Blaming the Recession
When I was in high school, I worked in my parents’ janitorial services company. It was a straightforward industry where virtually anyone with a mop and bucket could start a business- and did they ever! As the job market grew tighter, more and more “fill-in-the-blank’s cleaning services” kept popping up all over the place.
I remember talking with other owners of office cleaning businesses. They would moan and gripe- perhaps not unlike business owners in any other industry. They would complain that in tough economic times, the cleaner is the first to go. They would also complain that there was too much competition with such ease of entry to the cleaning market. This used to trouble me, because it didn’t line up with what I was seeing. We had never lost an account because a client no longer wanted to spend money on cleaning. In addition, we were getting some of the highest rates in Portland, and having very few battles with those who would seek to undercut us.
To me, office cleaning seemed like a recession proof business! As companies fired their full time janitor, they would seek out a service to take his or her place! Not only that, but businesses never want to let the cleaning service go (save the micro-sized offices) due to money. What is a few hundred dollars a month? By losing the cleaning service, a manager is taking the one of the quickest paths to losing employee moral. If you want to everyone to feel poor, then don’t have the office cleaned. The flip side is that in good economic times, more and more offices spring up and there is plenty of new business to go around. Janitorial services is a good business no matter what the economic condition.
Don’t get me wrong. Our cleaning company was not without its share of problems. We had all the client relations issues every other business faces, and there were many tough times financially. My point is that while many cleaning companies were quick to blame economic downturn on their financial troubles, there were clear-cut business mistakes to blame. Running a business takes balancing the marketing, management, finances, and human resources with performing the actual work- in this case cleaning. When there is a problem, recession is the easy answer because its all over the news. In reality, I think there were some common denominators with the complaining cleaning companies that we can learn from:
Not enough marketing. At the time, the basic source for customers other than referrals was the phone book. It was amazing to see how hesitant companies were to even pay to have their company put in bold. If you don’t stand out among all the other ads, how will people find you? I suppose there is the ever popular AAAAA Cleaning Service!
Appearance of being unprofessional. Many of these operations were run by people with full time jobs- and it showed. Broken down vans, worn out equipment, no uniforms, and process inconsistency gave the wrong impression. In order to stand in a recession, you can’t look like a recession business.
Trying to be low-cost leader. By supplementing their business with full time jobs, many of the companies were able to charge ridiculously low rates- like 75% less than us. Why would anyone pay me $100 when they can get their place cleaned for $25? One reason, among others, is that by paying me $100, they feel they have a better chance of getting the job done right. I hate competing on price, as I have said in many blog posts. It is never a real competitive advantage for a small business, and it just leads to heartache.
No real competitive advantage. Sometimes people compete on price because they feel they have no real competitive advantage. In a commodity-type service, what real advantage can you offer? Quality, for starters, is a great advantage to shoot for. Providing the best value- exactly what the customer is looking for and for the right price- is even better.
The bottom line is that even though recessions hit businesses hard (some more than others), many times looking internally before blaming external circumstances will give you better chances for success.
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