[Gilbert Sprous]

Has any one ever bid against a company called UK Cleaning?  I am taking it that they clean quite a few of the Pizza Huts.  I put in a bid that I thought was quite reasonable for a Pizza Hut in my area.  When I followed up I was told I was underbid by quite a margin.  The manager did not want to go with UK Cleaning but really had no choice as the price difference was quit a bit.  They had UK Cleaning in before but they did not like the service, I tried to go in from that angle but when she told me the price I could not match it, or come close.  The price was around 6.70 per hour.  That does not leave much for a profit margin.  The only thing that I can figure is they do not plan on covering holidays or sick leave, or providing any type or area manager.  Or, they just underbid it because they dont want someone else to get a foot in the door.  Any thoughts?  Any one went against them before?  Just wondering because there is no way I would try to match that price, or do I just wait until they go broke LOL.

Cheers

[Pristine Clean]

I know it very hard to understand how they can go in so low.

However when you are a large company you do not put all your costs per job. Like small companies do.

Large companies spread the cost of jobs over several jobs. Once you have enough numbers (contracts) you can go in very low its almost unbelievable.

It may not have been as low as £6.70 or if it was, he has not informed you how much they have charged for materials. There are many ways to gain a profit on such a small hourly charge.

We have contracts at £7.30ph but like I said its a numbers game!

Many people moan and say you are just undercutting! No its business. If other companies large or small cannot compete then move on.

Just because someone charges lower does not mean we are undercutting, it does not mean we wont be around for long, it certainly does not mean we will go broke. It just means that we have  worked out how to cover jobs, holidays, insurance .. all other overheads and still have a healthy profit at the tax year for companies house.

So yes I can say even on that price holidays are covered. Sickday are covered the lot.

Hope it helps you underatnd. Its spread accross the board of jobs!

Dave

[Gilbert Sprous]

I think you mis-understood my post.  I do understand how fixed costs versus variable costs can help a larger company to go in at a lower bid.  If you have more contracts the only increase in overhead is the variable, where as the fixed will be, well fixed regardless of size.  Also, if I was in their position and I could undercut to ensure no one got a foot hold into a business that I was quite comfortable in I would do it.  Protecting your territory is not such a bad thing, and even losing money in some areas to ensure a gain in others is a legitimate strategy and one that Sam Walton perfected.  I do have a niche of customer service that is unparalled.  I have been in business for about 16 months now and can say that not one of my contracts has ever missed a clean.  Sick, Holiday, short notice emergency, or natural disaster, we are always there.  If one of my staff can not make it and I can not find a suitable replacement, I do it myself, regardless of how far it is.  I have driven 1 1/2 hours to do a 1 1/2 hour clean.  To give you a bit more back ground, the Pizza Hut did have the same cleaning company in before because they take care of most of the Pizza Huts (I guess in this area) but they were not satisfied with the service and let them go about a year ago.  They had a problem covering sickness, holidays, and the standards were never checked.  Now saying that, from my understanding, they let them go, but now they have bid even less than they were charging a year ago. 

Going back to my post, I am just trying to find out if anyone is familiar with the company and if they do cover more pizza huts than just my area, then I would know if it would be worth me trying to come down and meet halfway so that the Pizza Hut here would accept my offer.  Where I would provide the level of service they are looking for, or would this company just come back and counter again.  As I said earlier, my niche is client satisfaction, and I know a lot of companies do boast of the same niche, but not many can say that they have never lost a contract.  To date I still have every contract that I have ever acquired, even through these economic times and my prices.  I would be willing to come down some in price but not to the point where I feel service levels would suffer, that would just give me a tarnish I am not looking for.  I realise that the average contract turnover per year for the average contract cleaning company is around 30%, I want to keep mine below 5% (0% at the moment).  My turnover is not huge, but I have reached 6 figures in what I consider a short amount of time, but I think I need to continue with what has helped me grow and stick with ensuring the very high client satisfaction rate. 

Saying all ofthat, which I think I may have given you more information than you really wanted LOL.  Do you know much about UK Cleaning and if I was to lower my price, would they in turn try and do the same to keep the contract, I am not really interested in a bidding war with a larger company. 

Cheers

[martin19842]

hi there

you need to establish if uk cleaning are in on a National or regional deal.

if its national, then the local restaurant managers havent got much of a say, also if you think about it they will only do toilets and front of house, , most of these organisations will do the kitchens themselves, and with regards to the staff and store areas, well same principle.

you need to establish if there are any other services that uk are providing, ie periodical floor care, or wash room work, they could quite easily be running from that point of view.

the other thing that you have to remember is that uk will have a contract manager who is responsible for that contract, the performance of it, and the profit and loss of the contract, and profit accountability is getting more  and more important, so despite what looks like a low price you can assume they are getting a return in line with what they want and need.

just  thoughts

regards

martin