Episode 63: 6 Ways To Increase Profits In Your Cleaning Business

Profits are not as high as they used to be in the cleaning industry. That's why we must be diligent about finding ways to increase profits. This video will give you 6 ways to do just that.

Please share your tips for increasing profits in your cleaning business by posting below the video.

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Episode #63 - Video Transcription

There are several things that have changed in the cleaning industry in recent years, and one of the things that is most troubling to people is the fact that profits are not as high as they used to be. And it's likely to always be an issue for cleaning business owners going forward.

Both businesses AND individuals that hire cleaning companies are carefully watching their pennies; so there's very little wiggle room for making mistakes with your pricing. So what can you do (besides cutting prices), to satisfy your clients, AND increase profits in your business?

Well here are 6 things I recommend:
1) Most cleaning companies these days offer several services. Take the time to figure out which services are most profitable and increase sales in those areas. So for example; if you know your tile and grout cleaning service is twice as profitable as window washing, then start marketing that service to every one of your clients that has tile in their building (or home, if you do residential cleaning). It may seem like a no-brainer, but I've talked to people that don't even bother to promote these other services that they provide! So be sure to start promoting your high-profit services regularly. And if possible, get every client on a schedule for having these services performed -- that alone will increase your profits!

2) Figure out which accounts are unprofitable. You are not in business to take a loss or break even - you must make a profit on every account! So what do you do if you find unprofitable accounts? First, figure out ways you can re-work the cleaning specifications to increase profit. If that doesn't work, raise your price. And if your client doesn't like the increase in price, then replace the client with a more profitable one.

3) Increase productivity. You can do that in two ways. The first way is to make sure you're using the most efficient equipment. If you have employees that have to vacuum 10,000 square feet of carpet every day, make sure they're not using a 12" upright vacuum cleaner to do it! It's just NOT very efficient! The choice of vacuum you use can make a huge difference in how fast the building gets cleaned and how much profit is generated. The other way to increase productivity is to make sure your employees are trained to work as efficiently as possible. The more productive your employees are, the bigger the bottom line. So now is the time to observe your employees at work and make adjustments if there are more productive ways of doing things.

4) Make sure you price your services profitably from the start. You aren't doing yourself any favors by going in so low that you can't make a profit. All you're doing is setting yourself up for frustration and failure. And make sure you're tracking your profitability on every account. If you guestimate a price and then don't track it to make sure it's profitable, you'll never know where profits are leaking from in your business. So take the time to price it right, and then track it to make sure it stays profitable.

5) Manage supplies more effectively. For example, if you're still manually measuring and diluting your cleaning chemicals, you're probably throwing money down the drain. Start using pre-portioned packets or dilution control systems. Also, don't "stock up" on supplies and chemicals if it's going to affect your cash flow. But DO stock up if the vendor is offering discounted prices or free shipping.

6) Cut back on unnecessary expenses. Take a closer look at your profit and loss statements to see if there are areas that are being wasteful. For example; stop wasting money by upgrading seldom used software; stop wasting money on gas by not combining several errands into one trip; watch for exessive use of utilities like air conditioning or heating, or not turning off the lights when not in use or at the end of the day. What about paying big bucks for a yellow pages ad that isn't paying for itself? Or take a look at a maintenance agreement that you're paying for every month that isn't being used. There are all sorts of ways you can cut the fat with expenses. It just takes a little time and digging into what's really happening with outgoing expenses.

So when it comes to increasing profitability, I'm probably just scratching the surface with the ideas I just shared with you today; but this is a good place to start. If your business is not profitable, or you're struggling with low profit, you won't be able to stay in business for long. So I encourage you take the steps necessary to save your business - starting today! Now I'd like to hear YOUR ideas for increasing profitability in your cleaning business.