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Avoiding the 7 most common cleaning pricing mistakes can help ensure your business maximizes profits so you can successfully grow in the long-term.
When you avoid these top 7 common cleaning pricing mistakes, you can:
Use this article to sustain successful profitability, and make sure your business doesn’t make these most common cleaning pricing mistakes.
Even though it’s important to be aware of the competition’s prices, copying their cleaning pricing is a huge mistake.
After all, there’s no way to ensure the competition is optimally pricing their services for the most profit.
In addition, every cleaning business is different with different profit goals, overhead costs, and break-even points.
For these reasons, it’s crucial to set your own prices. Then, loosely compare it to the local competition to see how your prices match up.
As a result, you’ll have a general idea as to whether you’re priced too low or too high in comparison to other cleaning businesses in the area.
Oftentimes, businesses will account for profit goals, yet fail to account for a percentage they can reinvest back into the business for future growth.
For example, you should have a set amount of profit you can use to:
By leaving ample room for business growth, you’ll ensure the long-lasting success of your cleaning business for many years to come.
Failing to consistently reassess client profitability is one of the biggest mistakes cleaning businesses make.
By regularly assessing how clients align with your profit goals, you’re able to ensure you’re only servicing clients who are generating ample profits.
Then, after determining a client doesn’t align with your profit goals, you can either:
If the client is in a severe profit deficit or they’re unwilling to pay more, then it’s likely time to fire them.
However, if the client is close to meeting your profit goal and is willing to pay more, then it’s likely okay to keep them onboard.
Although, you should also reassess clients who are superficially meeting profit goals.
In other words, if they’re impossible to please, and you’re repeatedly re-servicing them, then it’s likely time to fire them.
Keeping minimally profitable clients is just as bad as keeping unprofitable ones. After all, you’re wasting valuable time and resources which can be spent on more profitable clients.
With minimally profitable clients, it’s likely time to increase their price.
If they’re willing to pay the new price, then you can keep them.
However, if they’re unwilling to pay the new price, then it’s likely time to fire them as a client. Instead, replace them with someone more profitable.
In addition to regularly reviewing client profitability, it’s also important to recalculate your break-even point on a routine basis.
Due to inflation and other varying costs, you won’t know your current break-even point unless you’re regularly recalculating it.
By consistently revisiting your break-even point, you’ll ensure you always know how much profit you need to generate to optimally set prices.
Keep in mind, profit goals aren’t something you should just assess once a year.
After all, if you’re only occasionally assessing profit goals, then you can’t make improvements throughout the year to ensure you’re on target.
By routinely reassessing your status on meeting profit goals, you can adjust prices to make sure you stay on track.
Unfortunately, you’ll inevitably lose clients. However, it’s critical not to allow the fear of losing clients to prevent you from increasing prices.
Remember, it’s better to lose a minimally profitable client and replace them with a client who’s more profitable than it is to keep a minimally profitable client and allow profits to suffer.
ALWAYS either raise pricing or fire the client if a client isn’t aligning with current break-even points and profit goals.
By the way, you can easily assess client profitability with Service Autopilot.
Using the #1 cleaning service software, you’ll have the power to instantly access time on job, job costs, and more.
As a result, you won’t have to spend countless hours crunching numbers on client profitability. Instead, all of the information you need is easily accessible at the touch of your fingertips!
Instant invoicing
Better scheduling
Manage your clients and employees all in one system
By avoiding these cleaning pricing mistakes, you can maximize profitability, and:
Finally, you have the power to make sure your business doesn’t make these common cleaning pricing mistakes so you can be successful for many years to come!
Related: 3 Easy Steps to Get Your Cleaning Pricing Right
Originally published Aug 11, 2022 7:00 AM
Tags: Business Operation, Featured Post
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