What would you do? - Cleaning Talk - Professional Cleaning and Restoration Forum
 
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post #1 of Old 07-11-2012, 12:22 AM Thread Starter
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What would you do?

I own a commercial cleaning service in NJ. I have the opportunity to get the contract to clean two buildings. One I priced at $3,895.00 and then lowered to $3,195.00 when I was told that they currently pay $2,995.00 per month. I was then told that they cannot increase the budget a penny but they will give 30 days notice to the current company if we agree to the $2,995.00 per month price. I was hoping to pay for all labor costs at $2,600.00 per month but at this lower price I would try to get it down to $2,400.00 per month so profit of about $600.00 per month. They have a 2nd building which I need to match $1,250.00 per month and I'd can't make more than $250.00 per month on that one after labor. Bottom line is a total of $4,250.00 per month for a profit of $850.00 per month or 20% profit margin.
Would you be quick to take this one? Would like your opinions!
Thank you,
Peter Weiss
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post #2 of Old 07-11-2012, 01:36 AM
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How many days a week is it? How much work would it be for you personally?
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post #3 of Old 07-11-2012, 02:56 AM Thread Starter
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Would you clean this?

These buildings are 5 nights per week of cleaning. It wouldn't be me doing the cleaning so it takes none of my time personally.
Peter Weiss
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post #4 of Old 07-11-2012, 06:33 PM
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Heck, why not? If you went in and gave your price and they have basically said you either do it for this or not at all... and if you do it for that price you still make profit... and it takes none of your time personally... TAKE THE MONEY!!! As long as you have good employees to do the job.
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post #5 of Old 07-11-2012, 06:52 PM Thread Starter
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Would you take it?

Remember that unlike house cleaning, customers usually take 30 days to pay their bills. I pay my workers on the 15th and 30th which means I'm responsible for up to 2 months of payroll before I will probably see a dime. I will also need to pay my salesman his commission on the sale as well. I did agree to match the price but don't feel very positive about it.
Peter Weiss
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post #6 of Old 07-11-2012, 07:40 PM
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Well, that would mean the decision would be in your bank account. That part did escape me because we get paid before the work is completed. I MIGHT even start accepting credit cards. It's hard for me to do that because I don't believe in credit cards. Heck, even my 1 commercial account pays for the month ahead of time. I just don't know how you do it by getting paid after the work is done.
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post #7 of Old 07-11-2012, 09:01 PM Thread Starter
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Would you do it?

That is certainly the best part about house cleaning getting paid on the spot! It's just an expected part of commercial cleaning and each account needs to be priced based on the outlay of capital. Eventually you get your money back when the contract ends or the account gets canceled but it certainly is something to take into account. It's funny how I like only commercial cleaning and don't want to venture into house cleaning while others are exactly the opposite. There are advantages to both but they are two completely different animals.
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post #8 of Old 07-11-2012, 09:49 PM
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So that is a good conversation... why do you like only commercial? And, what are the advantages of commercial?
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post #9 of Old 07-12-2012, 12:22 AM Thread Starter
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Commercial vs. Residential

I like commercial because it's an easier, relatively clean expectation as opposed to a detailed cleaning each time with residential. I also like the bigger bucks involved with larger accounts where you can charge $5,000.00 per month and make $1,500.00 per month on just one customer. I have smaller commercial accounts where we clean for $80.00 for once per week cleaning but for me the excitement is with the bigger bucks!
Let me know your feelings about it residential cleaners?
Peter Weiss
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post #10 of Old 07-12-2012, 05:25 PM
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I like residential because doing things my way I can go out and get several customers a month. If I lose 1 or 2 or 5... I can easily replace them. We get paid before the job. Usually, except for right now, I won't be worried what the work entails because someone else will be doing it.

The excitement for me has always been the marketing, that's why I tried the marketing business. I love telling myself... this month I'm going to get 15 new accounts. That's why, if the cleaning business gets boring for me this time around I'm going to give another type of business a shot. Both business WILL work... the question will be... do I like either of them.
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post #11 of Old 07-21-2012, 06:43 AM
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I like both commercial and residential projects. I think commercial projects have more space than residential so we need more time to clean an office or shopping mall than a home or apartment.
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post #12 of Old 08-23-2012, 12:36 AM
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We have a small cleaning business that is mostly residential with one medium-sized commercial building. I love the residential side, mostly because of the personal relationships I have with my clients. But I also enjoy how easy the commercial building is; it is so simple to clean an office building compared to a house. Plus it has added a lot of stability to our business during the recession to have that one big client every month.
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