Episode 292 – Are You Trying to Hire Employees TOO Early? Make Sure Get This Right in Your Residential Cleaning Company First…
Today, we’re chatting with Kayla Bridges!
Kayla is struggling to find a way to hire employees while working from home and not having a website. It was the last part that got me thinking… are the priorities here right?
So many times members of Cleaning Nation have great ideas, but they’re prioritizing them in the wrong way. This is exactly what was happening with Kayla. When I asked her why she doesn’t want to have a website, she said she couldn’t afford one. The thing is, websites don’t have to cost $20k anymore to build, they don’t even need to cost $5k to build a simple workable website that can start getting you leads.
While years ago I might say hiring employees takes precedence over a website, that is not the reality of today’s market. Your clients expect you to have a clean looking website that is professional and high quality.
But professional doesn’t have to be expensive.
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We dived deeper into this problem to see why Kayla’s company couldn’t afford a website. The reasoning came down to the NUMBER ONE problem I see Cleaning Nation face day in and day out… charging TOO little for their services!
I hear all the time from others, “But Mike… my area is different. It’s a small town. It’s Alabama. It’s Missouri. It’s whatever.”
The thing is, humans are the same everywhere. In each of those small towns where you believe people can’t afford you raising prices, there is probably a Mercedes dealership near by or some other luxury brand. The fact that exists in your marketplace tells you that you are in a market where at least some people are willing to spend more on quality services and premium products.
It’s time YOU become that premium service.
The first step to that is knowing what your Cost of Goods (COGs) sold are. For a residential cleaning company, your COGs should be about 45-50% of the job’s price. That means if the job costs you $100 in labor and supplies to do, you charge $195-200 to do that job.
Now, for commercial cleaning, your COGs can actually be higher, but this is a pretty accurate COG for residential cleaning.
Resource Alert: Set Up Your Cleaning Company Structure the Right Way Before You Hire https://oldsite.growmycleaningcompany.comcleaning-company-structure/
When calculating what your COG is, take into account not just the hourly wage you pay your employee but all the other associated payroll expenses like taxes, social security. I would highly advise using a payroll company for this as it’ll be more accurate. The rule of thumb is to add 20% on top of the hourly wage.
If your employee gets paid $10 an hour, works 10 hours on a job, you’ll add 20% to their wages. In this case, the COG sold for the job is $120 so your price for the service should be around $220-250 dollars.
If people are saying you’re too expensive by doing this, then it’s more of a communication problem than a pricing problem.
You should ALWAYS be talking to your target audience about their pains.
Remember, cleaning a toilet for $10 an hour is a low value proposition. When you offer a married couple a way to relieve their stress when they come home from a long day of work where they can spend more time together because they don’t have to do any chores, now you’re offering a HIGH value proposition.
Your COG sold and prices should always be your priority #1 in your residential cleaning business. If you can’t afford something vital to your business like a simple website, then you’re likely pricing your service wrong.
Once a year come back to your pricing and make sure all of your jobs are matching the 45-50% COGs ratio. This way you can make sure you stay on track on charging the right prices.
Alright, all that being said, let’s dive into the Lightning Round!
Best advice you’ve received either personally or professionally?
Don’t sell yourself short, especially when it comes to friends who expect a discount because they know you. Charge them what you’re worth.
What’s the biggest mistake you’ve made in the cleaning business we can all learn from?
Hiring people that I already knew like friends and family.
What’s one idea cleaning nation can put into practice to improve their business or their lives immediately?
Staying organized! When you’re organized, everything goes much smoother.
Have any questions? Leave a comment below!