The margin is in the hour, not the invoice
Every decision in a cleaning company reduces to one calculation: what does an hour of cleaning cost to deliver, and what does it sell for. Get that right and the business scales cleanly, because each additional hour behaves like the last. Get it wrong and growth makes things worse, since you are simply repeating a loss more often.
The mistake is comparing charge rate to pay rate. Charge £20, pay £13, assume £7 of margin. The real cost of that hour includes employer National Insurance, the pension contribution, holiday pay accrued on every hour worked, the paid travel time between jobs that no client is billed for, materials, and a share of insurance and supervision. By the time those are in, the £7 is frequently closer to £4, and out of that £4 come the vehicle, the marketing, the admin and anything you intend to earn yourself.
Build the cost per productive hour first. Everything else in the plan — pricing, how many clients you need, when you can afford a supervisor — follows from that single figure.
Domestic and commercial are different businesses
They look similar and behave nothing alike, and trying to run both well at small scale is a common reason cleaning companies stall.
Domestic work pays a higher hourly rate, is won through local search and word of mouth, and is usually paid promptly. It also comes in one and two hour jobs scattered across postcodes, so a cleaner might be paid for eight hours and bill for five. Clients cancel, move house and change their minds, so churn is constant.
Commercial work pays less per hour but concentrates it. A four-hour evening clean at one office is four billed hours with one journey. Contracts run for a year or more, revenue is predictable enough to plan a rota around, and one contract can support most of a full-time role. The costs are a sales cycle measured in months, formal procurement with insurance and training evidence attached, and payment on terms that mean you fund the wages long before the money arrives.
Pick one as the core of the plan and let the other be secondary. The forecast, the marketing budget and the working capital requirement are all different depending on which you choose.
Growth makes the cash gap wider
This is the part that surprises people. A cleaning company that wins a large commercial contract has more staff on the payroll immediately and no additional income for sixty days. Winning three such contracts in a quarter is a genuine cash crisis arriving in the middle of what looks like a very good year.
The plan needs a monthly cash flow showing exactly that: staff costs stepping up when a contract starts, and revenue arriving one to two months later. Then it needs to state where the bridge comes from — retained profit, an overdraft, or an invoice finance facility arranged before it is needed rather than during the emergency.
Where SquarePlan fits
You enter your charge rates, pay rates, expected productive hours, client numbers and payment terms. SquarePlan calculates the true cost per hour with employer National Insurance, pension and holiday accrual built in, then produces the monthly cash flow, break-even point and profit and loss. Add a commercial contract paying on 60 days and you can see the cash trough it creates before you sign it.