• Facility Management
• Property Management
• Outsourcing and Manpower Staffing/Payroll
• Spring Cleaning Services
• Furniture Rentals
• Expatriate Relocation
• Fleet Management
• Guest House Management
• Services Apartments
What are the minimum margins that you think are ideal?
The mushrooming of small vendors and housekeeping companies has made competitive margins irrelevant. While I am not opposed to increasing start-up companies in this segment, I do worry over the 2% and 3% margins they agree to work on. Even if the bottom line is put to a low of 8%, it would be challenging to deliver fair services.
Today, there are many contracts that could be picked up; like lifting garbage or waste management for corporations, maintaining railway stations, and so on. But when these contracts are awarded on the least-margin basis, it becomes the root cause for malpractices.
For example, where the approximate cost of servicing amounts to about
र11,000/- of which the minimum wage is र6000/-, delivery and quality of service suffers and so do the staff. Contractors then resort to unprofessional practices in order to make ends meet.
What are the major challenges you faced in building your business?
As a young company, especially in the cleaning industry, funding is always an issue. Banks being the main source for funds and collaterals being the main eligibility to avail bank loans, many contractors face cash crunches.
Most contracts are finalized on 30-day or maximum 90-day payment terms; but the contractor has to raise funds to pay staff every month. Similarly, taxes have to be paid every month by the contractor, even though they are recovered from the client at the end of the term. Hence, arranging for working capital is a big challenge. In the case of Sunbeam however, we have been able to arrange for funds with collaterals.
Above all, the biggest challenge emanates from the client end, where payments are delayed much beyond the stipulated time. For example, if Sunbeam bills up to
र70 lakhs in one project and payments are delayed beyond the term agreed upon, my working capital gets badly hit, especially when one is working on such thin margins.
However at the end of the day, there is satisfaction attached to the delivery, when the clients are happy and acknowledge our efforts after overcoming all these challenges. There are tremendous opportunities for the support services industry in India; across all the sections of growth – Government and semi-Government institutions, the private sector, or even local Municipal Corporations.
What’s your vision for Sunbeam?
Sunbeam Facilities is now poised to take its place amongst the biggest Indian growth stories. In the realm of contract services, we believe our main strength is our long-standing experience. Our vision is to use the invaluable experience and knowledge gained to provide all clients with services that are competitive, of the highest caliber, and above all, reliable.
We endeavour to integrate constant and consistent quality within all areas of support and their associated functions; thereby, providing services that are second to none, and above all, elevating the customer service experience.