One of the most often-asked questions many new foreclosure cleaning business owners have is how to price their services. Especially if you have no previous business experience, it can be difficult to know exactly how to do it so that you don’t under charge or over charge. Following are three specific things you can do to price your foreclosure cleanup services right.
Foreclosure Cleaning: What to Charge?
Know What You’re Pricing: Underpricing is one of the main reasons many small business owners fail. If you own a foreclosure cleaning business — ie, a service business — it’s particularly important to figure in the “cost” of time and labor. And, this is why so many small business owners fall short in their pricing.
So, how do you come up with a fee for your time and labor? Quite simply, think of yourself as a hired worker. How much would you hire yourself out for, eg, $10/hour, $15/hour, $20/hour, etc. Then, you simply add that on to the cost of “hard goods,” which brings us to the next item on the list — the cost of supplies.
Pricing Supplies: Pricing supplies for your foreclosure cleaning business is very easy. Before we get to how to price them, you may be wondering what types of supplies you will need. They include cleaning chemicals (eg, bleach, degreasers, glass cleaners, chrome cleaners, mold and mildew cleaners, etc.).
Then there is the cleaning equipment you will need, eg, brooms, mops, gloves, buckets, sponges, dusting cloths, masks (it’s a good idea to get in the habit of wearing these because some properties you encounter will be so filthy you won’t be able to stand the smell), etc.
Now, on to the cost of supplies. You can find this out in a couple of ways.
2 Ways to Price Supplies
(i) Visit local stores that sell cleaning supplies. This can a Lowe’s, Home Depot or Sam’s Club. It’s best to visit those that sell in bulk, because ostensibly, that’s how you will be buying supplies. Spend several hours visiting several outlets and write down the prices. This is business research and will serve you well for a long time. You’ll be able to price jobs much more quickly when you know off the top of your head in and around what supplies cost.
They would be very much willing to help you out since you are now a prospective client. In fact, they might even make your job easier since they can give you a brochure of their products.
(ii) The second way to find out the cost of supplies for your foreclosure cleaning business is to buy some and do a cleaning job. Start with your house or the house of a friend. This is good because not only will you find out the cost of supplies, you’ll find out how much of each it takes to clean a home of say, 2,000 square feet.
This will also give you insight into how many hours you will spend to clean a house of this size, which means you can figure out how much to pay yourself (or workers) for labor.
Pricing Tip: When you visit local outlets, tell them what type of company you’re starting. They’ll more than likely go the extra mile for you — a prospective new business client — by giving out product brochures, telling you which cleaners work best for which jobs and other cleaning industry trade secrets professionals like you will need to know.
Check the Competition: One of the most important things you need to do when trying to figure out how to price your foreclosure cleaning services is to find out what the competition is charging. While you may want to pay yourself say $25/hour, you may find out that this cost is making you much more expensive than the competition, so you need to scale back to $20/hour.
Simply call up a few companies and pretend to be a customer in need of their services (yes, it is a little underhanded, but it is done all the time in the name of free enterprise; it’ll happen to you to if you start a business, so don’t think you’re doing anything terrible). Be prepared to give specifics, ie, how many square feet, what services you need done, etc.
Another advantage of doing this is that you get a good idea of how to handle service calls. Pay attention to how they question you, what they ask you, how they ask to schedule appointments, etc. You can use this information so formulate your own phone consultations.
If you do these three things, you will be able to price your foreclosure cleaning services almost right. And the reason we say almost is because there is a lot of on the job learning in this business. Every foreclosure cleanup job is different and you will learn from each one that you do.
But, if you’re new to this business — or small business in general — these are excellent tips to use to start pricing your foreclosure cleaning jobs.
May be reprinted on your site, blog, newsletter, newspaper, etc., with the following attribution, in full: To learn everything you need to know about how to start a foreclosure cleaning business, log on to http://ForeclosureBusinessNews.com. The site offers a plethora of information on buying foreclosures, preventing foreclosure, starting lucrative foreclosure businesses and the most recent news in/on/about the foreclosure industry. If it’s about foreclosures, you’ll find it at ForeclosureBusinessNews.com!
© 2009 Yuwanda Black for Foreclosure Business News