Cleaning company pricing can be tedious and time-consuming, especially if you’re not good with numbers. Especially at first, take your time with the pricing strategy of the firm. If you set too low prices for blood spill cleanup service or water damage cleanup service, you will either lose a big deal of the profits, or you will be forced to reduce the quality of work in order to reach a breakeven point.
On the contrary, if the prices for your blood spill cleanup service are too high, you could lose contracts, especially if you work in a highly competitive environment. Remember, in most cases, cleaning business pricing is about negotiating with the client.
Formation of prices for cleaning services
For one thing, you should learn how to accurately estimate labor and correctly calculate cleaning overheads, which will allow you to set competitive rates for your cleaning company specializing either in offering a blood spill cleanup service or a mold remediation service. This way you will be able to work and continue to make the profit you need.
To deduce a reliable pricing structure for a particular cleaning job, consider these three factors:
Labor and materials
Payroll costs include the salaries and benefits you pay to your employees. If you are partially involved in blood spill cleanup service, the cost of your labor, in proportion to your contribution, must be taken into account in the total calculation of labor costs. The cost of labor is usually counted as an hourly rate.
Overhead costs consist of the indirect costs required to operate a cleaning business. Overhead costs are usually calculated as a percentage of labor and materials. In fact, these are the costs that you incurred for one order minus labor and materials.
This is, of course, the difference between what you spend providing blood spill cleanup service or any other cleaning service to a client and how much you actually get for it. Net profit is calculated by deriving the profit factor minus the combined labor, materials, and overhead costs. The profit ratio will be greater than the actual percentage of gross income you will receive. For example, if you plan on having a 38 percent pre-tax gross income, you would need to apply a profit ratio of about 61.3 percent before labor, materials, and overhead to achieve that goal.
If you’re offering deferred payment to your customers, billing procedures need to be defined and followed. Thus, you must coordinate your payment system based on the customer debt repayment procedure. Keep in mind that many large companies pay certain types of invoices on certain days of the month; find out when your customers are doing this and schedule your invoices to arrive on time for the next billing cycle.
Your cleaning bill must clearly state the terms. Conditions include the date of the invoice, any discounts for early payment of the invoice, and surcharges for late payment. It is also a good idea to specifically indicate the invoice date on which the delay is recorded in order to avoid possible misunderstandings. If you’re going to be charged a late fee, make sure your invoice states that a late fee will apply. If you feel that you lack the necessary knowledge in financial issues, don’t hesitate to take the expert’s advice.