Costs To Consider In Proposals
There are some key ingredients in a proposal that may not be obvious. Following is a brief list of some costs that must be taken into account and customized to each opportunity.
• Consumable supplies usually account for only 2 to 4 percent of a contract and may not be required if the owner of the property provides them. These items usually include toilet tissue, paper towels, hand soap, plastic liners, sanitary napkins and other “consumable items” used by tenants and visitors to the building/space.
• Expendable supplies are those products that the custodial contractor uses to provide the required services and usually only account for .5 to 2 percent of a contract. They can include glass cleaner, neutral detergents, degreasers, polishes, strippers, floor finish, seals, carpet cleaning products, carpet spotters and other products necessary for the company to “clean” the account.
• Major Equipment can consist of machines costing over $1,000.00 and may be assigned to a large account or rotated among smaller accounts. They only account for .5 to 1 percent of a contract since they are depreciated over 3 to 5 years although the contractor usually pays up front. These pieces include floor machines/buffers, burnishers, auto-scrub machines, rest room restoration equipment and other high performance machines that can reduce labor costs thereby paying for themselves in short order.
• Minor Equipment usually ranges from $250 to $1,000 and is depreciated over 1 to 3 years in most cases. This line-item only accounts for 2 to 4 percent of the total contract and includes equipment such as vacuum cleaners, low end floor machines, pressure washers and other items that have a 2 to 4 year life span.
• Tools and supplies are expensed out over the service year and can include items under $250 including mop buckets, hand tools, rags, mop heads, scrapers and other tools that usually have a life of only a year or so based on use. These items should only account for 1 to 3 percent of the total contract unless there are special requirements involved.
Breaking out your “Other Costs” to better understand what you need to purchase and keep in inventory is important. Having an identification systems with strict check in/out procedures can help prevent your supporting competing janitorial services that can bid low since they do not have any capital invested in the “borrowed resources.”
Your comments and questions are important. 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.