Starting a cleaning company (Part 4) – Commercial target market

Everyone is not your customer – Seth Godin

Let’s start with a definition. According to Investopedia:

A target market is the market a company wants to sell its products and services to, and it includes a targeted set of customers for whom it directs its marketing efforts” 

So with that in mind, lets look specifically at the commercial cleaning service.

Australia’s Department of Employment reports that the cleaning industry is a very large employer with approximately 162,000 employees in November 2016. The cleaning industry is worth approximately $4 billion annually to the Australian economy. The majority of Australia’s commercial cleaning work is found in large cities due to the predominance of building and office operators, medical providers, retailers etc.

Now lets focus in on my home turf. There are larger-than-average sized commercial cleaning companies operating in Canberra due to the high concentration of government offices and higher than average income.

“There are approximately 3,014 cleaning services employees working throughout Canberra as of November 16, 2433 of which are employed as commercial cleaners.” (ABS, 2017)

Over the past five years the number of commercial cleaning jobs has fallen slightly (as shown in the graph below) and these jobs are expected to continue to decline into the future. The bundling of services into a property management contract is influencing the fall in cleaning jobs.

Cleaning graph

I don’t currently employ anyone and perform all cleaning duties myself, therefore it makes no sense to be targeting large firms and companies. I can’t yet meet their needs, nor can I currently compete with the larger cleaning companies. Even medium sized businesses with a dedicated premises often require a service that I don’t currently have the time, nor the manpower to provide. It goes without saying that my target market must operate from a physical location.

With that in mind, I can define my commercial target market as:

Small business

  • annual revenue turnover (excluding GST) of less than $2 million
  • less than 20 employees.

Micro business

  • run by an individual rather than a corporation or larger company
  • up to 4 employees.

In narrowing my focus, I can save both time and capital by approaching only those businesses who may require my services and who I can confidently provide services to.

So what businesses fit these target markets?

  • Consulting firms
  • training organisations
  • showrooms
  • retail stores
  • sports related premises (gyms, dance/yoga/Pilates studios, health practices).

There is only one winning strategy. It is to carefully define the target market and direct a superior offering to that target market – Philip Kotler

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