His Firing Turned Into a Chance to Clean Up
Starting with $5,000 in savings, a couple build a company specializing in scouring parking lots. Sales hit $1.1 million last year, and are going up.
When sales at the Los Angeles cosmetics company where he worked began to falter, Frank J. Pappano didn’t worry too much. After all, he was a top sales executive.
So it came as quite a shock when he was fired as part of a company reorganization in 1986. Losing his job was a bitter experience, but it also gave the Huntington Beach resident a chance to test new waters.
Using $5,000 in savings, Pappano and his wife, Margaret, in 1986 started their own company specializing in cleaning up parking lots. Sales hit $1.1 million last year, say the Pappanos, who expect even better results this year.
State and local governments spent more than $1 billion in 1987 to clean and maintain concrete and asphalt parking lots and roadways inside company compounds, according to Paul L. Gugenheim, president of the National Pavement Maintenance Institute, a trade group in Overland Park, Kan.
In recent years, Gugenheim said, more parking lot operators are hiring cleaners to maintain their lots and rid them of grease because liability insurers are requiring them to do so. Also, operators are doing more repairs on cracked concrete and asphalt grounds rather than replacing large parts of the surface because of increasing costs for materials.
The Pappanos got into the parking lot cleaning business through a chance meeting. Frank Pappano was job-hunting one day when he met a man who operated a mobile home cleaning business. The man explained that his business was profitable but could be even better if only he had more sophisticated cleaning equipment.
“I knew then that I wanted to be in the cleaning business,” Pappano said. “But cleaning what, I didn’t know--until I read an article in the (Los Angeles) Times about a woman who slipped on grease and oil in a Los Angeles parking structure and was suing its owner.”
The Pappanos later learned that the parking lot operator had been denied liability insurance because it did not have a formal cleaning program. They spoke with that operator and other property managers and found out that many--urged by their insurance companies--were looking for cleaners. The Pappanos said they could help.
“We offered a proposal and a demonstration of our services at a time when we didn’t have the equipment,” he said. “But we saw a need and knew that the owners would listen.”
The Pappanos persuaded a Los Angeles company that makes cleaning trucks to give demonstrations to their potential clients of how high-pressure water equipment could be used to clean parking lots.
After just three demonstrations, the Pappanos had notched $60,000 worth of business. They immediately bought their own equipment and had it paid off within three months.
In 1987, their company, TSCM, got its first major job: a two-year, $350,000 contract with San Diego-based Ace Parking Management, the largest parking management firm in California, to clean some Irvine Co. properties in Newport Beach and Irvine.
To fulfill the contract, TSCM had to hire more workers and buy new equipment. The Pappanos were forced to dig deep into their personal savings and refinance their Huntington Beach home. Several banks turned down their requests for a loan, saying the company had not been in business long enough.
Margaret Pappano, as the company’s president, did the financial juggling, while her husband scouted new business ties.
“I was constantly on edge,” she said, “because I had to meet payroll, but the receivables were sometimes slow in coming.”
TSCM qualified two years ago as a disadvantaged business enterprise. This state designation allows the company to bid for projects set aside for minority businesses. Margaret Pappano is of Mexican descent.
The Pappanos have recently landed contracts for public parking facilities at the San Diego Convention Center and the San Diego Concourse Convention and Performing Arts Center. They also have contracts to clean and maintain John Wayne Airport and the Koll Center in Irvine, plus public parking lots in Santa Ana and Pasadena.
While the concrete and asphalt surface cleaning business can be lucrative, there is lots of competition locally. Red Line Inc., an Irvine company that is larger than TSCM, found that by constantly incorporating new technology into the company’s fleet of 15 cleaning trucks, it kept its work force lean while business continued to grow.
“We’ve invested hundreds of thousands of dollars in new trucks and equipment to remain efficient and stay ahead of the game,” said Johnny Siroonian, Red Line’s vice president.
Lots of people can buy a power-washing machine, which costs about $1,000, and go into business for themselves cleaning parking lots, he said, but only a few companies can afford to shell out up to $150,000 for a truck that sweeps and vacuums properties.
