Do You Want To Learn How To Price YOUR Services? | TruckMount Forums #1 Carpet Cleaning Forums

Do You Want To Learn How To Price YOUR Services?

shane deubell

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I know how to price my services. Seriously ... it is not rocket science.

What is rocket science is knowing how to get the business.

Marketing is what separates the men from the boys.

And I will continue to play in the corner with the other boys while I wait on one of you men to show me how to market.
Sure we can do another thread on that...

Go and google how many households are in your service area and look at infousa at the number of businesses with 10 or more employees. PM me the info and then i will send you some questions to answer.

Marketing doesnt have black/white answers like accounting but you can use probability to find the right direction.

Ever notice with marketing gurus half the cleaners like them and half hate them, regardless of who it is?
 

Steamworks

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Regardless of how you come up with the numbers, what ur gross profit is etc I think that this is a very important thread. A lot of businesses fail cause they don't to this and look at what the other guys are charging. Also all these hacks that call themselves carpet cleaners and business owners who don't do this give our industry a bad rap. I'm sure if they did this they wouldn't be charging these low rates that they are charging. Good post Shane.
 

FastFinish

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I don't know if I could define a "Hack" within this forum based on how they do business, because in actuality I don't really know how they do business... I think I take more business away from good cleaners than I do "Hacks" IMO. Whoever went before me and convinced someone that they needed a good cleaning has laid all the groundwork in marketing, features, benefits, and the like.:D
They just are not memorable,.... As for me,... I make sure they never forget.;) Sales 101
 

johnp94

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Thanks for the time spent to share this info. Lately i've been looking at my pricing and the time spent on the job. This info could shed a clearer light on my profit margin.
 

ASAP

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I really really like the formula Shane! Thanks!
 

pablot

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NO not based on what the idiot across the street charges...
Based on YOUR Cost Of Service and gross profit you want to achieve

Pay no attention to actual numbers, the formula is what is important

Cost Of Service- direct costs to physically clean a carpet
2000 sqr ft

Labor- moving at 350 sqr ft hour = 6 hours This includes everything
6 hours x $25 hour = $150
Labor- $150

Materials- 2/3 Gallon of prespray and misc spotters $30
Materials- $30

Equipment- truckmount costs $25k divided by 6000 hours= $4.20 hour
Maintenance $2k divided by 6000= .35
1.5 gallons gas per hour x 6000 hours= 9000 gallons x $3.50 gallon= $31500 / 6000 hours= $5.25
Round it up to $10 hour
Equipment- $10 hour x 4 hours running time = $40
Equipment= $40

Van- $20k divided by 100k miles = .20
$3k in maintenance / by 100k = .03
Gas- 100k miles / by 15 miles gallon = 6666 gallons x $3.50 gal= $23,333
$23333/ 100k miles = .23 mile
Total cost $.46 per mile

Total Cost= Labor $150 + detergents 30 + equipment 40 + 20 miles $9.2
$230 Cost

This is a 1x service, we really want a gross profit of 60% or more

$230 cost /divided by 40% {the cost % we want to be at} = $575

Price for 2000 sqr ft = $575
$575 divided by/ 2000 sqr ft = $.28 per sqr ft
Thank you for share this info, i'll save it .
 

Deron06

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While I commend Shane for being so analytical, there are so many other variables that come into play. As long as you are making a profit and providing for your family, the utmost important thing is to work. If you are home, huddling about because you gave a price that was too high to some of the prospective customers who called, you are losing money. I used to be more hard-nosed when it came to my prices and in NY I could afford to be. In FL, it is completely different. I am dealing with a different class of people here. They do not have the same values as northerners do and in order to stay productive, I cannot go for the kill on every job. Some jobs are more profitable than others but all are somewhat profitable and the most important thing to me is to remain productive and work as much as possible at filling up my schedule. It is a constant battle and you have to be strong minded to survive it. There is not a single privately owned carpet cleaning business alive here today, that was here in 1995 when I moved here.

While I agree that you don't want to burn yourself and your equipment out doing low paying jobs, there are ways to maintain both. I have multiple vans and only sometimes do I use them simultaneously. Nobody who has ever worked with me is capable of maintaining the high level of quality that I perform at, so I am reluctant to send others out without my supervision. I wish I could but I learned the hard way that I can't. At least not until I have more business and can afford to hire somebody much better than your median carpet cleaner. Nearly every person who has worked for me, wanted me to send them out on their own and advised me that it would be better. Every single time, they were proven wrong. People suck. I don't trust them with my business or my belongings. They don't give a sh1t about anything but themselves and are so short-sighted that they do not realize, what is good for the business is good for them.

There are many challenges in this business but I feel that if you concentrate on maintaining your health, staying busy with work and keeping it fun in any way that you can, the rest will take care of itself.
 

randyg6224

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Great info Shane, but here is my question. When my tech and I do a job together, I can figure his hourly labor cost, but how do you figure my labor cost per job for myself as a salaried owner/operator? I would appreciate the help!!
 

Todd the Cleaner

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As long as you are making a profit and providing for your family, the utmost important thing is to work. If you are home, huddling about because you gave a price that was too high to some of the prospective customers who called, you are losing money.
I was just thinking about this yesterday when a customer called to have 7 areas cleaned and I quoted a price of $250 to do the job. They wanted to pay about half of what I quoted to which I said no.

It has been a slow couple of weeks here and I had no work for the day and I found myself wondering if I should have just gone and done the job at the lower price. It was close to home here so my fuel cost would have been minimal. My only fear is if I do it for half price they will always expect it and so will all their friends.
 

Deron06

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I was just thinking about this yesterday when a customer called to have 7 areas cleaned and I quoted a price of $250 to do the job. They wanted to pay about half of what I quoted to which I said no.

It has been a slow couple of weeks here and I had no work for the day and I found myself wondering if I should have just gone and done the job at the lower price. It was close to home here so my fuel cost would have been minimal. My only fear is if I do it for half price they will always expect it and so will all their friends.
How many friends could they possibly send your way? If you could get $150 for that job, wouldn't it go a long way toward feeding those wonderful kids of yours? Of course, you need to think about yourself before the customer, so if they want to bring down your price, fine. Be more efficient on that particular job than you might normally be.

In the end, it would have been better for you to have that $150 than not to have it.
 

FastFinish

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Todd, by your comment, I would say you probably should have done the job. At least you would have had the option to win them as a future customer, possibly up sell another service or at very least lower the customers expectation on what 1/2 price actually pays for...( perhaps they are used to minimal service from past experience and you could change their perception)
Bottom line for me would be the future potential for other services. After that it would depend on how charitable I was feeling.
 
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Pinosan

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I was just thinking about this yesterday when a customer called to have 7 areas cleaned and I quoted a price of $250 to do the job. They wanted to pay about half of what I quoted to which I said no.

It has been a slow couple of weeks here and I had no work for the day and I found myself wondering if I should have just gone and done the job at the lower price. It was close to home here so my fuel cost would have been minimal. My only fear is if I do it for half price they will always expect it and so will all their friends.
I had a lady Today, After I gave the price she said Laura said you charged less and you moved all her furniture. why are charging so much? I said, Actually mam I'm giving you one room cleaned FREE of charge; and yes Mam Laura paid less and I moved all the furniture for her. We respectfully do this for all people 60 and older but quite honestly you look 17 to me.

She laughed and said OK go ahgead and do it. But you are right Todd, When this p;eople talk to friends and relatives they always mentioned "you were cheap"
 

shane deubell

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Great info Shane, but here is my question. When my tech and I do a job together, I can figure his hourly labor cost, but how do you figure my labor cost per job for myself as a salaried owner/operator? I would appreciate the help!!
The simple solution is to put yourself on commission based on revenue. What/how do you pay your helper?
So you pay yourself 20% for your labor/sales, then any profits left over end of the month is investment money.
 
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Steamworks

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I was just thinking about this yesterday when a customer called to have 7 areas cleaned and I quoted a price of $250 to do the job. They wanted to pay about half of what I quoted to which I said no.

It has been a slow couple of weeks here and I had no work for the day and I found myself wondering if I should have just gone and done the job at the lower price. It was close to home here so my fuel cost would have been minimal. My only fear is if I do it for half price they will always expect it and so will all their friends.


I wouldn't let a customer cut my costs by half. Even if you get them as a repeat they will always try to bring ur price down. And the next time they need you and you don't give them that same low rate they will just call someone else. These types of customers have no loyalty to you. They just want a deal.
 

shane deubell

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I was just thinking about this yesterday when a customer called to have 7 areas cleaned and I quoted a price of $250 to do the job. They wanted to pay about half of what I quoted to which I said no.

It has been a slow couple of weeks here and I had no work for the day and I found myself wondering if I should have just gone and done the job at the lower price. It was close to home here so my fuel cost would have been minimal. My only fear is if I do it for half price they will always expect it and so will all their friends.
Todd and Deron06

The simple solution is follow your gross profit formula, so if a customer says i only have $100 to spend...
You give $40 in costs roughly 1 hour of labor/machine time and $5 in detergents.

They lower the price, you lower the cost. MARGINS stay same always
In todd's case i would say fine and just pre-spray stains only then acid rinse.

If you want to work for the local homeless shelter then do it on your own time, not company time.
You deserve and are expected to be compensated for your labor AND unearned income for investing/starting a business.
 

Deron06

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I agree with that, Shane. That is what I meant by "being more efficient". If they refuse to spend the amount required for my normal services then they are going to get less. Less time, less chemical, less effort but I still made money and the bottom feeders got what they paid for.
 
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