A large number of window cleaning businesses start out with residential work. However, as a window cleaning company grows, commercial business becomes more accessible and a viable source of revenue. If you own a window cleaning business, you might ask how much commercial work you should take on as part of your ongoing expansion. When should you take it on, and should it replace any of your existing residential business?
This article aims to help you make those decisions by highlighting the pros and cons of commercial window cleaning work along with highlighting key differences to residential work.
Generally (and with a few exceptions) commercial window cleaning jobs are bigger and therefore carry higher prices. As a result, you need fewer commercial jobs to make up the equivalent income in residential work.
You’ll therefore have commercial work in lower volumes – whilst this can be a disadvantage (more on that later) it also has it’s advantages. A major example is the fact that you have fewer customers to manage, communicate with, schedule and chase for payment.
Higher profit margins
Businesses are generally less price sensitive than consumers meaning that, commercial window cleaning rates are generally higher than domestic. As a result, you have the opportunity to price commercial business with higher profit margins, meaning it can be more lucrative than residential work.
Outside the UK, commercial window cleaning work is more regular than residential, meaning it provides a more frequent and often more reliable source of ongoing income. Even in the UK, the same applies to some types of commercial business; for example shop fronts are often scheduled weekly or fortnightly.
Though getting a mention in our ‘Pros’ section, having a lower number of individual jobs forming your income can present problems. As an example, let’s imagine 4 large commercial contracts make up your company’s entire income. Losing only 2 of those contracts, a perfectly feasible possibility, would result in losing half of your earnings. Losses of that size have the potential to cripple many businesses. With residential work, your risk is spread much more thinly across a large number of jobs.
Whilst fewer jobs mean less customers to manage, each individual commercial job requires more admin work when compared with residential business. For example, health and safety documents often have to written and provided along with proof of your business’s liability insurance. Quotes usually have to be given in writing, you’ll always be required to provide an invoice and you may need to implement measures to protect your business including work satisfaction forms. Whilst modern window cleaning software has made some of those tasks far easier, they are still tasks not usually required for residential jobs.
More subject to change
In the commercial world things can change quickly, and with very little warning. Cutbacks, buyouts, staff changes, and businesses going into administration are just some of the things that can mean you lose work overnight. Competitor undercutting is also far more common and customer loyalty can be harder to maintain – for example if you’re working directly for a commercial customer, your relationship is often with a staff member who is subject to all of the above factors. The same goes if you are subcontracting. This can be a major concern when it comes to commercial work, and many window cleaning business have lost jobs due to changes completely outside their control.
Specialist equipment requirements
Many commercial jobs require specialist equipment. If you don’t already own equipment capable of doing the job, you’ll need to invest and it will take a while to recoup that investment. In addition, some jobs require the rental of specialist access equipment like cherry pickers. Whilst you would allow for this when pricing the job, it makes the process of organising and completing the work more complex.
Many businesses inflexibly operate payment terms that can range from 30-60 days – and there is no guarantee they will make payment on time. Whilst it isn’t always an issue, chasing for payment can be time consuming and late payments are a very common problem for many window cleaning businesses – having a serious impact on cashflow.
As you can see, there are both advantages and disadvantages when it comes to taking on commercial business. It’s for these reasons that many window cleaning businesses choose to benefit from the best of both worlds and have a split of both commercial and residential work.
Header image provided by Concept