Should I Price My Cleaning Services By The Hour Or By The Square Foot?
This is a question we get from commercial cleaning business owners all the time. For those of you who do residential cleaning, there ARE some companies that price by the square foot, but it is much more common to estimate your time and apply your hourly rate. But for you commercial cleaners, it becomes a bit more complicated since there are so many different types of commercial cleaning accounts and dozens of variables that affect your ultimate price.
When it comes to square foot pricing, let me just start by saying it works best when pricing larger buildings of say, 10,000 square feet or higher, AND that are cleaned 5 days per week. If you are pricing small buildings to be cleaned less than 5 days a week, stick to pricing by the hour because the numbers just won't work if you try it the other way.
So let's do a quick example of pricing by the hour. You've got an 8,000 square foot office building that is to be cleaned twice a week. After workloading the location you estimate it can be cleaned in 2.75 hours per service (or 2 hours, 45 minutes). If your hourly rate is $22 dollars per hour, then you'll charge $60.50 per service. If you do the math, that works out to $524.33 a month.
Let's do an example of pricing by the square foot. You've got a 25,000 square foot office building that is to be cleaned five days a week. The type of building and cleaning specifications are almost identical to another building that you clean where you are charging $.095 cents a square foot. Since it's a similar building with similar specifications, you can use that as a starting point to estimating your price. 25,000 square feet multiplied by $.095 cents a square foot comes out to $2,375.00 dollars per month.
Keep in mind, that this is a very simplified answer to a very complex question.You can't just submit a cleaning proposal based on a square foot price you picked out of the air. There are many variables to consider, plus you should workload the location to get a more accurate picture of the time it will take to clean the building in order to make sure you will be profitable. If we take that $.095 cents a square foot price of $2,375.00 dollars and apply your estimated production rate, it will tell you how much time it will take to clean. For example, if you estimate your productiom rate to be 3800 square feet per hour, then you will have about 6.5 man hours to clean the building per service. (25,000 ÷ 3800 = 6.58). When you take these numbers to figure out the hourly rate you'll be making, it comes out to around $16.86 dollars an hour. Are you able to make a profit at that rate? It will probably be tough! So you have two choices. Either find a way to increase your production rate, or raise your price.
As you can see, there is no cookie cutter approach to pricing when it comes to the cleaning industry. Even though you may choose to price by the square foot, you also need to break that down so you can see what hourly rate you will end up making based on your production rates. If the numbers don't work, then adjustments need to be made.
If you are struggling with estimating pricing, workloading and production rates, I'd like to invite you to check out The Janitorial Store. When you join as a member, you can download the Bidding & Estimating ebook that takes you step-by-step through the entire process. You can also use the online calculators that will help you quickly manage the numbers, AND you'll get personal help from Steve and fellow members. For those of you that are already members, be sure to post your questions in the Discussion Forums on the website.
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Copyright TheJanitorialStore.com. All Rights Reserved. Steve Hanson helps owners of commercial cleaning companies build a more profitable and successful cleaning business through her online community at TheJanitorialStore.com. Jean is also the host of the popular Web TV show CleaningBiz.tv and author of the newsletter Trash Talk - sign up today!