How To Price Window Cleaning Services
Wondering how to price your window cleaning services? We’ve got just the formula for you.
It’s never easy to put a set price on your work, even when you’re aware of how valuable it is to the customer. Setting the right price is about more than adding and subtracting a few numbers; you need to price for profit.
However, this isn’t as common as you might think it should be in the window cleaning industry, this is because most managers choose to squeeze their profits in order to compete on price. However, if the best thing about your window cleaning business is the low price, then are you really doing that great of a job?
First, we’re going to have a look at the formula for calculating window cleaning prices. This is going to give you a baseline for the minimum amount you can charge and still break-even at the end of the month. Like any good business leader though, you probably want to do more than just survive: you want profit. That’s why we’re also going to cover the following:
Let’s get started!
Without further ado, this is how to find you how much you should charge for your service:
- Calculate your living expenses.
- Calculate your business expenses.
- Figure out your taxes.
Use the formula L/[H * (1 – T)] + B/H to determine your day rate. (Don’t worry, we’ll explain this below!)
Let’s break it down:
Yearly Living Expenses = L
Yearly Business Expenses = B
Total billable days/year = H
Total Taxes (%) = T
Your Day Rate = L/[H * (1 – T)] + B/H
Example: Let’s say you’re a one-man-band for now and need to make $43,000 per year to meet your living expenses. You expect your business expenses to be about $17,000 per year, your taxes are estimated at around 29%, and you plan to work 261 billable days per year.
Yearly living expenses = $43,000
Business Expenses = $17,000
Yearly Billable days = 261
Total Tax Rate = 29% = 0.29
Day Rate = $43,000/[261 *(1-0.29)] + $17,000/261
Day rate = $297
These numbers are just an example to put you into a mindset of calculating your prices based on your expenses, not on things outside of your control. However, if you’re further along and you already have a few employees working for you, the formula will be a little different:
Yearly billable days = D
Number billable hours/ days = H
Total working hours a year = D*H = Y
Business costs or total costs per year per technician (including: salary, software costs, vehicle expenses, accreditation, office overheads, and other miscellaneous) = B
Desired profit = X
Hourly rate = B/Y*(X+1)
Yearly billable days = 261
Number billable hours/ days = 5
Total working hours a year = 261 * 5 = 1305
Business overheads or total costs per year per technician (including: salary, software costs, vehicle expenses, accreditation, office overheads, and other miscellaneous) = 85 000
Hourly rate = B/Y = 85 000/1305 = $65
That hourly rate above is the breaking even price of your window cleaning services and it needs you to consider every single overhead, from the office coasters to your accounting and management software to the employees’ salaries. Depending on the state you operate in, you will have to account for state (or federal) minimum wage or, ideally, the living wage. Minimum wage is hardly going to attract the best and most dedicated employees so make sure you set up a healthy foundation for your business and start with the right attitude as an employer.
If all this sounds like A LOT of work, that’s because it is. So we made it easier by putting all this into a spreadsheet, including a long list of potential overheads. All you have to do is download it below, together with a short guide, put in your own numbers and get started pricing your window cleaning services:
If you don’t want to price your cleaning services per hour, some businesses also use a “per window” pricing method. This can help customers better understand the value of the service they’re being provided.
For example, if you’re able to clean five 30 x 50in windows per hour, you can list the price as “$13/ 30 x 50in window” but remember that it doesn’t include your profit margin. More about that in point no. 3 so keep on reading!
Now that you have the base costs of running your business, you’ll be thinking: “But I want to make me some profit, too!” and you’d be right. If all you’re doing is breaking even, you don’t have a business, you have a poorly paid (and very stressful) job! But before we factor in your profit rate, it’s important to take a look at your target market first.
A customer in Chicago may tolerate significantly higher prices than one in Kellerville, IL. Let’s say they’re a busy, single professional in their 30’s who works in the downtown area and cannot be at home to let you in until 7PM. Their perception of value is going to be very high if you are willing to accommodate them by sending a technician to their home after work hours; because of this, it’s more likely they’ll accept a slight premium charge on regular hours.
At the end of the day, you price according to the value you provide to the customer, not just according to your costs, or your competition. Are you able to offer expanded working hours? Do you offer a booking portal that saves busy (or anxious) customers from having to make phone calls? Do you keep them in the know via automatic notifications? Are you ready to offer them an experience that resembles what they’re used to seeing from big companies like Uber and Amazon?
Then by all means, charge for it! A premium experience deserves a premium price tag.
The million dollar question! Now that you know what kind of customer you’re targeting the costs of operating , you can start thinking of your profit margin. Ruth King, a field service financial consultant, recommends starting with the aforementioned cost of business per hour then deciding on the kind of net profit per hour you want to make.
Window cleaning business managers may hesitate to charge the prices they want for fear of alienating customers and there’s certainly a threshold where prices can become unreasonable. This being said, with transparent financials, you know exactly how much you need to charge in order to run the business and pay rent on the office, salaries, materials, and other costs (as we’ve shown above).
Remember, the value to your customer isn’t how much time or resources you spend on the job, but rather that they now have clear gutters and a cleaner, safer home. If it took you 30 minutes or 3h – that’s up to you to account for but what you’re really charging them for is peace of mind.
The takeaway on how to price your window cleaning services
In the meantime, perhaps you’re wondering where to start and we wouldn’t blame you if there’s simply too much information around, making things more confusing than they need to be.
The challenge that comes after pricing is invoicing accurately. If you’ve already figured out what you want to charge with the help of our spreadsheet, take it to the next level with the invoicing guide below!