Thursday, October 20, 2011

27 Reasons Not to Have an OnSite Service

For those of you who don’t sell FM services (OnSite service), but are planning to, or for those of you who do offer FM services, but haven’t yet figured out how to effectively “pitch” FM services, or for those of you who do offer FM services, and who are always interested in seeing how others “pitch” their FM services, here’s a document that may be of interest to you, a document I found while doing some Google research.

This document (which I’ve placed in my Google Docs library, and you will later see a link to take you to the document) was, evidently, prepared sometime after ARC acquired Imaging Technologies (the Atlanta-based reprographics operation formerly owned by Carter Pope), but before ARC rebranded all of its operating companies to the ARC name. For one thing, ARC now has over 5,000 FM’s (the number of FM’s stated in the document, 3,500, is seriously out of date.)

Before you read the document, I’d like to make a few comments.

The document speaks heavily of creating a “profit center” for the A/E customer. That point is made over and over, throughout the document. Note that not all A/E firms are reimbursable by their clients for reprographics expenses; whether clients are obligated to reimburse an A/E firm is a matter of the A/E firm’s policy and practice. Yes, I am fully aware that the “standard” form of (AIA) agreement between an Owner and Architect, contains paragraphs that deal with the Architect’s right to be reimbursed for reprographics expenses. But, not all A/E firms use that standard AIA form, and, even some that do use that form (as their contract), strike through the “reimbursement” provision. Like I said, it is a matter of policy, and each individual A/E firm sets its own policy. To go further on this point, some A/E firms that do include “reimbursement entitlement” in their Owner/Architect agreements, take very seriously the word “reimbursement”. Reimbursement, to an accountant (and, by background, I am a CPA), means just that, “reimbursement” – meaning reimbursement for “cost.” In order for an A/E firm to generate a profit on in-house (or out-of-house) reprographics output, that firm would need to charge its clients a higher price (for various reprographics services) than the A/E firm, itself, is being charged by the FM vendor. In other words, their has to be a spread between the actual price the A/E firm incurs and the actual price the end (Owner) client is charged. To some A/E firms, reimbursement means reimbursement. While to other A/E firms, reimbursement means cost plus profit. Years ago, I had two meetings with FM prospects on the same day, one in the morning and one in the afternoon. At the morning meeting (at an Architecture firm), the owner of the Architecture firm said, “no way we will want to earn a profit from our clients on the reprographics work we do for them; we are only entitled to recover “actual” cost with a small percentage mark-up, per our client agreements.” In the afternoon, the business manager of the A/E firm had a completely different take on things. He loved the idea of turning his in-house reprographics output into a “profit center”. These two different firms were in the same city, and, it is (was) highly likely that both firms did projects for the same clients. Anyway, as I said, some A/E firms like the idea of earning profits on reprographics, but some do not. Beyond that, reimbursement is not the only issue. Most A/E firms, even if they are not entitled to reimbursement or don’t want to be reimbursed for reprographics output, still want to be able to “account” for cost on a project by project basis, simply so they will have a good handle on the “bottom line” profit (or loss) on each project. They can’t know their real bottom line profit (or loss) if they aren’t accounting for all costs. Reprographics expenses are a cost.

Okay, now that I’ve said all that, open up the document and read how this reprographics firm “pitches” its FM service. I’ve not posted this document because I agree 100% with what’s said. Quite frankly, I hardly ever agree with 100% of what someone says.

Link to document:

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