Hard Decisions -- How We Managed A Cleaning Company Through A Pandemic
Hello! Phil Harper here, Co-Founder and President of WellNest. This blog post is to talk about the craziness of managing a cleaning company through a pandemic. Here’s part 1!
My decision-making in business is through two factors –Numbers and Gut Feeling. When quarantine began, numbers became irrelevant as there were only negative numbers.
Our first Hard Decision of 2020 came in March, followed by a series of many hard decisions over the coming months.
March 2020 — Hard Decision #1 – Stay open or close?
If we stay open, we serve those who need us and our team keeps their jobs. Obviously, we risk health.
Closing could mean our team would be out of work for months and need to find new jobs due to a potential permanent shut-down of WellNest.
Our solution? Stay open, keep jobs, and maintain payroll as best we could. Here’s what we did to start:
- Had one-on-one conversations with every member of our team to gather input
- Activated WellNest’s Emergency Fund to make payroll and offered a furlough letter (with a welcome back at any time) to anyone who elected unemployment
- Invested thousands of dollars into PPE for everyone
- Built an intense COVID-19 Safety Protocol and authorized aggressive use of disinfectants
- The shutdown indeed lasted months. With an imperfect unemployment system (albeit significantly increased), our team was relieved we stayed open.
Hard Decision #2 – Late March / April 2020 — How do we make payroll?
Now in early April, the WellNest Emergency Fund was low, I obviously stopped taking a salary in mid-March, and nothing was rebounding. Panic mode.
Without the equipment or expertise to make masks, our only option was somehow monetizing our primary intangible asset, which was the strength of our brand and our customer relationships.
Our solution? With a sense of hopeful desperation, we implemented an Employee Relief Fund and asked our clients to continue paying for cleanings with 100% of proceeds split amongst our employees.
This part of the story is my favorite. We raised over $35,000 in the next four weeks and everyone on payroll was paid between 75% and 100% of their regular paychecks through mid-April. THANK YOU for your support. The impact this had for our teams and their families was tremendous.
Hard Decision #3 – Mid-April 2020 — Take PPP or not?
Come mid-April, both the WellNest Emergency Fund and Employee Relief Fund were low. The government’s Payroll Protection Program (PPP) was released. The PPP was designed to help businesses make payroll for 8 weeks through a fully forgiven loan if we satisfy the requirements.
Sounds simple but it was an 800-page program and adding six figures of debt during a downward spiraling economic crisis is not exactly what you learn in business school. The loan documents said nothing about forgiveness or any of the PPP details, it was all a leap of faith and trust in the Federal Government.
Our solution? We again went back to the importance of keeping our team employed and off an unpredictable unemployment line. We signed for the loan, said a prayer, and remained grateful for our health.
Hard Decision #4 – Mid-April 2020 — How to satisfy the PPP requirements?
Looking at how we would satisfy the requirements given our position at the time, to achieve loan forgiveness we had to:
- Pay everyone at essentially 100% of their 2019 average wages
- Find work during a quarantine for an additional 3 more people for 8 weeks
- Restore headcount by 8 full-time employees by June 30, 2020
We decided to make the commitment to pay everyone at 100%. If we didn’t meet the requirements, we would have to repay 100% of whatever we spent. A risk worth taking but unbelievably nerve-wracking.
Our solution? Get creative and think outside the box. We first did the following:
- Our Operations Team — Elizabeth, Angie, and Hiley — built and delivered a 2+ hour COVID-19 training for everyone on our team. We now deliver this training to our clients’ workforces.
- We tapped into our cleaning professionals’ decades of experience and built stronger operations.
Throughout this process, we noticed the cleaning industry was transitioning from “low cost provider wins” to “we need the experts.” We set out to be the local leaders in this transformation.
We built what I called our “WellNest Commercial Reinvention.” We needed to completely gut and rehab the division with the impact of the pandemic at the root of everything we do. We began working on three distinct workstreams – Research and Design, Marketing and Brand Position, and Training.
Knowing the Residential Cleaning market would be slow to return, this would be our path to job recreation. We:
- Leveraged the expertise of Juliana Hess, a brilliant researcher and Commercial Real Estate Professional, to build a framework around what constitutes a healthy workplace ecosystem in a COVID and post-COVID era. This framework is our guiding light in focusing on cleaning and disinfecting the right areas, at the right times, using the right products, within budget.
- Transitioned Manu Aggarwal, our part-time Director of Marketing, to an 8-week full-time position to help us redefine our brand. He defined our market position, rebuilt our website, performed market research, and built the foundation for deploying our strategy. Manu was the central piece of our entire transformation.
- Hired Fernando Garcia, a member of our Advisory Board, to build a comprehensive commercial cleaning training program for us. Fernando is a former military officer with 18+ years of experience as a General Manager of one of the nation’s largest cleaning companies. He knows his stuff.
So far, I am thrilled and relieved our master plan has worked. We had a matter of days to figure it out. Here’s where we stand today (September 2020):
- For those who stayed onboard, we paid at between 75% and 100% of regular paychecks throughout the pandemic. I am very, very, very proud of this.
- We won several new commercial cleaning contracts, filling jobs and a portion of lost revenue. We recreated many of the jobs we had lost. Nearly everyone on our team is working overtime right now.
- We optimized and documented our operations with our entire teams’ buy-in and contributions.
- We successfully reinvented WellNest Commercial, gutting it down to the foundation and rehabbing with the impact of the pandemic at the root of everything we do.
- Our residential business is coming back, slowly but surely. While we lost 100 of our recurring customers until there’s a vaccine, we added 50 new customers as a result of our safety protocols and procedures.
- We are still waiting to apply for loan forgiveness; we did meet the requirements.
So what next? We hope to send a follow-up to this in 2021 as that would (hopefully) mean we weathered the storm and made it through. Stay safe and take care!
Thank you for reading!