4 Reasons why construction cleanups are the best way to grow your cleaning business

Reason 1 – Construction cleans DIVERSIFY your
business (don’t put all your eggs in one basket)

Longer term, traditional janitorial contracts are a great foundation for most cleaning businesses because they provide you with a steady stream of recurring revenue. Sometimes these contracts last for 5 years, so if you land a few of these, you can build yourself a healthy business right there.  You can also build processes here where big accounts are like a well run business.    

Just think, if you lose one of these contracts, you could lose 40% of your revenue overnight. That’s pretty much a fatal blow to any business, and I’ve seen it happen.

Because these long-term cleaning contracts are competitive and difficult to secure, losing one can be really hard to recover.

If you broaden your revenue streams by delivering construction cleans though, and you’ve got some systems in place to keep up with the market and submit bids for these jobs on a regular basis, this can be a business-saving insurance policy for any unexpected setbacks.

Reason 2: Construction cleans have higher profit
margins (30-40%)

Construction cleaning contracts have significantly higher profit margins than janitorial work.  Higher profit, higher risk; General Contractors (Turner Construction) are not as easy to do business with as a property management company (Jones Lang Lasalle).    You must be prepared to submit change orders, get written contracts,   follow paid when paid payment terms, work with stressed, behind schedule superintendents.

Over the past 5 years or so, we’ve secured over 692 post construction cleaning contracts for our local cleaning partners, the average contract size is about $7,500.    

A full cleaning work day on a construction site includes 4 laborers at 8 Hrs. per day. One day of work can be billed between $750 and $1,200 depending on scope.  Pricing actually varies per project type; scope and mobilization requirements do differ I will breakout a few common project types below and list a price per square foot you should quote at:

Worship. $            0.29
Police-Fire Station $            0.21
Industrial $            0.31
Restaurant $            0.61
Medical-Dental $            0.32
Unit-Residential-Hotel $          0.27
Car dealership $            0.17

Unit- Hotel- Residential project type
Rough clean: .14 cents per sq ft
Final clean: .19 cents per sq ft
Fluff: .06 cents per sq ft

Strip and Wax
1 coat: .06 cents per sq ft
2 coat: .13 cents per sq ft
3 coat: .20 cents per sq ft

Pressure Wash    .14-.18 cents per sq ft    

 
This data has not changed in 4 years.  Areas with a high number of illegal workers,
The prices are lower.  Bid low to win and profit less.  These prices are set to profit 40% of your contract value. $10,000 contract, you will earn $4,000 in profit.  Or you can use This pricing formula sheet  

Reason 3: Less competitive marketplace (construction
clean contracts are easier to secure once you find them)

Construction cleaning opportunities come and go pretty quickly, and these jobs can be hard to find regularly, if you don’t know how and where to look for them.

Most cleaning companies DON’T know how to find the jobs close to final cleaning purchase date or they are chasing jobs in which the project manager has already purchased final cleaning. IntelConstruct will give you the decision makers on only jobs that are in progress and the project manager will accept a final clean price now.    

Fact: In our years as a construction cleanup broker, we’ve secured 40% of the contracts we submit proposals  on for our cleaning partners.   This number is not based on winning bids without seeing the site or at bid due date (before the general contractor has been awarded the contract to start building)   Our win rate is high because we know that project manager’s usually want a cleaning company to walk each job site close to completion to confirm the job scope and submit a proposal after meeting the superintendent on site.

Best sources to find construction pre award bidding opportunities.  The General Contractor has not been awarded yet, and needs subcontractors to submit a quote based on the Architectural Drawings (high chance GC will not win their bid at this time):
Blue Book, LDI, ISQFT, Gradebeam, BidMail, ProjectConX, New Building permits, (public).  

Reason 4: Make better use of the resources
you already have, to make more money

If you have a cleaning business, you’ve likely invested in some assets which you’re not using to their full potential, so you’re sitting on a big growth opportunity.

Equipment (floor scrubbing machines, pressure washers,  window cleaning equipment, mops and bucket), and manpower (schedule changes per job requirements.)

When I talk about manpower as an asset what I mean is this: If you’ve got a crew working for you, and you’re not keeping them busy enough, they’ll eventually leave. I’ve seen this happen a lot, and it can really slow you down.

Losing good employees is a huge pain in the butt, and it costs your business money in the long run. Keep your crews busy, keep their wallets full, and they’ll stick with you for the long haul.

Many companies do  not hold workers compensation insurance, its just not needed for many longer term janitorial contracts.   Yes, General Contractors will require all subcontractors to hold this  usually a 1 time annual payment, so  you can bid projects without having  this insurance in place  , then once you are awarded the final clean contract, you have your insurance agent put the policy in place.

Wouldn’t you rather be working ON your business, rather than working IN it?

Recap: If you’re running a cleaning company, and you want to make more money
with less stress and build a stronger business – construction cleanups are a perfect fit.

• They diversify your revenue streams and provide some cushion for tough times.
• They’re more profitable and less competitive than janitorial contracts.
• They allow you to make money off the assets you already have, including equipment and staff.

I hope you see where I’m coming from here, and I hope you’re excited to start landing more (or your first) construction cleaning contracts. Over the next few blog posts in this series, I’ll show you exactly how to do it.

In the next blog post, I’ll show you the most effective ways I know of to FIND construction cleaning project opportunities in your area.

P.S.    If you’re sold on the concept of construction cleans and want to get started immediately, the easiest and fastest way to get in the game is by joining IntelConstruct.   Signing up takes just a few minutes and you can start contacting red hot leads within a few hours.