Financial of the Entrepreneurial World - Assignment Example

Cleaning contracts In the entrepreneurial world, upholding a competitive advantage is fundamental for the continued existence of your business. Office cleaning contracts are a secure and ever-present source of prospective revenue. ISS a cleaning company with the World Bank works in collaboration with the customers to precisely get to understand the client’s needs. The company is able to deliver a professional tailored cleaning solution. The need to save cost and increase efficiencies is a new trend in outsourcing cleaning services. As per the integrated service contract across Asia and Europe, as a cumulative number of organizations recognize the benefits of using specialists to reduce operational costs by up to 20 percent. The major challenges faced by the cleaning businesses are; Operating costs: During the period of lower revenues many contract cleaning companies are forced to redistribute resources, improve workforce performance and streamline back office functions such as human resources, accounting and IT this is in an attempt to heighten the efficiency and reduce costs. Winning and retaining contracts: Amplified competition in the industry is forcing corporations to bargain contracts with very stiff margins. In addition, many customers are aimed at cutting down the costs of operation in their own occupation by altering the terms of their agreements and reducing the frequency of cleaning procedures. Public sector spending cuts: The poor economic conditions present has Limited the public spend. This means that their will only be a few opportunities for contract cleaning company growth in the long-term. The declined job opportunities in addition to the increasing costs of fuel and employees, has resulted in UK companies cleaning industry making a loss. So as to face the challenges and persist in the market the cleaning businesses have integrated skill and abilities of employees to increase efficiency in level of performance. The workers are equipped with; cleaning skills: these are applied skills required by a cleaner to undertake the role competently; for example, the capability to control machinery and equipment; mopping skills; and the ability to use chemical substances without harm. It will thus reduce operational cost. Multi-tasking skills: it is important that staff execute a range of varied tasks in order for the businesses to endure the competitive market and keep low costs. Multi-tasking allows the control to reduce on the numbers of employees while still maintaining the level of output Management and leadership skills: to successfully implement operational practices that ensure the workers’ skills are utilized and staff remain motivated; Project management skills: ensure that an organization's resources are dispersed and used in a workable manner, plummeting operational costs. It will thus facilitate the efficiency use of resources and thus reducing on cost incurred Waste management skills: officers are accountable for the dumping of waste and the implementation of incentives to reduce its effect on the environment through workable initiatives such as recycling. A number of changes will be required to ensure that the cost reduction strategy is effective and profitable to the cleaning firm. These changes may include; Establish the right number of working days; It may be by reducing the number of times that the cleaning staff will be working on a particular job specification. It will translate to a reduction of the operating cost of performing a specific job. On the other hand, reduction of the number of working days, may lead to the employees being idle and may opt at changing the career the method may lead to loss of the workforce. Establish the right number of working hours; The total time take by an employee to work on a particular job is an important factor to consider when evaluating cost reduction strategies. Cleaners don't like working for less than one and a half hours as it outweighs the transport cost incurred by the worker. In huge offices, a cleaner ought to clean 2,000 sq. ft. per hour based on the cleaning requirements set. Reduction on number of hours worked may lead to overworking of employees which will de-motivate them. Lack of motivation to workers may lead to poor performance and satisfaction of the clients. Reduce the cleaning specifications If a firm is aimed at cutting the cost of contract cleaning services, they may opt to reduce the specifications of cleaning as follows; Vacuum Reception, Meeting Rooms and high profile areas should be cleaned daily. Use bins placed at central location, rather than bins placed at every desk. Toilets and kitchens need should be cleaned on daily bases if possible, but vacuuming, dusting and other tasks can be rotational. The above measure will best suit the cost reduction motive of any cleaning firm that is seeking to reduce its expenditure will increase the returns from the work performed. Ensuring that the workers all continuously trained to improve on their skill and specialization in the line of duty will ensure that each worker is adequately skilled to perform the job. Well, skill labor will work efficiently consuming less time while performing much huge chunk of work. This will, therefore, reduce the cost of operation due to a little time used to perform the job. The ability to multi task ensures that employees are in a position to handle different job at the same time altogether. When the workers of the cleaning company are able to handle these duties then much of the work is done by a few workers. This will diminish the number of employees in the organization and similarly the amounts of salaries to the worker. This is a significant measure in cutting down the costs of operations. Measurement of cost reduction is the estimation of the retained expenses by the business through the implementation of cost effective and efficient strategies that are in the provision of the service. The reduced costs can be determined through the evaluation of the cost that would have been incurred if the specific procedures would not have been implemented in the business. The amounts of time saved by the workers due to the continued training and specialization accounts for a high reduction of costs that would have otherwise been incurred with the use of unqualified personnel. Proper management and leadership of the employees ensure that there is coordination of work. Proper coordination comprises of a well-structured organization. This ensures that everybody is aware of his or her line of duty and thus efficiency and effectiveness is ensured thus reducing on the costs incurred in service provision. References Baron, D and Besanko, 1987, Monitoring, moral hazard, asymmetric information, and risk sharing in procurement contracts, Rand Journal of Economics Klein, B and Leffler, K., 1981, "The Role of Market Forces in Assuring Contractual Performance", Journal of Political Economy, Read More