The seven costs cleaners forget when bidding

There is a particular kind of cleaning contract that looks fine on paper and never quite produces money. The hours are right. The wage is right. The margin says twenty percent. And yet at the end of the year the site has contributed almost nothing.

It is almost never one big mistake. It is six or seven small ones, each individually easy to wave away, which together are worth more than the entire margin.

What follows uses the same reference site as the rest of these guides: a 12,000 sq ft office cleaned five nights a week, priced at $2,301 a month against $1,841 of costed inputs — labour, supplies and overhead — for a 20% net margin. If you want the derivation, it is in how much to charge for commercial cleaning.

1. Drive time

Twenty minutes round trip, five nights a week, is 7.2 hours a month. At a true labour cost of $21.25 an hour that is $153 a month, or $1,842 a year — two thirds of a month's revenue on this contract, spent sitting in a van.

Whether you owe it depends on where you are and how the route runs. Travel between sites during a shift is generally paid time; the first trip from home to the first site generally is not. But even where you do not owe it as wages, you own it as capacity — an hour driving is an hour that cannot be sold to anyone else.

2. Supervision and quality audits

Someone senior visits, walks the site, checks the restrooms properly, talks to the client and writes it up. Two hours a month at $30 an hour is $60 a month, $720 a year.

This is the cost people cut first when a site gets tight, which is exactly backwards. Sites lose contracts because standards drift, and standards drift because nobody checked. The audit is not overhead you can trim; it is the thing protecting the revenue.

3. Supply restocking runs

Not the supplies — those are already in your costing. The trip. Four half-hour runs a month to drop off chemicals, liners and paper is 2 hours, or $42 a month, $510 a year.

It sounds trivial and it is, per site. Across thirty sites it is a part-time job nobody has budgeted for and nobody is scheduled to do, which is why it ends up being done by a supervisor at supervisor rates.

4. Periodic work quietly absorbed

The big one. Carpet extraction twice a year across the carpeted 60% of the floor — 7,200 sq ft at $0.15 a foot — is $2,160 a year, or $180 a month.

Periodic work gets absorbed in a very specific way. It is not in the bid. Then a year in, the carpets look tired, the client mentions it, and rather than raise an invoice you do it, because the relationship matters and it is only one weekend. Then it happens again. Within two years it is an expectation with no price attached.

5. Equipment — the machines, not the mop heads

Consumable equipment is usually inside the supplies percentage. Capital equipment is not. A $6,000 auto-scrubber over a five-year life, shared across four sites, is $25 a month, $300 a year against this contract.

Small, but it belongs to a category that gets forgotten entirely rather than under-estimated, and it grows fast if a site needs something specific — a ride-on, a lift for high work, a dedicated machine that lives on site.

6. Quoting and mobilisation

The cost of winning the job and starting it. Four hours across the site walk, writing the proposal, the follow-up call, and the first-night induction, at $35 an hour, is $140. Spread over the first year, $12 a month.

The number is small because this assumes you won it. The real figure is your cost per win, not per quote — if you convert one in four, the true cost of acquisition is four times this. Quoting is the most expensive unbilled activity in most cleaning companies, and the only one whose cost falls directly with how fast you can produce a quote.

What the first six add up to

That is 20.5% of the selling price, against a margin of 20%. The forgotten costs are worth slightly more than the entire profit on the job. Miss all six and the contract does not have a thin margin — it has a margin of minus 0.5%. You are paying for the privilege of cleaning the building.

Nobody misses all six. But you do not need to. Miss just three of them — drive time, supervision and the periodic work — and the margin falls from 20% to 2.9%. Three plausible omissions, none of them dramatic, and four fifths of the profit is gone.

7. The one that happens slowly: no escalation clause

The first six are things left out of the calculation. The seventh is a thing left out of the contract, and it is the only one that gets worse while you do nothing.

A three-year contract at a fixed monthly price, against wage costs rising 3.5% a year:

Nearly six points of margin, $1,574 a year by year three, lost to a clause that would have taken one sentence to include. And this assumes ordinary wage drift. Any year with a statutory minimum wage jump well above trend does considerably more damage.

The fix is a single line tying the annual rate to a published index or a fixed percentage on each anniversary. Clients push back on this far less than people expect, because every commercial lease they have ever signed works the same way.

So what do you actually do about it

You do not add six new lines to every quote. You raise the number that is supposed to be carrying them.

On this site, covering all six would mean lifting overhead from 18% of labour to about 50%. That sounds enormous until you realise it is simply the true figure — the 18% was never real, it was the leftovers after the invisible costs had been quietly ignored.

Priced properly, the same contract goes from $2,301 to $2,892 a month, which is $0.24 per square foot per month rather than $0.19. Still comfortably inside the normal band for a five-night office. You were not winning that work by being efficient. You were winning it by being wrong.

Two practical steps:

• Work out your real overhead rate once a year. Total annual overhead divided by total annual direct labour, with drive time, supervision, restocking and equipment all inside the numerator. An afternoon's work, and it corrects every quote you write for the next twelve months.
• Decide periodics and escalation at quote time, not at renewal. Both are cheap to include when nobody is annoyed and expensive to introduce once there is a precedent.