Cleaning Technicians Don’t Grow Well When Kept In The Dark

Do your cleaning technicians know where all the money goes?

TheJanitorialStore.com

Everyone is familiar with high and low profit margins and their effect on business. Any cleaning company owner knows that the service industry is low margin driven and highly competitive. Without adequate margins, a business cannot pay its expenses and cannot retain earnings for future growth. The slim margins that cleaning business owners deal with can be stressing, to say the least. The owner must bid projects, purchase supplies, pay employees and expenses, all while maintaining happy customers and keeping employee turnover at a minimum. This requires pricing jobs competitively. Without competitive pricing, the business will struggle to cover expenses and will more than likely fail.

As a business owner, you have access to all this important company information. Without this information, you could not run your company at its full potential. This information helps you guide your decisions about business operations. Shouldn't the same be true for your employees? Information is the power that runs your company and your employees; you need to be connected to both. Employees want a boss who they feel is “in the know”. Someone they trust to share important information with them, which brings management and employees on the same page, sharing the same goals. By sharing information on a regular basis with your employees, you will not only close the gap between the boss/employee relationships, but also instill a closer commitment to the mission of the business. Your employees will be more eager to engage in the goals of the company, often offering meaningful and noteworthy suggestions for improvement or problem solving solutions.

What and how much should you be willing to share with your employees? That decision is entirely up to you. There is no right or wrong answer here. Share as much or as little as you feel comfortable with. A little will still go a long way. If management is willing to be a little more transparent with sharing company information, good and bad, employees will likely be more understanding of the company and its daily issues. You may be pleasantly surprised at the employee enthusiasm in offering hands on suggestions to solving these issues and problems.

An excellent example of shared company information would be letting your employees know that the cleaning industry is a low margin business. Most employees won't instinctively figure this out on their own, so it is up to you to inform them. Employees will generally view the company as an entity making the “big bucks” while the front line workers only receive a small piece of the enormous profit pie. As a business owner, you should help your employees understand how much it really costs to operate a business and how much profit actually remains after paying all of the business expenses. I'm not suggesting opening up the company balance sheet and divulging the internal operating figures, but allow employees to see the percentages of where the money goes. This will not only display the low margin business that you struggle with, but also allows them to be involved in the success of a profit and the disappointment of a loss.

During your next employee meeting, take the time to educate your employees on the low margin nature of your business. Demonstrate the high costs associated with running a business by giving an employee 100 pennies. This will represent 1 dollar of profit the business makes. Then ask the employee to pay 8 pennies for supplies and equipment, 55 pennies for payroll and payroll taxes, 6 pennies for rent and utilities, 6 pennies for insurance, 7 pennies for administrative costs, hiring and training, 4 pennies for office supplies and uniform costs, 3 pennies for benefits, 6 pennies for marketing (of course you will want to use the numbers that are true for your business).

After all the expenses are paid, the remaining 5 pennies represent the amount of profit the business has earned. Believe me; this will be a lot less than most employees have assumed. With this simple demonstration, you have provided your employees with the basic understanding that the business is not a money making machine. It also illustrates just how important they are in controlling costs and that giving 100 percent effort will help ensure the company makes a profit. Everyone's paycheck depends on it.

Inform your employees how important they are to the success of your business. Team work will bring continued success and a steady paycheck. A low margin business doesn't have to mean little chances for advancement either. Let them know that even a nickel profit is still a profit and those profits do add up. It will provide the company with future growth potential and the result will be passed on to employees by more opportunities for promotion and benefits for those individuals who earn it through hard work and dedication. Employees want to feel as though they are contributing, so by educating them about the internal workings of making a profit, they are more likely to be engaged, productive, and feel like they are part of the company's successes. Everyone in the company is important, from the president to the person who takes out the trash. Without one, the other cannot survive. It's imperative in this low margin service business that everyone is aware of the importance of their responsibilities. The employees should have a clear understanding of how the lack of performance from just one person can dramatically impact the business on a whole.

Sharing information with your employees will allow them to better understand the internal workings of the company, how the business is always undergoing change, and how the cleaning industry in whole can be a trying business to compete in. Share information face to face with your employees at a scheduled meetings or a just a casual pizza lunch and cover the company's goals, new strategies, and brainstorm ideas. By sharing this information face to face with your employees, you are exhibiting your willingness to be open and honest, demonstrating that their ideas, suggestions, as well as complaints, are always welcomed. Most employees want to have input into their jobs, their duties, and the projects at hand. They will be eager to be part of the company's goals and strategies. Don't keep your employees in the dark, because things don't grow well there.

Jean Hanson helps owners of commercial cleaning companies build a more profitable and successful cleaning business through her online community at TheJanitorialStore.com. Jean is also the host of the popular Web TV show CleaningBiz.tv and author of the newsletter Trash Talk - sign up today!

twitter