Janitorial Services Business 2012
The Janitorial Services Business is classified under NAICS code 561720 and SIC 7349. After reading this janitorial services market research report, also consider:
- Cleaning Services Business (original SBDCNet research report)
- Find a Janitorial Services Business Plan Template
Janitorial Services Business Overview Trends
The US janitorial services and carpet cleaning industry consists of about 50,000 janitorial companies and about 9,000 carpet and upholstery cleaning companies with combined annual revenue of about $35 billion. Major companies include divisions of companies such as ServiceMaster and ABM Industries, private companies such as UGL Unicco and Stanley Steemer, and franchisers such as Coverall Health-Based Cleaning System and Jani-King. The industry is fragmented: the 50 largest companies generate about 30 percent of revenue. Janitorial services generate most of the revenue for the industry.
Commercial real estate occupancy and income growth drive demand for cleaning services. The profitability of individual companies depends on good marketing. Large companies have an advantage in serving customers with multiple locations. Small companies can compete effectively in local markets, especially for small business and residential customers. Both segments of the industry are labor-intensive: for janitorial services, average annual revenue per employee is about $35,000; for carpet cleaning about $70,000.
PRODUCTS, OPERATIONS TECHNOLOGY
Janitorial services account for about 90 percent of industry revenue. Janitorial work includes general services, such as cleaning, trash pickup, floor polishing, and the specialty services of cleaning carpet and ducts and washing windows. Operations consist of crews cleaning commercial, industrial, and residential buildings by hand or with the help of basic equipment like floor polishers.
Carpet and upholstery cleaning firms account for about 10 percent of industry revenue
Commercial, industrial and government entities that contract operators to clean facilities are the primary markets for the Janitorial Services industry, but demand from these clients fell during the recession Consequently, demand for janitorial services suffered and the industry shrank, particularly during the height of the Great Recession. Revenue fell 5.3% in 2008 and a further 6.1% in 2009. Over the five years to 2011, industry revenue is expected to contract at an average annual rate of 1.7% to total $40.6 billion
The Janitorial Services industry will face far brighter conditions over the five years to 2016, due to the projected upswing in the economic cycle In particular, the education, health and medical industries will outsource many cleaning needs, providing sustained growth for the industry. As a result of these improving conditions, industry revenue is forecast to increase an average of 3.3% per year to total $47.7 billion in 2016, including a 3.1% jump in 2012
In 2012 Residential and non-residential construction activity will escalate, resulting in new cleaning contracts and more robust revenue growth. Demand for domestic cleaning services is also projected to rise; as unemployment trends downward, household disposable income will grow. The primary users of household cleaning services are households in the upper income brackets. The number of households with annual incomes exceeding $100,000 is expected to rise at an average annual rate of 1.6% between 2011 and 2016, which will result in greater demand for residential cleaning services.
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Janitorial Services Business Labor Market Conditions
Janitors and building cleaning workers held about 2.3 million jobs in 2010. About 32 percent were employed in the services to buildings and dwellings industry, and another 14 percent were employed in elementary and secondary schools. The remainder was employed throughout other industries.
The median hourly wage for janitors and building cleaners was $10.68 in May 2010. The median wage is the wage at which half the workers in an occupation earned more than the amount and half earned less. The lowest 10 percent earned less than $7.86 per hour, and the top 10 percent earned more than $17.88 per hour.
In May 2010, the median hourly wages in industries employing some of the largest numbers of janitors and building cleaners were as follows:
Employment of janitors and building cleaners is expected to grow 11 percent from 2010 to 2020, about as fast as the average for all occupations. Many new jobs are expected in facilities related to health care, as this industry is expected to grow rapidly. In addition, as more companies outsource their cleaning services, janitorial contractors are likely to benefit and experience demand. However, employment growth is expected to be tempered as fewer new buildings are built over the projections decade.
Job prospects are expected to be favorable. Those with experience should have the best job opportunities. Most job openings will come from the need to replace many workers who leave or retire from this very large occupation.
Janitorial Services Business Startup Costs
Cleaning Services Business Information Sources
- Cleaning Business Magazine
- The Commercial Cleaning Industry Overview from Jan-Pro
- SBDCNet Market Research Report: Commercial Residential Cleaning Services
- U.S. Commercial and Residential Cleaning Services Industry Report
- Excerpt: This study analyzes the $53.6 billion US commercial and residential cleaning service industry. Revenues for contract commercial and residential cleaning services are forecast to advance 4.5 percent annually through 2013. Exterior building cleaning will be one of the fastest growing services, while interior cleaning remains dominant. Residential and institutional buildings will see the biggest market gains.
For the full text of any content in this Cleaning Services market research report, the link has been provided for the report publisher, while a database article can be obtained from the local public or academic library or purchased from a document delivery service for a nominal fee.