fbpx

Maximize revenue and minimize costs by developing a janitorial expense budget for your business.

 

There’s no getting around it; if you want to run a cleaning business, you need a budget. To keep your doors open, you have to track and account for every janitorial expense to ensure that you don’t overspend or short-change customers.

Of course, a janitorial expense budget takes time to create. You have to consider supply costs, office rent, vehicle expenses, equipment, and employee hours, among other things. Overlooking just one of these things can drastically alter your revenue forecast, which ultimately means lost profits. With so much at stake, it’s worth it to sit down and map out a budget since you’ll save a lot in the long run.


Use cutting-edge technology to track your inventories in real time. Check out a free demo of Janitorial Manager right now to see how we can help you save money! 


janitorial expense

How to start your janitorial expense budget worksheet

Before you begin, decide how much time the budget should cover. Most companies go with an annual or quarterly budget, but you can do a monthly budget, too. Whichever you choose, make sure you stay consistent when you’re planning your costs. If you experience some seasons that are slower than others, that should be reflected in the budget as well.

1. Make an inventory list

It’s important to get granular with your janitorial expense budget. An easy way to keep track of your budget is to use janitorial management software like Janitorial Manager, but you can also create a simple spreadsheet. Make a list in the first column of the spreadsheet of everything you anticipate needing for however long you’ve set your budget for. Mops, mop heads, buckets, rags, cleaning solutions, trash bags, paper towels—the list goes on. Even things like fuel costs and employee wages should go into the budget.

You don’t, however, need to include things like vacuum cleaners, floor buffers, and other one-off purchases that you probably won’t make again in a year at least. Make a separate budget sheet for these items so you can still add the totals together for annual costs.

2. Estimate your inventory items

Once you have your inventory, go down the second column and note how many of each item you need. For example, you may only need a couple of mops, but you’ll likely need a lot of rags. Do your best to estimate how many of these items you’ll need each month. When in doubt, overestimate. You don’t want to end up not having enough of the things you need.

3. Price the items in your inventory

Now in the third column, enter the cost of a single item for each janitorial expense. Most of these should be relatively inexpensive on a per item basis. It’s a good idea to do some research on different companies that sell supplies so you can make sure to get the best prices. If something is listed as a one-time discount, use the actual cost for the budget so the total will end up higher than it needs to be. If you don’t use all of the money in the budget, it’s okay—you can find something else to spend it on or enjoy it as profit!

4. Count the cost

One of the reasons we suggest entering each janitorial expense into a spreadsheet is that at this point, you can write a simple formula to calculate the estimated cost of each item. Most spreadsheet programs have instructions for simple formulas like these, or you can look online for help. It may sound intimidating, but trust us, we wouldn’t recommend it if it weren’t easy to pick up.

Once you’ve written the formula in the top cell, you can drag it down, and each cell below it will populate with the total estimated amount of each line item. Finally, write another formula at the bottom of that fourth column to add each line item together. This will give you your total budget amount. If you’ve broken it down by month, it’s a good practice to multiply that number by twelve, so you can also see your annual total. This helps with planning for things like staffing, repairs, and other unforeseeable circumstances.

That’s it! Not so hard after all.

janitorial expense

The benefits of a balanced budget

Planning for each janitorial expense has quite a few benefits. The first and most apparent is profit. The lower your costs, the more revenue you get to keep. However, you should also consider your clients when creating a budget. Don’t merely get the cheapest supplies and equipment because they may not work as well, which can upset a client. Inexpensive equipment might need to be repaired more often, so now it ends up costing more in the long run.

Another benefit of a budget is happy clients. If you plan out your costs for the month, quarter, and year, you can offer your clients the best rates. If you don’t track your spending, you won’t know how much to charge clients, which will probably hurt your business pretty quickly.

The budget also helps you stay competitive. Since you know exactly how much you can spend, you also know exactly how much you need, and can price accordingly. Be smart about your purchases. Try not to spend a lot on rent or commercial vehicles, as there are ways to save a lot of money on those expensive costs. That said, also be smart about your rates. Sure, you might not make as much profit by lowering your rate for cleaning an office to beat the competition, but if you still make a profit, consider that you might make more in the end if you sign on more clients.

Finally, stick to your budget once you’ve made it. You can always adjust it in the next fiscal period if you find that you’ve largely overestimated something. If you try to adjust in the middle of a fiscal period, you may lose money because you might not have enough customers to cover each janitorial expense. Cut your losses, learn from your mistakes, and make up for them next time. It’s unlikely you’ll go out of business due to one month of overestimated costs, but stepping outside of your budget too often or too much can mess with your expenses and profits in the end.


Manage your budget and see real-time reports to see if you’re sticking to it. Schedule a free demo of Janitorial Manager to see this and other amazing features!


 

Translate ยป
Share
Tweet
Share
Pin