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  Topic Review (Newest First)
04-28-2014 12:46 AM
EasyCleanToronto As long as the rates and cost raises are fair you should be okay.
02-24-2014 11:05 AM
Maid to Shine
Quote:
Originally Posted by KimB View Post
I currently charge $40/hr for myself and another person to clean together. We are pretty much maxed out with what we can do and I need to figure out how to expand, which will involve becoming an LLC and having to pay disability and worker's comp for the current girl and a new person I need to hire. Since I'm going to have a large overhead increase (one time lawyer fee $1400 and WC/DB annually $3000), should I increase my rate for new customers and keep it the same for existing customers?
First and foremost you should have workmen's comp on your people. $3000 for WC? What is your rate in your state? Ours is about 5%. But our WC company has us pay it over 4 months.

As far as $1400... That is a lot. Why do you need a lawyer to set up a LLC? It took $25 and 3 minutes to set up our LLC when we were small in Colorado. An LLC is not complicated...

As far as your rate, you should be within $2 of your competition.
02-23-2014 08:47 PM
Islander Would you feel comfortable with going with Legal Zoom to get your LLC up and going? If so, this could bypass the lawyer fee and make more cash readily available for the upcoming costs of the employees to cover. I think I would be more apt to increase your estimates with new incoming clients. As far as your core clients, if they haven't experienced a rate increase in a few years, now might be the best time to start.
02-03-2014 01:17 PM
KimB
Rate increase due to overhead increase

I currently charge $40/hr for myself and another person to clean together. We are pretty much maxed out with what we can do and I need to figure out how to expand, which will involve becoming an LLC and having to pay disability and worker's comp for the current girl and a new person I need to hire. Since I'm going to have a large overhead increase (one time lawyer fee $1400 and WC/DB annually $3000), should I increase my rate for new customers and keep it the same for existing customers?
09-23-2013 06:26 AM
maryancell001 I believe that increase in rate should be done in gradual basis & at the same time keeping the old customer informed about the revised rates is important rather then giving them a sudden shock. Since no one like to pay extra for the same job which had been done earlier on old rate basis, but without revision in the rates, can somewhat give a lackluster service, as every item or kits for cleaning purpose have raised their cost too. Then why the same cannot be implied on cleaning services. Perhaps it can be done if it is done in a well planned manner to capture the market with ease.
09-23-2013 02:53 AM
stevenharris Increasing rates won't affect business, if the service provided is standard. People will always prefer their favourite cleaning specialists at any cost. New customers may hesitate to hire the services, but will eventually choose it because of the company's credibility.
08-16-2013 06:24 PM
romarina And you need to prepare your customers for rate increases.
08-16-2013 06:23 PM
romarina Yes, rate increases are necessary.
04-24-2013 09:55 AM
Preston Cleaners
Quote:
Originally Posted by AndrewWilliam View Post
Increase in rates of services is done gradually. Usually this increment is done on a yearly basis to keep customers aware of the increase in work but a sudden price rise can make the customers question like the way it happened in this case. It is better to maintain a balance and explain the customer politely about the issue you are facing regarding work.
I agree as long as you talk to the customer and explain the reason for the increase then, you can gradually increase rates over time. If you are being consistent in your pricing and are being fair in your amount of increase then 9/10 customers will be okay with this. You may have to lose a small amount of customers but the customers who value their experience with you will stay.

Cleaners in Preston
04-11-2013 06:52 AM
AndrewWilliam Increase in rates of services is done gradually. Usually this increment is done on a yearly basis to keep customers aware of the increase in work but a sudden price rise can make the customers question like the way it happened in this case. It is better to maintain a balance and explain the customer politely about the issue you are facing regarding work.
04-09-2013 07:56 PM
animalmother We're a smaller company, but its still a daunting task! We've just been doing a few a week and marking down on a spreadsheet when the work order was last updated. We're trying to prioritize based on the complexity of the house/job; the houses that we could clean in our sleep we're saving for when they make a new request or require a rate increase.
03-29-2013 03:26 AM
Maid to Shine I like the list idea with a work order, however I don't think I can scale that 300 letters... I will see what I can think of

-Crista
03-28-2013 10:57 PM
animalmother We are having the same issues at my company, trying to raise rates after sooo many years! I definitely like Crista's idea about raising rates a little at a time to avoid the shock. We want to start doing something like that, but there were quite a few houses that were basically costing us money to clean. We sent out a form letter to all our clients (so they didn't feel like they were being individually targeted), along with a personalized work order (really just a list of all the rooms/special notes for their house). I don't think a lot of people were aware of how much work we were doing in their houses. The majority agreed to the rate increase, the ones who didn't either quit our service or negotiated a slightly lower rate by having us skip rooms or time-consuming details (vacuuming the couch cushions, changing the sheets, etc). I hope you can work something out with her! Its hard when clients are friends and gang up on you.
03-22-2013 10:12 AM
Maid to Shine Sarescleaningservice,
This is actually a really good thread to have. You should always raise current clients every year somewhere between $0.50 and $1 per hour you charge. That way people see "Oh they raised me $2 per cleaning, that is not bad" but they never see, "oh they have not raised prices in 15 years and now they want more money, that makes since." We hand out rate increases every year, even if we don't raise someone's rate "Thank you for being our client, we decided that with the economy this year we would not raise your rate..."

We do have to raise rates on people who get a new puppy or have their children come live with them again for example. Sometimes we just have to loose the client because they do not want to pay more.

Hope that helps.

-Crista
03-21-2013 11:14 PM
sarescleaningservice
Rate increases

I have been in this business for 17 years now. Started as a partner with my mother and 3 years ago went off on my own. I have never had an issue with raising clients rates and only really do it if their home is requiring more attention and time than their initial bid. I recently had a client become very defensive when I raised her rate 15 dollars bi weekly. She has added a shedding dog a new bathroom and master suite onto her home since I have taken her. And also her children have become increasingly messy and busy. I was offended by her response and refusal to pay what I thought was a reasonable increase given her home takes an extra hour now. She wanted to know why her friends whom I work for we not having their rates increased as well. i ended up keeping her rate the same because I did not want to loose the business right now until I have a client to replace her but I am wondering how other smaller residential companies handle rate increases in general?

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