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Scared by the “big bid”?

intimidatedHi Steve,

Hope you are doing well. I attended Strategies for Success about a year and a half ago.  The seminar has made an incredible impact in my business and my life.  Thank you for all that Jon-Don and you do.

At SFS you spoke about commercial cleaning and I was hoping to get some feedback about a job that we are trying to put in a bid for. I just found out about this opportunity. I wish I had more time but it is due today. Oh well, it is what it is.

Anyway, a local university here in Phoenix is taking bids for carpet cleaning in its general services buildings which runs over 300,000 square feet! I am trying to put together a proposal. I am going to send you the link as well as the addendum link. If you have any advice, I would sure appreciate it.

Sincerely,

A Bit Intimidated by Paperwork

Hi Intimidated,

Sorry I missed your deadline.  My wife and I have been on safari in South Africa and then attended a religious conference in Durban.  But I digress …

Wow, Intimidated, that was a LOT of paperwork to read on your university proposal!  The good side is if you get it you will probably keep it.  Remember that your competition is equally and maybe even more “intimidated” than you are!  So the first thing I would say is don’t let yourself get flustered.  Just like with everything else we teach in SFS just approach this new area logically and calmly.  Here are a few questions and points to consider:

Do you want to do this type of regular, institutional work?  (I define “institutional” as hospitals, government buildings, schools and of course, universities!) There are (as usual) advantages and disadvantages:

Advantages:

  1. Institution’s credit and pay frequency is usually pretty good.  (Unless of course you live in California!)  And the regular cash flow is great!  (Assuming you bid the job profitably.)
  2. Their expectations re: job quality are usually pretty low.  So while we would never counsel you to do slip-shod work you also won’t have your feet held to the fire.
  3. As I mention above traditionally you can get “ensconced” and become part of the woodwork and you will keep the job a long time due to their inertia.  (We are talking “government” here, you know!)
  4. Even if legally the job has to go out to bid you will have the inside track because you will be familiar with the requirements and your cost structure plus you will be a known quantity to the administration.
  5. There is less “selling” involved.  You really don’t need to razzle-dazzle these people.  They just want your numbers on the job delivered by a reliable company with a proven track record.   However, institutional work has it’s downside too …

Disadvantages:

  1. Unlike residential and even some commercial where they will pay more for higher quality, you will almost always be dealing with a low-bid situation.  No problem- just adapt your production techniques to volume work, keep control of your overhead and most importantly- KNOW WHAT YOUR COST STRUCTURE IS!  There is no reason why you as a cost-efficient small operator can’t play with the big boys … IF that is what you want to do.
  2. Another significant disadvantage of institutional work is they normally will have much higher insurance, bonding and legal paperwork requirements.  Again, remember that your competition bidding on this job also must comply with these guidelines.  So at least you are on a level playing field.  But this points up the need to think strategically on where you want your company to go.  If you decide to enter the institutional market you can “amortize” these increased insurance and paperwork costs over many jobs.  It may not make sense to just have one institutional account.
  3. Much of this account will be night and weekend work.  If you are an owner-operator or have a limited staff what will this do to your other work?  (Not to mention your home life!)  In other words, big institutional contracts normally mean adding extra employees, with all the costs both financially and emotionally that this implies.

So after considering the pros and cons of institutional work you decide to strike off in this new direction here are a few thoughts:

  • Institutional work is a totally different business.  Run it as such.  Institutional work (as I point out above) is a whole different beast from even your other regular commercial accounts.
  • Get efficient- really, really efficient.  Simply put (and especially given the typical low-pile, glue-down carpet found in institutions) you should do much of your cleaning using encapsulation technology.  Find all you need to consistently clean 2,500 square feet per hour of wide-open spaces in this Special Report.
  • Since if you still plan to have a family life much of the work will be done by employees working away from your direct control you must build your Business Infrastructure around this goal.  As a SFS member just go to the “employee” section of your SFS Operations Manual and you will find a plethora of ready to use forms and systems.

Have you gone here on our SFS site to download my “Selling Commercial Cleaning” Special Report?  It also has some great ideas on how to ramp up your production efficiency.

Keep me posted on your progress.

Steve

PS  Plus you can download my “Commercial Carpet Analysis” form.

If nothing else this form will help you improve your bidding.  Let me know how the form works for you and what you decide to do.

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