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The Pricing Puzzle

Determining costs for commercial jobs

As any pool business with commercial clients knows, the work can differ greatly from residential projects, which makes pricing a challenge. While some pool companies steer clear of commercial jobs, others learn to navigate pricing as they go.

When setting pricing for commercial clients, look at the square footage of the pool, the amount of chemicals required to care for it and the time commitment involved in its upkeep. Luke Norris, president of Luke Pool Service in Atlanta, says pricing commercial jobs around usage and the client’s budget is most effective for his business.

“We bid pools by the amount of time it will take to clean the pool plus the estimated chemical usage over the whole year,” Norris says. “In our area, most pools are seasonal so it also includes opening and closing, and if they have bathroom facilities on the property that they want us to service, then it includes that as well. [Typically, that means] wiping down and sanitizing toilets, cleaning mirrors, sweeping, mopping, emptying garbage and replenishing supplies.”

Robert Freligh, president of Nationwide Aquatic Consulting, Inc., in Chestertown, New York, is a proponent of having a specific contract in place when working with commercial clients. Freligh advises that each commercial contract outline all costs involved in the job, and the expectations of both the client and the pool business.

While pool companies have differing priorities in setting their prices, consistency within the business is key. To help him remain consistent in his pricing, Norris maintains a Google spreadsheet that contains client information, how many gallons of water the pool holds, the ppm measurement of salt in the pool for proper sanitation, type of filter, frequency of service and service rate.

 “In pricing any job, I figure time required, hourly wages and burden, materials plus 40%, 15% overhead and 25% profit,” Freligh says. “I charge for travel time, but this varies from area to area. Also, on a larger job — like a filter install, chemical controller install or some other job where equipment needs to be purchased — I will put a 50% down payment requirement in the contract, but not on smaller stuff, where little money is required up front, like painting or acid washing.”

Of course, pricing commercial jobs sometimes involves even more forethought than just the basic calculations. “The service company should be aware that many commercial jobs may require a certificate of insurance and have specific requirements for the cost limits on that liability policy,” Freligh says. “If the commercial client is a municipality or other larger operation, prevailing wage may be required. This is a very involved type of job and may require getting recognition or some way of obtaining the opportunity to even bring on the job bid list.”

As with any business, staying competitive is a priority, but that always needs to be balanced with the need to cover your costs and time spent. While it’s inevitably a balancing act with some trial and error, businesses usually find their groove with commercial clients. “Clients tell us if we are too high or low,” Norris says. “Sometimes the contact or property manager will send us the contracts of other companies, so we know what they are charging.”

While you often hear that doing quality work keeps the jobs rolling in, Freligh cautions that this doesn’t necessarily represent the whole picture. While you don’t want to undervalue your services by pricing extremely low, he says, taking a loss on a commercial job or two to build a reputation and establish references is sometimes a valuable beginning step when dealing with commercial clients. Making a positive impression on one commercial client can create a valuable ripple effect that’s worth considering. “Hotel chains are a good example of doing a good job for one client, and the word gets over to the rest of the hotels in that chain in your local area,” Freligh says. “It’s the same with school districts and [YMCAs]. Once you establish a reputation in the commercial part of your job market, you will be surprised how the word can spread. Pricing can inch up once you become established.”

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