hey cleaning family it's Carolyn arano your cleaning business mentor and in today's YouTube video we are going to talk about how to price residential house cleaning so be sure to stick around for the entire [Music] video hey cleaning family welcome back to my YouTube channel in today's video we are going to talk about how to price residential house cleaning now I know that this is a very hot topic especially for those that are just starting out with cleaning homes we want to make sure that number one on we are making money but most importantly we want to be sure that we are turning a profit and that we are pricing in a manner that we can later on scale this cleaning business so this video is going to be a video for those that are looking to eventually hire other cleaning technicians whether that is the 1099 subcontractor model or the W2 employee model there are a few different factors that go into how to price a house cleaning now the first one is going to be your hourly rate meaning what do you want to build your clients for every single hour that you are out cleaning or have an employee or subcontractor cleaning for your business number two you are going to need to know or have a understanding of what your production rate is going to be now production rate means how long is it going to take to clean this home or you can even break it down to how long is it going to take to clean this room this refrigerator this oven and and so forth I will be linking a link in the description of this video on our residential cleaning bid calculator that I have created for residential home cleaning companies that already have my businesses clean times pre-populated and all you have to do is go ahead and plug in your hourly rate so we've discussed the hourly rate that you want to charge your clients we have discussed production rates and of course the third part to this equation is what are your costs going to be now I should have probably started off with what are the cost going to be because that is going to have or play a role in what you're going to be charging per hour that you're cleaning something that you want to keep in mind is that once you set a price whether that is hourly or a flat rate for a home it is going to be very difficult to increase that pricing with your residential cleaning clients in the future so if you start off extremely low once you start to grow and you need to increase your pricing whether that's because of products gas or because now you're paying someone else to come in and clean it is not going to go over very well and this is all based on my own experience so I suggest starting off at an hourly rate where it makes sense meaning don't start pricing as if you are always going to be solo cleaning because the goal should always be to grow and scale this cleaning business because at the end of the day we only have a limited amount of hours and we can only clean homes so many homes in a day or in a week before you completely cap out all right so my next point is I'm going to be doing a lot of speaking about hourly rates and hourly pricing now this is how I have have always ran my business and will continue to run my residential side of my cleaning business because I like to get paid for every single hour that my technicians are out in the field cleaning now you can also price at a flat rate but I will give you just a little bit of reasons as to why we don't price at a flat rate now regardless or not if you price at a flat rate you are still considering an hourly rate how much this clean is going to cost you and how long you are going to be in that cleaning so I will give you an example let's let say you tell me we charge $200 for a two-bedroom two B right I'm going to come back and say okay well how long is that going to take you to clean and you would say to me well that takes us about 4 hours to clean based on our production rate now 200 ided 4 is $50 now on the flip side of that I could tell you that my hourly rate is $50 an hour and a home your size typically takes four hours to clean now the difference between that flat rate and leaving it open as an hourly rate is that if you happen to go overtime you are not going to get paid the difference so let's say you estimate a clean to take four hours and you show up and the dirt level is higher or it is just a complete disaster for whatever reason that may be maybe there's a lot of organizing that's going into this that you just weren't expecting maybe the house is bigger maybe like I mentioned the dirt level is just higher than anticipated and that clean that you anticipated to take 4 hours right with one person is now a 6 S8 8 hour job so now you've went from 4 hours at $50 to 8 hours at $25 so this is one of the reasons why we have never pitched our services as flat rates unless it is a recurring client meaning that we've already cleaned this client's house before meaning that you know we don't really give a discount on our first cleanings and we're learning how long it should take to clean right um and then our recurring clients we will give a flat rate to because we know how long the house is going to take and how frequently we're going to be there but now if you are always having new clients homes to go in and clean that are not going to be recurring there is a chance that you are not going to be spot on all the time with your estimations of clean time so what happened was we did do some flat rates in the beginning I believe but the issue with that was was that we would show up to the jobs end up spending a substantial amount of time over and then actually losing money because we were putting technicians in to clean the job or if I was still cleaning at that time I wasn't hitting my $50 an hour that I was trying to make so I just wanted to start the video off by saying that yes you can certainly quote a flat rate however you are not allowing that flexibility to charge more so we say in our business when we talk to our clients a home your size typically takes x amount of hours to clean and a rate for that size home is let's just say $300 assuming that we're only charging 50 bucks and it's going to take us 6 hours to clean now then we continue to say if for whatever reason when we show up or you know halfway through the clean we realize that more time is going to be needed you will be informed and it will be at an additional rate of $50 per hour so that's how we word it with our clients and they are always happy to book with us now going back to that statement let's say we know that a three-bedroom three B from experience takes 6 hours to clean and we show up our technicians let the office know right away that hey this house is much bigger than we thought you know much dirtier than we thought whatever the case may be this is going to take way more than 6 hours now we will get on the phone with the client and let know and say you know hey Miss aano we just want to let you know the team just arrived and they let us know that this is more of an 8-hour job would you like us to stay within the 6-h hour cleaning estimation at $300 or would you like to approve any additional time now of course you may not know right right right away how much additional time that is but once you guys start to clean and learn you will get closer to saying you know it might just take an extra hour we're looking at two now sometimes you won't realize that you need more time until halfway through the clean or maybe even an hour for your to wrap that clean up and again that could be because of the dirt level meaning you might walk into a house and say okay yeah this is only going to take me six hours but then you get to that one bathroom or that kitchen right cuz the bathrooms and the kitchens are usually having the highest amount of dirt level due to grease food splatter if we're talking bathrooms Body Oil having to scrub toilets you know and showers that have not been cleaned in ages a bathroom and a kitchen can take you 1 hour alone you know what I mean like a shower could take you an entire hour to clean if you have to really scrub and go over it over and over again now again I'm speaking of my own experience I clean for an entire year before we started to hire people or rather before I got out of the field completely so I do know my clean times I know how long each room should take and I know how long each room could take in a different scenario so again we usually let our client know as soon as we arrive if we think it's going to take more time or at the very latest we give them a call 1 hour prior to the estimated time so let's just say we were cleaning a one bedroom one bathroom we know that usually takes us 3 to 4 hours and let's just say three to keep the math simple so on that second hour of cleaning we would call the client and say hey Miss arano we're coming up to the top of the last hour and we're going to need about you know an additional half an hour to an hour of clean time um because of XYZ because there was a lot of grease on the cabinets because you know the back bathroom really needed a lot of TLC and homeowners they know their home so they know that you know we're not just saying this this is true facts now 80% of the time the clients will go ahead and approve the additional time and if for any reason that other 20% of the time they do want to stick within the price that they were quoted we will tell them okay well in that case where would you like the team to focus or where would you like me to focus we have an hour left and this is where we're at in the home or the apartment what matters the most to you they might tell you you know what do all the floors they might tell you you know what just focus on the kitchen or skip the family room whatever the case may be they are completely understanding you just have to go in when you're you're quoting with them and speaking to them on the phone and communicating your pricing and just letting them know that this is how long it should take this is the price and any time additional will be at this rate okay so I just wanted to get that out the way now let's get into the good stuff how do you decide your hourly rate well number one you need to understand what it is going to cost you now if you're a solo cleaner your cost might be low right because you might be working out of your home office you're paying yourself heck maybe you haven't even you know started an official business yet so it could be all profit outside of your supplies but you want to make sure you take all these things into account if you're paying somebody else and again we do the subcontractor method but I'm going to talk on this from different angles let's say you're a sub you're subcontracting this workout how much are you going to pay that subcontractor realistically right how much do you have to pay them and pay them fairly making sure that they can cover their supplies you know they're paying their own gas they're paying their old tolls and this is their time right so let's just say for example you want to pay that subcontractor $30 an hour because that's fair in your area again let's say so you're paying them those $330 and you want to make $30 on top of that again we're talking subcontracting method this is how we run the business and I'll get into what we price later on in the video but for math sake you want to pay the subcontractor $30 you want to make $30 so right now you know your hourly rate is going to be $60 an hour okay easy enough number two if you are doing this as a W2 employee method there's going to be a lot more cost involved right you are paying for the drive time you're paying out of pocket for for the supplies you are you know paying for workman's compensation you are paying for and we call this um loaded overhead right so it's going to be different right so but you have to figure okay I'm paying this person let's just say it's $18 an hour but really it's costing me $22 an hour right with your loaded overhead how much now do I want to make on top of that so again let's say you want to make an additional $22 an hour on top of that so now you're looking at about $44 an hour for hourly rate so you do have to understand what is this going to cost you what is your loaded overhead and what type of profit margin are you looking to make because at the end of the day we want to be profitable you cannot charge your clients $25 an hour but it's costing you $22 an hour to send that person out then you're only making $3 an hour and are you really even making those $3 an hour because of travel time because of gas because of tolls because of you having to pay them back for all these different things so this is really important to consider when you're trying to figure out how much you're going to charge per hour I talk to a countless number of new cleaning business owners and we will sit down and do the math and try to understand why they're not making enough money and it's because of them not understanding what it's actually costing them to send people out and also I have a full video on why I moved from W to employees to 1099 contractors that I think you guys should absolutely check out I will put a link in the description of this video for you guys all right so now we talked about what is it going to cost you whether it's a subcontractor or a1099 employee right so now we want to talk about how to figure out what the going rate in your area is and now I want to tell you this and it's very important do not compare yourself to cleaning ladies or fellas okay and the reason why I say that and again this is no shade to any solo cleaners out there or any cleaning ladies or fellas I'm only saying this because you cannot compare yourself to somebody that is not running an actual business or is running a business right don't attack me in the comments but is not looking to scale this business because you will never be able to grow your cleaning business if you are trying to compete with someone that is not trying to grow their cleaning business if that makes any sense right I went into this business already knowing that I wanted to make a million dollars I wanted to have a team and I eventually did not want to clean any longer and as of you know a a year or so ago I'm completely hands off with the cleaning business only but for a couple hours a week and if you watch any of my videos you know that I cleaned for the first you know eight or nine months until I remove myself um you know and was really just working on the business so this video is for those that are looking to scale their cleaning business be profitable and be able to hire subcontractors or employees so don't compare yourself or your pricing to uh mom and pop shops or those that are just cleaning as a side hustle or again not looking to grow their business um and hire other people so what you want to do is make sure to do your due diligence meaning do your homework and find out pricing from other cleaning companies in your area or the areas that you want to service right so by doing that you are going to you know search cleaning businesses in your area go on to their website make a spreadsheet write down you know have different tabs write down how much they're charging for a one bed one bath how much they're charging for a two bed two bath see how much the pricing is changing on their instant quoting and booking forms which we should all have on our websites now I will have a link for another video talking about that in description of this video and try to figure out what the math is right see how much they're charging and I'm not saying just go ahead and go with that pricing right away you're going to have to do this for a number of different cleaning companies at least 10 to 15 this is not something that you guys can just try to skip out on or ignore this is going to take some work and this is what I did when I first started okay I checked people's websites I made a ton of phone calls acting as if I was a cleaning client and this is called market research you guys like no it's not shady no it's not uh crooked like no you're trying to figure out what other people are charging okay and I I'm happy to share my pricing with other cleaning companies and I don't take that offensively right because there is enough business for all of us to go around to all of us for all of us to make there is no way that my cleaning business can clean every single home in the state of New Jersey or let alone in my service area it's just impossible right so for you people that are going to be like oh that's so shady no it's not no it's not I know that's what you did to figure out your pricing so please calm down so make those phone calls go on the websites and let's just say for example you call another cleaning company and they tell you or give you a flat rate right so they say well for a 2 by two bath it's $200 you could say okay great well how many people are you going to send out oh we send out two people okay so you send out two people and how long will they be here they'll be there for 2 hours so now that tells me you're paying $200 for four hours of cleaning time that's $50 an hour and you guys are going to keep hearing me say $50 an hour just because it's really easy to do the math okay that's the only reason why um but then you reverse it right and then you can say okay well how much is it going to be to add the fridge it's going to be$ 250 okay so that tells me it's $50 to the fridge how much do the oven uh another $50 okay so now you're telling me it's going to take it's $50 for an oven and so on and so on right so these are the types of things that you want to try to figure out during your market research period and again this is very important for you guys so that you can go in and understand you know what you should be pricing you don't want to be too low because you want to be profitable and you don't want to be too high right over what's going in your market now like I said figure that out call different cleaning companies go on their websites this might take you a couple of days and find a nice medium right so when we were in grammar school we learned how to figure out the average of something so if you have 10 cleaning companies you add them all up you know what their hourly rate is divide it out by 10 and you will have an average as to what the going rate is in your market now when we were doing this we were calling all types of businesses so we were calling like the big chains Molly Maids uh you know New Jersey house cleaners whatever those big chains were and we figured out and a lot of them will even tell you you can just straight up ask what is your hourly rate per person and they'll tell you it's 50 bucks it's 60 bucks I live in New Jersey okay you guys I am on the East Coast I live in New New York I work in New Jersey it's one of the most expensive parts of the country you know aside from California that I can think of on the top of my head to live okay we are currently at $70 per hour per person okay again $70 per hour per person there are other cleaning companies in my area that are charging more okay and some of them are even solo cleaners they're charging $75 an hour $100 an hour so don't come crazy with me or telling me it's not realistic to charge $75 because you live in you know Wyoming or somewhere that's not on the East Coast cuz that's thing you guys are always getting me in the comments like relax I charge pretty fairly and I'm always doing research as to what people are charging nowadays because I know that the cost of living is rising like we also have to keep that in mind cleaning supplies don't cost what they used to in 2018 or 2019 a bottle of easy off was like under $3 when when I first started this business and now it's almost $8 a bottle so if you guys clean homes you know what I'm talking about so that's number one do your market research find out what the going rate is per hour and also more important understand what it's going to cost you okay we charge $70 an hour we give our subcontractors $35 an hour 50% of that even split and because again I know my cost I know what it cost me to run my business I know what I pay in marketing I know what I pay my office manager I know what I pay for all of the things so that's really really important when you are doing that market research like I said find a sweet spot for yourself so that you are somewhere that is fair and good for your business so just to give a little bit of backstory really quickly when I first started my business we were at $45 an hour per person person so 95 for a team of two we are currently at$ 140 for a team of two or $70 per person now you don't want to confuse yourselves with um you know clean times when you're trying to do the math meaning that we charge per person per hour so again I'm going to just use $50 for example if I know a two bed two bath takes 4 hours then that's $200 right $50 per person now if I send two people in there it's still going to be $200 but it should only take 2 hours so I just don't want you guys to confuse eles or under charge right like I've talked to some of my mentees and they've told me oh yeah we charge $45 an hour and I'm like okay cool that's per person right and they're like no not per person and I'm like so you're really not charging $45 an hour you're charging what is that like 2250 an hour and you're paying them 20 an hour so you're only making 250 an hour so don't confuse yourselves on that guys I would always say when you're doing the math always just think of Total Clean time 6 hours house cleaning 60 * 50 is 300 if you send two people in there it's still going to be 300 but now it's going to be a 3-hour clean because it's two people 2 * 3 equal 6 so that was something I just kind of wanted to be clear on now we talked about how to approve the additional time with your clients should you choose to do the hourly rate for cleaning again you know you give them a call and you let them know what's going on now something else I want to talk about um with how to price house cleaning let's say you don't you don't know your clean times okay you've never cleaned a house before and maybe you don't ever plan on cleaning a house maybe you're opening a remote cleaning business and you're not going to clean right I'll be happy to share some of my clean times with you guys and I will also be happy to share a residential client intake list all you have to do is click the link in the description of this video and I will have the residential intake form for you guys to download and it has a list of questions for you guys to ask it's going to help you be able to quote your cleanings and like be more on point so that you have an understanding of okay this should take this long or this should take that long um but I will just kind of get into how long it usually takes us to clean so one bedroom one bathroom typically takes anywhere from 3 to 4 hours now we have a minimum okay so our minimum is 4 hours that's another thing that we should talk about very quickly you can set your own minimum and you can always change your minimum meaning what is the least amount of money that you're going to go out and clean for because at the end of the day our time is money right and also your minimum can change depending on your financial situation if you really need the money then go out and work for that hour or two at 50 bucks or whatever it is right because you need to feed yourself your family and take care of yourself now as you start to get clientele as you start to gain more cleans you can always adjust that minimum you might have a three- hour minimum meaning that at 50 bucks you're not going to come out for anything less than $150 right the more that you grow the more that you can put these kind of items in place you know I always say take care of yourselves if you need the money go do it um we took every single type of clean we didn't have a minimum in the beginning I would have came to clean your bathroom for 50 bucks okay that's how bad I needed the cash now I'm at a point in my business where we will not come out for less than 4 hours because it's just not suitable it doesn't really make too much sense for me or my teams my technicians that I send out but you can also have a minimum should you choose to and you can always change that minimum as you go um so let's just say for example a one bed one bath I said it should take us about 3 hours but we charge for four a two bed two bath typically takes us four hours a three bed three bath typically takes us six hours a four bed four bath typically takes eight hours a five bed five bath 10 hours and as you'll notice like rule of thumb for me we're kind of multiplying the bedrooms and bathrooms right again I have have created a full calculator with clean times per room per extra uh you know hallway bathroom all that thing that all those things that you guys will need to quote for purchase and I will link that in the description of this video I think it's an awesome tool I already have pre-populated clean times it is 100% customizable so let's say I have a kitchen down as an hour but it's taking you an hour and a half you can go ahead and adjust that from 1 to 1.5 or let's say you clean faster than my team because maybe your checklist is a little bit different right you guys can go ahead and adjust that also the hourly rate you can always adjust so let's say you're starting off at 40 bucks now and in you know a couple of months you're charging $60 you can go ahead and adjust that so I'll be sure to link the residential clean bid calculator for you guys below um I also mentioned the residential intake form it has a number of questions that is going to help you with quoting your clients and also not getting jipped because our clients don't always know what type of cleaning that they need right they might call it a deep clean but really it's a post construction and you can charge more for that that okay you can charge up to $ 20 $30 per hour more for post construction somebody might say they need a deep clean but it's really a movein move out cleaning right so this residential intake form is going to help you have a better understanding and ask all the right questions so that you know what to expect when you go in or send your team I also do have a number of customer guidelines as well as all of the internal forms and paperwork that you could possibly need for your cleaning business meaning employee handbooks commercial cleaning contracts residential cleaning guides lines uh checklists right how to clean properly so like checklists are in the actual order in which you should clean in um and so forth so I'll also be sure to put a link in the description of this video for you guys on all the internal forms that we have so we have three different packages one for residential cleaning one for commercial cleaning and one for full service cleaning businesses so that will be made available for you guys as I mentioned earlier in this video your hourly rate is going to change over the years because of the cost of living going up right um um it's just going to happen and also in those internal form paperwork bundles that we have we have price increase letters uh email templates all kinds of things if you guys will check out my website I have created a number of downloadable you know forms online courses I have one-on-one coaching I have the residential bit calculator you can buy commercial leads I mean we're always adding things that I think of that can help you guys [Music]