What Costs to Include in a Cleaning Estimate

The number one reason cleaning businesses fail is pricing that does not cover actual costs. You might think you are making money but at the end of the year you have nothing. That happens when you forget to factor in the real expenses.

Labor costs

This is the obvious one but people still get it wrong. You need to cover hourly wages plus payroll taxes. If you have employees, you pay Social Security, Medicare, and unemployment taxes. That adds about 8 to 10 percent on top of wages.

Do not forget workers compensation insurance. It is required in most states and it is not cheap for cleaning companies. Factor it in per hour per employee.

If you are the one doing the work, you still need to pay yourself a wage. Do not work for free. Include your labor in the price the same way you would include an employees labor.

Supplies and chemicals

Cleaning solutions, paper products, trash bags, microfiber cloths, mop heads. These add up. A typical residential cleaning uses $3 to $5 worth of supplies. Commercial jobs might use more.

Some cleaners pass supply costs through to the customer. Others include them in the price. Either way, make sure you are accounting for them.

Equipment falls in this category too. Vacuum cleaners, floor machines, carpet extractors. You either own them or you are renting or financing them. That cost has to be covered somewhere.

Travel time and gas

If you are driving across town to clean a house, that time costs you money. And gas is not cheap. Factor in drive time to and from each job. Some cleaners build it into their hourly rate. Others add a travel fee for jobs far from their base area.

Do not forget vehicle maintenance. Oil changes, tires, insurance on your vehicle. It all gets used up driving to jobs.

Insurance

You need liability insurance. If a customer slips on a wet floor or claims you broke something, you need coverage. General liability for a cleaning business runs a few hundred to a couple thousand dollars a year depending on your size.

Bonding is also important for commercial work. Some contracts require it. It is another cost that has to be covered in your prices.

Overhead

Rent for an office or storage space. Phone and internet. Software for scheduling and invoicing. Advertising and marketing. Bank fees. Accounting. These are business expenses that are not tied to any specific job but they still need to be paid.

Take your total monthly overhead and divide it by the number of jobs or hours you do each month. Add that number to every job you bid. It is a small addition that makes a big difference.

Background checks and training

If you hire employees, you pay to run background checks. You might pay for training too. These costs are part of doing business. Include them in your labor costs or your overhead allocation.

Unemployment and benefits

If you offer any benefits to employees, those cost money too. Health insurance, paid time off, retirement contributions. Even if it is just a few dollars an hour, it adds up.

Profit

This is the most commonly forgotten item. You are not just covering costs. You are building a business. You need to make profit. After all the expenses above, there should be money left over.

A healthy profit margin for cleaning is 10 to 20 percent. If you are making less than that, the business will not grow. If you are making more, you are doing great.

The simple way to think about it is to add 15 percent to your total costs. That covers profit and gives you a cushion for unexpected expenses.

When you include all of these costs in your bids, you will actually make money. It feels like you are charging a lot but you are just charging what it costs to do the job right. That is how you build a sustainable cleaning business.