Undercutting Prices - Cleaning Talk - Professional Cleaning and Restoration Forum

Silverdot · 09-01-2009, 01:46 AM

I'm an individual cleaning apartments, move-outs etc. I was wondering how big businesses like Molly Maid etc. can get by with charging so much and stay in business? I can charge half what they charge and do a way better job!

Ok so maybe i need insurance, maybe i need to be bonded, maybe i should make it an actual business instead of everything under the table. even so.

Is all that really so expensive that people have to charge twice what I charge? for example. 1000 sq ft apt 1 bed 1 bath. I'd charge $50. Just for a normal house. Other companies would charge like $80 - $100 based on the calling around I did. It would take my wife and I an hr to clean. I'd even charge $30 for that.

I can't be the only person to realize there's opportunity here. What am I missing?

mold removal tampa · 09-01-2009, 07:19 AM

Most of things seems ok and i don't think here you missing anything and sure you can target as actual business.

RoofCleaningNashville · 09-01-2009, 08:23 AM

First of all if you don't have insurance then you are doing the business a disservice. What you have bought youtself is a job not a business.You need to correct your pricing and charge accordingly. Examples of insurance Liability, Workman's comp, Bonded, auto umbrella just to name a few. Not to mention that you are depriving the city/county tax revenue.

What it amounts to is if you charge $30 per hour for 2 people then you have a job for $15 per hour. You are going to be in a world of hurt if someone ever sues you without insurance. You need research on pricing more..... How can you upgrade equipment, buy supplies, pay employees etc for $15 per hour per person? It just can't be done.

Do yourself and others a favor and get legal with all the licenses and insurance. It sounds to me like you are a tax dodger. Paid cash under the table forcing others to have to pay more taxes then they should.

wubb2005 · 09-01-2009, 11:19 AM

No offense, but it's people like you that cause problems for the people who do pay for insurance, bonding, licenses, and pay their taxes. Also think about what you said: you're doing a better job than somebody who is charging more money and they still stay in business. Try going legit and raise your prices on new accounts. Then, if your old accounts won't pay more, they're not worth having anyway.

Silverdot · 09-01-2009, 11:54 PM

How am I doing the business a disservice? I wanted a job, not a business. I'm not trying to be the next Molly maid I just want to make some money. Remind me again why I should care about the "city/tax revenue"? I'm sure there are people out there who owe a lot more in taxes then someone who has cleaned 3 houses so far.

As long as I don't break anything, why would someone sue me? If they don't like how I clean I'll give them their money back no problem. I don't have employees, it's just me, so any money i make is pure profit. so IT CAN be done. I actually just bought a new vacuum with the money I made.

Why would I do others a favor? what have others done for me? Your right I am a tax dodger. I don't have enough money to start with, that's why I started cleaning houses. Why would I put myself farther into the hole by paying taxes?

Read the statics 1 in 6 people don't pay taxes anyways.

Please inform my how I cause problems for people. It's not about me making the most money possible. I don't want to squeeze people for every dollar. I just want a steady stream of income. I think that people who charge as much as they can get away with are just greedy. Even if you do have taxes etc. to pay for. People have to scrub a bathtub and all of the sudden it's deep cleaning and cost 8982357982 extra. Come on get serious.

I see no benefit in "going legit" until I'm ready to hire employees.

wubb2005 · 09-02-2009, 10:07 AM

If I didn't think I was wasting my time by replying I would say:

How am I doing the business a disservice?
Well, you're making it harder for the rest of us by bringing down the perceived value of our services. If you wanted a job, not a business, then go get a job.

As long as I don't break anything, why would someone sue me?
Maybe because the necklace the homeowner inherited from Aunt Martha "disappeared" one day after you cleaned. It might have been misplaced, or the maybe homeowner decided they wanted a few bucks to go to the casino this weekend. Either way, you get blamed for it. Don't think it will happen? Ask around here.

I don't have employees, it's just me, so any money i make is pure profit.
Did you buy supplies to clean with? Did you use your car to get there? You bought a vacuum? That comes off your profit. If you do nothing else, go buy yourself a copy of "Accounting for Dummies". There is no such thing as pure profit.

Why would I do others a favor? what have others done for me? Your right I am a tax dodger. I don't have enough money to start with, that's why I started cleaning houses. Why would I put myself farther into the hole by paying taxes?
If I was going to call myself a tax dodger I sure wouldn't do it in a public forum that the IRS can see. I'm going to make an assumption and say that your income wouldn't be high enough to pay any federal and state taxes but you would have to pay into Social Security and Medicare. I'll also assume that your parents/grandparents, or some other relation (or person who had a hand in raising you) is old enough to draw Social Security and Medicare. If I further assume that they provided you with shelter, clothing, and food, and medical care while you were growing up, then why not 'do them a favor' and pay back into the system that is trying to do the same for them?

Read the statics 1 in 6 people don't pay taxes anyways.
1. It's 'statistics' and 2. Where did you get that figure?

Please inform my how I cause problems for people. It's not about me making the most money possible. I don't want to squeeze people for every dollar. I just want a steady stream of income. I think that people who charge as much as they can get away with are just greedy. Even if you do have taxes etc. to pay for. People have to scrub a bathtub and all of the sudden it's deep cleaning and cost 8982357982 extra. Come on get serious.
I don't think most of us are greedy or want to squeeze people for every dollar. People who charge as much as they can get away with, and stay in business, are called Successful. Maybe they're called Greedy too. If they provide a legitimate service for the money and customers have a choice then why complain about it? Also, I'm always serious about my business.

I see no benefit in "going legit" until I'm ready to hire employees.
Don't worry, you'll never have to hire employees. Unless, of course, you decide to actually run a business.

Good Luck!

RoofCleaningNashville · 09-02-2009, 12:47 PM

How am I doing the business a disservice? I wanted a job, not a business.
If all you want is a job go and get one. You do not hurt me because I am in another state but what about the others that go out of business because you cheapen the service. Hence they can not pay employees. You don't have to be as high as others but you are way too low.

Remind me again why I should care about the "city/tax revenue"?
Roads, Schools, Water, Sewer, Police, Fire need any more?

As long as I don't break anything, why would someone sue me? If they don't like how I clean I'll give them their money back no problem. I don't have employees, it's just me, so any money i make is pure profit. so IT CAN be done. I actually just bought a new vacuum with the money I made.
Ditto the above response. And it took you 3 hours to pay for that vacuum in which you got nothing and that is a cheap vacuum.

Why would I do others a favor? what have others done for me? Your right I am a tax dodger. I don't have enough money to start with, that's why I started cleaning houses. Why would I put myself farther into the hole by paying taxes?
Collecting Sales tax does not put you in a hole. The customer pays it. What do you do when you go shopping? Other taxes are not negotiable and you must pay them or go to prison.

Read the statics 1 in 6 people don't pay taxes anyways. So you want the other 5 to pay for you?

Please inform my how I cause problems for people. It's not about me making the most money possible. I don't want to squeeze people for every dollar. I just want a steady stream of income. I think that people who charge as much as they can get away with are just greedy. Even if you do have taxes etc. to pay for. People have to scrub a bathtub and all of the sudden it's deep cleaning and cost 8982357982 extra. Come on get serious. You will not have a steady stream of income. You have only cleaned 3 houses. How are you going to market at $15 per hour? You need the extra charges for 1. Wages 2. Insurance 3. Transportation 4. Marketing 5. Supplies 6. Equipment Replacement and that is just off the top of my head.

I see no benefit in "going legit" until I'm ready to hire employees.
I am a one man show here and I have the insurance. How about when you accidentaly bump a table and a priceless crystal vase falls and breaks. What are you going to do then? Clean for 2 years for free? Accidents happen that is why you need insurance.

At this rate I will bet that you will be out of business within 2 years if not sooner.

Blayz · 09-02-2009, 02:11 PM

Why? when we send our employee's to a site the Client acts like they are less than human - why? people are so picky about who they want in their homes and offices - why? Clients don't think it's necessary to pay what they consider to be too much for the service we provide.

HELLO!!! It's called running a business

. Not, "Let's screw up the market"!

I am happy to know that you are one less penny scrapper who's not in this Big City. It's bad enough many people I meet who are in the business have these types of low rates - well as a result of low rates they lack - the service as well as the product. Many of the clients don't truly understand cleaning until they have something to compare their current dirty status to.

Well for the client who wish for reliable quality service we will see you soon!

For those of you who just need something wiped down when they get there, call the other guy he's cheaper anyway...

......

Silverdot · 09-02-2009, 11:35 PM

wubb2005

I think the "perceived value of services" is subjective. You may think your service is worth $80 and I may think you suck and your services are worth $20. It's subjective to the person doing the work.

If I use those cleaning items for my own housekeeping in my house, then yes it is pure profit, and no i didn't drive there I walked because my first jobs were here in my apartment complex.

Your wrong in all your assumptions, and i'm not paying back into a system that's going bankrupt anyways. People are living longer, and using more of social security. The people that raised me were smart enough to work hard the first half of their life so they didn't have to depend on anyone for their well being later in life.

Sorry for the typo and it's "google". You look it up. Your right i don't plan on running a business i plan on being like you and getting the most money i can for a service. whether that be through not paying taxes, or not hiring employees.

Thanks!

RoofCleaningNashville

Well my goodness don't let little ol me cheapen the service. Maybe the businesses that have a problem with me should read "accounting for dummies"

Other people pay for those things, why should i if i don't have to.

Thanks for your support. If i'm still cleaning houses in 2 years i'll put myself out of business. It's a temporary solution, not a career.

Blayz

Maybe you didn't understand. I do a better job then anyone in this area, and do the "deep cleaning" that they charge extra for, and i'm half the price. At least read the posts if your going to try and be sarcastic.

scrubs · 09-03-2009, 09:17 PM

First, I love all the attitude coming from a noob to the business who admittedly has no money, and is trying to tell people about accounting. If you don't want to listen to what people say that are likely more successful in the business than you, then perhaps you shouldn't ask the questions in the first place.

People like you give the business a bad name, and drive prices down to really low wages because you are too narrow minded to see where costs are and end up working for low wages without being smart enough to realize it. There is a happy medium, you don't want to be the cheapest person out there, nor do you have to be the priciest.

For one, if you want to be the cheapest, you'll attract a clientele that is all about the cheap. They want the absolute most for every penny, and they'll start asking more and more of you, and expect it without additional cost, as you obviously don't value your time and efforts very much. If you want to make money, you follow money, very few people make good incomes off the back of cheap or poor people that can't afford or won't spend their money.

Also, once you start off and establish your rep as the cheap cleaning guy, selling yourself out, you won't have much success raising prices later, as you will have already established your identity. So, once you realize how stupid your initial prices were and how much you are cheating yourself, it will be too late because everyone knows you as the guy that will sell himself out for low wages.

Third, would you rather work and clean one moderate sized house that took 3 man (or woman) hours for $100 and make $30+ an hour, or would you rather work and clean a couple of houses and take 6 hours to make the same amount, spending more time driving and such as well? Sure, being the cheap guy is the easy way to work, but you can make more and do less if you are smarter.

Don't discount the amount of time you spend driving, the amount of gas and vehicle repairs you spend, the amount for supplies and equipment, etc.

Oh, and people that actually have money and want quality service can see right through the guy that's just cheap, in fact, they usually don't trust such people. They see a person that doesn't value themselves, so why should they use them. So, being cheap will turn off a lot of people out there that would have paid you very well for your services, because they appreciate your time and efforts.

Your attitude stinks with regard to the BUSINESS that is cleaning. People like you that are all about working cheap because they're too lazy to build a real business, and too dishonest to report their income, are the greedy ones, not those running legitimate businesses making more money than you. Oh, and you don't need insurance, nobody needs it, until of course something happens and you need it. But you're smart, and I'm sure with your infinite business knowledge you can forsee every possible way that someone could sue you, so you won't need it. Or maybe you just know you have nothing to take in the first place, so it is just more convenient to put others and their items at risk so you can make a buck, rather than your own, since you don't have anything to risk by your own admission.

As far as you doing a better job than anyone in your area, I highly doubt that. You don't want to put the effort into making this a legitimate business, which shows a certain amount of laziness, which I'm sure travels over to making a quick buck. I pick up jobs from hacks like you anytime I want, selling the value of my service while people that only care about being cheap suddenly decide one day to leave their customers high and dry. Why do they do that? Because they are typically unreliable people. That is why they don't have any money and have to resort to such desperate tactics to get work.

Silverdot · 09-04-2009, 02:44 AM

I asked questions for informational purposes, just because people don't like how I'm going about it. That's their problem. I understand exactly what I'm doing to prices. Fact is one person doesn't have a big enough effect on the market to matter.

I get what you saying about doing less for more. With NO clientele I'm just trying to get jobs. So far I haven't had to drive anywhere because I have 12 apartment complexes on one street.

It's not that I'm too lazy to build a business. I just don't want to. I'm sorry if owning a cleaning business is your life long goal. Not mine. Just wanted to do it for some quick cash. People like you who know how to run a business aren't worried about people like me who

"give the business a bad name, and drive prices down to really low wages because i'm too narrow minded to see where costs are and end up working for low wages without being smart enough to realize it."

because you

"pick up jobs from hacks like you anytime I want, selling the value of my service while people that only care about being cheap suddenly decide one day to leave their customers high and dry."

so don't worry about my methods. Thanks for making a judgment on my whole character based on a couple post. I'm sure if we looked at your life under a magnifying glass you'd have no faults right?

Thanks for your OPINION though. :0)

PressurePros · 09-04-2009, 05:45 PM

You sound pretty much like a person without a clue. I'm glad you intend on keeping it that way. you could never own a business. You'd be bankrupt in six months.

Silverdot · 09-05-2009, 02:19 AM

Simply because i don't do things like everyone else would like me too doesn't mean i don't have a clue. Learn to accepted a different perspective, even if you don't agree with it. Like I said, I don't want to own a business. Or didn't you get the clue?

Ron Musgraves · 09-05-2009, 12:15 PM

Quote:

Originally Posted by scrubs

First, I love all the attitude coming from a noob to the business who admittedly has no money, and is trying to tell people about accounting. If you don't want to listen to what people say that are likely more successful in the business than you, then perhaps you shouldn't ask the questions in the first place.

People like you give the business a bad name, and drive prices down to really low wages because you are too narrow minded to see where costs are and end up working for low wages without being smart enough to realize it. There is a happy medium, you don't want to be the cheapest person out there, nor do you have to be the priciest.

For one, if you want to be the cheapest, you'll attract a clientele that is all about the cheap. They want the absolute most for every penny, and they'll start asking more and more of you, and expect it without additional cost, as you obviously don't value your time and efforts very much. If you want to make money, you follow money, very few people make good incomes off the back of cheap or poor people that can't afford or won't spend their money.

Also, once you start off and establish your rep as the cheap cleaning guy, selling yourself out, you won't have much success raising prices later, as you will have already established your identity. So, once you realize how stupid your initial prices were and how much you are cheating yourself, it will be too late because everyone knows you as the guy that will sell himself out for low wages.

Third, would you rather work and clean one moderate sized house that took 3 man (or woman) hours for $100 and make $30+ an hour, or would you rather work and clean a couple of houses and take 6 hours to make the same amount, spending more time driving and such as well? Sure, being the cheap guy is the easy way to work, but you can make more and do less if you are smarter.

Don't discount the amount of time you spend driving, the amount of gas and vehicle repairs you spend, the amount for supplies and equipment, etc.

Oh, and people that actually have money and want quality service can see right through the guy that's just cheap, in fact, they usually don't trust such people. They see a person that doesn't value themselves, so why should they use them. So, being cheap will turn off a lot of people out there that would have paid you very well for your services, because they appreciate your time and efforts.

Your attitude stinks with regard to the BUSINESS that is cleaning. People like you that are all about working cheap because they're too lazy to build a real business, and too dishonest to report their income, are the greedy ones, not those running legitimate businesses making more money than you. Oh, and you don't need insurance, nobody needs it, until of course something happens and you need it. But you're smart, and I'm sure with your infinite business knowledge you can forsee every possible way that someone could sue you, so you won't need it. Or maybe you just know you have nothing to take in the first place, so it is just more convenient to put others and their items at risk so you can make a buck, rather than your own, since you don't have anything to risk by your own admission.

As far as you doing a better job than anyone in your area, I highly doubt that. You don't want to put the effort into making this a legitimate business, which shows a certain amount of laziness, which I'm sure travels over to making a quick buck. I pick up jobs from hacks like you anytime I want, selling the value of my service while people that only care about being cheap suddenly decide one day to leave their customers high and dry. Why do they do that? Because they are typically unreliable people. That is why they don't have any money and have to resort to such desperate tactics to get work.

Great Sound advice Scrubs

bluehawaii07 · 10-15-2009, 11:14 PM

people like that silverdot guy is what has prevented me from getting a few accounts as I'm new, one month into it.

apartment cleanings and realtors around here in dallas rarely want to pay as i am running into the realtors and even commercial businesses saying, they have a girl or guy doing the cleaning. Majority are not "legit" businesses.

To get a few jobs, I had to price the job the same and sell myself. I provide very high quality and I aim to charge slightly above average for that quality but with the slugs who are illigitimate "businesses" without insurance etc, it is very difficult to do that.

I aim to expand and grow into becoming a major company here in the Dallas area, hiring employees, sponsoring charities etc with my profits. but, those slugs make it that much harder, just for the underneath the table buck.

Cat · 10-17-2009, 04:34 PM

Quote:

Originally Posted by Silverdot

I'm an individual cleaning apartments, move-outs etc. I was wondering how big businesses like Molly Maid etc. can get by with charging so much and stay in business? I can charge half what they charge and do a way better job!

Ok so maybe i need insurance, maybe i need to be bonded, maybe i should make it an actual business instead of everything under the table. even so.

Is all that really so expensive that people have to charge twice what I charge? for example. 1000 sq ft apt 1 bed 1 bath. I'd charge $50. Just for a normal house. Other companies would charge like $80 - $100 based on the calling around I did. It would take my wife and I an hr to clean. I'd even charge $30 for that.

I can't be the only person to realize there's opportunity here. What am I missing?

It's been about 6 months since I've checked in here and I'm happy I did because you gave me a good laugh today. LOL!

To answer a few of your questions:

1. Molly Maids charges what it does because they are a real business. You have admitted that you are not.

2. You say you can charge half of what real companies charge and do a better job. That's your opinion. I'm not sure that your clients would agree with you though.

Here is the question. Why would you clean an entire residence for $30 or $40? Wouldn't your time be better spent doing something less back breaking? You are working for slave wages.

Why not just take the time to start a real company? It just does not make sense, what you are doing. Yes, insurance IS expensive but well worth the expense.

3. My company has a minimum of $125 for biweekly cleanings. And that price would be for a condo or apartment. Our smaller homes start at $135 and go up. Our average is $165 - $180 for biweekly cleanings.

Yes, my company is licensed, bonded and insured. I have employees. I have a real business, almost 2 years old.

You would do better to go get a job at McDonalds for what you are charging (and I'm not totally convinced that your note is real. You strike me as a spammer seeking attention).

John · 10-27-2009, 05:31 PM

I started getting huge accounts when I bought the insurance. I have 4 licenses and liability ins and workers comp and it has only got me more and more business. I am glad to be able to manage the business and not have to go out and do the cleaning anymore. It is a great blessing

bluehawaii07 · 10-27-2009, 08:11 PM

While walking outside of a condo with a Realtor upon completion of todays Make-Ready, we saw two hispanic women with cleaning gear going to their vehicle.

She said, "there goes your competition, mexican and very low rates". I should have asked for their insurance and bonding paperwork etc and find out where they are working. I am sure they are working off the books.

Man, these "off the book" cleaners kill the pricing for us legitimate companies trying to grow.

www.MarineCleaningCo.com
Semper Fieldelis - Always Cleaning

bluehawaii07 · 11-09-2009, 09:41 AM

Quote:

Originally Posted by Silverdot

Simply because i don't do things like everyone else would like me too doesn't mean i don't have a clue. Learn to accepted a different perspective, even if you don't agree with it. Like I said, I don't want to own a business. Or didn't you get the clue?

maybe your apt complex would like to be informed you are without insurance or maybe the IRS wouldlike to know you are making revenue and not claiming or paying taxes, your apt manager will not like that either.

leetcleaning · 12-29-2009, 09:08 AM

You have an ethical obligation to follow all city, county, state, and federal laws when it comes to running your business. As long as you are doing that, then you are OK.

Both you and the individuals you do work for are free to take their own risks when it comes to the services you provide. Though, you have an obligation to do your due diligence in informing your customers of the risks they are taking using your services.

At the very least, I would purchase some business liability insurance. This is especially so if you are a sole proprietor, which I think you probably are. This may run you around $800 for an entire year.

As far as taxes goes, a person could easily report you to the IRS if they know you are not paying taxes on the money you make. If you haven't been doing any accounting either, then I fear for you.

As for pricing, you will want to make a 50% profit margin off the work that you do. If you are doing the work yourself, then include the cost of yourself in that equation. If you can undercut your competition while staying legal and legit, then more power to you. Though, it is best to be wise about how you go about that. Perhaps you can tier your cleaning and offer a low price for light cleanings and a higher price for more detailed cleanings. Just make sure you are undercutting your competition only when needed and never undercutting yourself.