To calculate the gross profit in a cleaning business, you will need to determine your total revenue and subtract your total cost of goods sold (COGS).
Total revenue is the amount of money your business brings in from cleaning services. COGS includes the cost of any supplies or materials used in the cleaning process, as well as any direct labor costs (such as wages for cleaning staff).
Gross profit = Total Revenue – COGS
It is important to keep track of all expenses related to the cleaning service, such as cost of cleaning supplies, wages and any other expenses in order to calculate the gross profit accurately.
Here’s more information on calculating gross profit for a cleaning business:
Determine total revenue: This is the total amount of money your business brings in from cleaning services. This can be calculated by adding up all the money earned from cleaning jobs for a specific period of time, such as a month or a quarter.
Determine cost of goods sold (COGS): COGS includes all the direct costs associated with providing cleaning services. These costs might include:
Cost of cleaning supplies (such as cleaning solutions, paper towels, etc.)
Wages for cleaning staff
Cost of equipment or tools used in cleaning
Any other direct expenses related to providing cleaning services
Calculate gross profit: To find the gross profit, subtract the COGS from the total revenue.
Gross Profit = Total Revenue – COGS
It’s important to keep accurate records of all expenses, so you can calculate the gross profit with confidence. Additionally, it’s helpful to track this information on a regular basis, such as on a monthly or quarterly basis, so you can see how your business is performing over time.
Keep in mind that gross profit is not the same as net profit, which is calculated by subtracting all expenses (not just COGS) from the total revenue. To calculate net profit, you will also need to include overhead expenses such as rent, utilities, and marketing expenses.