By Greg Allan, tradesman and creator of Data First Coaching
Why does a commercial cleaning contract look profitable but still drain the bank?
A commercial cleaning contract can look healthy on the quote and still cost the business money every week it runs, because the price was built as one blended number instead of three or four separate ones. A strata or office contract often gets won on a competitive square metre rate that covers the recurring clean, then has carpet work, a periodic strip and seal, or a restoration call-out folded into the same figure.
On paper the gross profit margin looks fine. In the bank account it does not, because staff turnover on that site, the chemicals and equipment used, and the quality checks the owner can never personally do on every shift all get absorbed into one number that was never built to carry them. A cleaner who only looks at the total contract value each month has no way of seeing which part of the job is the one quietly losing money.
What happens when a cleaning business prices a contract just to win the tender?
Pricing a commercial contract just to cover costs and win the tender sets the business up to work harder for less, not more freedom. The cleaner wins the office, the strata building or the facilities contract, then spends the life of that contract trying to make the margin work instead of banking it.
This is especially true once a cleaning business starts adding service lines. Carpet cleaning, restoration, water damage, mould and fire damage work, and insurance work all look like growth, and in the right business they are. But each one brings different crew skills, different chemicals and equipment, and different scheduling demands. Taking them on without the systems to run them as their own jobs, with their own cost, is a common way a cleaning business dilutes its margin and overloads its roster before it is ready for the extra work.
How do you work out what each part of a commercial contract really costs you?
You protect the contract by costing each part of it on its own, not as a share of the whole. The recurring office or strata clean, the carpet extras, the occasional restoration or water damage job inside that same contract each need their own true cost worked out, so the blended price you quote is not quietly hiding a loss-making line.
The number that matters here is gross profit margin, tracked by job type, not just by contract. It is the number that tells you whether the carpet work inside that office contract is actually paying its way, or whether it is being carried by the recurring clean next door. Memory will not tell you this. The week to week reality of rostering, chemical and equipment cost, and staff turnover on a site you rarely visit changes faster than any owner can track in their head.
What changes when you stop blending the price across every service line?
Once you separate the cost of each part of a contract, you can set a fixed price for each type of customer and each type of work, instead of quoting job by job and hoping the rates land where they need to. Picture a cleaning business owner who had been pricing every end of lease, every commercial contract and every carpet job on the spot, so rates varied between customer types and were never quite where they needed to be. Moving to fixed pricing across every customer, including builders handing over new sites for a first clean, with a real increase in the rate, and reviewing the cost of running the business every quarter, changes the contract from a number that was guessed at into one that is checked against what the business actually costs to run.
That review has to happen regularly, not once. Chemical and equipment costs move, award rates and staff turnover move, and a price set a year ago on an office or strata contract is working from an old picture of the business.
How do AI agents help you price and protect a commercial contract?
AI agents can take over the office work of tracking contract cost without the owner having to remember to check it. An AI agent is software that does a job the way you would do it yourself, using your own prices, your own wording and your own rules, so it can watch a contract the way you would if you had the time.
For a cleaning business, that might mean an agent that flags when the cost of running a particular site, including chemicals, equipment and the crew rostered on it, starts moving away from what the contract was priced for, before the next quarterly review rather than after it. Another AI agent can hold the quality check records for sites the owner never personally visits, so the information exists before a client calls to complain, not after.
This is what data first pricing looks like in practice: the decision on a contract renewal or a rate increase is made from what the job is actually costing right now, not from a feeling that the business is busy, so it must be doing fine.
How does Data First Coaching approach this?
Data First Coaching starts from the owner's own numbers, not from a general rule about square metre rates. Through the Trade Business Intelligence, Greg Allan's coaching looks at what each part of a cleaning business's contracts, the recurring clean, the carpet work, the restoration jobs, is actually costing against what it earns, to find where a contract is quietly bleeding margin rather than treating the whole business as one blended average. As Greg puts it, “Pricing isn't just about covering your costs, it's about building in profit”, and that only shows up once you can see each line on its own. The how of building that view, and what to do once the gap is found, is worked through inside the Academy, with members who are open minded, innovative and willing to share, because the Trade Business Intelligence is powered by every member.
