3 Simple Ways to Cut Operating Costs for Cleaning Businesses
If you own a company or are the head of a department, you are probably looking into options to reduce costs. Even when revenue is coming in, and even when the business is expanding, there is always pressure to reduce costs.
Experts and technology gurus talk about decreasing costs through robotics, artificial intelligence, and the like. We are constantly told how these will revolutionize our industry and others. However, if you have the responsibility to reduce costs you may want to start considering options that are feasible today. And that’s the focus of this article.
No need for Big Data, but gather some relevant data
Gathering data is getting easier with plenty of inexpensive tools. Many businesses use QR-codes and mobile applications to collect field staff data such as cleaner location. If you’re still a pen & paper lover, consider getting started with some software –even if it’s as basic as an electronic spreadsheet. The software you use is relevant but what is really important is being consistent.
If you are already doing this you should be able to answer the following:
Do you know which of your services provides better returns? Which one contributes negatively to your cash flow? Who are your top clients and what’s their profile?
If you already know which services are the most profitable at a client level, you are on the right track. You should now be equipped with the business intelligence to cut costs wisely.
Have some KPIs
Setting Key Performance Indicators (KPIs) is a good way to measure your processes. It will help you identify what’s a standard performance of a process or task. Once you have this information, you’ll be able to compare the performance of your team members, and even compare them with industry standards. Again, be consistent with your KPIs.
It’s a good business practice to have KPIs that can be reviewed periodically. If you can’t do that for whatever reason, re-design the KPI.
Sales staff commission and bonus: make sure you incentivize your sales team in an adequate manner. Many companies and sales people focus on revenue more than profitability. This is not necessarily a negative approach but it is a common mistake. Simply make sure your company goals are aligned with the bonus schemes for sales staff. Otherwise you’ll end up paying bonuses that add nothing to the bottom line.
In addition to the usual obligations (BAS, tax returns, financial reports, etc.) businesses in the cleaning industry often have to manage contractors and casual staff in large numbers. If your business does one-off cleans you probably end up recording a lot of information from field staff that is later used to create invoices.
These admin costs are not cheap. The solution BOSS provides is a simple one that will reduce your overheads by more than 50%. In a nutshell, you choose a partnership type (a casual or a dedicated resource) and you liaise with him / her the same way you do with any in-house employee who works remotely or in another office.
Back Office Shared Services (BOSS) is the only Australian outsourcing and offshoring company who specializes in the Cleaning Industry.