renewing office contract

« **on:** February 27, 2008, 02:59:36 pm »

Hi

One of our offices contracts are up for renewal, they havent cancelled within the time notice period and they are very happy with our work, so i was just wondering how to word a letter of renewal, i'll be keeping everything the same as last contract pretty much, only this time we will schedule in more quality checks and audits etc as staff are now carrying out the cleans there. I don't want to scare them off with a price increase. its 15hrs per week plus cost of supplies and materials (but not hand towels and toilet rolls), general office clean, 1 kitchen, gents & Ladies and one large office space, sits approx 50 - 60 people, and a smaller back office which sits about 10 staff and a training room, plus a small corridor / entrance area. we have been cleaning here for 12 months coming up. We use their vacuum cleaners also.

Out of interest what would you price this contract at?

Thanks
Lisa

« **Reply #1 on:** February 27, 2008, 03:35:03 pm »

As you know its largely down to area, but we would charge around 800-845 pcm + vat, to include all materials except t.rolls pht etc, i would drop them a brief phone call before you write, but thats me.

Chris

« **Reply #2 on:** February 27, 2008, 03:46:04 pm »

Hi Chris

I think our last contract price was a bit low, oh dear, there might be a jump this time for them, of a few quid per hour. We charged them £9.50 per hour for this last 12 months, plus around 50 quid each month on cleaning supplies and 15 quid a month for laundry of t towels.

We didnt price in for staff taking hols as we cleaned it ourselves, so theres 4.8 wks to add on, plus perhaps 1 hr or so per week for supervisory visit.

does the price you say include hols etc?

« **Reply #3 on:** February 27, 2008, 03:49:49 pm »

Yes thats to include hols lisa. 9.50 does sound a bit low to me , but i dont want to get in to that debate again with people saying they cant charge that etc etc...

Chris

« **Reply #4 on:** February 27, 2008, 04:00:45 pm »

Hi Lisa,

Ouch, that has to hurt!!

£225 + VAT here

Regards,

Rob

« **Reply #5 on:** February 27, 2008, 04:06:56 pm »

Hi Rob

255 per week?? !7 squid an hour? what does that include?

we quoted a small office the other day just 6 hrs per week £260 per month, and they said we were too expensive.

« **Reply #6 on:** February 27, 2008, 04:12:11 pm »

Any ideas how to write the renewal letter? looks like i may increase the prices after all, anyone know how much nmw will be this october? we pay above it, but just wondered if it had been released yet?

« **Reply #7 on:** February 27, 2008, 04:25:46 pm »

7 per hour, stop it Robert stop it........

« **Reply #8 on:** February 27, 2008, 04:35:23 pm »

Lisa,

I dont think our prices are excessive at all, the price includes the true cost of offering our services, including insurance/health & safety, holiday pay/sickness/pensions etc, etc.

At the present time, you are very nearly making a loss on this contract surely?

Regards,

Rob

« **Reply #9 on:** February 27, 2008, 04:52:45 pm »

17 quid an hour was what it was meant to say. shocked by that, it would be brill if i could charge that much.

i dont think i could make them pay that much of a jump. i dont want to lose the contract, but we probably have struggled on with it and don't want to be in a loss situation, rather not have the work.

« **Reply #10 on:** February 27, 2008, 05:02:08 pm »

I think you should vear towards that mark lisa rather than the lower end..

Chris

« **Reply #11 on:** February 27, 2008, 05:05:49 pm »

Hi Lisa,

Sent mail with a useful form for you to look at, hope it helps!

Regards,

Rob

« **Reply #12 on:** February 27, 2008, 05:10:18 pm »

Lisa,

Robert is much nearer the true price of the job than you.

I'm sure his form will show you Basic pay, holiday pay, sickness allowance, NI contributions, clothing/uniform, marketing, travel/vehicle costs, cleaning material costs, supervisory/managerial costs, etc.

Then, at the end of the day you are in business to make a profit.

Rob, could you send me a copy and I'll reciprocate to see how much our costing formulas differ by.

Cheers

« **Reply #13 on:** February 27, 2008, 05:20:54 pm »

Robert

If possible could I have a copy. (I dont have one to send back so will understand if you would rather not).

Based on our normal pricing calculation I would say that our prices are nearer to yours than to Lisas but would be unsure how to justify the extra bit.

Si

« **Reply #14 on:** February 27, 2008, 06:40:59 pm »

I work out the pricing on my contracts by the number of hours per week x your hourly rate x 56 (52 weeks in the year plus 4 weeks holiday)

« **Reply #15 on:** February 28, 2008, 07:27:40 am »

I am as always amazed at the variations in pricing on here, I am inbetween Lisa and Chris and manage to convert 2 out 3 quotes the answer is usually the same from the client when asked 'one cheaper one more expensive yours presented well'.

Anyway onto Lisas question, you do not need a renewal letter, use a rolling contract where by if the client hasn't cancelled the contract automatically continues. You should be putting your prices up yearly anyway, there are plenty of examples on here if you search, I remember posting one a while ago.

Fox

« **Reply #16 on:** February 28, 2008, 11:21:45 am »

Lisa, its all about your location. If people are charging £17 p h in London then fair enough. I would say anywhere else thats city based, you should be looking at around £11.50 to £13 p h, giving you a 40 to 45% profit margin. But if you're charging them £9.50 at the moment, I would increase it to £10.95 p h for a year. Ring them and tell them that there will be changes to your charges but don't specify how much. Then state in your letter how much it will be, tell them about minimum wage rises, supplier costs have jumped and if you are a good contractor, they'll be fine with that. Hope that helps.

adrian@abbey

« **Reply #17 on:** February 28, 2008, 12:17:34 pm »

Hi
Thanks for all the replies, i have just done a draft renewal quote, £9k for all cleaning, supplies and laundry service charge for the year. Does that sound a bit steep? considering they were paying around £7800 - £8k before

« **Reply #18 on:** February 28, 2008, 03:40:21 pm »

Lisa,
If you are happy with that figure, break it down to the last penny so that you can explain to your client what the increased charges are for. £9k a year is a good contract no matter how big or small your business is.

How many hours per week is it again?

Adrian

« **Reply #19 on:** February 29, 2008, 09:00:16 pm »

its 15 hrs per week, the 9k includes all cleaning supplies and service charges for laundry and supervisor for 1hr per week, and based on 56 weeks ( 4 weeks hol)

« **Reply #20 on:** February 29, 2008, 09:38:23 pm »

Arent we now on 4.8 weeks per year holiday?

« **Reply #21 on:** March 01, 2008, 11:49:19 am »

Lisa

Dont know if its different with general cleaning as opposed to window cleaning.

I keep lines of communication open regularly with the person who hired me, if you build good relationships with them , then it is easier to guage a situation before you put it formally to them.

Instead of writing to them , why not request a meeting with them and be honest about what you want.

This way they will agree to your terms 9 times out of ten or you can negotiate a compromise.

If they like what you are doing then they will normally bend a little to keep you, remember most people dont like change unless you have been doing a bad job.

Dave