When and why to raise your office cleaning prices is important for these 3 reasons. Your professional commercial cleaning business must increase rates to not only survive but to thrive in an ever-changing industry.
Think about it.
The price of milk will always increase, right? The price of gasoline for your vehicles will always rise. The cost of a good education will go up too. And, well, so should the rates for professional business owners.
No business can survive by remaining the same and certainly not at the same prices. As the rates for everything increases, so must your rate to your customers.
It will be the only way for your business to make it.
3 reasons when and why to raise your office cleaning prices
Inflation is the #1 reason to increase your office cleaning rates.
Inflation is when the general level of prices for services or products increase by an annual percentage. All in all, year after year, the purchasing power you have with currency diminishes. The average rate of inflation is 3% per year.
UPDATE 2/4/23: This percentage has changed and will always fluctuate as we’re now in a post Covid economy.
Does this mean your cleaning rates should increase annually by 3% as well? That would be wise, but it is completely up to you to decide how to implement that change with your commercial cleaning customers.
Whether you increase at 3% at the annual cleaning contract renewal. Or, at 5% – 8% at a contract renewal every other year is completely up to you. (I will explain how we did our contracts with our professional office cleaning service for the past 27 years in a little bit).
Payroll, insurance costs and liabilities, cleaning material and supplies are a reason to raise office cleaning rates.
In addition to payroll, insurance and supplies, general business expenses may receive a price hike every year including your office rental space, warehouse storage fees, office supplies and equipment.
Inflation is across the board and you have to adjust with it or you and your cleaning maintenance service will suffer.
Most companies feel this “pain” with their business in the profit margin. But, this does not have to be you. In fact, that’s our 3rd reason of when and why to increase your professional cleaning rates.
Investing more into your professional cleaning business and yourself is yet another reason to raise your rates for cleaning commercial office buildings.
If your cleaning business is not raising rates due to the rising costs of your bills, it will impact your profit margin.
Make no mistake about it!
Give this some thought….
Why are you in the professional cleaning business? If you have 1 or 2 answers, I’m willing to bet that one of them is to make money. Well that won’t happen if your business expenses are eating away at your profits.
This doesn’t have to happen!
No one wants to experience loss with their business.
Nobody expects their business to fail.
It’s simple – you have to pay the bills, but you can’t take the allocated portion of your profit to pay bills.
And no, it won’t “balance itself”.
You have to do what’s necessary and increase rates for your commercial cleaning company to keep steady with your profit margin.
Using your business’ profits to pay bills is not good, and it is a huge reason why businesses fail.
It happens in every industry with every type of service and business model. According to this article, only about 50% of businesses make it past 5 years.
Be one of the businesses that survives! Don’t be afraid to increase your rates.
I will be honest with you, things have changed with our company over the past 27 years of being in the professional cleaning industry. In fact, my very first cleaning contract was cleaning for 30 days FOR FREE as a way to secure an office cleaning contract.
It was a sales tactic to get cleaning contracts. At that time, I had nothing to lose, yet everything to gain.
Since then, I got married and my husband became my cleaning business partner. We learned a lot and grew our cleaning service. We settled on renewing our commercial cleaning contracts about every 3-4 years. Once a year for us seemed too frequent.
At the time of renewal, (the customer’s anniversary), we would add anywhere between 15% – 20% rate increase. We chose these amounts to bring our business current, (considering inflation), and to consider the impending increase of costs with our business.
It worked for us and it’s how we were able to maintain a healthy business for 27 years!
And, our customers appreciated us not hassling them once a year with a very small amount as opposed to a substantial increase every few years.
If your method doesn’t work, try ours.😉
Conclusion
The 3 main reasons when and why you should raise your office cleaning prices are keeping up with inflation, meeting the need to care for the rising costs of your business expenses, and to hold onto the profit margin you designated with your company. Additionally, challenge yourself to increase your commercial cleaning prices every couple of years instead of increasing rates annually.
“Until you value yourself, you won’t value your time. Until you value your time, you will not do anything with it. ” – M. Scott Peck
Until next time,
Happy cleaning!!!
I grew my office cleaning side hustle into a ½ million-dollar corporation with the partnership of my husband and our amazing staff. In 2020, I retired my service-based business to shift my focus and passion from serving cleaning clientele to serving cleaning business owners.
Utilizing my 27+ years’ experience, I offer free and paid products exclusively for cleaning business owners and cleaning side hustlers at A Janitor’s Story® Website and my VIP Group Coaching Membership App.
I’ve served other cleaning pros by helping them to turn one time cleaning jobs into high paying recurring customers, create excellent client retention practices, develop hiring systems that really work, build marketing techniques that convert and so much more.
If this is a place you’d like to explore, I’d love to serve you too. Simply sign up to my free weekly email newsletter for tips and inspiration. I can’t wait to meet you inside.
4 Comments
Hello Stacey,
I found this article extremely helpful. I have my own residential cleaning business, would you suggest the same rate increase for my business. Unfortunately its been 6 years and I’ve never raised a rate. I decided i wanted to grow the business and this is where I thought I should start.
I’d appreciate your advice.
Thank you
Danielle
Hi Danielle,
When you say the “same rate increase” what exactly do you mean? Same rate for all your customers? Let me know then I can help you. Thanks
Stacey ,My name is Fred and I would really like to know about adding a cleaning service to my business I do commercial hood cleaning.When putting a bid together what percentage do you ad for taxes , and does 18%profit sound about right ?And does 30% for taxes accurate? Did I leave anything out? overhead Monthly 5%(chemicals) Monthly.
Hello Fred,
Great question and it would be a lengthy answer. When putting a bid together you must consider 3 things, profit, operating costs, and labor. You can consider your all taxes as an operating cost, which will vary by your location and your labor costs. If you can operate on a 18% profit margin that’s just fine because 18% of $100,000 is $18,000. But if you’re speaking of 18% of $5,000, that’s only $900. So let’s just agree, if the bid amount is large, 18% is worth it. But if your bid amount is small, 18% is not enough. If you want a better explanation, you can book a 1:1 coaching call by clicking here. Thanks