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Pricing Paper, Plastic and Soap in Commercial Accounts

Intro

Pricing the cost of paper, plastic and hand soap can be challenging and financially risky if you don’t have a formula or historical basis for accurately estimating past or future use. The safest approaches are to let the customer order and pay for these products or to provide these products as extras or pass through cost with a slight markup cost (2% – 5%) for handling, purchasing and stocking.

If the customer is requiring these items to be included in the cost, bid or square foot price, ask them to provide or allow access to use and costing data from the current suppliers. If they are not forthcoming with this information, you will need to add an error factor (8% – 10 %) into your price to assure that you don’t lose money on providing these products.

As a last resort, your distributor or paper sales person should be able to assist you figuring out which products may fit current dispensers and in calculating pricing and use information. If you can’t use exiting dispensers there will costs associated with swapping out dispensers. An emerging trend in new, remodeled and public and heavy use restroom, is to eliminate paper towels and replace them with electric hand dryers.

Common variables that impact useage and cost are:

  • product and dispenser type
  • primary building use and occupancy
  • security of stored product
  • public or private building
  • product cost and contract length
  • quantity purchased

Actual use rates in a facility can vary over time as building use and occupancy rates change.

Other variables include: ply and thickness, sheets per roll, number of rolls per case, core size, tightness of the roll, square feet or sheets per case, and uses per case.

Here are some rough numbers that can be used as a guideline when no truly accurate numbers exist.

Method 1. Cost per person per year.

Building occupancy: Figure $27.00 to $35.00 per person per year for toilet paper and towels in most office buildings.

Method 2.  Cost per sq. ft.

Square footage cost: A safe number to use would be 6 to 8 cents per square foot per year for paper products.

Averages:

Each person is expected to use approximately two – four paper towels per restroom visit and most people will visit the restroom three times per day or up to twelve towels per person per day. If you know how many people occupy or visit a building per day, you can come up with some fairly accurate numbers.

If you don’t know how many people are in a building, but you know the square footage of the building, you can figure that on average, each person in an office building has about 225 sq. ft. of office space, which can give you a projected occupancy number. Health care facilities, food service areas and public restroom get more visits, so the numbers for these types of locations can be 20% or 30% higher.

One aspect or cost of paper products that most people overlook is the frequency and time it takes to service a restroom. One major cleaning contractor told me that 1/3 to ½ of the time they allow to clean a restroom is servicing the dispensers. The average multi stall restroom in building takes 20 to 30 minutes to service each night. That’s 7 to 10 minutes that could be saved in every restroom, if a paper system was used that reduced the frequency of service and/or the time it takes. There is a lot of money to be saved if you can reduce the labor cost, yet most people are more concerned about the cost of the product that they overlook the cost of labor. Changing to a different towel system (roll vs sheets) can cut service time in half the time, changing to electric dryers eliminates product, service and disposal times.

Toilet Tissue

Coed and Women

Number of users______ X 3 visits per day =_______ X the number of days open per week X 4.3 weeks per month =_______ total number of visits per month X 10 ft. per visit =__________ total footage used per month, divided by 1,125 ft. (roll length) = ____total number of rolls needed per month.

Men only

Number of users______ X 1 visit per day = ________ X the number of day open per week X 4.3 weeks per month = ________ total number of visits per month X 10 ft. per visit = __________ total footage used per month, divided by 1,125 ft. (roll length) = ______ total number of rolls needed per month.

Paper Hand Towels, Regular restroom

Number of users ________ X 3 visits per day, X ______ the number of days open per week X 4.3 weeks per month X 75% = _______ total use per month, divided by 275 uses per roll (550 sheet roll with 13 inch perf) = ______ total number of rolls needed per month.

Paper Hand Towels, Industrial or Health Care restroom

Number of users ________ X 5 visits per day, X _____ the number of days open per week X 4.3 weeks per month = ________ total uses per month, divided by 275 uses per roll = _______ total number of rolls needed per month.

Liquid Hand Soap

Number of users ______ X 3 visits per day, X _______ the number of days open per week X 4.3 weeks per month = _______ total uses per month divided by ____ uses per cartridge or box = _______ number of boxes or cartridges per month X cost per box or cartridge = ________ cost per month.

Note: for industrial or health care applications substitute 5 – 8 visits per day into the formula instead of 3.

Don’t overlook pilferage or shrinkage of toilet paper which can be as high as 25% to 30% in a public building if supplies aren’t adequately secured in dispensers and storage areas.

Here’s a formula plastic liner use in office areas, per service day per wk., for every 350 to 400 sq. ft. cleaned. As for amount of trash generated, it depends on the type of facility, where there is a recycle program in place, one average number I’ve seen used is that each worker or user generates 1.5 to 2 pounds of trash per day.

There you have it. Best of luck when it comes to calculation expendable supply useage.

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How to Bid a Facility Using Only Sustainable Product and Procedures

Forward thinking companies and contractors are adopting sustainable cleaning process and products as the only way of doing business and have found this to be a good operational and marketing strategy. Other companies have taken a wait and see approach and have not been willing to make a commitment to change, especially if it means an increase in costs. There is a large segment of the market, primarily the low-price contractors and customers, who don’t know or don’t care about sustainable cleaning and have no interest in changing the way they do business. Early adopters of sustainable cleaning include health care, education and local and federal government agencies. There are also geographic areas, primarily the West and East Coast states that have more interest in sustainability, with Central and Midwestern states having little or no interest in sustainable products or cleaning.

In the early years, sustainable cleaning and products were provided at premium prices, and in many cases, there are still slightly higher costs involved in the purchase and use of sustainable equipment, products and supplies. The difference in costs has continued to shrink and there is often hidden saving to be found during the implantation process. (more…)

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Cleaning Schools, Public and Private K-12

Pricing, Production Rates and Cost per Sq. Ft.

There are a wide variety of production rates, formulas, and industry standards that can be applied to the bidding and estimating of educational facilities. As with other types of cleaning, the only true rates are based on what you can accomplish with your staff, process, equipment and budget. There are no industry production rates that will apply in every situation as there are simply too many variables that must be considered. The safest approach is to break down each building and facility in to micro areas and bid and staff each area or building based on actual, as well as changing needs. Here are some guidelines that may be helpful: (more…)

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Bidding Stadiums, Arenas and Sport Venues

Stadiums arenas and sports venues come in many sizes. It is not a job that can be approached haphazardly, but demands planning, preparation, communication, coordination and the ability to quickly adapt to changing circumstances and requirements. The concepts outlined here are the same regardless of the size of the facility.

Primary factors impacting cleaning:

  • Type of Event
  • Attendance
  • Set-up & Tear Down Requirements
  • Cleaning Shifts
  • Weather

Break down of shifts:

  • Pre-event Cleaning
  • Event Cleaning
  • Post Event Cleaning
  • Next Event Scheduling

 

STAFFING:

Warning: These are only guidelines based on my experience and the information I have been able to collect. The only true and accurate time standards are based on your staff’s performance and experience. (more…)

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Bidding and Estimating – The Impact Technology

When it comes to being competitive in the marketplace. Technology has the potential to be a game changer. There are multiple ways you can apply the impact of technology to reduce costs without a loss of quality. I find that technology and better processes can allow you to reduce costs while improving the quality of the service you provide. Validating the numbers, you see being used in the marketing of technologies impact on cost reduction can be difficult to confirm.

Let’s take a look at some of the areas where technology can impact your ability to increase production rates and reduce costs.

Computerization:

You can’t operate a cost-effective department or business today without taking advantage of the benefits that computers and associated software bring to work place. Tracking of costs, bidding, communications, timekeeping, and quality control are just a starting place when it comes to the aspects of cleaning that are now much easier, faster and more accurate when processes are computerized. Taking it a step further requires that you do as many of these processes on a smart phone, the notebook and desktop machines are quickly becoming old school and far less productive than the phone in your pocket. (more…)

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Bidding Condo and Apartment Markets

Pricing and Production Rates

There are multiple ways to estimate, bid and price multi-family residential cleaning services, the most common are:

Flat Rate

A set fee or flat rate is charged based on the size (number of bed and bathrooms and or square footage, plus any extra services that are requested or needed). Prices range from $125.00 for a studio or one-bedroom unit, to $300.00 + for a 3, 4 or more-bedroom unit. Costs are dependent on the services provide, painting, carpet cleaning, and maintenance repairs are normally an additional cost. Items can have a flat rate also, stove $45.00, Refer $20.00, floors $15.00 for kitchen, $10.00 per bathroom, $10.00 – $25.00 for a shower stall, windows $3.00 – $10.00 each, outside only, 2.5 times the cost to include inside glass, carpeting $40.00 –$65.00 per room. (more…)

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Making the Transition from Worker to Supervisor

One of the biggest challenges we face in the cleaning industry is finding and keeping qualified workers. An even greater challenge is finding and keeping qualified leads, supervisors, and managers. One of the best places to find a new supervisor or lead is to develop and promote an individual from within the ranks of your existing staff.

As an industry consultant, I get to examine the inner workings of hundreds of cleaning businesses and organizations of all types and sizes. One thing I’ve notices is that very few organizations provide upward mobility training that is specifically targeted at helping existing workers successfully make the transition from cleaner to a lead or supervisory position. (more…)

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Bidding and Estimating Heath Care Cleaning

There is opportunity and good profit in the cleaning of health care facilities. This includes Dr., dentist and other professional medical offices and buildings. Other locations that require similar levels of service include labs, pharmacies, dialysis centers, and research, medical and pharmaceutical manufacturers. Larger facilities include hospitals, nursing homes, assisted living and hospice centers. Closely related locations include daycare, child development centers and health clubs.

These facilities require a more precise level of cleaning than basic office buildings, because of issues related to regulation, liability, medical treatment, contamination, and infection control. Other concerns include hazardous chemicals, sharps (needles and glass), plus the collection and disposal of various types of medical waste. Patient confidentiality, noise levels, hospital acquired infection rates (HAI), and patient surveys are important issues in health care facilities. The responsibly and risk inherent in these accounts should not be taken lightly due to the possibly of death, illness and liability if proper procedures are not followed. (more…)

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Cutting Floor Care Costs by 50% or More

Hard floor care is a major cost in most facilities and plays a key role in overall building appearance, health and safety. Floor care costs normally range from as little as sixty cents per square foot to over two dollars per square foot per year and represent 5% to 20% of the cleaning budget in most facilities. Cost reductions of up to 50% or more in floor care cost in any size and type of a facility is a realistic goal that can be achieved when new processes and technology are applied to how floors are maintained.

Making Cost Reduction Work in Your Facility

Reducing costs is not a one size fits all or one step process. True savings come about when all aspects of a floor core program evaluated and changes customized to meet the needs of the facility and its occupants in a way that improves processes, without a loss of service quality. Change and improvement that reduces costs takes time, part of the process involves the tracking, monitoring and adjustment of processes and frequencies based on testing and factual information.

Put together a “can do minded team”, do the needed research, develop a realistic plan and time line and you’ll be pleasantly surprised how much can be accomplished over a fairly short period of time. I didn’t say it would be easy or fast, but floor care cost reduction is definitely doable without a loss of quality. (more…)

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Cleaning Schools, Colleges and Universities

Educational facilities are a good and growing market that contractors are targeting and penetrating. This includes day and or evening cleaning in public and private schools of all types and sizes. Each segment of the market has demands that make it unique; colleges, universities, K-12, child development centers, and day care facilities are all slightly different in their approach, needs and expectations. As a service contractor it is your job to identify and meet these needs, even if they change minute to minute. Flexibility is requires on everyone’s part to get the job done and keep the customer happy. In this market everyone is your customer, from students and teachers to parents, administrators, government agencies, and the public.

Educational facilities have special needs and are different than cleaning an office building, factory or hospital. Anytime you have children, parents and the government involved, the work is more complicated and emotionally charged. Expertise, cost savings, staffing and a shifting of liability to a 3rd party vendor behind the growth in this market.

Not every contractor or employee is suited for this market; security, background checks, health and safety, image, appearance, professionalism and team work all play a role in meeting the changing expectations and demands of educational customers.

Area types range from normal office and conference rooms, restrooms, classrooms, shops, labs, kitchens and cafeterias, gyms and locker rooms. In the High Education world, you can find cleanrooms, research labs, lecture halls, animal cages, medical exam rooms, student housing, athletic facilities, stadiums, swimming pools, rock walls and the list goes on. (more…)

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