Not making enough profit? Here are your choices for fixing the issue.

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by Tom Watson on June 11, 2017

I get a LOT OF MAIL here at Cleaning 4 Profit on a wide range of topics (and I THANK YOU for that).

Though I can’t answer each individual email in as much detail as I would like to, I do my best to summarize the subject matter.

Lately I’ve received a few emails concerning profit margin. Though I don’t get tons of these type emails, they do come in somewhat regularly over the years. Specifically these folks indicate that when all is said and done, not much money is left over.

Though that is a bad problem to have, the good news is that it’s pretty easy to fix! In the VAST MAJORITY of cases you simply have to keep charging the same rate you currently are but allocate more hours for each job OR charge more per hour (or perhaps some combination of the two).

Though that won’t help you on a job after you bid it and completed the work (you have to write that off as a learning experience), it will help you GOING FORWARD. I can’t tell you how many times I messed up on bidding in the beginning, but the good news is that I learned from my mistakes.

So if you are CONSISTENTLY coming up short on jobs, then allocate more hours (add a “fudge factor” of several hours), or just charge more per hour. I tend to think the first option is best (allocating more hours). I always wanted to ACCURATELY ESTIMATE “how long” a job would take BECAUSE THAT IS EXTREMELY IMPORTANT.

You won’t be really good at bidding jobs right off the bat, as it takes some time to learn the ropes. But practice will GREATLY IMPROVE YOUR RESULTS over time. You just have to fight through it! The key is to market your company as much as possible so you get a lot of chances to bid your services. This quickens the learning cycle.

Another way to improve your profit margin is by CUTTING EXPENSES. Many times people part with way too much cash on things that DON’T ADD ANY VALUE to the company. Things like expensive cell phones, trying to buy cleaning contracts (big mistake) or buying supplies they may not need for months or years.

For the record, I made these mistakes too! I started making a ton of cash after about a year and a half so I went out and bought a carpet cleaning truck (about $45,000) because I wanted to make more. But the truck SAT IDLE FOR ALMOST A YEAR because I was TOO BUSY with my cleaning company.

So I put out a ton of money, and that money sat wasted for almost a year because I wasn’t prepared to start that part of my business. I had NO TIME to allocate for this! This lead to my truck having some “bearings dry out” on the blower because I didn’t lube them , and costing me about $2,000 to fix. A DOUBLE MISTAKE!

Anyway, like I said earlier, these issues are fixable, just take note of how longs each individual job takes to clean. This way you can track how well you are bidding. Over time you will have a notebook full of VALUABLE INFO that will allow you to price your jobs accurately going forward.

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