Springtime in the window cleaning industry is generally about as crazy as it gets. Springtime in the window cleaning industry in 2021, OFF THE CHARTS CRAZY! This has been a downright nutty start to the year, and as we turn the corner on July 4th and hit what I like to call “the summer lull,” I want to take an article to reflect on what I’ve found to be the best mindset and approach to managing the seasonal ups and downs of our industry.
Credit: Erick Martinez
My window cleaning business is in Minneapolis, MN, so my seasonality may be slightly different than yours. Still, in general, we come out of hibernation in late March, ramp up in April, go balls to the walls in May and June. And hit the summer lull between July 4th and Labor Day, ramp up again in September and then race the weather to the finish line from October through November, and maybe a smidge into December if we’re lucky. We focus primarily on residential and mix in some commercial projects here and there, but we do not dabble in route work so that you have a lens of my perspective on this one.
Springtime in the Window Cleaning
We focus very intently on two elements of our business; Capacity and Demand. We DO NOT entertain any other issues in our industry (at least we try not to). We may have system and process issues; we may have infrastructure issues; we may have software issues. Still, unless they debilitate our business from making money, we are generally going to put them on hold until we get to the summer lull or the winter hibernation before we address them. The reason is simple, the opportunity cost of shifting our attention away from producing revenue is too costly. As long as we can at least get by with what we have in place, we are better off staying focused on productivity.
Productivity requires two things, as previously noted, Capacity and Demand. We focus all of our attention on growing and training our capacity and then filling that capacity with as much demand as it can handle. Therefore, during the ramp-up and the busy season, especially early on, we spend our time and money on recruiting (capacity) and marketing (demand). Those are the two things that will make you money. I’ll point out, and will address in a future article, that equipment does not make you money. It might make your capacity and demand a little more productive, but you always need to start with the recruiting and marketing, or your equipment is useless. I’d also encourage you to have an open mindset regarding managing your recruiting and marketing spend. Understand that this budget is interchangeable. You may have noticed over the past few years, and especially this spring, that labor has been hard to come by. You may have also noticed that customers have not been. Therefore, don’t get caught in the trap of complaining about the labor market while customers are knocking down your door and you can’t serve them. Shift your budget, get aggressive on spending recruiting dollars, raise your prices, and let the customers come through that door. #ABCs #AlwaysBeCruitin #HireFastFireFast
Credit: Andrei Jose Pagsisihan
As we get staffed up, our attention turns to managing our Cost of Goods Sold (COGS – I know we are selling services, not goods, but it’s the nomenclature). While my last couple of articles hammered on managing all five categories of expenses, we only focus on this one in the busy season. We need to ensure all of this capacity and demand that we are stacking up is working for us and not against us. Our COGS is measuring our performance in the field, and as a reminder, includes things like labor, fuel, and supplies/tools. We use metrics like Production Rate ($/hr on both an individual and team basis), Quality Score/Net Promoter Score (we use Quality Driven and Broadly at different locations), % Capacity full, and weekly Gross Margin to keep us on track. If any of these metrics are outside our target range, we aren’t necessarily changing processes. We are simply holding employees accountable and sometimes letting people go as needed to ensure the people we have on our bus are the right people.
Throughout the busy season’s hustle and bustle, we intentionally set aside any focus on our Admin, Fixed, and Variable Overhead management. At the same time, these areas are essential to have dialed in to maximize the profitability of your business model. The time to fix issues and implement new systems and processes is generally too time-consuming to make changes and won’t have a fast enough or great enough impact to pay off. Don’t get me wrong; we are still tracking metrics and financial data in these areas. Still, unless something is severely broken and hindering our ability to be productive in the near term, we are simply building a list of things to address once we get into the summer lull or the winter hibernation. Some things we’ve run into in the past that would fall into this camp would be making a change with our office staff, changing CRM (Customer Relationship Management) or phone systems, training systems, and other processes and policies as needed.
As always, don’t forget to head to our website and grab our free chart of accounts download and free target budget template so you can keep your financials dialed in and your profit margin maxed out.
Dan Platta – CEO – Blue Skies Services
Bookkeeping, Beer, and BS on Facebook