The truth behind the super low prices given by janitorial franchises part 1

How to Determine if a Janitorial Service Quote is Realistic

One of the main lures of janitorial franchises are the extremely low prices they deliver on cleaning bids. While great differences in price should raise an eyebrow, many businesses take the bait of the lower price only to be disappointed by the quality of service later.

But before you grab a pen and sign with the lowest bidder, let's do what we like to call Janitorial Math, to see what that low prices really buys in the long run. 

For our example, let's just say you request a five day a week cleaning service quote for your office. You receive two quotes. The first from We Clean Janitorial, a local family owned janitorial service. The second from Janitorial USA, a large national franchise. Here are the prices each company presents:

We Clean Janitorial

$755 per month
2.25 Daily Cleaning Hours

Janitorial USA

$631 per month
2.25 Daily Cleaning Hours

Time for the math......

The first piece of math we have to do is to figure out if the price quoted will let the companies pay their employees. This is important because if the price a company charges will not allow them to pay their employees a legal wage, that is the first sign of trouble. Three very important questions to ask to get started are:

1. How many employees will be assigned to clean the building?
2. How much will the employees be paid? (Its usually safe to assume close to minimum wage.)
3. How many labor hours will be assigned to my building?

Let's say for the sake of simplicity that two employees will be assigned for cleaning. That means both employees would spend 1.13 (2.25/2) working in your office and that both will be paid minimum wage. The current (2011) Florida minimum wage is $7.79 per hour. 

To start, we will calculate the average hourly wage by multiplying the number of employees times the hourly rate as shown below. 

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This example with done using the minimum wage in the state of Florida in 2011. The same principles apply regardless of the current minimum wage. Simply use the current rate for your state as a baseline wage.

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The next step is to find the daily hours that the employee will work in your office. As we stated earlier both companies have quoted 2.25 hours of cleaning daily. Since two employees will be cleaning we divide this number by two. 

By multiplying the daily hours times the daily wage we can figure out how much the company will spend nightly on labor. In this example, labor will run $17.60 per cleaning day. 

Now we can figure out the weekly and monthly base labor expense. As we see below the base labor expense adds up to $352. Looks good so far and that both companies can afford to pay their employees. At this point you may assume that We Clean Janitorial is overcharging for their services, however remember that we will also have to factor in the cost of payroll taxes.

Not too bad right? But don't put away your calculators just yet. In part two of this article we'll take a look at some additional factors that are added to the base labor cost and overall expenses that will help to determine if the service price is realistic. Remember, this is an important step to evaluate whether the company is even capable of meeting your expectations with cleaning and if your dollars will be well spent.

Read Part Two