Friday, August 14, 2015

How to Setup a Profitable Office and Industrial Cleaning Business in Nigeria


The business of providing professional office and industrial cleaning service in Nigeria has been around for decades but only became very popular in the early 2000s because of the growing number of businesses that wanted to operate more efficiently. These businesses especially banks, hotels, embassies, hospitals, schools, churches, shopping malls, eateries, law firms, accounting firms and other service based companies realized that it paid them more to outsource the cleaning of their office premises by experts who can do efficient cleaning services thereby providing them more time to do their core business activities.

Office and Industrial Cleaning business is quite a lucrative one to do in Nigeria for various reasons. For instance, it has low capital requirement for starting it. Just like all service oriented businesses all you need is skills, work tools and good work ethic to secure new customers and expand. The administrative expenses are quite low since salary, rent and transportation are the major operating expenses taking up to 80% of the total operating costs. You don’t need to worry about inventory, machines or a factory to produce your service. Another reason the business is lucrative is the huge pool of available customers. Nearly 60% of medium to large sized business with more than 20 staff is in need of this service especially when that business is in a highly competitive industry and has to become more efficient to succeed. So we should be looking at between 80,000 to 200,000 businesses that already outsource their office cleaning or are in need of the service.  

The Market Opportunity for Office and Industrial Cleaning in Nigeria
No business wants to lose customers or get a bad name for keeping a dirty environment or have to waste man hours trying to keep their premises attractive. So that means the demand for this service is high and here's one reason for this -there are at least 480,000 registered companies operating in Nigeria as of 2014 according to the Federal Inland Revenue Service. From my estimate at least 250,000 of these companies are based in Lagos State alone. Abuja has more than 24,000 operating businesses of various sizes. The list goes on, but one thing they all have in common is the need to present an appealing environment to their clients/customers and not to spend precious time and resources off their busy schedules doing so. On average the amount payable to office cleaning companies is N40,000 for each employed cleaner/janitor. So if a 300 room hotel for instance decides to outsource its cleaning to a professional commercial cleaning business and require 10 cleaners, that means the hotel would be paying N400,000 per month for their services. The cleaning company may pay each Janitor N25,000 and thus would be making N15,000 on each employed cleaner.

Key Target Market Segments for Nigerian Office and Industrial Cleaning
I have chosen to divide the market segments for this business into two based on the scale at which you wish to operate.

Office and Scale Scale commercial Cleaning Opportunities
·         Restaurants including fast food, fine dining restaurants etc
·         Small Hospitals/clinics
·         Retail stores e.g Supermarkets, boutiques, electronic shops, car showrooms etc
·         Offices e.g NGOs, Travel agencies, ICT companies,   
·         Petrol Stations
·         Residential buildings within an estate
·         And many more

Industrial Cleaning and large scale commercial cleaning
·         Airports
·         Multi Storey Buildings (shopping malls, government office buildings etc)
·         Factories
·         Warehouses
·         Event Venues
·         Government owned hospitals
·         Public Schools
·         Big Churches
·         Banks
·         Telecomm operators’ offices
·         Multinational companies
·         Embassies
·         And many more

Startup Requirements for Industrial Cleaning/Janitorial Service in Nigeria
                Item
Cost
Basic Cleaning tools (Mop Buckets, Mop sticks, wipers, brooms)
N10,000
Initial Cleaning Supplies such as detergents, cleaning reagents etc
N5,000
Specialized cleaning equipment such as Vacuum cleaner, fumigation equipment,
N70,000
Rent
N600,000
Initial 6 months operating expenses (marketing, utility bills, levies etc)
N840,000
Registration and Legal expenses
N80,000
Office Supplies (stationery, cleaning supplies etc)
N60,000
Furniture

Contingency (other expenses you may not have planned for e.g emergencies, accidents
N300,000
Insurance
N120,000
Total
N2,075,000

Break Even and Payback Period for office cleaning
You can breakeven within the first 6 months if you can meet your sales target. That depends on the scale at which you’re operating though whereas payback is between 18 months to 3 years again depending on how well you manage the business and how much sales you can generate.


Do you wish to start an office cleaning business in Nigeria? I can write you a bankable business plan you can show to investors or banks to raise startup/seed capital. Just give me a call: 0803 206 4106 or email me: paulonwueme@gmail.com