In a dynamic and ever-changing economy, the cleaning industry is a very unique space to be investing in and to be a part of. Like many others, the cleaning industry has its own challenges ranging from the daily hassles of satisfying client needs to competition among major corporations and franchises.
Introduction to the cleaning industry
The cleaning industry is driven by one main goal, and that is to keep people’s spaces clean. It can be divided into three main categories:
- Commercial cleaning – mainly deals with janitorial services offered for factories, warehouses, retail and commercial outlets.
- Residential cleaning – these cleaning services are mainly for homes and residential apartments.
- Specialty cleaning – includes special services like dry cleaning
The three categories have various sub-divisions that mainly define the scope of each. In a 2015 report, it was estimated that the cleaning industry had 875,000 businesses employing an estimated 3.5 million people in the United States alone. Although these numbers have since risen, the cleaning industry has had some ups and downs.
Just like many other industries, the cleaning sector was greatly hurt by the Great Recession witnessed in 2008 and 2009. During those years, revenues fell by 5.3% and 6.1% respectively stretching the cleaning industry and all its sub-services. The residential cleaning sector was particularly strained in a time when such services were considered expendable luxuries. Fortunately, these setbacks were only temporary, and the industry bounced back to life a few years later. Revenues in 2015 stood at $50 million bringing the cleaning sector to the spotlight once more.
Business risks for new and existing companies
The cleaning industry is quite profitable and rewarding for successful enterprises, but this does not mean all companies have it the easy way. It is a general claim that cleaning companies lose up to half of their customer base each year and while this might be the case for some, it does not apply to all. Reputable companies that provide real value to clients will always realize a level of profitability in the business. However, the cleaning industry is quite competitive with both small and medium companies competing for the same pie size as established franchises. This is partly because entry barriers to the sector are quite low. Equipment requirement has always been minimal and employees entering the industry as professionals almost need no training. Today, small and new businesses can compete for the same residential and commercial cleaning contracts that were previously left for major corporations and franchises. This only shows how fierce the competition is for all businesses involved.
Business opportunities in the cleaning industry
Although competition is fierce, the cleaning industry still holds a great potential for all new and existing businesses. There are several sub-services within each category of service which makes it easier for one to settle for a specific niche. By choosing a specific specialty and targeting the local audience, one can build their business with fewer competitors and have a great opportunity for success. Nonetheless, aspects such as marketing, creating a thriving reputation and choosing the right location are still crucial to the success of any cleaning business. Urban and suburban locations with a higher population of affluent families are known to have greater potential.
There is also an opportunity in the green movement. In recent times, more people have grown conscious of the need to conserve the environment by using less harsh cleaning agents and solutions. This created a new market for “green” products which are deemed environmentally friendly. These products are basically non-toxic and use nature-provided ingredients that promote sustainability. The green movement can be used to rebrand and attract new market segments that are cleanly drawn towards these environmentally safe products and services.
Cleaning Industry statistics and targets
There are various opportunities in all cleaning service categories, and this can be better understood by looking at the statistics and targets with each.
- Residential cleaning
Those interested in residential cleaning must acknowledge that this market is popular in regions where the population has above-average wealth. This service is mostly sought after by people looking for free time to spend on other things. The ideal clientele is married couples aged 45 and above who hold college degrees and stable careers.
- Commercial cleaning
Commercial cleaning or janitorial services as they are commonly known is another popular category that accounts for about a third of the total business. These services are mostly offered to offices and non-residential constructions during the extra (second and third) shifts when their spaces are empty. If this is your main interest, then you should target business estates and industrial areas. It also peaks when there is a decline in office vacancy rates.
- Specialty Services (Dry cleaning/laundry)
The laundry and dry-cleaning business is very popular and has some 33,000 businesses operating across the US. While most of them are family-owned, there are various chains and franchises that still offer dry cleaning services. Investing in this segment requires innovation and anticipation of emerging trends to stay ahead of the competition. The market’s generated revenue was around $11 billion in 2015 and is expected to keep growing.
The cleaning industry is quite fluid and adapts with emerging needs and technologies. We can safely acknowledge that the sector is changing the world even as its business management model evolves. A great opportunity awaits those who intend to join the industry just as existing businesses have the chance to expand and target new demographics.
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