The Numbers Tell the Story: Financial Discipline That Fuels Growth in Cleaning Businesses
If you own a residential cleaning business and feel like your books are just... fuzzy, this episode of the Five Door Media Podcast is for you. We brought back, Matt Ricketts, founder of Better Life Maids and an M&A-savvy leader in the residential cleaning industry, to dive into the financial side of building a business that grows and lasts.
Matt doesn't just talk theory. He's built and scaled his own successful company and now advises other owners on how to grow sustainably, structure their businesses to sell, and think like an operator, not just a technician.
Here are the key takeaways from our conversation with Matt Ricketts:
Get Your COGS Under Control
One of the biggest profit killers in cleaning businesses? COGS (cost of goods sold) that's too high. Matt sees far too many companies running with COGS in the 60-70% range, and by then, it's nearly impossible to dig your way out.
“Once your COGS creeps above 50%, problems start to compound,” Matt explains. And most of that comes down to how you're paying your cleaners. Forget trying to trim costs on supplies or vacuums - those are small dollars. Labor is where you win or lose.
Pro Tip: Build a compensation plan that aligns with your pricing strategy. Paying 45% to techs might seem competitive, but if you're not charging enough, you're just setting yourself up to struggle.
Your Pricing Model Needs to Be Smarter
Pricing based solely on square footage? Matt says: not so fast. "A bedroom and a kitchen may be the same size, but one takes 12 minutes, the other takes an hour."
Instead, he recommends pricing by room and using square footage only as a modifier. Build a base model for homes, then customize. This gets your labor content right, and that’s where your profit begins.
Know Your CAC Like Your Bank Balance
If you're not tracking your CAC (customer acquisition cost) weekly, you're already behind. Matt breaks it down simply: ad spend divided by new customers that hit QuickBooks. Not leads. Not sales calls. Actual new paying customers.
Matt's team spends around $375 to acquire each new customer, and he knows exactly how long it takes to break even (about two cleanings).
Why spend that much? Because he knows the lifetime value of those customers, and he’s willing to lose money upfront to gain long-term profit. That's the power of contribution margin thinking.
Adopt the Contribution Method Mindset
This is the game-changer: stop obsessing over the first sale. Instead, ask: how much gross profit will this customer contribute over their lifetime?
Matt shared how they model lifetime gross profit and blend one-time and recurring clients into a simple formula. That allows his team to scale smart, track ROI, and stay agile.
The result? A 6.8x return on marketing spend. And even at a $375 CAC, that’s a healthy, repeatable number.
Weekly Financial Rhythms = Better Decisions
Matt doesn’t wait until the end of the month to look at the numbers. He and his team track key financial metrics weekly:
CAC
New customers
Gross sales
Average invoice value
Expenses
Bank balance
This kind of cadence builds financial visibility and prevents end-of-month surprises. It also helps you spot leaks (like creeping subscriptions or rising indirect labor) before they drain your margins.
Spending More on Marketing Can Be a Good Thing
Most cleaning businesses underinvest in marketing. Matt's take? 8-11% of revenue is usually healthy if you're trying to grow. His team spends over $30K/month in ad spend, because they know exactly what it returns.
Growth costs money. But if you know your CAC and your lifetime value, you can confidently "buy" revenue and know it will pay off.
Thinking About Selling? Build a Business Buyers Actually Want
Matt also dives into the world of M&A, sharing what makes a cleaning company attractive to buyers:
10+ years in business
Strong, stable staff
Recurring revenue
Clean books
Reasonable seller expectations
Want a higher multiple? Build a brand people trust and a system buyers can plug into.
Bonus tip: Don’t rebrand too fast. The logo and name that have kept customers loyal for decades are worth more than you think.
Final Thought: Numbers Tell the Story
Whether you're looking to grow, sell, or just stabilize, Matt's message is clear: You can’t afford to ignore your numbers. It doesn’t take a finance degree to lead with financial clarity. It just takes discipline, rhythm, and the right mindset.
Ready to build a more profitable business? This episode is a masterclass in financial strategy for home-service owners.
