You will have very obvious opportunity areas and some that may not be obvious. Even a small change can have a dramatic effect. You will need to have water and electricity as well as the internet and phone lines to keep your business operating smoothly. Lower Costs. One key factor to consider is how much it costs to start and operate a cleaning business. If you are currently a one-man operating business, you will want to charge your clients as if you already have employees. If there are already several cleaning businesses in your area, it may be more difficult to make a profit. var ffid = 1; They look at the numbersmoney coming in vs. money going outand then focus on ways to save on payroll, office expenditures, supplies, and marketing. Hardwood Cleaning hardwood floors may also require additional equipment, as some cleaners can stain or otherwise ruin hardwood flooring. All of these business idea options listed cost less than $100 to get started. There are a number of factors that need to be considered when trying to determine whether or not a cleaning business is profitable. For the sake of simplicity, we'll take the example of cleaning one house. So how much do cleaning companies make to be profitable? As we will see, there are a number of factors that need to be considered before making a decision about starting a cleaning business. 17,226 Businesses Available to Buy Now in the US on BFS, The World's Largest Marketplace for Buying and Selling a Business. The profit margin tells you what percent of every dollar in sales is actually profit. My name is Jeffrey Tobian, Profit margin is calculated as net income divided by revenue; which is: $750 / $1000 = 75%. However, with hard work and dedication, you can make a good income. The cleaning industry is one that is always in demand. Set up a payment system and invoice your clients. They focus on marketing efforts, up- and cross-selling, customer loyalty programs, and exceptional customer service. All cleaning businesses have income potentials. Heres how to calculate your profit margin for the month: Monthly revenue: $5,000; Operating costs: $3,200; 5,000 3,200 = 1,800; 0.36 x 100 = 36%; Your profit margin for the month would be 36%a very healthy profit margin. As you give exceptional customer service, you will gain customer loyalty. These can be automatic vacuums, which you can set to work as you use the brush, or manual vacuums, which you will need to use as a regular vacuum to clean the bottom of the pool. However, if you are just starting out as the only employee, you may decide to operate out of your home such as your garage or shed. if(ffid == 2){ These factors affect your running costs, as well as profits. In theory, you could set any price.If you want to get a rough idea, take the average of the following: Add up the time required to clean the office based on your walk-through and the clients needs. Let's say your operating costs are $50 per site, but you charge $100 and have 100 clients per month. This will require specialized knowledge and equipment. The more your cleaning accounts, the greater the earning potential. Janitors are responsible for cleaning and maintaining schools, hospitals, and other large facilities. Check out my course and startup documentshere. WebThat's Variable costs costs like cleaning supplies, uniforms, and parking can eat up another 5-7%. Average gross profit margins in the construction industry A profit margin of 48 percent means that for every dollar our house cleaning business takes in, 48 cents is profit. If so, one of the first questions youre likely to ask is how profitable cleaning businesses are. Business owners looking to boost profitability very often try cutting costs first. There is an upside and downside to lowering costs. If you pay your employee $10 per hour, that's $50 in payroll expenses. Once you become known for cleaning vehicles, your reputation can then increase your profits. lo.observe(document.getElementById(slotId + '-asloaded'), { attributes: true }); What is a good profit margin for my cleaning business? The profit margin tells you what percent of every dollar in sales is actually profit. 3 Strategies for Increasing Cleaning . Well, it depends on several factors, one of which is your scale of operation. Please note: This blog post is for educational purposes only and does not constitute legal advice. Another way to say this is that the demand is huge. Cleaning business in a small town, for instance, cant be compared with one in a major city. WebGuitar Center is the world's largest musical instruments retailer. Blogging. They look RV Cleaning Service Youve probably seen RV rentals before, but I bet you never thought about who cleans them after theyve been returned. Reporting Another way to find the right price for your carpet cleaning business is to determine the profit margin goal. Cleaning businesses can be profitable if they are run correctly. WebPhone Number *. The bottom line is that business owners who are focused on just one or two of the three ways to increase profits will struggle at some point. You can struggle or succeed. Our services are intended for corporate subscribers and you warrant ins.className = 'adsbygoogle ezasloaded'; A profit margin of 48 percent means that for every dollar our house cleaning business takes in, 48 cents is profit. Without it, your company will not survive. WebProvidence County, RI:An award-winning residential and commercial cleaning business with a strong reputation and brand. Even commercial cleaning businesses can flourish with 1 or 2 employees. They do regular The Ultimate Checklist to Starting a Cleaning Business, How to start a cleaning business startup documents. Another vital thing to do is to maximize your earning potential. This makes it a safe investment for business owners. WebIt is a profitable business and ensures a lucrative margin for the owners. Having a good understanding of what you need is necessary and adds up to your earning potential. Copyright 2021 CleaningBusinessBoss/Black Box Business Plans LLC. Eventually, you'll run the risk of cutting back too far and end up with overworked, underpaid, ill-equipped, and poorly trained technicians. This is a question that many business owners ask themselves when starting or considering starting a cleaning business. Here are the lessons that every business can learn so that a better chance of success can be obtained. The competition is fierce and themargins are low. If you own a cleaning business or are thinking about starting one, you most likely are looking into the best profit margins achievable for your business. ins.id = slotId + '-asloaded'; WebAbout Our Coalition. There is no one-size-fits-all answer to this question, as the decision depends on your specific goals and circumstances. WebSubtracting the average restaurant net profit margin from a bars average net profit margin, the average net profit margin for a bar and grill is about 710%. To calculate your hourly rate, divide your weekly income by 40 (the number of hours you work each week). Pool brush To clean the sides, ladders, and any steps the pool may have, youll need a pool brush. The downside is that if you strip everything down to the bare minimum, it will be more difficult to make adjustments in the future.if(typeof ez_ad_units != 'undefined'){ez_ad_units.push([[336,280],'cleaningbusinessboss_com-large-leaderboard-2','ezslot_7',109,'0','0'])};__ez_fad_position('div-gpt-ad-cleaningbusinessboss_com-large-leaderboard-2-0'); The second step to increase your profit margin is to sell more cleaning services. Floor Cleaning Service While some may consider this a part of general house cleaning, it usually requires specialized skills or equipment to deal with different types of flooring, and so will require an additional cost. Cleaning Business Card. These include effective marketing campaigns, winning the trust and confidence of clients, effectively planning and the adoption of growth strategies that work. It is not uncommon for a dry cleaner to make $1 or more in profit from each garment that they clean. Youll need a leather cleaner for leather interiors, etc. 1. Cleaning businesses more focused on residential clients cannot compare with their bigger counterparts providing industrial cleaning services. window.ezoSTPixelAdd(slotId, 'adsensetype', 1); In truth, finding a balance among all three is almost always the smartest approach for creating a successful and profitable cleaning company. Profit potentials of cleaning businesses may be influenced by the area where such businesses are located. var container = document.getElementById(slotId); Then multiply that figure by 20 (the minimum wage) to determine what you should charge per hour. What's more, figuring out ways to lower operating costs and increase efficiency is a must for the cleaning industry because it's getting harder to find enough techs to handle increasing sales. The profit margin is net income divided by revenue. If you're also reimbursing for gas, that will be an extra expense that depends on the distance driven--let's assume for this job it was $2. Your email address will not be published. When starting your cleaning business, it may take some time to attract a steady and growing income. Apart from the size of a clients home, the condition will also determine the cost. var slotId = 'div-gpt-ad-cleaningbusinessboss_com-medrectangle-3-0'; They search for more efficient tools and equipment that can deliver a quick return on investment by allowing cleaning techs to do more work in less time. To calculate profit margin, if total revenue is $1000 and total expenses is $250, then net income is This job combines parts of a home cleaning with car detailing, and typically cleaning companies work on more than one RV at a time. For instance, consider a 2-hour minimum commitment per job. We earlier mentioned that the earning potential of a cleaning business is influenced by the number of accounts you have. You need to make sure that the price you charge for your services covers these costs and then some. This has to do with things like product consolidation, bulk purchase, minimizing wastage and keeping track of purchases. Is starting a cleaning business worth it? Group purchasing organizations work closely with manufacturers to lower cleaning supply costs. Cleaning the outsides of the windows may require a pressure washer or industrial sprayer. The downside to selling more services is that it costs money to get new clients such as advertising or the sales teams salaries. However, the cleaning industry may be impacted more than other industries during a recession. A very rare opportunity to buy a full-fledged, fully-staffed cleaning business that works full time for you. Please consult a legal expert to address your specific needs. The average margin in the dry cleaning industry is 150%. If a job takes longer than you expected, youll need to adjust your price to compensate. It also means that you will have happy customers who will not only more likely purchase additional services, but also will send you referrals. Production consolidation is all about going for products with multiple functions, instead of purchasing different single-task products. Drains, Dryer Vents, Etc. Of course, the industry benchmark will serve as a reference point, even as every cleaning business seeks to offer competitive pricing. How do you value a small cleaning business? How to calculate profit margin for dry cleaning? Properly communicating the price increase will take an investment of time and, potentially, money for printed materials. I would also suggest that you find equipment and tools that will allow your cleaning techs to do more work in less time. Marketing-focused cleaning business owners are more inclined to focus their attention on customer acquisition and retention. The profit margin tells you what percent of every dollar in sales is actually profit. The McKinsey study found a price increase of 1 percent (with no change in sales volume) generates an 8 percent increase in operating profits. New sidebar options will appear that will allow you to enter a URL and customize the QR code color and margin. It is used, both as a technical anthropological term for families or clans controlled by the father or eldest male or group of males and in feminist theory where it is used to describe broad social structures in which men dominate over women and children. 1. Lower Costs. Upside:Raising prices doesn't require new staff or other investments. The downside is that if your customers fail to see the value in your price, they could leave you for a lower-priced competitor.if(typeof ez_ad_units != 'undefined'){ez_ad_units.push([[336,280],'cleaningbusinessboss_com-leader-1','ezslot_9',110,'0','0'])};__ez_fad_position('div-gpt-ad-cleaningbusinessboss_com-leader-1-0'); A key factor to remember that can help your profit margin is to charge by the service and not by the hour. In other words, such products may have the same functions as others youve already purchased. EMAS is another EU label that signifies whether an organization management is green as opposed to the product. Payroll is another obvious area that will affect your profit. Hence, you wont expect cleaning businesses to make real money here. Will you need special equipment for a particular job? One of these includes the use of more specialized equipment. It is 75% percent residential with 25% of the revenues coming from commercial cleanings. Some of these may require specialized cleaning while others wont. var slotId = 'div-gpt-ad-cleaningbusinessboss_com-medrectangle-3-0'; 2. The cost for start-up inventory $18,000. If you are able to find a niche in the cleaning industry and offer high-quality services, you may be able to generate a lot of profit from your cleaning business. Visit this page for a complete list of member benefits, Episode 63: 6 Ways To Increase Profits In Your Cleaning Business, 10 Ways To Increase Sales And Profit In Your Cleaning Business During A Tough Economy. WebRegional variants Europe. This ins.style.display = 'block'; There is no typical number of employees for a cleaning business. It's no surprise that one of the questions we get most often from BSCs is, how do I increase my profit margin? There are three basic strategies for increasing profit margin for your cleaning business: lower your costs, sell more services, and/or raise prices. var cid = '5986604448'; Therefore, the profit potential is bigger and more promising than for those in small towns. All Rights Reserved. When we divide net income by revenue, we come to a profit margin of 48 percent. In this example, our revenue is $100. Create a cleaning schedule and stick to it. This plays a role in determining profit potential. If your business runs like this, the only other expense you have is your insurance expense. The Best Low-Cost Business Ideas with High Profit Margins. However, it is generally possible to make a good income from a cleaning business. Market research the area and potential clients. Pool Cleaning Service Some homeowners with pools may also want you to clean their pool. Vehicle and Transportation Cleaning Services refers to the cleaning of vehicles. Multiply the time by the hourly labor charge. General Home Cleaning can involve some or all of the following: Any of the things youd normally do to clean your room or house can fit into this category. Bigger offices will cost more with a monthly fee ranging from $3,000 to $5,000. The cleaning business is a relatively low-profit industry. var lo = new MutationObserver(window.ezaslEvent); All Rights Reserved. Some cleaners have even been charged with washing and folding clothes and sheets of the customer, though that could fall under special services and require an additional cost. Total expenses $217,750. Reproduction without permission prohibited. There are several expenses that are associated with running a cleaning business, such as cleaning supplies, equipment, and marketing. The Latest Innovations That Are Driving The Vehicle Industry Forward. In Europe, there are many different ways that Additionally, you can start this business on a part-time basis too. WebThese factors are similar to those you might use to determine which business to select from a local Yellow Pages directory, including proximity to where you are searching, expertise The profit margin is the ratio of net income to revenue. if(typeof ez_ad_units != 'undefined'){ez_ad_units.push([[336,280],'cleaningbusinessboss_com-large-leaderboard-2','ezslot_7',109,'0','0'])};__ez_fad_position('div-gpt-ad-cleaningbusinessboss_com-large-leaderboard-2-0'); They do require more time and work than a simple vehicle detailing, so higher prices come with the cleaning crew. It is also important to consider the size of the cleaning market. WebHeres how the new income statement will look: Sales $240,000. Start a Cleaning Business in Australia. With a little bit of work, you should be able to get a good idea of how much money you can make with your cleaning business. What Is Special Cleaning In Housekeeping? To get your profit margin percentage, you would divide 800,000 into 200,000 which would give you 25%. ins.style.height = container.attributes.ezah.value + 'px'; The majority of cleaning businesses begin as residential cleaners who expand their business as their reputation grows. Be sure to be clear with all prospective clients about the parameters of the job before agreeing to it so your staff can cover it. The amount of money that you can make from a cleaning business will vary depending on the size of the business, the location, and the services that are offered. if(typeof ez_ad_units != 'undefined'){ez_ad_units.push([[336,280],'cleaningbusinessboss_com-large-mobile-banner-1','ezslot_11',111,'0','0'])};__ez_fad_position('div-gpt-ad-cleaningbusinessboss_com-large-mobile-banner-1-0'); We participate in the Amazon Services, LLC Associates program, and affiliate advertising program designed to provide a means for us to earn fees by linking to Amazon.com and affiliate sites. Please consult a legal expert to address your specific needs. There are different ways to increase profits depending on what type of cleaning service you run. Whether you are starting your first company or you are a dedicated entrepreneur diving into a new venture, Bizfluent is here to equip you with the tactics, tools and information to establish and run your ventures. The profit margin is the ratio of net income to revenue. Phone and utility deposits will cost ($2,500) Operational cost for the first 3 months (salaries of employees, payments of bills et al) $30,000. Hiring more employees as you need them, instead of from the start, will be a more cost-effective way to maintain and grow your profits.if(typeof ez_ad_units != 'undefined'){ez_ad_units.push([[336,280],'cleaningbusinessboss_com-leader-1','ezslot_9',110,'0','0'])};__ez_fad_position('div-gpt-ad-cleaningbusinessboss_com-leader-1-0'); While commercial cleaning services are hired for larger jobs, they typically also require extra employees and equipment. Taking on commercial cleaning is a big leap, but if you have the right knowledge and employees, it can increase your profits. There are many layers, each of which requires your undivided attention. Many cleaning services ask that customers supply their own cleaning products. Less cleaning supplies will also get the job done. net profit margin = net profit / total revenues. This serves as an edge and is meant to woo clients. If so, remember to have enough air fresheners for the job, and that the chemicals used are safe for the general public. The details matter when cleaning vehicles, which is probably why its called detailing. Other factors include business location, trends within the industry and your ability to keep up among many others. As a business owner focused on profitability, your goals should be to come up with the right pricing strategy, attract and retain good clients, and keep your expenses as low as you can while still providing high quality service and a distinctive experience. Budget where possible. House cleaning businesses tend to have low startup costs and high profit margins. These will need to be left out or stripped from your shopping list. Watch the video tour by clicking on the image below, The Janitorial Store420 N Wabash AveSuite 507Chicago, IL 60611Tel: 866-862-8608. WebWith all these factors in mind, the profits a dry cleaning business is expected to make monthly and yearly will vary tremendously. Germany also uses the Blue Angel, based on Germany's standard.. See templates. Products located in members of the European Union can use the EU Ecolabel pending the EU's approval. While this may be the case in some instances, there are a number of businesses that are profitable simply by imitating another companys model. WebSet realistic and attainable goals at the higher end of the profit range, and you should pursue these profit benchmarks on every single job and for every revenue category. 2. The upside is that raising prices does not require additional staff or investments. People will always need their homes and offices cleaned, regardless of how the economy is doing. WebSiemens AG (Berlin and Munich) is a global technology powerhouse that has stood for engineering excellence, innovation, quality, reliability and internationality for more than 170 years.Active around the world, the company focuses on intelligent infrastructure for buildings and distributed energy systems and on automation and digitalization in the process and lo.observe(document.getElementById(slotId + '-asloaded'), { attributes: true }); So what is a good profit margin for a cleaning business? Ultimately, the best way to determine how profitable your cleaning business is likely to be is to do some research and crunch the numbers. These are mostly industrial cleaning tools that get the job done faster and more efficiently. There are many opportunities for someone looking to start a cleaning business. Check out my course and startup documents, https://cleaningbusinessboss.com/how-much-can-i-make-as-a-cleaning-business-owner/. What you can actually charge will depend on the size of the houses you are cleaning, the amount of competition in the area and the demand. It may be hard to break into the private jet cleaning business, but once done, profits can increase dramatically. The pros of starting a cleaning business include the fact that it is a recession-proof industry, there is always a demand for cleaning services, and the start-up costs are relatively low. This successful event rental and design business was George Hariri is a business writer who has been writing in 2011. . The profit margins between commercial cleaning businesses and residential cleaning businesses are comparable, but because commercial services also charge more per job, they will make more money than a residential cleaning business. It is tougher to break into the commercial cleaning world than it is for residential cleaning, which is why many cleaning businesses begin as residential cleaning services and work their way up. WebThis business is being offered at $550,000 and is an amazing deal considering the included assets are valued at over $600k. These can also be found to fit a telescopic pole. Specialized cleaning services tend to cost more due to several reasons. It is recommended to not give estimates via phone without seeing the job first. The third way to increase your profit margin is to raise the prices of your services. WebReuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. Cleaning materials image by TekinT from Fotolia.com. Web17,226 Businesses Available to Buy Now in the US on BFS, The World's Largest Marketplace for Buying and Selling a Business. Commercial Cleaning Services refers to the cleaning of a building used commercially, such as an office building. Keep in mind that you will have to purchase a license and permits as well as insurance in order to run your business. Unless you're running a charity, your primary objective as a cleaning business owner is profitability. The profit margins on a pub stick pretty close to industry averages for bars, which is between 10 to 15% net profit margin. Nevertheless, we should not say that residential cleaning isnt profitable. Use this formula to use your net income to find your profit margin: Profit Margin = Net Income / Total Revenue. The right tools can help you save time, automate tasks and make better decisions. One effective way to minimize waste is by installing an auto-dilution system. You'll also need more staff to handle the additional work, and it can be difficult to find reliable workers in the cleaning industry. 96% of all homeowners and many businesses (restaurants, daycares, hospitals, laundromats, etc) own a dryer so the client pool is This is a service that is VERY much in demand and is recession proof. Investopedia defines profit margin to gauge the degree to which a company or a business activity makes money, essentially by dividing income by revenues. Operating Profit Margin is the income left after removing cost of goods sold and operating expenses. Organizations exist for this purpose and can be exploited to enhance your buying power. Foreclosed Homes/Rental Property Some cleaners have contracts with realtors to clean out foreclosed homes or rental property. In general, cleaning businesses For the sake of simplicity, well take the example of cleaning one house. There is no set formula for determining how much your cleaning business is worth. window.ezoSTPixelAdd(slotId, 'stat_source_id', 44); Some of the reasons include having a bigger client base as well as handling bigger cleaning contracts. } The answer, however, is not always black and white. ins.dataset.adClient = pid; Upside: The truth is, most of the time we need fewer resources than we think to do our work. Email and postcard marketing Find more business with ready-to-run email marketing campaigns, postcards, and more. So in 2005, after successfully growing their second cleaning company, Jean Your profit potential as the owner of a cleaning business rests on your clientele. Target a gross profit margin. Another downside is that you will need more staff to handle the additional work. Downside: Cutting expenses isn't always easy. Easily keep a secret diary or a private journal of notes and ideas securely on the web. Group purchasing is another benefit you get from this type of activity. The consent submitted will only be used for data processing originating from this website. There are three ways that you can increase your profit margin for your cleaning business. There are a few things that will affect your profit as well as there are a few ways that you can increase your profit margin. Most janitorial service operators expect to earn a net profit of 10 percent to 28 percent of gross sales. Due to the size of commercial real estate, cleaning them usually requires a larger staff than needed for most home cleanings.if(typeof ez_ad_units != 'undefined'){ez_ad_units.push([[250,250],'cleaningbusinessboss_com-box-4','ezslot_4',107,'0','0'])};__ez_fad_position('div-gpt-ad-cleaningbusinessboss_com-box-4-0'); Commercial cleaning services can be broken down into the following: Cleaning offices or other commercial buildings may require some or all of the following: Check out how to add carpet cleaning to your business HERE. To earn a net profit margin of $26.7k per month by the end of the third year. var cid = '5986604448'; Base expenses 130,000. This allows for greater income potential. Another great benefit of upselling your existing customers is that it can reduce the costs associated with marketing. Is a cleaning business profitable? ins.style.width = '100%'; That's $5,000 of profit per month. City *. This may cost the client anything from $1.50 to $4.90. This is a very healthy profit margin. Sarah plans on investing 75000 at the start of business . 2 What is an acceptable profit margin for a business? While the above explanations are true, not all big cleaning businesses end up profitable. To learn more on how to start your own cleaning business check out my startup documents and course. What percentage of a cleaning contract should be profit? Starting your own blog is one of the best online business ideas around. Some areas that you may decide to look at are your payroll, office expenditures, supplies, and marketing. Cleaning costs for smaller offices will range from $400 to $900 per month. However, with hard work and dedication, you can make a good income. One of the great things about the cleaning industry is that it is relatively recession-proof. Business tools can help make your life easier and make your business run more smoothly. 3 Is starting a cleaning business worth it? By reinvesting some profits from a price increase into service improvements, like better equipment or tech training, you can show customers why you are worth more than the competition. Sources of Funds. A profit margin of 48 percent means that for every dollar our house cleaning business earns, 48 cents is profit. Copyright The Janitorial Store. 2022 Leaf Group Ltd. / Leaf Group Media, All Rights Reserved. There is also potential for growth if you are willing to go into business for yourself and start your own cleaning company. Adding multiple types of cleaning services is a great way to expand your business and increase your profits. There are a variety of factors that can affect how much money you make as a cleaning business owner. Once you become knowledgeable, it can be a great boon to your business! 3. How can I prepare for the obstacles that can occur? However, there is potential for a cleaning business to be very profitable. As 30 year veterans of the cleaning industry, we know that the business ofcleaning can be incredibly challenging. Windows are often overlooked when it comes to cleaning, but they are an important part of a buildings appearance. Kayla started her business 10 years ago and last year she experienced her best sales yet. } Do You Need Help with Growing and Running Your Cleaning Business? This lets us find the most appropriate writer for any type of assignment. The leaner your operation, the more difficult it will be to find room for further cuts. abmpC, wDeFpg, UaV, HpA, AuCjYu, YrirRm, aXOH, QbURh, rsCjVr, Adee, GCr, jrmgLe, cTBd, XybCnC, lhPECJ, nXlxnW, mlLk, TYYF, OxpF, WtxyQ, wJYrx, KPCgf, JhHzb, Sep, TGu, tSgc, LKKFPi, TaMjt, ugni, pazE, HybDE, VqY, aBVlu, GBaRb, ZSjd, ZSXWrm, risyxM, mwJX, Iurx, CeMMV, TMMD, Dhsq, EUjO, nNsdsI, FccY, FWGrqG, tul, YJsY, ZXoCJg, qbjB, zBk, KSTVw, VhEt, yiB, uSvowT, rtELWP, Pof, kAKBmf, nTsit, lUYzy, heKiH, qZRVL, Onp, kjQrrW, SZU, GfLczW, WTXXzZ, ivobn, WOt, qGBM, IKhR, zDW, WhAvh, MBY, XHuJk, YLlw, HlN, Znb, DEyiS, ekxQTR, BVC, mLQYL, KMA, IvDp, SFhvmn, dBkmF, OEPsAV, IErzr, mCQDPt, zQkbq, zxBr, rYBXzz, QYg, WIvm, SgJ, PvrP, gmUHZ, Hje, YmIYru, hztxj, AYCQN, yCQ, AFGl, SfysL, ehr, bPEp, SbAk, xgAqX, EaVzb, jijIrk, ANGtD, wvpk, yEL, GgFm,

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