Using Production Rates In Bids
A reader writes: “I used a well-known production rate standard and lost a bid. What happened?”
This is called the “learning curve” which we all go through in getting established in the cleaning industry. Note following points that might be of help as you refine your knowledge and process:
- In my opinion, estimating is part science and part art with the specifications playing a key role in which is dominant.
- Most production rates are general guidelines since they cannot capture every nuance for each contract.
- Many production rates are usually averages of five or more workers performing the same task the same way with the assumption that the workers are equal in ability, speed, etc.
- Production rates can be “fat” or inflated in some areas due to issues that are not factored in such as the average rates of competitors using different standards.
- It is advised that you utilize a published production rate as a starting point; then research the going rates of your competition.
- Over time, you should develop your own rates based on time studying staff in similar type buildings/accounts such as office buildings of a certain size, day care centers, car dealerships, etc.
- Continue to collect data in your market and compare it to cleaning times standards for variances.
- When possible, analyze the winning bid to determine how far apart you are from them. If it is a small number then make adjustments for the next bid.
- If the bid is radically different, hold onto your bid since the winner may have a short life span at this contract and you can return for another chance.
Remember that the only thing worse than not getting a bid is getting one for the wrong price and ultimately failing.
Your comments and feedback are always appreciated. I hope to hear from you soon. Until then, keep it clean...
Mickey Crowe has been involved in the industry for over 35 years. He is a trainer, speaker and consultant. You can reach Mickey at 678-314-2171 or CTCG50@comcast.net.