In order for a business to thrive, it must have steady and increasing profits. A consistent revenue stream allows for various expansion and improvement opportunities. With many different types of business, it can be difficult to know which are profitable and which are not. Furthermore, certain types of industries have greater growth periods.
In this article, we will explain whether or not a commercial cleaning business is profitable and how to evaluate revenue possibilities.
Is a Commercial Cleaning Business Profitable?
To answer the initial question, yes, a commercial cleaning business can be profitable. However, this does not mean that no work is required. On the contrary, cleaning companies must strive for continuous growth and improvement.
As we will explain throughout the article, there are several different factors that can boost the profitability of commercial cleaning businesses.
5 Factors That Affect Cleaning Business Profitability
Similar to other companies, businesses in the cleaning industry must assess a variety of factors. In order to be profitable, they must evaluate these components with informed and timely decisions. By understanding these potential factors, you will be in a stronger position to succeed.
Competition in the Local Market
To begin, you must analyze the competition in your local market. When doing so, focus on what differentiates you from your rivals. Similarly, think about why potential clients would choose you over them. For example, you may offer competitive prices or stronger customer service.
Throughout this process, attention to detail is crucial. You must focus on the micro and macro facets of competition.
Business Expenses
Afterward, you should evaluate your business expenses. From the beginning, you must pay a variety of expenses. In particular, you will need to purchase cleaning equipment. Furthermore, you must obtain licenses and office space. Also, hiring and training employees costs money too.
Now, some may believe that downsizing or purchasing cheaper equipment can remedy this issue. While it may work in the short term, you will suffer from low staff morale. High employee turnover can result in a damaged reputation. Also, constantly hiring and training new staff members will be more costly. A business plan will help lay out and organize these expenses.
Types of Services Offered
In addition, you can adjust the types of services offered. If you notice that clients are not purchasing certain services, it may be best to remove them altogether. This works best for companies that are not looking to expand. If you are happy in your local market, specialize your services towards them.
Pricing Strategy
To continue, you should focus on your pricing strategy. Harkening back to competitors in the local market, it can be advantageous to offer more affordable prices. This may pique the interest of potential clients. However, you cannot always offer discounted prices. Eventually, you will need to return to normal pricing formats.
In addition, you can set prices based on fixed rates, hourly rates, and square footage. Clients may prefer fixed rates as it is a consistent price. For maximum profitability, it may be best to price based on square footage or hourly rates.
Client Base and Retention Rates
Client retention is essential to profits. Commercial cleaning companies should work hard to build a rapport with their customer base. If you are reliable and provide excellent services, clients will remain loyal.
In addition, friendly and informative customer service is helpful as well. Also, certain customers, such as offices or restaurants, may be interested in signing commercial cleaning contracts. This can provide a significant boost to your business.
What are the Advantages of Starting a Commercial Cleaning Business?
In the following sections, we will explain the various advantages of starting a commercial cleaning business. It should be noted that not all of the factors may apply to you or your business. Instead, these are scenarios and outcomes you can experience.
Low Startup Costs
To start, commercial cleaning companies tend to have low startup costs. You are required to purchase a cleaning license. This amount can depend on your state. In addition, you will need to purchase business and liability insurance. Then, you must hire and train employees.
Afterward, you will need to purchase cleaning materials. It should be noted that startup costs will depend on the initial size and scope of your business.
Flexible Work Hours
Since you are starting your own business, you are able to set working hours. Now, in the beginning, this may not be the case. Creating a company requires extensive hours of planning, preparation, and organization. However, once your business is established and running, you can adjust work hours according to your schedule.
High Demand For Cleaning Services
In general, there will always be a high demand for commercial cleaning services. As shown during COVID-19, the maintenance of healthy and sanitary locations are vital. In addition, restaurants and healthcare facilities must meet safety and health standards.
Therefore, they are more likely to hire and establish contracts with high-quality commercial cleaning companies. It is your responsibility to meet those demands with excellent service.
Opportunities for Growth and Expansion
Lastly, there are opportunities for growth and expansion. If your business has consistently improved and increased profits, it may be smart to think about expanding. You can hire more employees and accept larger jobs.
In addition, you can increase your service area and reach out to more clients.
4 Strategies for Increasing Commercial Cleaning Business Profitability
In order to notice the benefits of a successful commercial cleaning business, you must implement a proper strategy. Depending on your company, certain methods may be more effective.
Offering Additional Services
First, you can try offering additional services. This can lead to an increased network of clients. In particular, your business can provide deep-cleaning services. To continue, you can also offer carpet cleaning services.
Tasks like these require significant amounts of skill and time. In turn, they are more expensive. So, if you have the staff members and resources, consider offering more intensive cleaning services.
Implementing Cost-Saving Measures
To continue, you can reduce expenses by implementing cost-saving measures. An effective cost-reducing measure is removing all dangerous cleaners. Instead, you can purchase safer multi-purpose cleaners.
Also, you can use a dilution control system. This will save on chemical costs as the dispenser dilutes concentrated chemicals into usable cleaners.
Upselling Current Clients
In addition, you can try upselling current clients. To clarify, upselling means motivating customers to purchase additional cleaning services. Now, this is not necessarily negative.
Often, clients will require a variety of cleaning procedures. Instead of hiring multiple companies, they can solely work with your business. The key to upselling is emphasizing the value that the customer will gain from purchasing additional services.
Expanding into New Markets
Finally, you can try expanding into new markets. If you were primarily cleaning residential areas, try cleaning commercial locations. Furthermore, you can expand your service area. If you are able to hire more employees and additional supplies, increasing service locations can be quite profitable.
Subcontract with Dallas Janitorial Services for a Profitable Cleaning Business
While you are able to grow a profitable cleaning business by yourself, it may be smart to become a vendor with a larger company. In particular, consider subcontracting with Dallas Janitorial Services. Starting in 2006, they have become leaders in their field. As a subcontractor, you will be able to thrive in the cleaning industry while maintaining your independence.
FAQs About a Commercial Cleaning Business
How profitable is a commercial cleaning company?
In general, cleaning businesses can be quite profitable. With a varied selection of services and low expenses, your business can have great profits. Furthermore, with consistent revenue, you can gradually expand your company.
What type of cleaning business makes the most money?
Usually, commercial cleaning companies make the most money. Locations such as commercial buildings, restaurants, and hospitals have larger square footage. In addition, unlike residential areas, they may require more extensive services.
Cleaning businesses that offer varied services tend to make more profits. For example, offering floor and carpet cleaning can be helpful.
What business structure is best for a cleaning company?
The best type of business structure is dependent on the cleaning company and the owner’s financial situation.
A common type of business structure is a sole proprietorship. Under this option, there is a singular owner. This has its own benefits and drawbacks. The sole proprietor can receive the highest profit amount. However, they also face the most risk and potential liability responsibility.
Alternatively, you can opt for an LLC (Limited Liability Corporation). This business structure protects you from risk and keeps your personal and business finances separate.
What is the target market for a cleaning service?
There is a wide target market for commercial cleaning services. All places should be properly sanitized and disinfected.
However, depending on the commercial cleaning company, there can be ideal customer bases. For example, a smaller business with fewer employees may prefer cleaning residential areas. Since these places have lower square footage, they are easier to manage.
Alternatively, bigger and more established companies may opt for a larger commercial building and medical facility.
How much does it cost to start a commercial cleaning business?
As stated by Fit Small Business, initial investments can range from $1,250 to $150,000. If you are looking to start a larger-scale company, you will have to spend more.
Typically, it may be best to start small and gradually grow your business. Lastly, your business plan should include startup costs.
Learn More with Dallas Janitorial Services
Dallas Janitorial Services has a long-standing history of growth and success. With a trained and qualified staff of professionals, we can provide exemplary cleaning services. In addition, we have industry-leading cleaning equipment.
To learn more and schedule an appointment, please call us at 214-778-3689. We look forward to hearing from you!
