Carpet and Upholstery Cleaners

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 7,200 firms in the US primarily clean rugs, carpets, and upholstered products, typically on-site at the customer’s premise. Residential customers account for 85% of sales, while commercial customers account for about 15% of sales. Firms may also offer damage restoration, janitorial and custodial, hard surface floor cleaning, water damage restoration, and auto detailing services.

Industry Contraction

The carpet and upholstery cleaning industry has contracted over time, as has the size of the carpet market.

Sensitivity to Economic Factors

Carpet and upholstery cleaning is a discretionary expense and a service that is easy to delay when finances are tight.

Industry size & Structure

The average carpet and upholstery cleaner operates out of a single location, employs about 5 workers, and generates about $518,000 annually.

    • The carpet and upholstery cleaning industry consists of about 7,200 firms that employ about 37,000 workers and generate about $3.7 billion annually.
    • The industry is fragmented; the top 50 companies account for about 23% of industry revenue.
    • Franchises account for about 19% of the industry. Major franchise operators include Stanley Steamer, Chem-Dry, and ServiceMaster.
    • Most firms operate within a limited geographical market; in an industry survey by Cleanfax, 87% of respondents serviced a 50-mile area.
    • Carpet accounts for 32% of the US flooring market, according to Floor Covering News.
                                  Industry Forecast
                                  Carpet and Upholstery Cleaners Industry Growth
                                  Source: Vertical IQ and Inforum

                                  Recent Developments

                                  Mar 17, 2023 - Gains in Office Occupancy
                                  • More workers are heading back into the office, with office occupancy remaining above 50% for the third consecutive week, according to Kastle’s 10-city Back-to-Work Barometer. Four of the cities tracked in the barometer for March 1 to March 8 increased during the week, and Austin, Chicago, Dallas, and Houston achieved occupancy rates above the 10-city average. The daily high in occupancy occurred on Tuesday, with an average of 58%, while the daily low was on Friday at about 33%. Kastle’s data shows higher occupancy rates than last year, as more employers require workers to return to the office. Law firms are showing higher occupancy, at nearly 62% for the seven-city average in the legal barometer, compared to other industries. Demand for carpet cleaning is expected to increase as more workers return to their offices regularly.
                                  • Nearly half of small business owners reported job openings they could not fill in February 2023, according to the monthly jobs report from the National Federation of Independent Businesses (NFIB). Of those companies hiring or trying to hire, 51% of owners reported few or no qualified applicants for the positions they were trying to fill. About 21% of owners reported labor quality as their top business operating problem, and 12% reported labor costs as a top concern. According to NFIB Chief Economist Bill Dunkelberg, “The small business labor demand remained strong in February. Small business owners are working to maintain competitive compensation and are raising compensation in the hopes of filling their open critical positions.” A seasonally adjusted net 17% of small business owners expect to create new jobs in the next three months.
                                  • Cleaning services providers saw some mixed results in the third quarter of 2022, according to the Home Service Economic Report released in November 2022 by Jobber, a job tracking and customer management software firm. New cleaning work scheduled was flat in Q3 2022 amid a 16% year-over-year decline in contract jobs. One-off jobs were down 1.4%. New work scheduled was also flat in Q3 compared to a year earlier. However, Q3 median revenue was up between 5% and 7% compared to Q3 2021. While cleaning services firm revenues were up, growth was down significantly from the year-over-year growth posted in Q3 2021, which was elevated due to very weak market conditions resulting from the pandemic in 2020.
                                  • Inflation remains the top business problem for small business owners, with nearly a third of owners reporting inflation as their single most important problem, according to a survey by the National Federation of Independent Business (NFIB). The NFIB’s Small Optimism Index declined 2.1 points in December 2022 to 89.8, marking the 12th consecutive month below the 49-year average of 98. According to NFIB Chief Economist Bill Dunkelberg, “Overall, small business owners are not optimistic about 2023 as sales and business conditions are expected to deteriorate. Owners are managing several economic uncertainties and persistent inflation and they continue to make business and operational changes to compensate.” Staffing shortages continue, with 41% of owners reporting job openings that were hard to fill, a historically high rate. Owners are still encountering supply chain disruptions, with about half reporting a significant or moderate impact on their business.
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