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3 Rules For Exploding Profits And Help Your Cleaning Business Grow

October 24, 2020 in Business, Grow your Maid Service

This article is based on a presentation given by Debbie Sardone, founder of Cleaning Business Fundamentals, at the 2020 Maid Summit. Debbie’s clients have rightfully named her the “King Of Profits And The Queen Of Quality Of Life” and for a good reason. Known as America’s Top Cleaning Business Growth Expert, Debbie has the top Residential Cleaning Business Academy globally. In this post, we’ll highlight Debbie’s three rules maid service owners should follow for maximizing their profits. 

3 Rules For Exploding Profits And Help Your Cleaning Business Grow 

Most maid service owners start their businesses to find financial freedom on their own terms and create a lifestyle that serves their needs. While anyone can start a business and build something from the ground up, things can quickly fall apart when you don’t have a plan for managing your growth and profits. 

To see your business grow and maintain long term success is to make sure that you’re putting your profits first. If you’re not prioritizing profit, you’re leaving money on the table and risking the longevity of your business. Even if your company is growing, you still might find your business to be unprofitable and a bit chaotic without the right profit model in place. 

Luckily, there are tried and true ways to successfully manage your profits, creating a solid plan, charging what you’re worth, and knowing what numbers to keep an eye on. 

In this post, we will give you a blueprint you can use to build a scalable profit model. By implementing these three strategies, you’ll improve your cleaning business’s profits, and realize that with a few small tweaks, you don’t have to work for your business. Instead, it will work for you. 

1. Plan your profit 

As a cleaning business owner, if you’re not intentionally planning out how your business will be profitable, it’s likely that you won’t make a profit. Before you can plan your profitability, you need to decide on a profit model. Every business’s profit model will look slightly different, so it’s important to engineer one that works specifically for your business. 

In her Cleaning Business Fundamentals Program, Debbie Sardone teaches maid services owners how to create a foundational profit plan that will service your business and help you scale. 

One of Debbie’s central teachings is to follow a planned owner’s income and profit of $10,000-$12,000/year for each full-time housekeeper working for you. This assumes the owner is not cleaning; they are running the business. 

How this profit plan works is that if you have five full-time cleaners, then you will make $50,000-60,000 personal income by following this model. So each new cleaner you bring on should be generating at least $10,000/year in profit. 

Once you have your profit plan laid out, you need to map out an overhead expense model. All of your overhead and expenses that you pay to run your business should be accounted for. This model will help you figure out what percentage of your profits you can keep as the owner and how much you need to spend to run your business. 

For example, suppose you want to keep 20% profit as an owner and are spending 55% of your revenue on employee wages and expenses. In that case, you can only allocate 25% of your overhead budget for everything else. 

For more on how to measure your profit growth, check out our post on the 3 KPIs for maid service profitability. 

2. Run your business by the numbers

Knowing your numbers is synonymous with knowing your business. Your income and your profits are the only accurate measure of the health of your business. To maximize profits, you need to know what percentage of your earnings you are spending and how much profit you have leftover. 

If you’re not too familiar with your business profits and losses, starting by running a profit and loss statement every week until you understand your earning and spending patterns. Once you have a good idea of how much you’re making and spending every week, then you can start running these numbers once per month. 

You can create these statements using your accounting or bookkeeping tool. If you have a bookkeeper, ask them to send you weekly or monthly reports of these numbers. 

When looking at these numbers, pay specific attention to your revenue. It’s crucial to know what percentage of your revenue goes to labor costs, including worker’s compensation and taxes. Then take a look at how much you’re spending on overhead. 

Overhead expenses include all of the other costs you pay that aren’t directly related to the actual cleaning. For example, the cost of supplies, rent, utilities, and office employees are classified as overhead. 

Knowing what you’re earning and what you’re spending on labor and overheads will tell you how much revenue is left over for your owner’s income and business profit. 

3. Charge what you’re worth 

You can’t make a profit if you are undercharging for your services. If you’re not hyper aware of the market value of your services, your cleaning business is likely undercharging customers by 25-30%. Charging what you’re worth means not relying on giving discounts and using scarcity tactics to try and retain your customers. 

According to 2020 market research by Home Advisor, residential cleaning services typically charge between $40-80 per hour, with the average cleaning costing $116-$235 per session. Of course, these prices will vary depending on your region, so it’s also a good idea to do your research of competitors in your area to see how your prices compare. 

To make sure you’re charging the best rate possible, conduct an annual survey of similar businesses in your area. Ask professional cleaners in your state or region what they are currently charging their customers. If you learn that your competitors are charging more than you, it’s crucial to start charging more to protect your profits. 

For even more tips on setting the perfect price, check out our post on how to price your maid service cleanings the right way every time

When changing your prices, you can bring your existing customers up to market value and raise your prices for new customers. Rather than changing your prices once every few years, it’s important to change them gradually and consistently.

Your customers will be okay with small gradual increases each year. However, it can be jarring if you haven’t changed your price for them in five years, and suddenly, your rates are increasing substantially.

Final Thoughts 

Your maid service’s long-term success is highly dependent on your ability to protect and increase your profits. Take some time to inspect your current profit, revenue, and expenses and look for ways to be more diligent in tracking these numbers, and making sure you’re putting profits first. 

Following these three rules — creating a profit plan, knowing your numbers, and charging what you’re worth — will put your cleaning business in a position to grow year after year. 

For more detailed information on these rules, and how you can join Debbie’s exclusive 10-day challenge to permanently fix and grow your profits, watch the full presentation from the 2020 Maid Summit

This Maid Summit, hosted by ZenMaid, features over 40 talks from maid service owners and industry experts designed to help Maid Services grow and thrive. Check out full replays of these talks at MaidSummit.com. 

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About the author: Amar is the founder and CEO of ZenMaid Software, Inc (www.zenmaid.com). He previously started and ran Fast Friendly Spotless, a maid service in Orange County, CA. With the help of customized software to automate work he successfully operated the service in under 30 minutes per day. His goal with the maid service software at ZenMaid is to help other maid service owners do the same.

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