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Make Money by Cleaning Offices – Should You ‘Subcontract’?

October 12, 2012

You might wonder  if there are ‘easy’ ways to enter the commercial cleaning business.  Let’s just say there are ‘different’ ways; then look at a few of them. If you want to make real money cleaning offices, you’ll want to explore the possibliities.

 

Subcontracting

 

Some large national janitorial services have contracts with businesses throughout North America. In many cases they will seek out local contract cleaners to service those accounts. Many start-ups have learned to make money cleaning offices by subcontracting from these larger national firms.

 

Purchasing janitorial accounts

 

One way to gain experience as you make money cleaning offices is to purchase janitorial accounts from another cleaning service. Here, you are not buying a business, just cleaning contracts. The price set on the accounts is generally based on the amount of the monthly billing. If you want to start out by buying a janitorial route of several accounts with a substantial monthly income, expect to pay several thousand dollars. Such a janitorial route will often sell for 3 to 5 times the monthly gross billing.

 

If you choose to do this you should arrange to pay for the accounts over a period of time rather than up front. In this way the jobs can pay for themselves as you make money cleaning offices and you won’t risk paying for accounts not worth having. Be careful. I have seen jobs sold in which the people doing the actual cleaning were earning little more than minimum wage.

 

Purchasing a franchise

 

I’ve talked about franchising in earlier posts. Here are a few more thoughts:

Buying a franchise will generally get you a recognized name, training, a business development plan, and yes even help in acquiring your initial accounts – all for a fee. That fee may run into tens of thousands of dollars, and you’ll usually be required to purchase the equipment and supplies from the franchisor. In addition, you would usually have to pay an ongoing royalty of your gross sales. While it is certainly possible that purchasing a franchise will give you a head start to make money cleaning offices, I believe that any of the business and professional skills necessary can be learned without forfeiting thousands of dollars, and then paying a royalty on your earnings for the lifetime of business.

 

One thing often forgotten about franchises: they do fail. Franchises fail every day. Among the top five franchises the failure rate is over 16%. Now failing is bad enough, but the standard way many people buy a franchise is to take out an SBA loan with your home pledged as collateral. What this means in the real world is that one out of every five attempts among the five most popular franchises in the US  goes bankrupt trying to make his dream a reality.

 

In the real world, franchisors and franchisees often have a love-hate relationship. As a new franchisee, you may be lavished with lots of attention until your businesses is up and running. But there are new franchisees coming along, and they require attention. After a while the franchisee begins to realize that no matter how good a franchise, no matter how much support was provided, the success of the business is ultimately on his shoulders. If the business doesn’t go well, the new owner often blames the franchisor for not equipping or training him properly. If the business does well and the business owner has to begin making royalty payments, he often resents the franchisor. In either case initial love is replaced with something much less.

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