Ask Me Help Desk - Starting my Commercial Cleaning Business Now. In this economy?

Hi guys,

I've read through many of the responses to questions regarding Commercial Cleaning Businesses and I now have decided to start one myself.

First off, here's my situation:

My mother owned an office cleaning business when I was younger in Michigan - we mainly cleaned Real Estate offices, small businesses, office buildings, etc. So, to answer the question as to whether I've cleaned offices/etc for profit the answer is "partially" yes.

Present day - I'm now living in Orange County, California and planning on starting the Commercial Cleaning business. I'm fortunate in that I have some resources however the market is completely different from Michigan to California. It would seem that (although not perfect) the Southern California market offers much more opportunity.

My first question (and I'm sure I'll have others) is whether now is a good time to start this endeavor? With the economy being so down is there still a market for cleaning companies?

Secondly, is it even remotely possible to maintain my full-time job while attempting to build my business in commercial cleaning?

... With limited expertise I plan on focusing on office buildings early on and expanding thereafter. A friend of mine has done well for himself cleaning car dealerships, day cares, etc. Any thoughts?

My first question is; how involved were you in your mother's business? Were you involved in the business end of the company at all? How long ago and when you were... for how long?

My intent is to have a stating point Steven.

Do you have any actual business experience? If so, could you elaborate?

Thank you,

Stringer

I was younger when I worked with my mother so to answer the question of whether I was involved on the business side of the firm the answer would be no.

However, I did graduate from Mich State Univ with a finance degree and have worked in outside sales since graduation. I do understand that learning about a subject in school does not equal experience.

I have confidence in myself knowing that I've been able to "cold call" various types of businesses to complete a sale. I've done well in getting past "gate keepers" and speaking to the proper decision makers. Additionally, I believe I've been blessed with an outgoing personality as well as an analytical mind. I feel very fortunate because it seems many times we're either great with the numbers or great with the people.

I wouldn't say I'm extremely connected in Orange County but I've joined the Chamber of Commerce and have a very good friend that's has many contacts in the area who's willing to help. Plus, this SAME friend still owns a business in Michigan

So, here's the deal (and why I've thought of this particular business):

Coincidentally, a good friend of mine owns a Commercial Cleaning Company in Michigan. Essentially we've made a deal where he'll franchise his business to me in California with a 75/25 ownership split, me taking 75%. I don't have to pay any sort of franchise fee. With this, I'll be able to use his logos, contracts, documents, referrals, website, and advice. He's got a lot of great accounts in Michigan that I'm free to use as referrals.

Hi, StevenInCali!

My thoughts are that because of the economy, lots of businesses are probably looking to cut back on services that they may pay for and have people that are already employed shared a hand in doing things, such as cleaning rather than to hire someone from the outside to do it.

If I were to go into the cleaning business right now, my concentration for advertising and networking, would be in the residential sector of it. I would still advertise for commercial, but I think that I would be more likely to be successful, right now, advertising and networking for residential.

Just my opinion...

Stringer is an outstanding resource for information about this!

Thanks!

I see where you're coming from. I'm really starting to think that in this particular area there is still a market for it. Hopefully Im right anyway!

I'm not certain that I really want to get into residential as of now. I figured I'd build on the commercial end and then hire someone to work and farm for residential accounts while I take a small percentage of the profits. That person would have the benefit of using my insurance, brand, website, etc, rather than going out on their own.

I do have a neighbor who has lost a number of commercial cleaning accounts for economic reasons. But, maybe that is the exception and not the rule. However, Stringer will be able to advise you the best concerning that.

If you would like suggestions about marketing and advertising, please let me know. Those two areas are things at which I've had a lot of experience.

Thanks!

Good evening Steven,

Quote:

I have confidence in myself knowing that I've been able to "cold call" various types of businesses to complete a sale. I've done well in getting past "gate keepers" and speaking to the proper decision makers. Additionally, I believe I've been blessed with an outgoing personality as well as an analytical mind. I feel very fortunate because it seems many times we're either great with the numbers or great with the people.

This is one of the most important items in success, I fell that you already know this and that is good. Personal drive and passive aggression are always necessary if not a mandatory requirement on the road to success.

Quote:

My first question (and I'm sure I'll have others) is whether or not now is a good time to start this endeavor? With the economy being so down is there still a market for cleaning companies?

This economy, all over this country, requires us to do what I said above, only times ten. I have been in this business for over 25 years and I have seen and experienced quite a bit. Starting as a salesman, to sales manager, to VP of sales and marketing for the first 9 years. Then started my own (lead to three related companies) and we are doing about $6m annually now in sales. Most of the markets have been hit hard now more than I can ever remember. We have recently lost a large client over $1m per year and have had two others cut their service by 75%. We are fine though, these accounts will survive and will return to standard service in time.

We have always been a progressive company in sales and now that is even more enhanced. We just picked up a hospital and almost replaced the large account that we had lost. Although I do not advocate price selling it may be necessary at this time. Approaches such as; "I am pretty sure that we can maintain the service level and actually save you money." Is an approach that is coming up more and more, and it is what the prospects want to hear and have.

So, to answer your question, approaches to prospects vary across the board in getting new sales... value, price, experience, references, systems, techniques, etc. What matters is that this is your life in this economy, you have to give and apply so much more, there is business to be had. This business will not be in "new builds" so much as competing for existing business and additional work such as; carpet and hard floor cleaning, window cleaning, blind cleaning, restoration, etc.

Success in this business comes to those with intelligence, backbone and persistence, even in these times.

Quote:

I wouldn't say I'm extremely connected in Orange County but I've joined the Chamber of Commerce and have a very good friend that's has many contacts in the area who's willing to help. Plus, this SAME friend still owns a business in Michigan

To me, and this has brought us much success, cold calling and NETWORKING are two of the best methods to get new business. Talk to everyone, EVERYONE Steven. You never know what they do or who they know. Go to trade shows, visit with suppliers (a lot), local networking groups, etc.

I would suggest that you pick Clough's brain, he knows his stuff when it comes to effective and inexpensive marketing.

Quote:

Coincidentally, a good friend of mine owns a Commercial Cleaning Company in Michigan. Essentially we've made a deal where he'll franchise his business to me in California with a 75/25 ownership split, me taking 75%. I don't have to pay any sort of franchise fee. With this, I'll be able to use his logos, contracts, documents, referrals, website, and advice. He's got a lot of great accounts in Michigan that I'm free to use as referrals.

In this economy this sounds like a good idea and could jump start you business. However in the future I would consider buying out this agreement. I never entertained not having direct ownership, there are drawbacks. I would say here that when everything is considered, I would not become part of any of the national franchise opportunities offered.

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I figured I'd build on the commercial end and then hire someone to work and farm for residential accounts while I take a small percentage of the profits. That person would have the benefit of using my insurance, brand, website, etc, rather than going out on their own.

WE have salaried + commission sales people AND Agents. We cover the expenses of the agents and have an agreed upon commission (33%) that we pay on their sales. AND they also do "audits" of their accounts for service problems on a two week basis. We added 2 agents about two years ago that were retired workers who work about three days per week... it is working fine. They obviously have full access to our websites, sales materials, computer pricing methods, advertising and any personal help in sales that they need. The salary/commission workers are under much more control, but the "mix" works well.

Personally I would go after buildings where they are owned or leased by the company inside it. Early on, we took almost any type of business, later we were much chossier. Now we do not go after any businesses that are in trouble (Auto dealerships, mortgage companies, small banks, etc), try collecting, cleaning is last on their list when money is short. Property management sales take a long time to get, I would concentrate on other types and cultivate this business. They are usually entranced with several companies that take good care of them... boat trips, parties and many more benefits...

In conclusion, work like your life depends on it (does... don't it?). In the first 3 years (16 now) I went days without sleep but I wouldn't trade that time for anything. Now, it is different, I have those who do this. No they sleep... we have built a great group of people.

Your integrity in this business is vital Steven, always do what you say you will... even to your employees, important. To get and maintain their trust they need a good leader.

Go to [url]www.thejanitorialstore.com for all types of help in start ups and there is a Q & A part that is great with very experienced people to help. There is a small fee.

Good luck, come back and let me know if I managed to help.

Stringer

I fixed the link that you had provided to a site, Stringer

Cool site! :)

Quote:

Originally Posted by Clough

I fixed the link that you had provided to a site, Stringer

Cool site! :)

Thanks Clough, I am about to fall asleep here, it's been a long week.

An incredible answer, couldn't have asked for better...

From what I've researched carving a niche with small office buildings may not yield the highest of profits in commercial cleaning. It may take numerous accounts to yield any dollar amount that would equal a decent salary. The catch22 is that I wanted to start-off by doing most of the cleaning myself with some help possibly from a friend when needed. Obviously, it will be difficult for me to clean a larger building alone...

In my estimation it will be less difficult to link-up with smaller business than it will to land larger accounts right away. This is why I figured I'd start doing the cleaning myself.

For instance, a doctors office may pay-out roughly $150 - $250 monthly to a cleaning service (obviously depending on size). If I'm doing the service alone as I originally intended, I'd have to contract with at least 10 - 12 accounts to make roughly $2000 - $2500/monthly, depending on expenses. - All extremely rough numbers, of course. How quickly can one sign-up that many accounts is something I'm not certain of...

Strangely enough, the Commercial Cleaning business owner in Michigan claims that auto dealerships still request his services, even in this tough economic climate. I can see why (somewhat) as presentation can make-or-break a sale. It seems as well that he makes a larger gross dollar amount off the dealerships than the office buildings.. . Ug, I'm an American car owner all the way but I have to admit that some of the luxury foreign car dealerships seem to be still flourishing in Southern California. If I recall correctly the numbers he mentioned for auto-dealerships were ranging from $1K to $3K monthly again depending on size. (let me know if this sounds outlandish)...
The exciting thing about this business for me is being able to drive down any street and see growth potential all around. God knows there are a million office buildings, doctors offices, day cares, car dealerships, etc in this country.

Steven, you are setting your sights way too low... I believe that you have the ability to do better.

Two days after we started 16 years ago I signed a contract for $9,765.00 per month. I hit the streets and called and saturated every building of 15 to 20,000 sq ft or more. Sometimes you are in the right place at the right time.

The first year our sales soared then slowed because we had to take time to maintain and take care of this new business. But the three areas of business all apply; SALES (or there is nothing to do), service/operations and Admin, each is vital in your business survival.

The smaller office buildings are great to start, the mid and larger established competitors are not concentrating on these, around 8 to 10,000 sq ft. But hit every building and collect names, email addresses and phone numbers of the contacts... AND FOLLOW UP. Follow up is the most important... you are never too busy, never.

Have human resources ready when you get a contract so you do not have to turn down anything or worse not even call on these larger buildings for this reason. Go to the "Temp offices," talk with people that do cleaning-let them know that you do or will need people to work for you, etc.

Lift you goals my friend, much higher, in my opinion you should look at everything (I still wouldn't do car dealers, small banks, etc... been there.) Starting small is notable, those 10,000 - 15,000 sq ft buildings, but continue to go for the brass ring, one regular office building of approximately 40 to 50,000 sq ft, 5 days per week should bring a billing of about $7,000 to $7,500 per month.

Think this size or more, be ready and set up a relationship with a supply and equipment distributor first. They usually allow 60 to 90 days pay for newbies... show strong desire.

You need to devote yourself to this higher thinking Steven. Would you rather do 15 buildings or one to get the $7,500 per month?

Sweat to reward...

Rate my answer if you found it helpful, thanks,

Stringer

Getting in contact with a "temp" office does sound like a very proactive idea.

Is cleaning five days a week for an office typical? I had figured most places of business needing only 1 cleaning per week, regardless of the size.

The reasoning behind starting with the smaller offices lies in the lack of expertise I would have for larger projects. I figured that since I wouldn't be an expert at some of the more complicated tasks involved in cleaning (stripping and waxing, for example) that I may not be ready to take-on the larger builders. However, with general maintenance such as vacuuming, garbage, dusting, etc I'd be more able to tackle such tasks and building size wouldn't be an issue.

Good morning Steven, happy Sunday.

Always be thinking and planning.

"Is there a way that I can do this, learn this, make profit from this?" Ask yourself this always, question everything.

A successful entrepreneur wears many hats (I know, you have heard this many times, but truer words were never spoken), and the main key to his/her success is that you are always asking yourself questions; how do I do this (who can I ask), is there a better way, what do I need to do this, etc?

You sound like a bright, aggressive (in a positive way) and ambitious young guy, I say to you with respect; listen to what I am telling you...

You don't want to bite off more than you can chew, as I said before. But with planning and careful thought you also don't want to be a "Ma & Pa" company either. Become a professional in anything that you do, set the "bar" higher.

Did it occur to you that you can farm out some of the services such as carpet cleaning and hard floor work until you learn the methods?

Maybe you should have asked, "is there a way to do this?" And I would say yes there is. Almost all of the distributors (suppliers) of cleaning supplies, paper products and equipment have mini seminars all the time that go into minute detail in these seminars on how a VCT floor is stripped and refinished, how carpets are properly cleaned, proper chemicals to be used in cleaning, proper and efficient equipment to be used, etc. AND they are free. Again your approach to this excursion should always be quizzical. That should become your nature.

Another approach and one that should be considered, is to go to work for a janitorial company for 6 months or a year. Not in sales but ask for a position in operations; floor and carpet work, proper and efficient cleaning methods. Cleaning has to be; get it done properly and in as little time as possible to be profitable. Remember that labor in general is 50 to 65% of your monthly bill, control it.

There is no better way to learn this than "hand's on." It doesn't take long to learn it when you are doing it under an expert. Obviously, I would not tell them your plan.

Remember the 80 / 20 principal; 20% get 80% of the business and 80%----20%. You have to ask yourself why? In my humble opinion, it is the leader of those companies. They are the determining factor, the "driver."

Stringer

Hello SteveninCali:

Hey Steven how are you today, wanted to follow up with you on regards on your question on starting your own cleaning business, I know is about a year ago and wanted to get an update on how are you doing? The reason that I'm contacting you is because I'm also starting a new business in the same field and also in Cali but in the East Bay. Hope to hear from you soon and you can contact me at [email protected]