Percentage of profit

[Derick]

Whats a good percentage of profit for a commercial cleaning account. Thanks in advance for your help. Say for instance an account that pays $1000 a month but costs $900 monthly. I would think that 10% profit would be good, but is that above or below average?

[obmservices]

I would not accept to get anything under 30%, if we are in business is to get a decent profit. Consider the risk and the responsabilities you are taking.

[Grizzly]

It depends on what commercial you are going after and what the market will bear. We used to do 3 office buildings but the margins got so competitive, (3-5% net profit) that they were not worth keeping. Now it took a hit on the gross revenues and the banker had a fit until we replaced the gross revenue with stand alone light industrial giving us a margin of 40%. You see where I am coming from.

Bill

[Derick]

You've started me thinking about light industrial accounts. How did you go about getting the account and how different is it from the office buildings? Can I get a wet/dry vac and be on my way or should I ready myself to invest in a lot of industrial equipment?

[Grizzly]

By stand alone light industrial I am talking about locations like heavy equipment dealerships, industrial supply dealerships, distribution offices, logistics offices, etc. etc. You will not have to make a significant investment in equipment depending on the location you get. Most of ours simply require no more or less than any other account where we have to do floors , janitorial , windows, etc. We have also found that these locations are becoming tired of dealing with a number of different contractors and are looking at us to become their source of solutions within our knowledge and expertise. For example , we have expanded into garden maintenance, light bulb changing and shop floor cleaning. We have turned away from major electrical and roof repair. Marketing is no different than getting any other account.

Bill