How to Bid on Commercial Cleaning Contracts
If you want more cleaning contracts, you’ve got to learn how to price commercial cleaning jobs. You’ll need to understand production rates, overhead costs and the competitive landscape in your area.
You have to bid on a lot of janitorial cleaning contracts to get good at it. So, it’s not unusual for companies with limited bidding experience to subcontract for prime contractors (i.e. contractors who own the contract). But, that leaves you dependent on the primes to grow your company. If you want faster, more sustainable growth, you’ll need to start bidding on cleaning contracts yourself. Here’s some tips that will help you do that.
Subcontracting can help you learn bidding:
If you’re inexperienced at bidding, you can spin your wheels and bid on job after job without closing a contract. But, when you subcontract, you’ll get a good idea of how the prime contractors bid on jobs (and what you could charge for those jobs).
Remember primes have to make money on the contract, so they will usually mark up their price by 25-50% (personal experience). When you start bidding jobs on your own, you’ll have a better understanding of the process and close more commercial cleaning contracts.
Your competitive advantage:
When you subcontract, your primary focus is on job quality and efficiency. You’ve learned how to keep costs down in order to turn a profit. That experience and mindset will you give you a competitive advantage as a prime contractor.
Janitorial bidding software helps, but there’s no substitute for experience:
While bidding software can help you calculate expenses, there’s no substitute for experience when it comes to quoting a job. Software won’t tell you what profit margin to shoot for or how to price a job to win the contract.
While software can help you calculate production rates, expenses, etc., it won’t tell you how to quote the job to close the contract. That depends on other factors such as your own efficiency and who else is bidding on the job.
Prime contractors are good at sales
To bid on cleaning contracts, you’ll need to get good at sales (notice the distinction between sales and bidding). Bidding competitively will give you a chance at closing contracts. But, if your sales presentations skills aren’t up to par, you’ll close fewer janitorial cleaning contracts. Don’t be discouraged if the first few sales cycles don’t go well. Getting sales training can help, but there’s no substitute for experience.
Learn from your bidding mistakes:
When you start selling, you’re bound to make mistakes. You won’t close most of the cleaning contracts you bid on. Try to find out why you didn’t get a contract when you fail. Developing a rapport with the decision maker can help (they will sometimes tell you why you didn’t get the job if you ask). Knowing the reason you didn’t win the contract will improve your bidding (and sales) skills.
Price matching can help:
If you are having trouble bidding (and closing accounts), you can offer to match your competitor’s price. Ask to see proof of your competitor’s bid when you price match (seeing your competitor’s proposal is another benefit to this approach).
When you’ve closed a contract by matching price, you will find one of two things: 1) that you can turn a reasonable profit at the lower price; 2) you can’t be profitable at the lower price point (that’s the downside to this approach). In either case, you’ll learn more about the bidding process and will get better at it going forward.
Just because you didn’t win the contract, doesn’t mean that you’ve lost the job forever. Keep records of your quotes and develop an email marketing (or calling) campaign to stay in touch with those businesses. Remember, there’s a lot of turnover in the cleaning industry and the account you failed to close today could become your customer tomorrow.
Develop a strategy to generate qualified leads;
When you start going after contracts yourself, you’ll need a reliable source of qualified leads to bid on jobs. While many cleaning companies rely on outbound strategies like cold calling and appointment setting to generate leads, that approach often provides less qualified leads that are more difficult to close.
Don’t waste your time and money with DIY marketing:
There are lots of free online marketing and educational tools, e.g. website builders, courses on SEO, etc. to help small business owners market their companies. While these tools are helpful, it takes years to become proficient at digital marketing and get results. Why waste all that time (and money) when you can outsource the marketing to someone who can get results now?
Inbound leads are easier to close:
Leads generated through inbound marketing strategies such as pay per click and SEO are easier to close. Inbound marketing connects you with decision makers who have already decided to change cleaning companies. So, if you’re looking for cleaning contracts that are available now, inbound marketing is the way to go.
To get the best return on your marketing investment, hire an agency with janitorial marketing experience to generate qualified, exclusive leads for your cleaning company. Call for a free consultation today.