9 Ways to Justify Your House Cleaning Service Rates

There are so many ways homeowners could be affected by hiring the wrong workers to clean their home.  Part of your job as a business owner is to educate the public so they can make informed decisions. 

But what do you say when they object to the rate you have quoted them? That’s when you need to justify your rate and that’s where the education comes into play.

The ability to justify your rate is an important part of the job estimating and quoting process. If you have left a homeowner with a quote that is far beyond any others they have received, they will feel the need to convey this information to everyone they know.

Your business name charges more than any other house cleaners I have interviewed. Don’t bother calling them because I know you don’t want to pay that much.

Now your business is negatively affected in that community.  They believe you are over charging them and you can’t have that!

Your prospect may not know why you are charging more and they most likely will not have any idea what the rate difference could mean to them. That’s why you must educate them on what could happen if they use a service that does not protect the homeowner or their own business.

People who have never owned a business are not aware of the legal requirements and operating expenses that are needed to run a legitimate business. Many of them will reconsider their choices when they understand what could go wrong.

You may have one or more of these business expenses. Use them to educate your prospect and justify your cleaning rate:

1.  Business License – To have a legal business in your city, you must have a business license in the city where you are based, if one is required.  Not all cities require a license. A homeowner who hires an unlicensed business has no way of knowing who the business owners are, where they are located, and what they do. The fee that is paid to obtain a business license is needed and used to operate the city. A business license is used:

• To identify your business and make sure you are accountable for your actions
• To protect the public health and safety
• To keep track of your finances for tax purposes

Justification: We have a business license, which makes us accountable to the city.

2.  Employee Taxes – Most of the public has heard they could be held liable for worker taxes, but many of them do not realize what this means or how often this really happens. The reality is that most workers who are working for around minimum wage are unable to pay the taxes due on their independent status. They make so little that it’s often quickly used just for their living necessities. If they are legal citizens, there may come a time when the government finds them and expects the taxes to be paid.

It’s at this moment the worker will claim they don’t have the money and in fact they were working for Mr. and Mrs. Somebody. The government then will do the necessary research. If more than the allowed gross payment was made in that year to the worker, the government will then send a bill to Mr. and Mrs. Somebody as the employer of the worker.

Justification: My workers are employees and I pay their taxes which protects you from worker claims.

3.  Insurance Bond – varies by type of bond. This is the insurance that protects your clients from theft. The cost can vary from 1 – 4% of the bond amount for the type of bond you purchase and is based on rates in your state. For example, a janitorial bond (also used for house cleaning) for $10,000 in Arizona might be $100 per year based on a rate of 1%. If you raised that to $50,000 it might be $500 per year.

If the worker does not have a bond, the theft cannot be reported for investigation and the homeowner is left to file a claim on their insurance policy, if the item(s) were insured. If they were not insured they will ask you for reimbursement.

Justification: My workers are bonded which protects you from theft.

4.  Liability Insurance – Many variables will affect the amount you pay each year. The homeowner assumes responsibility of uninsured workers in their home. They could file a claim with their homeowner’s insurance or assume the loss themselves from damage done by the worker while cleaning their home.

For example, the worker knocks over a lamp while cleaning. Many homeowners will either not pay the worker or will ask him/her to pay for a replacement. If the lamp was worth a lot of money, they could claim it on their homeowner’s policy or buy a replacement themselves.

Justification: We carry liability insurance which protects your home if the unfortunate breakage or damage should occur.

5.  Worker’s Compensation – This policy covers on-the-job accidents that require employee medical assistance.  Not every employer needs worker’s compensation insurance. In some states, small businesses with fewer than three to five employees may not be required to carry workers compensation insurance. Just because your state may not require you to carry workers compensation does not relieve you of potential responsibility if an injury or death occurs.

Pricing varies by state and the type of risk your employees take while on-the-job. Premiums rise as the risk of a given job increases, such as contractors who may cost about $12 per $100 and even higher-risk occupations like roofers costing as much as $22.19 per $100.

For this reason, I had a list of work that we did not do because I didn’t want to be responsible for an injury my employee might sustain. This included things like using an extension ladder to clean pot shelves overlooking rooms.  In the long-run, this helped to mitigate the risk and kept my rates from rising.

Justification: We carry Worker’s Compensation that pays the employee medical costs should an accident occur in your home, such as slipping and breaking a limb.

6. Background Checks – Background checks are helpful in screening out applicants that would not be a good fit for your business. For example, you can’t hire someone with a criminal record when you have an insurance bond.  The only way to find this out is with a background check so you don’t put your business and your clients in jeopardy.

Justification: We do background checks for all our employees so you can feel safe while our workers are in your home. This allows us to exclude workers with criminal backgrounds and those who are not a good fit for our business.

7.  Employment Practices Liability Insurance – This type of policy is fairly new and is designed to protect a business by covering claims for harassment, discrimination or wrongful termination. It is specifically designed to help protect the insured and their business in the event an employee brings a suit or administrative charge. The homeowner assumes all risk from hiring uninsured workers – not only could he/she be taken to court for the unpaid taxes of the workers in their home, but they could also be sued for other reasons, such as harassment.

Justification: We carry Employment Practices Liability Insurance which protects you from being sued by a worker in your home.

8.  Employee Training – If you have an employee training program, you can quickly impress your prospect with how your workers are trained and the performance reports that are done on a regular basis to ensure the quality of their work. You spend time and money making sure your workers do the best work possible for your clients.

Without a trained worker in their home, how does the homeowner know the worker knows how to use cleaning products correctly? For example, using the wrong hand pad on bathroom and kitchen faucets could easily scratch them. Without the proper tools, the worker can’t do the most thorough job, like using the correct brush to scrub soap scum in the corners of showers or getting the dirt ring removed from around the faucet base or toilet seat locks.

Justification: Our workers are fully trained to prevent damage to the interior of your home. For example, using the wrong product could easily leave faucets and/or countertops with permanent scratches.

9. Products and Equipment – If you have invested in your own products and equipment, you have ongoing expenses to replace the products and repair the equipment. This is the only way you can ensure that your workers are performing the work to your specifications with approved products and equipment. These are things your prospect doesn’t have to monitor and purchase on their own.

Justification: We provide our own cleaning products and equipment so you don’t have to purchase and repair them yourself.

Other Business Expenses

How do you justify your rate if you don’t have any expenses? Then you are working based on an hourly rate. This puts you at the mercy of your prospect who may not want to pay your hourly rate. You could try and explain how you clean better than someone else, but good luck with that. At this point, you have to decide if you are running a business or trading time for money. Your customer now becomes your boss.

When you’re running a legal business, you and your customers are protected from what could go wrong instead of leaving it to chance. We don’t mean to have an accident in the home and that’s why businesses choose to protect themselves. Your worker or you yourself could use a product incorrectly, leaving a stain on your customer’s flooring or carpet. Now you are responsible for fixing the damage.

A legal business can easily justify their rates, making it easy for the prospect to make an educated decision. Your prospect may not care that you do background checks on your workers. If so, then you immediately know this prospect is not your ideal customer and you can walk away.

I’m not expecting most house cleaning businesses to have all of these expenses, but it’s good to know why it is available and the risk businesses take when they employ workers.

What to Charge

I receive a lot of questions about what a house cleaning company should charge. This is not a question that is easy to answer as it directly relates to your location and the type of service you offer. In addition, your expenses have to be determined before you can set your base rate and then determine what you need to charge to operate in profit.

This is covered in detail in the following publications:

• Research & Plan Your Business
• Identify Your Target Audience and Define Your Business
• Pricing & Bidding Your Jobs
• How to Become an Independent House Cleaner
• How to Start a House Cleaning Business

How do you justify your rate when you bid on jobs? Have you lost any jobs because your prospects don’t want to pay your rate?

If this article has helped, please leave a comment!