Route Bidding


#1

I have 75 locations to bid out, all 1 story, small store front chains to clean 1x/mo, and I charge the client anywhere from $37-54 a location depending on how many windows there at at any given location.

I pay my employees 30% commission + 5% car allowance (they use their own vehicle and gas) per location. Any given location can take 30-126 min. to clean and so 1 employee can realistically clean up to 4 locations/day with commuting to each job.

That means if an employee only does this route work every day, up to 5 days/wk, they only stand to make anywhere between $11-18/location. That means an employee can average around $54/day or only $270/wk. This is not a realistic income.

How are these other companies doing route work like this with peanuts to employees? Do you have a lot of turn over? Is there a work around? How do you handle scheduling?


#2

I worked for what I would describe as a discounter for about 10 years here…and yes a bit of turn over for sure ,but the guys that hung in there were at least treated well. They had so much work they just fit in new jobs on the appropriate routes . It was all about volume and working fast.


#3

So if you are only charging $37-$54 than each job should take a maximum of 20 minutes to 40 minutes. You say your guys take between 30 minutes and 126 minutes ( 2 hours ) to do each job. Well that is a problem all in itself. Plus drive time in between each one. You need to set your route so you work in one area or city a day. Have them accounts put in the normal schedule. Having to do one company a day and drive between locations is not the way to do it.


#4

I also believe your price and time is the issue. The biggest issue of the two is the speed and efficiency of your employees.

Can you explain your employees experience and the tools and techniques they use to clean glass and frames, maybe we can find the weak spot and improve there time and pay check and increase your business profit.

Look forward to your response!


#5

If you have an account that was only bringing $54.00 for 126 minutes worth of work - that is only .42 cents a minute ( $25.00 gross per hour not including down/drive time ) which is exceptionally low in our industry. I agree with JRod and WCS that they are either underbid or the workers are very slow or inefficient. If my guys follow my training they should be at min of $45.00 hour for storefront route work ( average for start to end time each day ) This includes drive times - down time- etc. Realistically though we really shoot for $55.00 hour since I pay 37.5%.

Also - They can deduct 53.5 cents per mile on their federal income taxes if they use to use their own vehicle. Are they taking your 5% and taking that deduction too ? If so save 5%. If you are paying the 5% for their car expenses you don’t want to be paying payroll taxes on that amount right.

Let us know what you end up doing to solve the issue. Any information like that is valuable on here - especially if its creative. Good Luck !


#6

Do you have production rates by window pane size?

This is a proposal I am working on so no set prices but great to hear the prices I had originally set are too low. We use traditional methods, squeegee or ext pole. How did you know that you need to make a base of $45 for your route work? And how does that price change compared to commercial building?

Also, sorry for my ignorance but I am still learning the numbers game…what do you mean by “are they taking your 5% and taking that deduction too?” I agree, I don’t want to have to pay for their car allowance plus taxes on top of it…


#7

Also, any advice on what software to use for this? We currently use Customer Factor but I have so many invoices to process daily as it’s not very user friendly for large quantity…


#8

So to be around $45/hr I need to charge around $90 for my highest priced location if it takes us a max of 2 hrs to clean a location? That means I potentially underbid my services by $36? YIKES!!!


#9

HAHA! So many questions…one more though. Do you pay your employees commission based off the total days job cost? or 37.5% off each individual job?

For example, you charge a customer 200 to clean his windows and your employee gets 37.5% of that individual job? Or, do you add up the total daily amount in gross revenue that he worked and subtract 37.5%?


#10

I will need to respond in the morning ok - Its too late to think clearly and respond with any clarity.

Jeff


#11

Updates?


#12

I will try to address those three inquiries in this post Washh :

They can claim up to 54.5 cents a mile as a deduction on their federal tax returns when using their own vehicle. So, I was asking if they are claiming this and getting that 5% from you also. If you continue to pay them 5% it needs to go under regular expenses rather than payroll ( you called them employees right - NOT Subs ). If not you are paying payroll taxes on the 5% in addition to the already base pay of 30%. Alternately, you can pay the mileage of 54.5 cents weekly and then at the end of the year take that as a deduction on your taxes. If I were an employee and I was doing $300.00 a day and getting a 5% gas rate from you - that would only be $15.00. That means that anything I drive over 22 miles and I am better taking the 54.5 cents a mile. 30 miles x 54.5 cents = $16.35 …see what I mean ?

You asked if I pay 37.5% per job or per total each day. We Pay on the total but it’s the same either way. I arrived at $45.00 for my company as a min baseline gross for total day average on assuming that they will be able to do $1.00 worth of work per minute when at the customers actually cleaning the glass. This is not unusual to be able to do $1.00 per minute ( $54.00 job can be done in 54 minutes ). So…Are your jobs really overpriced or are the workers not efficient. I ALWAYS focus on the latter first as a way to hit our target and " Fix the problem ". If we are doing the job efficiently at the $1.00 per minute pace and the job is only netting say .60 per minute - then the price needs raised.

The 37.5 % that I pay is based on this formula and our added total payoll taxes of 18% for every $1.00 of payroll. 37.5% x 18% = 44.25 % total payroll cost. My non payroll expenses are at about 15-20% annually so that leaves pretax owner cashflow of about 35-40 %.

If we train them sufficiently on route work they will make a " minimum " of $16.80 hour average from start to finish of day - 8 hours = $134.40 ( It means they have done $358.00 worth of work ).

Have I helped clear any of that up Washh ?