An economic recession affects everybody, from small businesses to large enterprises and every consumer connected. Stalling economic growth and the threat of compounding financial challenges place everybody on high alert to save money and cut expenses. According to many economists in both the private and government sectors, we may be heading into strained economic times as North America continues to grapple with inflation, causing price hikes across critical services and products, including food, gas, and energy.
The threat of a looming recession coupled with historical inflation has been complex for many, and the commercial cleaning industry is no different. Gas prices have directly impacted every commercial cleaning small business operation by increasing the cost it takes to drive from each client to the next. Add in supply chain challenges and transport costs of materials, and a business that relies heavily on labour means that prices rise significantly simply to operate the business. These are all direct costs and difficult to control or mitigate.
For small businesses, the threat is compounded by competing with larger companies fighting for market share during tense economic times. Both have much to lose, but small businesses face closure while larger companies can downsize to accommodate supply and demand. These businesses include frontline services such as healthcare, groceries, commercial cleaning, children’s goods, and many others. The good news is that commercial cleaning businesses have fared well during previous recessions or other factors that cause national concern – the pandemic being a great example – and several reasons continue to shine through from these earlier periods of economic uncertainty.
First, many brick-and-mortar businesses simply can’t afford to eliminate commercial cleaning services. Businesses must maintain the highest standards and quality when keeping storefronts clean. These businesses include medical and healthcare facilities, pharmacies, commercially packaged goods, grocery stores, and many others. Additionally, some larger businesses may reduce their workforce by laying off internal custodial staff only to outsource to a commercial cleaning company. The reason for this is to eliminate the cost of providing healthcare and other benefits. As this is not ideal (we don’t like seeing anybody lose a job) initially, those laid-off workers could now work directly with a commercial cleaning company and perhaps even buy into its franchise system.
This is not to say that commercial cleaning isn’t impacted at all – still, there are ways to help mitigate how a recession could affect your business.
Invest in technology when possible
Investing in technology is crucial to reducing the need for labour while ensuring you satisfy your customers’ expectations. One way businesses can ease financial burdens is by automating repetitive tasks. Turning to automation doesn’t mean companies should lay people off. Instead, if unfilled positions can be absorbed with current staff (or the business owner), do that – knowing it’s a short-term fix – then research the proper, cost-effective technology to handle those tasks. Think of how to use technology to automate your CMS or human resources tasks. See where you can outsource, automate, or absorb multiple positions into one. As a commercial cleaning operator, you are likely wearing many hats.
Re-evaluate expenses
This is a given and the most common, validated knee-jerk response. Inflation has been problematic for many businesses, and the commercial cleaning industry is no different. For example, the price of gas has eaten into the cost of driving from client to client. Include supply chain issues, and the cost to simply operate a business is now much higher. These direct cost increases cannot be eliminated, altered, or re-evaluated. However, it is advisable to evaluate discretionary spending and cut where possible. Taking the business model back to basics is a good rule of thumb. Cut the fat such as non-essential travel (especially since we know that most meetings and business processes can be conducted virtually) and focus on relationships, not production.
Invest in people and business growth processes
Some businesses may need to invest in frontline positions depending on the industry, but they shouldn’t forget about high-level staffing. Companies shouldn’t necessarily halt hiring, but make sure the company has a clear vision during a recession and competent employees at the highest levels. Your senior team will drive the company’s survivability if you navigate uncharted business climates.
Most importantly – and a mistake many companies make – be wary of cutting marketing expenses and employee benefits. This is particularly important in the commercial cleaning business. Commercial cleaning operators should find every way possible to protect their employees, as they also face strained economic times. Finding ways to continue caring for employees will win loyalty down the road. Additionally, marketing is one of the primary expenses that many people cut but shouldn’t. Marketing expenses are earmarked for sustaining the business and communicating with your customers. If you cut marketing down to zero, how will customers know you’re still open and delivering on your company’s value proposition?
Pursuing growth during a recession means taking risks and maintaining expenses that boost a company’s image and products or services. Cutting too much will leave companies worse once the economy picks up. The best move is to look at every downturn as an opportunity. Never, ever operate your business from a place of fear.
Adam Povlitz is CEO & President of Anago Cleaning Systems, one of the world’s leading franchised commercial cleaning companies and a leader in technological advances relating to business operations and janitorial services.
