In the coming decade(s), the most significant growth in the US economy is projected to come from service industries...and janitorial services are expected to grow among the fastest. Last year, annual revenues for the commercial cleaning sector were about $100 billion, and grew 6.3% for the year. By 2008, total receipts could exceed $138 billion.
The growth of commercial cleaning services has been helped by the boom in the construction of office buildings. In addition, schools, hospitals and government agencies...entities that traditionally had in-house staffs have "outsourced"...and are now using contractors for the work.
Janitorial service companies can be small, closely-held firms, or the larger multi-branch concerns. The barriers to enter the business are not high, and since 2001, many laid-off employees in other sectors have gravitated to the industry. Indeed, the number of janitorial service companies without paid employees has soared by more than 20% annually over the past few years
The industry association is the Building Service Contractors Association International (www.bscai.org). The industry's top issues are:
- High employee turnover...as much as 30-40% employee attrition monthly,
- Low client loyalty...66% of service contracts are lost within a few years,
- Increased clients security concerns,
- A growing demand for "green" cleaning...and a,
- Move to total service packages, e.g. landscaping, minor maintenance and security issues.
Additionally, because commercial cleaning is a low-tech business that's easy to enter (and many do); some of the savvier players are finding lucrative niches, i.e. damage restoration, mold remediation, and maid services.
For a list of commercial cleaning service companies in your area, visit the BSCAI website, and access the Member Directory.
Finally, there is an opportunity for financial advisors to insert themselves between the business relationship of janitorial service companies...and their clients. The national association BOMA, Building Owners and Managers Association represents (shockingly) building owners. In a future post, I will discuss how financial advisors can build networks with the BSCAI members, and the BOMA members...and build self-perpetuating referral networks.
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