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?

extremecleantn

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Shane, I would think Steve would think you're doing a darn good job here. We're getting old and will need replacements soon.

As for the elephant in the room question about owner operators, you are in the classic E-Myth problem, you own a job. If you don't go out next week you make no money.

"Own a job."

That's the best description I have heard. I don't want a job, I'm trying to run a business.
 

bojangles

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funny, i don't know any math formulas, but i charge exactly 28 cents a square foot, because at the end of the day, that's how much money i need/want.
 

ronman

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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
Excellent analysis.
Thanks for posting it.
There's a reason so many of us are broke-ass carpet cleaners.
 

Neil

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Am I reading this right? 6 hours to clean 2000 sq. feet?
I noticed that as well but he said to pay attention to the formula, not the numbers. My cost on that job would have been closer to $80.
 

StevenB.

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I must be just dense as hell:)....that is most likely why I have a problem following this logic...I'm not being a smart ass .
The factors that determine my cost aren't always the size. The conditions such as what type of carpet, how soiled, how often it's been cleaned and by whom, whether it's empty or full of furniture, The type of furniture to be moved have always determined how the man hours and my material cost.
My overhead is fairly constant and only varies a small amount regardless of the scenario.
I'll be the first to state I could and should be doing better. I'm keeping an open mind with high hopes of extracting something in this thread I can find useful.
 

Joe Kennedy

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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 feel like you train the customers to expect the lower price and that negotiating prices is the way to go. IDK I do my honest best to price match but im not matching the guy hauling a rug doctor around town for 10-15 a room. Im too good for that and make my case with the customer by asking questions like does XXX do this? Does his prices include XXX? Then Normally I can then win them over with a military, senior or first time customer 10% off.
 

shane deubell

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I must be just dense as hell:)....that is most likely why I have a problem following this logic...I'm not being a smart ass .
The factors that determine my cost aren't always the size. The conditions such as what type of carpet, how soiled, how often it's been cleaned and by whom, whether it's empty or full of furniture, The type of furniture to be moved have always determined how the man hours and my material cost.
My overhead is fairly constant and only varies a small amount regardless of the scenario.
I'll be the first to state I could and should be doing better. I'm keeping an open mind with high hopes of extracting something in this thread I can find useful.
Can't possibly take into account all the different production variables, equipment, vacuum, scrubbing, furniture.
That is a thread in itself, problem i have no first hand experience with a lot of equipment in a residential setting.

So i just used a gross number of 350 sqr ft hour
 

shane deubell

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I feel like you train the customers to expect the lower price and that negotiating prices is the way to go. IDK I do my honest best to price match but im not matching the guy hauling a rug doctor around town for 10-15 a room. Im too good for that and make my case with the customer by asking questions like does XXX do this? Does his prices include XXX? Then Normally I can then win them over with a military, senior or first time customer 10% off.
Doesn't matter if your price is lower if your costs are lower also, that was the whole point of the thread.

As you create pricing packages ALWAYS maintain your margin, min of 60%.
 
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Joe Kennedy

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I feel like you train the customers to expect the lower price and that negotiating prices is the way to go. IDK I do my honest best to price match but im not matching the guy hauling a rug doctor around town for 10-15 a room. Im too good for that and make my case with the customer by asking questions like does XXX do this? Does his prices include XXX? Then Normally I can then win them over with a military, senior or first time customer 10% off.
Oops I meant negotiating prices is not the way to go.. Darn iphone!
 

Beeks

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ok so im prepared to be eaten alive by some of you off this thread but here goes my point of view. I run two main "specials" 1. Single story home $175 2. two story home $250......but i have been running an ad lately with a much lesser price(you have to understand this is FLA, we are flooded with bait n switchers, and people are used to the lower prices down here, aka cheaper peeps) at single story home $100 and two story home $150. So since i have been doing this(lets use these numbers to make it easier to follow) I have increased my jobs from about 40 to about 60 a month. So your saying, you idiot your doing more work for the same income, but paying more in chemicals, time, travel, u name it. But I up sell the shit out of stuff, I get 7-8 out of 10 scotchguard up sales(thanks to Jon Don's, "reapply"method) and pic up tile on a regular with the demonstration that i do. So with all those extra jobs is all the extra income in up sales. As well as being in more homes, in return will give me more potential clients/referrals.

I haven't been on my own long, for less then a year in fact. So by no means do i know alot, im just curious what is everyone's input on this logic?
 

shane deubell

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ok so im prepared to be eaten alive by some of you off this thread but here goes my point of view. I run two main "specials" 1. Single story home $175 2. two story home $250......but i have been running an ad lately with a much lesser price(you have to understand this is FLA, we are flooded with bait n switchers, and people are used to the lower prices down here, aka cheaper peeps) at single story home $100 and two story home $150. So since i have been doing this(lets use these numbers to make it easier to follow) I have increased my jobs from about 40 to about 60 a month. So your saying, you idiot your doing more work for the same income, but paying more in chemicals, time, travel, u name it. But I up sell the shit out of stuff, I get 7-8 out of 10 scotchguard up sales(thanks to Jon Don's, "reapply"method) and pic up tile on a regular with the demonstration that i do. So with all those extra jobs is all the extra income in up sales. As well as being in more homes, in return will give me more potential clients/referrals.

I haven't been on my own long, for less then a year in fact. So by no means do i know alot, im just curious what is everyone's input on this logic?
Go through the first post and do the formula.

Now after you pay yourself $25 hour for doing the actual work, how much money is left over on the average job or end of the month.
At least 60% then your fine, if not then you have a problem.

The whole point of this thread is to do the math and quit making $hit up as you go along.
 

Beeks

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thanks for the formula by the way, i had already did it and im pretty damn close(taking upsales/avg job total) into consideration. Hadn't done it prior to making my costs i wont lie, and maybe i should up them a little, but like i said im pretty close regardless to maintaining that % 60
 

Spazznout

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Beeks, You got it.

The market and how consumers interact with it is changing.
To many on this forum and others make it seem like a bad thing if you upsell or cross sell. It seems to many aspouse that this is bait and switch. It is NOT. Even you were timid to post as you felt like you were going to be labeled. That is very evident in how you worded your post.

Shane is a smart and successful guy.
I like his formula a lot.

Bottom line, remember we do not have a retail showroom floor like many businesses. All businesses will advertise loss leaders or have promotions discounting there service or product to gain new customers. Even BMW, and Mercedes run commercial with their entry level vehicles shown. Then once in the showroom they will upsell and cross sell you on available options and upgrades. It wall mart or other retail they place the loss leaders in the back of the stores forcing you to go through the store and to see what other products they have to offer in hopes that you will buy more while in the store. Gas stations sell gas at near costs in hopes you will come in and buy a candy bar or soda or pack of smokes.

Our showroom is in the customers home. It is irresponsible and foolish NOT to show and tell your customers about all of the services you offer. Entice them to try additional services with demos and slightly discounted prices to get work done while in home saving you a return trip.

This is marketing and business in the 21st century.
 

shane deubell

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How you get there is a secondary issue depending on your skills and wants. I personally do not like to upsell all that much, scotchgard and then some info on tile cleaning is about it. Just my style...

BUT, we match our cost with the price upfront and always hit the profit target.
Doesn't really matter to me.

$30 room but we only spray,rake,wand
$60 for oversize

Furniture, Scrubbing, Vacuum is extra
 

Beeks

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yea we are very similar on most points and prices

thanks again for this thread it was very helpful
 

King Cobra

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How you get there is a secondary issue depending on your skills and wants. I personally do not like to upsell all that much, scotchgard and then some info on tile cleaning is about it. Just my style...

BUT, we match our cost with the price upfront and always hit the profit target.
Doesn't really matter to me.

$30 room but we only spray,rake,wand
$60 for oversize

Furniture, Scrubbing, Vacuum is extra
Shane, would you please explain this poor dyslexic...
 

shane deubell

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