[Pristine Clean]

Hi People,

I just wanted your opinion please on Prices. Yes I a bit taboo. Its just general opinions here.

I have read many of the posts and many are stating that commercial contract cleaning start at around £14.00ph

We have this month alone had 6 quotes to do. We ran a a small test. For example we spoke to the clients and we also got to see all of the other quotes. The names of the companies I wont mention.
Not one of the quotes we reviewed were at £14.00 per hour. Infact they were all around £11.00 inc materials.

Even for small jobs that were one visit a week started at £10.50 no more than 2 hours a week. Yes chemicals, bags included.

So why does most of the replies to price range start at £14.00. The people that woyuld have quoted £14.00 would have no chance in obtaining a commercial contract.

Dave

[Colin Stokes]

Now we'll go as low as £12 an hour but only for 40+ hours a week and I do get contracts at £17.50 (our min fee is £52.50 - for one visit per week) but would having a look today our average right now is £13.85

We did go lower but made a conscious decision that we know what profit we want to achieve and we'd rather stay smaller then take business below an agreed bottom line.  Maybe that is the wrong approach but we had overheads to make every month I didn't feel were worth the margins.  We actually resigned from many sites to implement that ethos.

That said we probably only get 2 new contracts every quarter and still after 5 years only employ 20 odd people so maybe lower margins and more contracts is the way to go although in my opinion  you'll never beat the self employed working for themselves type who are usually great cleaners because they care so much or the huge outfit that pay peanuts or employ illegal workers (come up against them all the time in London).

Dont know what its worth but thats my thoughts.

[vacman]

Colin

Your words are so soothing, because they echo my own thoughts and its something i dont hear or read often.

My sister and I are the only people working in our business at the moment; at it's peak we probably had ten employees in one form or another. All legally allowed to work here i might add 

As it stands, we have to work physically hard to make an average kind of wage for ourselves, but find that we're actually taking more out of it by doing the work than we were employing staff. Some people find that impossible to believe but the fact is that we were never able to make that much from staff. I often wonder where we were going wrong.

[Adam P]

does anyone feel brave enough to explain exactyl how they work out costs/profits? i currently have a problem where we got the chance to clean a very large school but start in a small area and if they are happy with us then we get rest of property to clean. we have unfortunately priced way too low being our first place we'd need to emply people. at the moment we are doing the work ourselves so any money made is profit as we don't take a pay, but we'd never be able to pay cleaners to do this for us.

we would like to charge £14 per hour but in all honest i don't think they'd be able to afford it as that almost double what they'd most likely been paying for as they did all cleaning in house. seeing others say around £12 mark so if we price that we'd be left with £5 per cleaner per hour for other costs.

I'm worried though of things like other costs which we've never done before, holiday pay, sick pay, employers insurance etc, and then finally how much we'd actually make from this contract.

in percentages how much profit would people be looking to take from each contract?

[martin19842]

hi there

i have over the past few weeks posted on here with regards to cost calcs.

hourly wage, add holiday pay, and employer NI, add equipment and material costs, then add the percentage that you require to manage the contract throughout the year, and finally add the nett profit element that you need to achieve.

now that isnt a secret or sensative calculation, the most diffcult part of the formula, is the contract management percentage, so add up ins, rent, elec, admin etc etc, and then divide by number of clients, or you can weight the formula, ie large clients to small clients, its up to you

hope that helps

regards

martin.

[Pristine Clean]

Hi Peeps

Thanks for your replies. Much appreciated.

Martin, Yes we know there is no real secret to pricing and everyone will charge different rates due to different factors.

As a company we are doing very well. However we do not win all the contracts. But are growing. I just wonder from time to time how people can go in so low and actually wondered if they have checked to see if they are making an actual profit or if the contract is costing them money.

Thanks
Dave

[martin19842]

hi Dave

oh i have no doubt that some contracts are done at break even or even at a loss, why do that, lots of reasons, trying to get other works on the back of it, ignorance that they dont monitor the P and L account.

regards

martin

[Fox]

Hi all

In my opinion the 'big guys' do it by pile it high, sell it cheap, it works and gives them a healthy profit overall, their sales techniques are also very sucessful and I believe that their attitude is win 5, lose 2, up by 3, allowing the management charges to be low.

If you have a 20 hour site at £11.00 per hour and pay £6 per hour you are left with £100 per week or £5.00 per hour, you do not have to factor in all of your overheads into this amount as that is shared between all of your sites.  You only need to factor direct costs and a % of o/h.  Direct costs are likely to be, holiday pay, employers ni (although in the case of most of these jobs it will not be a factor) uniform and P&EL, plant & machinery, chemicals & materials, administration & supervision, you are then left with your profit margin.  Holiday (min) £11.54 NI n/a uniform £1.70 (based on three each per yr at £15) P&EL Approx £2.10, plant & machinery £7.69 (based on £400 worth of equipment, remeber this is a cost only in your first yr thereafter maintenance only), chems & materials £8.80 (based on 4% of contract price, but believe me it will be nowhere near this if run properly) supervision £10.00 (0.5 - 1hr per wk), administration £6.60 (3% of contract) total MAXIMUM direct running cost £48.43.  % of overheads lets say for arguments sake £450 per week to run business with 30 sites of approx the size above = £15.00.  Profit on site £33.43.  Not bad at £11.00 per hour if you did have 30 like this it would bring you a profit of approx £1000 per week, so you can see that you could run many more sites at a lesser rate and earn more.

You can use the above calculations on most sites or just lump all hours worked and turnover together and do the math to get a beer mat calculation.

Fox 

[suffolkclean]

Hi Fox -I found your sums very usefel.
I have very little experience quoting for commercial work could you help me. I've been asked to quote to clean 2 hrs a fortnight with us to supply everything including vacuum,mop/bucket.
How do you work out how many cleans over the course of the yr ?? could you list for me idiot proof how I work it out when paying cleaner £6.50 eg what % is holiday pay so I can clearly work out my costs.
Id really appreciate it.
Barbara

[APPLEMAIDCLEANING]

Hi People,

I just wanted your opinion please on Prices. Yes I a bit taboo. Its just general opinions here.

I have read many of the posts and many are stating that commercial contract cleaning start at around £14.00ph

We have this month alone had 6 quotes to do. We ran a a small test. For example we spoke to the clients and we also got to see all of the other quotes. The names of the companies I wont mention.
Not one of the quotes we reviewed were at £14.00 per hour. Infact they were all around £11.00 inc materials.

Even for small jobs that were one visit a week started at £10.50 no more than 2 hours a week. Yes chemicals, bags included.

So why does most of the replies to price range start at £14.00. The people that woyuld have quoted £14.00 would have no chance in obtaining a commercial contract.

Dave

One way we win contracts is because other charge to high and the clients is being quoted far to much

We check cleaning hours against the square footage, for premises over 5,000 sq ft, you should be charging 2,500 sq ft of cleaning per man hour.

If your charging for only 2,000 sq ft per man, your probably charging to much. If your charging for 3,000 sq ft of cleaning per man hour, your loosing a bit i guess, Hourly rate should be £8-9 per hour for premises over 10,000 sq ft, and £9-11 for premises under 10,000 sq ft. 

[APPLEMAIDCLEANING]

Hi all

In my opinion the 'big guys' do it by pile it high, sell it cheap, it works and gives them a healthy profit overall, their sales techniques are also very sucessful and I believe that their attitude is win 5, lose 2, up by 3, allowing the management charges to be low.

If you have a 20 hour site at £11.00 per hour and pay £6 per hour you are left with £100 per week or £5.00 per hour, you do not have to factor in all of your overheads into this amount as that is shared between all of your sites.  You only need to factor direct costs and a % of o/h.  Direct costs are likely to be, holiday pay, employers ni (although in the case of most of these jobs it will not be a factor) uniform and P&EL, plant & machinery, chemicals & materials, administration & supervision, you are then left with your profit margin.  Holiday (min) £11.54 NI n/a uniform £1.70 (based on three each per yr at £15) P&EL Approx £2.10, plant & machinery £7.69 (based on £400 worth of equipment, remeber this is a cost only in your first yr thereafter maintenance only), chems & materials £8.80 (based on 4% of contract price, but believe me it will be nowhere near this if run properly) supervision £10.00 (0.5 - 1hr per wk), administration £6.60 (3% of contract) total MAXIMUM direct running cost £48.43.  % of overheads lets say for arguments sake £450 per week to run business with 30 sites of approx the size above = £15.00.  Profit on site £33.43.  Not bad at £11.00 per hour if you did have 30 like this it would bring you a profit of approx £1000 per week, so you can see that you could run many more sites at a lesser rate and earn more.

You can use the above calculations on most sites or just lump all hours worked and turnover together and do the math to get a beer mat calculation.

Fox 

This is how we work ours out but using abid model that breaks all the cost for us. 

[Fox]

Hi Barbara

Personally I would avoid this type of clean unless you can fit it in easily with something else.  However I am aware this wasn't your query!

Are you going to be leaving the equipment on site or using a mobile?  This question will set your 'equipment & machinery' costs.  I would be loathe to leave equipment for a fortnightly clean as they would use it in between cleans and you are paying for the depreciation so factor that in.  You should invoice this on an 'each clean' basis rather than 52 weeks and the holiday pay at 2hrs per fortnight at £6.50 per hour would be £36.40 over the whole year (for ease split to wkly calculation - 1 hr per week x 5.6 x 6.5 / 52 = £0.70) so it will cost you 0.70 per week for hols or £1.40 per fortnight (the cleaner would take 2.8 wks per year I would round it to 3 working days for ease)

Hope this helps
Fox