Benchmarking for Cleaning Businesses
According to Wikipedia; benchmarking is comparing one's business processes and performance metrics to industry bests and best practices from other companies. Merriam-Webster refers to it as: something that serves as a standard by which others may be measured or judged.
Benchmarking for Cleaning Business Owners
Benchmarking can benefit cleaning business owners in a variety of ways. For example, it can shed light on how their company statistics compare with other similar cleaning businesses and how well their business is currently performing when comparing past performance metrics. I cannot begin to count the number of times I have had building service contractors (BSC's) tell me that their business has grown by leaps and bounds but at the end of the year, there is no money left to reinvest in their company or that their profit margins are dangerously low. Unfortunately, as busy cleaning business owners, the only times we tend to evaluate our current best practices is during the “troubling times.”
Through benchmarking, you are comparing and measuring your operations to other successful cleaning companies. If you don't match up, perhaps it's time to re-evaluate your business practices to assure your business is growing and profitable.
Although benchmarking is important for the new entrepreneur entering the cleaning business, I feel it's the guy who has been in business for a while that can benefit the most. After all, as business owners, we should routinely evaluate how well our business is running, and benchmarking can help us accomplish that.
External and Internal Benchmarking
I think it's important to perform both, what I call external and internal benchmarking. External benchmarking would include gathering data from industry resources such as The Janitorial Store, ISSA, and BSCAI, on other cleaning businesses similar to your own. Internal would be data collected from your cleaning business operations.
External Benchmarking
A few years ago, we attended the ISSA Interclean tradeshow for the cleaning and maintenance industry. One of the presentations we attended was about benchmarking for your cleaning business. The following is some of the information and statistics that were shared with us. But these numbers have changed over the years and the production rates especially are much higher than the ones listed below, due to more efficient equipment and cleaning systems.
When bidding on cleaning a building, it's helpful to have an idea of what the averages are for cleaning rates per square foot. Keep in mind, however, that these are industry averages. There are many factors that must be taken into consideration when bidding on cleaning a building, so you must take these numbers with a grain of salt.
You need to do some of your own research to see where the numbers in your area stack up.
Education: $1.62 per square foot per year ($ 0.135 per square foot per month)
Office: $1.52 per square foot per year ($ 0.13 per square foot per month)
Office Cleaning Production Rates: On average, custodians are able to clean from 4500 to 5000 square feet per hour.
Considerations when bidding:
- Gross square feet vs. cleanable square feet vs. rentable square feet. Be sure to do your own measuring
- Cleanable square feet = building gross square feet minus walls (1.5% of gross) minus non-cleanable square feet.
- Are you including supervision hours as part of your bid? Are you providing special tasks such as extra attention to the president's office, non-cleaning activities such as setting up events, changing lights, and recycling removal? These tasks take extra time and must be considered when pricing your bid.
Quality Considerations:
In a Building Owners and Managers Association International (BOMA) study, average cleaning production rates were compared to customer satisfaction. It should be no surprise that the higher the number of square feet cleaned per hour, the lower the customer satisfaction.
A high production rate could be the cause of an unsatisfied customer if the cleaning company is using a zone cleaning system in the facility. It is common for cleaning companies to reach 5,000 or 6,000 square feet per hour using the team cleaning system and the customer being very satisfied with the service.
Production Rate versus Customer satisfaction:
3766 square feet cleaned per hour -- Not Satisfied
3168 square feet cleaned per hour -- Could Be Better
3082 square feet cleaned per hour -- Satisfied
2780 square feet cleaned per hour - Very Satisfied
Internal Benchmarking
Internal benchmarking of your own cleaning business allows you a look at how well or poorly your business is performing. It can help you gauge how well you are doing today compared to past data you have collected. For internal benchmarking, you will want to be looking at your practices, cleaning procedures, production rates, and quality control (performance). These will have the most impact on your company's ability to produce a profit.
Performing internal benchmarking on a regular basis puts the numbers right in front of you, letting you measure and evaluate the production and performance of your cleaning technicians for each of your facility types, under differing conditions, and implementing plans to improve upon the ones that are lagging behind your company standards.
Remember, however, that when you are collecting and analyzing benchmarking data, there are going to be variables that can sway those numbers. No two cleaning businesses are going to be operated identically and no two facilities that you clean are going to be identical.
Looking at other, similar cleaning businesses metrics as well as your own strengths and weaknesses can definitely help you to improve upon your company and the way it operates.
Conclusion
It's a good idea to check your own employees' production rates to see where you stand. If you see the rates per hour are too high, then you should check to see if the quality of work is up to standard. If you see that the production rates are too low, then you should see what can be done to increase productivity.
Benchmarking, whether external or internal, should be performed on a regular basis. This allows you a look into what other cleaning businesses are achieving within the industry, as well as your own company's present and past performances. Cleaning business owners, who best understand their business best practices and those benchmarks of other successful business operators, are the ones I feel will be around for years to come.
When bidding on cleaning a building be sure to use the Bidding Calculators available to members of The Janitorial Store (TM). You can play around with different production rates, prices per square feet, frequencies, and wage rates. This will help you to price your bid at a fair cost that will also be profitable for your cleaning business.
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