Some contract sweepers take to new markets gingerly, easing themselves in, testing the waters tentatively before making a full-fledged commitment.
Great American Sweeping takes its markets by storm.
"So many sweeping companies just talk price, complaining that the other guy is cutting his prices and cutting your throat," says Mike Sanborn, president of the fast-growing sweeping contractor. "Well, in every market we've gone into we've become the price setter, not the price breaker. We're 20% to 30% higher than all our competition in all our locations."
That's not an "extra" level of profit for the Henderson, CO-based sweeping contractor. It's just what the company needs to charge — and what the market should be paying — so a sweeping contractor can make a reasonable profit. The figures are based on the research Great American Sweeping does before deciding to enter into a market. Sanborn says he thinks the contract sweeping industry needs to work together as a team, selling quality work and customer service at a per-hour rate that enables sweeping companies to grow and become better, more profitable businesses. And that's how Great American Sweeping approaches the business.
"Contractors need to analyze the market and go where the price needs to be — not where the price is," he says.
Sanborn cites one market where the going price for broom sweeping on construction sites was $75 an hour. "Before we went into that market we analyzed it and we took a close look at that price and we found we couldn't do business for $75 an hour," he says. "We figured the sweepers already doing business in that market couldn't be profitable at that rate either."
So Great American Sweeping entered the market, boldly, at $95 an hour. "It took us a while to gain a foothold, but we are now firmly entrenched in that market," he says. "Within two years we have gotten 50% of the business and we're getting it at $95 to $100 and hour."
Sanborn says the same thing happened in another market where in 2000 broom sweeping was being bid at between $75 and $85 and hour.
"We didn't have a broom operation in that market at that point but we wanted to start one," Sanborn says. "We looked at it and decided we did want to get into that business, but we realized we couldn't be profitable at that rate. Now we're doing broom sweeping in that market at $95 an hour — and so is everyone else.
"We feel that the myth 'go cheap' is just that, a myth. It's not the way to go. It's not the way to develop a market and it certainly isn't a way to grow a business. Because when it comes right down to it the customers don't want the cheapest sweeping service. They want to have the best out there; they want the quality."
Sanborn emphasizes that every contractor is tempted to reduce prices to get business, but he says his company's experience shows that's not the way to be successful.
He says contractors need to pay attention to their toughest customers, particularly the customers who are always looking to drive the price down — while expecting the sweeping contractor to maintain the level of service.
"When you've got a customer who is beating you up so badly, telling you he wants to give you the business but he needs you to help him out by coming down in price, that customer will typically continue to beat you up on price once you give in the first time," Sanborn says. "He will become your worst customer, putting the most pressure on you and becoming the worst customer to do work for. It's a customer you probably don't need."
Place value on sweeping
He says much of the market's difficulties with pricing of sweeping services results from contractors and their customers not placing enough value on the service or analyzing its actual costs. He says a good example is construction site sweeping — sweeping pavement after milling and prior to overlays — which many sweeping contractors and even paving contractors want to get into.