Vacation rental cleaning business. Need advice.

[Jbrow327]

I have been inspired by the @Mike Partee thread about creating a productized service. I want to start a vacation rental cleaning business. It will operate on a subscription basis. The property owner will pay a flat rate every month whether the home gets cleaned 1 time or 10.

The big difference between my business and @Mike Partee's business is that I will be outsourcing all the work to cleaners instead of hiring them. Then I'll obviously upcharge from there to get my percentage. With outsourcing, I can start the business very quickly with little to no money.

1. Do you consider this a good idea?

2. What do you consider a fair monthly price to pay for a subscription based cleaning service?

3. I will mainly be contacting homeowners on Airbnb and VRBO. I'm assuming it will go like this.
A. I email property owners on those sites offering my services.
B. They email me back with the dates that the address needs a cleaning.
C. I contact cleaning companies and ask for their price for 5 cleanings a month.
D. I upcharge the price, making sure to double the cleaning companies price so I have wiggle room if they end up needing more than 5 cleanings. Then I email the homeowners back with the price.
E. They say no or yes. If yes, I have them pay me through PayPal. I don't know if they should pay me a monthly amount or the yearly amount right away.
F. I get back to the cleaning company and tell them.

4. Is there a way to automate a lot if not all of step 3 with some kind of software?

Thanks guys

 

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[biophase]

I have been inspired by the @Mike Partee thread about creating a productized service. I want to start a vacation rental cleaning business. It will operate on a subscription basis. The property owner will pay a flat rate every month whether the home gets cleaned 1 time or 10.

The big difference between my business and @Mike Partee's business is that I will be outsourcing all the work to cleaners instead of hiring them. Then I'll obviously upcharge from there to get my percentage. With outsourcing, I can start the business very quickly with little to no money.

1. Do you consider this a good idea?

2. What do you consider a fair monthly price to pay for a subscription based cleaning service?

3. I will mainly be contacting homeowners on Airbnb and VRBO. I'm assuming it will go like this.
A. I email property owners on those sites offering my services.
B. They email me back with the dates that the address needs a cleaning.
C. I contact cleaning companies and ask for their price for 5 cleanings a month.
D. I upcharge the price, making sure to double the cleaning companies price so I have wiggle room if they end up needing more than 5 cleanings. Then I email the homeowners back with the price.
E. They say no or yes. If yes, I have them pay me through PayPal. I don't know if they should pay me a monthly amount or the yearly amount right away.
F. I get back to the cleaning company and tell them.

4. Is there a way to automate a lot if not all of step 3 with some kind of software?

Thanks guys

So suppose the cleaning company charges $200 per cleaning. You will then charge the homeowner $1000/mo? That is so expensive. The homeowner would need 10 bookings for this to break even.

Most vacation rentals aren’t getting 10 bookings a month consistently. That would be 10 3 night bookings with no days missed.

This would only work if the homeowner thought it would average out and save them money.

Your better off charging for 5 cleanings and hoping they only have 4 bookings.

 

[Jbrow327]

So suppose the cleaning company charges $200 per cleaning. You will then charge the homeowner $1000/mo? That is so expensive. The homeowner would need 10 bookings for this to break even.

Most vacation rentals aren’t getting 10 bookings a month consistently. That would be 10 3 night bookings with no days missed.

This would only work if the homeowner thought it would average out and save them money.

Your better off charging for 5 cleanings and hoping they only have 4 bookings.

I see good points. What would you recommend I charge?

 

[GuestUser4aMPs1]

1. Do you consider this a good idea?

I've considered it myself, give it a shot! We have a huge vacation rental market where I live.

2. What do you consider a fair monthly price to pay for a subscription based cleaning service?

What I do in this case is pose as a customer to competitors in the industry already. Call them up, Start fielding quotes from cleaners. Ask if they do vacation rentals, and "How many times per month I should expect to pay for" = Will give you an average # of times a unit will need servicing. Do this a few times to get a generous sample size, a range of price per cleaning. Ask if they charge per square foot, etc...There really isn't any way of knowing what you can charge for it until you start asking. Maybe hop into RE investor groups and ask what the owners are paying for cleaning. This whole step requires some spy work and napkin math.

3. I will mainly be contacting homeowners on Airbnb and VRBO. I'm assuming it will go like this.
A. I email property owners on those sites offering my services.
B. They email me back with the dates that the address needs a cleaning.
C. I contact cleaning companies and ask for their price for 5 cleanings a month.
D. I upcharge the price, making sure to double the cleaning companies price so I have wiggle room if they end up needing more than 5 cleanings. Then I email the homeowners back with the price.
E. They say no or yes. If yes, I have them pay me through PayPal. I don't know if they should pay me a monthly amount or the yearly amount right away.
F. I get back to the cleaning company and tell them.

4. Is there a way to automate a lot if not all of step 3 with some kind of software?

Your main risk in this case is the company you're subcontracting to go around you and go straight to the client for repeat work...Try to make a moat with contracts, or It may be worth instead to generate the leads ffor them instead for a retainer. Lots of ways to chop this up.

 

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[Jbrow327]

I've considered it myself, give it a shot! We have a huge vacation rental market where I live.

What I do in this case is pose as a customer to competitors in the industry already. Call them up, Start fielding quotes from cleaners. Ask if they do vacation rentals, and "How many times per month I should expect to pay for" = Will give you an average # of times a unit will need servicing. Do this a few times to get a generous sample size, a range of price per cleaning. Ask if they charge per square foot, etc...There really isn't any way of knowing what you can charge for it until you start asking. Maybe hop into RE investor groups and ask what the owners are paying for cleaning. This whole step requires some spy work and napkin math.


Your main risk in this case is the company you're subcontracting to go around you and go straight to the client for repeat work...Try to make a moat with contracts, or It may be worth instead to generate the leads ffor them instead for a retainer. Lots of ways to chop this up.

Awesome thanks Mike!! When you put it that way generating leads for a monthly retainer sounds a lot better. How does pay work with leads? Do I get a percentage of the cleaning fee?

 

[biophase]

I see good points. What would you recommend I charge?

I don’t know. But most subscriptions work on the fact that they are cheaper than what we currently pay per use and that most people don’t use it enough compared to what they pay.

For example I pay $30 for unlimited car washes. The car washes cost $15/ea so if I go twice I break even. If I go 3x I am ahead. If I go 25x a month they will lose money on me. I’m guessing most of a few times only.

I just don’t know what number would appeal to a property owner.

You will probably lose a lot of money on a few accounts and make a little money on most accounts.

How are you going to market it? Unlimited cleans? Or a certain number of cleans?

 

[Jbrow327]

I don’t know. But most subscriptions work on the fact that they are cheaper than what we currently pay per use and that most people don’t use it enough compared to what they pay.

For example I pay $30 for unlimited car washes. The car washes cost $15/ea so if I go twice I break even. If I go 3x I am ahead.

I just don’t know what number would appeal to a property owner.

Very good point. I am going to reconsider this business idea. Subcontracting makes a subscription based business hard to run

 

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