Setting up a cleaning business is todays blog topic.
The audience is aimed at Business Studies students, as well as those considering setting up a cleaning business.
The cleaning industry is a growing business in the UK, currently worth over 9 Billion pounds a year, according to the British Business Bank .
The cleaning sector can be split into two types, domestic and commercial.
Domestic refers to cleaning carried out in peoples homes.
Commercial cleaning is done in business premises, such as offices and factories.
According to Churchill Home Insurance’ 12% of uk homes employ a cleaner.
For someone wanting to set up as a cleaner, there are many factors to consider.
Supply and Demand
The cleaning industry is expanding, which means that demand is growing.
This is being driven by increasingly busy lifestyles of more affluent professional people.
The supply side of the cleaning industry, is the people who actually clean houses and offices.
While I am not going to go particularly into the demographics of the typical cleaner, it is generally fairly low paid, and has a largely female workforce.
Typically cleaning pays around £10 an hour in 2022, though there will be regional variances.
For example places like London, where the cost of living is higher, will likely offer higher wages.
Barriers to Entry
Barriers to entry is a term which describes how easy it is to set up a business in a particular industry.
Setting up a cleaning business has what are known as ‘low barriers to entry’.
Low barriers to entry mean that it does not need a lot of money, or a high level of training and specialist skills, to start a cleaning business.
So you may be thinking great, I can start a cleaning business easily, therefore its the perfect business.
Well yes and no, as you need to consider competition.
If its easy to start, then it will be an attractive business for other people to also start.
If you are in an industry with over an supply of similar businesses, this can make it harder to gain work, or potentially reduce wages.
Wages are potentially reduced, as price becomes a factor in the buyers (customers) mind, as they know they have lots of choice of supplier.
Fortunately demand for cleaners is growing, and supply is struggling to keep up with demand.
If there is less supply of cleaners to go round, this will tend to put up prices over time, as buyers have to pay more to secure the service.
This brings us onto something called ‘price sensitivity’.
Price sensitivity refers to how much a change in price, affects a consumers willingless to buy a product.
Some products and services are very price sensitive, and an increase in price will make consumers less likely to buy.
Buyers are generally less price sensitive to essentials such as basic food stuffs and essential utilities such as electricity.
Differentiation is important in businesses, and is basically about what makes you different to the competition.
You need to ask yourself this question for a number of reasons.
Firstly if there are a lot of competitors competing for a releatively small number of work opportunities.
This is especially relevent to commercial cleaning contracts, where being able to provide something your competitors can’t will be attractive to buyers of your service.