Foreclosure Cleaning - Advice on What to Do and What Not to Do When Pricing Jobs

In most cases, when potential clients call you for a foreclosure cleaning job, they're going to want you to give them a rate over the phone. You should patiently explain that you have to view the property before giving an estimate.

Once you clear this hurdle, they're still going to want you to give them a rate immediately after viewing and assessing the job.

Don't.

Following is why.

Foreclosure Cleaning Jobs: An Industry with Thin Profit Margins

Most of the services offered by foreclosure cleaning companies have thin profit margins. This means you have to know what your direct and indirect costs are in order to price a job correctly. This is not only fair to your bottom line - it's fair to clients as well (even if they don't realize it).

Foreclosure Cleaning Pricing: Direct and Indirect Costs Defined

Direct costs are those expenses that can be defined in absolute terms for every job. These are things like how much you pay workers and the cost of supplies. You know these costs are exactly, which makes it easy to factor into a pricing model.

Indirect costs are a bit trickier. They are the costs that are not accounted for in your direct costs for a particular job. However, they are every bit a part of pricing a foreclosure cleaning job as direct costs. Hence, they should be factored into every estimate you give.

Some examples of indirect costs are annual business license renewal, phone, paper and toner for your printer, etc.

The inability to factor in indirect business costs accurately is a major reason so many new small business owners find it difficult to price jobs. Because they leave these out, they usually wind up undercharging and find themselves in the red -- and out of business -- before they know it.

How to "Accurately" Calculate Indirect Costs for Your Foreclosure Cleaning Business

The word accurately is in quotation marks because, by their very nature, indirect costs are not concrete. But you can get pretty close calculating them using some specific formulas and common sense.

Your largest indirect costs are pretty easy to calculate (eg, wages, business insurance, phone).

The intangibles are what will give you headaches, eg, gas for running around giving estimates and calculating how much time it's going to take to complete a job. The only way to figure costs like these out is to pull upon knowledge you already have.

For example -- take gas. To get a good idea of how much you're going to spend, calculate a certain number of miles per week. If you stay within a certain geographic area (say, 50 miles) then figure giving 1-2 estimates a week initially. At 100 miles per round trip, you can get an idea of how much gas you'll be using.

Once you do a foreclosure cleaning estimates, you'll get better and better and calculating costs -- and hence, raise your profits for each foreclosure clean up job you do.

May be reprinted with the following, in full: To learn everything you need to know about how to price foreclosure cleaning jobs, get the manual Pricing Guide for Foreclosure Cleaning & Real-Estate Service Businesses: How to Price Jobs for Profit at http://www.Start-a-foreclosure-cleanup-business.com