Determining Cleaning Costs
A reader writes: “I bid on a new building that was almost identical to one that we are already cleaning, yet we are losing money. What gives?”
When you stated that it was “same type of building,” you meant total square footage since there are many differences between the two sites that should be obvious. Let’s look at just a few in this article.
First of all, your embedded costs are much higher for what we will refer to as Building B compared to the first account, Building A. This new building has security requirements that make it much more expensive to service. It can take more than 30 days just to get all the background clearances and in most cases, your prospective employee has gone on to other opportunities. You did not price in the additional costs for these expenses and overhead.
Another hidden cost is the distance from your main office. It takes over five hours for supervision to travel to and from Building B; whereas Building A is less than one mile away. This distance impacts delivering indirect labor costs, fuel, productive time, supplies, inspections, customer service and even paychecks. You need to look at providing an onsite computer terminal so your supervisor can submit reports, order supplies and perform other tasks that you are still trying to do by hand. Your local vendor should be delivering supplies, not you. The savings for implementing a computer and possibly a tablet inspection system could be substantial if implemented correctly.
Finally, the two buildings are different in age, traffic/tenant count, standards and expectations. Building B will require more labor to achieve the agreed upon standards than Building A. Your assumptions that the buildings are “similar” has led to your possibly losing money. You may need to “retune” this account and either adjust the price or the expectations/specs as appropriate.
Learn from this experience since buildings can be similar or radically different as we have noted.
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.