Conduct a short analysis of the business climate in your market to determine a pricing structure for your office cleaning business.
Last updated: July 30, 2016
Question from HBT reader: I want to start an office cleaning service and I don’t have a clue about pricing. Offices are of various sizes and I don’t know how much to charge for my services. I need your help!
Pricing your commercial office cleaning services can seem rather difficult when first starting your business. The tendency is to feel that you’ve got to be precise right from the start – but in truth you just need to be in the ballpark.
After you’ve bid on a few jobs you can adjust your pricing to accurately reflect your place in the market. You’ll find that honing in on the right price for your services doesn’t take long.
When pricing your services, keep in mind these things:
Net Profit – You need to operate with a profit. Generally speaking, you need to project your expenses, taxes you’ll pay, and the salary you will draw. Your cash flow should be enough to run the business and still have some left over for future expansion, major purchases, etc.
Supply and Demand – Is the market flooded with commercial cleaners or is there a shortage in your area? If you’re stepping into a starved market, you can price your services at a premium. If not, you may need to lower your prices or offer a specialty service others are lacking to get your foot in the door.
Here are a couple of ways to get specific pricing information:
Check Out the Competition – What does your competition charge? You can find out by calling other companies just outside of your area. This way you’re not viewed as a competitor. You can assume that companies in your area will have similar pricing structures.
Visit with Supply Stores – Contact the janitorial supply stores in your area. These people can provide a wealth of information. Let them know you’re going into business and you’re calling to determine supply prices for your future needs. Since they love to have new customers, you will be in a position to ask other questions about the business environment that they otherwise might not be inclined to answer.
What should you expect to earn for your services?
The rates for commercial cleaning varies depending on your location. The cost of living in your area, the types of cleaning services you provide, plus the points I mentioned above all determine your price.
Rates can range from earnings of $15 an hour up to $40 or more. Of course, you will be charging your customer a set price, but your mindset when pricing jobs should be to think in terms of the value of your time. If you think a job will take about 2 hours and you think $30 an hour is a reasonable rate, then charge that customer $60.
Put together some financial projections, do a little research and set your price. Remember, you don’t have to be precise. Just be careful not to set your prices so low that you’re working for free or on a minimal profit margin. In the end, it’s not unreasonable for you to expect earnings of around $50,000 a year or more when you are in full swing.
ABOUT THE AUTHOR
Brett Krkosska provides how-to advice on small business and home-based work issues. He is the founder of HomeBizTools and the publisher of Straight Talk, a syndicated column that offers a unique perspective on today’s business issues.