Busy lives and a focus on making the most of family time is likely to drive the cleaning businesses in the residential sector. But there are opportunities too in the commercial world, according to the IbisWorld report on the cleaning sector, Commercial Cleaning Services in Australia December 2013.
In part one of this feature, we revealed the industry trends according to IbisWorld; here we look at two of the cleaning companies in the franchise sector and find out how they see the future shaping up.
BEBRITE CLEANING
Founder Diana Wilson says there has been a tremendous upheaval in the commercial sector, as a result of the economy. “When big commercial contracts feel under pressure the first thing to go is the cleaners. It’s hugely competitive. That’s why we changed to a combination of both commercial and residential, it gave us security.
“You could have 30 to 40 residential clients which come to about $40,000 and between one and four commercial customers with an equal value. If you lose one commercial client, the loss could be a quarter of your business if you don’t have residential.”
That’s why the business has the lowest franchise attrition rate in the industry at 3.8 percent , she says.
The mix of residential and commercial clients also spreads the payment process, Wilson explains. Residential customers pay on the day and commercial night contracts will pay up to 30 to 60 days. “It keeps you paying your bills.”
The residential market is always a viable proposition she adds, but a cluttered space makes this a highly competitive sector. In her view, the differentials are marketing strategy and how franchisees feel about the network and the franchisor. “There are some areas that make a difference for franchisees, including royalties.”
Bebrite franchisees pay a flat fee, Wilson explains. “So if you earn $30,000 a month you will only pay $555. It makes for a sustainable business – but it’s not so good for us!”
The other defining element of the business is the use of Australian manufactured environmentally friendly cleaning products.
Wilson believes the importance of this will only increase, not just because of client preference but for the environment, and for the protection of the cleaners themselves, using the products for eight hours a day.
OZZY KLEEN
The business caters for commercial, residential and carpet cleaning. So how are the various sectors faring?
The commercial world is proving tough right now with clients “very frugal”, says director Ken Patterson, and proving to be slow payers.
The carpet cleaning service has been affected by a recent push from Fair Trading to highlight longstanding rental legislation that defines there is no legal requirement for tenants to clean carpets at the end of a lease.
But while overall there’s been a bit of a slowdown in the cleaning sector, Patterson says there is plenty of potential in the residential market with an increasingly time poor population looking to offload cleaning duties.
This is an opportunity too for older people being passed up for jobs to find a future in the cleaning sector, he suggests.
“It’s a great opportunity for people to come in; we have a $5,800 + GST entry level and that includes equipment.”
Looking ahead, Patterson’s target is between 10 and 20 franchisees on board this year. He believes providing new franchisees with existing clients to service and a share of the earnings from these jobs will help them get established.
When it comes to environmental concerns, Patterson’s approach is to tackle the cleaning job with the best products available – depending on the circumstances of the job and the type of product the client prefers.
“Customer service is vital,” he says; in fact, he adds, it’s important to have a personal touch and view customers more as friends. he payoff he says, is the reverse psychology: “When was the last time you fired a friend?”
Check out our final part of the cleaning feature coming soon!
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