Florida Contractor Consolidates Many Services Into One Company

Florida Contractor Consolidates Many Services Into One Company


Michael Diglio grew up in a family of entrepreneurs. As a result, when he started college at the age of 18 it seemed only natural to, at the same time, start a business of his own. What he chose to form was a landscaping company. As his business became increasingly successful, Diglio says he found himself taking fewer and fewer college classes in order to keep up with the time demands of his growing company. Ultimately, he was forced to quit altogether in order to run his business full-time. From then until now there has been no looking back, only forward.

“My father, as well as some other family members, were all entrepreneurs,” said Diglio. “As a young child, I was brought into their offices and their businesses and also worked there in the summertime. It was basically a family tradition to have your own business and as a result I started one at a young age. When I graduated from high school in 1993 I went right into business.

“Despite not having finished college I’m proud of the success I’ve achieved. I don’t think college necessarily means you’ll be successful. The fact is, I have a number of friends who have high level degrees and some of them are just barely scraping by. However, I have three children and would like for all of them to go to college.

“I think a college degree is important but if I had to have a choice between having a college degree or having an entrepreneurial spirit that was determined to get things done, then I think the right attitude and a determination to truly make something of oneself is more important than a college degree.”

That spirit describes the young Michael Diglio, who was eager to please his landscaping clients. One of the ways he thought to do this was to see if there were other services he might be able to provide. At one point, a client asked about him doing parking lot sweeping and, as he recalls now, this was an activity he had never given the least bit of thought toward.

“Quite honestly,” said Diglio, “I was just a guy who started a company where I thought I could work variable hours and make some decent money while I also took classes. The idea was to schedule maintenance work around my class obligations. However, one thing led to another and one day in 1995 a property manager said ‘Can you do parking lot sweeping for us?’ I didn’t even know there were parking lot sweeping trucks out there. After doing some research I bought my first Schwarze parking lot sweeping truck for, as I recall, $35,000. Once I had the truck, I went out and sold parking lot sweeping services.”

Today Diglio’s comLocationspany, Consolidated Service Group (CSG), boasts offices in three major market areas of Florida. The firm’s headquarters are in Orlando, with regional offices in both Tampa and Jacksonville.

“We are a full-service property maintenance company but we have different entities,” said Diglio. “We operate using management partners. Holdings also include a paving and sealcoating company, as well as a general contracting firm. Each is operated by a managing partner. I am the managing partner for Consolidated Service Group, along with a minority partner. Most recently we acquired an appliance repair company and are also, at the moment, looking to acquire an air-conditioning repair company.”

The new companies, like the ones before them, will operate as standalone businesses. However, they will also become part of the overall services available to the customers of Consolidated Service Group. Each of those will also have a managing partner to run the day-to-day details of the operation. They will be people who are experienced in that particular field, which assures that quality services will always be provided.

“My philosophy is that I can’t be great at everything,” said Diglio. “A property manager once told me, back in the early 90s, that the company was a ‘jack of all trades and a master of none.’ That comment insulted me. So, over the years, I tried to figure out how I could resolve that issue in order to become a master of all we do. My solution was to buy service companies that would complement what we are already doing, then bring on managing partners who would have the specific expertise and management skills to run those different companies.”

Signature File

One marketing tip I gleaned from my email exchange with Michael was that he includes a list of all of the services his company currently provides in his email signature file. This serves as a reminder to anyone he corresponds with about all of the types of services that are provided through Consolidated Service Group.

Although the company has grown significantly through the years, in the last few years CSG has actually contracted its amount of parking lot sweeping. That’s because the parking lot sweeping industry has become much more competitive; margins have gotten smaller and the price of equipment has gone up drastically.

Schwarze Sweeper“Today, that same class of sweeper I started with is around $80,000,” said Diglio. “I can only speak for here in the state of Florida, but the sweeping climate here has become very, very competitive. Frankly, I’m glad that I was smart enough to start diversifying via buying businesses within related service areas. At our three locations in Orlando, Tampa and Jacksonville, at one point in time we did over $150,000 per month in sweeping.

“Now, we probably have dropped that down to about $50,000 per month, even though CSG’s overall sales have risen. We made that business decision because the prices that customers are willing to pay for parking area sweeping have been so degraded. At our height we had between 28 and 35 sweepers – it’s hard to recall the exact figure since so many years have gone by – and today we run about 10 sweepers a shift.

“My advice for anyone trying to determine what other service areas they might want to get into is to perform strong due diligence before getting involved in anything. Also make sure it is something you will enjoy being involved with. And, no matter what any other services are that you might want to add, the fact is that you shouldn’t have to do any other services besides your core business of sweeping in order to make a good living.

“What’s happening right now, at least in the state of Florida, is that the cost of equipment and everything else associated with sweeping has gone up significantly. At the same time, although prices have gone up a little, they haven’t kept pace. One of the problems we have in the sweeping industry, bid pricing, has been solved in many of the other, allied industries around us; for example, seal coating, paving and striping. In all of those there are standards for what should be charged. You can look around and find what the standard is per square foot. That [kind of baseline information] just doesn’t exist in our industry for parking lot sweeping.

Sweeper“Because I have three offices with different salespeople, I came up with an estimating system. I wanted to make sure we are both consistent and profitable. To do that, we bid on a square footage basis. However, when you talk to other contractors in other areas, or with manufacturers’ representatives, all of whom are trying to be helpful, their answer is typically ‘Go out, look around, and then estimate how much time it will take to sweep that particular account.’ Sweeping is the only industry I know that doesn’t have objective guidelines for how much a service should cost.”

In the audio podcast connected to this article, you can hear more details about Diglio’s ideas in this regard. As a part of this conversation he includes information on his interactions with third-party vendors and his negative opinion about how they are ‘beating up’ sweeping contractors on price. This includes discussion about the importance of keeping your pricing at a profitable level and real-life examples showing that you can still win contracts when you do so.

“If there’s one thing I’d like to tell the entire parking lot sweeping industry it’s to stay away from those third-party vendors and their low-ball pricing. When you get to the point where it’s just not worth it, why do the work for less? Contractors who do [conform to third party vendors’ unrealistic pricing] are a major problem and I don’t see it ending anytime soon. That’s one of the major reasons why I am looking for other businesses to purchase, ones that are uniform and more organized in their pricing structures. In sweeping, we should have higher pricing and the competition between contractors should come on the levels of management capability and quality of service.”

In the audio podcast, Diglio and I also discuss the rise of sweeping contractors leasing vehicles to former employees who are then considered independent contractors. In many cases, the former employees have been provided with assistance in leasing their sweepers, which are then parked in their driveways. This has become somewhat pervasive in a number of areas, including Florida. However, federal agencies are now giving more scrutiny to this scenario and it is becoming increasingly difficult to qualify for operation in this manner.

BlowerDiglio has recently collaborated on a new innovation with Mark Schwarze, head of Victory Sweepers, Inc. Brainstorming together, they came up with an innovative way to lower costs in the area of backpack blower expense. This involved moving to a battery pack-powered blower system for the majority of sweeping-related blower work. The spare battery is recharged via an adaptation on the Victory Sweeper itself.

“What we came up with,” said Diglio, “is to test out the idea of using battery-powered blowers. So far, this has worked out very well. Mark came up with a system on our Victory sweepers that allows us to recharge our spare battery while we are using the blower and between stops. We get about 45 minutes to an hour of service time from a battery and it only takes about 15 minutes to charge our secondary battery back up.

ChargerUsing battery pack blowers saves us significantly in fuel. These days, the power of the battery backpack is such that it will handle most of what we need it to do. However, we do also carry on the sweeper a larger, gasoline-powered, blower for really tough jobs. We can use the battery unit probably 90% of the time, which has saved us a tremendous amount of money on fuel.

“The electrical system on the sweeper is set up so that when the sweeper is off, so is the charging system for the batteries. That way, we don’t have to worry about our chassis battery being drawn down by the charging of the battery. The new system we have on our Victory Sweepers is just another way we are keeping competitive in a market that has been so mutilated in recent times.”

Recognizing that there is no money to be made during ‘windshield time,’ CSG’s sweeper fleet runs on a routing program called My Route Online. He has found this to save the considerable amount of time, especially since with parking lot sweeping the routes are relatively static.

“If a contractor hasn’t tried a routing program yet,” said Bigley, “I think they will find that a routing program will save a considerable amount of time if its directions are followed for going between your stops. Then, make sure your drivers are following the sequence. Routing programs, we have found, are also something that will save you time and money. Ours can be integrated with the GPS system; you can push the data to a smart phone or tablet and it will even indicate to your drivers where to go on their route and the order in which they should be servicing customers. The navigation portion of it can even guide them there if they are new to the route.

ServiceList“Back in the 90s I had to spend a lot of time on getting drivers to the right locations at the right times. Now, with technology, we can spend a lot more time on items like safety, and additional training on how to operate the equipment properly. This allows us to do the best job we can possibly do.”

Although Diglio says they have also used more traditional GPS systems, including geo-fencing capabilities, Consolidated no longer uses that type of system. Rather, he has some devices, which are put into selective vehicles, that provide that sort of information.

However, these are not installed in all of the sweepers all of the time. These work on the system commonly called ‘breadcrumbs.’ The data allows whoever is monitoring the system to see exactly where the driver went; did they just do the front of the stop or did they go around to the back or other areas they’re supposed to be covering? However, Diglio points out that even when you can see exactly where an operator went at all times you still don’t know that they did a good job for the customer.

“I’m a techie type of guy and I’ve spent many thousands of dollars on different GPS and related systems through the years. Now, we spend much more of our resources on making sure we get the driver to where he’s going safely and efficiently. We monitor to make sure the driver goes to every stop; missing stops is something we have zero tolerance for. When we tell a customer will be someplace then we will be there. Then, when we’re there, we’ll be doing a great job for them. Fortunately, I have a great deal of confidence in our employees. We pay them a good hourly rate and train them well. In return, they do a good job for us. In the rare instances when there is a problem, though, our supervisor is going to catch it.

MichaelPhilosophy“At the end of the day, it’s all about doing what you say you will do and providing excellent service every time.”

Toward the end of the audio podcast our discussion turns to the value for contractors in generating a system for bidding their parking lot sweeping, such that they can be consistent and knowledgeable. Diglio says he’s proven that it works well to learn how to bid per square foot and how that translates into time spent on the jobsite.

He also urges other contractors reading this article to realize that the third-party vendors are pitting contractors against each other in an effort to line their own pockets. He feels that an objective analysis will show this has caused pricing, at least in Florida, to drop to about 30% under what should be market value. Diglio urges others in the industry to take note of this, along with how much the expense of everything associated with the sweeping business has increased in the last few years.

“As an industry we need to come up with a formula for computing the pricing that sweeping deserves. They’ve done it in many other industries, including paving and striping and seal coating. There’s in no reason we can’t do that in the power sleeping industry, as well.”

You may reach Michael Diglio through his company’s website, www.csgcamservices.com.

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