Maximize Revenue While Providing Excellent Value

Pricing is where many portable sanitation operators leave money on the table. Price too low and you're working hard with minimal profit. Price too high and you lose customers. Get it right and you build a thriving, profitable business. Here's how to price your services strategically.

Understanding Your Costs

Before you can price effectively, understand your costs:

Direct Costs (Per Unit Serviced)
• Equipment depreciation
• Fuel for pumping truck
• Water for cleaning
• Chemicals and supplies
• Labor (your time or employees)
• Maintenance and repairs
• Transportation

Indirect/Fixed Costs (Monthly)
• Office space and utilities
• Vehicle payments and insurance
• Equipment financing
• Software subscriptions (SanMan)
• Marketing and advertising
• Permits and licensing
• Business insurance

Calculate Your Minimum Price

This is where you break even. Here's a basic EXAMPLE calculation:

1. Total monthly costs (fixed + variable) = $8,000
2. Average services per month = 400 units
3. Minimum price per service = $8,000 ÷ 400 = $20/unit

This is your floor. Never go below it. But you're not in business just to break even—you need profit.

Profitability Pricing Models

Model 1: Cost-Plus Pricing
Formula: Minimum Price + Desired Profit Margin
Example: $20 minimum + 50% markup = $30/service
This is simple and ensures profitability, but doesn't account for market rates.

Model 2: Market-Based Pricing
Research competitor pricing in your area and price accordingly. Avoid competing solely on price—offer better service or value instead.

Model 3: Value-Based Pricing
Price based on customer value received, not just your costs. Premium customers (events, corporate) pay more than basic contractors.

Model 4: Tiered Pricing
This is the most profitable approach:

• Standard Service (basic maintenance): $25-35
• Premium Service (includes deodorizing, enhanced cleaning): $40-50
• Maintenance Programs (weekly recurring, discounted): $20-30/service
• Emergency Service (after-hours): 50% premium to standard
• Seasonal Discounts: 10-15% off winter contracts

Strategic Pricing Tactics

1. Minimize Discounting
Every dollar discounted is lost profit. Instead of discounts, offer value-adds:

• Free additional services (extra cleaning, deodorizer)
• Service guarantees (4-hour response time)
• Loyalty programs (rewards for repeat business)
• Bundle services (save when servicing multiple units)

2. Price for Growth Seasons
Event season pricing can be 30-50% higher than off-season. Don't leave this money on the table. Customers expect premium pricing during peak times.

3. Add Ancillary Revenue
Increase profit without raising service prices:

• Handwashing station rentals
• Portable soap dispensers
• Toilet paper and supply sales
• Solar lighting rentals
• Specialized equipment (ADA-compliant units)

4. Optimize Route Efficiency
Use SanMan software for automated routing to reduce fuel and labor costs. This improves margins without raising prices.

5. Reduce Waste and Inefficiency
• Consolidate service routes
• Minimize travel between jobs
• Reduce truck downtime
• Streamline chemical usage

Pricing for Different Markets

Construction Sites
Budget-conscious, need reliability. Price: $25-35/service
Strategy: Long-term contracts at slight discount for guaranteed volume

Special Events
Willing to pay premium for service. Price: $40-60/service
Strategy: Higher margins, better service, guaranteed availability

Parks & Recreation
Government contracts, predictable volume. Price: $20-30/service
Strategy: Reliability and consistency, competitive bidding

Festivals & Fairs
High-volume, short-term. Price: $35-75/service (may vary by duration)
Strategy: Premium pricing for short-term, intensive service

Implementing Price Increases

If you've been underpricing, raising rates should be gradual but intentional:

• 5-10% increase annually is reasonable
• Communicate value improvements along with price increases
• Give existing customers notice (30+ days)
• Frame increases as necessary to maintain service quality
• Consider grandfather pricing for long-term customers

Use Data to Optimize Pricing

SanMan software tracks profitability by customer, route, and service type. This data reveals:

• Your most profitable services and customers
• Which routes are inefficient
• Seasonal pricing opportunities
• Where to focus marketing efforts

Common Pricing Mistakes to Avoid

❌ Underpricing to win customers (you'll never be profitable)
❌ Not adjusting for market conditions (seasons, competition)
❌ Ignoring indirect costs (they're real costs)
❌ Competing on price alone (never sustainable)
❌ Not tracking profitability by customer
❌ Offering discounts to discount-hunters (wrong customer type)

The Bottom Line

Your pricing should reflect your costs, market conditions, and the value you provide. Use data-driven decisions (enabled by SanMan software) to optimize pricing and maximize profitability. Build pricing strategies that reward loyalty, efficiency, and service excellence.

Ready to optimize your business? Schedule a free consultation with TOICO. Call 1-888-935-1133 or visit www.toico.com/sanman to learn how SanMan software helps you track profitability and make better pricing decisions.