Disintermediation in the Cleaning Service Business
"Exploring the source and viable solutions to halt Disintermediation before it starts."
1. Introduction: What is Disintermediation in the Cleaning Service Business?
First, Disintermediation in business occurs when the "middleman" gets cut off, and business dealings are conducted "directly" between the worker and the paying client. We use the word middleman because the situation can apply to different scenarios. It could take the place of a variety of business relationships, such as:
Employer | Employee
Employer | Contractor
Contractor | Sub Contractor
Marketplace owner | Participating Marketplace Service Provider
Franchisor | Franchisee
Master Franchisor | Franchisee
2. What's wrong with the practice of Disintermediation?
What's wrong with that picture? Depending on what side of the fence you are on, you'll have a different opinion. Now, if the sole purpose of a client is to "save" money and the "sole" sense of the worker is to maximize earnings, then what can be wrong with the activity?
Locating new cleaning service customers is an art in itself, and only some clients likely understand the cost a company spends to acquire their business.
Depending on the medium of advertising or used marketing pricing company, the cost to secure a new contract with a client can vary from $0 for a referral to as much as a few hundred dollars for paid advertising or other client acquisition strategies. So when a cleaning associate makes a side deal directly with a client, skipping the entire part of the client acquisition takes a lot of skill, time, and practice to master; let us now discuss the negative aspects of this Disintermediation in the house cleaning industry.
2.1 Violation of Trust.
The violation of trust affects the client, the house cleaner, and the company. The client may not trust the ostensible getting the best deal, so they cut out This activity. Disintermediation is a clear violation of the trust between the company and the company. By engaging in such transactions, individuals may put themselves in danger of conducting business with someone who is not licensed and lacks insurance. What could go wrong?
The cleaners must trust that the company is paying them reasonable wages for all the work they do on a dedicated basis. But if they understood the intricacies and expense of acquiring clients and running a business, they would have a different perspective.
2.2 It is Unethical
Furthermore, from the perspective of a business, it is unethical, and this is a toxic activity that happens all too often and "may be responsible" for shutting down some major national and state-level franchised companies. It may be because Disintermediation usually happens behind closed doors and is nearly impossible to prove. However, after many years of dealing with clients and an enormous amount of house cleaners, we will testify that Disintermediation is accurate and happens at every business level, from mom-and-pop operations to nationally recognized brands.
2.3 No Skin in the Game
People engaged in this activity need better ethics, as they violate fair business practice policies and lack the full knowledge of the expense, difficulty, and expertise necessary to establish a legal entity. They also need to pay more attention to the time required to develop and implement an effective marketing plan and the amount of time and money involved in recruiting the people with the best house cleaning experience.
3. Remedies to combat Disintermediation
3.1. Seek Compensation
From a business perspective, at least from our organization, any house cleaner caught making a backroom deal with a client will be charged a fee that we see as reasonable for every client that we lose to this. When dealing with a client's issue, it is fair to consider the potential financial loss from losing future business and referrals. Usually, when a house cleaner behaves in such a manner, other companies resort to legal action.
3.2 Ensure Competitive Pay to Cleaning Staff
First, we have identified the two main factors contributing to this type of business dealings. Many cleaners believe that they deserve a raise in their pay. Our team conducts ongoing research on the cleaning industry to ensure that all cleaning associates receive fair Compensation based on current market conditions.
3.3 Ensure a Safe and Sustainable Working Schedule
In addition, if we have a job that is too difficult by most standards and requires an exaggerated work pace to get the job done within the time frame allotted by the client, we'll usually meet with the client to see if we can adjust. Suppose the workload proves to be too arduous for the house cleaner. In that case, it is imperative to either decrease the tasks or increase the service fee slightly to allow ample time for completing the job without placing undue strain on the cleaner.
3.4 Offer Clients a Highly Competitive Rate
On the other hand, occasionally, we get a client that wants to get the best deal possible. We are also very proactive in researching local and distant rates in the house cleaning industry to be sure that prices offered through our business are very competitive. In addition, we always provide every client the option to better manage their spending budget by allowing them to select what needs to get done in order of priority. Furthermore, we'll advise clients if we notice the cleaning frequency is too close and offer cleanings at longer intervals. This solution will enable you to manage the complete cost of the service with utmost effectiveness and precision. A service company must explain the complete package with the service fee. It is the cleaning crew and the assurance of dealing with an insured and properly organized company.
4. Disintermediation is a result of misinformation, in part.
We understand that some cleaning associates may need to be more valued and paid. Although it is difficult to ascertain the leading cause of this, we have a few theories. These two examples serve as a motivation to look into ways to cut out company may and deal directly with the clients.
4.1 Exaggerated Earnings Potential
Some cleaners may hear stories, usually unfounded, from others in the industry about how much more they make when dealing directly with clients.
4.2 Inaccurate Calculations
They may also see how much a client pays for a service they perform and then incorrectly assume how much the company makes. Unless you run a business, it is easier to accurately calculate the costs associated with running a business. The check you see made out to the company is gross. Now deduct all the expenses related to advertising, marketing, payroll, business tax certificate, franchise tax board fees, and insurance.
4.2 Lack of Client Acquisition Skills
The process of successfully finding and converting a lead into a paying client is a skill that takes time and patience to master. Many aspiring sole proprietors start as cleaning associates of an already established company. They want to work under something other than a based company. It is usually because they already tried and failed at lead generation and conversion. Converting clients into their portfolio costs no money and requires no lead generation skills.
5. Our Solution to Minimize Disintermediation
We strongly believe in the abundance of clients and know there are more clients than any company can handle. Throw education into the equation, and you can provide the few ambitious cleanings associated with a proven path toward success in this ever-changing industry. The few cleaners who may have thought about cutting into your clients can become an ally, and together, you can prosper even more.
5.1 Entrepreneurship Through Licensing Agreement
We embrace entrepreneurship and have structured our business to allow ambitious cleaning associates to earn more by participating in our licensing agreement. By embarking on our licensing program, they will learn all the steps necessary to start a business and have it legally run at a city and state level. Our program provides the mentorship needed to start the business in less than 30 days.
5.2 Client Acquisition Strategies
Upon completing the paperwork, we provide training on highly effective methods for acquiring, retaining, and converting cleaning service clients for long-term success.
5.3 Back-end Software Implementation
To ease the workload of a newly minted business owner, we provide the necessary know-how to keep proper accounting records, accept credit card payments from clients, and bookkeeping procedures for easy end-of-the-year tax reporting.
Rest assured that our licensing package comes with a thorough operations manual of at least 100 pages, ensuring your success as a small business owner in the cleaning services industry. Despite the complexity of the transaction involving our intellectual property, we are confident in the value and comprehensiveness of our package.
Although Disintermediation will plague most service-based businesses for the foreseeable, there are ways to combat it and turn all the players in the same direction. Through our licensing program, we have turned this into a win-win-win situation for our staff, clients, and our business. We strive to be transparent in every part of our business when dealing with our cleaning associates and the public. Our comprehensive licensing program and this initiative assure our commitment to fairness, competitiveness, and protection against disintermediation risks. Our licensing program and this effort will guarantee that we are fair and competitive and minimize the risk of Disintermediation.
7. Questions & Answers
1. Question: What is Disintermediation in the Cleaning Service Industry?
Answer: Disintermediation in the cleaning service industry refers to the practice where the middleman, such as an employer or contractor, is bypassed, and direct business transactions occur between the worker (cleaner) and the paying client. Different types of business relationships can exist, such as employer-employee, contractor-subcontractor, or franchisor-franchisee.
2. Question: What are some negative aspects of Disintermediation in the cleaning industry?
Answer: Disintermediation can violate the trust between clients, cleaners, and the cleaning company. Engaging in this action could be deemed unethical and may result in undesirable outcomes, including harm to businesses and potential closures of companies. People engaging in Disintermediation might need a complete understanding of the costs and complexities involved in client acquisition and running a legitimate business.
3. Question: How does the cleaning company suggest combating Disintermediation?
Answer: The cleaning company offers several remedies to combat Disintermediation. These include seeking Compensation from cleaners who engage in backroom deals with clients, ensuring competitive pay for cleaning staff, maintaining a safe and sustainable work schedule, and offering clients a highly competitive service rate. These measures aim to address the root causes of Disintermediation and encourage fair business practices.
4. Question: What are some reasons that might lead cleaning associates to engage in Disintermediation?
Answer: Some cleaning associates might engage in Disintermediation due to exaggerated earnings potential stories they hear from others in the industry. They might also need accurate calculations regarding how much the cleaning company earns from their services. Additionally, a lack of client acquisition skills and failed attempts at lead generation could push them toward Disintermediation.
5. Question: How does the cleaning company propose to minimize Disintermediation and promote fairness?
Answer: The cleaning company's solution involves an entrepreneurship-focused licensing agreement. They encourage ambitious cleaning associates to participate in their licensing program, which imparts the knowledge needed to run a business legally. The program offers training on effective client acquisition strategies and back-end software implementation. This approach aims to empower cleaners to become successful business owners and minimize the risk of Disintermediation.