By far the biggest question cleaners ask when I speak with them and definitely the hottest topic on facebook groups and forums. Most people seem to base it off of what the competition charges or the client is willing pay, the problem with that is you don’t have the same cost of goods sold (cogs) as your competitor or same fixed cost. So how can I price match?
Square foot pricing is the most popular and easiest way, which is great IF first you do the math and create a couple categories. We can go by fast/medium/slow or large/medium/small or and even a combination of both. In the top nav bar above we have a job calculator to help figure out job costs and what gross profit margin you want to be at with the square foot pricing listed >>>>>>>>> http://methodcleanbiz.com/calculator/.
What is an acceptable gross profit margin? Is your margin the same on a $300 job as a $30k job? Not for me to judge but some questions to decide before figuring out a commercial carpet cleaning bid. When I think about it, I try and look at it over the year too. For example is this a 1x $300 job or 4x year program at $1200. At least with a quarterly program our marketing cost is pretty low because the routine is fixed already, where a 1x job we have to now spend more marketing dollars to find that $900 difference, 10% discount would be fair to me, but that is a personal choice.
Now first we have to define what is your gross profit, the fact is everybody does it differently and don’t want to debate over the best way. The point is for us to define what our gross profit margin is, what our job costs are. Loosely this means whatever costs to physically complete the job, for example labor, detergents, van and equipment. Problem is many cleaners borrow money for van/equipment so for practical purposes it is a fixed monthly cost. In this case you can go with Time/Materials or labor and any chemicals used.
An example might be Large jobs 50% profit / Medium 60%/ Small 70% gross profit. The reason is we need more overhead for 10 small jobs versus 1 large one. Just think about all the driving alone plus bidding, phone calls, etc, it really adds up.
This is something that will only come from real world experience based on your specific way of cleaning carpet, number of steps used and available equipment. Another variable is the type of office it is, a 3000 sqr ft hallway can be done pretty fast, maybe 1200 sqr ft hour with an experienced crew, while 3000 sqr ft cubicle farm might only be 700 sqr ft hour with furniture moving. Size of the office definitely matters, our set up time is being spread out more over 15000 sqr ft versus say 3000 sqr ft. If the set up time is 1 hour, that is going to add another 25% to a 3k sqr ft job but only 5% to 15k sqr ft job, see the difference? Job difficulty, what if we have to remove 30 gum spots? That is going to add 2 more hours depending how embedded they are and spread out. We have a video on this here >>>>>>> http://methodcleanbiz.com/2015/12/14/calculate-commercial-carpet-cleaning-production-rates/
So tell me already, how much should we charge for 15,000 square feet of commercial carpet cleaning!
15,000 Sqr ft Commercial Carpet Cleaning
Method used steam cleaning, 1x job with a goal of 70% profit margin (using time/materials), wide open areas with a production rate of 1200 sqr ft per hour, 1 hour set up time. Hourly rate of $150 per production hour.
15000 / divided by 1200 = 12.5 hours + 1 hour set up= 13.5 hours
13.5 hours x $150 per hour = $2,025
$2,025 / divided by 15,000 sqr ft = .135 cents per square feet.