Hey Steve,

I’m a fairly new carpet cleaner here in Oklahoma. I have recently been given the opportunity to snag 5 very large apartment communities through referrals. These accounts would be just what I have been waiting for to get my second van running full time. I currently have one large complex under my belt but I do think that I have not been charging enough. I ran them a flat rate for 55-75-95  for their 1, 2, and 3 bedrooms. This included spot removal and basic urine treatment. I recently spoke with the company that lost the account and found that they were charging nearly half on the cleanings but when they did spot treatments they were getting a final payment of twice what I am getting. I am used to pricing residential but really have no clue on where to start with apartment pricing. I don’t want to low ball these complexes and not get near what is standard. I have tried to get some pricing out of locals but no help!! I need some help finding the rates for complexes. Something with spot, urine treatments, and per unit/bedroom. I have almost a 100 percent of getting the accounts unless I don’t bid correctly. If you can help me out in anyway possible I would appreciate it. Thank you very much.

Sincerely,

Floundering in OK

Dear OK,

Good to hear from you.  And yes, I feel your pain.  Successfully pricing your work is a combination of accounting, alchemy and most certainly a leap of faith for most carpet cleaners!  So what are we going to do with you?

May I respectfully call attention to one key phrase in your question?  “I have tried to get some pricing out of locals but no help!!”

The problem is you are asking the “blind to lead the blind”.  The average (or even above average) carpet cleaner does not have a clue on how to PROFITABLY set their prices so therefore if you look to the “locals” for help you will wind up going broke!!  Listen carefully here: “Do NOT let your competition serve as your Pricing Consultant”!

May I suggest instead a 4 step process?  A)  Get as efficient as possible.  In apartments it is all about speed and production and there is nothing wrong with this.  Commercial cleaning is a very different beast from residential.  B) After implementing your higher production steps start a cleaning diary which will let you know EXACTLY how many apartment units and/or how many square feet you can clean per hour.  C)  Analyze your cost of doing business INCLUDING your fixed administrative and marketing costs PLUS the amount of profit you wish to make.  (I believe “profit” is the reason you went into business, isn’t it?)  D) Now you should be able to easily determine exactly how low you can go on a given apartment project AND still make money.

One reminder.  Look not only at the price but also be sure to have clearly defined job specifications.  For example, you can base your per unit pricing on how many units you do at the same time.  For example, one price for five or more units on the same trip versus one.  This will motivate them to better organize their calls for you and minimize your drive time.  Also specify that the apartment must be completely empty or a furniture moving charge will apply.  Ditto on debris, etc.

Finally, I would also suggest you challenge the complex to pick their dirtiest unit and you will clean it- free of charge IF they are sincerely interested in your services.  I found very few of my commercial accounts took unfair advantage when I put it like this.

Let us all know how it goes,

Steve

P.S.  I agree on the cafeteria approach on the pricing question.  Get your foot in the door with a budget (but still profitable) price and then build the job to make the big bucks.

Related posts:

1. Sick and Tired of PRICE, PRICE, PRICE in Milwaukee
2. Dealing with Price Concerns
3. Timidly entering the commercial arena …
4. Too high? Too low? HELP!
5. Turning the tables on those pesky “Price Shoppers”!