I thought about writing another edition to the blog back in September when I received a string of phone calls from local Schools asking would we be able to price to undertake the grounds maintenance work from April 2018.
Now this was music to my ears, as; as a business getting into local authority work has always been the goal of Cheshire Grounds Maintenance (CGM) and a huge range of other businesses from Plumbers to paper suppliers. I pride myself on trying to be an ethical business, so when I do get a phone call asking for me to price work from new customers, I always ask if they have a current provider and ask why they are looking elsewhere for the same provision. If the response is that the customer is not happy and the provider is not fulfilling their requirements or it is a legitimate end to a contract and tenders are invited then I have no issues in pricing the work.
Over the past few seasons we have tendered for various Local authority and Parish work, some we have been successful and some we have not. When I find out what the work I didn’t get went for I find my self saying “how can they do it for that”, “surely something has to suffer.” So to be honest the requirements to actually be on the list to tender for Local authority work, these are things like; a certain level of insurance, proof of viability, money in bank to sustain not being paid for a few months, are not worth the rates for the jobs at all. I do not see why a business should work for either no return or at a loss, the idea of business is to make money, invest that money back into the business to sustain quiet periods and I should not be ashamed of wanting to make money by providing a quality service which works safely and keeps customers happy.
In a world where many items we use on a daily basis are going down in price, tv’s , laptops, teles and the endless DFS super sale, costs for businesses big or small are on the rise such as ; Insurance, the insurance tax, petrol, vehicle costs, vehicle duty, costs of materials, cost of repairs, employment costs but what people are willing to pay for the work is decreasing. Now the recession is ten years old and the excuse of the squeeze on costs is waring very thin but people and businesses still expect a quality service at low prices.
Lowest price is not always best value for money. The only true way to see if you’re getting best value is to ensure the job is being done to the same specification. For example; parish councils or Local authorities will have a tender specification which a company will base their tender on. However not all customers will use a work specification so when I have been putting prices in for work, I have had to explain what I will be doing for the price, that’s fine until another company puts a price in which is cheaper but not the same amount of work is covered by the price, but all the clients see is the price.
This has been a long winded way of bringing me back to the original topic of Schools phoning me up asking me to price the work. I said to one person who contacted me, this is a coincidence as I’ve had several calls this week from schools, they responded by saying well you will have as all Cheshire schools have had their budgets cut again and need to find savings or staff will be laid off, so surprise surprise the first thing to be slashed is the grounds maintenance budget, with the ultimate words spoken to me “as its public money we have a duty to provide best value” however best value is not always the cheapest but the cheapest seems to be all the public sector looks for, not necessarily good service but cheap. Now I know a few companies who do the School work and I have an idea of costs they charge the service they provide and even at those costs as a business I could not do it for, never mind with another decrease.
The decrease in costs of Local authority work has been reflected across the various trade industries in both public and private sectors. A good example is several of my clients are property management companies and I like to think we have built up a good relationship, I prioritise their work and they respond to the usual “will you just” “can you just” “now you’re not going to charge for this are you as your already on site” “we will make sure more work comes your way” etc etc. However recently I have lost out to other companies coming in cheaper, with the response from the property management companies being similar to that of the public sector “we have a duty to our clients to make sure we get value for money” and just like the Schools cheaper is not always best. I have looked at the work I have missed out on and the standard has not been the same as mine or more frustratingly it’s not the same job I priced for, less work undertaken so it’s bound to be done cheaper, so all the loyalty I have shown has been forgotten about in the name of best price.
The domestic sector is not much different, I was aware that when doing grounds maintenance for domestic customers your competition is anyone who has a vehicle and mower and quite frequently these people have no insurance or many overheads to worry about so can do jobs cheaper bur not necessarily better. I remember turning up to price cutting a lawn and I quoted £12, the customers were happy then after a few weeks they told me that another company had stopped and quoted £10. I said let them do it for £10. Anyway the next season I was asked to go back to that job as the person who was doing was no longer in business as they couldn’t make it pay, but would I do it for £10. Nope not a chance was my response, I explained it should have been £15 and I was doing them a favour at £12 but no way would I do it for £10, I want to earning money not losing money.