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Episode 1017

Should You Switch from Residential to Commercial? (and more of your questions answered!): Episode 1017


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EP 1017
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Episode 1017 – Should You Switch from Residential to Commercial? (and more of your questions answered!)

In this Facebook Live Q&A session, the Cleaning Nation community gathered to discuss various aspects of the cleaning business. Mike Campion, the host, provided insights and answers to questions from viewers. Here’s a summary of the key points discussed:

Transitioning from Residential to Commercial Cleaning:

Sheila Woodward asked how to transition from residential to commercial cleaning while maintaining financial stability. Mike explained that many residential cleaners want to move into commercial cleaning, assuming it’s more profitable. However, the transition is not always as straightforward as it seems. Commercial cleaning involves a different sales cycle, staffing needs, and work hours compared to residential cleaning. Mike emphasized the importance of assessing the actual financial situation in the residential cleaning business before deciding to transition to commercial.

Cost of Goods Sold (COGS):

Melissa inquired about what should be considered as part of COGS. Mike clarified that COGS includes variable costs directly associated with the cleaning job. This includes labor, workers’ compensation, payroll taxes, and supplies that are consumed during the cleaning process. He also discussed the inclusion of credit card fees and mileage/drive time.

Owner's Pay in COGS:

Melissa further asked whether an owner’s pay should be factored into COGS if they work on cleaning jobs. Mike explained that owners should pay themselves similarly to other employees when they perform cleaning tasks. This ensures a clear distinction between profit and owner compensation.

Scaling the Business with Employees Working 30+ Hours:

Anna wanted advice on scaling the business when employees want to work 30 hours or more per week. Mike emphasized that the business should not bend to accommodate the preferences of individual employees. Instead, stick to a standard scheduling approach. If an employee insists on working more hours than the business offers, it might not be a good fit.

Getting Out of Cleaning:

Haley Morgan shared her situation, where she needs to make $2,500 for personal and business bills but is still working as a cleaner. Mike offered two strategies:

  1. Focus on sales and higher-value tasks. Invest the time you would spend cleaning into acquiring new clients, which can be more profitable in the long run.
  2. If immediate income is crucial, consider temporarily working extra hours while hiring and training additional cleaners. As the business grows, you can gradually reduce your cleaning hours.

The key takeaway from Mike’s responses is to make business decisions that align with the overall strategy and financial health of your cleaning company. It’s essential to consider the long-term goals and profitability of the business when making decisions about transitioning, allocating costs, or scaling up.

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