We live in a competitive world, and what works for one company might not work for another. Flexibility allows you to create a structure for your cleaning business that works best for you and your clients.
You should be excited about your new venture and prepared for the challenges of owning your own cleaning company. Insurance Canopy is here to help you think through your pricing model. Below, we explain how to price your cleaning services and the four steps you need to take to protect your business’ financial success.
Setting Your Pricing
Let’s look at different ways you can price your cleaning services. Finding the right fit for your business is essential; that’s why we will walk you through the pros and cons of each! Check out our simple cleaning business pricing guide reviewing different pricing models.
1. Per Square Foot
Pricing your business by square feet can give you the best profit margins. Setting a rate per square feet lets you quickly offer a quote when customers know the size of the space they need cleaned.
The average rate for house cleaning services in 2020 was between $0.05 and $0.10 per square foot. Consider higher rates to deep clean a house when booking move-out cleanings or spaces with hoarding. The average rate for these can double; consider charging up to $0.20 per square foot.
One of the challenges of booking by square feet is that you don’t have an opportunity to walk the space to understand areas of concern. Clients will expect that your pricing gives you a margin of error for tough jobs or deep cleaning.
2. Per Room
Setting your rates on a per-room basis works best when working in residential or commercial properties. To calculate these accurately, having time and experience in the cleaning industry is an essential factor when trying to build a profit margin into a job. Figuring out a rate per room is easy enough: take the average time per job and how many rooms you cleaned.
For example, residential cleaners understand cleaning the bathroom will take longer than the living room, so averaging the time between them is how you calculate the cost. If the living room would charge $40.00 to clean and the bathroom would be $60.00, then your average room cleaning cost would be $50.00 per room.
Calculate this based on how long it takes to clean that space for your particular employees or team.
The downside of pricing per room is that you might find you are spending longer in spaces than you calculated. This approach can hurt profitability, especially when cleaning large commercial spaces.
One way to ensure your time is valued is to charge customers by the hour. Some customers may be skeptical that hourly rates will benefit your cleaning business and not them. However, this structure allows you to customize their cleaning plan fully.
For example, there is a high demand for professional Airbnb cleaners willing to clean short-term rental spaces between visitors. Charging by the hour allows you to add small tasks like counting silverware or laundering bedding. Make sure to outline detailed tasks for hourly rates to illustrate your value clearly.
Hourly pricing rates depend on the location you service. Comparison shop or discuss rates with clients to find a sweet spot for your service.
4. Flat Rate Pricing
Many professional cleaners prefer pricing their services on a flat rate basis. Consider the variables we have discussed with other methods, including the type of property and condition of the space.
Charging a flat rate or fee is when you perform a service for a set price, making the same amount of money no matter how fast you get the job done or how large the property is. This solves the problem of the client feeling like they are paying for your time.
Next, there are some things to take into consideration when you are setting rates whether hourly, flat rate, or by the square foot. Customers appreciate someone who has done their research and knows how to price their cleaning services.
The average cost of cleaning services in 2020 was between $25 to $90 per hour. Do you know why the range is so large? Location, location, location. It all comes down to where you work and service clients. Consider factors such as cost of living for your area, median household incomes, and competition availability. You should also consider that location drives demand—certain areas will have a higher percentage of people looking to hire professional cleaning services.
Here is a map of the average median household income in the United States in 2019, provided by the Census Bureau.
It can be helpful to check local competitors’ pricing, especially as you are talking with customers who have likely price shopped. When you peruse their site or call their team, find out which pricing model they use (flat rate, per square foot, etc.). This research can be helpful if you do not understand the cost of living for the area because you are new to the area.
Steps to Competitive Research
If you are in an area with steep competition, meaning there are many other cleaning services, one of the most important things you can do is find a unique selling point for your business. With the research you have done, it is easy to find a unique benefit you can offer to clients.
3. Years of Experience
One thing new businesses often forget about is the value of experience. Price yourself to make a profit once you calculate the cost of supplies and tools, but be fair in your assessment of your professional skills and understanding. People will pay more for seasoned professionals, which is never something you should falsify in your advertising.
As your business grows, you will find you can charge more for your services based solely on how long you have been in business. Your experience, number of employers, and busy schedule will all contribute to your pricing.
We hear this time and time again from janitorial staff and maids. When starting out, they forget to consider how much work some jobs can take solely because of their condition! Don’t forget to factor in one vital thing: the state or condition of the space you are cleaning. Pricing should vary based on things like “move-outs” and foreclosures.
Clearly list that “deep cleaning” prices will vary. The typical increase for a residential deep clean is at least $60/hour. But, always factor in actual circumstances to your pricing, as we have discussed. There is so much that goes into pricing these jobs. Take your time and do it right!
5. Size of Cleaning Space
Last, and probably most obvious, is the size of the space you are cleaning. Do your math here to ensure you understand each job’s complexities (e.g., will there be more carpet than hard-surfaced floors to clean?). Not all office janitorial jobs will be the same, nor will housekeeping jobs. You will have to factor the size, by number of rooms or square footage.
Offer Discounts & Promotions
- Returning customers receive 10% off a service
- New appointments get a FREE window washing treatment
- Carpet cleaning appointments come with a free pair of house slippers
- Refer a friend for 20% off your next appointment
Insure Your Business
As you work hard to set up your business and consider how to price your cleaning business services, we suggest that you look into insurance for protection against claims.
You may not initially consider this as you set or revise your house cleaning prices, but liability insurance can give you peace of mind. If your business were to cause any damages or accidents, your insurance policy might help you cover the costs. This way, you don’t have to worry about paying for liability claims out of your own pocket.
Grow & Maintain Your Profits
If you regularly have issues with a client, it is alright to part ways. If you get into a tense conversation about the value of your services, remember that you can work to replace the revenue.
There are countless ways to find the support you need when letting go of long-time customers. Talking with people who have the same struggles and are willing to discuss them can help with perspective. We find that being a part of Facebook groups can make it a little easier.
Building A Staff Team
When your business is ready to take on employees, you will experience new challenges with your business. These include additional managing and scheduling employees, adjusting your pricing, taking on new risks and liability, and meeting new business insurance requirements.
First, tackle expectations of time spent on jobs. Make sure your employees understand your expectations for professionalism, timing, and service quality. Your employees reflect your business and will affect what customers think of you. On-the-job training is usually best to combat this as it allows you to communicate standards and check their work.
Next is the challenge of new insurance liabilities. One piece of that is the worker’s comp required for part-time and full-time employees. There are very few exceptions to the rule that each employer must provide worker’s compensation coverage for employees. Check local requirements for contractors as well, as some areas will still require coverage to be extended there.
Last, check with your professional or general liability small business insurance to ensure all parties of your business will be covered. Sometimes this can look like a Janitorial Bond outside of your general liability, while other companies might offer similar coverage with Employee Dishonesty insurance coverage. Make sure to list the number of employees or contractors, as this can affect your ability to file a claim. Luckily, though, there are affordable coverage options for many types of cleaning business services.
Don’t be afraid to raise your rates if you have been in business for several years, even with your regular clients. A best practice is to give your clients a 30-day notice before raising rates, typically via email or in person. Give them a flat percentage or a new customized quote for their property based on how you price your cleaning business, so they know what to expect.
Expanding Your Offerings
If you are experiencing tough competition, where you can’t seem to land basic cleaning jobs based solely on pricing, one way to start closing gigs is to expand your offering. Now, some insurance providers do prohibit certain activities, so check exclusions before you expand your offerings.
Here are general ideas for expanding your services, in an effort to close more cleaning gigs:
- Window Cleaning
- Power Washing
- Gutter Cleanup
- Ducts & Vents Blowout
- Mold Remediation