Expanding Out Of The Office, And Into The Home

Back in the early 1980s, Josephine Ames was quite content with her residential cleaning business. Expanding the young business—particularly into the foreign territory of commercial cleaning—was not on her mind until a client planted the seed.

A residential client asked Ames to give her husband, the president of a quarry, a quote for cleaning his offices. She won the bid and began a new career as a dual cleaning operation.

“Our company still does cleaning for that same location, although it has changed owners four times in the last 16 years,” says Ames, president and owner of Ames Services, Ltd. In Annville, Pa.

Ames’ story is fairly typical of cleaners who do both residential and commercial work. These businesses typically start in one area and then expand into the other by chance. But it doesn’t have to happen that way. In fact, it might be money wise for BSCs to make the leap into residential work purposefully.

“I would encourage BSCs to enter the maid-service industry. I think it will continue to grow more in demand,” says Mike Skoda, president of Mark’s Cleaning Service in Medina, Ohio. His company systematically diversified its janitorial cleaning operation to also include residential work. “There are so many add-on services to go with it. For instance, carpet cleaning, wood-floor care, drapes, furniture cleaning and tile and grout cleaning. We plan on increasing our business by at least 25 to 50 percent over every year.”

Profit potential
BSCs might wonder why they should bother with residential cleaning, particularly if their commercial business is doing just fine. Probably the best reason to add maid service to the mix is the benefit to the bottom line.

“The main reason we diversified into maid service was research that indicated a good fit with our present staff and a high profit potential,” says Skoda. “It is very low risk, the cleaning solutions are inexpensive and staffing is reasonably easy.”

Residential services tend to have at least a slightly higher profit margin than commercial work because there is limited equipment, an abundance of potential clients and the daytime-only hours making staffing simpler.

Plus, a major benefit is the ongoing cash flow, Ames says.

“Start-up costs are low, each individual contract is low dollar, and most accounts are paid at the time services are provided,” she says. “There is no waiting for your money as in commercial work.”

Of course, there are pluses and minuses for each type of business. House cleaning usually is done during daytime hours, but clients may be more finicky and can cancel up to the last minute. That means the residential team must always be on its toes. Commercial work, on the other hand, tends to be more consistent with clients who rarely cancel, but work is usually late at night or on weekends.

Commercial accounts typically require bidding, which can be a headache, while residential work is much easier to price. And residential clients can quickly grow attached to a particular cleaner and demand that they always clean their home, while businesses rarely see the night cleaning staff.

Getting started
If building service contractors are convinced residential work would complement their commercial business, then finding customers is the first — but most difficult — step.

When Karen Even expanded her Gingham Girls Cleaning Service to include commercial clients, she found that most of her work came from her residential clients who worked for big businesses in the area. The same can be true when expanding from commercial to residential.

“If you have a good reputation in the commercial line, people are going to trust you. Start talking to some of the commercial accounts about cleaning their home,” says Even, of Sheboygan, Wis.

Once BSCs find residential clients, they’ll need to consider how to set up that side of their business. First, they should do a market study by taking a look at the immediate competition. Then contractors should call them and ask for an estimate on their own home, or that of a friend or relative, to get a better understanding of pricing. Associations such as Building Service Contractors Association International can help with training materials and for a support group to get questions answered.

Also, most managers of dual businesses say it is smart to keep the residential and commercial sides each as a separate entity within the business.

“They are very different and you have to run each as a separate operation,” says Dan Bishop, president of The Maids International Inc., Omaha, Neb. The company started in commercial cleaning 25 years ago but now focuses almost exclusively on residential work.

“It’s a separate management team; it’s a separate office structure,” he says. “There’s very little crossover. We’re in a cash business — we get paid every day. In commercial, you are in receivables. We see our employees twice a day — you don’t see that in a commercial business. Even the cleaning chemicals are a little bit different.”

While each operation is distinct, there is potential for overlap, owners agree. Some cleaning solutions may be used for both homes and offices. Staff members may be cross-trained and utilized in both areas if the need arises. Offering both types of services may also be a bonus for employees, who can pick up additional hours by working for both operations.

But remember that cleaning a home is different from cleaning an office. The space is much more personal, so expectations are higher and trust may be more difficult to earn. The home is new territory with new areas to clean. Contractors and their staff must be able to handle showers, cribs and pets.

“There’s depth to it,” says Bishop. “Some people have taken it lightly that you just send some girls out and clean a house and there’s more to it than that.”