Episode 43: Commercial Cleaning vs Residential Cleaning: The Pros and Cons You Need to Know

Episode 43: Commercial Cleaning vs Residential Cleaning: The Pros and Cons You Need to Know

Brandon Schoen:
Should we do commercial? Should we do residential. Should I do both? And we steer people towards, Hey, if you're already doing it, that's the luck. But really what we focused on in the beginning was niching it down. The riches are in the niches, focus on one thing. And then once you get that successful, you can branch into something else. So whether you've already started in commercial, run with that, and then you can branch into residential or vice versa. But that's really what our biggest recommendation is. When you're getting going, don't try and do everything. And don't try to do both. If you don't have to.

Announcer:
Grow your cleaning business, make more money, have more time. This is the Profit Cleaners podcast with your host Brandon Condrey and Brandon Schoen.

Brandon Schoen:
Welcome back everyone to another episode of the Profit Cleaners, the only place where you can learn from the top 1% of cleaning business owners from around the world to level up your business and win. I am your host, Brandon Schoen I'm joined by my cohost..

Brandon Condrey:
Brandon Condrey.

Brandon Schoen:
And today we've got another exciting topic to discuss with you guys to instill some knowledge on the topic of commercial cleaning versus residential cleaning pros and cons. Should you be doing one should be doing both? So we're going to dive into that. I think how we should start this out is a little quote, actually, a couple of quotes, but there's a quote in marketing direct response copywriting. That's used a lot, which is if you're speaking to everyone, you're speaking to no one. And a lot of times people, especially in their marketing and their business, they're trying to do everything and be all things to all people, the Jack of all trades. And there's also another quote that is from the one thing, which is a great book. If you guys haven't read the one thing, but it opens up with a Russian proverb and it's all about, you've probably heard this quote before, but it's, if you try to catch two rabbits, you'll catch none. And so it's that same idea. If you're trying to talk to everyone, you're speaking to no one, but again, a lot of people ask us, should he do commercial? Should we do residential? Should I do both? And we steer people towards, Hey, if you're already doing it, best of luck. But really what we focused on in the beginning was niche, niching it down. The riches are in the niches. And so focus on one thing. And then once you get that successful, you can branch into something else. So whether you've already started in commercial, run with that, and then you can branch into residential or vice versa. But that's really what our biggest recommendation is. When you're getting going, don't try to do everything and don't try to do both if you don't have to.

Brandon Condrey:
So you are listening to the Profit Cleaners that we are a residential cleaning podcast. So spoiler alert, we like residential, but we'll still go through the pros and cons for both.

Brandon Schoen:
Yeah, because this was actually a very similar conversation that we had when we started this business. Well, should we do commercials? Should we do residential? What are the pros and cons? And we've discussed this in a past episode, in the very beginning of the podcast where we didn't go quite in depth as much depth, but we're going to go more in depth on the pros and cons and just some extra ideas just to get you guys thinking. And again, the biggest idea here is to try to focus guys, try to focus on one thing. All right, let's jump In.

Brandon Condrey:
Let's do it. So we'll start with commercial, get out of our own comfort zone. Cause that's not what we really do. So what are the pros to commercial cleaning? The big one is that the contract that you get, they're all contracts, but the big one is that it's a big contract. It's a big dollar amount, lots of commas in there sometimes depending on how big the building is. That's nice. That's a good time to see that there's a lot of money in there. So that's good. Yeah, absolutely. There's also less details involved in house, move invasives and picture frames and books and stuff off of people's kitchen counters and family photos and stuff. If you've got a contract to clean the floor of a big giant warehouse, well man, it's just 16,000 square feet of concrete. So that's pretty easy.

Brandon Schoen:
Yeah. So you're probably gonna spend maybe even a little bit less time. It's not as tedious or time-consuming as say the residential where you're really doing the details and fine tuning those details. So yeah, moving on. We could probably move in faster as well. And just because of that, very reason, you're not going into these crazy details in the commercial. So you're probably able to move through that whole building or whatever the project is a lot faster in general. That's also a very positive thing. Next would be..

Brandon Condrey:
People aren't normally watching your back. Like they are in residential cleaning. They're not following you around and make sure you're not opening my sock drawer and stuff. If you're cleaning a giant warehouse, you can't really walk away with this pallet full of stuff. So like we know what you're doing and you're just emptying trash cans. It's all good.

Brandon Schoen:
Yeah. And You'd be surprised. We have a lot of stories of that. And the residential side of things, like just very funny stories, oftentimes where it's the customers watching over the shoulder of the cleaners. And a lot of times that's our older clientele doing that, but it's something you probably won't experience in the commercial space. That's for sure. What else can we tell them about commercials, more pros?

Brandon Condrey:
So larger accounts are easier to manage. So you get them, you front load the work on the front. You're going to get them all set up. And the lower margin is tolerable because you're going to do it over and over and over again. The volume of that I think is important too. On the pro side is that most businesses need to be cleaned pretty frequently. So you're not going to get a business. That's like, come clean my business once a month. I'm like, are you sure you've had 3000 customers come in here? Like we've got gotta be in there every day. A lot of commercial stuff is everyday.

Brandon Schoen:
And there is some longevity to it as well, because a lot of times you're dealing with businesses and people that have a reputation, like Brandon said, there's a lot of people coming through their business every day. They need it to look clean so they can have people keep coming to their business and things like that. And just the fact that probably businesses are going to be more loyal in general to something like that. They're using it.

Brandon Condrey:
If they win the contract bidding process. They don't want to be doing that every year or every other year. So like, they're going to sign you a multi-year deals so that we don't have to mess around with this.

Brandon Schoen:
Again, that's a big part of that. There's a lot more contracts in this space. So that would again make it more longevity and possibly more lucrative, kind of a toss a bit. It just really depends on what kind of commercial you're doing. Like Brandon said, some of those contracts could be really huge contracts. It might feel more lucrative, but when you really get in there and you're doing the volume and all the work, it might be a lower profit margin. So just very much that's.

Brandon Condrey:
Alright. So the dark side of commercial cleaning this one's big for me. The equipment is so expensive. I gave that hypothetical example of a 16,000 square foot concrete warehouse. You're not doing that with a microfiber mop. I mean, you need a machine. You're going to have a ride on. You've seen them. You've seen them in airports and stuff, but it's like a little tiny street that moves inside of a big building. It's mopping and doing all this stuff. So you gotta have an operator that's driving it around. So those things are pricey. And if it's not that then it's a floor buffer or something. So there's a lot of equipment involved. And depending on how many contracts you have that stuff's there, you don't move that thing around on a truck. It lives in that building and you go clean that at the building. You ride it when you're there.

Brandon Schoen:
And then the other big con is we're family guys. We have families. And one of the big reasons we didn't want to get into this space in the beginning was because of the hours. It's much of the time. It's always at night. So these businesses are doing their operations during the day. Really the only time you can come and clean them is when they're closed.

Brandon Condrey:
Yeah. Because they don't want to interrupt the service. They need to be able to service customers and stuff. You can't do that. If there's some guy riding a buffing machine in the back, you're working overnight. Even if you're not cleaning, if I'm not riding the buffer machine. Yeah. Someone's gotta be up managing the business, answering calls. If emergencies are happening from employees, you gotta be there For them.

Brandon Schoen:
Right. So we really didn't want to go into that area because we have kids and we want to be home with their families at night. So if that's something you're considering, definitely think about that, but it also lends itself to other problems because it's at night, you're also going to have a harder time finding quality employees sometimes because not everyone wants them.

Brandon Condrey:
Yeah. Unfortunately. And the ones that do want to work at night, that can be a strange variety of people sometimes. Typically speaking, I would say that your average potential employee is not going to be shooting for overnight work. They're going to be doing that as a last ditch effort. I couldn't get a day job. So I had to get a night job.

Brandon Schoen:
Yeah. So you might actually have more turnover than you think in the commercial because during the day people like the hourlies during the day, they like that date job hours, night is going to be harder. So you're going to have just harder pickings for good people and probably higher turnover.

Brandon Condrey:
Yeah. So another one is cashflow. You've got the contract worked out. This is going to depend on how the contracts worked out, but are they paying you once a month? Are they paying you in arears? So they're paying you at the end of the month. Did they pay you at the beginning upfront? So you're putting in the hours, got to make a payroll and that'll come later. Is that business that you're servicing falls on us some hard times. And you're one of the not approved vendors and you get your delayed payment, then you're managing cashflow. Like what's your accounts receivable looking like how long are those accounts?

Brandon Schoen:
And even though these might be bigger jobs, like, as you said earlier, the margins might be lower. So your cashflow may actually be tighter. So you really might have to manage that a lot tighter than maybe with the higher pref emergent in a residential cleaning business.

Brandon Condrey:
Also kind of generally speaking chemicals and supplies for commercial stuff is typically more expensive than it is for residential. So many people make mops and brooms and things that the competition for price and the residential side is a bit lower, but the space on the commercial side is a bit different. So the consumables are a little bit more expensive. So you just going to have to deal with that.

Brandon Schoen:
And then when you guys are doing pricing for commercial, it's going to take more time. There's going to be a bigger bidding process because they're going to have to probably look at five or 10 different companies. These are big contracts and there's a lot more details that go into it. So probably a longer overall timeframe.

Brandon Condrey:
Longer sales cycle. You've got to just deal with it over and over and over again.

Brandon Schoen:
So there's going to be some uphill challenges there versus residential you're you're in and out pretty quick. And there's not a whole lot of that going on. People want to make a decision a lot faster. Other than that, we talked about high turnover. If the company runs into financial trouble.

Brandon Condrey:
I jumped ahead on that one. I didn't even know was on the list. We already said that.

Brandon Schoen:
So let's reiterate that.

Brandon Condrey:
Yeah. If the company you're servicing runs into financial troubles, oftentimes cleaning is one of the things that can be just pushed to the wayside. We'll hire someone in house to do it. Maybe they won't do it as well, but we're going to pay way less to do it. So that's just, you're on the chopping block potentially.

Brandon Schoen:
Yeah. And think about it this way guys. When you have a residential cleaning business, you might have a thousand customers or a hundred customers, right? If half of them quit, we still have 50 customers. If half of them quit. And when you're doing commercial and you only have three or five big clients, well now you're down to one or two clients. That's like all your business right there. You're running a higher risk because you don't have, you're spread out a lot more in the residential. Whereas in commercial, all your eggs are a lot more in one basket.

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Brandon Schoen:
Hey guys just wanted to let you know that we are taking one-on-one coaching clients. And it's awesome. So if you want to be navigating the industry trends, figuring out how to grow your cleaning business to the next level. So you can win. Get more customers, have better systems, have better retention, all that good stuff. Then hop on one of our coaching calls. And we'll about what we'd love to help you guys out.

Brandon Condrey:
So to reserve your spot, head over to Profitcleaners.com/coaching.

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Brandon Schoen:
Now let's turn into residential, let's talk about why did we choose this business over commercial? And a lot of it is the pros from this side of the world.

Brandon Condrey:
The work is during the day, we pitched that to potential employees that it's like bankers hours, you get here at 7:30, 8 o'clock we're going to be done at five, six o'clock. They also get to spend time with their kids, which is nice. We don't want to feels bad to me to be able to restricting employees access with their own family. So working during the day, we have to be awake during the day to deal with that stuff. So that's just a little bit easier.

Brandon Schoen:
Yeah. And it fits more with our company culture and ethos, which is a lot more like our target audience is families, families with kids and pets and things like that. So our big tagline is get your time back, claim your weekend. If we're able to do that with our employees, because we're also in that mindset of wanting to be home with our kids on the weekends and at night, and our employees are experiencing that same benefit. It just embraces that culture even more. And so it's really a positive thing. And everybody does. Once they get that weekend break, they come back into the week, full energy, full bore on the ready to go. So it really has worked out well for us.

Brandon Condrey:
Another pro is no contracts. I mean, you can obviously we could implement contracts, but we did have that other contracting episode that we talked about that we don't do it. I don't think you should have to sign a legal document to get your house clean. So no contracts, it's easy, no bidding, no, whatever. Just here's the price. Do you want it? Great. Cool.

Brandon Schoen:
Another pro is you can scale a lot faster. So commercial, so many businesses, so many buildings in town that need the service with residential. There's probably 10 times or a hundred times more houses out there. Everyone almost out there has a living place to live. Right. They have an apartment, they have a house. So really you just have a greater possibility potential to capture of that market share and really scale a lot better.

Brandon Condrey:
Yeah. So market's bigger, more access to things. Another good one is the quick cash flow. We have a CRM where we've plugged in people's credit cards and we run those the day of the cleaning and we get that deposit in our bank two days later. So we're not in that situation with commercial where you have to go along on, how long is it going to take? When did we invoice someone? Do they pay that type of thing?

Brandon Schoen:
So let's see, there's also just in general, more potential residential opportunities out there than commercial businesses. Like we just mentioned. So just more people that own houses, there's going to be more opportunities for you to network with realtors and other people in the housing markets and things like that. And it's just a great place I think, to start, even if you want to do commercial at some point, I think it's a great launch pad to get your foot in the door with the cleaning space and the residential, and then go into commercial. But again, we're not here to say, do one or the other. We're just giving you the pros and cons and giving you a high level.

Brandon Condrey:
So on the cons on the residential side, there's a lot more detailed work you have to pay more attention. Customers are definitely going to be looking for that, with that detail work and that high touch service comes opportunity to break stuff. And sometimes that stuff is expensive. You have to cover it.

Brandon Schoen:
Right? And it's just more time consuming in general because of that more detailed approach. Whereas with the commercial, they're not even looking at all that as much or just sweeping right through there in the residential, you really do have to have your systems in place for operations to deliver that product. A lot of times they're watching you clean in their house. People are a lot more particular in their home. So you're going to need to really up your game on the quality side of things and just delivering that product and making sure it's right really on point.

Brandon Condrey:
So people nitpicking, that's definitely another con they're going to be paying attention to that. This is my house. I can't believe you didn't make the bed the way that I wanted it to sheet three inches off on this side. Another one is that scheduling is a concern and the residential side, and this became much more of a big deal during the pandemic when everyone is staying at home. And as much as I want to say, the pandemic is going to go away and everything's going to be okay. I do think that people working from home and staying at home is going to be one of the more permanent aspects of what happened with COVID. So you should expect that people are going to be at their house when you're cleaning them. If you tell them you're gonna be there at 12:30 and they rearrange their work schedule around that, and you showed up at three, we're going to be very mad. Scheduling is a bit more of a challenge. It's certainly not insurmountable, but it is a concern.

Brandon Schoen:
Yeah. And that makes me think overall in general guys, with a lot of these, you're just managing more expectations. You're interacting with people more versus the commercial side of things. You're not really seeing people are not there. They're at night, you're going to have to up your game on customer service on attention to detail all these things, residential,

Brandon Condrey:
You also need to hire customer centric people. When you have that bigger customer base, thousands of people, you're going to have to talk to them. You're going to have to email them. Someone's going to be managing that process for you. When you sign up the big commercial client with the contract, great. They handed it to the accountant and they send you the thing for the invoice all the time. When you probably never really talked to anybody that much, we do have customers on the commercial side. And I'd say probably the majority of them that we're on autopilot. We don't really talk to them that much. It's great, but you are going to talk to a lot of people.

Brandon Schoen:
And it also means you're going to have to attract people that are a little bit more, people-centric a little bit more interactive with your customer audience because you're to be in their houses during the day. Oftentimes they are working from home or they're going to see the cleaners. And it's great. If you have people that are like interacting versus someone that doesn't want to talk to them at all and just wants to go work at night and do the commercial stuff. That's a lot more, I think of the audience you might attract for commercial, but just know that you're going to have to work on attracting more people-centric players.

Brandon Condrey:
That's the nuts and bolts of the pros and the cons. But we do have some bonus info just on those two industries. As a whole. One thing I want to mention is if you look around your town, if you look at the commercial cleaning companies around, if you dig into looking them up and doing their research, see how many of them offer residential? I would argue it is probably zero. Maybe a couple of, I have a friend in town who runs a commercial cleaning company. And they have like a little maid service in there that cleans, I'm talking like four or five houses. And two of them I think are employees of the company. It is not what they're focused on. Their focus is definitely on larger commercial businesses.

Brandon Schoen:
I think the point here was the production rates are different from residential to commercial. A lot of times we're going off of square footage and residential, maybe also in commercial, maybe it's hourly, depending we have a whole episode on pricing and strategies on that stuff as well. But yeah, you're going to have different production rates because you're offering, you're really working more on like volume and scale with commercial versus more detail oriented stuff with the residential different.

Brandon Condrey:
Yeah. So your employee and the residential side is going to have to cover 700 square feet an hour. If it's one person on the commercial side, you're talking about 4,000 square feet an hour. So they just have to move faster, which is hence the lack of detail really.

Brandon Schoen:
You think about the marketing and these businesses guys, the residential market is more business to consumer versus business, to business where the commercial space is much more business to business. So you just have to think about that. And when you're doing your marketing again, when you're talking to everyone, if you're trying to attract commercial people and residential, you're speaking to everybody, well, you're probably going to attract to nobody. In this case, remember that business to consumer, you can really target that very easily on a lot of these platforms like Facebook, Google AdWords, where you can right in front of this audience that is actively seeking the service. Like I have a problem and I want to solve it right now versus the commercial space. You might have to reverse engineer that and think a little differently. Like where can I advertise to commercial people and where would they be hanging out? Maybe you'd go through LinkedIn and to the business profiles of the owners of the companies on there, but it requires a different marketing.

Brandon Condrey:
And who do you talk to in the commercial building? If it's a big warehouse, it's a national chain. Are you talking to the local manager? Do you have to go to corporate? You have to figure out how to make those inroads. I used to do the commercial medical device sales. And sometimes that was a problem. Even figuring out who I have to talk to, to be able to tell him like, Hey, I'm amazing. You give your pitch to the wrong person. Like, yo, you just wasted all my time. I'm not the one that handles whatever. Yeah. The marketing is definitely a lot too.

Brandon Schoen:
Yeah. The marketing is very much different. And I would argue that probably a little bit easier to get in front of the average person that owns a house. You can very much easily target them on Facebook demographics to like families that own pets down to these crazy, like really granular ways to segment these audience. Not to say that it's one is better than the other. You can target both of, but just leveraging what we've noticed, leveraging a lot of the local platforms. The next door is the Facebooks. The Googles it's really easy to get in front of the business to consumer audience.

Brandon Condrey:
Lastly, If you're considering adding on either commercial or residential to whatever you're offering, now, you might have to alter the name of your company because it just might not make sense. We've got an example in here of squeaky clean maid services. You're not going to get some huge warehouse to sign up with squeaky clean maid services because they don't need a maid walking around with a feather duster, cleaning boxes. They need something bigger. A lot of the companies around here have building maintenance in the name there's franchises that have building maintenance in the name. And that lends itself to being more than like, yo, we're just not going to clean it. We do lots of other different things too. We're going to maintain this asset to make sure it keeps working.

Brandon Schoen:
Yeah. So you might want to think term, if you do want to go into both markets, maybe brand your company, something that would be able to parlay into both markets and you could pivot from residential to commercial or vice versa without having to rebrand and do all that. But if that's the case, if you already named yourself like maid service, home cleaning, maid service or something or other, then you might have to rebrand or create a separate company entity just to do commercial.

Brandon Condrey:
That's the basics. So you can do with that. What you will, I will mention that we do clean a couple of small offices that are in the neighborhood and we only pick those up during the pandemic. And we are trying to stop the bleeding. There's three offices in the neighborhood. They are all less than 3000 square feet. And they are basically the type of office that is built like a house. They have a kitchen area and a couple of bathrooms and some desks and carpet and we're cleaning the desks so that it has to be digital oriented. And these are the ones that we worked out with. Like, Hey, just so you know, we don't clean after hours. Are you cool with us coming in during business? All those people said yes. And every case, none of those businesses were customers aren't on site. It's not like a retail shop or there's going to be people in the building. It is literally just some people at a desk. Sometimes we try to come in when they're on lunch, to give them a little bit of a break. I'm not saying you can't, you don't have to pigeonhole yourself to a degree where you feel like you're stuck. You feel like you need to make a move, make a move, but just be wary of what that is. And so we treat those people just like houses. We priced them the same as houses based on the square footage, they're scheduled the same as houses. So we didn't have to alter our process to make those guys fit into the system. That's how we did it.

Brandon Schoen:
Actually, those specific offices that we cleaned during the week are during the week during business hours. And they agree to that. Some businesses just can't do that. There was another instance recently where a big rock climbing gym in town wanted us to do their commercial cleaning, but we're not set up for that. And I was trying to figure out how we could do it without literally setting up a whole another team. And I think, but it's just not possible. Like you really do need to have a night crew to do it. You need to have them do it every day at night and on the weekends, which we don't work right now. So it's just a whole another animal. Really? Yeah. And so if you want to do it, you got to create the team and the system for doing it on the nights and the weekends and the different team members and the different cleaning and that just the way to do it. But otherwise like Brandon saying, if you can work it in somehow to do some offices or some lighter, lighter commercial during the week during your normal business hours, that could also be an option.

Brandon Condrey:
One thing we did consider and a business mentor had brought up to me was what if you had a completely separate division, what if you had a team that was just dedicated to this? And they knew that they were going to have to work weekends and after hours. And we did kick this around in the office. And ultimately we just didn't think that any of our workforce would just volunteer to like, I hate working Monday through Friday during banker's hours, definitely want to work after hours. And on the weekends, there's just not a lot of people, at least in our workforce, because we've primarily targeted. We've pitched those hours to people. So that's who we have. Maybe if we had hired specifically for that, it would be differently, but we just didn't think a lot of people would volunteer to change up their nice schedule. I don't get to see my family for dinner time schedule. We ultimately did not proceed with that. So we ended up with those couple small offices and that's it. There is some food for thought, yeah.

Brandon Schoen:
Food for thought guys. If you're looking to catch one of those rabbits focus on catching one of them, not both of them, cause you probably can catching nothing. And that's the name of the game here between the residential commercial. If this guys, if this spurred some thoughts, some inspiration maybe shifted your mindset, let us know guys comment, leave us a review on if you're on iTunes podcast or wherever you're at comment review, like subscribe, all that good stuff. And it really helps us out guys we are doing this for free to help you guys out and pay it forward. And hopefully just deliver some knowledge that transformed your life, transforms your business. That's the goal here. And hopefully you guys are all winning and learning and growing together.

Brandon Condrey:
Keep it clean,.

Brandon Schoen:
Keep it clean.

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