My favorite part of being the CEO of a company that provides services to small and midsize businesses (SMBs) is meeting amazing people. I have the frequent pleasure of encountering some of the most passionate, innovative and dedicated entrepreneurs in the nation. Our over 14,000 clients are, quite literally, changing the world.
Every now and then I have a chance to sit down with one of these dynamic entrepreneurs, ask them some questions and get to know a little bit about the secret to their success. And because our mission is to power success with extraordinary HR, I like to share what I learn from our clients in hopes it facilitates another business owner reaching their own goals.
Recently, I chatted with Gerry Alvarado, Vice President and Co-founder of Geralex Janitorial Services, a company that was started more than 14 years ago in the Chicago area to provide environmentally friendly janitorial services to businesses. Gerry spoke about the explosive growth that nearly took his company down, the challenges he faced and the lessons he learned.
Burton: Not too long ago, you went through a period of rapid growth at your company. Can you tell me a little more about that experience?
Gerry: Business had already been steady for us but, like you said, in 2015 we just grew very large, very fast. In a matter of months, we went from having one location with 24 employees to three locations with more than 300 employees. Unfortunately, we had failed to scale our administrative processes early on when we built our business so our sudden growth really threw us for a loop.
We found ourselves unexpectedly facing major compliance issues and what seemed like insurmountable challenges staying on top of all our HR duties. We were completely unprepared to handle our new business landscape and the rapid hiring we were undergoing. We didn’t have the knowledge we needed to effectively manage our payroll, wage-and-hour regulations or workers’ compensation insurance. We needed help updating our employee handbook and didn’t know how to do the appropriate hiring and termination documentation.
Before we knew it, we found ourselves facing steep fines and embroiled in several lawsuits as a result of our noncompliance. All of this threatened our very existence. We were, quite literally, victims of our own success.
Burton: Well, that was two years ago and your business seems to be doing really well. How did you overcome your compliance challenges?
Gerry: We did what we should have done quite some time ago—we turned to the experts to handle our HR. With TriNet’s help, we are now crawling our way out of all the workers’ comp and unemployment claims we had against us. We are relying on TriNet to manage our payroll and benefits, which was much too large a task for us to take on in-house. We are also working with TriNet’s team of experts to implement HR best practices, such as improving our hiring and onboarding practices. We learned an expensive lesson but, fortunately, we have been able to turn things around and now we can focus our resources on our customers and the growth of our company.
Burton: Administrative issues aside, you have been very successful in growing your company. What is the secret to your success?
Gerry: We are supposedly in the janitorial services business but, really, we are in the people business. At the same time, in our industry, it’s really hard to make a profit. We live or die by long-term contracts. We have to keep our clients consistently happy in order to retain them. And in order to keep our clients happy, we have to make our employees happy. Happy employees result in happy clients. So the secret is really simple--we do what we need to do to take care of our employees. This includes providing a happy working environment with competitive benefits. It’s important they know their company cares about their wellbeing.
Burton: What’s in the future for Geralex?
Gerry: Now that we have a great team in place with great employees and great vendors, we are free to look at other markets and start planning how we will expand our services. Right now, we are opening an office in San Antonio. Developing a presence in a different state comes with a lot of challenges but it is now possible because we have aligned ourselves with the right people. Our plan is to continue to serve our employees and our clients so we can keep growing.
Burton: Any advice to others looking to expand into new markets?
Gerry: It’s never easy to grow but if you surround yourself with resources and people who are aligned with your goals, it makes your job a lot easier. Get help from experts where you need it. I had to learn the hard way that I am not an HR professional and my time is better served focusing on my business and what I do well, and letting the experts handle the rest.
It is clear this organization has focus and direction. To all the folks reading this post, what is the biggest lesson you’ve learned about building your business?
This communication is for informational purposes only; it is not legal, tax or accounting advice.