What High Profiting Pressure Washing Companies Do To Be Successful

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1 What High Profiting Pressure Washing Companies Do To Be Successful

2 Table of Contents The Situation Of The Pressure Washing Industry... 2 Why Are Pressure Washing Contractors Going Out Of Business?... 3 What Does Success Look Like?... 3 Constant Profitable Growth... 3 Proper Pricing Standard And Payment Protection... 4 Consistent Delivery Of Work... 4 Analyzing Labor Productivity And Performance... 4 Motivating Your Staff... 4 More Free Time, Money, And Quality Of Life Essential Drivers Of A Successful Pressure Washing Business... 5

3 The Situation Of The Pressure Washing Industry The bad news for pressure washing businesses is that census data shows 40 out of 100 businesses don t make it past the first year. Of the ones that make it past the first year, 80% don t make it past five years. Lastly, 80% of the ones that make it past five years, will eventually fail. Market Share The market share for exterior pressure washing is significantly low. Their market share accounts for just a 5% share. The majority of the players in this industry are the small and medium sized companies. This therefore means that there is no player that is largely dominant. The revenue generated is up to 9 billion dollars with the annual growth estimated at 5%. Changes in recent years Over the year there has been significant growth due to the increased construction of office spaces and business buildings. This has over the time increased the client base and hence an increase in the demand for exterior cleaning services. Another trend that has been happening over the time is the rising per capita income which had drastically reduced during the period of great depression. The rise has therefore created a bigger room for the clientele base, unlike during that depression time when clients decided to do away with cleaning services as a result of businesses surging. Growth As expected the growth has been consistent and an upward trend has been realized. Construction of rental facilities and increased construction of non-residential building has created are expected to shift the demand for exterior pressure services for these new businesses being set up. This means that the small and medium sized companies that offer these services are expected to have their services outsourced. The growth is also expected in terms of entry of other local players in the market. The ease of entering the market makes the venture very lucrative. The entrant is also motivated by the industry not having many regulations as well as a relatively small seed capital is required. Future trends The future trends of the industry are solely based on how the industry performs. As a result, the control of the market share in terms of exterior pressure service provision and related services will be crucial moving forward. Residential and commercial buildings create a success factor for the industry and as such many more buildings being constructed will have a positive impact on the growth of this industry. 2

4 Why Are Pressure Washing Contractors Going Out Of Business? It all depends on how you run your pressure washing business and whether your focus is on residential or commercial projects. Another factor that comes into place is the demand in the area you operate in and how much work you and your staff are willing to put into sales and marketing. On the low-end, we see companies that make around 3% profit before taxes. It s not much of a comfort to know you aren t the only one in this situation, but 97% of every pressure washing contractor only pull in around 3% net profit. Here are the top 7 business reasons if you feel you are not making enough profit: Bad or minimal lead generation Poor call handling and internet presence Underpricing in order to make a sale in general house washing Lack of defined selling low close rates 35% and less Lack of defined work delivery low close rates 35% and less Bad management of labor productivity Lack of staff motivation Lack of skills in financial management What Does Success Look Like? The successful company; whether it s a one-person operation or a massive business with over 50 trucks, employs systems and procedures for success. The following pages show what successful contractors achieve and their standard operating procedures (SOP) that are employed in their business. Constant Profitable Growth The residential service provider achieves 3 of 10 service calls converted into quoted work 8 of 10 non-service agreement customer calls converted into service agreements 65% increase in revenue and profitability 400% increase in quoted replacement and accessory jobs The commercial service provider achieves 3.25 average billable hours per commercial job 5 out of 10 quotes converted to sold-jobs Increase project close rates of 50%+ 42% average sold job gross profit margin 30% increase in revenue and profitability 3

5 Proper Pricing Standard And Payment Protection Studies show the average pressure cleaning technician is only around 52% efficient across as 12-month period, meaning that flat rate pricing is the only way for contractors to set fair prices without alienating their customers. On top of this, great contractors make use of proposals and invoices that offer payment protection terms and liability protection. What s great about flat rate pricing is that you are provided with pricing credibility and are able to reduce competition by quickly pricing and proposing work right there. Consistent Delivery Of Work The modern customer demands that their expectations are met every time they use a product or service. If you aren t able to deliver consistently then they won t call you back. Consistency is why some companies follow the franchise model like Best Buy and McDonald s. Each restaurant and retail franchise has set company standards and checklists to ensure each order is delivered to a consistent level of quality. Have you ever noticed why every employee asks the same questions? It s in their manual. They understand the importance of consistency and how asking customers about their needs through forms for the health, safety, comfort, property, or savings to increase sales. Like a franchising business, a contractor increases the average repair and replacement ticket and prevents the need for a costly call-back through proper call handling procedures, an onsite call assessment form, pricing standards, and checklists for standards in work and delivery. Analyzing Labor Productivity And Performance Keeping track of daily billable hours to service calls and jobs is your best option when it comes to knowing what you need to keep busy and whether you can justify your next hire. Tracking will allow you to introduce performance-based pay for your technicians and installers, as well as knowing when to adjust pricing. Keeping track of billable hours, the amount of service agreements, and the number of accessories/replacements per calls made or hours billed compared to job labor budget isn t as hard as it sounds. One-truck companies can use pocket pads and log billable hours following calls; companies with several employees can have technicians log calls after jobs for debriefing. Many contractors will understand if they are making a profit without needing to look at their finances by keeping track of billable hours. Motivating Your Staff Motivation is the most overlooked aspect of businesses of any size. Pressure washing business owners must keep employees motivated, and they should have the proper systems to do this. Performance-based pay is an integral part of paying staff on every level, 4

6 but how do the owners keep motivation? Every business owner when dealing with obstacles loses their focus and drive. Owners are faced with lots of challenges on a daily basis and can quickly feel overwhelmed. Even so, it s rewarding to be your own boss, even if it does get challenging. More Free Time, Money, And Quality Of Life Written procedures and documented policies rarely ever get respect. Many Pressure Washing business owners will recognize the need for standard policies, but they consider standard operating procedures to be some kind of necessary evil. Why? Having work delivery standards in writing creates structure and frees up the time of owners to allow them to manage the business. Every Pressure Washing company stands to benefit from standardization. It s possible to duplicate most pressure cleaning service work processes. Having work delivery standards written down offers a better solution for communicating and applying consistent standards and practices within the organization. Proper standards explain things for employees and make everything easier for them. There s no need for them to guess how tasks should be done and which checklist to use because they are able to follow procedures by referencing computers and printouts. With standard routines, employees have more predictable jobs and improve their ability to perform a task. 3 Essential Drivers Of A Successful Pressure Washing Business The most important key essential element for success is obtaining and retaining happy customers: Providing accurate estimates and pricing Delivering accurate work Verifying work delivery The second key is to aim for 100% customer retention Achieve retention: Service agreements Loyalty programs Social connections The third key is obtaining more profit and revenue Profitability 5

7 Growing the business Sustaining business These strategies are what we found that most successful pressure washing companies do in their business. If you implement these strategies, you can duplicate their success. Should you keep doing what you are currently doing, you will end up getting the same results. So, let s get you started right away! ServicePowerWashing Call us at Or Visit 6