Now that the economy is stabilizing and even growing in some sectors, many businesses are considering purchasing new equipment, although some business owners still don't feel confident enough about the current economic outlook to make such an important investment. Instead, they are renting machines, tools, and equipment on an as-needed basis, reasoning that, at least for now, rental is a safer and wiser option.
Building and industrial contractors are jumping on the renting bandwagon. “Renting equipment gives us the equipment we need, when and where we need it, without having to worry about capitalization, interest, amortization, depreciation, maintenance and repair costs,” says Jim Chesak of C&K Services, Newburg, Wis., which provides roofing, gutters, siding, and window installation and repair.
The rental industry may not have thought to look to the professional or commercial cleaning industry for potential customers in the past, but it is definitely a market worth investigating. Though estimates vary, the professional cleaning industry is believed to be worth $80 billion in the United States. It is also one of the fastest-growing industries in the country despite the recent recession.
While the cleaning industry did not escape the downturn unscathed, rental companies should know that it has traditionally been viewed as recession-resistant, or at least recession-resilient. Cleaning does not experience the ups and downs of the general economy as strongly as many other industries; instead, it tends to remain relatively stable over time.
What is the professional cleaning industry?
So why are those in the rental industry unaware of what the “jansan” industry (as it is referred to) is all about? For one, most cleaning work is done at night or during weekends, putting it out of sight, and out of mind. Secondly, though there are certainly some major players and giant corporations in the professional cleaning world, much of the industry is made up of mom-and-pop companies. Those mom and pop companies include not only the businesses actually performing cleaning services but also the distributors that market cleaning supplies and the manufacturers that produce them. It is these small companies — specifically cleaning contractors — who are important potential customers for rental businesses.
In recent years, the general public has become increasingly aware of the importance of the cleaning industry, especially as it relates to public health. The SARS epidemic several years ago, the many cases of Norovirus that occurred on cruise ships at about the same time, and, more recently, the H1N1 virus, all proved the importance of effective and proper cleaning to stop the spread of disease. These incidents also changed the focus of the cleaning industry itself. Instead of cleaning just for appearance, most cleaning professionals now realize that they also clean to protect human health, and that the tools and equipment they choose must also support this task.
The needs of the cleaning contractor
The best way for rental companies and managers to take advantage of the burgeoning cleaning market is to better understand the needs of the cleaning contractor. Accomplishing their tasks in an efficient, satisfactory, and cost-effective manner is a cleaning contractor's biggest concern.
In the professional cleaning industry, time is money. Many cleaning contracts and billing rates — from carpet cleaning to nightly cleaning in office buildings and schools — are based on the size of the facility and not necessarily on how long it takes to clean it. This means that if a contractor can satisfactorily clean a location in three hours instead of the six hours it takes a competitor, that contractor can either make twice the money or offer the customer a more competitive bid, winning more clients in the process.
This also means that janitorial equipment, such as floor buffers, walk-behind and ride-on automatic scrubbers, carpet extractors, wet/dry vacuum cleaners and other tools that are dependable, easy to use, and improve worker productivity, are at the top of any cleaning contractor's list.
Why would cleaning contractors rent?
Cleaning contractors might choose to rent their equipment because it's a simple, taxable expense with no amortization, depreciation, or any of the other tax issues that come into play when purchasing a machine that may cost several thousand dollars. But there are also other reasons that renting might make sense for professional cleaning businesses:
- Handling emergencies
For some cleaning contractors, the most lucrative part of their business is service they provide only occasionally, such as carpet cleaning and floor care. But emergency clean ups — for instance, those that may be necessary after floods or fires — can potentially be even more profitable. Because some of the equipment used for emergency clean up is only needed a few times per year, however, renting such machinery is often a less-expensive option than purchasing it. And many times, the rental costs can be passed on to the customer.
- New construction/remodeling clean-up
Clean up of construction and remodeling sites can also be a big moneymaker for some cleaning contractors. Once again, buying the equipment required for just a few jobs per year is not always cost effective, whereas renting on an as-needed basis is.
- “Try before you buy.”
Many cleaning contractors are interested in testing out different equipment models before actually making such an important purchase. Renting is a perfect way to conduct a hands-on test to see if the machine in question will meet their needs.
New challenges, new clients
While things look better with the U.S. economy, there are still uncertainties to be weathered by businesses of all kinds, but for those in the rental industry, this uncertainty can be turned into an opportunity to find new clients within the professional cleaning industry. Getting to know the professional cleaning market better, and providing the equipment needed by its constituents can be a win-win for cleaning contractors and rental businesses alike.
Gary Pelphrey is general manager of Powr-Flite Direct, a manufacturer of professional cleaning equipment for building service contractors and the rental market. He may be reached through the company website at www.powr-flite.com.
