Commercial cleaning companies were not spared from the tumultuous times brought on by the COVID-19 pandemic. As offices closed and in-building personnel-limits began, most cleaning companies had their revenue cut to the bone. There are, however, several strategies that commercial cleaning companies can use to help increase cash flow and profit to help them recover, while also helping them during future slow seasons. Cleaning companies that capitalize on current customer trends and adopt new methods first are likely to see those changes translate into profit. In this article we will cover a collection of profit-boosting strategies aimed to kick commercial cleaning companies to the next level of profit.
Post-Pandemic Location is Key
As businesses adjust to post-pandemic office life, commercial cleaning companies may consider changing their area of operation to a new business hotspot. A side effect of businesses accepting remote work is an increased rate of headquarter relocation to cities with kinder tax codes or lower rent. Relocating your cleaning company to a post-pandemic tax haven like Seattle or Cincinnati can both help your own bottom line and open you to a new market of post-pandemic modern office spaces.
If you would like to learn more about the best cities for post-pandemic relocation, consider Kapitus’s comprehensive guide showcasing some of the top cities for relocation.
Another aspect to consider when choosing a new location, or when coming up with ways to improve in your existing location is assuring short travel time from your warehouse or office to the client. Working within a certain mile radius and/or using compact vehicles can both decrease your travel time and working in a metro area is one of the best ways to make sure your clients are grouped together in a convenient way for your staff. An added bonus – save some money on gas and other travel related expenses!
Separate Your Company from the Competition
While relocating to a city is one way to increase business, one certainty that comes along with a a move is the fact that competition will increase in parallel. Instead of having potential customers consider your cleaning business one of several options, separate yourself as the only option for a particular type of service. Depending on your company’s region and potential clientele, certain cleaning niche markets may be ripe for the taking.
Defining a niche will also work as a great pivoting tool in your existing location.
Businesses that specifically service offices may benefit from expanding their window cleaning options as well as offering in-depth restroom cleaning services. Another avenue for commercial cleaning services is to market your niche toward colleges and universities. Another potential niche could even be unattractive cleaning services such as trauma cleaning or post-death services. The COVID-19 pandemic massively drove up interest in intensive sanitation services. Marketing your company as both a cleaning and sanitation service could be a key method to making your cleaning company even more attractive than the competition.
The bottom line is: Stepping into more specialized markets is a key method to making your business more appealing than a general cleaning company. But, take note: many specialized cleaning fields require specific training and equipment, so do your research and learn what the clients in your community are looking for.
Strengthen Your Bid Customization Based on Long-Term Client Needs
When preparing your bid packet, there are certain strategies to make your company more attractive to long-term clients or those with high square-footage offices. When calculating your monthly rate for cleaning services consider what factors drive your rate. Long-term clients – like universities – may be interested in finding a company that charges by room rather than square footage; while offices with one large room will certainly be interested in square-footage rates. Long-term clients are most often either established businesses or government offices. Being that such offices work standard workdays, it may be effective to play up your company’s ability to work very early or very late hours.
One of the most effective means to impress a potential long-term or high-return client is after your first consultation, find their areas of elevated expectations like – kitchen or restroom cleanliness – and put specific language about their needs in the first draft of a prospective contract.
Is it Time to Reassess Your Rates?
Commercial cleaning companies should regularly compare their rates with local competition to see if they are still competitive. You need to be actively aware of competing prices. You need to also determine which companies offer the same services as you and consider ways to make your company the better deal.
In the event you lose a bid for a cleaning contract, reach out to the prospective customer, and ask which company they chose and what about your package dissuaded them. Your existing customers can also be a helpful resource in determining your rates. Create a customer survey asking which of your services are most and least effective. Rates should be determined on an individual and local level, as depending on the region in which you operate, identical services can have massively varying prices. Regularly watch pricing trends and be certain that your company is as competitive as possible.
Reduce Operational Costs
Commercial cleaning companies have exceedingly high overhead and operational costs. Keeping a steady flow of materials, trained staff and equipment can massively cut down on a company’s profits. There are, however, several methods cleaning companies can employ in order to assess your own overhead and see where profits may be slipping through operational gaps.
Purchase in Bulk: Suppliers that service cleaning companies traditionally offer bulk services at a discount. Determine what materials your staff uses most and invest in bulk purchasing in order to keep long-term profits high.
Increased Training and Management: Consider implementing training regiments beyond initial onboarding. Keeping your staff up to date with new machinery and finding where they work best through personalized training can help you and managers better decide where certain staff work effectively. Putting staff on jobs where they work efficiently is a clear-cut way to ensure materials aren’t wasted and machinery lives longer.
Workloading Software: Efficiency is key in the cleaning industry. There are several software solutions aimed at increasing productivity and in turn reducing expenses. Workloading software considers how long a certain cleaning task will likely take and create simulated schedules with maximum productivity. The most well-known workloading software created for cleaning companies is InfoClean. InfoClean allows users to input their own production rates and also allows easy comparison of staffing plans and cleaning techniques.
Tactical Financing to Increase Cash Flow
Commercial cleaning companies are often paid by invoices from their clients which may not become liquid for 60 to up to 120 days. Cleaning companies with a density of unpaid invoices may consider invoice factoring services. Invoice factoring is an agreement between a business and a lender who, in this case, is acting as a factor. Factors will buy a business’s unpaid invoices outright and pay approximately 95% of the invoice’s value immediately. The factor will then be responsible for collecting on the invoice when the customer eventually pays out. When the customer pays the factor, the factor will then pay a piece of the 5% to the business while also keeping a cut for services rendered.
If a company is doing business with a large number of unpaid invoices, it is likely that the expedited cash flow of invoice factoring services could be a key part of your business’s growth. For companies who deal with one or two large clients especially, invoice factoring can help fund expansion that would regularly take much longer.
Another financing option to consider is equipment financing. While several cleaning companies choose to rent equipment like iodizers or carpet blowers, buying machinery through financing is an effective way to both get your staff familiar with specific machinery models and appear more prepared to potential clients. Equipment financing can also cover new vehicles or even office furniture for budding companies. A modern piece of equipment quickly becoming a necessity due to COVID-19 is the electrostatic sprayer. Often called ESS, electrostatic sprayers are one of the most effective sanitizing tools for both surfaces and droplets, but the machine itself is exceedingly expensive. By having an ESS in your arsenal, your company can more meaningfully assert themselves as a cleaning company with attention to sanitation as well.
If you would like to learn more about your cleaning company’s financing options, consider getting in contact with a Kapitus financing expert who can address your unique situation.
Final Cash Flow Considerations
Maintaining profitability for a commercial cleaning company is a uniquely difficult balancing act of high overhead costs but equally high returns. There is no one strategy to becoming a profitable business, but a meaningful first step is determining what your business does best and how to do it even better. Consider the strategies above as a check list and see which pieces work best with your unique business.