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UK General Cleaning Forum => General Cleaning Forum => Topic started by: Bizzie Lizzie on February 13, 2007, 07:05:26 pm

Title: Price Increase
Post by: Bizzie Lizzie on February 13, 2007, 07:05:26 pm

Hi All

I have been cleaning for a commercial client for 12 months now - and as I stated my charge for the cleaning is due to increase, how much can I increase by? 

I would be really grateful of any advice.
Thank you
Bizzie Lizzie

Title: Re: Price Increase
Post by: J. Deans on February 13, 2007, 08:28:31 pm

Hi,

You must always be able to justify a price increase if a client requests it in order to renew your contract.

There are a couple of ways to do this:

The long way:
Whatever profit you made in the first 12 months of the contract, should be the same for the next 12 months (not as a cash value - but as a percentage) Then add up ALL your business expenses as a forecast for the next 12 months. If this is more than last year, work it out as a percentage and increase accordingly. The amount of profit is then increased as well, without actually increasing the percentage of the profit.

The short way:
Follow the rate of inflation (and a tiny bit more if you want to include cost rises that are not always directly linked to inflation - such as fuel price rises etc!)

Which ever method you use, you should itemise and document it properly in the event that your client requests your reasons for the price increase.

Hope this helps

Title: Re: Price Increase
Post by: Jan K on February 13, 2007, 10:17:27 pm

i usually go the second way :)

Title: Re: Price Increase
Post by: heritagecleaning on February 15, 2007, 07:36:54 pm

Things I always mention as well as inflation are:
- Rising motoring & fuel costs
- Rising costs of liability insurance
- price of materials