u/contractgauge — reddlx

13 extra labor hours dropped this account from 24.4% margin to 18.3%

I was looking at a recurring commercial cleaning account and wanted to see how much a relatively small labor overrun could actually affect the month.

The estimate was:

$4,850 monthly revenue
119 labor hours
$23 loaded labor cost/hour
$928 in other monthly costs

That worked out to roughly $1,185 profit at a 24.4% margin.

Then I kept revenue and the other costs exactly the same and changed actual labor to 132 hours.

So only 13 extra hours for the month.

That added $299 in labor cost, and the result moved to:

$886 profit / 18.3% margin

That’s about a 6.2 percentage-point margin drop from a 10.9% labor-hour overrun.

If that same monthly variance kept happening for a year, it would be about $3,588 less profit.

The part that caught my attention is that 13 hours across an entire month doesn’t sound huge until you look at what it does to the margin.

For people managing recurring commercial accounts: when you see something like this, do you investigate workflow/staffing first, or do you start questioning the original price?

u/contractgauge — 1 day ago

▲ 1 r/cleaningbusiness

Do you price cleaning jobs for the perfect day or a normal one?

Something I keep thinking about with cleaning bids is how easy it is to underestimate labor without realizing it.

A job might look like a 6-hour job on paper.

But that 6 hours usually assumes everything goes right:

access is easy
nobody is waiting on keys or security
the crew works at the expected pace
no extra client requests come up
supplies are where they need to be
no callbacks
no delays between areas or locations

Then the contract starts and the “6-hour job” regularly takes 6.5 or 7 hours.

That difference doesn't look huge on one shift, but over a month or a year it can completely change whether the account is actually profitable.

I'm starting to think a bid shouldn't be based on the best realistic day. It should probably still work financially on a pretty normal, slightly messy day.

Curious how other owners handle this.

When estimating labor, do you add some kind of buffer, or do you estimate the job as tightly as possible and adjust later once you have actual hours?

reddit.com

u/contractgauge — 4 days ago

▲ 10 r/cleaningbusiness

Commercial cleaning owners: what’s the biggest mistake people make when pricing a bid?

I’ve been looking at different ways people price commercial cleaning jobs — by square footage, labor hours, production rates, or a mix of everything.

For those of you who have actually priced commercial contracts, what usually causes a bid to look profitable at first but turn out to be a bad deal later?

Is it usually underestimated labor time, payroll costs, supplies, overhead, travel, or something else?

And before you submit a bid, how do you personally check whether the margin is actually worth it?

Interested in hearing what works in real-world contracts.

reddit.com

u/contractgauge — 5 days ago