I trust everyone had a joyous Holiday Season, with lots of food, warmth and good times. I always tell myself that I should practice the cheer, love and giving of Christmas all year long. But I, like others, seem to get back into the groove and before long, I’ve forgotten the Christmas spirit and it’s business as usual.
Happy New Year
It’s that time of year again. A couple weeks writing the wrong date on checks and time to get vehicle license tabs again. It’s also a great time to look toward the future. I find that making a list of projects each day, each week and monthly helps me to get focused on what needs to be done, verses what I might want to do, but not necessarily what I should be doing. This year I’m going to put some extra effort into developing and following a specific marketing plan for my business. Check with me at the end of 2002 to see if I was able to follow it and if it made any difference.
A Review of 2001
Not considering the death and destruction of 9/11/01, it was a pretty good year for the cleaning industry and cleaning businesses. Even with the economy going to hell in a hand basket, business was brisk and plentiful for most companies. In some ways it was business as usual, more belt tightening, more leaner and meaner, more hustling a little faster, and more dirt that somebody was willing to pay to have you haul away.
Mold was big in 2001 and will be even bigger in 2002, even though I think it’s overblown and a great way to rip off the insurance companies, not that the insurance companies haven’t done their share of ripping people off. When it comes to disaster clean up, fire restoration and mold remediation, these services are about as close as you can get to legalized theft without the fear of getting a free ride to the county jail in a police car.
As for insurance companies, I got a letter from my insurance company last month, just a friendly reminder that due to the problems associated with 911, should I file a claim of any kind, I should understand that there could be extended delays in processing and paying my claim. Let me see, insurance companies are already notorious for slow pay, 90 days or more being considered normal. So I wonder what they mean by extended delays, maybe six months? That should settle real well with all the contractors who are already holding at least 90 days worth of insurance company paper.
The U.S. government (OSHA) is set to once again issue its long awaited ergonomics standard, we’ll see if it becomes reality or if, once again, business interests are able to quash the effort.
A lot of new and innovative equipment, chemicals and supplies came on the market in 2001, I expect we will see many new additions in 2002 as well.
Projections for 2002
After a little crystal ball gazing here’s what I see.
This will continue in the industry with chemical and equipment manufacturers, as well as with suppliers and distributors until one or two major players are left in each category. Cleaning contractors will continue to be impacted as their customers are bought up, merge with larger organizations, close their doors or cut back on services in an effort to increase profits. Smaller contractors will feel the pinch when larger multi-location interstate customers, in an effort to reduce costs, give all their work to one large national firm who then subcontracts the work at a lower rate.
Full service contractors who offer a variety of services from cleaning and landscaping to cooking and security will continue to gobble up market share with larger national and international companies who want to save money by reducing the number of vendors they deal with.
Hot Services for 2001
Mold remediation and disaster clean up will continue to be good as weather extremes are experienced around the world. You can expect more high and low temperatures, as well as floods and high wind. Our climates are changing as the earth warms up. This will have a negative impact the lives of many, while creating work for others.
Some flash in the pan services that you are likely to see come and go are gum removal and grout cleaning. Longer-term business opportunities will relate to wood and stone maintenance and restoration and providing quality services to niche markets in local and regional areas. Something large companies haven’t yet figured out how to do effectively.
In my opinion, the U.S and world economies are out of control. Nobody really knows for sure what the economy will do. We are truly in uncharted territory. Economists are predicting a pick up of business by mid year. I think that’s nice of them, but I don’t see any good reason to believe that it will actually happen. I expect economists and bankers will be saying the same thing in June of 2002. Only by then they will be predicting a pick up in business by the end of the 3rd quarter or the end of the year, in hopes that Christmas sales and left over budget surpluses will again increase sales.
I believe tax cuts, interest rate reductions and the war on terrorism are artificially propping up the U.S economy and that sooner or later we will have to find a way to get back on stable economic ground. At the same time, marginal businesses are closing and thousands are being laid off as business sags. In response, corporations are rushing to cut costs in an effort to prop up their balance sheets and stock values. And Amazon.com which continues to lose money, will, in the next six months, either close or merge with another company.
The only way out of the economic quagmire, that I can see, is for workers and businesses to continue to increase production, while reducing the cost of goods and services to their customers. Generating more profit is the only way that I know of that a company or a country can truly achieve long term prosperity.
My prediction, continued positive predictions by others while business in general and the economy continue to limp along over the next 24 to 36 months, after which the economy will stabilize and solid long term growth will return.
Cleaning Industry Trends
In the U.S., finding and keeping good cleaning help will continue to be the major problem that employers face.
In an effort to solve problems and generate sales, end users, manufacturers, suppliers and distributors will continue to offer and place more emphasis on employee training.
The public will continue to become less tolerant of unsanitary conditions in public and private restrooms. They will speak with their feet and pocket books. Smart companies will clean up and dress up their restrooms, in some cases making them luxury retreats, because doing so will generate positive customer feedback and loyalty.
I think you’ll see more interest in green or environmentally preferable products as prices come down and effectiveness increases. I think you’ll see more use of vapor cleaning systems and micro-fibers over the next year.
Carpet sales will continue to decrease as both residential and commercial locations install more wood, stone and laminate surfaces. Laminates floor coverings over the next year or two will solve their installation and moisture related problems and will take a far greater share of the market than anyone expects at this time.
The Carpet and Rug Institute (CRI) in an effort to increase carpet sales will come out with a Green Label Cleaning program.
Industry trade shows will continue to take a beating as people travel less. Regional shows will become more popular as will regional trade associations for cleaning professionals.
In the next year I think you’ll see a long over due change in top management at the Building Service Contractors Association International (BSCAI).
I guess I’ve said enough for one year. I expect I will get a few phone calls from some who may not agree with or appreciate my comments. So be it.