Watch the full December Core KPI webinar on monthly operating expense.
You stare at the expense line and your first instinct is to find a cheaper supplier, a cheaper vacuum, a cheaper phone plan. That instinct is exactly what keeps your monthly operating expense — one of the 12 core KPIs that drive your margins — higher than it needs to be.
What monthly operating expense actually measures
Monthly operating expense is the core cost of running your business: office and space, sales and marketing, and the salaries of your office staff — what many owners call fixed costs. You can total those line items directly, or reverse-engineer the figure by subtracting cost of goods sold and operating income from revenue.
This is a "red" KPI, meaning lower is better — but it's an unusual one. It isn't tracked inside MaidCentral, and there aren't firm industry benchmarks the way there are for other KPIs. As a rough gauge, operating expense tends to land around 20–30% of total revenue.
Why you can't cheap your way to profitability
Here's the trap. On a sample P&L with $100,000 in revenue and $10,000 in pre-tax profit, shaving 10% off cleaning supplies lifted profit by only about 2% — hours of deal-hunting for almost nothing in return. As Tom Stewart put it, you can't cheap your way to profitability.
The smarter target is your expense percentage, not the raw dollar amount. A $300 vacuum that holds more, needs less maintenance, and lasts longer beats a $100 one — even though it costs more up front — because it lets crews clean faster and deliver better quality.
Three levers that double profit
On that same $100,000 P&L, three moves each double profit from $10,000 to $20,000 on their own:
- Clean 25% more homes. Revenue and cost of goods sold rise together, but fixed operating expense stays put — so its percentage drops.
- Raise your bill rate 10%. Revenue climbs to $110,000 with no added cost, falling straight to the bottom line.
- Lower payroll-to-revenue from 50% to 40% — through efficiency gains, smarter pay structures, or team-vs-solo decisions. The goal is never to pay techs less; it's to make everyone more productive.
Stack all three and the illustrative profit jumps to roughly $43,750. That's the difference between growing and scaling.
Where the savings actually live
Once you stop chasing pennies, focus on efficiency. Zone-based scheduling tightens routes and cuts drive time and fuel. Consistent scheduling and a master schedule keep the same techs on the same homes, lifting quality and retention at once. Automating invoicing, payroll, and notifications — and pushing scheduling and payment control to a customer portal — frees admin hours for higher-value work. Buy supplies in bulk and direct from suppliers, but only audit those costs once or twice a year. Above all, a culture of consistency quietly improves every red KPI you track.
The Monday takeaway
Pull your P&L, calculate operating expense as a percentage of revenue, and stop measuring it in dollars alone. Then pick one lever — a bill-rate bump, a zone-scheduling pass, or a single automation — and run it for a quarter. Growing the top line, not trimming the bottom, is what makes this number shrink.
FAQs
A: Monthly operating expense is the core cost of running your business — office and space, sales and marketing, and office-staff salaries — often called your fixed costs. It does not include direct labor or supplies tied to producing each clean (those sit in cost of goods sold). It's tracked as a "red" KPI, meaning a lower percentage of revenue is better.
A: You can do it two ways. Either total all the line items directly — office salaries, advertising, software fees, insurance, property taxes, and the like — or reverse-engineer it by taking revenue and subtracting both cost of goods sold and operating income. Both should land on the same figure.
A: As a rough gauge, monthly operating expense tends to fall around 20–30% of total revenue. There's no firm industry benchmark for this KPI the way there is for others, so treat that range as a directional target rather than a hard rule and watch your own trend over time.
A: Because supplies are a small slice of the picture. On a sample $100,000 P&L, cutting cleaning supplies by 10% raised pre-tax profit by only about 2% — a poor return on hours of deal-hunting. You can't cheap your way to profitability; the bigger gains come from revenue and labor efficiency.
A: Grow the top line instead. Cleaning more homes, raising your bill rate, or lowering payroll-to-revenue each shrink operating expense as a percentage of revenue without your touching the expense line at all. The aim is a smaller percentage, not a smaller dollar figure.
A: A lot, when combined. In an illustrative $100,000 P&L, cleaning 25% more homes, raising the bill rate 10%, and cutting payroll-to-revenue from 50% to 40% each doubled profit on their own — and stacking all three lifted profit from $10,000 to roughly $43,750. These are sample figures, not guarantees, but they show the leverage in working a few KPIs at once.
A: Start with efficiency. Zone-based scheduling cuts drive time and fuel, consistent scheduling keeps the same techs on the same homes to boost retention, and automating admin tasks frees office hours for higher-value work. Bulk and direct supply purchasing helps too, but only needs reviewing once or twice a year.
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Recommended Reading
The posts below dig into some related ground you might enjoy.
First on the list is Bookkeeping for a Cleaning Business: Accounting Guide , which covers how to set up bookkeeping for a cleaning business, from a weekly routine to tax deductions and hiring help.
We'd also recommend Top 4 Payroll Services for Cleaning Companies, that explores the Four Best Payroll Services for Cleaning Companies. Based on multiple factors we have compiled our research and here are our final results.
Finally, there's Can a Cleaning Business Make You Rich?, which walks through typical profit margins and annual earnings at each company size, plus the common mistakes that hold owner income back.
