Have you ever wanted a business loan, a loan to get you started? How do the Banks know if your idea is going to fly or not? Are they really just buying into you and your past credit to satisfy themselves that the loan would be repaid? Or are they doing more? How can they tell if window cleaning is a good bet for them?
Business Manager: Hi, how can I help you today?
Me: I would like to borrow 20k for my new business venture.
Business Manager: Ok, what is your new venture?
Me: It’s a lemonade stand.
Business Manager: Ok, then…….?
That scenario of meeting the bank’s business manager is probably played out every single week, fifty two weeks of the year.
Heeeey, starting a lemonade stand might be the best business idea since sliced bread. Wait, ‘sliced bread’? Now there’s a business idea! The point is, what do the banks think of YOUR industry and ultimately your business idea. You might want to start your window cleaning, soft washing, pressure washing business with some decent top of the range equipment, you might need a van. It soon mounts up. Whereas some equipment manufacturers offer finance deals that include vans, invariably your needs may require an overall starter bank loan.
How does the Bank know? Lemonade stand or window cleaning?
Banks do their research and are nearly always thorough with their industry analysis on sector trends. They have to be, lending out Billions to business can be risky if you dont understand all the potential risks. They put in time, money and resources into analysis reports on different industry sectors. It is this that helps them understand the business you require a loan for.
For example, this is what Santander thinks. Their analysis of the window cleaning industry in the UK is as follows:
What has been happening in the window cleaning sector?
Demand for window cleaning services has grown over the last twenty years or so for a variety of reasons:
1) Modern building styles use large areas of glass and other specialist cladding and finishes which has boosted demand for window cleaners, particularly those able to work at height.
2) The appearance of business premises of all types has become increasingly important, so regular window cleaning is essential.
3) Domestic householders have less and less time to devote to window cleaning.
4) There are more elderly people in the population, who need help with window and other cleaning tasks.
However the industry has remained very fragmented, with many small businesses, often operating from home. Competition has kept rates low and, as this is a very labour-intensive industry, staff wages also have remained low. This has led to problems recruiting and retaining able employees.
Recent years have seen the industry attempting to improve standards and raise the status of the window cleaning industry through education and training for employees. Because much of the window cleaner’s work is potentially dangerous there have been several initiatives in recent years aimed at reducing falls and raising the industry’s awareness of the need to carry out risk assessments under the Work at Height Regulations. New technology such as telescopic pole systems have reduced the need to work at height, although because this type of equipment is expensive it is generally used by larger window cleaning firms. Larger firms may also have introduced a range of other services for customers such as general cleaning or gardening services.
Although the window cleaning market as a whole is forecast to grow, the current downturn in the economy is likely to affect demand as business customers may close down or reduce the amount they spend on window cleaning services. Domestic customers may lengthen the window cleaning cycle to save money, or decide to clean their windows themselves. During periods of recession competition always increases for window cleaners because there are many more unemployed people looking to earn money. The window cleaning business is easy to start up in because the cost of the equipment needed is quite low.
You will have to decide whether:
1) There is sufficient demand in your area to support your proposed business.
2) You will be able to compete successfully against established window cleaning firms.
3) You will be able to weather the current downturn in the economy, which would mean less work and more competition.
Keeping up to date with developments
Joining a trade association is an excellent way of keeping up with developments in your industry. Join the Master Guild of Window Cleaners here
The Cleaning and Support Services Association (CSSA) represents all sectors of the cleaning industry.
The British Cleaning Council represents the UK cleaning industry as a whole, and organises national exhibitions and awards. It promotes the Clean Britain Awards.
The British Institute of Cleaning Science (BICSc) is not a trade association, but an independent body with members from all areas of the cleaning industry. Contact BICSc at 9 Premier Court, Boarden Close, Moulton Park, Northampton NN3 6LF or visit the BICSc website for more information.
Subscribing to a trade journal is another good way of keeping up to date with the latest industry developments.