The number 1 question asked by new cleaning companies is how much do I charge for house cleaning? You don’t want to under cut your services, and loose money. But you also don’t want to over charge so that you don’t pick up any cleanings.
After reading this post make sure to jump over to my post How to Give a House Cleaning Quote to learn how to deliver an effective quote to land more cleanings!
There are so many factors that go into setting your cleaning prices. You will want to know how long it takes you to clean a house. AND. You will want to know what others in your area are charging. Once you know the answers to those questions you can begin setting a price schedule for your services.
I have spelled out how cleaning companies determine what they charge for house cleaning service. Grab a cup of coffee, a pen and note pad. This article is filled with lots of information and tools so that when finished, you will be a few steps away from charging a fair AND competitive market price for your cleaning services!
Here we go……
Hourly vs Flat Fee
The first question to answer when determining what you will charge for house cleaning, is whether you want to charge hourly or a flat fee per house, per visit. If you are planning to service regularly occurring clients (which I really hope you are!) you will definitely want to charge a flat fee per house. Most all of the large chains charge this way and I know many successful business owners who do as well. It is just the norm for the industry and for good reason.
If you charge a flat fee per clean you and your client will know what to expect with each clean. They will be given a flat price for a specific service. There will be no need to leave a job undone because the client only wanted to pay for 2 hours.
With Flat rate pricing both the client and the cleaners will be happy. There will be no question or doubt that your cleaners did not clean fast enough or they intentionally took too long to clean so as to charge more.
Calculating your cleaning rates
So I am hoping that I have talked you into charging a flat fee for cleaning houses. Now we can move forward.
When setting your prices there are 2 major factors that go in to your cleaning prices.
- What the going rate is in your area
- How long does it take for you to clean
If you do not price within your local market you will either be loosing money on potential profits because you are charging to less. OR If your cleaning prices are to high, then you will loose potential clients.
1. What are others charging in your area?
It is so VERY important to do this step. you want to make sure your prices fall within an area your potential customers are willing and able to spend for your services. Because after all the #1 purpose of your business is to gain clients so you can become profitable...am I right?!?!
Do your market research to see what other companies are charge for house cleaning. I would call 6 – 10 companies. Make sure you have a range of large to small businesses. Again, you want to call businesses that are legal businesses offering similar services. Don’t call Curley Sue who charges $50 to clean a house because she operates out of her car. You will not be competing with her.
Look up cleaning companies in your area, include the larger franchises as well. Write all the names and phone numbers down on a spreadsheet so that you can remember what each one said. When calling ask the following questions and record the answers…
Ask these questions…
1. Do you carry insurance? What kind... You will want to know what coverage others have so that you can use it in your marketing and closing client deals
2. Do you charge extra for the 1st clean? Again, you’ll want to know this as well. This way you can decide if you want to or if not, use it in your marketing and sales pitch that you don’t while your competitors do.
3. How much for weekly? Bi-weekly? Cleaning times are different depending on the frequency of the cleaning. Make sure you are getting this information.
4. What do you charge for extra’s? Or are they included? Knowing if and what other companies are charging for extras will help you again in setting your prices. Or if you use my House Cleaning Checklist (Hint, Hint), then you can advertise that while your competitors are charging for these things, you include them in your cleaning rotation. (I closed ssooo many clients this way, they LOVE it!)
While you are calling your competitors, make sure to record other ‘non-pricing’ related information. This information will help you to create a better quoting experience for potential clients. You’ll be able to use it to stand above your competitors as well. After all you will want to make sure you are offering the BEST service in town! So here it is make sure you record…
- Did some one answer the call on the first call? If not, when did you receive the call back?
- How did they answer the phone? Did they just say Hello? or did they announce their business name?
- Do they quote over the phone or did they want to do a home inspection 1st?
Whatever your data shows, you will want to make sure you stand out and above your competitors. Potential clients will be calling around gathering up prices as well, you will want to make sure that you give the best 1st impression.
Define a pricing window
Organize cleaning prices from high to low. You will want to know what the low and high point of cleaning prices are in your area. Record the Highest price point, the Median (the middle), and the lowest price points. Depending on your business structure you can decide if you will be aiming for a more premium cleaning service or a more economical.
2. Know your cleaning times.
It is important to know how long it takes to clean an entire house using your Cleaning system. The best way to do this is to test this on your home, your mom’s house, friends and families. Using your cleaning checklist/cleaning system, record how long it takes for you/your team to clean a house from start – finish.
Record the square footage and # of bathrooms, bedrooms and extra rooms there are in the house. How long did it take you (I recommend setting a stop watch), was it an initial clean, weekly, or biweekly.
Side Note: Every time I cleaned or my team cleaned, I would record the time. It is actually good business practice to do this continually so you can always track your profitability and efficiency.
Your largest expense with house cleaning will be your labor cost. You want to make sure that you are covering your labor costs. The average cleaning company spends 40% – 50% of their revenue on total Labor costs. That includes hourly rate, taxes, and payroll fee’s.
The more efficient your cleaning times are, the higher your profit margin will be and/or your prices can become more competitive. To improve your cleaning times, read my blog post where I teach you to clean more efficiently.
Determine your hourly rate compared to your market research.
Using your cleaning times and the cleaning prices you gathered, you can calculate what your hourly rate is for each of the High, Median, and Low price points. *It is important that your timed cleaning correlates with the size of the home you obtained your quote for. *
Example: You cleaned a 2,000 sq.ft. home bi-weekly in 196 minutes (3.27 hrs). You called around for quotes and determined the high, median and low prices were: $145, $115, and $82 at that size.
Now divide each by your cleaning time. This will give you the hourly rate.
High: $145/3.27 hrs = $44.34/per hour. Median: $115/3.27 hrs =$35.17/per hour. Low: $82/3.27 hrs = $25.08/ per hour.
Charge by Square Footage OR Per Room
Now that you know what you can realistically charge per hour, you can can start setting your prices. You’ll have to determine whether or not you will want to charge by the square footage of the home OR the # of rooms/bathrooms. Cleaning companies large and small use either pricing method. When I was running my cleaning business I used square footage because it worked better for me.
I was able to create a grid worksheet in increments of 400 sq ft starting with 1000 sqft. I priced each levels (home sizes) by weekly, bi-weekly, monthly, and 1 time. This way when I had a potential client call in, I could quickly give them a quote with my sales pitch. They liked the up front pricing and usually got me in the front door.
How will you market your business?
Will your business model be a low cost option for clients, or will you be a premium high-end service. This is your preference on what service you want to offer. I will tell you that when I had my cleaning business I did charge on the mid-high side. With my rotating cleaning schedule I was able to offer my clients the ‘extras’ that most companies charge extra for.
I highly recommend that you follow the same schedule. When I told potential clients this, especially those who where very particular, they loved it and this was the #1 factor that helped me stand above the competition in my area. We offered a very comprehensive cleaning schedule at a more affordable price. Our customers base boards, door trim, interior windows and trim, refrigerators and such were kept up on a regular basis. This kept our clients happy and offered many referrals!
I can’t say it enough! NEVER base your business model as the lowest price. With so many ‘trunk cleaners’ out there, you will inevitably be undercut by someone who does not pay employees, operates under the table. Since you will have a legitimate business, there is no way you can compete with that.
Create a Pricing Worksheet
I highly recommend to use Excel or some sort of spread sheet with columns and rows. In the first column you will want to have your home size groups (ie… Sq Ft, # of rooms). I will use the Sq Ft as an example, as that is what I had previously used. Start with less than 1,000 sq ft and go up from there in 400 increments.
Here is an example of the pricing worksheet we had used.
Using the data you have recorded with you cleaning times insert it into the correct line item. (For ex. 2,000 Sq Ft, Bi-weekly you would insert your 196 minutes and 3.27 hrs) Using your hourly rate you came up with previously insert it into the hourly rate column. To calculate the cleaning rate for a 2,000 sq ft home on a bi-weekly basis you would calculate the hours x the hourly rate = Cleaning Rate. (Ex. 3.27 Hrs x $35 = $114.45.
To fill in the remainder of the worksheet add about 15 minutes when moving up/down in home size. To add time for frequency, add about 22 minutes from Weekly —> Bi-weekly —> Monthly. Move outs take about 4 hours longer than a weekly cleaning service, One time cleanings will take you about 1.75 hours longer than a weekly cleaning.
As you start cleaning more homes and continue to time yourself and your team, you can fine tune your cleaning times to better reflect your service.
With move out cleanings I highly recommend you quote a certain price, but disclose the number of hours you planned for. Tell the client that if it takes longer or less time then you will adjust the price accordingly. These types of cleanings can go really well, or you cleaning team could really be walking into a disaster! It all depends on how well the home was kept up.
Keep it consistent
Once you have determined what you are going to charge, stick to it! You will do your research and determine the price structure that will best fit your company and the services you offer. Don’t fall into the trap of charging less for one customer and more for another. When they see your service in action they will be happy to pay the fee that you worked so hard to develop 🙂
Plus…When you start getting referrals from existing clients, they will talk about service and rates. You will not want to explain to Susan why her neighbor Debbie pays $40 less.
Your quoting will be very streamlined. No crazy calculations will have to be done. With your new pricing worksheet you will be able to easily implement quoting across several plate forms such as over the phone, website forms, and over social media.
Phew!!! There you have it in 2118 words…How to determine what you should charge for cleaning services!
If you have any additional questions don’t hesitate to drop me a line here ——> Roberta@wellkeptclutter.com
After all, that is what I do, help people like you get their cleaning business up and running so that you can break that 9 – 5 job and create your own financial freedom!