Charging the right amount for a cleaning service is paramount for the company's success. Charge too little, and the company will be run into the ground by a lack of profit. Charge too much, and prospective customers will seek out a more reasonably priced cleaner. Jacquelyn Lynn, author of "Start Your Own Cleaning Service," says pricing for everything from a maid service to carpet cleaning should be determined by three factors: labor and materials, overhead, and profit.
Labor and Materials
The cost of labor and materials is calculated by estimating the man-hours required to complete a task, plus the cost of supplies used. For instance, if a cleaning technician earns $10 per hour and a job will take two hours for one person to complete, then the cost (to the business owner) is $20. Now, suppose the supplies used totaled $5. Then, the total cost of labor and materials would be $25.
A start-up business may consider offering some free services to friends and family members to get an idea of how long it will take to perform particular cleaning tasks.
Overhead
Overhead refers to the expenses of being in business, such as advertising, insurance and automobile expenses, to name a few. As a rule of thumb, Lynn says, overhead costs range from 10 percent to 40 percent of the company's payroll. Once a business has been in operation for about a year, this figure will be easy to calculate. Until then, plan on forecasting based on what is being paid out each month.
If payroll for the year is $50,000 and overhead expenses total $5,000, then the overhead rate is 10 percent.
Profit
Determining how much profit will be in each job is as simple as deciding what percent of the cost should be profit. Cleaning companies operate somewhere between 10 percent and 28 percent of gross sales. The actual figure used will depend on local market conditions.
Using the numbers from above----labor and materials at $25 and overhead at 10 percent, or $2.50----the preprofit figure is $27.50. To make a profit of 20 percent, an additional $5.50 would be added to the figure, bringing the final bill to the customer to $33.
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