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The Impact Of The Recent Recession On The Cleaning Industry

The Impact Of The Recent Recession On The Cleaning IndustryDuring the late 1990s and well into the first decade of the 21st century, many cleaning and janitorial product supply and service companies benefited from a growing economy, which at that time was in far better shape than it has been since 2008.  During that earlier period, clients and customers were not as budget conscious as they are today.  They weren’t as nitpicky about product or service pricing and were considerably more liberal about their spending and the specifications of each product that they purchased.



Although the industry witnessed the onset of more new companies, there seemed to be an endless supply of clients and customers.  However, when the economic downturn began, it undid most of these positives as well as certain business inefficiencies, the growing revenues they had been experiencing, and the increase in profits that resulted.  For many businesses, especially the newer ones started up during the “boom” period, this was a nightmare that became an unwelcomed reality.



As competition became more widespread and the pressure of price haggling became more intense, business profitability decreased dramatically and eroding profits were common throughout the industry.  Additionally, those business inefficiencies mentioned above were no longer being overlooked.  Many new companies as well as existing were no longer profitable and wound up closing their doors.  Even the more successful, well-established companies had to redefine the meaning of “business as usual.”



However, there are always exceptions.  Although profit margins were diminishing, many companies realized that the solution to this economic dilemma began with the client or customer.  What they understood was shrinking profit margins resulted from much bigger issues, the biggest of which was how to reverse declining profits.  The smarter companies took steps to dramatically to eliminate or reduce redundancies dramatically while at the same time cutting some operating expenses and increasing efficiency in the process.



It was concluded by many industry experts that the key was the elimination of as much waste as possible and an increase in efficiency levels.  The biggest drain was poor relationships between product distributors and manufacturers.  It was discovered that redundancies in supply chain costs occurred roughly 25% of the time.  When you combine the redundancy issue with increased internal waste and the state of the economy, you had the perfect recipe for disaster.  Keeping this in mind, you should try and uncover these problems within your company so that you can reverse them and get back on a profitable path once again.