Count The Cost of Your Janitorial Proposal

Suppose you wanted to build a tower. Wouldn’t you first sit down and count the cost to see if you have enough money to complete it?

CleanlyRun blog post image - Crane

For if you lay the foundation and are not able to finish it, everyone who sees it will ridicule you saying, this person began to build and wasn’t able to finish.

These wise words written 2000 years ago are still true today. And these foundational truths has guided me well for many years, from running multiple businesses to navigating life.

In this Blog Post, I’m focusing on how to determine what it will cost to clean a building before you set your bid price. You MUST “Count the Cost” first!

Based on my three decades in the Janitorial Industry, here’s my Top 10 list of considerations required to calculate a profitable Janitorial Bid!

  1. GENERAL BUILDING TYPE: Different building types have different cleaning times/production rates. A 3,000 sq’ fully carpeted Library may only take 2 hours to clean, while a 3,000 sq’ Medical Clinic with 1500 sq’ of waxed VCT floors may take 4 hrs.
  2. CLEANING FREQUENCY AND LEVEL OF DIFFICULTY: Cleaning difficulty level is gauged not just by the size of a building, but rather by looking at the number of employees in the building (Building Density), plus the number of customers or patients or clients – the “Traffic” – that frequents this building on a daily basis. Higher building density/traffic results in longer cleaning times, which equates to a slower cleaning production rate for you and your cleaning staff. Basically, the more people in and out each day equals more trash, spills, messes, etc., which means it takes you longer to clean.
  3. CLEANABLE SQUARE FOOTAGE AND FLOORING TYPE: Whether you count ceiling tiles, get the number from your potential customer, or look online at the County Property Appraiser, make sute that you get the actual Cleanable Square Footage. Did you know that carpeted floors clean 15-20% faster than hard floors? And that waxed, vinyl tile floors with a shine can take 10% longer to sweep and mop than other hard floors like ceramic tile?
  4. DETERMINE PRODUCTION RATE: A facility’s Production Rate refers to how many square feet of a building can be cleaned by one person, in one hour, performing a set of standard cleaning tasks. Of course, you will have a much slower production rate when doing residential and construction cleaning.
  5. TOTAL DAILY CLEANING/LABOR HOURS: Once you have your Production Rate, this rate is then used to compute how many hours are required to clean a building per visit (i.e., the Daily Cleaning Hours). And once the Daily Cleaning Hours have been workloaded – that is, labor and wages have been distributed across these hours – then the bid’s Labor Costs can be computed by the system.
  6. LABOR COSTS: Once the Daily Cleaning Hours have been workloaded – that is, labor and wages have been distributed across these hours – then the bid’s Labor Costs can be totaled.
  7. ADDITIONAL PAYROLL COSTS: These costs typically include applicable Federal, State dan Local Taxes, as well as Work Comp, etc. There are government websites that can give you your state rates to go by. Your Accountant can help you. Also, there are many payroll software programs as well as many Employee Payroll Companies and Employee Leasing Companies that will give you an exact percentage.
  8. CHEMICAL /SUPPLY COSTS: These can run 3-10% of your monthly costs and expenses. These costs typically include floor cleaner, glass cleaner, all-purpose cleaner, disinfectant cleaner, bowl cleaner, stainless steel polish, etc. Buy chemicals in dilutable, concentrate form to keep costs down. Chemical mixing stations are great also. Products like bowl cleaner and stainless steel cleaner are usually sold “ready to use” (RTU), and cost a bit more, so shop around for reasonable pricing. Equipment like vacuums, buckets, floor buffers, etc. are an upfront cost that can be depreciated over time (talk to your Accountant).
    Chemicals like floor stripper, floor finish and carpet cleaner are an expense if you provide your customer with extra Specialty Work, but is included when and if you add these services in your bid.
  9. OTHER MISCELLANEOUS COSTS / EXPENSES / OVERHEAD: These typically include things like.. higher level managers over multiple buildings doing inspections, training, cell phone costs, fuel, etc. When you’re just starting out with only a few buildings to clean, these costs are minimal and can be hard to define, but figure in at least 2-3% to be on the safe side, even if you are the only employee and do all the work.
  10. TOTAL JANITORIAL COSTS / EXPENSES: Congratulations, now that you’ve calculated all of these costs and expenses you’re ready to “SET YOUR PRICE” (via Profit Margin or Cost Markup)!

Keep in mind:  When you get requests for a Janitorial Proposal, that’s the time to create a winning bid! If you’re content with the way you’ve been calculating your Total Janitorial Costs/Expenses,” that’s great. But if you’re looking for a proven competitive edge – my automated best practices – I encourage you to try a free 30 day trial of CleanlyRun Janitorial Bidware.

Check us out at CleanlyRun.com… Let’s grow your business!

CleanGuidePro Successful bidderDrake

Janitorial Email Marketing to Grow your Business

Over five years ago, I began a blog post about Janitorial Marketing with the following two paragraphs:

CleanlyRun blog post image - Left Quotation mark

To fail to have a Janitorial Marketing Plan is to plan to fail at marketing your janitorial business. But a plan is only as good as the method(s) it employs. And the best methods are the ones that not only generate the most customer interest and sales, but do it cost-effectively. So where should you focus your limited marketing dollars? Television, Radio, Billboards, Telemarketing, Yellow Pages, Hired Sales Reps, Newspaper Print Ads, Cold Calls, Direct Mail?

Twenty-five years of janitorial business experience has taught me that the best marketing method is (hands down, no close second, leader of the pack) Direct Mail Marketing! It’s cheap and effective and almost always generates a good response.

CleanlyRun blog post image - Right Quotation mark

— Cleanly Run, Inc. – Drake’s Blog – A Proven Janitorial Marketing Plan That Works! – May 2013

 

Flash forward:  I still support those options, but with one crucial addition – Direct Email Marketing!
CleanlyRun blog post image - E-mail Marketing

In fact, Direct Email Marketing is now my number one Marketing Method for contacting a prospective Janitorial Customer about placing a Cleaning Bid. ( My former #1 – Direct Mail – is still a good option, but it’s shifted to a distant second.)

Of course, Email Marketing has a bit of a learning curve in the beginning. You need to build your contact list, create a clear (and personal) message, list a call to action, and link to your website. But once you get it, you’ve got it; Bid Requests Will Happen!

The purpose of this post isn’t to teach you how to create an email campaign – (that’s what Google is for) – but rather to give you some reasons why you should add this tool to your marketing arsenal. So here are my Top 6 Reasons to use Janitorial Email Marketing to grow your Cleaning Business:

  1. PEOPLE USE EMAIL – A LOT!  85% of adults send or read daily. 99% of those check their email an average of 20 times per day. (I’m probably checking my messages closer to 50 times a day, but that’s just me…)
  2. PEOPLE ACTUALLY OPEN YOUR CAMPAIGNS:  The stats show an average of 21% Open Rate of your Campaign. (In my experience, that stat is spot on accurate.) Adding videos can increase open rates up to 3 times.
  3. OTHER COMPANIES USE IT:  An average of 81% of small, medium and large companies use email as their primary customer acquisition channel (and 80% use it for customer retention). Companies keep using what works.
  4. DASHBOARD STAT TRACKING:  Let your numbers guide you to winning campaigns. Numbers such as who’s interested, who’s not, website clicks, emails opened (and opened multiple times), best day and time to send and many more useful statistics. For example, when you notice that someone has opened your email multiple times but hasn’t replied, you may choose to target a direct mailing to them.
  5. IT’S AFFORDABLE:  You can run multiple janitorial email marketing campaigns for less than $100 a month. Or you can always start small for as little as $10-$15 per month.
  6. IT WORKS OUTSTANDINGLY WELL FOR ME!  Yes, I’m an actual eyewitness to the success of email marketing. My janitorial marketing campaigns result in multiple requests for cleaning proposals (and I typically win a high percentage of these)!

 

Looking ahead:  Once you’ve created a successful email marketing campaign – and you will – the requests for a Janitorial Proposal should start coming in. That’s when you’ll need to create professional, profitably priced Cleaning Proposals to win the jobs… If you’re looking for a proven competitive edge, I encourage you to try a free 30 day trial of CleanlyRun Janitorial Bidware.   As a Co-founder, it’s been extremely gratifying to see thousands of companies sign up and win new cleaning bids using my automated best practices!

Check us out at CleanlyRun.com… Let’s grow your business!


CleanGuidePro Successful bidderDrake

Customize your Janitorial Bids

CleanlyRun Janitorial Bidware Features

From time to time, we like to highlight some of the system features of CleanlyRun (aka CleanGuidePro) Janitorial Bidware.

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Background Note: CleanlyRun Janitorial Bidware provides a time-tested set of standard pre-populated Proposal Sections for each Janitorial bid. (A lot of trial and error has gone into determining what proposal lengths and layouts generate the best customer response.)  But you always have the option to:

  • Edit as you see fit: You can include (or exclude), rearrange, and Add/Edit/Delete any Cleaning Proposal section by using our feature-rich Proposal Section editor (which contains three rows of toolbar options).
    CleanlyRun - Editor Toolbar

  • Colorize the Header, Footer and Table of Contents: Sure, you can easily change the text color of any Proposal Section.  But you also have the ability to change the color (or suppress the display) of the Header, Footer and Table of Contents for any proposal.
    CleanlyRun - Color Switcher tool

  • Upload your Logo and other images: You can include photos/logos/images on any page of a Janitorial Bid. And once your images are uploaded, they can be resized and manipulated within the Proposal Section editor.
  • Upload supporting documents (like a Certificate of Insurance): You can also upload documents to a Cleaning Proposal section (like Proof of Insurance).
  • Create your own templates: If you opt to build your own proposal templates from scratch, feel free to use the “My Data” drop-down list to insert data placeholders on any page.

 

CleanGuidePro Successful bidderHave it your way!  At CleanlyRun, we want the presentation of your Janitorial Bids to benefit from our experience and expertise, but in the end, you're in charge!

Janitorial Profit Margin versus Janitorial Cost Markup. Which to choose?

Not understanding the difference between Janitorial Profit Margin and Janitorial Cost Markup is one of the most common pricing mistakes in the cleaning industry.  I’ve seen way too many new business owners decide to price their janitorial bids solely on Markup – “I’d like to make $500 on this job” – rather consider the Margin of Profitability for the work…

Both terms – Margin and Markup – help you calculate profit, but prioritizing the wrong one could hurt your bottom line.

Let me break it down.
CleanGuidePro blog post image

Margin: (a.k.a. Profit Margin) is the percentage of the final selling price that is profit. In the highly competitive janitorial services industry, Profit Margins can trend low for very large jobs — say, 12 to 15% — but that range is unprofitable for small to medium clients.

Markup: (a.k.a. Cost Markup) is either the (a) Dollar amount above cost, or the (b) Percentage of the cost that you add on to get to a bid price.

So which approach should you use? As a general guideline, it is probably better to focus on your Profit Margin rather than a Cost Markup in a service business. A higher Profit Margin percentage matters more than a higher Cost Markup percentage. For example, a 25% Cost Markup only yields a 20% Profit Margin, which means that your markup isn’t as profitable as it may seem at first glance.

With margins, a 50% Margin means that half the selling price is profit. So, a 50% Margin means there is a 100% Markup — as you have added 100% of the cost price to make the selling price. (With margins, a 100% Margin is only possible if the cost price is zero.) In short, a focus on Profit Margin is more effective when it comes to pricing your janitorial bid.

Of course, situations and customers vary, and the choice to prioritize Margin or Markup is yours. Fortunately, CleanlyRun Janitorial Bidware displays Markup and Margin right next to each other, so you always know what is your Profit Margin’s equivalent Cost Markup — and vice versa.  In addition, we’ll suggest a minimum Profit Margin/Cost Markup for each bid that you can adjust as you see fit.

On a related note, I’ve touched on how the Profit Margins of smaller businesses can be higher than bigger ones, even with a lower Fair Market Price.

That’s enough math for now! 😉

CleanGuidePro Successful bidderDrake

Janitorial Bidding Software That Works!

Long story short:

After 25 years of hard work, determination, faith and years of trial and error developing a systematic bidding method for my own cleaning business, I ended up building (with an unbelievable team of programmers) the janitorial bidding software that I was searching for.. A proven systematic approach that has generated millions in sales. A system that works!

Long story long:

My name is Drake Thomas, I’ve been in the cleaning business over 24 years. I started out at age 19, supplementing the income from my full time job by cleaning my sister Linda’s house once a week (for $40 cash). It took me about two hours to clean, so I averaged about $20 an hour. I made 4 times the minimum wage rate at the time and she got a clean house for a week! That’s a win/win in my book!

I saw that there was good money in cleaning, but it wasn’t my dream job at the time; I had other life plans to pursue. Linda was already a very successful computer programmer, having graduated Valedictorian in high school and cum laude in college, and she urged me to get a degree as well. So, over the next five years, I worked in sales and went to college part time, receiving an AA degree in CIS, Computer Information Systems. The degree was good, I learned a lot about computers, but I never pursued that career path. But, I did meet my lovely wife Kristin there and we just celebrated our 19th wedding anniversary!

Just before I graduated college, an opportunity arose to take over a tiny floor care company (stripping, waxing and polishing floors). The owners, an older couple, were moving out of town in two months and would lose the handful of accounts that they had. I made them an offer of $5,780, (the total value of all their equipment if purchased new). The deal was that I would give them a deposit of $2,500 – (a credit union signature loan) – and work with them at night (for free) during a two month training period. The balance would be paid off in 6 monthly installments from my business profits. They happily agreed. So for a while, I worked a day job, attended college part time, and then stripped floors at night (sometimes until 5am). Then I got up at 7am to do it again. At the end of the two month training period, I quit my day job. I figured if I could sell for “them”, I could sell for myself. Initially, I only offered floor care, but I pretty quickly started bidding – and winning bids – for complete janitorial services.

This calculated risk paid off, but isn’t life full of risks? The fruit is at the end of the branches. During my career, I’ve read literally hundreds of books on business management, motivation, goal setting, systems, sales/marketing techniques, cash flow, customer retention, budgets, planning, cost cutting and the list goes on. But my number one book concerning business is the book of Proverbs. It has taught me more about business than any other by far. Things like “mere talk leads to poverty” (take action!), “all hard work returns a profit” (don’t be lazy!), and “seek wisdom more than choice gold or fine silver” (knowledge is power!).

Over the years, I’ve won hundreds and hundreds of bids for monthly janitorial service, floor waxing, carpet cleaning, pressure washing, specialty work and supply sales for Banks, Car Dealerships, Churches, Corporate Offices, Day Cares, Dentist Offices, Doctor’s offices, Hair Salons, Hospitals, Ice Cream Parlors, Law Firms, Medical Facilities, Pawn Shops, Property Management, Restaurants, Retail Stores, Schools, Veterinarians, and just about everything in between. What’s the secret you ask?… There is no secret! Just a quarter century of hard work, determination, faith and years of trial and error developing a systematic bidding method for my own cleaning business. A proven approach that has generated millions in sales. A system that works!

This bidding system is available to you now! Welcome to CleanGuidePro Janitorial Bidware, cleanlyrun.com! If you’re looking for the right janitorial bidding software to help you win more bids, you’ve found it. You can accurately bid on commercial and residential, monthly cleaning accounts, 13 specialty work tasks like floor stripping, carpet cleaning, pressure washing, tile &and grout cleaning, day porters, etc, commercial and residential construction cleanup, and much more!

Over three years of development has gone into the creation and development of this software. We just released in February of this year and hundreds of janitorial companies have already signed up, given us awesome feedback and most important, are winning bids! Not only is it designed to bid the way that I’ve bid and won hundreds and hundreds of times, but the behind the scenes team of software programmers have integrated the latest business rules technology to capture every nuance of successful bidding. This team is headed up by – you guessed it – none other than my sister Linda. Her thirty years of expertise and experience working on a multitude of Fortune 500 IT projects have made CleanGuidePro come to life. I half kiddingly tell people that I’m a Grand Master Janitor, but Linda is truly a Grand Master Programmer! Call it fate, destiny, or a match made in Heaven, but don’t call it coincidence. My love and gratitude to her.

 

Sign up today for our no obligation, free 30 day trial and start winning those bids! Check it out for yourself at cleanlyrun.com !

Sincerely,

CleanGuidePro Successful Residential Cleaning bidderDrake