Residential Cleaning vs Commercial Cleaning
Very commonly I am asked, "which is a better business, residential
cleaning or commercial cleaning?" and I answer... Both. The
truth is both have the potential to be very strong and lucrative
businesses. It's just a matter of which best suits you and your
market. Here are some things to consider when considering the two:
Your Market
What type of market are you looking to serve? Are there enough middle
class households to support a residential cleaning business? Are
there enough small - medium sized businesses, office parks, etc.
to support a commercial cleaning business? While most cleaning franchise
territories are based on population and qualified households the
truth is it only takes a small fraction of that potential market
share to have a booming business!
Market Saturation
Study your market. Do you find that either the residential or commercial
sector is underserved or over saturated? Competition is a good thing
so don't be scared, but sometimes markets can be over saturated
in one area or another. Don't be afraid to compete but be careful
not to jump in a given sector where the providers outnumber the
potential customers.
Hours of Operation
Residential cleaning customers typically want you to clean their
home while they are not there - ie: during standard business hours.
This means you and your employees rarely work nights, weekends and
holidays. This can be a great benefit to not only you, but to your
employees. Being able to assure your employees they wont have to
work weekends can be a great advantage when hiring a strong staff.
Commercial cleaning customers typically want their offices cleaned
when they are closed. This means most commercial cleaning services
are rendered between the hours of 7pm and 6am. These are not always
the easiest hours to attract good employees.
Cash Flow and Receivables
Most residential cleaning customers leave a check on the kitchen
counter the day the cleaners come. They clean the house and take
the check. This means no receivables! Most commercial cleaning services
bill their customers monthly, and sometimes have to wait 30 - 60
days to be paid. This means the owner of the commercial cleaning
franchise will have to have more operating capital to pay its employees
while they wait to be paid by their customers.
So far it sounds like the residential
cleaning franchise offers more advantages than the commercial right?
Well here comes a biggie that offsets them all...
Customer Retention
We all mess our houses up differently... Do you have pets? Kids?
Do you live on a dirt road? The list goes on and on as to how we
dirty up our homes. This means our needs from the cleaning service
will vary a lot. A good residential cleaning franchise will offer
a strong "system for cleaning" but truth is - one size
does not fit all! Residential cleaning customers can tend to be
very picky, sometimes hard to please and not always the most loyal
customer. Owners of residential cleaning businesses find themselves
having to re-clean a home or even worse - having to replace lost
customers quite frequently.
On the flip side, commercial cleaning customers tend to be easier
to please. Come in the office, vacuum, clean the rest rooms, dust
- and don't break or steal anything and you've got a happy customer.
This results in a more satisfied customer base and less turnover.
Most commercial cleaning franchises claim customer retention rates
of 85% and greater. This means when you land a commercial cleaning
account your chances of keeping that customer for a long time is
pretty strong - provided you do a good job. Losing customers is
very frustrating and replacing them can be time consuming and expensive.
It costs 4 times as much to replace a customer as it does to keep
one so it's an important consideration.
In Summary
At the end of the day there is huge potential in both residential
cleaning and commercial cleaning. Weigh your pro's and con's, study
your market and choose the one that best suits you.
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