Tuesday, December 13, 2005

Provide Something Extra

We're required to purchase an occupational license each year in order to legally hire an employee. I just searched all year-to-date occupational licenses for the janitorial/cleaning industry and found that just over four hundred licenses were granted. The alarming thing is that I only searched one county. We compete in four counties.

Think about that for a minute. Four hundred cleaning businesses have been in existence at some point this year for just one tiny county. I should restate that. Four hundred "legal" cleaning businesses have been in existence. There's probably a few thousand "illegal" cleaning companies out there.

In contrast, only twenty-six accounting firms were granted a license this year. Fourteen liquor stores. Seven boat dealers. One amusement park.

We compete against a lot of people. It's an easy business to start. A few bucks at the dollar store, a few flyers in a neighborhood, an inexpensive occupational license, and you're in business. It's easy to start, but difficult to maintain. That's proven time and time again. Check out your area Yellow Pages if you need tangible evidence.

Highly competitive markets are typically the least efficient markets. Businesses tend to take the easy way out and attempt to capture market share by being the least expensive option. It's harder being better.

The problem is that you can never be the cheapest provider in a highly competitive market. Somebody will always beat your price. Think about the airline industry. There's not four hundred airlines, but there might as well be. The cheapest provider gets the customer. When is the last time that you paid a higher price for air travel? If you have paid higher, then there is a reason. That airline gave you something extra.

The cleaning world better wake up before it's too late. You better start providing something extra.

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