18 Things to Consider When Switching from Residential to Commercial Cleaning

So, you're thinking about switching from Residential to Commercial cleaning. Welcome to the Dark Side! I kid...we're the good guys. 

Why switch? Maybe you're frustrated with the level of complaints that can happen with residential. Maybe you prefer to work a little more autonomously without your clients hovering over you. Maybe you want to switch for the income and scale potential. Or maybe you just want to try something new. Whatever the reason, there are several things you should know before making the Big Leap.

As with anything, there are advantages and disadvantages. As I've posted before, I never have done residential cleaning, aside from one-off favors. It's not our jam. We started only with commercial. Many years ago we did consider acquiring a residential cleaning company but in the end we passed. Why build a wheelhouse if I'm not wanting to spin the wheel?

From my experience in reading within various residential cleaning Facebook groups and coaching those who do residential cleaning, and in comparing my 25 years' of experience in commercial, here are some advantages and disadvantages I noticed when considering the transition into commercial cleaning.

Advantages:

Opportunities

Ever hear the phrase, "It's not what you know; it's who you know.". This phrase rings so true with commercial. Of our previous company's 45 year history, more than half of our business came about through referrals. We weren't necessarily asking for referrals like we should have, but other facilities would contact our clients on the regular asking who they use for cleaning services. Moreover, if you choose to continue residential know that some of your commercial contacts will ask you if you clean homes too.

Better Frequency = More Pay

Commercial clients often need more in terms of a cleaning frequency. Home cleaners often clean in a weekly and biweekly frequency. Depending on the size of the commercial client, they might need five days or even seven days per week. That translates to more time cleaning and therefore more income.

Easier to Scale

Commercial is much easier to scale. At our peak, our average client brought in over $5,000/month. That's due to an average frequency of 5X/week and hours worked per visit. How many homes would have to be cleaned each month to equal one $5,000/month client?

Production Rate

I'm putting this into the Advantage column. There's a stat out there, and as of this post I don't know the source, though it's either ISSA or BSCAI, but the average commercial cleaner can clean 3,000 square feet per hour vs much, much less for residential. Having filled in for some of my employees or subs over the years, I can certainly attest to that. In fact, the 3,000 is a requirement within our own company, scope of work considerations aside. Why is it faster than residential? There are many reasons including surface types, more open spaces, a more frequent cleaning schedule, etc. Why is this an advantage? You can clean more in less time.

Heartier Surfaces

Generally speaking, you won't find the same delicate cleanable surfaces at an office vs home. It's mass produced furniture and generally it takes a lot to damage it. This helps you clean faster with less worry. 

Ownership

With the above mentioned, office workers won't claim ownership over their surfaces like they would at their home. I'm not saying it's OK to cause damage at your commercial clients. But accidents happen. And there are times where a scratch might happen, and it'll be much more forgiving.

Potential for Less Complaints

Not all clients think the same. Ever read about APPA's Five Levels of Clean? Some clients need spotlessness. Some are ok with casual inattention. When we do our walkthroughs, we ask a series of questions intended to solicit answers for a tactical cleaning plan and we also ask pain point-related questions. It's the latter we use to determine whether or not they expect a spotless clean or if they just want to maintain what they have. If they come to us with wanting a spotless clean, then we'll budget more time to do so. If they don't care about perfectionism, then we know from experience that complaints won't be that common.

Always Learning

There's always something new to learn with commercial cleaning. You get to learn how to clean new surfaces. You get to make old look new again (especially with floor work). You learn new processes that speed up time and make you more efficient. One big takeaway in my cleaning journey is how you buy cleaning products and supplies. Before I ever got into the cleaning business, I would drop into my local WalMart and buy a bottle of this cleaning product or that, and I assumed that's how all cleaning business owners made their supply purchases. I learned real quick that this is a great way to lose money, and that purchasing at places like Home Depot, Amazon, or even at the Dollar store would lead to spending more money that what you need to. I learned the value of concentration and that if you're spending $1 per gallon on dilutable cleaning supplies, you're losing profit.

Something New Every Time

It's never a grind in commercial. You're always facing something new. You're learning a new process. You're meeting new people. You get to try out new skills. One of my favorites is that you get to see new buildings. I'm blessed to be in the Washington, DC area. There's a lot of history here and got to tour many buildings that the public doesn't have access to. Something new all the time.

Disadvantages:

Buying Cycle

The buying cycle for residential is a lot faster than commercial. With residential, you have a homeowner and that homeowner is in a much better place to make a faster buying decision. But with commercial, the buying cycle is a lot longer. There are a couple of primary reasons for that. First is their buying and decision-making process. While one person typically makes the decisions in a small commercial setting, you may have multiple in a large commercial property. It has to get passed around within the chain of command before they can even make a decision. Churches were a top niche for us. It wasn't uncommon for 1 person to make a decision to reach out to cleaning companies. Then the proposals are put forth before a church finance committee, that only meets once per month. And then it's brought before a monthly executive meeting before they sign off on it. It could take 2-3 months before they finally decide. The other reason is due to your competitors. Some of your competitors will lock in your clients for a year or more with no option to escape before that year is up. So even if they want to change, they cannot and you (and they) have to wait it out.

Multiple Decision-Makers

As mentioned above, you might have multiple decision-makers. This can pose a challenge when pitching and selling to your potential client. You might have one who is gung-ho in using your services, but you might have to win over others, and most of the time you won't have access. One question I'll typically ask somewhere along the line in the sales process is, "Are you the only one who will make a decision on changing cleaning services, or are there others?" and that'll open doors to pitching in front of others. Nope, it's not scary whatsoever. You get to stand in front of a few strangers and explain why you're the best. 

Lower Conversion Rates

You will have lower conversion rates in commercial over residential. I'm putting this in the disadvantage column because some people think that receiving a "No" is a bad thing. No it's a great thing. We aim for 20% win rate, with 80% telling us "No". And we're very happy with the profitability of that. But I'm putting this here because it's a shock for many when they're told "no" more often than not. 

Longer Payment Cycles

Residential cleaners going in to commercial often face the shock of longer payment cycles. Some small offices, ran by decision-makers who are used to residential cleaning companies, are often expecting that payment is due right away. However, if you're looking to scale up, this isn't the case with larger offices and other commercial properties. We required Net20, in that we invoice on the first of the month for that month, with payment due by the 21st, and we'll extend a grace to the end of the month. But most of our prospects have required Net30. Some have required Net45-60 even. If you're coming from residential, this can be a shock. Make sure your contract is clearly defined as to when payments are made.

More Capital Outlay

What does it take to start a residential client? You're sharing a vacuum and a mop at a minimum, and you're only forking out a little bit of cleaning supplies that first clean. You typically don't need to worry about labor because they pay right away. But with commercial, it's different. If you have a Net30 client, know that you may not get paid for the first time until the far end of that window, and many of my new clients, it may not come in until the following month. Not only that, you still need supplies and equipment in there. So if you have a 25,000 sqft client and you're in there 8 hours for 40 hours per week, you might have $3500 in up front labor costs (paying at $18/hr) and $600 or so for your first month or two of supplies and equipment. So you might have $4K in costs you have to pay out before you even pull in any income from this new client. This needs to be a serious consideration when growing your business. This is something I didn't learn until it was almost too late. The company I worked for racked up a large 6-figure debt because none of us understood the concept of cash flow. I was focused on sales only, and I wasn't minding the finances. Grow and scale but at a healthy pace.

More Marketing is Needed

You do need to market more with Commercial over residential, and you can't rely on the same marketing channels as residential. You truly need a healthy focus on inbound marketing and outbound marketing. Inbound includes any marketing channel that brings business to you, and this includes a website, SEO, social media marketing, blogging, paid ads, and more. Outbound is where you reach out to them and this includes calling them, emailing them, networking with them, mailing, LinkedIn outreach, and more. If you're coming from residential, you're probably focused on Facebook only. Definitely do more to get more.

Separate Marketing is Needed Too

The above said, you need to market separately from your residential cleaning company. I see so many mistakes in the cleaning industry when they focus on both in the same marketing channel. Prospects review based on need. If a commercial prospect googles "cleaning company near me" they are immediately drawn to sales copy that solely fixes their need. If you promoting residential cleaning when they need their bank cleaned, they'll be more likely to look and buy elsewhere. So in your website, have separate pages for residential and separate pages for commercial. In flyers, have a flyer for commercial and have a flyer for residential. 

You Need to Prospect More

You need to market more to win more. It's a numbers game. Get familiar with your numbers and track your calls, emails, and other outbound marketing tactics. From experience, of every 100 phone calls I make, I might get 1-2 walkthroughs booked. I'm not a fan of phone calls. However, I have a commercial client who is booking walkthroughs at a 25% rare, thanks to a stellar VA making calls for him. In my emails, I might have to send 250 to book 1-2 walkthrough. With sales letter, my odds are better at 3-4 for every 100 sent. Check out the book Fanatical Prospecting by Jeb Blount. He says that your prospect, if they don't know you or your brand, will need to see your business 20-25 times before you win them over, or in this case, a walkthrough. So, be prepared to be told "no" an average of 19 times before you see winning results. A "no" now is a "yes" later. 

Most Cleaning is in the Evening

Most of your clients will need evening cleaning. This isn't always the case. Some clients may need daytime porter services, or sometimes they needed daytime preventative disinfecting on touchpoint surfaces, like what we saw during COVID. But generally speaking, you may not be able to start until everyone knocks off for the day. If you're cleaning a gym, that may not be until after 10-11pm. Or for a bar/restaurant, that could be a start time of 1am or later. 

Don't let the disadvantages sway you from your business potential. Welcome to the Dark Side.