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General Cleaning Issues - Floorcare, car valeting, buying and selling businesses, pricing, staffing, market research, etc.

Cleaning Review (Market Research)

Posted by David129 (David129), 3 September 2003
I am conducting a complete review of my companies Cleaning requirements from specification to total no of contractors (cleaning companies) Where can I find the benchamark cost per sqft / sqm for store cleaning. What is the acceptable average profit / hr as a % e.g 12% mark up. Which regions are premium rate and if awarding more than 1 region is it acceptable to require additional % discount for each region awarded.
Posted by Mike_Boxall (Mike_Boxall), 3 September 2003
Hi David
Not sure I can answer all your questions but the following information taken fom MSI's research into the cleaning industry shows the segmentation of an 'average' cleaning contract by type of cost as follows:

 74% Labour
   7% Profit margin
   6% Machines and equipment
   4% Materials
   4% NI Costs*
   2% Training
   3% Other (inc transport, uniforms, marketing & other costs)
____
100%
* NI was calculated before the recent rise although overall it would only make a fraction of a difference

From what I know of supermarkets contracts they are generally already under priced. There is a very high turnover of contracts and I know of 2 resonable sized companies that have folded because the margins are so tight. Most smaller contractors struggle to finance the deal because of the significant negative cashflow (wages paid weekly / payments in 30 - 90 days later)
There is a direct link between contract value and cleaning standards and the more you reduce the price the worse the situation becomes.
Just out of interest, are you happy with the standards the contractors currently provide?
Regards
Mike
Posted by David129 (David129), 3 September 2003
Hi Mike

Thanks for the response very useful. As a whole the two different facias of this stores chain have very different costs per region. With very differeing % Margins. The quality appears to be good although I am sure that cost can be taken out by commonalising the specifications and allowing more contractor autonomy in decision process. I am trying to bench mark the regional cost per sqft hour of a cleaner in order to understand the market place more.

Regards

David129

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