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.
