Whether you’re a seasoned commercial maintenance company or a residential company considering taking on some commercial clients, one thing is certain: You need to have a solid plan in place. Bruce Moore Sr., chairman and CEO of Eastern Land Management, says commercial business is a popular venture because it offers businesses a recurring revenue stream.
“It’s not totally recession-proof, but it does give you some security and strength in your overall financial health,” he says.
Moore got into the commercial aspect of the business because, frankly, he wasn’t thrilled with the demands that his residential client base was making. He didn’t enjoy taking calls at 8 p.m. or missing out on time with his family. He realized the commercial sector involved companies that had regular 9 to 5 schedules.
“When they left to go home for the night, they were done for the day,” Moore says. “They weren’t interested in calling their service provider unless they had to talk about business.”
“(Commercial operations) are a bigger picture operation, and they’re a little different than residential,” he says. Here are a few ways Moore has made commercial operations work for his company:
Have a plan.
When you first get started in the commercial sector of the industry, you probably have plenty of ideas circling in your head. And Moore says that’s great, but it’s important to get those ideas down on paper.
“Especially when you have other people in the business with you, whether it’s managers or salespeople, (it’s important) to have everyone on the same page and rowing in the same direction,” he says.
At ELM, the company hosts a strategic planning meeting in August. The meeting is held off site, and it always incorporates a little fun, too. “We spend about a day and a half with our leadership team (Moore, the current president, the controller, and branch managers),” he says. “And we have a facilitator to keep us on schedule.”
Narrow your focus.
There are countless avenues to the commercial market. Shopping malls, industrial parks, medical facilities and educational campuses all have their own needs. Most of the facilities even have a trade association that they fit into. Moore says homing in on the types of properties you’re interested in will help the you develop key relationships.
Sometimes, you even have to say ‘no’ to new customers. “It’s difficult to tell a customer no, but unfortunately you sometimes have to do that,” Moore says. The customers you should turn down are the ones who will run your company dry without producing a profit. Sticking with those customers could end up wasting time and resources you could be providing to another client instead, he says.
Moore also recommends going after customers in a specific geographic location rather than spreading out. In fact, ELM found customers right down the street from their office.
“We really looked at targeting those customers who fit our profile and were within the geographic area,” he says.
And it makes sense to cut down on gas and drive time, too.
You also want to narrow down your financial targets, which can be done in those yearly strategic meetings. Exploring what types of profit centers your company has will help provide the best service to your customers. If you offer enhancements, for example, that can be a profit booster.
“Identify what your targets are going to be and set sales goals and growth goals,” Moore says. “Align your sales and operations so that you’re not overselling. There’s nothing wrong with making a stretch, but you don’t want to create unnecessary stress because that leads to customer dissatisfaction.”
Beef up your assets.
If you’re planning on servicing larger areas, you’ll need to up your game when it comes to equipment and labor. You may need to buy more equipment or the latest models to get familiar with the new technology. Moore says it may even be time to invest in a larger building.
“Sometimes turning over old equipment on a regular basis is a better strategy,” Moore says. Along with bigger contracts, more equipment and added labor, your company will also need to carry a higher insurance policy.
“Corporations want to make sure if something happens, it doesn’t come back on them,” Moore says. “There’s much more risk and corporations want to be protected from that. And commercial auto insurance, it goes without saying you need that regardless.”
Adding advisers to your team can also help educate your company. “We’ve used several of the industry’s experts over the years,” he says. “They get around to other companies and can educate you as to what’s happening (in the industry) as well.