As of March 2021, the overall U.S. economy was operating at 22 percent below pre-pandemic levels. However, it should begin a rebound in the second half of the year, according to Richard Branch, chief economist with Dodge Data & Analytics, which focuses on trends in the construction industry.
On the other hand, the outlook for new construction is not so good. “[New] construction is certainly one of those industries that will take time for the recovery to really dig in, take hold and gain traction,” he says.
One of many reasons for this, beyond just the negative impacts of the pandemic, are some of the tariffs that have been instituted on construction materials in the past four years. It is estimated that new construction costs are up more than 5 percent from a year ago, primarily due to these tariffs.
However, when it comes to retrofits and building renovations, things do appear brighter. This is because landlords and developers want to make changes to existing facilities, all to “improve their facilities by providing more physical space for workers and improved environmental attributes, such as better air handling and washroom spaces,” Branch notes.
Further, many business leaders and commercial real-estate observers believe the concept of “remote working” may be starting to wear thin on some employers.
David Hewett, a 35-year veteran of the commercial real-estate market and a BOMA Fellow, describes one key reason for this. He points out that “many employers have spent a great deal of time and energy building a company culture. The company’s culture helps make a company a brand. With staff working remotely, the ties that bind those cultures are starting to fray.”
What this all means is that building renovation should see a healthy upturn in 2021. With this upturn, another opportunity may emerge for retrofit contractors. Once these renovations are completed, existing facilities must be cleaned and made ready for building users. Because of the downturn, contractors providing this extra add-on service may find this a lucrative offering, one which may help them offset the difficulties of 2020.
What is Renovation Cleanup?
Before we go any further, we should define what construction or renovation cleanup is all about. A solid working definition is the following:
Construction cleanup, also known as post-construction cleanup, is the cleaning up of new or recently renovated homes or commercial facilities. This cleanup is necessary before these facilities can be lived in or put into use.
There are typically three phases to cleanup following renovation or new construction. Depending on how big the project, all three are necessary. These three phases include the following:
- Phase one. This is also known as the “rough clean.” Phase one is performed once the contractor has installed all the necessary framing, plumbing and electrical work in a facility. It typically consists of the removal of larger debris, stickers from windows and doors, trash removal, along with a general sweeping or vacuuming of the area using a wet/dry vacuum cleaning system.
- Phase two. This typically involves kitchens and restrooms. The following areas need special attention: new sinks, cabinets, restroom fixtures, appliances, windows, glass and glass doors.
- Phase three. This is the “final clean” or the “punch clean.” It involves a thorough, deep cleaning of the newly renovated area, as well as removing all debris and the bulk of the building waste. The contractor and building owner/manager then tour the area with a “punch list,” checking off that areas have been cleaned per agreement. (Phase three cleaning may also focus on exterior cleaning. However, this is more common with new construction cleanup, not renovation.)
The Right Distributor Makes the Job Easier
Contractors performing retrofit or renovation cleanup should always use commercial cleaning equipment and supplies. This equipment is designed for much “hardier” use than consumer supplies. Further, commercial cleaning solutions are typically more effective and manufactured to be diluted. This is a cost savings when compared to household products sold for home use.
One of the most important partners any contractor can have when performing renovation or construction cleanup is an astute janitorial distributor, someone who knows the work and what is involved.
According to Michael Wilson with AFFLINK, a distributor-member organization with 350 independent distributors around the country, along with finding someone that knows the ins and outs of construction cleaning, contractors need to find someone that is “stock ready” and able to ship products immediately.
“Typically, the client is anxious to get the job done. Waiting for equipment to be delivered or supplies, like nitrile gloves, goggles, even ready-to-use and free pour [cleaning solution] concentrates, can slow the entire cleanup process,” Wilson says.
Wilson also suggests that contractors look for distributors that provide the following:
- A wide and deep offering of products. “Construction cleanup can vary based on the materials used,” Wilson notes. “The more products the distributor markets, the more likely the right product will be available for use.”
- Wilson’s advice on product selection: “A wide array of products is only helpful if you know which ones to select. An astute distributor can help here tremendously.”
- Timely delivery and delivery options. “Many times, the contractor will find they need a product unexpectedly,” Wilson says. “The distributor should be able to deliver the product quickly, same day or next day.”
- Easy to work with. “Construction cleanup can be complicated,” Wilson adds. “Unexpected problems should be expected. You want a partner on your side that will listen, help meet challenges and even show up at the construction site to provide advice.”
What Does Cleanup Pay?
By now, you’re likely wondering how much you can make providing your clients with construction and renovation cleanup services.
Here’s the good news: If bid correctly, construction cleanup can be very lucrative.
Here’s the not-so-good news: There is not one price that fits all.
- Some contractors and their clients may not want or need all three phases of construction cleanup as discussed earlier.
- Some projects are much more involved than others.
- Charges can vary due to competition and community.
- The types of materials, including flooring installed, can impact pricing.
In some cases, contractors charge by the hour. For example, one contractor bills clients about $1,000 per day for four workers, working eight-hour shifts.
In other situations, charges are priced per square foot. This method is used most frequently when cleaning up very large areas of a facility and new construction.
“Once again, a janitorial distributor may prove very helpful when it comes to determining charges,” adds Wilson. “They know what is involved and they likely know what others in the area are charging. Before sending your client a proposal, talk to a distributor first.”
What About Insurance?
Many insurance needs related to construction cleaning will be the same types of insurance contractors are already carrying.
In most cases, contractors will need to verify they have Workers’ Compensation insurance and general liability insurance. If hiring subcontractors, the subs should also have these types of insurances in place. In some cases, the contractor’s insurance will only apply to employees of his or her company, not subcontractors hired to perform cleaning duties.