There’s more than one way to trim your janitorial expenses without layoffs or even cutting back on payroll hours.
It’s essential to make a profit running a commercial cleaning business. That’s no surprise. And in theory, it’s easy enough – you just need more money coming in than going out. The tricky part is figuring out how to balance your janitorial expenses with your incoming funds.
For many businesses, payroll is the largest percentage of their expenses. That also makes it the easiest one to single out as a place to cut back. However, layoffs can create more problems than they solve.
Your remaining staff may feel like the company isn’t stable, and they may look for other jobs. When people leave, the team you still have on staff has to work harder to make up the difference, leading to burnout and possibly cutting corners in order to get the job done. Furthermore, if you get an influx of new contracts, you have to go through the hiring and training process with fewer veteran staff members to help.
And yet, there are times you absolutely need to trim your janitorial expenses. How do you reconcile these competing issues? Here are some ideas that can help you cut your costs without letting employees go.
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9 Tips for cutting janitorial expenses without cutting staff
1. Get a handle on your expenses. One of the first steps to take in cutting your janitorial expenses is to get an accurate view of what your expenses are. How much are you spending on supplies, equipment repairs, office space, insurance, gas, utilities, and so on? That’s not to say these expenses aren’t vital to your business; it’s just important to know where you stand.
2. Look for obvious places to cut spending. Outside of payroll, take a look at your list of expenses. Are there any obvious places you can trim your costs? These might include subscriptions or memberships you don’t use or advertising that isn’t bringing customers in. And let’s be honest, do you really need to keep ordering those company logo pens?
3. Reduce inventory. One area where you could save significantly on your janitorial expenses is your inventory. Do you have cleaning products that expire before you use them up? Do you have numerous general-purpose cleaners for different clients? Could you move your clients to one or maybe two cleaning product solutions? This won’t always be the case, and certainly, you need specialty products for different surfaces. However, if you can cut down on the amounts you order, you may find there are cost savings to be had. This is especially true if you’re renting storage space.
4. Switch to concentrates. In many cases, concentrates are less expensive on a per-ounce basis (and more environmentally friendly) than ready-to-use products. They also take up less storage space. You can also get more product out of the same order, leading to reduced shipping costs. The key here is proper dilution. If you have a dilution system in place, you’re in luck. However, careful measuring by your team will give you the same results.
5. Make your routes more efficient. If your teams are traveling from one side of town to the other and back again, you could cut your transportation costs by planning more efficient routes. This will be somewhat dependent on where your clients are and the timing of service, but you could potentially save enough time to add a client or two to your roster, which would increase your revenue and not only reduce your janitorial expenses.
6. Pay invoices on time. If you look closely, many of your invoices may have an additional fee if you don’t pay within a specified time. Keep an eye on these, as one or two late fees may not seem like much, but these costs can add up over time.
7. Review your business contracts. Insurance might be the big one here. Do you have the right policy? Or are you paying for more than you need? Could you get a discount by bundling your business and commercial fleet insurance? Take a look at any fleet vehicle leases, too, and be careful of going over any mileage limitations or any other specifics that could leave you paying more than you need to.
8. Review your janitorial contracts. Scope creep is big in the service industry. You’re contracted to do ABC, then gradually, you get roped into doing D, E, and F. Your expenses go up, but your revenue doesn’t. Meanwhile, your customers begin to expect that you’ll do everything you’ve been doing. It may be a tough conversation to have, but if your teams are experiencing scope creep, you have to talk to the customer. Your good customers will be understanding and not have a problem either paying you more for these services or reverting to the original contract. And your customers who expect you to continue on without paying more? They aren’t the customers your business needs.
9. Invest in your business. This might seem to be the opposite of cutting your janitorial expenses. However, as a longer-term solution, investing in your business can have a huge ROI. Here are just a few ideas that can pay off:
- Buy or lease new equipment. New equipment runs more efficiently, requires less maintenance, and gives your commercial cleaning business a competitive advantage.
- Get certified. There are numerous certifications available that can put your company into a niche field of limited competition. This may be anything from specializations in hard flooring to offering LEED credits to biohazard cleanup.
- Take advantage of technology. Systems like Janitorial Software can streamline your entire business. Keep everything from inventory to inspections to schedules to bidding all in one user-friendly location.
Ultimately, layoffs should be a last resort in cutting your expenses. Take these steps first and you may find that it’s not even an issue you need to worry about.
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