An Introduction to Bidding and Estimating for Contract and Commercial Cleaning Businesses

Friday, November 1, 2024

Acquiring new customers is a very important function for any building service contractor or commercial janitorial contractor. One of the most important steps in that process is the bidding phase, which determines the price for recurring janitorial services. Over the last 40 years, BSCAI has been a leader in bidding and estimating education for facility contractors. During this six-article series, we will identify the key components to calculate bids and estimates for commercial janitorial services.

The core focus for most building service contractors is recurring janitorial services. The quoting of those services to determine a monthly price will be the focus of this series.

Once a bid is completed, it becomes the framework and budget for the services you’re providing. When executing your plan based on your bid, if you find you are not achieving your budgeted objectives, there are many steps that can be taken to correct this issue. If you notice that the customer is unsatisfied with work being performed, it may be a bidding strategy issue, due to a production rate or work loading concern. If the gross margin for your new account does not provide what you had projected for your overhead and profit, there is a good chance that your estimated janitorial costs during the bid process were incorrect.

By having a strong janitorial bidding system, you will quickly identify answers to the following critical questions:

What new janitorial bid opportunities do you qualify for and which of these opportunities qualify for you?
How quickly can you have your cleaning crew perform the specified tasks for a new customer?
How many new employees need to be hired?
How much will you pay them?
How many hours will they work?
What equipment will they use?
When and how throughout their work shift will they perform specified tasks?
How much profit will you make from this new account?
What are all the potential overhead costs that need to be considered?
Who will be responsible for customer satisfaction at this account?

If you are a growth-oriented building service contractor, then adding new business will invigorate your team and have a positive effect on the morale of your leadership. As you grow and improve your skills for bidding new janitorial accounts, additional opportunities will provide themselves which will further motivate your team.

This bidding and estimating series will contain five future articles.

Bid Qualification for Building Service Contractors

In this article, we will summarize best practices for properly reviewing a prospective customer’s request for proposal (RFP) or specification list. We will show how to develop criteria for what prospective commercial facilities you should bid. We will also provide best practices to help you quickly identify when your company does not qualify for a bid opportunity.

Production Rates for Efficient Bidding

In this article, we will review in detail best practices for estimating how quickly a commercial cleaning crew should perform specified tasks. We will discuss individual production rates, reoccurring comprehensive production rates and total comprehensive production rates. We will discuss the difference between task-oriented and results-oriented specifications, and how to calculate production rates for each. All of these are a crucial part of the bidding strategy for cleaning contractors.

Work Loading Strategies

In this article, we will show how to take the production rates you are using and establish a labor plan for providing all specified services.

Job Costing for Profitable Bids

In this article, we will show how to properly calculate all non-labor costs. We will also discuss methods for determining the percentage of profit and overhead needed for a growing BSC business to succeed and thrive. Estimating janitorial costs accurately is vital for developing profitable bids.

Putting It All Together

In our final article in this series, we will discuss how the above components work together and how to leverage each aspect of the bidding and estimating process. We will also discuss complexities and variables you will want to be prepared for as you navigate the intricacies of bidding strategies for cleaning services.

Future Opportunities

In addition to these articles, BSCAI provides annual in-person Bidding and Estimating Seminars. This year, in coordination with the 2024 Contracting Success Conference in Las Vegas, BSCAI will host two seminars on Monday, November 18.

The Bidding and Estimating 101 Course is for business leaders who are new to building service contracting or are transitioning from residential cleaning or specialty cleaning into commercial cleaning. If you want to master janitorial bidding, estimating techniques, proposal development, pricing strategies, and industry best practices, this seminar is perfect for you. During this seminar, participants will learn basic information about bidding and estimating. They will also be taken step by step through a case study of a bid for a 20,000 square building. This seminar will run from 8 a.m. to 11:30 a.m. PST on Monday, November 18.

The Bidding and Estimating 201 Course is for business leaders and sales professionals who have had exposure to sales and/or the building service contracting Industry. This course is designed for anyone who is looking to level-up their best practices as a building service contractor and prepare to expose themselves to large opportunities. During this seminar, participants will learn about the variables and details involved in creating a large multi-site bid. This seminar will run from noon until 4:30 p.m. PST on Monday, November 18. Sign up for the Bidding and Estimating 201 Course here!

By mastering the bidding and estimating process, building service contractors can gain a competitive edge, ensuring profitable bids and satisfied clients. Whether you are just starting or looking to grow your business, this series will guide you through the key aspects of successful janitorial service bidding.