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

Hiring family and friends in your janitorial business

Ask Drake

President and Co-founder of CleanGuidePro

With the truly, humbling success of CleanGuidePro, we’ve received great questions by companies all over the world about varying topics in the janitorial industry. Allow me to share yet another one of them with you.

Hey Drake: My Janitorial business has grown and I’ve started hiring employees. I’ve got eight part time employees now. Three are family members (my son and one of my sister’s daughter), one is a friend from high school and five are employees unrelated to me. My biggest employee issues by far have been from my family and my friend. I’ll get a call or text saying, “Sorry, can’t make it tonight, I need Friday off, etc.”. Also, when they’re late or do poor quality work and I confront them about it, they don’t seem to care and actually get upset with me. We just landed a new cleaning account and I’ll need to hire three more employees soon. I’ve got more family members that say they’re available to work for me, but I’m reluctant to hire them. What do you think? Should I hire family and friends or not?

Family employees

Answer: This is a great question and one that is near and dear to my heart. The simple answer is “YES” if you do it right and definitely “NO” if you do it wrong!

In the early days, I had my little kids help me (on Friday evenings and Saturdays) clean buildings and pull trash. They got paid with a trip to 7-11 for Slurpees, Ring Pops and Lemonheads and were ecstatic to get it!

As my janitorial business growth continued, I hired well over a thousand employees, including all four of my kids (as well as their boyfriends and girlfriends), my wife, my mom (as honorary CEO), two of my sisters, nieces, nephews, cousins, my mother-in-law, brother-in-law, friends of mine and friends of my family. I’ve also had to (reluctantly, tearfully and prayerfully) fire some of these people that I loved (AND STILL DO). All in all, family and friends have probably been about 4% (40) of my hires.

Hiring family and friends has been an incredible blessing to me by strengthening most relationships, yet it’s been a curse by destroying a few others. I have a close relative that still rarely talks with me due to our unsuccessful working relationship. This remains my biggest personal failure in business…

The bottom line answer to your question is this. Family and friends can be a great asset to your janitorial business, but establish guidelines and procedures for these people just like employees that are not related to you. When you do this, you will find that it strengthens both your business and your family!

 

CleanGuidePro Successful Residential Cleaning bidderDrake

Janitorial Employee-Supervisor Conflict

Ask Drake

President and Co-founder of CleanGuidePro

With the truly, humbling success of CleanGuidePro, we’ve received great questions by companies all over the world about varying topics in the janitorial industry. Allow me share one of them with you.

Hey Drake: As our janitorial business has grown, we’ve promoted two of our better cleaners to Supervisor positions. Soon afterwards, I had Supervisors telling me to fire certain employees and hire better people. I’ve also had employees calling me and saying that their Supervisor is bad, lazy and plays favorites among other things. What’s the best way to solve conflict between your supervisors and employees?

Supervisor-Employee conflict

Answer: First, let me congratulate you on your growing business! Your question is one that every successful business owner faces at some point in their growth.

Let me make it simple and clear. Your job as the owner is not to be a referee between supervisors and employees, making judgment calls based on some “gut feeling” as to who is right and who is wrong in each and every situation. Rather, your job to establish employee guidelines and criteria in employee handbooks, noting specific job descriptions for each position (from entry level cleaners to supervisory personnel) with clearly spelled out duties and responsibilities. Basically, everyone show know what their duties are and what the consequences are for failing to follow procedure.

Here’s how it works… Every employee should read your company handbook and sign off that they understand the consequences off “no call, no show”, “being late”, “poor quality work”, etc. Each cleaner should be trained and receive a checklist, detailing exactly what duties to perform on their shift. Likewise, each Supervisor should receive training and a checklist detailing exactly what duties they perform on their shift and (in particular) during the “end of night checklist”. This way when conflict arises (and it will!) you can look at which company procedures were violated and make a correct, unbiased decision!

Business 101 “rightly” teaches us that written systems and procedures, with clearly defined job descriptions with a touch of “common sense and love”, eliminates most of our business problems!

 

CleanGuidePro Successful Residential Cleaning bidderDrake

How To Workload a Janitorial Bid (when you do the work)

How do you workload (i.e. allocate the labor) for a janitorial bid when you’re the one doing all of the work?  I’ll answer that question in a moment. First, let me just lay a little groundwork. I’m posting this particular blog in response to the many small business owners – those just starting out and doing all the work themselves – that have asked me this very question.

CleanGuidePro Janitorial Bidware Workloading and Pricing screenTo create an accurate, competitive and profitable janitorial bid, you need to accurately calculate what it will cost you to clean this building every month. First, you need to know how many total hours a day are required to clean this building. Then, you need to figure out who will work these hours and at what wage (workloading). The hourly wage that you pay your workers determines your labor cost for the month.

Okay, simple enough, when you have actual employees, but back to the original question, how should you workload a bid when you’re the only cleaner?  Here’s the straightforward answer that most people seem to resist: Use the same hourly hourly wage that you would pay an employee (if you had one).  If you want to grow your janitorial business – and I’m assuming that you do – you’re going to have to hire employees at some point.  So from day one you need to think in terms of “What’s my profit margin on this bid” rather than “What’s my desired personal hourly wage”.

Most new business owners tell me that they price a job to make $20 to $30 (or more) per hour doing all the work themselves. That’s fine to think like that early on and it even motivated me 32 ago when I cleaned my sister’s house for $40 for two hours of work (plus I raided the fridge for leftovers, snacks and cold beverages)… PLEASE NOTE: I do NOT recommend that you raid your customer’s refrigerators!  Although.. if you happen to find a box of Krispy Kreme donuts with a few perfectly good donuts in your customer’s break-room trash, it’s fair game! Just sayin…

But when you inflate your wages when pricing a job, you’ve skewed your Profit Margin analysis.  In other words, you’ve left no room to gauge your real profit over costs.  When you workload using a fair employee wage (albeit a future employee) for your area, you can accurately determine your market costs and derive a bid’s true Profit Margin (which can range from 15% – 40% depending on the type and size of the job)…  That’s a fundamental best practice for janitorial business growth!

I’m Drake Thomas (President/Co-founder of CleanGuidePro Janitorial Bidware) and I’ve been pricing janitorial bids for over 25 years.  Let’s look at an example of the right way and the wrong way to workload a bid…

 

CORRECT BID WORKLOADING, Employee Wage, $8.75/hr

  • 10,000 sq’ Building, 5 days per week
  • Calculated Cleaning Production Rate by Employee: 2,500 sq’ per hour
  • 4 Total Daily Hours  x  $8.75/hr  = $35 a day cost/ $757.75 a month cost for labor
  • $757 Labor Cost + 30% for payroll taxes, chemicals, misc, etc. = $985.08 YOUR TOTAL MONTHLY COSTS to clean this building.
  • Now add a fair Cost Markup of 33% (which is equivalent to a Profit Margin of 25%) for a Monthly Bid Price of $1,313.44.
  • Your Monthly Profit on this bid is $328.36 a month.
    And looking ahead to when you have employees, you’ll only spend about 2.5 hrs a week – say 10 hours a month – on this account (i.e. dropping supplies, inspecting, scheduling, talking to customer, etc.). Which you can also think of as making $32/hr for your time actually spent on this job!

 

INCORRECT BID WORKLOADING, Owner Wage, $20/hr

  • 10,000 sq’ Building, 5 days per week
  • Calculated Cleaning Production Rate by Owner: 2,500 sq’ per hour
  • 4 Total Daily Hours  x  $20/hr  = $80 a day (which covers both your cost + your profit).
  • If you charge $20/hr for this bid, you will charge them $1,732.00 per month. The problem is that unless your sister owns this building, you WILL NOT win this bid 99.99% of the time! You’ll be the highest bidder…

 

Want to see the best practices of Janitorial Workloading in action? (After a lot of hard work, it’s been automated.) Check out the Workloading and Pricing screen (i.e. Step 4 of the Bid Creation process) in my CleanGuidePro Janitorial Bidware. Over two years of development went into the creation of this software that was designed to workload and price and win bids the way that I’ve done hundreds and hundreds of times. There’s a free 30 day trial, and I’d love to hear what you have to say about it…

But no matter how you generate a  janitorial cleaning proposal, always think in terms of “What’s my profit margin on this bid?”.


Happy Bidding,

CleanGuidePro Successful Residential Cleaning bidderDrake