How do you price a commercial cleaning contract without losing margin?

What to do

• Use square footage as an input to labor-time estimation, not as the entire pricing formula.
• Do not submit a bid until loaded labor plus direct costs and overhead are visible.
• Check the per-visit economics first, then convert the price to the contract frequency.

Start with the service scope and frequency

A commercial bid should begin with what the client expects on each visit: areas cleaned, restrooms, kitchens, floor care, trash, consumables, access requirements, security procedures and any periodic tasks. Two buildings with the same square footage can require very different labor because layout, density and service standard change the work.

Write the recurring frequency separately from periodic work. A three-times-per-week office contract should not silently absorb quarterly floor work or special detail tasks unless those items are priced into the agreement.

Estimate labor time, then validate it

Use the walkthrough, your own historical jobs and a reasonable production assumption to estimate cleaner-hours. If you use square footage or a production rate, treat it as a starting estimate rather than a guarantee. Restroom count, room density, touchpoints, access and required quality level can move the actual time materially.

After launch, compare estimated cleaner-hours with actual cleaner-hours. A recurring commercial contract becomes safer when the estimate is treated as a hypothesis that gets checked against real service data.

Calculate loaded labor, not base wage

Base wage is not the full labor cost. Build a loaded labor rate that reflects the employer costs you actually carry, then multiply that rate by the cleaner-hours required per visit. If you do not know your loaded labor rate yet, use a documented temporary assumption and replace it once your payroll data is available.

Add the costs that disappear from simple calculators

Commercial jobs can look profitable when the quote only covers wages. Add the other costs attributable to the visit and a reasonable share of fixed overhead.

• Supplies and chemicals used on the account
• Travel, parking or vehicle cost
• Equipment use, maintenance or consumables
• Allocated admin and insurance overhead
• Any contract-specific service or compliance cost

Use margin math correctly

Once total cost per visit is known, a target-margin price can be calculated as price = total cost ÷ (1 - target margin). Margin and markup are not the same calculation. Your target should come from your own business economics, risk and capacity rather than a universal percentage copied from another company.

Worked example

Suppose a commercial visit requires seven cleaner-hours and your loaded labor rate is $22 per hour. Loaded labor is $154. Add $18 for supplies, $12 for travel and equipment, and $36 of allocated overhead. Total estimated cost is $220 per visit.

If your planning target were a 35% margin, the formula would be $220 ÷ 0.65 = about $338.46 per visit. At three visits per week, using 4.33 weeks as a monthly planning average, that is about $4,397 per month. This is an example of the math, not a recommended market price.

Before you send the proposal

Check that the scope, frequency, exclusions, start date and periodic work are written clearly. Then ask a final question: if actual service time runs longer than estimated, how quickly will you know? A CRM can keep the commercial opportunity visible through walkthrough and estimate follow-up, while a margin tool can help you review the economics separately.