Profitability of A Commercial Cleaning Businesses, Explained

Many say that if you’re good at something, never do it for free. And if you’re good at cleaning, you might be wondering if you can make a buck out of it.

Ever wanted to turn your knack for cleanliness into a profitable business? The commercial cleaning industry is a burgeoning sector, with significant profit potential. 

A 2023 report from Statista projects the U.S. commercial cleaning industry to be valued at almost $160 billion by 2028.

The growing demand for cleaning services in various commercial spaces is ever-growing. But can you really cash in on the trend? 

Definitely.

But like any other business venture, success relies on several key factors. Let’s look into details like service types, pricing strategies, market acquisition, and market competition.

Factors that Affect Profitability in a Commercial Cleaning Business

Profitability is not guaranteed. Several factors can affect your success, especially in a highly lucrative and cutthroat industry.

Here are key factors to look into

• Types of commercial cleaning service offered: Specializing in niche-specific services like medical cleaning (averaging $35-50/hour) or post-construction cleanup ($25—$35/hour) can command higher rates than typical office cleaning. Diversify your services so you can tap into various markets and industries, and increase your revenue streams.

• Your pricing structure also is significant to your bottom line. Research average rates in your area and consider factors like experience and service complexity. For example, a one-time deep clean of a 1,000 sq ft office might cost $200 — $400 while a monthly contract for the same space could range from $150 to $250 per visit.

• Overheads can eat into your profits if not managed carefully. Cleaning supplies can account for about 5-15% of the revenue while equipment costs vary on the services you provide. For example, a vacuum cleaner might cost $200 – $500, while a floor scrubber can run upwards of $2,000)

• The economics of client relationships lean heavily towards retention. Acquiring a new client can cost 5–7 times more than retaining an existing one due to marketing, onboarding, and initial setup fees.

• The lifetime value of a client of a commercial cleaning company can be substantial, unlike residential cleaning, which might be a one-off or occasional service. Commercial contracts often involve ongoing, regular cleaning. This means a single satisfied client can generate a steady stream of revenue for months or even years, as opposed to, let’s say 5 residential clients each requiring a one-time spring-cleaning.

• Differentiating your business is crucial in a competitive market. Offer a Unique Selling Proposition that your competitors do not. Offer eco-friendly cleaning solutions or specialized services for niche industries to give you an edge.

• Businesses may reduce cleaning budgets during economic downturns, affecting your revenue. However, periods of growth and peak seasons can lead to increased demand for your services. Take Black Friday sales or flu season for healthcare facilities. Expect to have a much more positive cashflow during these seasons.

• Staying adaptable and adjusting your marketing and service offerings to align with these fluctuations can help you navigate economic cycles and maintain a steady stream of clients.

How much should you charge for commercial cleaning services?

Choose from various pricing models, like hourly rates, fixed project rates, or monthly contracts. Each model has pros and cons, so choose the one that best suits your business and your client’s needs.

To illustrate this, let’s imagine you run “Sparkling Spaces Cleaning”, a commercial cleaning company offering a range of services. Including cleaning for special events.

A potential client would be an events organizer named “Events Galore” (creative, right). They are in need of a post-event cleaning service for a corporate function that they just hosted.

Here’s a sample commercial cleaning quote you could provide showing how much you can charge for a fixed project rate model:

Sparkling Spaces Dallas

Quote for Post-Event Cleaning Services

Client: Events Galore

Event: Corporate Gala

Date: November 15, 2023

Venue: The Renaissance Dallas Hotel, 2222 N Stemmons Fwy, Dallas, TX 75207

Services Included:

• Trash and debris removal
• Floor cleaning (sweeping, mopping, vacuuming)
• Restroom sanitation (toilets, sinks, mirrors)
• Surface disinfection (tables, chairs, countertops)
• Kitchen/bar cleaning
• Window and glass cleaning

Pricing:

Service	Quantity/Area	Rate	Total
Trash and debris removal	10 bags/containers	$10.00 per bag	$100.00
Floor cleaning	2,000 sq ft	$0.15 per sq ft	$300.00
Restroom sanitation	4 restrooms	$40.00 per restroom	$160.00
Surface disinfection	N/A	$150.00 flat rate	$150.00
Kitchen/bar cleaning	N/A	$200.00 flat rate	$200.00
Window and glass cleaning	20 windows	$10.00 per window	$200.00

Total Cost: $1,110

Additional notes:

• This quote is valid for 30 days
• A 50% deposit is required to secure the booking.
• Final payment is due upon completion of the cleaning service.

The sample quote illustrates a fixed project rate model. In this model, you determine the total cost of the job based on specific services request, venue size, and additional factors, like number of restrooms or windows.

A fixed project rate model offers clients transparency, as they are given visibility into the exact cost upfront, avoiding surprises or hidden fees. 

Cleaning companies can accurately estimate their costs with this model, as it ensures profitability. Additionally, invoicing and payment are simplified with a single fixed amount.

Comparison of pricing models for a commercial cleaning business

Choosing the right pricing model is vital to attract clients to your business. Here’s a quick look into the pros and cons of each:

Pricing Model	Pros	Cons	Best Suited For
Hourly Rate	Flexibility to adjust pricing for unexpected tasks or additional time.	Less predictable for clients, potential for disputes over hours worked.	Smaller jobs, one-time cleans, jobs with variable scope.
Fixed Project Rate	Transparent and predictable for both parties, simplifies billing.	Less flexible if the scope of work changes, risk of undercharging if not accurately estimated.	Larger projects, recurring cleans with a well-defined scope of work.
Monthly Contract	Predictable recurring revenue for the cleaning company, client receives a discounted rate.	Less flexibility for both parties, potential for underutilization if client’s needs change.	Long-term cleaning needs, clients who value consistent service and a predictable budget.

Ultimately, the most effective pricing model is one that aligns with your business goals. Take the time to weigh the pros and cons of each model. You may need to offer a combination of both, depending on which cleaning service or package you offer.

Conclusion

The commercial cleaning industry is overflowing with potential if you are willing to put in the effort. Profitability isn’t guaranteed, but understanding the key factors affecting it can increase your chances of success.

Choose your services carefully, set competitive prices, control costs, and build strong client relationships. Adaptability in the market is a must so you can create a thriving and lucrative business.