Why Am I Not Making Money In My House Cleaning Business? (Part 1)

Does it feel like you're working like crazy but not making any money? You're not alone - many house cleaning business owners feel this way. Usually it's because we're simply too busy to pay attention to whether or not all our hard work is actually creating a profit for our business. In order to assess your own situation, you need to stop and take a close look at your business to see where the leaks are.

First, you need to analyze each account to see if you're making a profit. Let's do an example:

• Your billing rate is $27 per hour.
• Your estimate for cleaning the home is 5 hours per service on a bi-monthly cleaning, for a total of $135 per service.
• $135 x 24 services per year = $3240 per year in sales.

You should have a total of 120 cleaning hours for the year for this client. After reviewing your records, you discover your employees spent 138 hours cleaning this account. $3240 divided by 138 = $23.48 per hour. This means your true hourly rate dropped to $23.48. This doesn't leave much room to pay expenses and make a profit, does it?

In order to get the profit back to this account, you should first make sure your time estimate is correct. Perhaps you under-estimated the amount of time needed to clean this account. Or maybe the client has added additional services that your employees are doing, but that you're unaware of. If this is the case, you should be getting paid for the additional time spent on these tasks. If you find that you under-estimated the time needed to clean, you may need to raise your price.

If, after assessing the situation you decide that your original estimate of 5 hours per cleaning is correct, then the problem is probably due to a lack of cleaning efficiency. There are a number of possible reasons for inefficiency, including: lack of motivation; inadequate equipment; lack of training; inefficient cleaning procedures; or problems with team members.

Before you can determine how to increase inefficiency, you first need to find out the underlying cause. Once this is determined, you can take steps to correct the problem. Once the team is back on track your profits should increase!

Part 2 in this series will discuss another common reason accounts may not be profitable - under pricing.