How Much Should I Charge For my Cleaning Services?
Maximizing profit for your cleaning business
Introduction
How much should I charge for my cleaning services? This is a question you hear very often in the cleaning industry. Unless you have purchased a franchise and it came with a started kit which most of them do (S.O.P, pricing model, uniform etc.), for the rest of us, there is a 99% chance you have asked yourself that question every day or at least once a week. Every time you talk to a cleaner(s) or visiting a cleaning page on social media (Facebook etc.), there is a good chance you have seen someone trying to find out how much they should charge for a clean.
So let’s cut to the chase. First, no one on the internet should tell you how much you should charge for a clean (NO Seriously… But keep reading). There is no particular way to price a cleaning job because the price sometimes depends on the region, the city or the country but most importantly the type of clean that is being done. Different factors go into quoting a cleaning job which may or may not affect your cleaning business. If you choose to follow someone else’s price model, there is a good chance you may leave money on the table or over charge for the clean.
Free Excel Pricing Models For Cleaners
In this article, we will share with you different ways of calculating and quoting cleaning jobs. We have taken the time to create templates that you can download for yourself and use at any time. With this information at your disposal, you have the freedom to pick which pricing model will work best for you and that is beneficial to your cleaning business. Knowing what goes into pricing a clean will make you and your client more comfortable knowing what they are paying for.
The idea that one model fits all is like saying everyone should wear a size 9 shoes. It just does not work. Depending on the stage your business is at (see different scenarios below), you or your staff will require different tools and pricing models to make profits and keep the business going. After all, no business has ever lasted without making a net profit unless you are Amazon but that is a different story.
Scenario 1: You are a new cleaner and you have no idea where to start, let alone how much to charge for your cleaning service.
Scenario 2: You have been cleaning for a while now, but you are still unsure how much to charge. Sometimes you lose bids because they are too high, and other times, you don’t make as much as you did on similar jobs.
Scenario 3: You are a pro, been cleaning for a few years but you are still the only person on your staff who can quote the job properly because you don’t trust anyone else to quote. Or better yet, your way of quoting is just too complicated.
Scenario 4: You operate in multiple cities and each location requires a slight different pricing model.
First thing first, Find Out Your Production Rate (Sq. Ft. Cleaned per Hour)
Production Rate (P.R) is the square footage cleaned per hour. For instance, if you are cleaning a house that is 1500 sq. ft. and it took you 3 hours to clean the space. Your P.R is 500 sq. ft per hour. Different factors such as crew size and type of clean you are servicing will affect your teams production rate. It is very important to track and know your teams P.R in the long run.
If you are brand new to the cleaning industry and you have never cleaned before. When quoting a new home, as a rule of thumb you should expect to spend 1.5 to 2 hours for every 1000 square feet of a home. If the home is 2000 square feet, it should take you around 3 to 4 hours depending on the state of the home.
If you have been cleaning for a while, you should already have your production rate or have an idea of what it is for the different types of clean you offer (Regular Clean, Deep Clean, Move in/out Clean, vacation clean etc…). If not, here is a great way to get your numbers (Download Production Rate Calculator Excel).
What goes into the Pricing of a Home Clean
Production Rate — Every cleaner should know their crews’ production rate (Download Production Rate Calculator).
Labour cost — labour cost is how much you will be paying yourself or your cleaners which may vary per cleaner but also per state or country. Make sure to look up what the minimum wage is in your region and adjust as you see fit based on work experience etc…(Wage Per State USA).
- Let say you are paying $16 per hour and the work will take 4 hours, that is $16x4 = $64
Payroll Taxes — Any time you employ someone you have to pay payroll taxes. As part of the Federal Insurance Contributions Act tax (More on FICA) which allows you to earn credit for Social Security benefits. Check with your accountant or payroll provider but a good number to withhold is about 18% of your labour.
- Therefore, payroll taxes will be $64 X 0.18 = $11.52. Now your total is $75.52
Supplies & Equipment Amortization — An industry standard for supplies is 6% which takes into account labour cost, payroll taxes
- 6% of $75.52 is equal to $4.53. The total will come up to $80 as we rounded up.
Overhead (Office staff, supplies, marketing, software etc.) — If you are just getting started there is a good chance your overhead is still very low or $0. Most cleaning businesses have an overhead and they usually account for anywhere from 25% on the low end to 50% on the high end.
- Using the high end percentage (50%), you get 50% of $80 which equals $40. Therefore, the total is now $120
Profit margin — This is where you get to decide how much you want to charge in order to get the job. 30% is probably the lowest you want to go and in some cities, you can go as high as 45%.
- Let’s go with 35% as it is a good number to use. Multiplying the total by 35% gives you $42 ($120 X 0.35 = $42). The total is now $162 ($120 + $42 = $162)
Sales Tax — The total for the clean is $162. Please note that this does not include the sales tax. If your state or region requires you to charge sales tax, you have to tag a sales tax on top of your total.
- For instance, in California the sales tax is 7.25% which will be an additional $11.8 in taxes ($162 X 0.0725 = $11.8). The total will be $173.8 ($162 + $11.8 = $173.8).
Pricing Plan
Now that we know what goes into pricing a clean, let’s explore the different pricing methods and which one is potentially the best fit for you.
There are different ways to price a cleaning job but majority of models fall under two categories, Hourly Wage and Flat Rate. This depends on what you are more comfortable with. Ideally, if you are just getting started working for yourself and don’t have much overhead, it is best to start with a hourly pricing model. As things start to pick up, you have more crews on the road, you are insured and need software to handle back office tasks etc…it may be best to switch over to a flat rate. Reason being that it is much easier to predict your profit margins.
Hourly Rate
The national hourly rate per cleaner is $25 to $90 depending on which city or town you reside in. These rates depend on different factors such as experience, customer reviews and how many cleaners will be cleaning the house. For instance, in Toronto, Canada the average going rate per hour for a cleaner is between $35 and $45. By doing a quick google search or calling local competitors, you can have a hourly rate and price your services accordingly.
Toronto Google search for hourly wage
Keep in mind that the hourly rates are charged per cleaner. With a 2 member cleaning team, you will be charging the hourly rate for each cleaner. Two cleaners at $40 per hour for a 3 hour clean equals to $40 x 2 x 3hrs = $240 for the clean.
When charging hourly, a prominent question is “how long will it take to clean my place?”. This will depend on different variables such as the size of the home, number of bedrooms and the type of cleaning they want done (regular clean vs deep clean) and other factors. But for beginner, you should expect to spend on average 1.5 to 2 hours for every 1000 square feet of a home.
According to Home Advisor a single family home base price should be between $120-$150 to clean (extras not included).
Pricing per Production Rate
Not every home is the same, hence why some times paying per square footage is a more preferable method than hourly. When pricing this way, it requires you to know your production rate for the different services you offer (regular clean, deep clean and move in/out clean).
Dividing the total square footage of the home by your production rate will give you the total time needed to clean the space. Multiplying that time by your hourly rate will give you an estimate for a one time clean
If you do not have a Production Rate, an alternative way to charge is per square foot. Depending on the home conditions, cluttered or if the home has not been cleaned for a while, that will most likely impact the charge rate.
The square footage price varies between $0.05 and $0.15 for a regular clean. If you choose to price per square feet which is not the best way to price a residential job, we suggest you see the condition of the home prior to cleaning.
Production rate pricing works best for large houses and large condo units (Download the production rate calculator).
Flat Rate
Flat rate pricing is the most preferred way by homeowners. It offers a guarantee price and no uncertainties that may come with the other ways of pricing a house clean. The flat rate vary according to what the customer wants cleaned.
Typically starts with a base price for the basics and goes up as you add more items to the list. For instance, a regular clean can start at $80 for 1 bedroom and 1 bathroom (2 hours clean) and for every bedroom added to the clean an extra $8 and $20 per bathroom. Which means for a 3 bedrooms and 2 bathroom house, it is going to be $116 ($80 base, + (2bdm X $8 = $16), + (1bthrm X $20 = $20), Total = $116).
This way of charging will most likely cost slightly more than charging per the hour but it will also alleviate some of your customers worries. The price you see is the price you pay. Download a Flat Rate Price Calculator for your business.
How do I track my maid services Profit?
Calculate Your Profit Margin
Most cleaners don’t like the accounting aspect the cleaning business but it is probably the most important thing to know if you wish to scale your business be profitable in the long run. Knowing the percentage of variable costs and fixed costs will help you understand how much of the overall price is going to be left for the company (net profit). We will cover accounting topics of cleaning business in future post.
Variable Cost — cost associated with the direct clean such as labor.
Fixed costs — Cost associated with running your company. Despite having a full schedule of customer or not, these are cost you will have to pay such as utilities, rent, SEO, ads, software etc. (Download financial breakdown per clean)
Net Profit — Removing the variable costs as well as the fixed cost from your overall revenue will give you your net profit.
The net profit is essentially the life line of your business. It is with knowing your bottom line that you can make projection of future earnings, hire more staff, buy more equipment and put money into different marketing channels to help grow your cleaning business.
Conclusion
if you’re new to the industry or have been working but pricing cleaning jobs have been inconsistent, we hope the information provided above will help.
Use the method that best suite your business and area in which your cleaning business is servicing. Price a job hourly if you are just getting started or use the production rate method if you are able to keep track of your production rate or better yet use the flat rate method for your client and your piece of mind as it locks in a price in which both parties are happy and comfortable with.
I hope this article provided value and is able to help. If you have any questions or have a different way of pricing your jobs, we would love to hear from you. Comment below and don’t hesitate to share with someone who is embarking in a cleaning journey or already owns a cleaning business.
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