Winning a commercial cleaning account takes more than having a low price. In fact, if your price is too low, it may be a sign that your company is inferior to the competition. Pricing the job right requires you to know what your expenses are. From fixed expenses, such as insurance, to variable expenses, such as supply cost, knowing what you spend per job will allow you to price the job in a way that gives your customer added value while leaving a net profit for you.

- Skill level:
- Moderate

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## Instructions

- 1
Calculate the hourly labour cost for the job.If you estimate that it will take two workers approximately three hours to complete the job, then the total work hours on the job is six hours. Next, multiply the total number of work hours by the hourly cost per worker (assume £6 per hour for this example). Therefore, the labour cost for the job will be £39.

- 2
Account for fixed cost per hour, known as overhead. Vehicle and business insurance are a set amount each month. Other fixed costs include loan payments, rent and utilities. If your fixed expenses equal £3,250 per month and you have two full-time employees operating approximately 320 hours per month, then you would divide the £3,250 expense by 320 work hours to have £10.10 per hour of expenses. Therefore, multiply the 6 work hours for the job by £10.10 of expenses to come up with £60.90.

- 3
Add the cost of chemicals and other expendable supplies to complete the job. Assume the cost is about £6 in actually used cleaning agents.

- 4
Calculate the total cost of the job by adding your labour ($60), overhead cost ($93.78) and your variable cost ($10) to come up with your pre-profit figure of £106.4. Calculate in your profit by multiplying your markup rate, assume 25 per cent by the pre-profit figure ($163.78) which is £26.6. Add the £26.6 to the £106.4 to get a final price of £133.0.