Many cleaning professionals visit the International Custodial Advisors Network (ICAN) Ask the Experts (ATEX) page for insight. We deliver advice to help you perform your job.
Friday’s Question
We put in a bid to clean two buildings at a car dealership. One building is 15,000 square feet; 12,000 square feet of the building is shop area where mechanics work, while 3,000 square feet is office and customer waiting area.
All tile floors have to be mopped daily, six days per week (including shop). We also have to empty trash, including shop trash, clean the employee kitchen, four restrooms, wipe down desks, etc.
The second building is 12,000 square feet. The shop needs to be cleaned daily, which is the same as above. The balance of the building is carpeted, and has tiled showroom and offices that need to be cleaned six days per week in addition to four restrooms, an employee kitchen, and a customer lounge.
Every three months all windows in both buildings are to be washed by us (including window panes on overhead shop doors). We furnish all cleaning supplies, while the client provides paper towels and toilet paper.
Our bid was US$6,300 per month and was accepted. We have been cleaning for a year and keep the facilities spotless. Recently, the dealer told us they had a bid for lower and asked us to rebid. I came in a little lower, around $5,000.
This figure gave me virtually no profit, and the dealer told me the cost was too high. I have gone over figures repeatedly and cannot come down any lower. Were my rates too high?
Friday’s Answer
Let us do some general calculation. You were cleaning and doing a good job in a difficult 6-day- a-week facility for a year at $6,300 a month, looking after 27,000 square feet, a charge of 23 cents per square foot. Now, they propose you do the same work for less than 18.5 cents per square foot, forcing you to work for close to a break-even price.
From our standpoint this makes no sense, but it does from theirs.
Car dealers are notorious for inflating auto prices with phony dealer fees, prep fees, rust-proofing fees, tire-inflation fees, etc., and since they know there is a lot of negotiation slush money in their pricing, they figure you operate the same way and can always be negotiated down. What better tactic than getting you to compete with a lower bid?
This auto outfit knows that you do a good job and wants to keep your high-quality services at the rate of a lesser experienced service provider who has tossed out a proposal figure that may leave them with no profit either. Don’t take the bait.
The sole purpose of business is to clear a reasonable profit on the service offered, and when you cease to do that, you have no reason to continue with the effort.
I cannot say your pricing honestly can be bettered or not, but that is not the issue, is it? You did, for one year, what you said you would do for what you originally proposed, and now someone has thrown a lower number into the mix. What to do?
Hard as it may seem, give up the job. If these other people can make a profit at a much reduced rate, you will have learned a lesson. You could have improved your efficiency or production rates to match theirs. You can now work on doing that.
However, many of us have had this situation presented and have thanked the facility manager for allowing us to be of service by arranging a smooth turnover to the new folks. We kept the quality up, and left with a good reputation for providing great service at a fair price that was not dictated by unaware competitors or cheap property managers.
Enter the new cleaners, who may or may not perform as well as you did. If they fail, who will get a call if you left with dignity?
Since you are under no obligation to offer discount prices that demand you pay minimum wages, cut corners, and starve to keep in business, let the price hunters go on hunting. If they care for their facilities, they will be back, and if they don’t care, why would we want them as clients anyway?
– Lynn E. Krafft, ICAN/ATEX editor
View additional bidding & estimating questions and answers from ICAN/ATEX here.
