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 A UNITED STATES 
 DEPARTMENT OF 
 COMMERCE 
 PUBLICATION 
 
 
 URBAN 
 
 PROFILE 
 
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 U.S. 
 
 DEPARTMENT 
 
 OF 
 
 COMMERCE 
 
 Economic 
 
 Development 
 
 Administration 
 
 Office of 
 
 Minority Business 
 
 Enterprise 
 
 BUILDING 
 SERVICE 
 CONTRACTING 
 
 To 
 
 
 
For sale by Superintendent of Documents. U.S. Government Printing Office 
 Washington. DC. 20402 - Price 30 cents 
 
URBAN 
 
 BUSINESS 
 
 PROFILE 
 
 BUILDING SERVICE 
 CONTRACTING 
 
 SIC 7349 
 
 April 1972 
 EDA-72-59582 
 
 Prepared for 
 ECONOMIC DEVELOPMENT ADMINISTRATION 
 
 in cooperation with 
 OFFICE OF MINORITY BUSINESS ENTERPRISE 
 
 
 U. S. DEPARTMENT OF COMMERCE 
 
 
 Washington, D.C. 20230 
 
 
 Peter G. Peterson, Secretary 
 
 c 
 
 Robert A. Podesta, Assistant Secretary 
 
 9» 
 
 for Economic Development 
 
 X3 
 
 John L. Jenkins, Director 
 
 1 
 
 Office of Minority Business Enterprise 
 
 •■'<■' 
 
 -. ■ • 
 
 
This report was prepared by Boise Cascade Center for Community 
 Development, Washington, D.C., under contract with the Office of 
 Economic Research, Economic Development Administration. The 
 statements, findings, conclusions, recommendations, and other data 
 in this report are solely those of the contractor and do not necessar- 
 ily reflect the views of the Economic Development Administration. 
 
FOREWORD 
 
 As part of a continuing program to provide encouragement and 
 assistance to small business ventures, the U.S. Department of Com- 
 merce is issuing a series of Urban Business Profiles. 
 
 It is hoped that these reports will serve as a meaningful vehicle 
 to introduce the prospective small urban entrepreneur to selected 
 urban-oriented businesses. More specifically, a judicious use of 
 these profiles could: provide a potential businessman with a better 
 understanding of the opportunities, requirements, and problems 
 associated with particular businesses; provide guidelines on types 
 of information required for location-specific feasibility studies; 
 assist urban development groups in their business creation activities. 
 
 <t .^sTV^cx^ 7K. 
 
 Robert A. Podesta 
 Assistant Secretary 
 for Economic Development 
 
Table of Contents 
 
 Page 
 
 I. Recommendation 1 
 
 II. Description of the Industry 1 
 
 A. Identification 1 
 
 B. Dimensions 2 
 
 C. Characteristics 4 
 
 Nature of the Product — Nature of the Cus- 
 tomer — Technology — Competition — Ease of 
 Entry — Financing — Profitability — Dependence 
 on Outside Factors 
 
 III. Feasibility Analysis 12 
 
 A. Review of Key Factors 12 
 
 Management — Market — Location — Labor 
 
 B. Special Factors for New Minority Ventures 13 
 
 C. Projections of Attainable Returns in Industry 13 
 
 Small, One-Man Operation — Franchise 
 Operation 
 
 IV. Establishing the Business 16 
 
 A. Approaching the Market 16 
 
 B. Plant Requirements 16 
 
 C. Financing 16 
 
 D. Labor Force 17 
 
 BIBLIOGRAPHY/TRADE ASSOCIATION 
 
 APPENDIX A — Specifications for Custodial Services 
 
 APPENDIX B — Professional Building Maintenance Agreement 
 
 APPENDIX C— Estimating a Single Job 
 
 OFFICE OF MINORITY BUSINESS ENTERPRISE (OMBE) AFFILIATES 
 
 URBAN BUSINESS PROFILES 
 
URBAN BUSINESS PROFILE 
 Building Service Contracting 
 
 (SIC 7349) 
 
 I. RECOMMENDATION 
 
 Building maintenance service is one of the fastest growing indus- 
 tries in the United States today. The growth of the service sector of 
 the economy, the increasing urban concentration, and an ever- 
 growing tendency for office building owners to "contract out" their 
 office building cleaning needs combine to support a current indus- 
 try growth rate of 15 percent. The attractiveness of this market and its 
 relative ease of entry have caused a high level of competition among 
 building maintenance contractors. Firms obtain business largely on 
 the basis of price competition in bidding, though an established 
 reputation for reliability is also important. These industry character- 
 istics, along with the labor intensive nature of building maintenance 
 services, underscore the importance of managerial skills to success. 
 
 The building maintenance industry employs a large number of 
 minority workers, and there exists a growing number of such persons 
 with experience in supervisory positions. An experienced mainte- 
 nance crew supervisor, who acquires independently or through 
 franchiser training practical skill in cost estimating, bidding, and 
 employee management, can earn a moderate return on his time and 
 invested capital in the building maintenance service business. 
 
 II. DESCRIPTION OF THE INDUSTRY 
 
 A. Identification 
 
 Building maintenance services are included in Standard Industrial 
 Classification (SIC) 7349, Miscellaneous Services to Dwellings and 
 other Buildings, described as: 
 
 Establishments primarily engaged in furnishing, to dwellings 
 and other buildings, specialized services not elsewhere clas- 
 sified, such as janitorial services, floor waxing, office cleaning. 
 
 Building maintenance contracting is a service-oriented activity 
 providing janitorial and related services to homes, small businesses, 
 

 commercial office buildings, hospitals, apartment houses, govern- 
 ment offices, factories, hotels, motels, schools, etc. Services provided 
 include such things as: 
 
 Dusting, dustmopping of floor areas. 
 
 Other floor cleaning, including vacuuming, floor waxing and 
 
 buffing, wet mopping, and stripping and machine scrubbing. 
 
 Toilet room cleaning. 
 
 Cleaning of stairways and landings, as necessary. 
 
 Cleaning of walls, woodwork and partitions. 
 
 Cleaning of building exterior. 
 
 Window washing, as necessary. 
 
 Sample building maintenance specifications, detailing the required 
 services, are attached as appendix A of this report. 
 
 In addition to those services listed above, a building maintenance 
 contractor may provide what is known as the "total maintenance con- 
 cept." This includes the provision of heating, air conditioning, and 
 electrical engineers, painters, carpenters, yardmen, and garage per- 
 sonnel. Other operations handled under such a contract might 
 include elevator operators and dispatchers, guards and lobby dis- 
 patchers, and specialized personnel who might be required by the 
 particular building or institution. 
 
 There is a decided trend toward this total concept form of build- 
 ing maintenance. If a building services contractor is not himself 
 equipped to handle all the above-mentioned services, he may con- 
 tract with the building owner to provide them, then subcontract 
 those services which he himself is not equipped to perform. This 
 tends to make the building maintenance contractor more attractive 
 to his prospective client. A building owner or manager is interested 
 in receiving the best maintenance at the lowest possible cost with 
 the least visibility. This is best provided by the one contractor who 
 renders all the services required by the building. In the total concept 
 plan, the contractor in effect serves as the "middle man," presenting 
 the building owner with a completed product — a clean and efficiently 
 run building. 
 
 B. Dimensions 
 
 There were some 9,675 businesses with payrolls in 1967 which 
 provided general building maintenance and janitorial services on a 
 contract basis, according to the 1967 Census of Business of the U. S. 
 Department of Commerce. These businesses earned gross receipts of 
 $884 million and paid wages amounting to over $555 million during 
 1967. These figures indicate that there has been significant growth 
 
in the industry since 1963, when there were 6,949 businesses, $500 
 million in receipts, and payrolls totaled $317 million. 
 
 It is currently estimated that over half of all building maintenance 
 service firms are unaccounted for by these statistics, as they report 
 no payroll in census data. Current figures are unavailable, but, in 
 1963, 9,414 firms provided contract building maintenance service 
 with no employees in addition to the proprietor and perhaps mem- 
 bers of his family. This large number of one-man firms account for 
 only a small fraction of total industry earnings, however. These 9,414 
 proprietors reported only about $38 1 /2 million in receipts in 1963, 
 the last year in which data were collected for these nonpayroll firms. 
 
 The structure of the industry is suggested by the accompanying 
 breakdown of all the 1963 reporting firms by size in terms of receipts. 
 
 TABLE 1 
 
 Dimensions of the Industry — 1963 
 
 Payroll 
 Size of establishment Establishments Receipts entire year 
 
 (By receipts) (Number) ($000) ($000) 
 
 Total, all establishments 16,363 538,523 316,893 
 
 Establishments operated 
 
 entire year, total 14,074 508,005 301,422 
 
 With annual receipts of: 
 
 $500,000 or more 175 N.A. N.A. 
 
 $300,000 to $500,000 140 N.A. N.A. 
 
 $100,000 to $300,000 554 90,554 56,157 
 
 $ 50,000 to $100,000 625 43,362 24,040 
 
 $ 30,000 to $ 50,000 721 27,178 13,077 
 
 $ 20,000 to $ 30,000 852 20,426 8,272 
 
 $ 15,000 to $ 20,000 715 12,096 4,218 
 
 $ 10,000 to $ 15,000 1,250 14,969 4,195 
 
 $ 5,000 to $ 10,000 3,101 20,483 2,980 
 
 $ 3,000 to $ 5,000 2,358 8,051 634 
 
 $ 2,000 to $ 3,000 2,063 4,126 326 
 
 Less than $ 2,000 1,490 1,490 182 
 
 New establishments in business 
 at end of year 2,289 $ 20,085 $ 9,940 
 
 The current market for building services is over $1 billion. It is 
 estimated by Building Services Contractor (the leading trade publica- 
 tion in the field) that by 1976, more than $2 billion a year will be 
 spent on commercial, institutional, and industrial cleaning services. 
 The same source estimates that over 30 percent of the Nation's office 
 buildings and factories were cleaned by outside contractors in 1968, 
 compared with 15 percent only 5 years before. Combining this 
 growing share of the office building market with the rapid rise in 
 industrial and commercial construction affords a glimpse of the 
 growth potential of this industry. 
 
The trend today is toward greater concentration within the indus- 
 try. That is, while there are still a great many small establishments, 
 larger establishments are accounting for an ever greater portion of 
 the gross receipts. Most of the building maintenance service estab- 
 lishments are located in urban areas for the obvious reasons. The 
 cities provide the concentration of business, commercial, and gov- 
 ernment buildings to be serviced, as well as employee availability. 
 In particular, the contractor will find his clients among predominantly 
 urban facilities (in addition to commercial office space), such as 
 railroad stations, department stores, sports stadia, airports, etc. New 
 York City, for example, where over 95 percent of all the large office 
 buildings are cleaned and maintained by service establishments, 
 accounts for one of the largest concentrations of building service 
 contractors in the Nation. 
 
 Minority entrepreneurship in this field is relatively scarce. Accord- 
 ing to industry sources, only about 5 percent of the establishments 
 grossing from $100,000 to $1 million annually are minority owned. 
 However, this figure is above the national average for all businesses 
 of this size. Because a major portion of the work force in this field 
 is now made up of minority group members, there exists a growing 
 pool of minority individuals with some experience in a supervisory 
 capacity who might be able to make the transition from labor into 
 management of building maintenance establishments. 
 
 C. Characteristics 
 
 1. Nature of the Product 
 
 The building maintenance contractor serves building owners and/or 
 managers. He provides these clients with a continuing service — a 
 clean and well run building. The reliability of the building service 
 contractor is being purchased as well as his cleaning ability — the 
 assurance that the work will, in fact, be performed. Thus, the product 
 can actually be broken down into two components: quantity and 
 quality of cleaning and other building maintenance functions and 
 the assurance that those functions will, in fact, be performed. 
 
 Building maintenance services are usually provided to building 
 owners and managers on a contract basis. Contracts are generally 
 for 1 year, with either party entitled to terminate upon 30 days' notice. 
 Since building maintenance and janitorial services are performed on 
 a continuing basis, the contractual system is the most efficient manner 
 to insure the provision of these services. A sample Professional Build- 
 ing Maintenance Agreement is attached as appendix B. 
 
2. Nature of the Customer 
 
 The customer of a building services contractor is the building 
 owner or manager. As discussed above, the client must have the 
 services provided by the building contractor — that is, he must have 
 a clean, serviceable building. However, in order to achieve this goal, 
 he may have the option of: (1) doing his own janitorial and other 
 maintenance work; or (2) contracting such work to the building serv- 
 ices. Which of these options will be chosen depends upon the size 
 and complexity of the building to be maintained and the costs of 
 performing the maintenance work with in-house staff compared to 
 contracting out the work. 
 
 Building owners are finding — to a greater and greater degree — 
 
 that it is more economical for them to contract out their janitorial 
 and building maintenance functions. A firm devoted to maintenance 
 work can afford to use the more advanced equipment being devel- 
 oped and can rely more heavily on specialization of labor. The result 
 is that the contracting firm can usually do a better job for less money. 
 Thus, a building owner will generally include the cost of a building 
 maintenance contractor when computing the overall cost of the 
 building. On an average, if a commercial office building rents space 
 at $6.50 per square foot, it will assume that maintenance costs will be 
 $.50 per square foot per year. 
 
 The customer will choose a building services contractor on the 
 following basis: 
 
 a) the contractor's ability to provide quality service; 
 
 b) the contractor's reliability to assure that such services will, in 
 fact, be provided; and 
 
 c) the cost which will be required for these services. 
 
 On the other hand, how does the building services contractor 
 decide for whose work he will bid? In undertaking market analysis 
 of potential customers, the building services contractor will take into 
 account such things as: the number of commercial, government, or 
 other serviceable buildings or businesses in his market area; the 
 amount, types, and degree of completion of new construction; the 
 amount of potential business already accounted for; the possibility of 
 providing services to those buildings already accounted for at a less 
 expensive rate (due to the new contractor's lower overhead, lower 
 salary requirement, or greater efficiency), etc. 
 
 The number and types of customers of a building services con- 
 tractor will also depend upon certain characteristics of his own 
 operation. These might include: number of employees on the payroll 
 
at a given time; number of potential employees in the market areas; 
 amount of equipment on hand or available; capital required for ex- 
 pansion and possibility of obtaining it. 
 
 Major locational determinants include the location of potential 
 customers in relation to the dwellings of the contractor's employees 
 and the location of the customer with respect to the contractor's 
 place of business and storage supply. The contractor must decide if 
 a building is, for example, so distant from the location of the clean- 
 ing equipment and the employees needed to do the cleaning that 
 it is impractical for him to service it 
 
 All of these factors are included in the contractor's estimating 
 calculations. Cost estimating is one of the major skills required of 
 the building services entrepreneur. He must accurately measure the 
 above-listed factors, decide what weight to give each, and translate 
 these decisions into a price which will be competitive and which 
 will at the same time provide him with an acceptable profit level. 
 These estimating procedures are discussed in greater detail below. 
 An example of one possible estimating procedure is attached as 
 appendix C of this report. 
 
 3. Technology 
 
 Building services contracting has traditionally been a labor inten- 
 sive business. The main expense item of any contractor is his payroll. 
 In a sense, the contractor is merely a "labor broker" who handles 
 personnel problems for the building owner. 
 
 The new or prospective entrepreneur is likely to need a wide range 
 of skills, preferably gained by experience as he develops an enterprise 
 in the building maintenance field. He will probably do much (if not 
 all) of the actual cleaning work at first, as well as the estimating of 
 new jobs and the selling of his services. When the operation expands, 
 the entrepreneur, while still cleaning, estimating, and selling, will 
 have to train his new employees. In addition, growth will bring 
 problems of accounting, inventory control, purchasing procedures. 
 He will have to have a relatively high degree of proficiency to operate 
 a successful establishment. 
 
 Once a business has become established, the entrepreneur of a 
 building maintenance service can usually take out as profit 5 percent 
 of the net receipts of the business, according to informed industry 
 sources. The percentage will vary, of course, depending on: 
 
 a) the accuracy of entrepreneur's estimating procedures. If the 
 entrepreneur does not estimate properly, profits built into business 
 contracts will be consumed by costs overrun. 
 
b) the extent of the competition on the contract. In some instances 
 the entrepreneur will cut profit margins in an effort to win contracts. 
 
 c) the amount the entrepreneur wishes to reinvest in the establish- 
 ment. This in turn will depend on the desired rate of growth. 
 
 The employees of a building services contractor are, for the most 
 part, unskilled. (The major exceptions to this are window cleaners 
 and any engineers provided.) Any training received is usually on-the- 
 job, although some larger contractors are beginning to use classes 
 to supplement this training. 
 
 Most employees used by the building services contractor are 
 women, who are used for all but the heavy work. The majority of 
 the employees in this field, particularly in the larger urban areas, are 
 minority group members. Since most of building contract work is 
 accomplished during the nighttime hours, it provides an excellent 
 ''moonlighting'' job and a source of income for those with little 
 formal training or education. 
 
 Wage rates for employees hover around the minimum wage rates 
 applicable. In larger urban areas, wages are usually somewhat higher. 
 In Washington, D.C., for example, with a minimum wage of $1.65 
 per hour, the wages of building service employees range from 
 $1.75 to $2 per hour, with $1.90 per hour the average rate. Window 
 cleaners' wages are higher, often ranging from $4 to $4.50 per hour 
 and up. 
 
 In some locations, wage rates and availability of labor may be 
 somewhat affected by unionization. (The building services industry 
 is covered by the Building Service Employee Union, as well as others 
 for the more specialized employees.) This is mainly true in highly 
 industrialized towns which are in any case predominantly union. 
 Elsewhere, the moonlighting nature of the jobs and rapid turnover 
 among the employees have prevented unionization from taking hold. 
 
 One of the main problems of a building services contractor is the 
 high turnover rate among his employees. Industry sources indicate 
 that most remain on the job for a period of 2 to 6 months. This is an 
 annual turnover rate of from 200 to 600 percent. This situation, again 
 due to the moonlighting nature of the job, has caused a premium to 
 be placed on reliability by the building services employer. 
 
 The high turnover rate has also led to increasing the screening pro- 
 cedures for potential employees of the building services company. 
 Many job application forms now contain rather pointed questions 
 involving: the reason the applicant desires work; whether or not he 
 is buying a home; how long he has been on his present job, etc. The 
 
whole object of such screening Is for the contractor to acquire a 
 "solid" employee who will have an interest in working and who will 
 stay on the job. 
 
 Equipment required in the building services contractor field has 
 been relatively basic in the past. A sample inventory of equipment is 
 reproduced below: 
 
 Sweeper 
 
 Buffer 
 
 Brushes 
 
 Floor pads 
 
 Extension cords 
 
 Mop bucket — round — oval 
 
 Wringer 
 
 Mop 
 
 Dust mop handle 
 
 Dustpan 
 
 Trash containers 
 
 Water pails 
 
 Pushbroom 
 
 Strawbroom 
 
 Rubber gloves 
 
 Uniforms 
 
 Smocks 
 
 Shirts 
 
 Ammonia 
 
 Bowl cleaner 
 
 Cleanser 
 
 Disinfectant 
 
 Furniture polish 
 
 Liquid detergent 
 
 Floor finish 
 
 Plastic bags 
 
 Sanitary napkins 
 
 Toilet seat covers [ occasional 
 
 Paper towels 
 
 Recently, technological advances and greater sophistication have 
 affected the equipment used by the building services contractor. In 
 addition to the list of basic items reproduced above, such machines 
 as institutional vacuums, high pressure cleaners, and power sweepers 
 with centrifugal clutch are now available. These technological ad- 
 vances have affected profitability positively and have somewhat 
 reduced labor requirements in the industry. 
 
 One major piece of equipment used by the building services con- 
 tractor is a truck. The new entrepreneur may at first transport 
 machines and supplies in a car or station wagon. Usually, however, 
 the enterprise will develop to the point where one or more trucks 
 are needed. In a survey performed by Building Services Contractor, 
 the average number of trucks in operation per firm surveyed was 4.3. 
 
 8 
 
The same survey noted that 92 percent of building services con- 
 tractors keep a warehouse of expendable cleaning supplies, with the 
 average firm keeping 54 days of normal consumption on hand. Being 
 able to keep such stock on hand is a problem to be dealt with by 
 any new entrepreneur. 
 
 There are definite economies of scale accruing to a building serv- 
 ices contractor. These usually begin at annual gross revenues of 
 $500,000 and include savings on supplies, which can then be pur- 
 chased directly from the manufacturer rather than from the distrib- 
 utor, savings on machines (with fewer having to be purchased for 
 each additional $100,000 of income), and easing of credit binds for 
 the growing business. 
 
 4. Competition 
 
 The largest form of competition the building services contractor 
 has to face outside of his own industry is in the form of buildings 
 which do their own in-house maintenance. This alternative is becom- 
 ing more and more rare, however, as building administrators realize 
 the advantage of contracting with a maintenance company. The 
 building administrator is relieved of the worry of hiring and firing 
 of maintenance employees, can rely on the contractor's use of more 
 specialized labor, obtains the use of more advanced and complex 
 equipment, and has no inventory problems in this area. 
 
 The growing market for the building maintenance services indus- 
 try does not insure high margins and ease in securing work. However, 
 a great many small contractors in this field assure intensive bidding 
 competition, with the emphasis on shaving prices. Cost of mainte- 
 nance is a primary determining factor in the choice of a building 
 services contractor, and the building owner will, reputation for 
 quality and reliability being equal, choose the contractor who comes 
 in with the lowest bid for the job required. In this type of price 
 competition, the large contractor has some advantages, the small 
 contractor others. The large contractor may be able to provide equip- 
 ment and supplies at a less costly rate than his smaller competitor 
 because of economies of scale; the cost of "gearing up" to do a job, 
 especially a large one, may be lower for him. On the other hand, the 
 small contractor may have lower overhead, due to lower direct 
 expenses and less equipment, and may be willing to have a smaller 
 profit margin for the sake of getting the job and developing his 
 reputation. 
 
 The problem of estimating must again be stressed. The small con- 
 tractor, and especially the new entrepreneur, must be particularly 
 
careful in his estimating procedures. A net deficit is likely to result 
 from inaccurate decisions about costs and personnel requirements, 
 and although a contractor may be willing to reduce his profit margin, 
 maintaining a loss is hardly a sound business practice. 
 
 5. Ease of Entry 
 
 The ease of entry into building services contracting is attested to 
 by the large number of firms beginning operation each year. There 
 are no licensing requirements in this industry, and many contractors 
 begin with no more than experience in the cleaning field, determina- 
 tion, and a small amount of capital. Because many businesses begin 
 with no more than the owner and operator (and perhaps one other 
 part-time employee), qualified employees do not present an immedi- 
 ate problem for the prospective entrepreneur. At this stage, no office 
 or storage space is required, and a new enterprise can be operated 
 from the entrepreneur's home. Between $1,200 and $1,500 monthly 
 contracts may be sufficient to begin an operation if accurate cost 
 estimation and time allocations have been made. The failure rate of 
 building services contractors is, according to industry sources, higher 
 than the combined rate for all businesses. Some of the reasons for 
 failure cited by trade authorities include: overextension, resulting in 
 inability to complete jobs properly and to the satisfaction of the 
 client; poor estimating procedures, resulting in cost overruns and 
 unprofitable contracts; lack of managerial experience, resulting in 
 higher than usual labor turnover; competitive weakness because of 
 lack of established reputation; and general administrative difficulties. 
 
 In addition, industry sources indicate that experience in the build- 
 ing maintenance field is almost essential to the success of an enter- 
 prise. The majority of contractors interviewed stated that they had 
 worked for 6 months to 2 years in the field before attempting to 
 branch out into independent operation, and many noted that it was 
 this early experience that helped to insure their success. 
 
 6. Financing 
 
 It is difficult to estimate the capital requirements of a new or 
 prospective building services contractor. Industry sources indicate 
 that a rough rule of thumb is: have available capital in the amount 
 of three times the expected first month's gross income. For example, 
 an entrepreneur who has secured a contract that will produce 
 monthly gross receipts of $1,500 will be able to begin operations with 
 $4,500. This amount will cover the cost of supplies, salary for the 
 entrepreneur and any employees he might require, and working 
 capital requirements needed to carry him through the timelag in 
 payment for past services. 
 
 10 
 
There are no special programs or sources of capital for establishing 
 a building services contractor. The Small Business Administration, 
 however, has been quite active in providing regular business and 
 economic opportunity loans in this field, a large portion of which 
 have been to minority entrepreneurs. The breakdown of these loans 
 is presented below. 
 
 $750,250 
 
 TABLE 2 
 
 SBA Regular Business and Economic Opportunity Loans: 
 
 Building Maintenance and Janitorial Services 
 
 Number 
 
 White 
 
 
 
 
 Other 
 
 
 total 
 
 and others 
 
 Percent 
 
 Black 
 
 Percent 
 
 nonwhite 
 
 Percent 
 
 60 
 
 33 
 
 55 
 
 23 
 
 38.3 
 
 4 
 
 6.7 
 
 Volume 
 
 White 
 
 
 
 
 Other 
 
 
 total 
 
 and others 
 
 Percent 
 
 Black 
 
 Percent 
 
 nonwhite 
 
 Percent 
 
 $522,300 
 
 69.6 
 
 $186,950 
 
 24.9 
 
 $41,000 
 
 5.5 
 
 Another form of organization and source of capitalization that is 
 becoming increasingly popular in this field is the franchise arrange- 
 ment. One of the largest franchise operations provides such assistance 
 as training programs, managerial assistance, continuing counseling 
 support, working equipment, supplies, advertising and promotions 
 for a nominal fixed fee. 
 
 7. Profitability 
 
 As noted above, the reasonably successful building service con- 
 tractor can expect an average of about 5 percent profit on net 
 receipts. The industry can be expected to grow at about 15 percent 
 per annum. 
 
 Factors tending to decrease profitability are: inaccurate cost esti- 
 mation; the high labor turnover, with resultant costs; frequent theft 
 of equipment and supplies; and overextension of operation. 
 
 8. Dependence on Outside Factors 
 
 The field of business maintenance contracting is less subject to the 
 effects of economic conditions than are many industries or types of 
 business. Building cleaning and maintenance needs exist irrespective 
 of business cycles, and purchasers of these services usually think of 
 them as fixed costs. One effect of the business cycle, however, is the 
 decrease in construction during times of recession, in turn causing a 
 decrease (or, more accurately, a less rapid increase) in the contractor's 
 potential business. The availability of credit would most likely affect 
 the building services contractor less than other areas of the economy. 
 
 11 
 
III. FEASIBILITY ANALYSIS 
 
 A. Review of Key Factors 
 
 The following factors bear on the feasibility of establishing a build- 
 ing service contracting business: 
 
 1. Management 
 
 The new entrepreneur requires experience in the field of cleaning 
 or building maintenance. At least 1 year working for an established 
 firm will enable him to acquire the technique of accurate cost esti- 
 mating which is essential to his success. Because personnel manage- 
 ment is also vital, the new entrepreneur will need experience or 
 potential in this field as well. If the prospective manager has shown 
 some knack for selling, accounting, and ability to handle inventory, 
 he is enhancing his chances for success. 
 
 2. Market 
 
 The market for his services will determine the new contractor's 
 success. Such a market can be analyzed in part by the following: 
 
 a) concentration of office buildings in the area; 
 
 b) new construction, noting state of completion; 
 
 c) competition; 
 
 d) the contractor's own reputation. 
 
 3. Location 
 
 While not crucial at the early stages of operation, the contractor's 
 offices and warehouses should be convenient both to his prospective 
 clients and, if possible, to the homes of his employees. 
 
 4. Labor 
 
 Although availability of labor is usually not a problem, retention 
 and management of this labor can be problems. Employee benefits, 
 profit-sharing and other such methods are often used to hold em- 
 ployees, and careful screening of applicants and training of employees 
 are used to ease the management problem. The building services 
 contractor may benefit from the activities of government-funded 
 manpower programs which screen jobseekers and which provide 
 basic education and pre-vocational training to them. Such programs 
 as JOB 70, the Work Incentive Program (WIN), and on-the-job train- 
 ing under the Manpower Development and Training Act (MDTA 
 O-J-T) would provide a ready source of potential employees in most 
 
 12 
 
urban areas. An analysis of the quantity and quality of the work force 
 is essential in assuming the potential feasibility of the enterprise. 
 
 B. Special Factors for New Minority Ventures 
 
 The largest market for a building services contractor is in the urban 
 areas. It is in urban areas, too, that there exists a reservoir of potential 
 employees, many of them minority members. Thus, location and 
 labor will serve as assets to the prospective minority entrepreneur 
 who can also benefit from a continually growing market and the in- 
 creasing acceptance of minority entrepreneurship. 
 
 C. Projections of Attainable Returns in Industry 
 
 Projections follow for two different types of operations. The first 
 is for a starting independent operation, with three part-time em- 
 ployees. The second is for a new franchise operation for professional 
 building maintenance. 
 
 1. Small, One-Man Operation 
 
 The projections here are based on the following assumptions: 
 
 a. A one-man operation, with the prospective entrepreneur having 
 had some experience in the building maintenance field. 
 
 b. Three part-time workers, each available for approximately 17 
 hours per week of employment at $1.65 per hour. 
 
 c. An initial investment by the manager of $4,500. 
 
 d. A 40-hour work week for the owner, who does both selling and 
 supervising of the operation as well as some actual building mainte- 
 nance work. 
 
 e. Operation out of the home of the manager during at least the 
 first year of operation, using the personal vehicle (car, station wagon, 
 or small truck) for the business. 
 
 f. A relatively high cash requirement, since the owner will be 
 unable, as a new operator, to secure his supplies and equipment on 
 credit and will require initial cash outlays. 
 
 As the following operating statements shows, such an operation, 
 grossing $18,000 per annum, might provide a net profit of about 
 $9,600. This figure is deceptively high, however. It does not take into 
 account the owner's draw for salary and any amounts to be reinvested 
 in the business. 
 
 13 
 
Gross Annual Revenue 
 
 Investment 
 
 Area served and customer type 
 
 Production hours 
 Operating location 
 Vehicles 
 
 Equipment and material 
 
 Distribution of labor 
 
 Owner's function 
 
 Number and type of employees 
 
 Fixed costs 
 
 Vehicle depreciation 
 
 Equipment depreciation 
 
 Telephone and yellow pages 
 
 Rent, office help, supervisory, outside services 
 
 Total fixed costs 
 
 Variable costs 
 
 Labor 
 
 Advertising, selling expenses 
 Payroll tax, employee fringes 
 Vehicle operating cost 
 Liability insurance 
 
 Total variable costs 
 
 Net profit before tax and 
 owner's compensation 
 
 $18,000 
 
 $4,500 
 
 7 to 12 buildings 
 4,000 to 6,000 sq. ft. each 
 36,000 sq. ft. total 
 74 hours per week 
 Works from own home 
 Car, station wagon or 
 used truck 
 
 $3,000 
 
 Management, sales, and cleaning 
 Owner, 3 part-time employees 
 for cleaning 
 
 500 
 
 750 
 
 50 
 
 
 
 $4,500 
 
 700 
 
 600 
 
 1,000 
 
 300 
 
 $ 1,300 
 
 $ 7,100 
 $ 9,600 
 
 If the entrepreneur has had adequate experience in the field, if he 
 is able to sell his services, if his cost-estimating procedures are accu- 
 rate, and if he provides quality service, a 1st-year operation of this 
 size is feasible. However, unless all of these characteristics are pres- 
 ent, as well as a willingness by the new entrepreneur to forego present 
 profits and reinvest heavily in his business, an establishment such as 
 this cannot be maintained for any length of time. 
 
 2. Franchise Operation 
 
 The owner of a typical, but hypothetical, franchise must initially 
 invest $5,000. Of this amount, $1,500 is paid to the franchiser for 
 goods and services, including: 
 
 • The licensed use of the franchiser's trademark and training — 
 $900. 
 
 • Professional products, business forms, supplies and tools, sales 
 promotion aids, and technical manuals — $500. 
 
 • Equipment— $100. 
 
 14 
 
The training provided by the franchiser is particularly geared to 
 servicing buildings, offices, and plants under contract. Because of 
 such possible benefits as the established name of the franchiser, cost- 
 cutting centralized purchase of supplies, advertising provided by the 
 franchiser, and continuous consultation and advice, the franchisee 
 may possess advantages over the independent operator. In addition, 
 special financing is occasionally provided by the franchiser, making 
 it easier for an individual to begin a business. 
 
 New operation — Husband and wife or part-timer 
 
 Investment $5,000 
 
 Area serviced and customer type 22,000 square feet 
 
 Operating location — works from home 
 Vehicles — one truck, probably used 
 Equipment — primarily supplied by franchiser 
 
 4 to 10 commercial buildings 
 4,000 to 6,000 square feet each 
 
 Distribution of labor 
 
 Owner's functions — housekeeping, sales and management 
 Number and type of employees — owner and wife, with 
 one part-time employee 
 
 Gross Annual Revenue $15,000 
 
 Fixed costs 
 
 Vehicle depreciation $ 500 
 
 Equipment depreciation 50 
 
 Telephone and yellow pages 100 
 
 Rent, office help, outside services 50 
 
 Manager's administrative salary 1,000 
 
 Total fixed costs $ 1,700 
 
 Variable costs 
 
 Manager's production salary $7,500 
 
 Labor (part-time) 1,750 
 Sales expense (advertising — paid by 
 
 franchiser) - - 
 
 Vehicle operating cost 1,200 
 Franchising fee (percentage of gross 
 
 income — here, 7 percent) 1,050 
 
 Liability insurance (paid by franchiser) -0- 
 
 Total variable costs $11,500 
 
 Total costs $13,200 
 
 Profit before tax $ 1,800 
 
 Net to owner 
 
 Manager's administrative salary $1,000 
 
 Manager's production salary 7,500 
 
 Profit before tax 1,800 
 
 Net to owner before taxes $10,300 
 
 15 
 
IV. ESTABLISHING THE BUSINESS 
 
 A. Approaching the Market 
 
 If he is planning an independent, one-man operation, the prospec- 
 tive building services contractor should have his market fairly well 
 defined. In addition, he should have already secured contracts assur- 
 ing him of $1,500 monthly gross revenue. These agreements are made 
 through previous contacts while working in the field. Ability to secure 
 these contracts will indicate to the entrepreneur that his bidding has 
 been price competitive, and if his performance is of acceptable 
 quality, he should be able to maintain an independent operation at 
 this level for at least 1 year. 
 
 The franchisee, on the other hand, does not require an initial 
 knowledge of the cleaning industry. The franchiser trains him to be 
 an expert professional cleaner. The franchiser also generally provides 
 the new owner with an advertising and sales promotion program, 
 other assorted sales aids, and instructions on their use. These bene- 
 fits, added to the use of the franchise brand name and the advantage 
 of its reputation, will ease the franchisee's approach to the market. 
 
 B. Plant Requirements 
 
 The small, one-man operation requires minimum space and can 
 comfortably be operated from the entrepreneur's home. The only 
 room needed is a storage room for equipment and supplies; a 
 garage or basement area will certainly suffice for the 1st year of 
 operation at this level. The same is true for the beginning franchise. 
 
 Growth of the establishment will require office space and more 
 storage space than can be adequately provided in the home. At this 
 point, the entrepreneur will seek a location close to the buildings 
 which he is servicing and as close as possible to the location of his 
 employees. Office space may range from about 1,000 square feet for 
 an establishment with 15 to 40 full- and part-time employees, to 
 22,000 square feet of office space for a 900-man operation. In addi- 
 tion, storage space may run 500 to 13,000 square feet, accordingly. 
 
 C. Financing 
 
 The basic investment involved in building services contracting is 
 the purchase of equipment and supplies. Although some financing 
 arrangements may be made with equipment suppliers, expendable 
 items such as chemicals, cleaning agents, and paper products will 
 require a cash outlay. In addition, enough capital must be kept on 
 hand to meet 1 month's payroll requirements, supplies, and rent. 
 
 16 
 
(This is necessary because of the timelag between contractual agree- 
 ment and actual payment.) 
 
 Because the initial capital requirement is relatively low, the building 
 services contractor can often begin operation with his own savings 
 or other private sources. If a franchise operation is contemplated, the 
 franchiser is often willing to provide special financing arrangements. 
 And it may be possible to secure a loan from the Small Business 
 Administration. Unless the individual entrepreneur has an independ- 
 ently stable credit reputation, it may be difficult to secure conven- 
 tional bank financing for this type of operation. 
 
 D. Labor Force 
 
 The labor force used by a building services contractor is, for the 
 most part, unskilled. Although the wages are low, recruitment of 
 employees is rarely a problem. The new entrepreneur, probably need- 
 ing only two or possibly three part-time employees, will be able to 
 recruit them through his previous business contacts or through the 
 standard advertising methods. 
 
 As the enterprise develops, however, maintaining a reliable and 
 efficient labor force will require special effort. Such an effort might 
 include such things as profit sharing, bonuses for outstanding work, 
 and other employee benefits. Raising the wage rate as much above 
 the minimum wage as possible is probably the best method of 
 securing and maintaining personnel. 
 
 17 
 
BIBLIOGRAPHY 
 
 SMALL BUSINESS ADMINISTRATION, Washington, D. C. 20416 
 Small Business Administration, Office of Planning, Research, and 
 Analysis, Selected Industry Profiles, August 16, 1968. 
 
 Guide to the Assessment of Minority Business Opportunities. 
 
 BUILDING SERVICE CONTRACTOR, 101 West 31st Street, New York, 
 N. Y. 10001. 
 
 Trade magazine, published bimonthly. Each firm engaged in con- 
 tract cleaning, maintenance services, and allied operations may 
 obtain one copy bimonthly without charge, by a written request 
 to the publishers. To all others, the subscription price is $6 annually 
 — $10 for 2 years. Single current copies are available at $1 per copy; 
 back copies available at $2 per copy. 
 
 FORMS FOR THE BUILDING SERVICE CONTRACTOR, National Asso- 
 ciation of Building Service Contractors, 2215 M Street, N.W., Wash- 
 ington, D. C. 20037. 1970. 
 
 Representative samples of forms used in building service contract- 
 ing businesses throughout the country. 
 
 7967 CENSUS OF BUSINESS— BC67-SA1 , Bureau of the Census, U. S. 
 Department of Commerce, Washington, D. C. 20233. 
 
 7963 CENSUS OF BUSINESS, Bureau of the Census, U. S. Department 
 of Commerce, Washington, D. C. 20233. 
 
 TRADE ASSOCIATION 
 
 The trade association serving building service contractors is the 
 National Association of Building Service Contractors. This association 
 has over 550 members, primarily engaged in contracting of building 
 maintenance service and janitorial cleaning. Associate members are 
 manufacturers of cleaning supplies and equipment. 
 
 NABSC is located at 2215 M Street, N.W., Washington, D.C. 20037. 
 It was founded in 1965 and serves as a representative voice of build- 
 ing services contractors. In addition, NABSC conducts studies in areas 
 of interest to building services contractors, such as costs and ratios, 
 industrial relations and personnel, marketing and sales, contract im- 
 provement, materials and supplies sources, etc. 
 
 18 
 
APPENDIX A 
 
 Typical Specifications For Custodial Services 
 
 1. Waste Paper — Ash Trays — Daily 
 
 Waste baskets and ash trays shall be emptied daily. Ash trays 
 shall be wiped clean. Trash generated by normal daily office 
 routine shall be emptied into trash containers. Trash removal 
 shall be provided by the contractor or building owner. If by con- 
 tractor, he generally subcontracts. 
 
 2. Dusting — Daily 
 
 All furniture, file cabinets, and horizontal surfaces which can be 
 reached while standing on the floor shall be dusted daily with 
 a chemically treated cloth. 
 
 3. Dust Mopping — Floors — Da/7y 
 
 All noncarpeted floors shall be dust mopped with a treated yarn 
 dust mop daily with special attention being given to areas under 
 desks and furniture to prevent the accumulation of dust and dirt. 
 Dust mopping shall be done after furniture has been dusted. 
 
 4. Toilet Rooms — Daily 
 
 a. Wash all mirrors. 
 
 b. Wash hand basins and hardware. 
 
 c. Wash urinals. 
 
 of. Wash toilet seats using disinfectant in water. 
 
 e. Wash toilet bowls. 
 
 /. Damp mop floor using disinfectant in water. 
 
 g. Damp wipe, clean, and disinfect all tile and other surfaces. 
 Spot wipe and clean where necessary. Walls and partitions 
 are to be free of handprints and dust. 
 
 h. Replenish hand soap, towels, and tissue. These expendable 
 items shall be furnished by the building owner or contractor. 
 In 90 percent of contracts, provided by the contractor. 
 
 /. Toilet bowl brush shall be used on toilet bowls, and care 
 shall be given to clean flush holes under rim of bowl and 
 passage trap. 
 
 /. Bowl cleaner shall be used at least once each month or more 
 often if necessary. 
 
 19 
 
5. Stairways and Landings — Daily — As Necessary 
 
 All stairways and landings shall be dust mopped with a treated 
 yarn dust mop daily. Railings, ledges, and equipment shall be 
 dusted daily. Spot cleaning of doors and walls shall be done as 
 necessary. These floor areas shall be damp mopped, scrubbed, 
 waxed, and buffed as necessary. 
 
 6. Vacuuming — Da/7y 
 
 All rugs in office areas and public spaces shall be vacuum 
 cleaned daily. Hard-to-get spots and corners shall be cleaned 
 with necessary tools. 
 
 7. Floor Waxing & Buffing — Da/7y and As Necessary 
 
 All noncarpeted resilient floors shall be waxed with Underwriter 
 Laboratory approved materials. The frequency of the waxing 
 shall be governed by the amount of wear due to weather and 
 other conditions. The floors and traffic areas shall be waxed so 
 as to maintain a uniform appearance throughout the entire 
 building. Corridors and elevator floors shall be buffed daily. 
 
 8. Wet Mopping — Da/7y and As Needed 
 
 All waxed floors shall be damp mopped when dirt can not be 
 swept or dusted, and spots shall be removed daily. 
 
 9. Stripping and Machine Scrubbing — As Needed 
 
 This operation shall be accomplished as frequently as necessary, 
 depending on the need to remove dirt-embedded finishes, stains, 
 spillages, and wax buildup. 
 
 1 0. Water Coolers — Da/7y 
 
 All water coolers shall be cleaned and polished daily. 
 
 11. Spot Cleaning — Da/7y 
 
 Walls, doors, painted woodworks, and interior glass shall be 
 kept free from handprints and smudges which can be removed 
 with cloth and neutral cleaner. The type of cleaner to be used 
 shall be appropriate for the wall material. 
 
 12. Ash Receivers — Da/7y 
 
 Ash receivers shall be cleaned and sanitized as necessary. 
 
 20 
 
13. Lighting Fixtures — Semiannually — Annually 
 
 All lighting fixtures shall be dusted every 6 months and washed 
 annually. 
 
 14. High Dusting — Quarterly 
 
 Pipes, ledges, mouldings, etc., shall be dusted every 3 months- 
 
 15. Venetian Blinds — Da/7y 
 
 A sufficient number of Venetian blinds shall be dusted or damp 
 wiped daily so that all blinds shall be dusted every 90 days. 
 Draperies shall be straightened and vacuumed. 
 
 16. Walls, Woodwork, and Partitions — Quarterly 
 
 All walls shall be brushed down every 3 months with approved 
 wall duster or a vacuum cleaner. 
 
 17. Glass Partitions and Doors — Monthly 
 
 All glass partitions and doors shall be damp cleaned monthly. 
 
 18. Window Washing — Quarterly 
 
 All windows shall be washed inside and outside once every three 
 months. [Often contracted out, because of high insurance risks, 
 labor skills required, etc.] 
 
 19. Air-Conditioning Grills — Monthly 
 
 All areas around air-conditioning and return air grills shall be 
 cleaned once each month. 
 
 20. Elevators — Daily 
 
 The interior surfaces and fixtures of the elevators and the elevator 
 lobby doors shall be dusted daily and damp wiped as necessary. 
 
 21. Polishing — Da/7y — Monthly 
 
 All doorplates, kick plates, brass and metal fixtures within the 
 building shall be wiped daily and polished monthly. 
 
 22. To/7et Rooms — Da/7y [This involves day laborers.] 
 
 Maid and/or porter shall make periodic checks of toilet and rest 
 rooms, and shall replenish supplies, clean fixtures as necessary, 
 empty waste cans, etc. 
 
 21 
 
23. Policing Floors — Daily [This involves day laborers.] 
 
 Corridors, lobbies, and other public areas shall be kept free of 
 wastepapers, cigarette butts, matches, etc. 
 
 24. Entrance Lobby — Daily 
 
 Entrance lobby shall be serviced daily. Lobby glass shall be 
 washed and cleaned as necessary. Particular attention shall be 
 given floor and glass doors during inclement weather. 
 
 25. Building Exterior — Da/7y 
 
 Entrance shall be swept clean of litter. Sidewalk shall be kept 
 clean and free of snow and ice. Salt or other ice-melting mate- 
 rial shall be furnished by the building management. 
 
 26. General — As Necessary 
 
 a. Employees of contractor shall report to the building super- 
 intendent any conditions such as leaky faucets, stopped 
 toilets and drains, broken fixtures, etc., or any other unusual 
 happenings in buildings. 
 
 b. Employees of contractor shall check windows and turn off 
 all lights when night cleaning is finished. 
 
 c. Employees of contractor shall have proper identification dur- 
 ing hours of employment. 
 
 d. Employees of contractor shall not disturb papers on desk, 
 open drawers or cabinets, use telephones, televisions, radios, 
 drink, or gamble while on duty. They shall report any open 
 safes and cabinets to the building guard force or building 
 management. 
 
 e. Day employees shall be under supervision of the building 
 superintendent. The duties and work schedule shall be agreed 
 upon by contractor and building management. 
 
 f. Daytime employees of contractor will wear uniforms. They 
 will be neat and clean in appearance. 
 
 g. No cleaning services shall be provided on legal holidays. 
 
 22 
 
APPENDIX B 
 
 Sample Professional Building Maintenance 
 
 Agreement 
 
 AGREEMENT made on [date] between [contractor] 
 
 and [client] 
 
 NOW THEREFORE, the parties agree as follows: 
 
 1. Beginning on [date] f Contractor will provide and 
 
 perform for the Client the services described in the work 
 schedule [see appendix A], in the buildings and areas to be 
 serviced therein set forth. 
 
 2. All personnel furnished by the Contractor will be employees 
 of the Contractor, and the Contractor will pay all salaries and 
 expenses of, and all Federal social security taxes, Federal and 
 State unemployment taxes, and any similar payroll taxes relat- 
 ing to such employees, and will carry workmen's compensa- 
 tion insurance for such employees. The Contractor will be 
 considered for all purposes an independent contractor, and 
 will not at any time directly or indirectly act as an agent, 
 servant, or employee of the Client. 
 
 3. The Contractor will provide all proper safeguards and shall 
 assume all risks incurred in performing its services hereunder. 
 
 4. The Contractor shall provide the insurance coverage agreed 
 upon, include comprehensive liability coverage and work- 
 men's compensation coverage. 
 
 5. Without limiting the responsibility of the Contractor for the 
 proper conduct of its personnel and the cleaning of the areas 
 to be serviced hereunder, the conduct of the cleaning person- 
 nel hereunder is to be guided by rules and regulations as 
 agreed upon from time to time between the Client and the 
 Contractor, and such additional special written instructions as 
 may be issued by the Client to the Contractor from time to 
 time through its designated agent. 
 
 6. The Contractor is responsible for the direct supervision of its 
 personnel through its designated representative, and such rep- 
 resentative will, in turn, be available at all reasonable times to 
 report and confer with the designated agents of the Client with 
 respect to services rendered. 
 
 23 
 
7. The Contractor agrees that the cleaning services to be pro- 
 vided hereunder shall be performed by qualified, careful, and 
 efficient employees in strict conformity with the best practices 
 and highest applicable standards. The Contractor further 
 agrees that upon the request of its Client, it will remove from 
 services hereunder any of its employees who in the opinion 
 of the Client are guilty of improper conduct or are not quali- 
 fied to perform the work assigned to them. 
 
 8. It shall be understood and agreed that during the term of this 
 agreement and for ninety (90) days thereafter, the Client will 
 not, directly or indirectly, hire any person employed by the 
 Contractor. 
 
 9. In exchange for performance of services hereunder, the Client 
 shall make payment to the Contractor for services rendered 
 
 hereunder at the rate of per month. The Contractor 
 
 will give the Client at least thirty (30) days notice of any price 
 change for services rendered hereunder, and the Client will 
 notify the Contractor of any changes in the use of the areas 
 covered by this agreement and any additions to or changes in 
 the furnishings or floor, wall, or ceiling surfaces forming a 
 part of the Client's premises. 
 
 10. The Contractor will perform all services required hereunder, 
 except when prevented by strike, lockout, act of God, acci- 
 dent, or other circumstances beyond its control. 
 
 11. This agreement shall continue in effect for 1 year from the 
 date services are to begin, but may be terminated by either 
 party by giving thirty (30) days written notice by registered 
 mail addressed to the other party. 
 
 24 
 
APPENDIX C 
 
 Estimating A Single Job* 
 
 Assume that the building maintenance contractor is pricing the 
 maintenance of 50,000 square feet of office space. The work is to be 
 done each weekday evening after employees leave at 5 p.m. Calcula- 
 tions indicate that three men and a supervisor will be needed on a 
 regular 40-hour week. The estimate should look like this: 
 
 MATERIALS AND EQUIPMENT 
 (Approximately 15% of total labor costs) 
 
 $ 230.00 
 
 Materials 
 
 Prorated 
 
 Equipmer 
 
 (per month) 
 
 equipment depreciation 
 it repairs and maintenance 
 
 Monthly hours Wage rate 
 480 $2.25 
 160 $2.60 
 
 $ 160.00 
 60.00 
 10.00 
 
 LABOR COSTS 
 
 Number of men 
 3 
 1 supervisor 
 
 Monthly 
 payroll 
 $1,080.00 
 416.00 
 
 $1,496.00 
 Vacation, sickleave, overtime factor, etc. — 10% 149.60 
 
 $ 1,645.60 
 
 TAXES AND INSURANCE 
 
 **Social Security — 5.2% of monthly 
 payroll $1,496.00 $ 77.79 
 
 State and Federal employment taxes 
 
 2% of monthly billing 30.71 
 
 Insurance cost (prorated for total monthly 
 billings on all accounts serviced by firm) 30.00 $ 138.50 
 
 SUBTOTAL (70% of bid price) $ 2,014.10 
 
 To arrive at total price, divide subtotal by 70% 
 
 $2,014.10 ^ 70% = $2,877.28 
 
 15% of monthly contract for overhead = $ 431.59 
 
 15% of monthly contract for profit = 431.59 $ 863.18 
 
 TOTAL MONTHLY CONTRACT $ 2,877.28 
 
 TOTAL YEARLY CONTRACT $34,527.36 
 
 PER SQUARE FOOT PER YEAR 690 
 
 (National avera ge ranges from 500 to 800 per square foot for maintenance) 
 
 *Adapted from Building Services Contractor for April 1968. 
 **As of July 1971. 
 
 25 
 
OFFICE OF MINORITY 
 
 BUSINESS ENTERPRISE 
 
 (OMBE) AFFILIATE ORGANIZATIONS 
 
 Albuquerque 
 
 National Economic Development 
 
 Association (NEDA) 
 1801 Lomas, N. W. 
 Albuquerque, N. M. 87104 
 508/843-2386 
 Victor M. Casaus, 
 
 Regional Vice President 
 
 Atlanta 
 
 Atlanta Business League (NBL) 
 
 329 Walker Street, S. W. 
 
 Atlanta, Georgia 30314 
 
 404/524-5449 
 
 Franklin F. O'Neal, Executive Director 
 
 Wendell White (OMBE Representative) 
 
 404/526-6304 
 
 Baltimore 
 
 Morgan State College Minority 
 
 Business Enterprise Project 
 2108 North Charles Street 
 Baltimore, Maryland 21218 
 301/685-0610 
 Ralph J. Ross, Executive Director 
 
 Boston 
 
 The Roxbury Small Business 
 
 Development Center 
 126 Warren Street 
 Roxbury, Massachusetts 02119 
 Bernard Wiley — Acting Executive 
 
 Director 
 617/427-6333 
 
 Frank Bispham (OMBE Representative) 
 617/223-2381 
 
 Chicago 
 
 Chicago Economic Development 
 
 Corporation (CEDC) 
 162 North State Street, Suite 600 
 Chicago, Illinois 60601 
 231/368-0011 
 Garland Guice, Executive Director 
 
 26 
 
 Bennett Johnson, Jr. (OMBE 
 Representative) 
 
 312/353-4460 
 
 NEDA 
 
 537 Dearborn South 
 
 Chicago, Illinois 60605 
 
 312/939-2607 
 
 Gilbert M. Vega, 
 
 Regional Vice President 
 
 Cincinnati 
 
 Determined Young Men 
 
 3880 Reading Road 
 
 Cincinnati, Ohio 45229 
 
 513/221-0180 
 
 Merven Stenson, Executive Director 
 
 Cleveland 
 
 Greater Cleveland Growth Corporation 
 
 690 Union Commerce Building 
 
 Cleveland, Ohio 44115 
 
 216/241-4313 
 
 Melvin Roebuck, Executive Director 
 
 Minority Economic Developers 
 
 Council (MEDCO) 
 10518 Superior Avenue 
 Cleveland, Ohio 44106 
 Armond L. Robinson, Administrator 
 
 Dallas 
 
 Dallas Alliance for Minority Enterprise 
 
 (DAME) 
 7200 North Stemmons Freeway 
 Suite 1006, UCC Tower 
 Dallas, Texas 75222 
 214/637-5170 
 Walter Durham, Executive Director 
 
 Denver 
 
 Colorado Economic Development 
 
 Association (CEDA) 
 1721 Lawrence Street 
 Denver, Colorado 80202 
 303/255-0421 
 Edward Lucero, Executive Director 
 
Detroit 
 
 Inner City Business Improvement 
 
 Forum (ICBIF) 
 6072 - 14th Street 
 Detroit, Michigan 48208 
 313/361-5150 
 Walter McMurtry, President 
 
 El Paso 
 
 NEDA 
 
 First National Building 
 Suite 10B 
 
 109 North Oregon Street 
 El Paso, Texas 79901 
 915/533-7423 
 Jose Manuel Villalobos, 
 Regional Vice President 
 
 Indianapolis 
 
 Indianapolis Urban League 
 445 North Pennsylvania Street 
 Indianapolis, Indiana 46204 
 317/639-5391 or 253-5418 
 Sam Jones, Executive Director 
 
 Kansas City 
 
 Black Economic Union (BEU) 
 
 2502 Prospect 
 
 Kansas City, Missouri 64127 
 
 816/924-6181 
 
 Curtis McClinton, President 
 
 NEDA 
 
 703 North 8th Street 
 
 Kansas City, Kansas 66100 
 
 913/342-6663 
 
 Richardo Villalobos, 
 
 Regional Vice President 
 
 Los Angeles 
 
 South Central Improvement Action 
 
 Committee (IMPAC) 
 8557 South Broadway 
 Los Angeles, California 90003 
 213/751-1155 
 Louis Wilson, Director 
 
 The East Los Angeles Community 
 
 Union (TELACU) 
 1330 South Atlantic Boulevard 
 Los Angeles, California 90022 
 213/268-6745 
 Claude Martinez, 
 
 Director of Development 
 
 NEDA 
 
 5218 East Beverly Boulevard 
 
 Los Angeles, California 90022 
 
 213/724-6484 
 
 Silvestre Gonzales, 
 
 Regional Vice President 
 Jack Wilburn, Coordinator 
 213/824-7691 
 Powell McDaniel (OMBE 
 
 Representative) 
 213/824-7715 
 
 Joseph Luna (OMBE Representative) 
 213/824-7715 
 
 Memphis 
 
 Memphis Business League (NBL) 
 
 384 E. H. Crump Boulevard 
 
 Memphis, Tennessee 39126 
 
 901/574-3213 
 
 Leonard J. Small, Sr., Project Director 
 
 Harold Jones (OMBE Representative) 
 
 901/534-3216 
 
 Miami 
 
 NEDA 
 
 8551 Coral Way 
 Suite 307 
 
 Miami, Florida 33155 
 305/221-5531 
 Dr. Antonio Machado, 
 Regional Vice President 
 
 Newark 
 
 MEDIC Enterprises, Inc. 
 287 Washington Street 
 Newark, New Jersey 07102 
 201/642-8054 
 
 New Haven 
 
 Greater New Haven Business and 
 Professional Men's Association 
 226 Dixwell Avenue 
 New Haven, Connecticut 06511 
 Gerald S. Clark, Executive Director 
 203/562-3819 
 
 New York 
 
 Puerto Rican Forum, Inc. 
 
 156 Fifth Avenue 
 
 New York, New York 10010 
 
 212/691-4150 
 
 Hector I. Vasquez, Executive Director 
 
 27 
 
New York (continued) 
 
 Richmond 
 
 Capital Formation, Inc. 
 215 W. 125th Street, Room 313 
 New York, New York 10027 
 Hirom C. Cintron, Director, Harlem 
 
 Office 
 212/222-9650 
 
 Brooklyn Local Economic Development 
 
 Corporation (BLEDCO) 
 1519 Fulton Street 
 Brooklyn, New York 11216 
 212/493-1663 
 Preston Lambert, Executive Director 
 
 NEDA 
 
 19 West 44th Street 
 
 Room 407 
 
 New York, New York 10036 
 
 212/687-1128 
 
 David J. Burgos, 
 
 Regional Vice President 
 
 Philadelphia 
 
 Entrepreneurial Development 
 
 Training Center 
 1501 North Broad Street 
 Philadelphia, Pennsylvania 
 215/763-3300 
 Alphonso Jackson, Director 
 
 Phoenix 
 
 NEDA 
 
 Amerco Towers 
 
 2721 North Central 
 
 Suite 727 South 
 
 Phoenix, Arizona 85004 
 
 602/263-8070 
 
 Joseph Sotelo, 
 
 Regional Vice President 
 
 Pittsburgh 
 
 Business & Job Development 
 
 Corporation (BJDC) 
 7800 Susquehanna Street 
 Pittsburgh, Pennsylvania 15208 
 412/243-5600 
 Forrest L. Parr, President 
 Marian Diggs (OMBE Representative) 
 412/644-5529 
 
 National Business League 
 
 700 North Second Street 
 
 Richmond, Virginia 23219 
 
 703/649-7473 
 
 Allen Roots, Acting Project Director 
 
 San Antonio 
 
 NEDA 
 
 1222 North Main Street 
 
 Kallison Tower, Room 422 
 
 San Antonio, Texas 78233 
 
 512/224-1618 
 
 Cipriano F. Guerra, Jr. 
 
 Regional Vice President 
 Jesse Rios (OMBE Representative) 
 512/225-5511 
 
 San Francisco 
 
 Plan of Action for Challenging 
 
 Times (PACT) 
 635 Divisadero Street 
 San Francisco, California 94117 
 415/922-7150 
 Everett Brandon, President 
 
 Seattle 
 
 United Inner City Development 
 
 Foundation 
 1106 East Spring St. - Xavier Hall 
 Seattle, Washington 98122 
 206/626-5440 
 Wilson Culley, Executive Director 
 
 Washington, D. C. 
 
 Mayor's Economic Development 
 
 Committee (MEDCO) 
 1717 Massachusetts Ave., N. W., 
 
 Room 704 
 Washington, D. C. 20036 
 202/667-6480 
 Michael D. Wallach, Director, 
 
 Business Assistance Center 
 Curley King (OMBE Representative) 
 202/967-5051 
 Howard University's Small Business 
 
 Guidance & Development Center 
 Post Office Box 553 
 Washington, D. C. 20001 
 202/636-7447 
 Dr. Wilford White, Director 
 
 28 
 
 <HJ.S. GOVERNMENT PRINTING OFFICE: 1972-721-937/709 
 
Profiles of urban businesses are for sale at listed prices by the 
 Superintendent of Documents, U.S. Government Printing Office, 
 Washington, D.C. 20402. 
 
 Beauty Shops (25 cents) 
 Bowling Alleys (30 cents) 
 Building Service Contracting 
 
 (30 cents) 
 Children's and Infants' Wear 
 
 (25 cents) 
 Contract Construction (30 cents) 
 Contract Dress Manufacturing 
 
 (25 cents) 
 Convenience Stores (25 cents) 
 Custom Plastics (30 cents) 
 Dry Cleaning (25 cents) 
 
 Furniture Stores (25 cents) 
 Industrial Launderers & Linen 
 
 Supply (30 cents) 
 Machine Shop Job Work (30 cents) 
 Mobile Catering (25 cents) 
 Pet Shops (30 cents) 
 Photographic Studios (25 cents) 
 Real Estate Brokerage (25 cents) 
 Savings & Loan Associations 
 
 (30 cents) 
 Supermarkets (30 cents) 
 Preparing a Business Profile (20 cents)