Find out how you can boost your commercial cleaning business profits starting today!
Can you increase your commercial cleaning business profits without increasing your revenue? Yes. Can you do it without cutting hours for your team or letting your quality slip? Yes. Can you do all of this and increase your profits starting right now? Absolutely.
This might sound like some dream or marketing ploy to get you to invest in a new commercial cleaning scheme, but it’s not. The reality is that making money takes work. It’s no different if you’re trying to increase your cleaning business profits. This isn’t a get-rich-quick story. There’s not some magic formula that will flood your bank account with cash.
However, if you’re willing to put in the time and effort, there are ways you can boost your profits. And you don’t have to cut back on quality to do it.
Ready to strengthen employee and customer relationships? Let’s start the conversation! Reach out today for more info.
Getting a clean view of your finances
Your cleaning business profits are the amount of incoming revenue minus your expenses. So if you bring in $1,000 on a commercial cleaning project, and you spend $100 on equipment and supplies, $600 on payroll, and put another $100 toward your general overhead, your profit is $200.
These are just random numbers. There are, of course, numerous factors that go into how much you spend on equipment, supplies, payroll, and overhead. And some jobs are more profitable than others. Still, these numbers give us something simple to work with so we can look at some different ways to boost that cleaning business profitability.
Your very first step is to get an accurate view of your income and expenses. In the example above, your incoming cash is $1,000. But in reality, you may have one-off jobs and contracts that are beginning or ending. You may order supplies weekly, or your payroll might change seasonally. Look through your bookkeeping records and, to the best of your ability, determine your average monthly numbers. This will help give you a longer-term look at your financial situation.
While a broader view of your finances won’t increase your profits, it does offer perspective. And it provides a more holistic look at your accounting. For example, a big equipment purchase will cut into profits. However, when you spread the cost out over time, it’s less of a financial burden. You might even find that some types of new equipment can help increase your team’s efficiency and lead to higher profits.
Turn your cleaning business profits into a tidy and exciting number
With an accurate view of your financial situation, you can start looking at different ways to increase your commercial cleaning business profits. More importantly, you can determine how to increase those profits.
Of course, an easy way to increase profits is through increasing revenue. Signing new customers or adding services to an existing contract is always nice. But we want to focus on getting the most out of what you already have. Then your profits increase exponentially with each new client or service you invoice. With that in mind, let’s examine a few avenues for boosting profits.
1. Supply types. There are numerous factors to explore here, and a lot of potential savings. Ready-to-Use products (RTU) are often more expensive than concentrates. While they may have a higher initial price tag, concentrates will last you much longer, and you can store more, leading to fewer orders and lower overall shipping expenses.
2. Supply costs. Are you getting the best deals on supplies? Or could you benefit from price shopping with other suppliers? Remember that there’s a difference between price and value, and that the least expensive item isn’t always the most cost-effective. That caveat aside, though, you may be surprised at how much you can potentially save by switching suppliers.
3. Order amounts. Changing the numbers on your orders could be a huge source of increasing your cleaning business profits. For example, many suppliers offer bulk discounts. In just one example, a single bottle of multi-purpose cleaner is $12, while a case of four lowers your price to $10 per bottle. You can get that down to $9 per bottle if you order three or more cases. You can look at this as saving $36 when you buy three cases of a product, but that’s not just savings – it’s also profit.
4. Shipping costs. Here’s another place you can easily and quickly boost your profits. In the example above, the shipping cost for one bottle is $7.50. If you were to expand on that and order six cases of this cleaner one at a time, you would spend $180 on shipping. However, if you order six cases at once, your shipping would be $102. Be sure to look at the shipping carrier, too. The least expensive option can change depending on how large your order is.
Just for fun, here’s an example of how much your order amounts and shipping costs can impact your commercial cleaning business profits. Here’s what this would look like if we were ordering one bottle of general-purpose cleaner at a time:
- 24 bottles X $12 per bottle = $288
- 24 orders X $7.50 shipping per order = $180
- Total for ordering 24 bottles one at a time = $468
By contrast, here’s what that looks like if we order all in one shot:
- 24 bottles X $9 per bottle = $216
- One order of 24 bottles X $102 shipping per order = $102
- Total for one order of 24 bottles = $318
Your total profit increase here is $150. And if this is a monthly order, you’re looking at an $1,800 difference.
These are, of course, just smaller numbers and only one product, but the concept is the same for larger orders. Let’s get back to some of the ways you can increase profits, though.
5. Offer excellent service and build customer relationships. It’s substantially less expensive and certainly less energy to keep a customer than to contract with a new one. That’s not to say you shouldn’t work to attract new customers, but it’s important to treat your current customers like royalty. And while this is a longer-term way to increase profits, it’s a step you can take right now.
6. Get payroll under control. As necessary as it is, payroll is still the largest expense for many businesses. There’s a lot of nuance here, as you want to keep your employees happy and well-paid. That said, there’s likely some room for improvement. You can read more about payroll here and here.
7. Invest in your business. While it might seem like putting money into your business is the opposite of increasing profits, this is another longer-term strategy that can pay off immensely. For example, a good accountant could save you quite a bit on your quarterly taxes. Higher quality and more efficient equipment could increase productivity. Similarly, investing in janitorial software, like Janitorial Manager, can help you track inventory, keep your schedule efficient, and ensure your contracts are profitable.
Certainly, increasing profits will take some work on your part. But if you want to avoid the potential turmoil that comes with cutting staff or raising prices, these seven ideas are an excellent place to start.
Take advantage of the value Janitorial Manager can bring to your cleaning operation to streamline your processes like never before. Learn more today with a discovery call and find out how to make your cleaning operation more efficient and cost effective!