Small Business – When Government Stacks the Deck Against You

We expect a fair degree of corruption, arrogance and drooling self-interest from our elected officials. After all, in the last 206 years, we have fallen a great distance from the days of the “virtuous republic” that existed-or was thought to exist-in that first decade after the Revolution. Yes, we expect it, but I would have more respect for the operatives, the party-men and the politicos themselves if they could be just a little intelligent about it. The current issue with the Bush Administration, Congress, the SBA and the awarding of a great deal of money earmarked for small business, is a case in point.

When Big Business Seems Small

It is illegal, a felony that comes with fines and a prison term, to try to pass your big business off as a small business to get one of the 23% of Federal contracts reserved for small businesses. Yet, it happens all the time. According to the American Small Business League, a non-partisan watchdog group, some $60 billion in Federal contracts go to major corporations each year. How it happens brings us to the question of how you decide that a business is truly small.

Counting Heads

What is a small business? How do you measure it? Is it revenue? Sales? Staff size? Any one of these could be a viable measure, but for the most part the matter is decided with staff size. Depending on the industry, you can have a maximum of 1,500 employees and still be considered a small business! (Federal Regulations Title 13, Part 121, Section 201)

These larger “small businesses,” with 1,000 to 1,500 employees, deal in oil, aerospace, rail transportation, textiles, and chemical and rubber products. Wholesalers, regardless of their products, are capped at 100; information technology value-added resellers are capped at 150 (a very recent change) while the rest are capped at either 500 or 750. In 2005 (the most recent data available), there were 5,966,069 firms in the U.S. with 500 or fewer employees and they employed 58,644,585 people out of a total employment of 116,373,003. That is 50.3% of the working population working in what could easily be described as legitimately small businesses. If you add up the firms with larger numbers of employees, you find that there are 11,546 of them and that they employ 9,475,180 people, 8.14% of the workforce.

Call me crazy, but a firm with 1,000 employees doesn’t seem to be very small to me! It may be small when compared to the giants in its industry, but it is a giant compared with the vast majority of small businesses. In 2004, there was an effort to bring the number of employees down from 500 to 100 for a business to be classified as small. In spite of a great deal of support for the measure-including U.S. Representative Lynn Woolsey (D-CA), who said: “By working to change the definition of a small business for government contracts from 500 to 100 employees, federal contracts specifically designed to ensure the success of American small business would go where they belong – to support Americans, not big companies dressed in sheep’s clothing.”-the effort was killed by the SBA itself. That, however, is only the beginning. Another has to do with how small businesses are certified.

Finding a Certified Small Business

The question of how many employees a small business can have is complicated even further when we see that the government has been rather lax in enforcing the contract award rules for small business. In fact, in 2005, some $49 billion in Federal contracts that were set aside for small business were actually awarded to the 13 largest government contractors. This lax enforcement has led to cases where the small business in question is actually a subsidiary of a much larger company, where businesses have outgrown their small business status, where big business misrepresents itself as a small business and where government procurement offices, such as with the military, simply disregard the rules and do business with who they like.

The Small Business Front

Two of the most prevalent ways that large companies can maintain a small business front are through the legal loopholes that allow a small business to retain its status throughout the life of its original contract-and bid on new business as a small business-no matter how large it grows and even after it is bought out by a large company.

In either case, what the company in question is doing is, in fact, legal. Their actions are also limited by the fact that the loophole is based on the length of the small business’ initial contract. For example, if a small business wins a 10-year contract to provide computer hardware, it maintains its small business status for the full 10 years of the contract regardless of how large it grows or if some huge conglomerate buys it. This has been an issue for some time. Consider the following:

According to a 2006 report on the U.S. Government Accountability Office: Commerce Information Technology Solutions (COMMITS) Next Generation Governmentwide Acquisition Contract, “We found that many of the 55 COMMITS NexGen contractors have grown significantly or have been acquired by larger businesses and may no longer meet small business size standards. We also found that a significant portion of the task orders intended for the smallest contractors were issued to larger, incumbent contractors.”

Incumbent contractors tend to get the lion’s share of the government’s business. A 2004 SBA Office of Advocacy: Eagle Eye Publishers’ Report said that: “Of the top 1,000 small business contractors in FY 2002, Eagle Eye Publishers’ analysis found 44 parent companies it identified as either large firms or ‘other’. Contracts to these two groups taken together had a total value of $2 billion.” The report continued, saying that: “The Department of Defense and the General Services Administration accounted for 79 percent of the contract awards found to have gone to large businesses.” One of the conclusions drawn from the report was: “As a result of this lack of transparency, many awards that should be reserved for small firms go to large firms unchallenged.”

Disregarding the Rules

Rules can be broken either directly, by a willful disregard on the part of those the rules were intended to regulate, such as a company that purposefully misidentifies itself as a small business in order to get a contract; or they can be broken indirectly by a lack of oversight and enforcement that creates an atmosphere in which the rules can be ignored. One of the problems sited against the SBA is oversight. “SBA did not review the majority of reported bundled contracts that we identified, though procuring activities must provide, and SBA must review proposed bundled acquisitions. As a result, 192 contracts identified by procuring agencies as bundled were awarded without SBA’s review. If all of these are actually bundled contracts, a minimum of $384 million would be potentially lost to eligible small businesses, based on minimum dollar reporting requirements of $2 million.” (SBA Office of Inspector General: Audit of the Contract Bundling Process, May 2005) And consider this from the SBA Office of Inspector General: Audit of Monitoring Compliance with 8(a) Business Development Contract Performance, March 2006:

“Though SBA delegated 8(a) BD contract execution authority to 26 procuring agencies, SBA did not ensure that procuring agencies monitored whether companies complied with 8(a) BD regulations when completing 8(a) BD contracts . . . SBA has ultimate responsibility for ensuring that companies comply with 8(a) BD regulations”

The SBA is the final oversight authority for these contract awards and yet through their lack of enforcement efforts, it is easy for large businesses to slip through. Why is this? There are two likely reasons. The first is that the Bush Administration, when it came into office, cut funding for the SBA. At the end of the Clinton Administration, the budget for the SBA was about $1.1 billion. By 2006 it was down to $456.5 million. Funding has increased since the 2006 low; for 2009, that number has increased to $657 million, mostly due to funding for disaster relief loans; but the agency has nowhere near the budget it used to have. Generally speaking, if you cut funds to an agency, certain things start to slip and that is not a message that the SBA, or the Bush Administration for that matter, want going public.

However, it already has.

An audit by the American Small Business League (ASBL) and two independent experts showed that even while the SBA was saying that it is a “myth that large companies, including large, multi-national corporations are taking away federal contracts specifically intended for small businesses,” it was discovered that the Bush Administration had in fact included billions of dollars in awards to Fortune 500 corporations and other large businesses in the United States and Europe in its small business contracting statistics. Also, the Bush Administration failed to comply with the congressionally mandated 23% small business contracting goal by including such corporate giants as:

  • Dyncorp
  • Battelle Memorial Institute
  • Hewlett Packard
  • Government Technology Services Inc (GTSI),
  • Bechtel
  • Lockheed Martin
  • General Dynamics
  • General Electric
  • Northstar Aerospace
  • Booz Allen Hamilton Inc.
  • Raytheon.
  • British Aerospace Engineering Systems
  • Buhrmann NV (Dutch)
  • Thales (French)

More than that, ASBL’s research also found that the government was forced to systematically increase the volume of contracts awarded to small businesses in order to balance out those that were going to inappropriately large companies. In addition, awards to legitimate small businesses were systematically inflated to equalize the reduction of small business contract dollars awarded to Fortune 500 corporations. The ASBL found that according to SBA numbers, Circle B Enterprises Inc. received $887.5 million during 2005. However, the government’s own figures indicate that Circle B Enterprises Inc. received $287.5 million during 2005, which represents a discrepancy of $600 million. The ASBL audit found several other instances where the contracting numbers of legitimate small businesses were also significantly inflated.

The Bottom Line

The government decided to play fast and loose with small business contract money and they got caught siphoning it off to some of the largest companies on Earth. There are those that will only see the damage that this will do to McCain in the fall, yet another Bush Administration failure/debacle/betrayal-whatever you like best. That, however, is not the point. The point is why was the SBA hamstrung and placed in the position it has been in by the Bush Administration? More than that, why has this abuse been allowed to go on for so long? Call me a political cynic-I am from Chicago so I come by it honestly-but the only thing that makes sense to me is that government officials are paying back the people with deep pockets who helped to get them elected and they are doing it at the expense of, well, YOU. True, paybacks are a time-honored political tradition, but by stealing the money from small business, the U.S. Government as a whole turned its back on the overwhelming number of U.S. employers and employees in favor of a handful of major corporations. I urge you, as a small business owner; and you as an employee of a small business, to write your senators and congressmen, and to write to each of the presidential candidates, McCain and Obama, and their respective party chairmen-Republican and Democrat alike, and tell them that you want this to stop. Remember, small business contract set-asides are for YOU, not major corporations. It is time to remind Washington of that.

Franchisee Compliance With Law and Government Licensing Issues

A franchising company must always be a Stickler for details when it comes to government licensing and compliance with Law of their franchises and franchised outlets. If a franchisee fails to comply with Law or secure the proper government licenses to operate their business it could become a public relations nightmare.

Not only must franchising companies monitor their franchises, they should also address this issue prior to the commencement of the franchise in the franchising company’s franchise disclosure documents and franchise agreements. It is for this reason that I added a clause into all of my franchising companies franchise agreements. Below you’ll find a clause;

3.24 Compliance with Law

3.24.1 Government Licensing

Franchisee will comply with all national, federal, state, regional and local laws and regulations pertaining to the operation of the Franchised Business and will timely obtain and maintain any and all permits, certificates, registrations, insurance or licenses necessary for the full and proper conduct of the Franchised Business. Franchisee will pay promptly, as they become due, all national, state, city and county licensing, registration and permit fees and charges in connection with the operation of the Franchised Business.

— — — — — — — —

Now then, you must consult your own franchise attorney to determine how best to address this issue for your company and to make sure that you are protected as a franchisor to insure the integrity of your brand-name. I hope you will consider this in 2006.

We Need Continuing Education for Politicians, Bureaucrats, and Government Regulators

It is amazing how many rules and regulations are put forth by government bureaucrats and regulators demanding various professionals who hold licenses to go to ongoing education classes. Most of these classes are mundane, and more about demanding that the professionals submit to authority to maintain their licenses, than anything that will help the consuming public with important safeguards. In many regards as a business owner this totally irks me because we have bureaucrats in Washington DC, and at the state level making more and more rules and regulations each and every year.

It seems that they just can’t help themselves, and they assume that anyone that violates one of their rules or regulations is unethical, an evil doer, or trying to dodge their responsibility in protecting the public. That’s just not the case, often their rules and regulations don’t fit the circumstances, and the entrepreneur or business person is just trying to service their customers despite all the bureaucratic nonsense in the way.

I’ve come to the conclusion over the years, and I’ve even brought this up at our think tank, that politicians, bureaucrats, and government regulators need to have ongoing education for themselves. This is because many of them have never run a business, or participated in the free market system, therefore they don’t understand it.

Rather than the business community getting angry at all the nonsense, why not just make it mandatory that these people working in the government learn the ropes of the real world. What should we be teaching them? Well, here are three items below that might be a good start;

1. Free Markets
2. Constitutional Refreshers
3. The Inefficiencies of Government Bureaucracies

First of all, maybe they need some on-the-job training, and actually work in a business, and mirror as a temporary tagalong with an actual small business person to see how difficult it is to run their operation with all the nonsensical regulations that are put forth. Then I believe they need to read Milton Friedman’s “The Right to Choose” and DeLorenzo’s “How Capitalism Saved America,” and of course Ayn Rand’s classics.

Finally, I believe these bureaucrats and politicians need to take constitutional refresher courses so they don’t promote laws which impede our rights as citizens, business owners, or our right to free contract. You see, these folks need to understand that bureaucracies are by their very nature inefficient, and therefore every time the government does more, they create inefficiencies not efficiencies in free markets. Yes, we need ongoing education classes for politicians, for bureaucrats, and for government regulators. That’s only fair.

Implementing a Superior Investment Review and Governance Process

The work that we do in this particular part of the Wachovia Corporation is to look across the enterprise at the multiple portfolios that we have in 10 strategic business units; each with their own P&L, each with the delivery model for driving success and valuing shareholder return. So a couple of years ago we began to do some comparisons with the amount of money that we were investing in the initiatives; whether they be Lean or Six Sigma, Process Improvement, Project Management, whatever that may be, we looked across multiple initiatives, and when we compared against the industry we found that we were spending up to two-thirds more in initiatives than other major corporations of the same size. The return on investment it was not as optimal as it could be.

So we began down a path to really optimize our capital investment portfolio. This was a bit of a challenge, given that each of the 10 separate strategic business units had their own model for how they wanted to look at the portfolio, the initiatives, the process improvement, the programs, the projects, whatever they may be, and make their own decisions. It was truly a collaborative effort to gain the buy in and the support and begin to look at a process that was governance related, but more of an influence model in how we were going to, as a financial institution, really drive home the need for better investment and the right projects, the right initiatives.

Think about for a moment how many of you have pet projects and things that you would really like to see up and running, you would like to have unlimited resources to get the job done. How many of you have unlimited resources to get the job done? I do not know about you but for us it’s a challenge. We always have more heart and more energy than we have people or time to get the work done.

We really started to look at what would be a value capture. How could we begin to have kind of a pull mentality as opposed to a push strategy.

This really falls into four buckets of categories that we want to focus on. One was spend effectiveness. We wanted to reduce our capital commitment substantially while improving return on capital deployed, and we also wanted to better align those investments.

Across these 10 strategic business units there were things that were done that made sense for a particular business unit. Perhaps we could create a forum or a community of practice where there was opportunity to look across the enterprise and ask the question, “Does it make sense for several of these business units to engage with each other and collaborate so that we get more synergy, more effectiveness and more efficiency out of a particular initiative?”

That also meant working with our program offices to look at the portfolios-the portfolios of Six Sigma initiatives, Lean initiatives that were taking place, Project initiatives that were taking place-and begin to balance the execution capacity and really look at the risk management. What we found within many of these initiatives is some of the cost that was not being optimized and we were not managing the risk in the business as well as we could.

Risk management became an important partner sitting at the table with us as we began to look at end-to-end processes and began to do enhancement.

The next one was around process efficiency, and this was around freeing up resources from those pet projects and really allocating them to specific initiatives where we could focus and have the most optimal impact.

The last area was performance accountability. There became a strong reemphasis on the validation process to ensure that we were maximizing and optimizing the return on investment.

We took a look at some of the elements for implementing the plan. We started with a very simple framework-Where are we today? How do we want to get there? Where do we need to go? and What support will be available to get this work done?

The implementation of what we call an investment rationalization process across these multiple business units included a syndication process, where we invited each of those key principles or key stakeholders to the table to become an active member of a community that would be decision makers, drivers and activists for the company in making decisions that would make an impact.

We began a diagnostic process. We wanted to understand where we are today, what does it look like and how we are spending money. What was interesting about this is if you sit down and have a conversation with each of these lines of business, the portfolio they are working on and their special projects, each of them would tell you, “Oh, I cannot do that with this other line of business because we are special.”

However, what we found is about 80 percent of what we do is common. It wasn’t until we really sat down and dissected it and started to look at each of the individual components and compartments that we found common ground for each of these organizations to work on. We told them upfront, “We recognize each of you are special and you will need some customized areas, but let us focus on what is common first, and then absolutely, each of you can customize the program after we have got a common platform on which we can work.” So we got great buy in and support to do that, and we worked through the diagnostic process.

End-to-end, the implementation of the investment rationalization process for us took a year. We started this process three years ago; we are into out third year now.

The initial diagnostic evaluation took us about six weeks. We asked: Where are you? Who are we? Who are you? How do we show up with each other? What does that look like? What are the common elements? Then we put together a plan for action that said how we would partner together.

Next, we wanted to look at the design element: How do we get there? So what does that look like? What is in it for you? What is in it for me? What is in it for us collectively as we work together? That process took about two-and-a-half months.

Then we began to look at beta initiatives: Where do we need to go? We identified some common elements of enterprise initiatives that would span all 10 of the business and we picked one. Let us just start with that, let us do a pilot, let us do a design element, let us see if this works end-to-end, let us walk it through.

As we worked through that process what we found was that 95 percent of all the elements were on a common platform, and only 5 percent needed to be customized for each of those strategic business units in order for them to be able to deliver to the customer and to the market based on where they were.

So as an example, in financial services our investment bank needed to show up a little bit differently with a large customer than the general bank who might interact with you or I in our personal banking account, so certainly we can understand that.

But how we got there was based on a common platform and common elements from an end-to-end perspective that could be applied towards that specific customer.

We are in the process now of working through the last element, which we call institutionalization or available support. As we look across each of these 10 business units we have aligned portfolio offices for each of the individual units. This allows them to truly look at how much money we are investing in capital allocation today from improvements in our business, what is the anticipated return on investment, what is the actual return on investment and how we matched back against the expectations.

From a corporate perspective or a governance perspective, a financial organization gave limited dollars back to each of the lines of business in order to spend. We didn’t tell them how to spend the money, just that they had certain amount that they could spend. It was up to each of the lines of business to then determine their strategic plan, initiatives that support that, and how those things line up so that they could feel like were empowered to make their own decisions on what was most important to them.

That’s a critical point. There was a lot of what we call “noise” in the system, feedback while we were trying to work through this particular point. Initially there was a feeling that there was a top-down governance process that was not going to allow each of the business units to make their own decisions on how they invested their capital expenditures. That was not the case at all.

What it was was a pot of money that was given to them for investment purposes. They could make their own decisions on what they invested the money in; and then they were expected to make decisions based on what would give them the best return on investment. That worked very well.

There were two major work streams if you look across investment rationalization: the “what” and the “how.” What is it that we need to do, how are we going to get there? The “what” was a lot of the design elements. We took a look at how we could get agreement on elements of the next generation approach. In other words, could we get a collaborative effort going so that each of the different lines of business could come to an agreement as to how they would make decisions on 80 percent of the work that we do? It can be different portfolios in different offices, that’s fine, but the how they got there needs to have a common platform or consistent repeatable processes.

How would each of these organizations be in welcoming the change? We know change management is perhaps one of the hardest things we do when we are implementing an improvement, a process improvement, continuous improvement-that is where we get the greatest resistance to change. So it was very important that we engage each person that was involved in the decision making and the design elements to ensure that we had understanding of the current environment.

What the governance process and the “what” part of the diagnostic phase focused to is a future state being based on current state assessments and stakeholder feedback. Literally, what we did is we created a matrix around three buckets of work: What are the structures that you need in order to make this happen? What behaviors do we expect out of people as we go through this change, because that was a significant part of the change element? and What are the processes that you need in place so that they are consistent and repeatable for those common elements that we have? So structure, behavior and processes were the three common elements that we looked at from a governance perspective and from a process perspective to help them find end-to-end solutions.

We looked at enterprise-level capital allocation, giving them the authority to make the decisions without having to come before a review board to gain approval from the CFO of the company, the president of the company. They could literally make these decisions at a line-of-business level.

Now, this was a significant change. Previously, anytime more than $250,000 was going to be spent in an initiative it had to come before a former review committee, a former body, and it had to be approved by a group of about 50 leaders, top of the house. Not only was that time extensive, it was a drain on resource time at the top of the house.

This pushed the decision making out to each of those 10 lines of business so that they themselves could hold their own committee meeting and look at their portfolio. They could do the push and pull to prioritize the work that needed to get done in order to meet their customers needs.

It also went from a cycle time of 86 days to make a decision with 50 executives that convened once a month to review, and if you didn’t get approved you had to go back through the review cycle again, down to literally 72 hours. So from 86 days to 72 hours they could make a decision end-to-end, and they could gain approval by their executive team. So significant improvement there.

Investment screening. As I mentioned, it no longer came before this large body, it came before their line of business body. So in moving the decision making to the people who literally owned that P&L process they could take a look at their anticipated rate of return. They could take a look at how much money they had to invest and they could begin to prioritize their initiatives in a different way. This really helped them understand how they were going to use the very precious people resources that they had and dedicate those people to the right initiatives so that we no longer had project stalled or initiatives stalled or process improvement stalled.

I do not know if you have ever experienced running through a process improvement where you needed to engage a key stakeholder and the resource simply was not available or it was two or three weeks before you could get time on their calendar to make a decision, then you would have to hold an information discovery meeting only to come back and get a decision several weeks later.

Well, this process began to really make sure that the most critical resources were available for the most critical initiatives because we no longer were doing 175 initiatives adequately well; we were now doing 50 initiatives extremely well, and it made a big difference.

It got into the portfolio management. Then we put a process in place across the enterprise where there is a common system that each of the lines of business are putting their information into so we have transparency to look across each of the different lines of business to understand what is going on at the top of the house. Again, it is not a governance perspective but it is a knowledge-based perspective to understand the high risk impacts, high risk initiatives, how are we tracking, our resource availability, our capital expenditure and our rate of return. So it was a knowledge sharing across the top of the house with decision making at each of the lines of business.

We looked at the overall investment rationalization process flow: What will it look like? What are the roles and responsibilities now? If you are going to give decision making at the lowest level possibly you have got to make sure that there is clear governance and a charter, on roles, responsibilities, and the expectations when we come together as a body to make approvals for our line of business.

So again, we worked to be very clear on the roles and responsibilities of each of those members. We established three boards: One was called an IRB, an Investment Review Board, and within the line of business they identified the key people who need to be at the table to make a decision. It maybe shared service partners that they had out, such as maybe in the training organization and the HR organization, maybe in the IT organization, if within a revenue producing line of business they needed to make a decision where they would need support from those key partners. So key people were identified to sit on their board. They established regular meeting schedules so that they could work through making those decisions in a timely manner.

We also established an Investment Review Office, which did a screening, if you will, before things would go into the Investment Review Board. This was a program office that would take a look at the different artifacts that were coming in for the initiatives to make sure that the resources were available, the funding was available, and that it was prioritized at the right level in order to go before the committee for approval in the first place.

Then the partnership was with the program or portfolio management office to ensure that all the process improvement, continuous improvement or projects that were coming through were meaningful and hit the strategic plan at the top of the house.

Although that sounds like it might have generated a lot of incremental headcount, it didn’t at all. That was why it took a year for implementation. We really took a look at what the different roles are that we have out there today-who is doing what-and we reorganized in a way that did not require any additional headcount at all. It optimized the people that we had in place, provided clarity of role and expectation and it provided a framework for making decisions quicker, with higher impact to the bottom line.

We had to ask the right questions. We wanted to make sure that we had the right people with the right behaviors and that they had the right information to make those decisions.

This gives you a little bit of a backdrop on what the organizational structure looked like, but we really focused to making sure that there was measurement and matrix; what are the four key matrix that are critically important at the top of the house?

Now, when we went and started looking across the 10 major lines of business, we found more 150 matrixes that were measured at the company. By the way, some of them were the same matrix called different things, and they got there just a little differently. So while it was all fruit salad, it was apples, oranges, bananas, nectarines, white fruits, so have you. This became really important to say-at the top of the house there are four things we really want to know, and here is how we want them measured. There is the four things that we need for total transparency to make sure that we are having valid impact across the business.

So we established those measures and matrixes for success. We had a strong change management and communication plan in place to ensure that with literally hundreds of thousands of employees that have just cascaded out, there was a good communication plan in place and the appropriate type of communication and/or training took place based on the role and responsibility that people had in this process.

We worked with our training organization to provide training in the least invasive way and with the most impact. So for some individuals we had Web-based training where they came in, or we had leader led instruction, but that was really minimal. The majority of the training and communication that took place was by way of cascading information through the owners of each of these lines of business and their portfolio offices, holding small group sessions, town hall meetings, things of that nature and then addressing questions and concerns.

The head of each of the line of business or shared service organization aligned their Chief Financial Officers along with the PMO organization. As I mentioned earlier, we put in place an Investment Review Office where they would take a look at the prioritization of the projects and initiatives before they went before the Investment Review Board for that line of business, and the Chief Financial Officer for that organization was part of that decision making. So in the room you could literally have a well-informed, fact-based decision, based on if we were ready to move forward or not.

When we began this process we had anticipated that we would be able to improve our capital investment and return by 20 percent or more through effective implementation of the investment review and governance process. So if you had a hundred million as an investment pull and we reduce that by about 32 percent, reinvested some of that money back into the right type of initiatives that were going to either drive revenue or significantly reduce cost or significantly improve customer satisfaction, those were the three criteria, then the net result would be $79 million being spent and 21 percent improvement.

We reduced our spend by $1 billion in 2007. We reinvested a little bit over $500 million for a net return of nearly 40 percent. By the way, we are not perfect in resource allocation, but we have really enhanced our resource allocation processes, and as a result of that we have our most senior, seasoned people, working on the highest impact, highest risk, highest net return initiatives 85 percent of the time; previously it was 22 percent of the time.

So you get what you measure. If you put KPIs in place people pay attention to them, then they will show up in that way, and it’s the same thing here. We really have focus and attention on, we would like to invest in all pet projects, we cannot do that, what are the most impactful, and by the way, we are not making those decisions anymore, you are. You have ownership of that and here is a methodology to get you there. By the way, to make sure that we have agreement on that methodology we would like to invite who you would like to have at the table helping us to make the decisions.

Sounds simple, but it was complex. Each of our portfolio offices was at different levels of maturity; but they have now come together as a community. Previously they did not know who each other was, they now do. Not only do they know who each other are but they also know the people in the organizations, and so if there is an opportunity for a cross-functional implementation to take place they know who to call, who to have a conversation with, and they have an existing relationship today.

Businesses and Government Municipalities Are Guilty

Most Businesses and Government agencies are guilty of over-purchasing unnecessary cleaning products. The fact is, grease and dirt equate to soil. The same soil that is on the ground is the same soil (dirt) that gets tracked into buildings which is the same dirt on the carpet, which is the same dirt on the vinyl, ceramic, upholstery, walls, clothes, etc.

It seems really silly to me that purchasing agents, business owners, procurement personnel, & cleaning companies, don’t stop to think about the products they purchase. Purchasing peripheral items that are limited to a single use will cost you money in the long run. Not to mention the time involved with training personnel how to use each and every product.

Using a safe, non-toxic, biodegradable, and concentrated product designed to be used in industrial settings such as a “High Octane, Non-Combustible, Emulsifier”, can eliminate the wasted time, money, and energy they spend purchasing items intended for single purposes.

A chemical company located in Halethorpe, MD, has visited over 100 schools between Washington DC and Baltimore Maryland to conduct a survey based on janitorial buying habits. Studies show that in every school, you will find a multitude of cleaning products in the janitors closet that are either collecting dust, not preferred by the maintenance worker, or simply never got around to being used. Too many products to serve the simple task of removing dirt from various surfaces throughout the building. What a waste of dollars.

In some cases, you will find that these entities are spending well over Seven ($7.00) per quart when they should be spending less than.32 cents per gallon of cleaning solution. This represents a tremendous savings for both government and private industries.

It gets even worse when they found that many government agencies and private businesses are purchasing aerosol products. Aerosol products are a joke because the end-user is not able to use the total volume of cleaning product- dollar for dollar. Aerosol packaging requires gas as a propellant. For an example, a 32oz aerosol can may only have 20 oz. of usable product. If the buyer paid $7.00 for the 20 oz. can of product in reality they are really paying $44.80 per gallon. With industrial concentrates, that same agency or business could have the opportunity to spend less than.32 cents per gallon, a cost savings of $44.48 per gallon or $11.12 per quart.

To check the math $7.00 per 20 oz. of usable product equals.35 cents per quart for that aerosol..35 x 32oz = $11.20. $11.20 x 4 = 44.80 per gallon vs. paying only.35 cents per gallon for a concentrated industrial strength compound.

There are a handful of schools and local business that understand the concept and the importance of this cost-saving benefit. Workers who have used the product actually comment on how it saves them time, money, and energy because of the performance of the product.