How to price house cleaning services
Ask FSB's experts demystify the math of pricing services in the booming home and office cleaning industry.
Joe Vitale, New York City
I currently own a carpet-cleaning business that is about six years old. I am thinking of expanding into home and office cleaning, but have no idea on how to bid the jobs. I used to work for a large cleaning firm in a large city in California, so the prices were set really high. I now live in a small town where there is not so much cash flow. Is there a source or guide that anyone knows about that is not a scam?
By Myrlande Davermann, Fortune Small Business contributor
Dear Joe: "'How much should I charge' is the million dollar question – literally. The answer is a big part of the difference in what makes a million-dollar cleaning business versus the typical mediocre house cleaning business," says Gary Goranson, founder and president of cleaning company Work Enders and leader of the House Cleaning Biz 101 program. There are so many factors to consider in properly pricing a housecleaning that the answer to the how-much-to-charge question is rarely obvious.
The size of the home does have a bearing on what you should charge, but the time and labor involved in cleaning it is what really matters. The House Cleaning Biz 101 program is based on a formula Goranson refers to as "POM=CP," which stands for "Payroll (what you'll have to pay your worker) + Overhead (average cost per cleaning of administrative and non-payroll expenses) + Markup (the markup required to achieve your desired profit margin percentage on the job) = Cleaning Price." Average markup runs from 25% to 33%, to generate a profit margin of 20% to 25%, according to Goranson.
The formula works because it begins by factoring in what it costs the owner in labor and travel time to perform the job, Goranson says. He trains people to account for both current and future expenses. For example, if you don’t have a commercial office space and anticipate needing one, you should factor into your projections how much you think it will cost for you to expand out of your home setting, and include that in your overhead. That way, when you are ready to expand, you will be looking at a realistic picture.
Debby Sardone, president of the Association of Residential Cleaning Services International (ARCSI) notes that the house cleaning business has been booming for years and shows no signs of slowing down. She agrees that pricing jobs is difficult: "There are many complexities."
She does have a few rules of thumb, though. Most house cleaners need about an hour to an hour and 15 minutes for every 1,000 square feet of regular maintenance cleaning. First-time cleanings will take double to triple that length of time to remove built-up grime and bring the house to a "maintenance" level. New clients are expecting to pay more on the first visit – "so don’t be afraid to charge more," she says.
While prices vary around the country, the typical rate for professional maid services ranges from $30 to $40 per labor hour, she says.
Finally, Goranson recommends that before quoting prices over the phone, you visit the potential client's home and take a look at the work entailed. For more information, check out the House Cleaning Biz 101 program or follow-up with the ARCSI.
From lakila,Washington DC how do i get fully licensed,bonded and insured. for a first time business owner.
From Gary Goranson, Boynton Beach, FL Hi James….excellent question. This is the Achilles Heel of most new (and many established) residential cleaning services. Have you checked out our site at http://www.housecleaningbiz101.com?
From James Oakley ca, I am getting ready to open up a home cleaning business and I am trying to find out on how much to change.
From Jeneanne Swoger,Randleman, NC Your comment is so true. I have been in business for 21 years and I have found that sometimes you have to move away from clients that abuse you. I had a lady who asked when I preferred to be paid. I told her weekly, and she never left the check. I made the decision after several attempts to say I don't run the money down! I don't waste my time on someone who starts off being a bad client….it only gets worse.
Jeneanne
From Jerry Kovach Pricing is weird, some parts of the country are twice as high as others. We refer business all of the time to a maid service after doing work for our
Atlanta Handyman Service. They are a great service but customers do complaint that they are not cheap!
From Ivete, Buckhead GA We run http://www.gomescleaning.net in Buckhead. This article is very interesting and we have seen first hand what happens to our competitors if they don't pay enough. Turnover and poor service are the result of an inconsistent labor force. We pay 70% of everything we take in in labor. As a result, we don't lose employees or customers. Our profits aren't as high, but we are rewarded with a very stable business.
From Jerry Atlanta GA I run two residential maid services. Our primary one http://www.amazoncleaning.net spends about $20 per hour in wages. We spent about $20,000 in software and advertising just to start the business. Finally after our 2nd year, we made our first profit. All I can tell you is more important than the customers you take are the ones you don't. If a client doesn't respect the service or the people who work for it, do not take that client. Trust me, you will save yourself a lot of unnecessary stress.
From Carol, Salem, Or. I've been in the business almost 20 years now and it has taken me almost that long to figure this out! No, really I have always told my prospective clients that I charge for the work I do, NOT for how long it takes me to do it. We clean on average 7 homes a day(3 person team) and we can get through a home in about and hour or less. We have our clients trained to be picked up for us as we come to clean, not to pick up. They totally understand. Of course we have a system and a schedule to keep and therefore get right to work. We do not waste time. Really that is the secret to success I think. We average about $40 an hour. I can usually tell what I am going to charge as soon as I walk into a home. Hope this helps.
http://www.LetItShineCleaning.com
From Cara Mackey, Slidell, Louisiana Great answers! You would want to estimate how much it would cost you to clean the home(supplies, gas, etc.) and how much of a profit you would like to make and base it on that. Of course you do want to give the customer a reasonable price.
From Gesliane,Silver Spring ,Maryland Hi, my name is Gesi and I am a house cleaner that has been working for 4 years in the DC, MD, VA area. I have references if needed and I do anything needed around the house. If you would like for me to do anything extra, there might be an extra fee depending on the job. Please e-mail me or call me to set up an estimate. I provide references upon request. Email is the best way to reach me. I garantee total satisfaction of services provide.
Thank you.
I PROVIDE FREE ESTIMATES!
E-Mail: andemartinhago@hotmail.com
Phone: (240)482-6456 or (240)848-6844
From Gary, Boynton Beach, FL There is no legitimate cleaning service anywhere in the United States that would charge as little as $8 to $12/hour. They could not even find workers in NYC or many other regions of the country to work for these kind of wages, let alone run a business and earn a profit. With workers comp and payroll taxes, it is not uncommon for a cleaning company to spend $15 to $20 per hour on wages for their cleaning staff.
From Yuliya K, New York, NY, www.ecompetitors.com I really like your idea and I wish you all the best in you business. I know that prices in NYC are approximately between $8 and $12 per hour. In small towns is slightly cheaper.
From Debbie, Lewisville, TX Great article! Another aspect of pricing jobs is accurately assessing how much time it will actually take to clean on the first visit, versus the follow up "repeat" visits. Owners can lose their shirt on first time cleans if they are unable to size up dirt and price it! Check out my free "Cracking The Dirt Code" eBook to help with this:
http://www.themaidcoach.com/dirtcode.htm
Debbie Sardone
http://www.themaidcoach.com
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Just getting into the business. I'm the only cleaner to start off–any reasonable bonding insurance out there?