Thinking of starting your own cleaning company? This PESTLE Analysis For A Cleaning Company will help you pinpoint key factors that will impact your business.
Can you recall when your house needed cleaning, and instead of doing it yourself, you picked up your phone and called a cleaning service company?
We all have taken cleaning services from different cleaning companies throughout our lives. The concept of cleaning companies is really unique.
All you have to do is book an appointment, and a couple of guys from the cleaning company will show up at your doorstep. They will provide cleaning services that will make your house or workplace shine.
You might ask, what's the point of discussing the operations of cleaning companies? Since we are conducting a PESTLE Analysis For A Cleaning Company, discussing its history and operations is essential.
The need for cleaning services has always existed. However, cleaning companies didn't exist earlier. In ancient times, wealthy people had servants who provided cleaning services.
On the other hand, middle-class people used to perform household cleaning activities themselves. However, the dynamics changed entirely after the Industrial Revolution.
During the 18th and 19th centuries, people moved from rural to urban areas. Their lifestyle changed, and they became more work-oriented. As a result, they didn't have time to conduct cleaning activities themselves.
Moreover, factories were established due to the Industrial Revolution and required regular cleaning. As the demand for cleaning increased, cleaning companies emerged in the 20th century.
These cleaning companies exploited the need for cleaning and started providing cleaning services to households, factories, workplaces, etc. In return, they started charging specific fees.
In parallel, the manufacturing of cleaning equipment started. Companies like Dyson emerged with vacuums and other cleaning equipment, helping cleaning companies expand further.
Throughout the 20th century, cleaning companies kept on establishing. Advancements in the technology and infrastructure helped them to expand their operations further.
In the 21st century, cleaning companies have become more professional and organised. They also started booking appointments online and advertising on websites and social media platforms.
Moreover, cleaning companies got further divided based on specialisation. For example, carpet cleaning companies and sofa cleaning companies were established.
Furthermore, big cleaning companies started offering franchise opportunities. This allowed entrepreneurs to initiate their own cleaning businesses under established brand names. As a result, the number of cleaning companies grew rapidly.
Currently, there are more than 1,063,988 janitorial companies in the US alone. Moreover, residential housecleaning businesses in the US made sales worth almost $20 billion in one year.
Cleaning companies play a significant role in the growth of global cleaning services, worth more than $63.2 billion and seeing more establishments.
Now that we have discussed the operations of cleaning companies let's proceed further and discuss what PESTLE analysis is. PESTLE analysis is a tool that highlights how different external factors impact the operations of an industry or a sector.
PEST analysis analyses how various political, environmental, economic, social, legal, and technological factors affect an industry or a sector. Now that we have discussed PESTLE analysis, let's proceed and conduct the PESTLE analysis for a cleaning company.
Political Factors That Affect A Cleaning Company
Political factors in a PESTLE analysis highlight the government policies and political environment that impact businesses. In this section, we will look at how various political factors impact a cleaning company.
Governments make rules and regulations about many things. Environment-related regulations made by the government can significantly impact the operations of a cleaning company.
A cleaning company might be troubled by waste management and disposal regulations. Moreover, the company might have to spend extra bucks to train its staff and adopt environment-friendly practices.
A cleaning company that fails to comply with regulations will face legal consequences. Moreover, the government's taxation policies impact the operations of a cleaning company.
Suppose the government imposes high taxes on the services sector. In that case, the profit earned by cleaning companies will fall, and they will suffer.
On the contrary, if low tax rates are imposed on the services sector, the productivity and profits of a cleaning company will increase.
Furthermore, political stability is very important for a cleaning company since it ensures smooth operations. During political turmoil, the cleaning company's operations might be disrupted due to political riots.
Similarly, government funding and subsidies impact a cleaning company's operations. If the government initiates a subsidy scheme, all cleaning companies will expand their operations and purchase the latest equipment.
As a result, their subsidies might play a significant role in increasing the efficiency and productivity of a cleaning company.
Economic Factors That Affect A Cleaning Company
Economic factors are the micro and macro-level economic factors that impact a company's operations. This section will examine how various economic factors impact a cleaning company.
Interest rate is an economic factor that greatly impacts a cleaning company. Whenever the state bank raises the interest rate, the cost of borrowing increases; hence, it becomes difficult for a cleaning company to borrow money from banks for expansionary purposes or to purchase the latest cleaning equipment.
On the contrary, when interest rates fall, the cost of borrowing falls, and it becomes easy for a cleaning company to borrow money from banks. Moreover, the overall economic condition affects the demand for cleaning services.
At a time when the economy is booming, people have high disposable income in their pockets. Hence, the demand for cleaning services is high. However, during economic recessions, people tend to limit their expenditures.
As a result, the demand for cleaning services falls during economic recessions. Inflation also impacts the operations of a cleaning company. In times of high inflation, the cost of labor and equipment increases, forcing the company to increase its rates.
However, increasing rates impact a cleaning company negatively since it makes the demand for cleaning services fall.
Social Factors That Affect A Cleaning Company
Social factors are related to a society's culture and norms. This section will identify how different social factors impact the operations of a cleaning company. Over the years, people's lifestyles have changed.
In urban areas, almost every household is a dual-income household. People have adopted busy lifestyles, so they don't have time to perform cleaning activities themselves.
This lifestyle change paved the way for cleaning companies, and the demand for cleaning services has increased.
Moreover, the aging population is another reason for the increasing demand for cleaning companies. Currently, almost 10 percent of the world's population is over 65.
These people can't carry out cleaning activities by themselves. Hence, they have to contact cleaning companies for their services. As the percentage of elderly people grows, the demand for cleaning services increases.
Moreover, as the work-from-home trend increases, the demand for services required at the workplace is falling. Many offices have embraced the work-from-home trend or adopted the hybrid model, which has decreased the demand for workplace cleaning activities.
Similarly, many sectors have shifted completely online. For example, many IT firms have abolished physical workplaces and shifted their online operations. Such changes in the corporate sector are causing the demand for cleaning companies to fall.
Technological Factors That Affect A Cleaning Company
Technological factors are the factors related to innovation and technology that affect businesses. In this section, we will examine some technological factors affecting cleaning companies.
Technology has benefited the cleaning industry over the years. Automation and robotics have increased cleaning companies' efficiency significantly. Moreover, technology has dropped cleaning companies' operational costs.
For example, the latest machines have replaced the manpower used for cleaning. As a result, cleaning companies can now generate more revenue and increase their profits.
On the other hand, innovation also has a negative impact on cleaning companies. Due to technological advancements, cleaning machines such as vacuums are easily available in markets.
People have started buying this cleaning equipment since it is automatic and cleans itself. This has caused the demand for cleaning companies to fall significantly.
Besides that, cleaning companies can benefit from software and Apps. A cleaning company can launch its personal App for appointments and customer communication. This will help the company communicate with its customers and help the cleaning company market and advertise.
Furthermore, technological advancements make eco-friendly cleaning equipment available in markets. Cleaning companies can use this equipment to carry out cleaning activities, which can attract environmentally conscious customers.
Legal Factors That Affect A Cleaning Company
Legal factors are the factors that refer to the laws present in a society. Every company must abide by these laws, or it might have to face legal consequences. This section of the PESTLE analysis will discuss what legal factors affect the operations of a cleaning company.
All companies must ensure that their practices comply with employment laws and that their employees are treated fairly.
Moreover, a cleaning company should not hire underage workers and pay laborers more than the minimum wage. A cleaning company can be banned and fined heavily if it fails to uphold employment laws.
Furthermore, a cleaning company has data on its customers. Cleaning companies should make sure that their database is secure. In a data breach, the cleaning company can face lawsuits and penalties.
In addition, laws related to insurance policies impact cleaning companies. A cleaning company must follow all these laws and form policies to compensate its workers and customers.
A cleaning company should also follow occupational health and safety regulations to ensure its workers' safety. If the company fails to do so, law enforcement agencies might prohibit it from operating.
Environment Factors That Affect A Cleaning Company
Environmental factors are environmental-related factors that affect a business. Let's examine how different environmental factors impact a cleaning company.
Over the years, environmentalists have spread awareness about global warming and pollution, so governments and individuals have become very responsive. Cleaning companies are often labeled for dumping the waste into the environment.
Dumping unprocessed waste can damage the reputation of a cleaning company, which will eventually cause the demand for the company to fall. Moreover, governments can take strict action against cleaning companies polluting the environment.
Moreover, water scarcity is an issue that can affect the operations of a cleaning company significantly. As the water table is going down in different parts of the world, it can become expensive for cleaning companies to source the water.
As a result, the cleaning company's profits will fall, and it might suffer financially. Besides that, the energy crisis also negatively impacts cleaning companies since most cleaning equipment requires energy to function.
Cleaning companies can use energy-efficient cleaning equipment to minimize their contribution to the energy crisis.
PESTLE Analysis For A Cleaning Company: Final Word
Cleaning is an essential part of our lives. Every individual wants his house or workplace clean. However, sometimes people don't have time to clean their households. In that case, they simply contact cleaning companies and ask for their services.
The need for cleaning companies has always existed. However, cleaning companies began to be established after the Industrial Revolution, and their operations have evolved over the years.
Currently, there are tens of thousands of cleaning companies in the US alone. These cleaning companies contribute billions of dollars to the US economy.
In today's article, we conducted the PESTLE analysis of a cleaning company to see how different external factors impact its operations. The PESTEL analysis framework highlighted different political, social, environmental, legal, technological, and economic factors that affect a cleaning company.
If you enjoyed reading the PESTLE analysis for the cleaning industry and want to read more, take a look at more examples of PESTLE analysis.
