Pricing jobs is an extremely delicate subject because there isn’t a “right answer” to anything pricing related.
What you need to understand is that there is what you value a service at, and what someone else perceives the value at. Learn the definition and meaning of “Value Proposition” and memorize it well, it will be what defines your service, and company. There is a book called “Discipline of Market Leaders” that can be purchased at https://www.vitalsource.com/products/the-discipline-of-market-leaders-choose-your-michael-treacy-fred-wiersema-v9780465003976?duration=perpetual
Although the information is dated, the concept isn’t. There is an axis on how you define your value proposition. What has been found is that a business CANNOT afford to be the cheapest, fastest and best quality. Even Amazon and Walmart struggle to excel in all 3 of these.
What I am getting at is what kind of business do you want to be? Do you want to be a McDonalds or do you want to be a Cheesecake Factory? They both do the same thing, make you full. But the customer experience is entirely different, and so is the pricing. Do you believe McDonalds will put Cheesecake Factory out of business? I don’t believe so. I will take a date to the Cheesecake Factory way before I ever take them to McDonalds, unless I just want to terminate the relationship (it is ok to laugh).
The concept is the same with a cleaning business. Do you want to send someone who doesn’t groom themselves, or someone who is presentable? Do you want to send someone in a beat up van with 3 different colors? Or a truck that is wrapped and represents your company well? Image has a cost, and the Cheesecake Factory knows this. You are going for the clients who eat at Cheesecake Factory, not McDonalds. The pricing I go over below will paint a better picture for you.
There are 3 different pricing models in residential cleaning I have seen. The two I have personally done are model 2 and model 3. Model 1 is a model I never want to be in, and you will understand why when you understand the math.
Model 1) Do you want to run 3 trucks doing 100$ jobs 5 to 7 times a day with profit margins of 25$ per job? That would be 2100$ a day with a profit of 525$.
Model 2) Do you want to run 2 trucks a day that do 2 jobs a day at 500$ per job with profit margins of 250$ per job? That would be 2000$ a day with profit margins of 1000$ per day
Model 3) Or 1 truck a day doing 1 job a day that is a $1000 job with profit margins of 600$ per job?
These numbers may vary depending on your region. But for the Houston market this is pretty accurate. And the profit posted per job does NOT INCLUDE WHAT YOU PAY YOURSELF and will VARY depending on how you run your business. This is the cost to do the job, and I tacked on some operational costs outside which I call a “constant”.
Your “constant” expenses are insurance, truck notes, rental space, phone service and paid ads (there are others, but this is the majority of them as an example).
Basic Pricing Guide for Model 1, 2 and 3
I am going to go over Model 1
99$ per driveway
80$ for single story house wash (splash and dash)
120$ for two story house wash (splash and dash)
300$ for a luxury home (generally stucco and 4000+ square foot)
0.03 cents per square foot on commercial concrete (commercial more than 10k square foot)
150$ for a gas station cleaning
200$ for a 1 story roof wash
0.75$ per linear foot of wood fence cleaning
15$ for small back porch
50$ for pool area
150$ to clean a small commercial building like a KFC or gas station (something 2000 square foot or less)
300$ to clean a medium sized building like a larger sized restaurant or Discount Tire
1000$ to clean a larger building like Walmart
200$ to clean sidewalks for a Ross/Marshalls or similar sized shopping center
17$ per garbage truck ( I discovered there are regions where Fleet Wash will do a garbage truck for 9$ which is insane to me )
20$ per day cab 18 wheeler (not including aluminum brightener)
11$ per box truck (like UPS or FedEx)
This is pricing I have seen often from companies who are new, especially owner operators. So this is how I feel about this pricing. If I am charging 99$ for a driveway, after everything is said and done I am basically making 30$ profit for an hour of my time, which is similar to having a job. The purpose of me starting my cleaning business was to NOT HAVE A JOB. What I also found is when I sent an employee that I paid 10$ an hour to, it would take them twice as long as me. Why? Because I am paying hourly instead of incentive based. It would take 2 hours for them to get there, clean, and leave for their next job. Out of my 30$ profit I was closer to 5$ profit off the job when I had my guys clean. And when they were hourly, they never UPSOLD.
Another issue I have with this model is that if you get called back to do a touch up, you now lose money to clean this property. Basically you CAN’T AFFORD quality service and will HAVE to ignore the customer on a call back, in order to be profitable with this model.
Another issue with this pricing model, is that customers who are cheap are generally at the least reasonable customers and expect a bargain for the least amount of expense. These are the Walmart shoppers.
This pricing model is very ineffective in my opinion, yet so many people do this. This is the pricing model that exists for people who want to continue working 8 to 10 hours a day, every day. And it makes it difficult to hire employees and become profitable
I am going to go over Model 2
This was a pricing model I have found to be the easiest to run, and works well with my business.
175$ per driveway
200$ for a single story house wash (splash and dash)
260$ for a two story house wash (splash and dash)
0.07 cents per square foot (commercial more than 10k square foot)
300$ for a gas station cleaning
500$ for a 1 story roof wash
1.10$ per linear foot of wood fence cleaning
40$ for small back porch
100$ for pool area
350$ to clean a small commercial building like a KFC or gas station (something 2000 square foot or less)
700$ to clean a medium sized building like a larger sized restaurant or Discount Tire
3500$ to clean a larger building like Walmart
600$ to clean sidewalks for a Ross/Marshalls or similar sized shopping center
40$ per garbage truck
40$ per day cab 18 wheeler (not including aluminum brightener)
20$ per box truck (like UPS or FedEx)
900$ for a luxury home (generally stucco and 4000+ square foot)
This pricing model makes it affordable to have employees clean and able to afford “callbacks”. But what I found is that call backs can still hurt your bottom line, and you want to prevent them as much as possible. With this pricing model I had 10$ an hour employees and would get an occasional call back and it was very frustrating. But then again I was only paying $10 an hour and got what I paid for.
Once upon a time I had a person who was paying $17 per garbage truck with Fleet Wash but gave Fleet Wash a “C Rating” for quality of work. I came in at $35 per garbage truck and a year later, I was called back and they were fed up with the lack of quality work done and awarded us the fleet of garbage trucks (being twice the price). We retained the account at this price.
I feel that for companies that want to grow, this pricing model works great and can get your foot in the door with a lot of customers, and the pricing is JUST high enough to get rid of bargain shoppers. These customers shop at Target.
Now I am going to go over Model 3
300$ per driveway
400$ for a single story house wash (splash and dash)
600$ for a two story house wash (splash and dash)
0.12 cents per square foot (commercial more than 10k square foot)
475$ for a gas station cleaning
900$ for a 1 story roof wash
2$ per linear foot of wood fence cleaning
100$ for small back porch
250$ for pool area
600$ to clean a small commercial building like a KFC or gas station (something 2000 square foot or less)
1200$ to clean a medium sized building like a larger sized restaurant or Discount Tire
8000$ to clean a larger building like Walmart
1200$ to clean sidewalks for a Ross/Marshalls or similar sized shopping center
65$ per garbage truck
80$ per day cab 18 wheeler (at this price, you will be aluminum brightening by default)
40$ per box truck (like UPS or FedEx)
1800+$ for a luxury home (generally stucco and 4000+ square foot)
This pricing model is very unique and these numbers aren’t fake, because I have absolutely gotten these prices (and higher) in a saturated market (Houston). However I did not get this price on garbage trucks myself, but I know of a company who did get them at 65$ a truck when I was at 40$ a truck because their quality of cleaning was BETTER, and Waste Connections valued QUALITY of work over my LOWER PRICE on a decent volume of trucks. I lost the account to another company when I was the lowest price.
This is what is amazing about this pricing model, your profit margins are high enough to give EXCELLENT customer service, and give added value to your customers who aren’t price shopping, but want quality work and reassurance that if something goes wrong, you will be able to handle it.
It gets even better! When you are Model 3 you can afford to pay your cleaning techs VERY WELL and you create LESS problems for yourself when your techs are paid well.
An important thing I learned from Andrew Thompson with Viper Tech https://www.vtmobilepressurewash.com/
is that the customers who are willing to pay 600$ to wash their house and want the best service, socialize and network with other people, who are willing to pay 600$ to wash their house and want the best service.
These customers shop at Neiman Marcus and Arlan’s (Arlan’s is a grocery store that is about 50% more expensive than everywhere else, but their customer service is FLAWLESS).
Type A, B and C Customers
You have three types of customers at a restaurant. Type A is the one who volunteers to pay for the entire bill. Type B is the one who demands it be split. Type C is the type that doesn’t want to pay the bill at all and hopes a Type A is at the table to cover their bill. You want to service Type A customers. Type A customer’s fit Model 3. Type B customers fit Model 2. Type C customers fit Model 1.
Here is something interesting I have found. The majority of the customers I have gotten from Facebook were type C customers. The majority of customers I have gotten from Linkedin are Type A customers. Google is a mix of C, B and A customers (but mostly C and B).
When you have a relationship based business, you will mainly just have type A customers.
Oh and news flash, majority of family and friends who ask for cleaning service WILL BE TYPE C CUSTOMERS if you are lower middle or middle class getting into this industry! You will have some that are type A and B, but I have found friends always wanted me to clean for less than market value. Why is that? Because my background is lower middle class, and I myself was a type C customer. So most people I associated with were also Type C customers prior to me owning a business. I am actually making a conscious effort to become an A Type customer, and I am learning it is a mindset shift that needs to take place. I have found myself wasting more time to find a good DEAL costs me more than if I spent that time marketing and acquiring more customers.
My father is still a type C customer LOL! He is a classic example of a customer I never want to have. He expects perfection and expects the best price. If there is a slight miscalculation on the service he will be irate and want to bash the company. This is exactly the customer you don’t want if you want to be a model 2 or 3 company. He will spend hours researching how to save 200$. In the market today with his skills he is valued at 150 to 200$ an hour and doesn’t realize wasting time to find a good deal is extremely expensive considering his unique talents. And when he reads this, he will deny what he is reading!
Other Pricing Tips
So aside from what I have already posted there is more to pricing than just having a “rate”.
You have some variables that you need to look into.
- Sense of Urgency (needing to be done by a strict deadline)
- Odd hour requirements (like only being able to clean between the hours of 6 and 10 PM for a commercial building)
- Meticulous cleaning description made by customer (are you going to remove all of the spider webs from my house as well?)
- Are you going to use our water or are you going to bring your own?
- How much do you charge per hour
Sense of Urgency
So here is a classic example I like to give. At 9 AM a realtor calls you and says I have a 1 story house that I need cleaned by 1 PM. I have a photographer coming in at 3 and I need the house cleaned immediately!
For some reason many times they feel entitled to my services being immediate, because I found they don’t value us as an industry. My pricing model was mostly model 2 when I was a full time cleaner. So my price that was normally 200$ for this house would escalate to 450$. And EVERY time the realtor would tell me “that price is too high”. I say “excellent, this is the price for me to drop what I am doing and to clean it right now”. 50% of the time they will call back and you will execute the sale. You have to treat your business like supply and demand and when they have a sense of urgency and want you to change your standard systems, they have to pay a premium for “emergency services”.
Odd Hour Requirements
I had a parking garage that we were only allowed to clean during business hours and had to shut down by 5 PM. Our normal price per square foot is 9 cents. This job we charged 14 cents a square foot because of this parameter and we sold the job (which is substantial for a 200,000 square foot garage in Houston, most only want to pay 6 cents a square foot).
I said on a Model 2 business a single story house wash is $200. This is for a “splash and dash” cleaning which involves downstreaming the house with bleach, rinsing and being done. But you NEED to ask the customer if they expect all the wasp nests and spider webs to be removed. If the answer is YES then the price automatically goes from 200$ to 450$. Because this job will go from being 1 hour to 2-3 hours. This doesn’t mean they are a bad customer, on the contrary this is actually going to be a GOOD customer who will be the MOST likely person to want you to clean their house EVERY YEAR because they can’t STAND a dirty home. What you DON’T want is a customer who expects you to do all of this work for 200$. That is a customer for your competitors, not for you.
Bring Your Own Water
When the customer expects me to bring my water, they automatically have dropped to a C customer. They want to save 10$ on their water bill so that you can haul 300 gallons of water and it costs you substantially more, because they don’t care about your business. When you attach a 200$ water haul fee, you will convince them it is best to use their water. That is the only reason they want you to bring water, because they are cheap. It is OK to train your customers. This isn’t the restaurant industry, the customer isn’t ALWAYS right in this instance.
How much to charge by the hour
This is simple, you just simply don’t want to charge by the hour. Ever. This never ends well for both parties and will open more problems than solutions.
I can cover this subject for an eternity but will end it here.
Simply put there is no PERFECT price, but I have developed a formula for my pricing to make it profitable for my business.
Remember, this pricing isn’t set in stone. This pricing reflects my experience with an over saturated market in Houston (which is comparable to Florida). I know in some regions people can get 2 and 3 times what we get per job. But one of the luxuries of Houston is we have an insanely large market, so the volume isn’t hard to get if you develop a good marketing plan.
If there is anything I want you to remember from this article, is this,
If you have a realtor who is meticulous and needs the work done IMMEDIATELY you graduated from a 200$ splash and dash to a 450$ meticulous job. And then you now have the 250$ emergency fee which puts this 1 story house at a 700$ job. If they have no water and you have to bring your own you add a $200 water haul fee and this is now a 900$ job! This is WHY when someone asks “what do I charge for this?” I don’t have an answer until you read this entire blog and understand how pricing works in this industry.