ICS Magazine

Business Cycles

September 15, 2008

In my 40-plus years of affiliation with the cleaning Industry I have watched closely the ebb and flow of our business in relation to the ups and downs of the general economy. Unlike direct retail, our service business seems to weather the storms of economic downturn and recession fairly well. When money gets tight, as it is now, consumers tend to want to take good care of what they have, as opposed to replacing their things with new.

Cleaning companies often experience actual increases in business when the general economy takes a downturn. There is an increase in consumers shopping for a bargain, but companies with strong reputations for providing good value for the price paid seem to do well during these times. One thing that is a bit different about the current times is the relationship of the economic downturn to the two issues of housing and the price of fuel.

The “correction” in the housing market has led to a decrease in New Housing construction which has definitely affected the carpet manufacturing industry resulting in some of the lowest levels of production and sales in recent history. This could have a delayed effect the cleaning industry, since these would be the carpets being cleaned in the years to come. The whole mortgage and foreclosure crisis has created a lot of pressure on the bank accounts of consumers. On the one hand, many are cleaning up homes to sell, while others are just letting things go, expecting to lose the property. This creates an uncertainty in the cleaning marketplace unlike anything I’ve seen before.

The price of oil and gasoline has cut deeply into the amount of “disposable” or elective income available for services like carpet cleaning. While travel plans and vacations can be modified, many must use fuel for transportation to and from work in order to keep their jobs. This need for basic transportation, plus the increase in the cost of shipping goods to market leading to higher prices for food and other basic necessities, will cause people to look at what is a necessity and what is a luxury.

To weather this storm, cleaning businesses need to emphasize the role cleaning plays in maintaining a healthy environment and protecting the value of expensive furnishings. Cleaning just for appearance reasons can put our service into the “optional” category, but health and investment protection are more likely to be placed in the necessity column and less likely to get cut out of the household budget.

I am still optimistic that the current times represent as many opportunities for the cleaning service professional, but careful marketing and packaging of our services emphasizing improving the healthiness of the home and protecting the value of investments is a necessity.