Cost Control For Commercial Cleaning and Service Contracts Continued.
Then organise your list and begin your budget by following these steps:
Step 1 – Identify the main components of expenditure i.e. rent, rates, service charges, capital projects, commercial cleaning contractors.
Step 2 – identify sub-components, for example under commercial cleaning you might easily find: regular daily cleaning, commercial window cleaning, cladding cleaning, commercial carpet cleaning, consumables, waste clearance.
Step 3 – clarify the specification for each by focusing on end-user needs. If certain specifications need increasing estimate the cost. Conversely cost can be reduced by reducing or ceasing unnecessary specification.
Step 4 – List the sources of cost i.e. commercial cleaning contracts, contract terms, frequency of services, inflation. Use the list to make your budget more accurate and keep the list to help forecast any likely future changes to your budget.
Step 5 – Establishing cost for each subcomponent can be done in a variety of ways:
- Analyse previous years expenditure and taking into consideration inflation
- Negotiate commercial cleaning contracts and services through tender
- Request cleaning contractor or service provider to provide detailed analysis of their quotations.
- Outsource a third party consultancy to provide certain cost analysis
Step 6 – As with all businesses and organizations certain costs will purely reactive therefore part of your budget will be reactive by necessity. Where this is the case use as much historical data gathered by analysing trends to help you make an informed guess as to how much of your budget will be reactive and always allow a contingency margin for worst case scenarios.
Step 7 – After submitting you budget for approval you will likely receive a request to make cuts. Cutting cost is vital to improving your bottom line. There is a danger in making unreasoned arbitrary cuts as this can create crisis’s later on that will likely cost more to rectify in the long run.
Balance with regard to timing of budget creation is critical. Too early and costs will likely change, too soon and you will likely be under pressure to deliver and may inadvertently fail to take into account the many factors that make a successful budget.
However, the steps outline should provide you a framework to follow and enable you to easily identify change making the forecasting process that much more accurate.