From Nickel-and-Dimed to Premium Priced: 3X sales & Drastically Increased Profits in 4 years
Background
A $13M (at the time) janitorial company specializing in large commercial office cleaning and periodic maintenance like floor polishing and metal restoration. The company had top-line growth but less than 5% profitability, leaving little cash for growth initiatives or owner distributions. Leadership believed they could not raise prices and were stuck in commodity pricing.
We identified & implemented the following strategies to improve cash flow:
Implemented monthly profitability scorecards with root cause analysis for bottom-performing customers.
Trained customer service teams to identify and sell high-margin add-on services during daily building inspections.
Ended unprofitable contracts while retaining and winning back clients who valued the service.
Correctly priced all new contracts to ensure sustainable profitability.
Conclusion
Through our pricing and customer profitability review, we helped this janitorial company boost its bottom line from 5% to 15% while tripling revenue in four years — all without sacrificing service quality. Sales increased from $13M to $40M; profit went from $250k to $7M.
Solutions
Challenges
Net income misleading leadership into overlooking true cash position
Some practices highly profitable while others operated at a loss
Profitable practices subsidizing underperformers
No clear debt service or working capital benchmarks in place
Benefits
25% increase in top-line revenue from high-margin add-on work
100% increase in bottom-line profitability in year one
Revenue tripled in four years
Bottom line percentage increased from 5% to 15%
Improved client retention and reactivation rates
Save money, make money, stay out of trouble, have fun.™
