Janitorial Services

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 59,000 janitorial service providers in the US clean building interiors, windows, and the interiors of transportation equipment, such as aircrafts. Specialized services include disaster recovery, medical cleaning, and mold clean up. Some companies provide outdoor services, such as snow removal and lawn maintenance. Non-residential customers, such as those in institutional, office, and commercial buildings, account for 80% of industry revenue.

Immigration Laws

Most janitorial jobs do not require workers with English-speaking skills, and tend to attract both legal and illegal immigrants.

Green Cleaning

Growing concern with the environment and sustainability issues has led to increased demand for the use of eco-friendly cleaning products and methods.

Industry size & Structure

The average janitorial services provider operates out of a single location, employs about 20 workers, and generates $1 million annually.

    • The janitorial services industry consists of about 59,000 companies that employ over 1 million workers and generate about $60 billion annually.
    • The industry is highly fragmented; the top 50 firms account for 28% of industry sales.
    • The industry includes national and regional companies, franchises, and independent operators.
    • Large companies include divisions of ABM and ServiceMaster (Merry Maids).
    • Non-residential customers, such as those in institutional, office, and commercial buildings, account for 80% of industry revenue.
                                Industry Forecast
                                Janitorial Services Industry Growth
                                Source: Vertical IQ and Inforum

                                Recent Developments

                                May 17, 2023 - Clean Restrooms Drive Sales and Repeat Business: Survey
                                • A new survey by the Bradley Corporation found that 60% of consumers will spend more money at an establishment if they know it has clean and maintained restrooms, according to CleanLink. The Healthy Handwashing Survey also found more than half of those surveyed said an unclean or unpleasant public bathroom shows poor management and lowers their opinion of the overall establishment. In the 55-plus age category, more than 60% reported poorly maintained bathrooms lessen their view of the company. According to Jon Dommisse, VP of marketing at Bradley Corporation, “Restroom maintenance may seem like a business no brainer but limited budgets and facility staffing issues mean that companies are doing more with less staff and resources. Nevertheless, customers place a high value on clean restrooms – and reward businesses that offer them. It’s incumbent upon facility managers to prioritize regular restroom cleaning and make sure that everything is in good working order.”
                                • Labor quality was the top business problem for small business owners, called out by 24% of owners, according to a survey by the National Federation of Independent Business (NFIB). The NFIB’s Small Business Optimism Index declined 1.1 points in April 2023 to 89.0, marking the 16th consecutive month below the 49-year average of 98. According to NFIB Chief Economist Bill Dunkelberg, “Optimism is not improving on Main Street as more owners struggle with finding qualified workers for their open positions. Inflation remains a top concern for small businesses but is showing signs of easing.” Owners are still encountering supply chain disruptions, with about half reporting a significant or moderate impact on their business.
                                • According to the Jobber Home Service Economic Report, sustained consumer demand, new business formation, and rising costs are trends for home service businesses such as cleaners, landscapers, and HVAC technicians. Home service businesses had low to flat revenue growth in 2022 over 2021, following very high growth in 2021; gains were primarily driven by higher invoice values as the number of invoices sent per month has only risen slightly. The rising costs for home service businesses have contributed to an average invoice value increase of 10% year over year since 2020. New business formation has consistently grown since mid-2020, with more than 40,000 new construction businesses and 30,000 new lawn care and cleaning businesses starting each month. Materials and labor costs rose in 2022, two major costs for the home services industry. Commodities with the biggest effect on service providers in 2022 were gasoline, HVAC equipment, and steel products.
                                • 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 janitorial services will increase as more workers return to their offices regularly.
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