A small office. Three cleaning visits a week. P1,500 a month. Your very first customer. What could possibly go wrong?
You have been thinking about starting a cleaning business in Botswana. You have read about the opportunity, explored the costs and imagined the day someone finally says: “Can you send us a quotation?”
Then the call arrives.
An office in Gaborone needs its premises cleaned three times a week. It is prepared to pay P1,500 per month.
You want the client. Having your first contract would make the business feel real. You can picture the before-and-after photos, the recommendation to other offices and the possibility of more work.
But there is one question that matters more than the excitement:
Will this contract make money?
Welcome to The Pula Challenge, a PulaGo series where everyday business decisions meet real financial reasoning. The scenario below is fictional and all prices and costs are illustrative, not Botswana market quotations.
New here? This episode is the sequel to The Cleaning Business Opportunity in Botswana, which covers who to serve first and what it costs to start. That article finds the opportunity. This one prices it.
The offer: would you say yes?
The client wants approximately 13 cleaning visits per month (three per week on a yearly average: 3 × 52 ÷ 12). In this example, you provide the cleaning materials and arrange the transport and labour.
You write a quick budget:
| Item | Monthly amount |
|---|---|
| Contract income | P1,500 |
| Transport | (P450) |
| Cleaning materials | (P350) |
| Labour | (P500) |
| Amount left over | P200 |
You see P200 left and think: “At least I am making something. The first client is always the hardest.”
Your turn
The client is waiting for an answer. Choose yours before you read on — then open your card and see what it costs you.
Accept it. A small profit and a reference are worth it.Show what this choice costs you
The reference is real. The small profit is the part to check. P200 is what is left after transport, materials and labour — not after running the business. On the assumptions in the next section this contract is an estimated P50 a month short, which makes it a reference you are paying about P600 a year to hold. That can still be a decision you make deliberately, with a date on which the price changes. It should not be one you make by accident.
Negotiate. The contract is too tight.Show what this choice costs you
Likely the strongest answer here — but only if you know what you are negotiating towards. “A bit more” is not a number. Break-even on these assumptions is P1,550 and a 20% margin needs P1,937.50, so those are the two figures to walk in with. And price is not the only lever: scope, visit frequency, who supplies the materials and when you get paid all move the cost side as well.
Decline it. Your time is better spent finding another customer.Show what this choice costs you
Not the timid answer. A contract that loses money every month eats the cash and the hours you need to win a better one, and a first customer who will not pay a price that covers realistic costs is usually the one who also resists the first increase. If the price genuinely cannot move, declining is the responsible decision — and it is a great deal easier to say once you have the arithmetic in front of you.
There is no vote counter here and no results to show you: a tally we invented would be exactly the kind of number this episode is telling you to check. The argument happens on the PulaGo Facebook page instead — comment A, B or C and say why. Bonus points if you spot a cost we missed.
The P200 trap
The P200 is not yet your actual business profit.
It is the amount remaining after the listed direct costs, before other expenses of running a company.
What about the cost of replacing a worn mop or vacuum cleaner? The mobile data you use to arrange visits? Invoicing, recordkeeping and the time spent supervising the work?
Suppose the business needs to allocate these additional monthly costs to this contract:
| Often-overlooked cost | Monthly allocation |
|---|---|
| Administration and recordkeeping | P100 |
| Equipment wear and replacement | P100 |
| Phone, banking and communications | P50 |
| Additional monthly costs | P250 |
Now look again.
| Calculation | Pula |
|---|---|
| Monthly income | P1,500 |
| Direct costs | (P1,300) |
| Contribution before overheads | P200 |
| Allocated overheads | (P250) |
| Estimated monthly profit / (loss) | (P50) |
You did not make P200. On these assumptions, you lost P50.
And that could be an optimistic loss: the P500 labour estimate must be checked against the actual hours, applicable pay requirements and employment costs. If you will do the cleaning yourself, your own time also has economic value. No allowance for those costs should silently disappear just because the owner is doing the work.
This is why revenue is not profit, and winning a contract is not the same as winning good business.
How much should you actually charge?
Using the same illustrative assumptions:
- Full monthly cost: P1,550 — the P1,300 of direct costs plus the P250 of allocated overheads.
- Break-even monthly price: P1,550. At this fee the contract costs you nothing and pays you nothing.
- Price for a 20% profit margin: P1,550 ÷ (1 − 0.20) = P1,937.50.
A quotation of around P1,950 per month would produce P400 in monthly profit at those assumed costs, or a margin of about 20.5%.
| Price point | Monthly fee | What it leaves you, at the assumed costs |
|---|---|---|
| The offer on the table | P1,500 | An estimated P50 monthly loss |
| Break-even | P1,550 | Nothing. Costs covered, no profit, no margin for a bad month |
| 20% profit margin | P1,937.50 | P387.50 a month |
| Quoted at a round figure | P1,950 | P400 a month — a margin of about 20.51% |
Margin is not markup, and the difference is the whole calculation. A 20% markup would price this at P1,550 × 1.20 = P1,860, which is a margin of about 16.7%, not 20%. For a margin you divide: price = cost ÷ (1 − margin). The formula holds for any margin under 100%; at 100% it has no answer, which is the arithmetic telling you that you cannot have a price made entirely of profit.
That is a calculation, not a recommended market tariff. You still need to check the size and condition of the premises, cleaning frequency, actual hours, materials, travel, wage requirements, client expectations and the prices customers are willing to pay. VAT treatment, if applicable, must also be considered separately — the figures above are the fee and the costs, not a VAT computation.
Free spreadsheet: the Cleaning Contract Pricing Calculator — Excel is this whole episode as an editable workbook. Replace the illustrative figures with your own fee, visits, labour, transport, materials, overheads and target margin, and it recalculates the break-even, the quote and whether the contract makes money.
Is negotiating always the right answer?
Not necessarily. The right answer depends on what you can change without compromising service quality or legal obligations.
You could:
- Clarify the scope. Are bathrooms, windows, kitchen areas, consumables and deep-cleaning tasks included?
- Reduce avoidable costs. Could visits be scheduled alongside work for another nearby customer, reducing travel?
- Change the package. Would the customer accept fewer visits, provide certain materials or agree to a different service level?
- Set payment terms. Can the client pay a deposit or at shorter intervals so that you are not funding supplies and wages while waiting for payment?
- Protect your people and your standards. Do not make a loss disappear by assuming unpaid owner labour, underpaying workers or cutting essential safety supplies.
If the client will not pay a price that covers realistic costs, declining the contract may be the responsible decision. A bad first contract can consume the time and cash needed to win a better second contract.
Botswana business owners: check compliance too
Pricing is only one part of running a cleaning company. Botswana’s government business information includes a Cleaning Services trade category, and the relevant trade licence or business registration certificate process should be checked for your circumstances. Company or business-name registration and tax obligations are separate considerations.
Useful official starting points:
- Ministry of Trade and Entrepreneurship eServices: trade licences, business registration certificates and the application steps.
- Official doing-business portal: the government’s own guide to establishing and running a business.
- Local Enterprise Authority (LEA): business development support and training for small enterprises.
- Botswana Unified Revenue Service (BURS): tax registration, records and tax obligations, including VAT.
- CIPA: company and business-name registration.
Check the current requirements before quoting for work or commencing operations; the applicable permissions and fees can depend on the business and location. Registering a company does not by itself authorise cleaning operations.
Your turn: what would you do with P1,500?
Imagine the client is sitting across from you, ready for an answer.
Would you take the contract for P1,500, negotiate closer to P1,950, propose a smaller service package, or walk away?
Tell us A, B or C and explain why. Bonus points if you spot a cost we missed.
The best business owners do not simply chase customers. They understand what it costs to serve those customers well.
If our earlier article on the cleaning business opportunity in Botswana inspired you to start, this challenge helps you take the next step: price your first job before you promise to deliver it.
Use the companion PulaGo Cleaning Contract Pricing Calculator to replace the illustrative figures with your own.
For help organising your income and expenses, explore QuickBooks Online support and training from On-Basic.
And when you are ready to formalise and grow your idea, visit PulaGo — or read the guide to registering a company in Botswana.
Could a business idea like this one be investable? PulaGo is exploring Startup Partners, a programme that would put capital and hands-on business support behind one early-stage Botswana business. It is separate from this series — applications are not open, and taking part in The Pula Challenge gives no advantage in it — but the page explains the thinking.
PulaGo — Register. Comply. Grow. On the go.
Editorial note: this educational example is not a supplier quotation, legal advice or a substitute for checking current Botswana trading, employment and tax requirements. PulaGo is a private company and is not affiliated with, endorsed by or part of CIPA, BURS or the Government of Botswana.