Keeping Your Ducks in a Row
Mark Schwarze began in the sweeping business more than a half century ago, in 1965 at the age of seven. His father, Bob Schwarze, was the founder of Schwarze Industries, Inc., now owned by Alamo Group. Mark is currently the Sales, Marketing and Product Development Manager for Victory Sweepers.
by Mark Schwarze
My background in the sweeping/sweeper business began 55 years ago at the age of seven. I was the 'trained and designated' broom pusher on all sidewalks for my dad's contract sweeping business. His parking lot sweeper back then was a mechanical broom unit called an 'MB Cruiser.' Sweeping was via a PTO. It only had right-side steering so, initially, me riding along was a problem.
However, since dad liked building things out of wood he had previously built me a 3' square toy box. The box became transformed to be my seat on the left side of the International chassis. Because it was a standard shift machine, if dad got hurt we had no one to drive it since I was too young to drive and mom couldn't drive a left-hand, standard shift, vehicle. You can see what prompted him to develop and manufacture a true, air-based, parking lot sweeper!
Eventually a gas-powered blower replaced both me and the broom and, ultimately, my sweeping experience developed into the business of manufacturing sweepers. During my many years in the business – and after working with many hundreds of contractors through the years – what I've noticed in my travels is there is always helpful experience to be found, and I love finding it. However, I have also noticed an alarming trend in the contract sweeping business that needs to be addressed, discussed, researched and FIXED.
The major problem I see with way too many sweeping contractor businesses is owners who do not have their "ducks" in a row.
In my old Schwarze Industries days, I had the pleasure of working with a Sales Manager, Doug Ledbeatter. He ran our Schwarze Australia sales team and was always spewing bits and pieces of pure and simple wisdom. Doug was a great motivator, a hard worker and one of the smartest business guys I've ever met: Nothing fancy, just ground level, solid common sense wisdom. Doug always said, "If you can't measure it, you can't control it. And, if you can't control it, YOU ARE OUT OF CONTROL!" Using my best Australian accent let me say that he was Spot ON!
As I travel around delivering sweepers, doing demonstrations and so forth, I remember my dad's definition of a sweeping contractor, which he opined to me when I naively remarked that "contractors need to get together and work together in order to be more successful." His response was grounded in his North Dakota farming wisdom; he believed parking lot sweeping contractors were very similar to farmers. He explained that, like farmers, sweeping contractors were for the most part the "salt of the earth" – good and ethical people.
Both farmers and contractors, he said, liked working alone, which is why the odd, late hours were to their liking. Independence was also their strength as well as their weakness and, finally, both tended to be people who 'did it their way.'
Organizing parking lot sweeping contractors, dad said, was liking getting farmers to share tractors, it was not happening. Today, 50+ years later, I agree he is still correct in that assessment. And, I think the concerns I see for this industry have their roots in his defined reality of sweeping contractors. Having myself struggled financially with mistakes I've made, I sincerely believe that many parking lot sweeping contractors, though not all, have to get their ducks in a row if they and their profession is going to survive. Here is what I've observed:
1. Contractors (as well as everyone in business) must know their costs. My biggest issues came from running on my 'gut' and, trust me, the bigger your gut does NOT mean the bigger your brain! If you aren't reviewing your revenue and cost numbers WEEKLY, you are driving blind trying to negotiate the bumps in the road by feel. That is an excellent way to fail in business. True feel comes from interpreting your financial numbers.
2. Contractors also tend to focus on what they like to do instead of what they need to do. A great book I read but didn't follow as well as I should have is called the "E Myth." Very few people are good or trained at running a business, instead they have a skill they love and that is also needed to be successful in business. But here it is, if you don't develop your "Business" skills quickly you will never survive.
3. Just like farmers, many contractors don't invest enough of their profits into their working capital. Now that they are in their own business and actually generating the most money they've seen in their lives, gets used on the actual business. The new car, boat and motorhomes are not essential for your business and buying these kinds of items can be a deadly trap. Please don't misunderstand: the money is yours and you can do with it as you please. However, having a rainy day reserve is essential.
Do you really know who owns more of your business, you or your financing sources? I had this pointed out to me on several uncomfortable occasions by my financing sources while I was trying to explain to them that I was the real boss...
4. Don't fall into another trap, which is to use sweeping as a loss leader to get other business for striping, sealing or pressure washing. I have heard this a lot more than I'd like. Stuffing the revenue box is important but wisely analyzing what you're doing BEFORE you do it might save you lots of pain.
5. Most contractors never pay themselves a true salary when they are starting out, when they are the ones actually out there every night doing the sweeping. They tend to view their bottom line that includes their discounted labor as being replicable with simply the addition of machines. In those situations, sweeper #2 isn't going to double profits. Then, when sweepers #3 and #4 are added in an effort to try and prop up falling margins, the overhead tsunami requires so many new expenses that such a loosely run small business can't catch its breath. These contractors typicall don't have discipline in their accounting and so don't have an ability to see the curve and off the cliff they go.
I have seen deterioration in revenues and margins almost every year. However, there are many very smart operators out there who know their costs and have pricing based upon getting a normal profit. All of the older, most successful, parking lot sweeping companies – and there are many, – seriously manage their business and don't let their business run them.
In conclusion, inspect what you expect! Whether that is following up on your employees' work or confirming your financial position, develop an ongoing method that allows you to confirm what's actually going on in your business.
Financial statements are not a year-end tax formality; rather, they are tools to help you see the curves ahead. The more often you can review accurate numbers, even informally, the better you will run your business. Weekly financial reviews of all key current elements, including accounts payable, accounts receivable, risk costs from insurance to legal, and safety concerns and projected maintenance expenses need to be addressed weekly.
Know every aspect of your costs! I believe this is absolutely the most major issue in this industry because many of the parking lot sweeping contractors in America DON'T REALLY KNOW THEIR COSTS! Become obsessed in this duty because it is the knowledge that will help you avoid many regrets in the future and can save your business. On this same topic, don't lie to yourself! If some aspect of your business costs looks too high or low, make sure!
Hiring and growing people that help you in your strengths is fine, but even more important is to hire people whose strengths serve to cover your weaknesses. And, when I say hire them I don't mean you have to always have them on you company payroll. You may simply need to add their services for a short period of time but by all means consult them.
If there's something the last two years have shown us, it's that business is fluid and constantly subject to changing. All of our decisions are determined by each of our relatively small bodies of knowledge; it's always a good idea to find professionals who can help out, whether as a new hire or as a consultant or mentor.
The best way to continue to love what you do is to make money – and to do that you must be able to control your numbers, your costs and your risks. Otherwise, they will control you. Finally, keep all your trucks... I mean "ducks," in a row!
You may reach Mark Schwarze via email sent to email@example.com.
* Ducks in a Row Info Source: https://www.wisegeek.com/where-did-the-term-get-your-ducks-in-a-row-come-from.htm
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