Seriously, $65/hr is nuts. If that's the going rate for cleaning service in SF, I clearly picked the wrong profession. Even for two workers that's high. What are they doing, cleaning up hazmat? How can it be that their regular service functions at $25/person-hr, but cleaning is $32.50/person-hr?
I wonder if they have trouble finding trustworthy workers, or if they are intentionally targeting the the upper segment of the market. (Perhaps to drive sales for other Exec services?)
Is it possible they are providing benefits to their workers, and that explains the cost? It probably makes sense for someone who is around harsh chemicals all day to have decent healthcare.
Contractor vs. Employee would be one easy difference. Cleaning is a more specific task. I'm guessing they have a list of "do's and don't" for the 2 people @ $65 rate. If you have someone performing random "on demand" tasks paid after completion, they could easily just be 1099's. Profit could be similar.
This pricing is not out of line in the least if you're treating this as a real business. Hourly wages would probably be in the $12-18 range. With 2 cleaners per job, that looks like an acceptable margin while also providing for all the normal overhead. Certainly a different approach from PathJoy.
What percentage would you estimate as the normal overhead for something like this? What would an acceptable margin be? They have $3.3M in investment funding, so it seems like the margin would not need to be very high at the start (if they're going for growth).
There are a lot of factors in overhead but 20 - 40% would be right assuming all the common expenses for this kind of business. I also assume they employ their cleaners and aren't all contractors.
Sure they have some cash but this is a service business with the biggest money to be made in recurring customers. Providing a deep discount upfront and then having to adjust later to make a profit seems short sighted.
I wonder if they have trouble finding trustworthy workers, or if they are intentionally targeting the the upper segment of the market. (Perhaps to drive sales for other Exec services?)
Is it possible they are providing benefits to their workers, and that explains the cost? It probably makes sense for someone who is around harsh chemicals all day to have decent healthcare.