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Nick Kozak for the Toronto Star
Case Studies
Posted: October 29, 2013
by Jared Lindzon

Toronto’s CFTB connects reliable, temporary hospitality workers with employers, needs more clients

Vital Stats
Name:
Connect for the Best
Owner:
Margaret Readings
Address:
5464 Yonge St, Toronto M4Y 1W9
Phone:
647-236-2382
Email:
margaret.readings@cftb.ca
Field:
Employment services
Employees:
1 part-time
Years active:
2
Product offering:
Online connection of pre-qualified workers to employers

Margaret Readings knows just about everything there is to know about the hospitality industry.

Working as a housekeeper in the U.K. before moving to Canada in 1979, she has held just about every position in the hotel business, including assistant director and director of housekeeping, hotel manager, director of procurement, and a slew of others.

Through this work she noticed a major pain point hotel almost all hotel managers struggle against — scheduling shiftwork with temporary staff. So, she started a company, Connect For The Best (CFTB), to solve the problem by allowing hiring managers to quickly locate qualified, fully vetted workers who can handle a range of service positions.

She hired a developer to build a platform and website, CFTB.ca, in 2009. Two years later she left her as director of procurement at Starwood Hotels and started running the business full-time.

The site is already successful on one count —  approximately 600 workers in and around Toronto have already signed up and been vetted — but finding new clients to hire these staff remains a challenge. And Readings is in a catch-22. She desperately needs sales staff to expand the business, but can’t afford a new hire until she’s found more clients.

“It’s about getting people to think a little bit differently, and that’s what I struggle with,” says Readings. “When you call people up they’ll say it’s a great idea, and then I don’t hear anything from them.”

The business model does seem to work. Readings has already acquired 20 clients — including such notable businesses as the Westin Harbour Castle, Starwood Hotels, the Metro Toronto Convention Centre, plus a number golf courses, banquet halls and non-profit organizations who use the site on a less frequent basis.

According to Readings, her clients use the site for increasing capacity during peak seasons, replacing workers who have called in sick, or finding staff for one-off events.

When creating a profile on CFTB.ca, service industry workers provide a resume and list of references. Their profile isn’t posted publicly until those references are checked, and Readings says only 20 per cent make it through the vetting process — saving HR departments in the hospitality industry valuable time and resources. Workers are then matched up with relevant hiring managers. A feature to let workers indicate their available hours and the distance they’re willing to travel is also in the works.

Unlike temp agencies, which are typically used for hiring additional staff on short notice, Readings does not take a cut of workers’ earnings. She runs the business with the help of one part-time staff member, requiring much less overhead than hospitality industry recruiters, and can therefore provide competitive rates. After a 30-day free trial, clients pay $1.00 or $1.50 per hour for the number of hours they need to fill, depending on the position, or they can get unlimited job postings for $169 a month.

“I did a case study last year at One King West. They used me over the Christmas period instead of using an agency (and) saved about $3,000 in fees. The workers made an extra $9,000,” says Readings.

But she needs to add between 15 and 30 new clients to her existing 20 to hit the break even point, and her effort to bring in new sales staff have so far failed.

“I did hire somebody else that was a complete flop,” she says, adding that she also approached marketing consultancies to help with hiring — but after investing approximately $60,000 of her own cash into the business, they were simply too expensive.

While Readings is confident that her product is a win-win for both employers and employees across the service industry, Ian Dainty, CEO of B2B Business Coach — a Toronto business consultancy — suggests that she should consider narrowing her focus.

“It sounds like she knows the hospital industry well, but she should focus solely on a small part of that, and build her business through a niche market,” says Dainty. “Then, when it gets to a critical mass and she’s making some money on it, she can hire people to expand it into other areas.”

Dainty adds that by becoming an expert in a particular segment of the service industry, Readings can charge more for providing more specialized services.

In the meantime, Readings is optimistic that the upcoming winter blitz on hotels, banquet rooms and bars will give her business the growth spurt it needs to break through her cash and hiring problems.

“Christmas is coming, so cocktail parties and dinners and that sort of thing, that’s when a lot of casual staff are needed,” she says. “The outlook for the next couple of years, especially in 2015 with the Pan American Games coming, I’m incredibly optimistic.”

EXPERT VIEWS

As Interviewed by: Tom Henheffer

Readings’ focus is way too broad, and narrowing that down will be absolutely crucial at this time. She’s already got 600 workers lined up, that’s way too many to ever place. She needs to stop taking them in and start focusing on getting clients. It’s a classic entrepreneur’s problem, having to do everything all at once, and Readings has done an alright job of that so far. But she’s swung too far in one direction, and if she can’t afford a salesperson, she needs to start concentrating on sales herself. I’d start with a bit of research to determine what customers are currently using the service, how often, and how much they’re spending. That way she’ll know which businesses to approach for a maximum return on investment. The exception to this approach is at Christmas, when Readings may want to expand into multiple industries to take on extra cash that she could use to hire a salesperson, or just to keep the business going. But if she doesn’t figure out where her business is strongest during the rest of the year, she’ll have a very hard time achieving growth.

by Mark Simpson - GBC

Readings' business is lopsided: she’s an expert at recruiting and qualifying varied talent (supply), but needs help building the client side of her business (demand). A talent supply of 600 pre-qualified workers is more than adequate, now Readings should focus on sales and business development. B2B development is about networks, relationships, trust, staying top-of-mind, and providing consistent quality and value. Readings could ‘work her network’ by tapping into former trusted colleagues for leads and talent demand. More networking, personal presence at hotels, ‘meet and greets’, and connecting lunches would also help with relationship building and staying relevant with potential hiring managers. Readings should think strategically about who she connects with concertedly and what she purports to sell: narrowing her talent provision focus will help busy hotel management understand her real differentiation and recruitment expertise. Once CFTB is the trusted talent supplier to a given hotel, as an example, then Readings could look to hiring for peripheral roles within that same hotel chain, not before. Readings has to build her brand and reputation — and thereby her business — by focusing on her core differentiator as a recruiter as well as a specific target segment.

by Brynn Winegard - Ryerson

Readings needs to suck it up and hire a professional salesperson. She talks to people, gets a great response, and then never gets a call back. In other words, she just isn’t closing the deals on her own, and as such needs someone who can actually get contracts signed. But Reasings does have advantages. What she’s selling isn’t an optional service, it’s mandatory, and will become even more important as employers move away from employees and toward contractors. I can see demand for CFTB really growing, especially because Readings’ pricing is unbeatable — most of her competitors would be charging at least 20 per cent of what employees earn. In fact, her rates are so low she might even be able to increase them slightly and still stay competitive. I’d also focus more on one niche. Readings’ expertise is in hotels, so I’d start there, but the biggest growth for her service will come in the hospital and long-term care facilities. I recommend starting small, and then move into servicing other industries as capacity and revenues increase.

by Deirdre Fitzpatrick - GBC