Bidding to Retire?
What You’ll Learn
- Calculate time, cost, and profit
- Set a reasonable competitive price
- Keep to the number in the bid
Short Summary
A bid should start with clear time and cost numbers each time. First, estimate the time needed for office cleaning work. Add expenses plus overhead, then add a fair profit amount too. That math sets an hourly bill rate near the high end for offices. The mistake is doubling the price because the bid feels low. That move can price the bid too high for most office jobs. Other companies bid near the local market and still make profit. Send the bid at the math number and keep it steady.
Frequently Asked Questions
What if the owner wants to charge twice the math price?
That often prices the bid too high. Keep the math number.
Can a bid be above other bids and still win?
Yes. Keep it near the high end of the market.
What numbers should go into the pricing math?
Start with a time guess for the work. Add all costs plus overhead costs for the site. Add a profit amount on top of that.
What happens if a very high-priced bid gets accepted?
Another company can bid lower and still make profit. The customer may switch later.
How can the business avoid changing the number at the end?
Set the price after the math is done. Send the bid without changing it.
Transcript
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Hi there. Welcome back. Dan again from CleanGuru.
The message today is: don’t bid to retire. When I’m reviewing bids with cleaning businesses, I’m often surprised. It’s happened so often that I thought I would make a little message about it.
Sometimes when a person is bidding a job, the cleaning business owner starts off with a good time estimate. They put in their wage, they have their expenses and overhead and profit, and they come up with a price that reflects the reality for the job they’re bidding on.
But then something happens. Even though the math was good, they move away from that math and they start to have feelings or thoughts, like: “I wonder if I could do better on this job. It really would be nice. I think I deserve to make quite a bit more than this. I think if I could get this up to quite a bit higher.” They’ll double the price from what they thought they priced it out to be. Now they’re maybe making $75 or $100 an hour, and they’re feeling like, “Man, I deserve to have this. If I got this one, I’d be all set.”
That would be great if we could all get jobs at a very high hourly billing rate. It would be terrific. But the thing is, other businesses aren’t bidding to retire. They’re bidding to build a business, and we have to remember that.
Because you’re going against competition where they’re not going to double the price and end up at $100 an hour. They’re bidding at maybe $18 an hour wage. Let’s just say the hourly billing rate turns out to be $36 an hour, and they’re bidding it competitively in the commercial environment—let’s say a standard office cleaning job. You’ll go up against them in competition, and you may not get the job.
So the job that you thought would set you up for life—this would be terrific, this is all I need—you never really get, because you bid too high.
By the way, if you do get it, you’re really vulnerable. Because if someone else bids that job, they could bid quite a bit less and still make good money profit-wise. Why? Because they’re hiring a cleaner and they’re training them and supervising and working with them. They’re building a business, not bidding to, like I say jokingly, tongue-in-cheek, not bidding to retire.
I wish it could be that way, but in most cases it can’t.
It’s something to keep in mind: stick to your guns when you figure out what the job takes and what the reasonable, competitive—maybe the high end of competitive—price would be that reflects the reality of time and cost and profit. That’s the way to go to build a business, and something to remember as you move forward.
Till next time, remember you can do this. You really can.
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