hurt your bottom line.

Let me break it down.
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Margin: (a.k.a. Profit Margin) is the percentage of the final selling price that is profit. In the highly competitive janitorial services industry, Profit Margins can trend low for very large jobs — say, 12 to 15% — but that range is unprofitable for small to medium clients.

Markup: (a.k.a. Cost Markup) is either the (a) Dollar amount above cost, or the (b) Percentage of the cost that you add on to get to a bid price.

So which approach should you use? As a general guideline, it is probably better to focus on your Profit Margin rather than a Cost Markup in a service business. A higher Profit Margin percentage matters more than a higher Cost Markup percentage. For example, a 25% Cost Markup only yields a 20% Profit Margin, which means that your markup isn’t as profitable as it may seem at first glance.

With margins, a 50% Margin means that half the selling price is profit. So, a 50% Margin means there is a 100% Markup — as you have added 100% of the cost price to make the selling price. (With margins, a 100% Margin is only possible if the cost price is zero.) In short, a focus on Profit Margin is more effective when it comes to pricing your janitorial bid.

Of course, situations and customers vary, and the choice to prioritize Margin or Markup is yours. Fortunately, CleanlyRun Janitorial Bidware displays Markup and Margin right next to each other, so you always know what is your Profit Margin’s equivalent Cost Markup — and vice versa.  In addition, we’ll suggest a minimum Profit Margin/Cost Markup for each bid that you can adjust as you see fit.

On a related note, I’ve touched on how the Profit Margins of smaller businesses can be higher than bigger ones, even with a lower Fair Market Price.

That’s enough math for now! 😉

CleanGuidePro Successful bidderDrake

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Janitorial Fair Wages

Ask Drake

President and Co-founder of CleanGuidePro

With the truly, humbling success of CleanGuidePro, we’ve received a lot of questions (from companies all over the world) about a variety of topics in the janitorial industry. Allow me to share yet another one of them with you.

Question: I’m new in the business and have been doing all the work myself, along with my wife helping. I want to go after larger accounts that will require me to start hiring employees.

I feel that if I pay my cleaners $14-$15 an hour, they will all do a great job, thereby eliminating complaints. Also, I’ll let my potential customers know this and be able to charge more. What do you think?


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Answer: Sounds good in theory.  Pay them more, they’ll perform better and my customers will gladly pay me more!

Unfortunately, after 26 years in business, hiring 1,500+ employees, experimenting with wages and interacting with hundreds of customers, this approach simply does not work in practice. Your question has two parts. let’s take a closer look..

  • Q1: Pay entry level cleaners $14-$15 an hour, (when the prevailing wages are $8.05 -$9.00) and they’ll perform better.

    A1: Maybe, maybe not. My experience has been that the vast majority of “poor performers” will perform just as poorly at $12.00 an hour as they will at $9.00.  However,  a market–rate employee should quickly move up to higher wages as their performance warrants it.  (And performance can be improved with proper training, supervision and followup.)  In other words, higher wages are earned, not a given. So definitely reward your top performers in short order, but don’t assume that starting a new hire at “above market” rates will guarantee a high performance.

  • Q2: My customers will pay me more to get better service, “if” I pay my employees more.

    A2: Good luck with that. Listen for the deafening silence of the “crickets” when you approach your clients with that logic. Customers today “expect” great performance and outstanding value in their selected service providers. They want and deserve great service at a fair market price. Take great care of them, cherish and yes “love” them. You will make more money though extra project work, carpets, floors, supply sales, customer loyalty and invaluable references!

Trust me on this one. Pay the fair and prevailing wage, provide training, supervision and followup. Increase pay based on performance and charge your customer a fair market price, then take care of them and watch your profits and business increase!


CleanGuidePro Successful Residential Cleaning bidderDrake

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Janitorial Employees versus Subcontractors?

Who cleans your buildings? Your janitorial employees or subcontractors? Not sure what the difference is? Well, as a business owner you should know the difference and be committed to classify your cleaners correctly. It’s not difficult to determine and it would behoove you to do it right, thereby avoiding costly IRS penalties, fines and tax levies for unpaid payroll tax liabilities on misclassified workers.


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Over the course of 25 years in the janitorial business, this has been my experience…

An employee: If you have the right to control or direct not only what is to be done, but also how it is to be done, then your workers are most likely employees. Basically, if they answer to you, wear your uniform, use your equipment or vehicles, use your chemicals and you train them how to perform the tasks, they are definitely your employee. Therefore, you must deduct and pay the appropriate employee payroll tax liabilities of your state or jurisdiction.

There are numerous accounting software programs and payroll companies that can handle this for a nominal fee. They calculate the correct payroll tax deductions, write the payroll checks, file timely and accurate quarterly reports, such as 940’s, 941’s, UCT6’s, etc..

EMPLOYEE PROS:

  1. They do it your way! You hire your own people, train, supervise, inspect and personally control the quality.
  2. You know exactly who’s in your buildings.
  3. You make a higher profit margin percentage than using subcontractors.

A Subcontractor: If you can direct or control only the result of the work done and not the means and methods of accomplishing the result — then your workers are probably independent subcontractors (whose wages are reported to the IRS via form 1099). An example of using a legitimate subcontractor would be to pay another janitorial service company – (that has their own license, liability and workers comp insurance) – a percentage of your total contract revenue to clean a building.

I’ve used subcontractors on select projects and I’ve also been been a subcontractor for some huge national companies (on statewide cleaning contracts). I’ve made a legitimate and legally classified profit in both scenarios. But 99% of the time, I use my own employees…

SUBCONTRACTOR PROS:

  1. When you’re awarded contracts in other cities or states and the logistics and distance of the location behooves – (I just like that word) – you to use a local cleaning company.
  2. You just set the guidelines and expected results. The subcontractor hires their own people, trains, supervises, inspects and personally controls the quality.
  3. You cut one monthly check to your subcontractor, minus your profit.

Keep in mind my friends, whether using your own employees or a subcontractor to fulfill your contract service requirements, classify them properly.  (There are plenty of IRS guidelines and accountants to help you.) Want to sleep well at night? Pay the tax man correctly!



CleanGuidePro Successful Residential Cleaning bidderDrake

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Janitorial Company Newsletters

How necessary are Janitorial Company Newsletters to the success of your business? In your own mind, you can make a case for or against just about anything and be satisfied with your decision. “It’s time consuming, it costs money, probably no one will read it anyway, blah blah blah.” Then be content with your decision, right or wrong. Let me challenge you to make a right decision concerning all things, but specifically Company Newsletters.


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As the Good Book tells us to spread the “good news” and admonishes us to focus on, “whatever is good, admirable, excellent or praiseworthy, to think and report on such things.” In the same spirit, a “Good Newsletter” that recognizes and praises employees for outstanding performance, perfect attendance, anniversaries or birthdays, just to name a few, is invaluable to your company as a whole!

In the janitorial business, especially, where only one or two employees are assigned to a single building with little or no contact with other employees, newsletters are a great way to keep them feeling part of the team. Let me give you my Top Company Newsletter sections, (in no particular order), that have shown the love to my many employees and customers over the years!

  1. Customer Spotlight: We send our newsletters to our customers as well. We highlight one of our customer’s facility managers in each of our monthly newsletters. We put their pic and a brief Bio of them. We tout their good qualities and what a pleasure it is to team up with them. Everyone loves to see their name and pic in print and it strengthens our business relationship. Win-win!
  2. Helpful Customer Tip: Things such as, “Did you know that using Roll Towels vs Multifold Towels, Jumbo Roll Tissue vs Household Toilet Tissue can save you 20% in annual supply cost?” They (accurately) view your company as a valued partner in keeping their costs in control, plus you’re seen as an expert in the industry.
  3. Employee Milestones: New employees, 6 month, 1 year, 2 year, 5 year anniversary, birthdays, etc.., whatever to put their name in print. As I said earlier, everyone loves to see their name in print, for whatever reason.
  4. Employee Praise: If you, one of your supervisors or a customer reports an exceptional job done well, performance, or anything good about your employees, tell it/give a shout out in your newsletter.
  5. News Updates: “We were just awarded the contract for ABC or XYZ companies”, “We just implemented such n such software to better serve our customers and employees”, etc. Shows your employees and customers that your company is highly in demand and the real deal!
  6. Safety Tip: Reminders to put out wet floor signs at all times, never push down on trash cans with your hands or how to deal with a bloody spill at a medical job site all convey that you as a company are concerned with your employees safety and well being.
  7. Crossword Puzzle: You can find these all over the internet to copy and paste. Try to use questions and answers that are cleaning related. Such as, what floor cleaner is best to use on waxed floors..? Answer: Neutral Cleaner. I was actually surprised, but people love crossword puzzles!
  8. Offer Services to your Customers: Let them know that you offer janitorial supplies, residential carpet cleaning services, tile/grout cleaning, etc.. You will get extra work.
  9. Training: Offer reminder monthly training tips, such as restroom training, vacuuming, detail vacuuming or dusting tips. Keep emphasizing the basics!
  10. Message from President: Offer an encouraging word to your biggest asset, your employees. Give an uplifting message that inspires from you or a quote from someone that inspires like Zig Ziglar, that said “people don’t care how much you know, until they know how much you care, about them”.. Inspire and empower your employees!

Spread the Good News my friends. Month after month. You won’t be sorry, I guarantee it!


CleanGuidePro Successful Residential Cleaning bidderDrake

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Janitorial Employee Training – Top Tips!

Who needs janitorial employee training? Let me give you three groups that benefit greatly from it… Your company, your employees and your customers!

Janitorial Instructor

“Hey, come on..” you say. “Who needs training to sweep, mop floors and empty trash?  Besides, on the job training is good enough, right?”  Well yes, if you want your company to be “good enough”, with average employee turnover, average customer retention and average to below average company growth. But, if you want an exceptional company, with exceptional employee retention, exceptional customer retention and exceptional company growth you will definitely need to have a formal Employee Training Program.

Yes, training employees costs money, but that’s the wrong way to look at it. Training is actually an investment in your company that always provides a return on investment from day one.  After 25 years in the janitorial business, I’ve learned that for every dollar I’ve invested in training, I’ve seen a minimum of three to ten fold  return to my bottom line!

I can’t emphasize strongly enough that your customers need to see consistent cleaning results from your company every single day in order to keep cutting you a check each month. Training your employees, supervisors and managers from day one in the proper techniques, procedures, policies and systems will keep those checks coming in!

As I’ve developed and tweaked my Employee Training Program over the years, I’ve found that covering the following (high level) topics have produced consistently well trained employees:

  1. New Employee Handbook, Company Policy: (Part 1 of Orientation Class): This is a classroom training session where new employees are given their employee handbooks, uniforms, clock-in instructions, etc.. The handbooks are reviewed and they sign a form that they have received, understand and will comply by them.
  2. New Employee Safety Training Manual: (Part 2 of Orientation Class): This is a classroom training session where employees are trained in regards to safety and hazards on the job? Employees are given a safety test, results are verified and corrected until everyone understands the correct answer and a copy is placed in each employee’s file.
  3. New Employee Basic Cleaning 101 Training Manual: (Part 3 of Orientation Class): This is a classroom training session where all the basic cleaning tasks are explained and reviewed. Things such as, dusting, detail work, trashing, sweeping, mopping, vacuuming, restroom, direct supervisor and customer interaction.
  4. Restroom Cleaning Training Manual: (Part 4 of Orientation Class): This is a classroom training session, where step by step restroom cleaning procedures are demonstrated and emphasized. Restroom cleanliness is one of the top areas of your customers will judge your performance. Keep them clean!
  5. Supervisor Training Manual: This is a classroom training session, where multiple topics are covered. Your site supervisors need to be trained to be leaders, trainers, problem solvers and mentors. This training will cover everything from basic cleaning and stain removal to budgets, work loading, specialty work, supply ordering, employee evaluations, customer relations and much more.
  6. Floor Care Training: This is classroom and on the job training sessions, primarily for your “Floor Techs”, where floor care cleaning techniques (primarily waxed floors) and procedures are explained, reviewed, demonstrated and learned. Things such as floor stripping, scrubbing, auto scrubbing and buffing/burnishing.
  7. Carpet Care Training: This is classroom and on the job training sessions, primarily for your “Carpet Techs”, where carpet care cleaning techniques and procedures are explained, reviewed, demonstrated and learned. Things such as spot cleaning, fiber identification, portable units, truck-mount units and general carpet cleaning maintenance techniques are explained.
  8. Specialty Work Training: This is classroom and on the job training sessions, primarily for your “Floor Techs and Carpet Techs”, where specialty cleaning techniques and procedures are explained, reviewed, demonstrated and learned. Things such as tile and grout cleaning, pressure washing, upholstery cleaning and exterior window squeegee cleaning to name a few.

 

I’ll go into more detail on each of these training topics in future posts. But however you structure your employee training, you’ll never regret making this winning investment in your business!

 

CleanGuidePro Successful Residential Cleaning bidderDrake

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Overcoming Anxiety in the Janitorial Business

How do you overcome anxiety in the janitorial business? A better question might be, how do you overcome anxiety in life in general? As the old saying goes, if you tell anyone you’ve met that you’ve heard about their problem, they will answer by saying, “Who told you?”.

Anxious Janitorial Businessman

It has been clinically proven that fears (real or imaginary problems) in the heart of a person cause anxiety or worry.

First, let’s focus on the “real” stressful things in business that you can control. In business terminology we’re talking about Risk Management. In any business, things can go wrong at any time any place. This fact alone can cause worry, but you can mitigate general anxiety just by practicing due diligence. Make sure you’re properly insured with liability insurance and workers comp. Stress safety with your employees via employee orientation, safety training and regular safety meetings. Maintain your vehicle and equipment on a set schedule. Pay your taxes promptly. Pay your employees fairly and treat them with honesty and integrity. Basically, if you do the right thing in business, your anxiety, stress and worry levels will all be decreased; Not totally eliminated, but dramatically reduced.

Okay, but what about the imaginary things you worry about? What if this happens? What if that happens? What if my best isn’t good enough? What if I fail? What if my health fails? What if _____ (fill in the blank)? I personally choose to replace my irrational, imaginary worries every day by renewing my mind with words of hope, life and peace! Isn’t it all about peace anyway, my friend? Peace is the antithesis of anxiety!

Let me share some of my favorite quotes to overcome anxiety with peace..

  • “Do not anticipate trouble, or worry about what may never happen. Keep in the sunlight.” -Benjamin Franklin
  • “I learned that courage was not the absence of fear, but the triumph over it. The brave person is not the one who does not feel afraid, but the one who conquers that fear.” -Nelson Mandela
  • “Be happy in the moment, that’s enough. Each moment is all we need, not more”.- Mother Teresa
  • “There is nothing that wastes the body like worry, and one who has any faith in God should be ashamed to worry about anything whatsoever.” -Mahatma Gandhi
  • “How very little can be done under the spirit of fear.”–Florence Nightingale
  • “Do not be anxious or worry about anything, but in every situation, by prayer and petition, with thanksgiving, present your requests to God.” –Paul the Apostle
  • “Therefore I tell you, do not worry about your life, what you will eat or drink; or about your body, what you will wear. Is not life more than food, and the body more than clothes? 26 Look at the birds of the air; they do not sow or reap or store away in barns, and yet your heavenly Father feeds them. Are you not much more valuable than they? Can any of you by worrying add a single hour to your life?” -Jesus
  • “The message is clear: If you don’t like your situation in life, don’t fret or worry – do something about it. Worry less, act more!” –Zig Ziglar
  • “Only Thing We Have to Fear Is Fear Itself”: FDR’s First Inaugural Address-Franklin D. Roosevelt
  • “You gain strength, courage and confidence by every experience in which you really stop to look fear in the face. You are able to say to yourself, ‘I have lived through this horror. I can take the next thing that comes along.’ You must do the thing you think you cannot do.”― Eleanor Roosevelt

So I encourage you to overcome any business anxiety with (a) practical business risk management tactics and (b) through words of peace. That’s what’s worked for me…

 

CleanGuidePro Successful Residential Cleaning bidderDrake

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Janitorial Uniforms – Buying vs Renting

Ask Drake

President and Co-founder of CleanGuidePro

Dear Drake: I’ve had my janitorial business for three years now and have 18 employees. I provide company tee shirts with our name and logo on them. The problem is that it seems like I’m constantly buying tee shirts. When an employee quits, I rarely get the tee shirt back and if I do, it’s so faded and worn that it’s only good for a cleaning rag, not something I’d give to another employee.

What’s your opinion on buying janitorial uniforms versus renting from a uniform company?

Employee uniforms

Answer: Very good question! I’ve been there and have felt your pain, especially in the wallet. First off, let’s come to the consensus that uniforms of some kind are a must! They enhance your image and project professionalism. Over the years I’ve bought and rented (leased) uniforms at some point with varying degrees of success. I’m defining success in this area as being cost effective, easy to administer and keeping my staff looking sharp.

The pro with buying is that you only buy as needed. The con with buying is that shirts aren’t returned, cheap tee shirts fade and wear out quickly and you have very minimal reuse.

The pro with renting is that they give you procedures and a system to follow. You get forms for ordering – employee assignment sheets that your employees sign – stating how many shirts they received and the cost to the employee (taken from their last pay check) if not returned upon termination of their employment. The con with renting is that you’re locked into a contract (up to 3 years, with payments EVERY month) which can be much more expensive over the course of the contract than buying as needed.

Let me share what has served me well over the years. I use a buying system that utilizes the pros of buying and the pros of renting. A simple system (below) that is cost effective, easy to administer and keeps my staff looking professional!

  1. Establish your own Employee Uniform Policy and form. It will state the number, size and type of uniform shirt/shirts they receive. Also, your cost of each shirt and stating that they will turn in their uniform shirts a minimum of three days before their last check is cut or the cost will be deducted from there last check. No exceptions. They sign their acceptance of this policy. They keep a copy and you keep a copy in their employee file. Notice, I didn’t mention pants or shoes. I only provide a uniform polo shirt. Employees are required to purchase their pants and shoes at their own cost. We specify jeans or khakis depending on the location and closed toe shoes.
  2. Buy from a local, established embroidery store that sells tee shirts, polos, button down shirts, caps, custom logos, etc. You support the local economy and usually can purchase as few as two at a time. Don’t buy the plain 100% cotton tee shirts, they fade and wear out quickly. Buy nice, sturdy 100% polyester/synthetic blend polo shirts with company logo. They usually cost about $30 a piece, but these shirts are stain resistant and hold their form and color through hundreds of machine washes (employees are required to wash their own uniform shirts). No one wants to have $90 taken out of their last check over 3 shirts. You’ll get these shirts back 90% of the time. 85% are in good shape and can be reused again and again.
  3. Create a monthly, uniform ordering form. Have a goal of keeping extra shirts of each size in your warehouse stock. Simply order what you need once a month, once a quarter or as needed.

Remember, in business, have a cost effective system and keep it simple!

 

CleanGuidePro Successful Residential Cleaning bidderDrake

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Janitorial Employee Time Keeping

Ask Drake

President and Co-founder of CleanGuidePro

With the truly, humbling success of CleanGuidePro, we’ve received great questions by companies all over the world about varying topics in the janitorial industry. Allow me share one of them with you.

Dear Drake: We’ve been in the janitorial business a little over a year now and are ready to start hiring a few employees to help with our workload. Managing employee’s time is new to us. Any suggestions on how to track their weekly hours for payroll? Should we put in time clocks, have a “self write-in sheet” for them to write their own times down, or just pay them for a set amount of hours? .

Answer: Great question! First, let me get you thinking the right way. You don’t manage employees time, but rather you “manage” the “system” that manages your employees hourly timekeeping.

Having employees write their own time down or paying them for a set amount of time is a system allright, but it’s a system of the employees managing you! Learn from my early mistakes. I’ve stopped by to check buildings with write-in sheets at 8pm, with all employees gone and the times written down are 6pm in and 10pm out. I’ve also paid employees for 3 hrs a night, received customer complaints that things were getting missed, then find out the employee was only there for 1 hour each night!

Time-clocks are an OK system, but have drawbacks. Units are expensive, travel time to get time cards and manually entering in payroll data are all time consuming. Cliche yes, but “time is money” off your bottom line.

Here’s the hands down, best system to keep track of your employee hours for payroll. Telephone Clock-in Systems! This is online computer software that allows employees to clock in/out from their jobsite using caller id. It’s in real time and sends email or text alerts to you if someone is late, no shows, etc. You can see reports, print or email timesheets, export payroll and much more with the click of a button. It saves you time and money and it’s affordable to even the smallest of companies. That’s managing a system that works!

These systems are not put in place to control or manipulate “bad” people/employees at all. Employees should be cherished, appreciated, taken care of, paid well and yes, even loved! Systems are put in place to create a work environment that reduces chaos, creates structure and a sense of order. Systems foster harmony and peace in the workplace and i’snt that what it’s all about anyway my friend!

CleanGuidePro Successful Residential Cleaning bidderDrake

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Janitorial Competition and Fair Market Pricing

Ask Drake

President and Co-founder of CleanGuidePro

With the truly, humbling success of CleanGuidePro, we’ve received great questions by companies all over the world about varying topics in the janitorial industry. Allow me share one of them with you.

Dear Drake: I own a start-up janitorial business in a large U.S. city and I have to compete with large companies to win bids. How does CleanGuidePro Janitorial Bidware address this issue as well the concept of “fair market pricing”?

Answer: First of all, there is no real “set market” or “fair price” chart – i.e. Dallas vs. Chicago – to go by. That’s the wrong way to think anyway…

You need to think in terms of what’s the fair market costs associated with your area. For example, what are the minimum hourly wages, chemicals, state and local payroll tax rates that you have to pay. (By the way, our bidware does all this for you in Step 4 of the bid creation process, the Workloading and Pricing screen.

All size companies (especially the large national and regional ones) have to calculate/count their monthly costs to clean a building FIRST! Only then do you add a fair profit price (which is also suggested by the software).Remember, the bigger companies will always have higher costs than the smaller companies, because they have higher overhead, More mid level supervisors, higher liability insurance, etc…, therefore slimmer profit margins.

Don’t be intimidated by the bigger companies, but rather focus on constantly improving your own company! Keep in mind that the “big companies” were all a start-up once.

 

CleanGuidePro Successful Residential Cleaning bidderDrake