Why Cleaning Companies Go Out Of Business.

by admin - June 24, 2014

Going Out Of Business
When starting out some of the best advice I had received was from Sally Schopmeyer at Maintenance Inc: Make sure your pricing appropriately because you are here to make a profit. Sure, seems reasonable enough. Though when running a house cleaning service one of your main concerns is getting and keeping customers. Some business owners see ultra-low pricing as the way and soon find themselves in a precarious predicament.

Over the past few years I’ve been approached by five cleaning services seeking a buyer. After reviewing the financials, a theme appeared: Their pricing was too low making none profitable. Three were un-buyable, price was simply too low. I could save two of them because, though not profitable, only a slight increase in pricing was needed.

Increasing prices sucks. Every cleaning service owner I’ve known dreads it. And sometimes it’s necessary less you lose your business completely. So when raising pricing you need to show concrete data, you need to be 100% transparent.

For example, with the recent acquisition of Dial-A-Maid we mailed a welcome letter including the three previous years of tax statements. We owed the customers an explanation of why the price were increasing by showing Dial-A-Maid’s unprofitability. When people see the genuine, crucial necessity for raising rate, they can be VERY understanding. They understand a little help from them goes a looong way for the greater good of preserving employees’ livelihoods and providing top-notch customer service.

So price appropriately!

Not only do you need to cover your costs, you need to take care of your people. They are the MOST important asset to your cleaning company. With good pay and respect, you will retain the top performers. Yes, that’s obvious. Though without the cash flow you only attract the mediocre.

Warren Buffet once said “it’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price”. Same with a house cleaning service, you get far more when paying a fair price. Better people. Better service. And peace of mind knowing the people that serve you today will be there tomorrow for you!

P.S. Again, kudos to Sally Schopmeyer who knows the cleaning industry; Maintenance Inc. is lucky to have her!


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