June 21, 2021

How the Subscription Model Improves Your Operations Budget

Manager working on the operations budget using laptop and calculator in office

For any company, budgets can be a tricky and unpredictable aspect of the business. Creating them, sticking to them, and adjusting them can be a difficult but crucial task to keep your business up and running. 

Operations budgets can be difficult due to the number of departments such as production and sales, types of equipment, and labor costs. This also makes them incredibly important because it impacts the successful and efficient operation of your entire business. 

Aside from this, an operations budget will also provide financial accountability. With a well-organized and closely followed operations budget, you will decrease the chances of splurging on any purchases that might not be necessary for the business. 

In the cleaning business, an operations budget is especially important to BSCs and managers of cleaning teams. 

Respondents to a CMM facility management survey noted that “half are responsible for 11 or more facilities; 37 percent of them are responsible for more than 20 facilities.” 

They make the final call on the operations budget of their teams and facilities, so they must know how they can improve on this. 

Typical Budgeting Problems in the Cleaning Business 

1. Budget Cuts 

Over the last year, many things have changed. The pandemic had a significant impact on many businesses, some of which lost revenue and some even shut down completely. On the other hand, the focus on cleaning for health and safety has never been stronger. 

As CleanLink puts it, cleaning team managers are facing “the age-old challenge of doing more with less.” Often customers do not fully understand the complexities of maintaining a considerable number of buildings and different areas, which can make it difficult to manage their expectations. 

Meeting higher standards on a lower budget can be a challenge for BSCs and managers, but it can be done once you take a good look at your operations budget. 

2. Misunderstanding Total Cost of Ownership

Another budgeting problem that might come up is simply not knowing the total cost of machine ownership. Most property managers and BSCs struggle to stay up on the total cost of ownership for their fleet because the bills for their equipment are being sent to a separate accounting department. 

When you have three machines, this might not be a big problem. It is easier to communicate about this with accounting, or managers might even handle the bills themselves. However, once you have a larger fleet, this can cause issues when it comes to your operations budget. Many machines, all with multiple bills from service, maintenance, and repairs can easily make any manager lose sight of what is being spent to keep the machine running. 

Being unaware of the total cost of ownership can cause the budget to be incomplete, which can lead to problems with both future and present expenses. In this way, it can impact the health of your cleaning business. 

3. Cost of Labor 

Another thing that can cause issues in an operations budget is labor costs. The cost of labor is one of the biggest expenses in cleaning budgets. Couple that with the inability to track performance and set clear processes and the cost of labor can be driven higher than necessary. 

Information like cleanable square footage, the scope of work, priority areas, and minimum frequency of cleaning is crucial for time management. Although BSCs and facility managers are aware of the importance of this, it can be hard to monitor everything that needs to be done when they are not on location. This can lead to staff not knowing a clear process, and the day's cleaning goals, and even result in mediocre cleaning. 

Knowing how many hours are necessary to clean a space as well as setting up clear processes can save a significant amount in terms of labor costs. 

4. Losing Track of Maintenance and Repair Costs

Many cleaning teams that are tasked with cleaning larger areas use cleaning machines to help get the job done more efficiently. But while these machines can be a great solution to save time, they might be causing other problems when it comes to your operations budget. 

A large fleet of machines can make it difficult for managers to know exactly where the machine is and how (and if) it is always functioning. Unexpected breakdowns or malfunctions can cause service and maintenance costs, but you need to know this happens to be able to incorporate it into your budget. 

When managers oversee many machines in separate locations, this might slip through the cracks, causing these costs to get lost in translation. 

The All-Inclusive Subscription Is a Solution 

1. Budget Cuts

Using cleaning equipment that is provided through an all-inclusive subscription can positively impact an operations budget. 

One of the biggest benefits is that subscribing to equipment frees up capital and keeps it liquid, giving you flexibility. 

For example, when subscribing to floor cleaning equipment from ICE Cobotics, you’ll pay a set monthly payment for your entire fleet for the duration of the contract. 

This includes maintenance, parts, service, and more. This can help offset unexpected expenses that often negatively impact a budget, which is especially difficult to navigate when your budget is shrinking or just tight. 

Not only that, but by subscribing you’ll keep cash liquid since there are no large upfront costs, and this gives managers and BSCs the ability to bid on more jobs or offset budget cuts. 

2. Total Cost of Ownership 

 An all-inclusive subscription can have a positive impact on understanding the total cost of ownership of your machines. 

Across the cleaning industry, it is common practice for property managers and BSCs to be left with the responsibility of maintaining their equipment. This means that when a machine is down, they are responsible for calling to get maintenance and service. 

This results in trip charges, and labor and service chargers, often being billed separately. Multiply that across a fleet of twenty or more machines, and it is easy to see why understanding the total cost of ownership is a challenge. 

With a subscription plan, the service, maintenance, and parts are included—eliminating the hassle of multiple bills and making it easier for your finance team to keep track of the exact cost of the machine. 

This can have a positive impact on the overall operations budget as much of the guesswork is taken out of the picture. Plus, you’ll gain a more accurate understanding of equipment costs which can help better keep the budget on track and have a major impact on forecasting for the future. 

3. Cost of Labor 

For managers, the efficiency and productivity of their cleaning team is a crucial part of labor costs and, thus of the operations budget. Luckily, with the right tools, this can easily be improved without straining your staff. 

As mentioned before, one of the biggest problems for BSCs and managers is maintaining an accurate overview of cleaning teams and equipment. Losing track of machines, for example, can cause productivity issues and gaps in the budget. 

Fleet management software, like i-SYNERGY ICE Cobotics, allows users to gain real-time insight into the use of cleaning equipment and is included in the subscription service at no extra cost. 

End users gain access to information like equipment operator, location of the machine, total square footage cleaned, and run time. In this way, managers can know when, where, and how their fleet is being used. 

With access to this real-time data, BSCs and managers gain insights into the cleaning process anytime, anywhere. This information helps to identify pain points in the routine and gives managers the ability to create more efficient and effective cleaning plans and to work with staff to optimize routines and processes. 

4. Active Maintenance 

As noted above, the costs associated with maintenance and service of equipment can be a problem when it comes to budgeting. 

It can be easy to lose track of the different expenses necessary to keep a fleet running, hurting the overall budget. 

“The real expense isn’t always the cost of the damaged structure, but the business interruption, loss of use or loss of income associated with the peril that is the most costly expense," according to Timothy Hull, director of operations at Violand Management Associates 

So, while the cost of maintenance might not be the main issue, the downtime this produces can pose a real problem in your daily operations and budget. 

With a subscription service, managers and BSCs gain access to Active maintenance can help to reduce downtime and even identify or anticipate problems before they arise. 

Since the subscription service includes access to i-Synergy, managers, and BSCs gain the help of the ICE Cobotics’ service team. 

Through close observation and tracking of machine notifications and alerts, the team learns what error codes need what parts or labor and works to notify the equipment users before there is an issue. 

On top of that, the service team can diagnose and fix issues from a remote location—working to fix the problem as soon as possible, or they’ll deploy a service technician to the site. 

Another excellent feature here is that since the Client Care team is consistently working to decipher notification codes, they can prep the service technician before arriving on site—limiting the amount of time it can take to get a machine up and running again. 

This reduces machine downtime, which can take a week to two weeks in typical situations. Active maintenance keeps your team working, helps to eliminate unnecessary downtime, and is included in the subscription service at no extra charge. 

Reach out to our Automation Experts for more tips and information on how to improve your operations budget! 

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