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Janitorial Services 2018Clean MoneyAccording to the latest data from the US Census Bureau (2015), there were 55,998 janitorial services companies in the US, 58.5% of which had 1–4 employees. The Bureau of Labor Statistics forecasts job growth at 10% through 2026, faster than average.As of May 2017, a total of 2,164,040 million people was employed in the industry, including company-employed janitors. Janitorial service companies employed approximately half of this number, or slightly more than 1 million people.Annual revenues for the janitorial services industry were estimated at $44.267 billion for 2017 and are expected to increase 1.9% during 2018. Office buildings are the largest segment of commercial cleaning contracts, at 31%.Building Service Contractors’ 2016 RevenueRevenue Compared to 2015PercentSignificantly higher18%Slightly higher40%The same20%Slightly lower17%Significantly lower5%CleanLink, July 2017 Looking Forward to More CleanlinessContract cleaners were optimistic about 2017, with 82% expecting higher profits, with most (52%) envisioning slightly higher profits and 30% thinking profits would be significantly higher. Only 4% thought profits would decrease during 2017.Three-quarters of contract cleaners thought business conditions would improve and 40% thought cleaning frequencies would increase. Fifteen percent planned to buy another cleaning company within the next panies with in-house custodial departments are concerned about having their work outsourced, and this is a trend in the industry. Of those custodial executives who say outsourcing is a threat, 78% said all cleaning tasks are at risk of being outsourced.Most Frequently Outsourced TasksTaskPercentTaskPercentPest control78%Carpet cleaning25%Grounds care/landscaping46%Security23%Fire and water restoration36%Matting services21%Window washing37%Floor stripping/finishing18%Snow and ice removal33%Graffiti removal7%CleanLink, June 2017 Cleaning Company MarketThe 50 largest US janitorial companies generate approximately 30% of industry revenues. Since office cleaning is a major portion of the business, most work occurs in big cities, such as New York, Chicago, Los Angeles, Washington DC and Houston.Large companies have the advantage of servicing customers with multiple locations, especially when located in different regions. The biggest US companies are ABM Industries, ServiceMaster, Coverall North America, Jani-King and Stanley Steemer.Franchises account for approximately 10% of total industry revenues. Several cleaning franchises were listed in Entrepreneur’s 2018 Franchise 500, including Jan-Pro at #4, Anago at #31, Vanguard Cleaning Systems at #44 and Buildingstars at #63.Selected US Building Services Contractor Revenue, 2017Company2017 RevenuesYOY % ChangeABM Industries$5.5 B+6.0%ServiceMaster$4.9 B+6.0%Coverall North America (franchise)$238.3 MNAJani-King (franchise)$44.8 MNAStanley Steemer (franchise)$242.0 MNAHoovers, CNBC and ServiceMaster, April 2018Opportunities and ChallengesThe average cleaning company loses as much as 55% of its customer base every year because of a lack of service quality. The nature of the business is good cleaning jobs go unnoticed by customers, but problems cause immediate scrutiny and, often, dismissal.The increasing number of industrial buildings will result in an increase in the industrial cleaning segment of the market, which, because of its challenges, such as working with dangerous chemicals, is the highest priced service. The commercial cleaning business is tied closely to new construction of non-residential buildings, which is forecasted to increase 4% during 2018, twice the rate of 2017.Non-Residential Building Forecast by Type, 2017 vs. 2018Building Type20172018Hotels8%-2%Office5%6%Retail-8%1%Education5%6%Healthcare1%5%Public buildings2%6%Industrial0%4%Other non-residential2%0%Oldcastle Business Intelligence, October 2017Janitorial Industry TrendsJanitorial companies are being pressured to maintain low costs while still providing a high level of service. Some companies are boosting profits by adding value-added services, such as window washing or carpet cleaning, to existing panies are training employees to be more productive to retain more accounts and keep costs low. Some companies are performing background checks on employees.The green cleaning trend continues to advance. Some regulatory agencies, such as LEED and CRI, are focusing more on healthy indoor environments, which is driving the use of safe cleaning products. This is particularly true for healthcare facilities.Additional AnalysisMany janitorial companies can utilize technology solutions to improve productivity. More than half (54%) use software for job scheduling, inspections, purchasing, etc. Experts agree updated software is a critical tool for both profitability and growth. Because the margins are so small, any fluctuation in labor or material cost could result in an unprofitable account, so companies must scrutinize those costs closely, daily or weekly.Since a good cleaning job is generally taken for granted or ignored by clients, but problems are quickly noticed, janitorial companies can use smartphones to photograph their sparkling work and send them to clients in a weekly email, noting anything they did “above and beyond.” Such regular communications will keep janitorial services company top of mind with their clients in the event there are any building management changes as well as reduce attrition.Management Priorities Custodial Managers Plan to Emphasize During 2018PriorityPercentHiring/maintaining a quality staff34%Improving staff performance/cleaning times15%Cutting costs14%Improving our overall perception10%More/better staff training9%Increasing budget dollars8%Increasing staff4%Green cleaning and sustainability4%More management training1%CleanLink, June 2017Sources: Statista Website, 4/18; US Census Bureau Website, 4/18; Entrepreneur Website, 4/18; CleanLink Website, 4/18; Bureau of Labor Statistics Website, 4/18; First Research Website, 4/18; CNBC Website, 4/18; ServiceMaster Website, 4/18; Hoovers Website, 4/18; Building Solutions Website, 4/18; Services Magazine Website, 4/18.Updated: April 2018? 2018 Media Group Online, Inc. 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