I own a small cleaning business in the central Florida area. We have been in business for about 2 months as of next week seem to be turning a decent profit so far. We spent only enough for the city and county license, workmans comp, liability, a small amount of supplies, and $40.00 on local advertising directed at apartment complexes. We are currently doing between 7-10 apartments per week for 5 different properties. We also clean the offices of 3 of the properties on a bi weekly basis. Our pricing is a little variable at the moment. One of the properties has a set price they pay of $65.00 per unit, but they also pay a "dirty fee" and a "extra dirty fee" where we end up making $90 or $130 respectively. Our general pricing when we set it ourselves is $65 for a 1bd 1 ba, and $5.00 per additional bathroom. So if we had a 3 be 2 ba we would charge a $70.00 flat fee. We do however charge extra for really bad apartments. If an apartment is really bad we charge an additional $15.00 + an additional $5.00 per bathroom. For example if we had a very dirty 3 be 2 ba we would charge the normal fee of $70.00 + 15.00 + 5.00 + 5.00 for a total of $95.00.

The reason I am going into such depth about our pricing is I am running into a problem. If I was to hire a 3 man crew at $7.50 an hour (a wage I personally think is too low to be paying for this kind of work - we deal with some nasty apartments on occasion) it feels like we just won't be making what we would like to make per unit. Currently my wife and I are both working. She would like to be able to stay home and work as the receptionist for our business and eventually I would like to just manage the business and expand. I worry that apartment cleaning just isn't profitable enough on its own. If it takes a 3 man crew 1.5 to 2 hours or an average of 1.75 hours to clean an apartment we charge $70.00 for I am paying 39.37 in labor, not counting our share of the employee taxes and supplies. That leaves us with 30.63, less after subtracting the other costs. I feel like the profit should be more in the 50% range, but that would mean we need to be charging around $80.00 per apartment on average. I just worry that if my prices are more in the $80.00 range I may lose some of my business. Should I raise my prices and if so how should I manage speaking with the managers of these complexes about a price raise?

Another question, I don't know how to get office contracts reliably. I was thinking about doing a mailing campaign to all the offices in my area (lawyers, banks, churches, etc) and see how much I can generate from that. All the apartment business we have managed to obtain so far is through direct mail of flyers we printed up ourselves and some reasonably priced business cards we picked up online. If you have any other suggestions about types of offices I should look for and mail to I would love to hear some.

I would also like to say that I frequent these boards and read on occasion but this is my first time posting and I consider you to be an inspiration, Stringer. I would like to thank you for what you do for the community here and I hope one day my business will be as successful as yours.

Ben, thank you for the compliment it was kind of you.

First, don't limit yourself to any one market especially in the beginning, later after you have a business base built up you can start choosing what business you desire.

You are presently at approximately 56.3% labor, mine runs between 45 - 65%. The difference is the volume; 50% of $1.00 is only 50 cents. 50% of $1,000.00, well you get my point.

Many fail in a new business for many reasons however to me the main reason is the lack of total commitment and being willing to do whatever is required to reach your dream.

If you have read some of my posts you know already that I believe in all types and ways of getting new business; flyers, web site, mailers, etc. But the most effective is personal contact, let them see you and your desire. Cold calls let you see the building and assess the value to you.

Also networking works wonders. Join social groups, local business groups, you local chamber, etc.

Talk to EVERYONE, if they cannot help you directly they may know someone that can... and keep doing this. I still do even after 17 years. These people are like a 'fifth column' in that they can let you know what is going on. You cannot be everywhere, all these people can help you and your company growth, offer a finders fee of say 10% of the first month's billing.

Have you done a business plan? You must do this, purchase or go to your library to get help with it. You have to know where you are going to get there.

Above all, don't do it for the monetary reasons, do it because you want to be the best in providing this service and the money will follow.

I would suggest that you start targeting smaller commercial prospects. There offer more income flow and are easier to deal with in my opinion. Although my wife started a house cleaning business from nothing and added 55 homes in 2 1/2 years and sold it for a very nice profit.

To be successful In my opinion this has to be the reason that you put you two feet on the floor each morning my friend that is the kind of desire that is necessary to succeed.

Plan on contacting 20 to 30 businesses a day, each day you may only find one piece of business but you would not have had that if you didn't apply yourself. On average a 100 cold calls will get you 8 - 10 interviews from that you may sell 1 or 2. But remember do not burn any bridges, those businesses/buildings will be there to call upon again in a few months. That is what is nice about our business.

Go get them, let me know how you did. If you have additional questions, I am here. Most of all Ben, don't get discouraged keep going it will happen this is a good business but takes a lot of effort.

Stringer

Hey Stringer, I appreciate the response. I have decided next week I am setting aside a day to go out and go door to door looking for business. I came up with a list of business types to go to and was wondering what you thought and if you had any to add to it. My list so far is medical offices, banks, gas stations, department stores (I know some use outside cleaners, not sure which ones but I guess I will figure that out), call centers (this area is the fastest growing area in the country for call centers), law firms, accounting offices. I had considered colleges, but I assume they probably hire their own maintenance. I would assume the same of malls. I hear some fast food chains hire cleaners to come in and clean their bathrooms etc so I may look into that as well. We also have a lot of government contract businesses in this area as well (Harris, Intersil, Lockheed-Martin etc) so that may be something to look into in the future. I think their contracts are only up for bids every 5 years though. I was also thinking about checking on a contract with the clerk of courts here, but I am not sure how to go about doing that yet. Do you have any places I am overlooking that I could add to this? Should I just grab a phone book and go down the list in the yellow pages making calls as well?

What do you think of websites like Linkedin? I was thinking about getting a business profile started there and creating some other business social networking pages as well (twitter, Facebook etc). By the way, we got a lead yesterday for a large tutoring office in this area. She said they had recently got rid of their cleaners and had started doing the work themselves but were probably going to hire more cleaners and she wanted to pass our business card on to her boss. We also have a meeting with another property under one of the same companies as our current properties tomorrow morning so we will probably have another 2 or so apartments per week from that. I am just still unsure how we are going to handle bids on these commercial contracts. I am not sure what a competitive rate in our area is. I assume most charge by square foot when going with commercial contracts but I guess it also depends on what they actually want us to do. I mean for these offices I am cleaning for the apartment complexes I am making between 65 (the complex with set prices) and 100 (my own bid) per visit, but the offices are not that large. The one where I make $100 it takes my wife and I two hours to finish the whole thing. The ones where we make $65 (we do 2 at the same time for a total of $130) takes us about 4 hours. I am not exactly sure what the square footage is for the office we do for 100. I assume it is in the 2000-3000 range at most. It has an exercise room, 4 bathrooms, a computer room, a small kitchen, a class room, a decent sized lobby, and 2 small offices. So I guess depending on the size that puts us in a 5 to 3.3 cents per square foot range for this particular office. Does that sound like a reasonable price that I should apply to other jobs? I mean, it starts to seem kind of high once I start looking at larger square footage offices. If I was to apply the 3.3 cents to a 40,000 square foot office I am looking at $1333.33 per visit. Does that seem like an accurate price per visit to you? I mean, 4 times a month would be $5333.32 at that rate. It seems expensive to me, but I guess 40,000 sq ft would be a pretty large job as well.

Sorry about all the questions, it's not very often that I get to ask questions to someone who has already done what I am trying to do and I am still very new to this business. I appreciate your time to respond though. Hope to hear back from you soon.

Hi Ben, I only have a few seconds presently, I will return tomorrow to respond more in depth.

One thing is vital... plan ahead. Prepare for the work; personnel (workers), financing, insurance, taxes, management of these buildings, etc.

Sit down and do a business plan. Are you incorporated as yet?

Let me know, I'll be back tomorrow Ben.

Stringer

Sole proprietorship at the moment, but planning to switch in the near future. Which company type would you recommend? We have a business plan in mind, but we haven't actually sat down and written it. I will work on getting that done later today.

My partner and I are Sub S. It allows a bit lower taxes.

Hi Ben, quite a few questions but that is all right. Next time though if you don't mind let's handle a few at a time, OK?

I have reread your post # 3. Let's see if I can do any good here...

1. Sales via phone or cold calling in person is an ongoing venture and a must for all businesses. I know that you are busy but do not put sales and service second. I would plan at least three half days per week initially (4 hours) to new cold calls. Important, build your pipe line and ALWAYS keep new prospects in it. (Part of your business plan.)

I would call on buildings that are approx 2,000 to 4,000 sq ft initially. I would try regular businesses; medical, banks, call centers, accountants, law firms, etc are great. Retail, restaurants, gas stations fast food... not so much they turn over cleaning companies almost weekly when they get a lower price. Small colleges are great, some do have their own people some don't! Medical requires special services, master these and you cut a nich for yourself.

Government work that IS NOT paid to you directly by the government is good. I would stay away from local, state and fed jobs, 4 - 5 months to pay you presently. We stopped bidding those jobs 11 years ago.

Go to the local towns near you and your own town and get a list from the chamber or the BBB. Also subscribe to you local newspaper/s I get a lot of leads there with buyouts, remodelings. New start ups, expansions, etc. Also do as I suggested, go to all the chamber meetings and don't be afraid to introduce yourself. Help out there, you make a lot of contacts that way. People buy from people they know, they feel 'safe.'

We belong to Linkedin.

2. A moderately dense building of 40,000 sq ft should bring around $5 - $6,000 per month with 5 day/week service in a metropolitan area. What city in fl are you in Ben?

3. I figure my jobs three ways to qualify for my final monthly price; sq ft, how many man hours and what I know the competition is doing presently in my area. All three combine to give me an average. We also use a computer program to compute costs for pricing, but adjust for unusual things.

3. Always make sure that the sweat to reward is there. As you grow you will learn a lot of invaluable things about this business. Go to any trade shows around you. Go to your local cleaning supply distributors as they put on training exhibits free.

4. Work long and prosper... :) DO YOUR BUSINESS PLAN; Sales, service, administrative, trade shows. Networking groups, etc. Set goals and time frames which are adjustable.

http://www.bnet.com/blog/salesmachine/how-to-turn-rejection-into-success/13781?promo=808&tag=nl.e808 -BNET ( A great sourse of info Ben)

More questions... fire away.

Stringer

Hey, thanks for all the information. Sorry about the late response, we are having a very busy week. We have 11 apartments and 2 offices scheduled. To answer your question, I live in Melbourne, on the "space coast". It is about 1-1.5 hours south of Orlando. The population here is around 74,000. Then there is West Melbourne which is really part of Melbourne but trying to be its own city which has about 15,000. Then there is Palm Bay about 15 minutes south of us with about 100,000, and Rockledge and Viera with 24,000 and whatever Viera has, can't seem to find the information, but they are about 15-20 minutes north of us. There are some other cities a little further north than Rockledge such as Merritt Island, Cocoa Beach, Cape Canaveral etc.

I will respond a little more when I have more time. Thanks again.

Oh, and there are also all the beach cities along A1A. Satellite Beach, Melbourne Beach, etc. Those are only 5-10 minutes away.