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  • #995087
    Papaya cleaning
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    Hi
    Just saw this site. Was goo how to get more commercial cleaning. My wife and i have wanted our own business for a while now. So we decided to start a cleaning company on the Gold Coast Qld. We started with domestic and Bond cleans. Which is doing well. We also have a few offices we clean. I am wanting to get more into the commercial side as i think there is better money for our company to grow. I am just wondering the million dollar question. How can we get more commercial work. At present we charge 35 per hour. Is that to cheap for commercial.

    #1199954
    Paul – FS Concierge
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    Hi And Welcome to the Forums. It is great to have you!

    I run a commercial cleaning company on the Gold Coast. It is a very competitive region for prices and a lot of people are surprised to find out that rates have actually dropped from 5 or 6 years ago.

    We charge per job, not per hour and base our rates on how big the job is as well as how hard the cleaning is to do.

    The smaller and harder the job is, the higher the rate – more than $35 vs the larger and easier the job is, then we charge less than the equivalent of $35

    We started out with a website optimised for Google and set up an efficient Adwords account. Over time, we climbed the Google ladder and now do not need to advertise.

    Get in touch if you have more questions.

    #1199955
    bb1
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    Papaya cleaning, post: 236720, member: 82754 wrote:
    At present we charge 35 per hour. Is that to cheap for commercial.

    Interesting question, and sure the answer sits with what others are charging, ie Paul mentions on some jobs they charge less (based on an hourly equivalent), so you are somewhat tied by what others are charging.

    But also don’t let that limit you, in my business there are those that charge $35.00, and there are those that charge $60.00 plus , and it comes down to do you want to be working 90 hours per week to draw a good income, or do you want to be working reasonable hours.

    Are you just doing it as a job, bringing in the same $’s as you could be as an employee, where you also get Leave, Sick leave, Super, you carry no risk, and you go home at the end of the day and forget about it.

    Some interesting figures to contemplate, if you were to be an employee the minimum wage as a cleaner is just under $20.00 (I’ll use that as it’s easier), add on 9% super (think it still is) brings it to $21.80, add Leave, etc, and you are most likely coming up to the equivalent of $25.00 (ok last was guess work, but you can see where I am heading)

    So you need to get at least $25.00 an hour to make the equivalent of the minimum wage payable. Now the ATO benchmark for expenses in a cleaning services business is an average of 45%, but as low as 36% (high of 56%), so lets use the 36%.is $12.60. (you have a lot of expenses if you really sit down and think about it)

    Ok so where am I headed, you want to get at least $25.00 an hour to get the equivalent of the minimum wage. But your expenses at the very best scenario (based on ATO benchmark) is $12.60, so I already get to $37.60 an hour.

    Sure I am just chucking in figures, and you need to base it on your real costs, and your expectations, but think about it.

    Again harking back to my industry, those who trade at the lower end of the scale get a lot of clientele, and they are working hard, but they are also the first business’s to shut down because they are just not making enough money for the effort they are putting in (and I’m not talking quality, purely input compared to return)

    So when working out your hourly rate, don’t go only on what others charge, also look at your input expenses, and think about everything, I have being told all it costs me is a few litres of petrol to service a job, but there are really heaps more expenses.

    When I started, I started at the low end of the scale, but quickly found out it was better to charge more, and did you know that the quality clients are happy to pay more. I’m happy for the others to take the lower rates, they are normally the troublesome clients who even if you charged $20 an hour would want the highest quality and still complain about you charging to much.

    #1199956
    Peter – FS Administrator
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    Hi Papaya,

    Congratulations on the business – sounds like it’s off to a good start.

    There’s some good advice here already and food for thought.

    Pricing is always a tricky one and as Paul and Bert have said you do need to remain competitive yet also price for sustainable profit based on the clients/projects.

    With services my overall thoughts tend to be to avoid the race to the bottom in terms of pricing (as Bert says it gets to a point where it’s not worth the risk) and try and position yourself as providing a better quality offering, not just the cheapest. There’s always someone willing to quote a cheaper price!

    While very important in competitive industries, price is only one factor in a buyers purchase decision and many will pay for other things that are important for them. So you need to find out what those things are so you can over-deliver on them and justify a price premium.

    For example, commercial clients (possibly landlords, agents, biz owners etc) might value things like responsive communication, speed, reliability, insurance, after-hours work etc etc… Unlike domestic cleaning which may be much more personal, I imagine commercial buyers just want a very safe pair of hands that does a fast, professional and efficient job without any risks, disruption or hassles.

    Paul is a pro in the field :) so asking lots of questions is always a good place to start!

    All the best, Peter

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