Canadian Company Cleans Up In U.S. Market

Canadian company cleans up in U.S. market: Cleaning up the Magic Kingdom is a big part of Canadian entrepreneur John Radford’s business this year. His company, Construction Cleaners Group, is doing the cleaning during construction of Walt Disney World’s huge Fantasyland expansion under way in Orlando, Fla. The company’s workers are busy vacuuming the caves and below the tracks of the new Little Mermaid computerized ride; power-washing stone bridges along streetscapes; and shining the Dumbo the Flying Elephant virtual-reality pavilion to get it ready for opening. The clean-up is taking place round the clock until construction is finished and Walt Disney Co. brings in its own cleaning staff.

It’s all part of what Mr. Radford, the founder and chief executive officer, describes as the specialized cleaning his company offers, as a janitorial service catering to the construction industry. It does what's called an “architectural clean” for general contractors – from shining windows inside and out to vacuuming rugs to waxing floors to meet the satisfaction of the architect once a project is complete. Each job is a one-shot deal so the company usually has several on the go at once.

Construction Cleaners has come a long way from its start, back in the late 1970s, when the Toronto Board of Trade took a chance on a 19-year-old Mr. Radford by giving him a grant for $2,000 to go into the cleaning business. He bought equipment, put a small down payment on an old truck, and hired a student staffer.

Today, the company, with headquarters in both Toronto and West Palm Beach, Fla., and seven regional U.S. offices, has about 20 full-time employees and annual revenues of $2.5-million -- additional staff are hired as needed. About 95 per cent of business is in the United States, working for construction companies with projects ranging from Universal Studios to federal prisons and the U.S. military.

Mr. Radford, the founder and chief executive officer, describes as the specialized cleaning his company offers, as a janitorial service catering to the construction industry.

The 54-year-old Mr. Radford focuses on sales, splitting his time between Canada and the United States. He shares how he cracked the U.S. market and why he’s now looking back to Canada for work.

Q: Why construction cleaning?

A: I grew up in the construction business as a young boy in Windsor. My dad was vice-president of Eastern Construction so I remember jumping in the trucks as a kid. The company moved to Toronto when I was 14 and did a lot of big projects like Roy Thomson Hall and Sun Life. By the time I was in university [at the University of Western Ontario], I’d help my dad in the summers doing things like window cleaning and blacktopping. One of the first jobs I ever did for him was when they were renovating Union Station. That was my start in doing commercial construction projects.

Q: Once you had the seed money from the Toronto Board of Trade, how did you get your own clients?

A: I started knocking on the doors of construction trailers and offering my services. My first job was Hazelton Lanes in Yorkville. They were doing construction and wanted the stores cleaned up because they had clients from Paris coming in. I liked that they paid cash – cash is king when you’re small. There are good margins on those upscale businesses, so they paid us what we wanted. They just wanted a perfect store.

Q: When did you take your business to the United States?

A: During the recession in the late eighties when interest rates were high. The Toronto market was extremely competitive, with people literally working for cost, so I couldn’t continue in business doing that. I applied for a visa to work and live in the U.S. – that was when free trade was brought in – and was lucky enough to get one. The idea was to take the business you had in Canada and start a similar company in the U.S.

Q: How did you break into the U.S market?

A: It was much more difficult to research than it would be today because we didn’t have the internet to do searches. I read engineering magazines that would tell me what projects were starting and the year they were finishing. I’d catalogue all those and hit them. If there was a $10- or $20-million job, I’d watch them until I knew they were finishing, phone them up and say, ‘Would you like a price?’ Nine times out of 10, they’d say, ‘We’d love a price.’

I really keyed in on doing construction work only and on some of the big players in Canada like EllisDon that were expanding in the U.S. as well. I ran on their coattails for jobs we did in Toronto, and said, ‘Well, we can do your jobs in the U.S.’, so it was a natural fit. Before leaving Canada, I also decided to explore some different, smaller mid-sized markets like Wichita, Kan., that were far less competitive but still had a lot of great projects going on, like courthouses and arenas. One of the first jobs we did was a big hockey arena in Albany N.Y., for one of the major hockey teams.

We used to clean $100-million prisons in the middle of coal-mining towns. Nobody’s there to bid on this stuff so we would get huge $100,000 cleanups and bring our managers in. They’d stay at the local hotels and we’d hire the hotel’s cleaning people. Or we’d put ads in the local newspapers and use different employment agencies.

Q: Are prisons big business for you?

A: We do a lot of prisons. We had five prisons going in Pennsylvania at one time. They’re like a self-contained village – half a million square feet – with huge kitchens, medical and dental facilities and basketball courts. There’s a lot of cleaning involved. We’re starting on a $200-million federal prison in West Virginia and just finished one a month ago in Alabama. Those big federal prisons are cookie-cutter – all the same architect – so if you clean one, you can clean 10 across the country and price them out the same.

Q: How did you set up the company?

A: I used the model from big general contractors in the U.S.… for setting up. I’d get my key people and take them to the site. If it was a big enough job, they’d stay there a few weeks and I’d hire locally. As long as I had my supervising managers to be able to handle those local jobs, I could do it.

The uniqueness of our business is that we run it on a national basis so we can cover every state or province. It’s all with the same stencil. The key is to have your own personnel managers in charge, people who know what they are doing. You can always hire cleaners. It’s the managers who are so important.

Q: How did you find those managers?

A: It’s a team-building process from the original people we brought in. When you hire locally, maybe two guys work out great and are willing to go on the road. We have about 15 regional managers and the rest are labour. We’ll keep the labour on tab for when something comes up in their region and hook up when we need them. We pay well and some of these guys just like the freedom of jumping in their truck and going to different places.

Q: How do you market?

A: Word of mouth somewhat. When we finish a job, the company might say, ‘We’re starting another project in New Mexico.' So we follow some of the different general contractors who are happy with us. In the office, we key in on all the starts of jobs, catalogue them very carefully and follow up. We don’t get them all but we hit about 50 per cent or more on everything we bid.

Q: What was the biggest challenge going into the U.S.?

A: Recognition. People didn’t know who we were. Buffalo was one of the first inroads I made into the U.S. market from Toronto because they were building schools and hospitals. It was a whole other market but I could still go home at night. Another early job was the Rock and Roll Hall of Fame in Cleveland. We had to work at night, sometimes 150 feet in the air with lifts. …You get good kudos for tough jobs like that and you build from there.

Q: How did you connect with companies like Disney and Universal?

A: I’d drive around all the different sites in Florida for hours looking at the things being built, such as hotels to see who’s doing what. Then it’s a matter of talking, networking and hustling. Business is all about hustling. It’s finding the right person who can give you the contract. The one we’re doing at Disney is for a company called Hoar Construction. They’ve used us for a lot of work before and happened to be doing the Fantasyland project, so our connection led to the current contract.

Once you get in, you get requests from other companies and we hustle up. There are trailers for the different projects, so we’ll go knock on a trailer and say, ‘Hey, we’re doing work here and this is our brochure.’ The great thing about my business is they never say no. Companies are always interested in price and service. They all sub this work out because they don’t want to do it. Plus, if you’re already on site doing work, that’s a huge thing.

Q: What’s the difference between business in U.S. and Canada?

A: I wouldn’t say the companies in the U.S. pay better but they pay well. One thing is, we don’t have near as many major projects with big budgets here. There’s not a lot of difference in working. The big jobs in Toronto tend to be union as well so you deal with the same things. I find that Americans, even if they don’t know you well, will give you a fair shot. If you do great work, you’ll have a good chance of getting more work.

Q: Are you planning to come back and do more in Canada?

A: I never really left Canada. I have family here and a home in Oakville but my green card allows me to live and work in the U.S. I’ve got a joint venture company here and we’re trying to get more work. Right now we’re doing all the cleaning for the [Trump International Hotel and Tower Toronto]. We’ve done Trump work in Miami so we got the work up here because of our roots with them in the U.S. There are some nice jobs coming up in places like Halifax, and Saskatchewan is a hotbed of construction right now. It’s an interesting twist that, 25 years later, we’re coming back to the Canadian market looking for areas that have grown up.

Q: What’s your advice for breaking into the U.S?

A: It’s a matter of doing great work, keeping your reputation in good stead and your nose clean, and letting them know you’re around.

I think the future in North America is service businesses. It’s a low startup and can be highly profitable. You don’t have to concentrate on the big cities. You just can’t compete. There’s less competition in the smaller places. … You can build a nice little business and it’s just a plane trip away.

Q: How do you manage running a U.S.-based business from Toronto?

A: The technology makes it easier. I’m on the phone all the time. With cell phones, you can stay on top of jobs, so it really doesn’t matter if I’m in Toronto or Florida. I’m up to date with all of my people all the time. You can run this business out of anywhere.