Like most service businesses, owners of cleaning companies often find themselves asking what the right price would be to charge for their services. It is a matter of trying to find a balance between charging enough to cover all of your expenses, but also make sure that potential customers are actually willing to pay the price. The pricing question is a tricky one to answer, but using the process outlines will give you a much clearer picture of how much you should charge for your cleaning services.
In order to determine the price you should charge to clean a 1,500 square foot house, follow these steps:
- Visit the house that you will be cleaning first.
- Estimate your labor costs.
- Factor in your costs for supplies, taxes, and overhead.
- Determine your desired profit margin.
- Weigh the final cost that you come up with against your competition.
To paint the full picture, we should go into more detail about each of those steps, and then you will have a much better understanding of how to price your services.
Always Visit the House Before Giving a Price.
Whether you are offering a cleaning service, or any other type of service, most business owners come to find out pretty quickly that not all jobs are created equal.
Even if you know that the house you will be cleaning is 1,500 square feet, you should still go and take a look at the house before giving the client a quote. Some houses might be in rough shape and need a lot of work done, while others might need what is nothing more than a touch up.
In most cases this will also give you the chance to actually meet the people that you are working with, and work with them to determine when the best time is for you or your staff to be at the house cleaning, what exactly they want done, etc.
Having strong relationships with customers will strengthen your brand while you are at it, and it will give you a better idea of whether or not you are getting a return on the time and energy that you are putting into your business. The bottom line here is to visit the house, and make sure you know the entire situation before you start giving out prices.
Determining Your Labor Costs
When it comes to figuring out your price for cleaning a house, you are going to have to make sure that you are accounting for the labor costs associated with doing the job.
With a 1,500 square foot house, it is reasonable to have two workers working on the house. That can either be two of your employees, or yourself and an employee, depending on the size of your company.
All of your employees should be making $7.25 per hour at a bare minimum, seeing that that is the federal minimum wage. In most cases, however, it would be safer to expect to pay your employees closer to $12 per hour in order to clean houses.
If you are cleaning a 1,500 square foot house, that should take somewhere from about 2.5-3.5 hours to complete.
Multiply that by two people and you can expect your labor costs to come out to around $60-$84 on the surface. You might have to dig a little deeper into how much the cost of labor is, but this gives you a good estimate for how much you will need to charge to cover labor costs.
You also might save some money if you are still a new company and still doing some of the cleaning yourself.
Factoring in Supplies, Taxes, and Other Overhead Costs
On top of your labor costs, it is important for you to sit down and think through all of the other costs associated with cleaning the house.
That includes the supplies, taxes, transportation for employees to get to and from the house, and perhaps a whole list of other costs.
It would be difficult to break all of this down in just this article, because a lot of these variables are going to be specific to where you are located, what type of business you run, how far away you are from your customers, and so on.
Truthfully, these costs should not eat up too much money when you are looking at them on a house by house basis. The best way for you to figure out roughly what your costs are for each house is going to be through experience.
Determining Your Profit Margin
Now for the part that we all like to talk about. Making a profit.
After you have had the chance to sit down and get a good idea of what it costs you to clean a 1,500 square foot house. It is even better if you actually have the costs laid out in front of you for the exact house that you will be cleaning.
Determining your profit margin, or your markup, should actually be one of the simplest steps of the process. All you have to do is determine how much money you plan to make on each house that you clean and try to balance that with what price clients are willing to pay.
Earlier on, you will likely be willing to sacrifice some of your profit margin in order to actually pick up your first few clients.
We would all love to make 100% profit margins, but clients are not going to pay for that. When you can’t get clients to pay your prices, your profit automatically becomes zero.
To give you a general idea, look into marking your prices up about 30% from what you determined the costs to be. That is usually a fairly good place to start, and if you think that a lower number will help you gain more traction then bring your prices down a little bit.
The biggest tip for determining your profit margin is to try to come up with something that you will be happy with consistently. That is why you want your profit to be expressed as a percentage and not a dollar amount.
If you start out pricing your services based on a 30% markup then you will want to keep it at least close to that as you move forward.
As your business becomes more established you can gradually move that number up, but what you do not want to do is mark one house up by 30% then the next one by 15% and the one after that by 60%. That is too inconsistent.
Weigh Your Prices Against the Industry Average
After you have come up with some prices for your services, it is a good idea to compare those prices to other competitors in your market. This does not mean that you should be looking to be the same but doing this could show you if there are any red flags or huge mistakes in your plan.
Figuring out the industry average can also help you create a strategy moving forward with your business. If you are a new cleaning business, then you are likely going to charge a little less than the well-established businesses that you are competing with.
However, that gives you an idea of what prices you might be able to charge in the future once you become more well-known and better established. You might even be able to find areas of the other businesses that could use improvement and then provide better service to your customers at a better price. That creates a win-win situation for everyone!
Even with all of the information outlined above, you still might not have a great idea of exactly how much to charge to clean a home of this size. That’s okay. On average, it costs around $195-$215 to have a 1,500 square foot home cleaned. Using the information above, you should be able to come to a number close to those prices, and then determine what your strategy is and where exactly your pricing will fall.
If you are looking to be a lower cost solution for your clients, then you are going to want to price your services around $195 for a 1,500 square foot house. It could even be less as long as you can still cover your costs and grow the business. On the flip side, you could position your business as a premium service and charge closer to $215 or more for top of the line cleaning. Doing so might allow you to grow quicker as you bring in more funding for your business, but it could also bring your business to a halt if your customers are not willing to pay that price.
Frequently Asked Questions
What is the best way to find clients for my new cleaning business?
There are an endless number of ways to find new clients for your cleaning business. You can advertise locally by putting up fliers, or you can even advertise online and target people in your area. The clearer you can get about who your target customer is, the better your advertising can be!
Should I ever raise or lower my prices for cleaning houses?
Yes. If your business is new, then you are likely going to keep your prices lower in order to get clients to come in. You should not be afraid to raise your prices over time, especially if your services are getting better and becoming more valuable.
How much should you charge for commercial cleaning?
Commercial cleaning is a little bit different because you are usually doing the cleaning more frequently and building longer term relationships with your clients. Generally commercial cleaning businesses will charge a monthly rate somewhere from $0.05 to $0.25 per square foot.
Please note that the contents of this blog are for informational and entertainment purposes only and should not be construed as legal advice. Any action taken based on the information provided in this blog is solely at your own risk. Additionally, all images used in this blog are generated under the CC0 license of Creative Commons, which means they are free to use for any purpose without attribution.
About the author. Entrepreneur and Cleaning Business Fan.
Hi! I am Shawn and I am a happy individual who happens to be an entrepreneur. I have owned several types of businesses in my life from a coffee shop to an import and export business to an online review business plus a few more and now I create online cleaning business resources for those interested in starting new ventures. It’s demanding work but I love it. I do it for those passionate about their business and their goals. That’s why when I meet a cleaning business owner, I see myself. I know how hard the struggle is to retain clients, find good employees and keep the business growing all while trying to stay competitive.
That’s why I created Cleaning Business Boss: I want to help cleaning business owners like you build a thriving business that brings you endless joy and supports your ideal lifestyle.