A reader writes: “Dear Mickey. Greetings for the Day. I am from India requesting you to please share and guide for explaining the thumb rule used in calculating the cost per square meter (manpower and cleaning/consumables).”

I am still amazed at the power of the Internet to bring people from around the world together. You are my first inquiry from India. First of all, you might research CleanLink for past articles where I have addressed pricing, estimating, costing in greater detail. You can also use a web engine to view YouTube and other videos on this subject.

In my opinion there is no rule of thumb that applies to everyone and I certainly would not assume that I understand your situation and market. I recommend you study the local market to determine what other successful companies are charging and then use that as a comparison to make sure you are competitive. Be very careful to compare the same tasks with the same specifications and expectations. An example of generating costs follows:

The key is to determine what tasks (example: vacuuming or dusting or cleaning a restroom) to determine how long it takes per time. Let’s assume that it takes you 10 minutes to perform a task and there are 30 units. This means 10 x 30 = 300 minutes x 260 days per year = 78,000 / 60 minutes = 1,300 direct labor hours per year. Multiply this times your wage rate (assume \$10 U.S.) 1,300 x 10 = \$13,000. Add to this your equipment, supplies, overhead and profit to generate a total cost for a given contract. You would include all the tasks necessary to satisfy the requirements in the same manner. Although the formula will work for you, your numbers will certainly be different.

An alternative is to take on a current contract with same terms, price, conditions for a period of 30, 60, 90 days and then negotiate a price based on your actual costs. The 30, 60, 90 days should give you time to generate actual numbers as well as earn the trust of the customer. Good luck and I wish you well in your endeavors.

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.