For years window cleaning companies able to offer clients a national coverage have dominated the UK landscape alongside facilities companies such as Mitie or OCS.
Between them, they have commanded hundreds of millions of pounds of window cleaning contracts. Back then contracts at this level were only for the ‘super companies’.
It was good news for regional window cleaners, lucky enough to be awarded the branches of a national client that fell into their geographical area. Bad news in the sense that the work was usually lower paid, but over looked if a bunch of sites were offered together.
One of the reasons that was understood about this so called ‘lower paid’ work and to the reasons why it is ‘lower paid’ are because apart from the usual overheads required to organise such large contracts, the national window cleaning company has to take a profit too. Otherwise what is the point in doing it, right?
But there is another reason and it’s far from the perceived idea of keeping the profits for themselves but more about simplicity. Let me explain.
Imagine having the opportunity to quote on 3000 branches of B&Q Stores. It would not be humanly possible to visit every branch. A fair price would have to be applied based on a small selection of stores of the average type within the client’s portfolio. The costs are applied then to the 3000 branches in order to reach a figure. If this figure leaves a profit, then the ‘numbers’ work and this contract would be a ‘balanced portfolio’.
This would undoubtedly create some form of unfair level field on how much each store would be paid to the regional window cleaner, however, at a macro level too the regional window cleaner may find that they have achieved a ‘balanced portfolio’, that the ‘numbers’ work and that they are able to make some profit. After all what’s the point in doing it (again).
A definite trend is taking hold. Brexit is still uncertain and unclear in terms of the exact details of the deal causing investment into the UK to stall. Inflation is high, wages are low, and people are holding on to their money. They may even start to trim back after Christmas.
Interest rates will rise perhaps two more times in the next twelve months – the great British squeeze may be on its way?
Regional window cleaners with competition in their area are already finding more tender participants hungry for the same contracts. Window cleaning quotes will lower for companies with staff, and staff wages will stagnate. Self-employed window cleaners turning over less than 25k per year, will probably hold in for better days whilst the less motivated and the near to be retired will bail out early.
Lucky for some the VAT threshold will maintain its current level of 85K for the next two years. We would like to see that dropped to 20k (now, that is a whole new article all together.) It evens the competition in the residential sector and puts more money back into helping things like the NHS. A penny in the pound on National Insurance is also a good idea.
Against all of this back drop, National window cleaning companies that may have some window cleaning assets and infrastructure but rely heavily on subcontractors will begin to shed regional subcontractors and take the work in house. This will create a significant saving and keep them competitive in the new world order.
Nationals that do not have a window-cleaning infrastructure of their own will struggle to survive in the new world order. They usually manage teams of smaller companies and self-employed window cleaners across the UK. Their only option is to lower their prices to compete. Not good for the regionals they rely on since invariably the prices are already near rock bottom and at minimal acceptable levels by the window cleaners at ground zero.
The new world order does not mean the Nationals have the upper hand, far from it.
The new world order is happening right now, companies are evolving to the Brexit era. Previous companies that benefited and grew their companies on the back of subcontracting to Nationals are now creating their own network. In the world of social media, trade shows, networking, associations the new fledgling nationals are setting out their stalls.
Companies are joining forces; some are expanding nationally with the rise of ultra pure water filling stations positioned across the UK. Everyone wants to be national, now.
In the beginning this will create a buyers market and will indeed put stress on the well-established national window cleaning companies. There will be winners and there will be losers. But there will always be a bottom price. Learn more about the bottom price and nationals here.
The trick is getting into that position and keeping it just long enough to ride the storm.
At this level you cannot be beaten on price, but providing a poor quality service can oust you. And guess what? There are another 15 companies lined up behind you in the new world order.
So, here is how you are going to get through it. Imagine you and your competitors are all hanging from monkey bars. The monkey bars are a metaphor for the National contract that you have won but your competitors want that contract from you.
You just have to be the last man hanging from the monkey bars. 2018/19 is going to be war; there may be lots of casualties. So, dig deep.
Read: 5 ways to get more commercial window cleaning work