Do You Have Minimum Prices For Your Commercial Cleaning Business?

Minimums are everywhere in our society and are abundant in business environments. There are minimum wages, minimum age requirements, minimum banking fees, minimum scores required to pass a test, minimum requirements to run a software program, or just doing the bare minimum. Have you thought about the minimum price you should be charging for your cleaning services?

Maximize Profits By Initiating Your Company's Minimum Price!

Your cleaning business should have a minimum price for the cleaning services you provide

Every cleaning business owner is well aware of the competitive nature of this industry. It seems like many up and comers are under pricing their cleaning services in order to grab their share of the customer pool. Unfortunately, many cleaning companies are forgoing quality in order to “low ball” every bid opportunity that arises. But don't get caught up in trying to compete on price.

A business needs to make a money, period. And with the ever rising costs of doing business today, the frugal owner will need to take a careful look at their true costs of doing business and apply those costs back to the customer, regardless of the size of the facility or the square footage of the project work to be performed.

Generally, smaller sized buildings need less frequent cleanings than larger buildings. The cleaning frequency on these smaller buildings (2,000 – 5,000 sq ft), may only require once a week or even once or twice a month servicing.

Take into consideration your true labor costs, expenses, and indirect costs to operate your cleaning business. Regardless of the size of the account, it will take time to manage and invoice the customer. But don't shy away from the opportunities small accounts can provide for you. There is definitely profit to be made by managing these little gems.

We had plenty of small accounts as we got started in business. The trick to making money on smaller accounts is about management. Establish efficient cleaning routes to get to these smaller accounts. Schedule the cleaning so your cleaners don't have to drive any significant distance to each location, thus reducing travel time. Also, try adding additional services besides the normal cleaning. For example, does the customer need window cleaning, carpet and floor maintenance, or even building maintenance such as parking lot sweeping? You may also add the customer into your referral system. It's not the size of the account, but how you manage it that will pay big dividends.

Pricing Smaller Cleaning Accounts

Many smaller accounts may take an hour or less to clean the entire space, but you don't want to bid it hourly. If you do, you will most likely be losing money. Let's say you normally charge $25 per hour for cleaning services. If you are pricing a once per week cleaning on a 2500 sq. ft. office and you're estimating it will take one hour to clean, you'd only be charging $25 per service or just over $100 per month. Can you really make a profit by charging just $25 each time your cleaner goes there to clean? Besides the actual time it takes to clean, you should also take into consideration travel time, and loading and unloading supplies and equipment.

Here is another example of how NOT having a minimum price can impact your normal bidding process. The account has 1500 cleanable square feet and the prospect is asking for twice per month service. You estimate the time to clean at 45 minutes per service. If you charge $25 per hour, that comes out to only $37.50 per month. There is no money to be made at $37.50; in fact, it may be costing you money.

Coming up with a minimum price is really up to you. Minimum prices can start at $200 and up. It comes down to your company's numbers and what works best for your cleaning business. So if you're working on a bid, and it comes out to less than your minimum charge, charge your minimum price.

Another example of setting minimums for cleaning is for one-time cleaning services. If you accept one-time cleanings, make sure you make it worth your while. The same goes for an existing customer that calls with an emergency service request.

We often had customers call to see if we could make a trip over during the day to fix a plugged toilet or remove a spot from their carpet. It may only take 10 or 15 minutes to unclog the toilet or remove the spot; should you charge your hourly rate and then pro-rate it because you didn't spend the entire hour cleaning the spot? No, that doesn't make much sense, does it?

If you did that you could end up charging only around $7.00! What about the time you spent on the phone with your customer, finding an employee who could go take care of the problem, paying them for their drive time, as well as the time to take care of the problem? You'll never find a plumber charging for just the time on the job. Rather, they bill a minimum rate that includes drive time. In a case like this, decide on a minimum rate for a one-time or emergency service.

You may charge anywhere from $40 to $75 for your minimum service fee, depending on the service and the going rates in your area. Just remember to let your customer know ahead of time what they'll be paying for this one-time or emergency service. For contract customers, be sure to include this pricing in their contract and explain what it is for.

It is easy to lose profit in your cleaning business by not planning ahead for minimum rates. Be sure to decide in advance what your minimums should be and then communicate that in advance to your customers. And don't pass up on the smaller accounts; you can end up making a nice profit on those little gems.

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