A significant percentage of the Maintenance, Repairs and Operation budget is spent on janitorial or custodial services. In fact, the average is 30% of an MRO budget is spent on custodial services which is more than the next five expense items combined. It is critical to have a good handle on this expense.
Many property managers struggle with the cost of cleaning. It is an obtuse figure that’s hard to figure out. There are a large amount of variables that go into costing.
- How much time does it take to clean your property?
- How much do you need to have cleaned?
- What are the frequencies of cleaning?
- What are the types of areas that need cleaning, hard floors verses carpeting etc.?
- What are the traffic patterns of your facility and how does that effect budgets?
The purchasing process for buying cleaning services is not always simple. Educating yourself on as many methods of costing is important to arm you with the information to ensure you are fully informed when it comes to the largest single expense in the MRO world.
The Challenge of Calculating Cleaning Costs
With so many factors that enter into the budgeting process, it can be challenging to arrive at a formula that can be applied to every building.
It seems like setting that regular monthly budget would be easy enough but it fails more often than people realize. The reason for the struggles are not always apparent, sometimes the scope of work could be not detailed enough or the execution may be wrong. It is important to have a handle on as many components so the correct adjustments can be made.
- Is the scope of work correct?
- What are the heavy duty cleaning needs?
- Are the frequencies correct?
- Type of flooring and scope of work for the various flooring types
- Cleaning materials used
- Tenants use patterns
There are numerous variables that impact cleaning costs. When determining your budget before entering into a contract with a cleaning service supplier, start with the time and motion study.
Introducing the Time and Motion Study
A time and motion study takes individual cleaning jobs and breaks them down into small components and comes up with averages that you can use in order to set up benchmarks for cleaning.
For example, on average it takes 18.5 minutes to vacuum 1000 square feet of carpet with a 14 inch upright vacuum, or 19.50 minutes to vacuum 1000 square feet with a 15 inch upright vacuum. So with a 15 inch vacuum the production rate is 3243sq ft per hour and a 14 inch vacuum it is 2657sq ft per hour. Move to a backpack vacuum with a 20 inch carpet tool, and the production rate goes up to 8000sq ft per hour.
The purpose of the study is to establish a baseline. Using the formula to calculate what it will take to complete a specific job, you get a more accurate estimate of the costs. But as stated in the example above there is still a great variety in the results even using the time and motion study depending on factors like equipment, etc.
If you’re one of the many property managers that frequently scratch your head wondering, “is this a reasonable price for cleaning services?” this study is a starting point to establish baselines and to adjust your largest single expense item on your MRO budget.
How it Works
The easiest way to analyze your costs is to use a time and motion study template. Excel makes it easy to plug in numbers and churn out the estimate you need. Understanding how this study works will help you calculate your costs more accurately.
Here are the basics that you need to know to get a realistic figure:
For once a week cleanings use 4.33 days per month. If you need twice per week cleanings, use 8.66 days per month. For five days per week, use 21.65 days per month, and so on and so forth.
Using these figures, you will get an average monthly cost of cleaning that’ll accurately fit in with your annual budget.
2) Include a difficulty factor.
Use your best guess to estimate the difficulty factor. The higher the number, the more difficult the cleaning is. For example, cleaning an auto shop where oils and dirt are abundant is more difficult than cleaning an office filled with computer programmers.
Also take into consideration the density of work, layout, location of garbage, number of waste bins, amount and type of garbage generated, etc. Each of these plays a role in how long it takes someone to clean your property.
3) Calculate the square footage.
Calculate the square footage of your property as the last step. This should include the total cleanable square footage of your office. For example, if you do not need any of the space outdoors cleaned, do not include that in your square footage analysis.
4) Add in the dollar rate per hour.
The spreadsheet calculates the approximate hours based on the data entered using the time and motion study. Put in your hourly rate taking into account overhead, insurance, etc. You then can get a baseline of what your costs may be depending on what the prevailing rate is for the area you are in etc.
5) Get your total.
With all of these costs entered into the excel spreadsheet, you’ll have an approximate budget. This number will help you determine how reasonable and accurate each bid is that you receive.
If a bid is too low, you’ll know that they do not understand the full scope of work. You can expect those prices to increase once work begins. If the bid is too high, you might want to ask about the pricing to make sure you did not overlook a difficulty factor on your property that will cost you more.
Would you like an editable version of the time and motion study template excel spreadsheet? Download it here.
Finding the right cleaning company is tough if you do not have the right information. You have a lot to consider in addition to the cost.
To help you get a more realistic idea of what it takes to find the right cleaning company for your property, we encourage you to download our free report called Purchasing Strategies for MRO. In it, you’ll get everything you need to make the best decision for your property.
Cleaning and custodial expenses have a large variation depending on the scope of work and many other variables. Use this report to find the most cost-effective approach for your building.