Owning and operating a cleaning business involves a multitude of day-to-day functions. One of the most critical functions consists of the payment of your employees. How much you choose to pay will depend on various factors. The first and most crucial aspect to consider is the average rate of competing employers. Once this has been determined, you can decide by which method you prefer to pay your employees. You may choose to pay per job, by the hour, or by the hour with incentives. Third, you must determine a base rate, which will be the minimum wage that you will pay per job or the minimum wage that you will pay per hour. Next, you will calculate the most beneficial pricing structure for your cleaning business. Finally, choosing a set wage and implementing the pay structure will finalize your plan.
First, it is vital that you perform research to determine the average going rate for employees of cleaning businesses in your surrounding area. You will want to also look at your competitor’s pay scales, where available, to determine how competitive your business will be regarding wages paid to employees. This step will require moderately extensive research, but will create the foundation for your pay scale.
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Second, it is necessary to determine if you will pay your employees per job, pay them per hour, or pay them per hour with objectives. This determination will also be a factor in if your workers will be classified as independent contractors or as employees. As a cleaning business, you have the option to classify workers as either or, but there are pros and cons to each of the options. Furthermore, paying an independent contractor and paying an employee leads you down two different paths on the backend in terms of the administrative and accounting aspects.
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The next step in deciding how to pay your cleaning business employees involves determining the base rate. Whether you choose to pay per job or per hour, you will need to specify a base rate for paying your cleaning business employees. A base rate will be the very minimum amount per hour that an employee must earn or the minimum amount per job that an independent contractor is paid per job.
Once you have determined the minimum per hour or per job rate, it is critical to decide on the pricing structure for your business. Are the fees you bill to your client based on an hourly rate? Alternatively, have you chosen to charge your customers per job? There are pros and cons to each approach, but determining which you will use and implementing said approach will provide assistance with determining how much to pay your cleaning business employees.
Finally, once each of the previous steps has been completed, you can choose a set wage and implement the pay structure into your business. This final step should be a culmination of your research, pay frequency, the base rate, and pricing structure for your business. If each step is implemented correctly, you should have developed the necessary groundwork to choose and implement your chosen wage.
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The first and most crucial step of the process begins with researching your competition. As a cleaning business, the prices you set can vary widely depending on what kind of services you are offering as well as your location. In San Diego, California, cleaning services are likely to be priced higher than cleaning services in Fayetteville, North Carolina. By researching your competition both at a local and state level, you can get a closer look into your market’s average wages and even narrow it down by your specific niche.
If you are focusing on residential cleaning, then you will want to look for competitors offering similar services. Is your cleaning service more of a “touch-up” service or a “deep clean” service? These are essential factors when investigating competitor’s prices and wages. Take note of the type of pricing structures used by your competition, and if possible, use websites such as Glassdoor and LinkedIn to find statistics on their employee wages.
This information will be useful because it can help you determine whether you want to lead, meet, or lag the cleaning business market in terms of your employee wages. Leading the market would mean paying higher salaries than your competition, which could mean landing more quality workers and, therefore, longer client retention. Meeting the market means paying at or about the same amount as competitors for wages. This strategy typically puts you right on par with competitors but does not lend much of an advantage to your cleaning business. A final option is to lag the market by paying your employees wages lower than your competitors. This strategy is unlikely to bring high-quality workers and could result in loss of clients due to subpar work. It is recommended that you either meet or lead the market in terms of your employee wages. Ideally, you would want to lead the market, but it may be necessary to budget tightly as a new business, so meeting the market would be a sufficient starting point.
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The second step in determining what wages to pay your employees is to determine the pay frequency. As a cleaning business, there are many different options for pay frequency. The first option is to pay per job. If you are going to pay per job, it is imperative that you are familiar with the labor laws applicable to your business. Paying per job does not mean you can pay your workers below the legal minimum hourly wage. A per job payment must at minimum equal the legally required minimum wage. Paying per job can be a good option if you plan on having one individual complete the job.
For example, if you are a residential cleaning business and you have a job to clean a kitchen, living room, bathroom, and dining room area, you have the option to pay per job. You could advertise, for example, $100 in wages for the job. If the cleaning job is estimated to take five hours, your approximate hourly rate would be equivalent to $20 per hour. Depending on which state you live in, that can be a high wage or a low one. This step is where your research will come into play. Refer back to your notes to find what a similar job pays competitors employees. If $20 per hour sets you to lead the market, that is a good starting point for paying by the job. Understand, though, that a higher wage means either a higher cost of service to the client or lower profits to you as a business.
Alternatively, you can choose to pay by the hour. Paying per hour can be a better option if you can make generally reliable estimates on the time it will take to complete a cleaning job. If your cleaning business is tailored to specific cleaning jobs which can easily be quantified by time, then paying per hour may be the best option. Paying per hour would mean setting a flat rate that meets or exceeds the legal minimum wage that applies to your business. It is good practice to start your workers at least slightly above minimum wage. You should review your budget and expected expenses to ensure you can afford to pay your employees at a higher rate.
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Perhaps you live in California, where the minimum wage for employers with 25 or fewer employees is $13 per hour, and you want to pay your employees $16 per hour. Paying four employees for 20 hours each per week would cost $1, 280. This necessary wage means any cleaning jobs performed must be completed within those allotted hours and must exceed the cost of salary enough to cover overhead costs, as well as turn a profit. Refer back to your budget and research to understand how much higher than minimum wage you can afford to pay your employees. Paying per hour can sometimes lead to issues. If workers know they are paid by the hour, it may discourage them from working with speed and precision. Employees may purposefully move slower or incur overtime, creating unnecessary costs to your cleaning business.
A solution to simply paying per hour is paying per hour with objectives. This type of hybrid pay frequency allows you to combine hourly pay and commission into one. For example, you can pay employees the minimum wage of $15, with the objective that each cleaning job must be completed within four hours. Creating goals ensures that employees are aware of the time requirements and are scheduled a four-hour block to fulfill their job duties. Training and coaching on speed cleaning can assist in each employee enhancing their capability of completing cleaning jobs in a timely and efficient manner. Those crews who do not exceed their time block for a quarter will receive quarterly bonuses correlating to the number of cleaning jobs completed within the objective time. This type of pay frequency provides motivation to workers through monetary incentives. This type of incentive is good for employees and can
The second step in determining what wages to pay your employees is to determine the pay frequency. As a cleaning business, there are many different options for pay frequency. The first option is to pay per job. If you are going to pay per job, it is imperative that you are familiar with the labor laws applicable to your business. Paying per job does not mean you can pay your workers below the legal minimum hourly wage. A per job payment must at minimum equal the legally required minimum wage. Paying per job can be a good option if you plan on having one individual complete the job.
For example, if you are a residential cleaning business and you have a job to clean a kitchen, living room, bathroom, and dining room area, you have the option to pay per job. You could advertise, for example, $100 in wages for the job. If the cleaning job is estimated to take five hours, your approximate hourly rate would be equivalent to $20 per hour. Depending on which state you live in, that can be a high wage or a low one. This step is where your research will come into play. Refer back to your notes to find what a similar job pays competitors employees. If $20 per hour sets you to lead the market, that is a good starting point for paying by the job. Understand, though, that a higher wage means either a higher cost of service to the client or lower profits to you as a business.
Alternatively, you can choose to pay by the hour. Paying per hour can be a better option if you can make generally reliable estimates on the time it will take to complete a cleaning job. If your cleaning business is tailored to specific cleaning jobs which can easily be quantified by time, then paying per hour may be the best option. Paying per hour would mean setting a flat rate that meets or exceeds the legal minimum wage that applies to your business. It is good practice to start your workers at least slightly above minimum wage. You should review your budget and expected expenses to ensure you can afford to pay your employees at a higher rate.
Using Social Media To Recruit Employees For Your Cleaning Business
Perhaps you live in California, where the minimum wage for employers with 25 or fewer employees is $13 per hour, and you want to pay your employees $16 per hour. Paying four employees for 20 hours each per week would cost $1, 280. This necessary wage means any cleaning jobs performed must be completed within those allotted hours and must exceed the cost of salary enough to cover overhead costs, as well as turn a profit. Refer back to your budget and research to understand how much higher than minimum wage you can afford to pay your employees. Paying per hour can sometimes lead to issues. If workers know they are paid by the hour, it may discourage them from working with speed and precision. Employees may purposefully move slower or incur overtime, creating unnecessary costs to your cleaning business.
A solution to simply paying per hour is paying per hour with objectives. This type of hybrid pay frequency allows you to combine hourly pay and commission into one. For example, you can pay employees the minimum wage of $15, with the objective that each cleaning job must be completed within four hours. Creating goals ensures that employees are aware of the time requirements and are scheduled a four-hour block to fulfill their job duties. Training and coaching on speed cleaning can assist in each employee enhancing their capability of completing cleaning jobs in a timely and efficient manner. Those crews who do not exceed their time block for a quarter will receive quarterly bonuses correlating to the number of cleaning jobs completed within the objective time. This type of pay frequency provides motivation to workers through monetary incentives. This type of incentive is good for employees and can
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