Before you embark on your cleaning journey, you must figure out whether it’s the right fit for you. To do this, here’s a balanced look at the pros and cons, industry trends, financial details, and more.
Pros and cons
When validating a business idea, you should always look at both the positives and the negatives of the opportunity to ensure you make a rational decision.
Minimal upfront investment
Quick and easy to get started
Run your business from home — no office required
Your services will always be in demand
Smaller profit margins, as clients focus on price
Tough, physical, even disgusting, work
Cleaning industry trends
Cleaning services can be split into two segments: commercial, or janitorial, which is the much bigger market; and residential. Both are experiencing steady growth of late.
Number of people employed – US janitorial companies employ more than 2 million people.
Trends and challenges
Trends shaping the cleaning industry include:
Growing interest in eco-friendly cleaners and green technologies to reduce the environmental footprint of cleaning services and supplies
Greater demand for sterilized and disinfected surfaces amid lingering concerns about covid-19. As a result, cleaning demand from hospitals and clinics is expected to increase more than half by 2026, according to Research and Markets.
Use of automated and robotic cleaning tools
Challenges in the cleaning industry include:
Lack of adequately trained cleaners
Low cleaning efficiency
Risk of accidents
Most popular states – California and Texas have the highest demand for both residential and commercial cleaning jobs.
How much does it cost to start a cleaning business?
Starting a cleaning services business is relatively cheap, but it’s still a good idea to know what you’re paying for.
Starting a residential cleaning business could cost as little as $1,000 if you already have a vehicle, or don’t need one, and use basic cleaning supplies. However, if you’re looking to launch a commercial cleaning company or take on multiple projects at once, you may need as much as $20,000 to cover more specialized equipment and supplies. On average, though, you’ll need around $10,000 to start your cleaning business.
You wouldn’t be able to do much cleaning without quality equipment! Here are some of the key tools for the trade:
Cleaning solutions and disinfectants
Spray bottles, gloves, sponges and scrubbers
Mops and brooms
If you need any specialized cleaning supplies, you could shop at a specialist such as Cleaning Supplies USA.
Licenses and permits
$100 - $500
$500 - $3,500
Cleaning equipment and supplies
$300 - $5,000
Branding, marketing, and advertising
$100 - $1,000
$100 - $250
$0 - $100
$0 - $7,500
$1,100 - $17,850
How much can you earn from a cleaning business?
Revenue and profit will vary widely depending on capabilities. For solopreneurs, you could work from home and expect to generate revenue of around $50,000 in your first year or two, even with a modest number of appointments. This would mean a pre-tax profit of $40,000, assuming an 80% profit margin.
With more bookings, you can hire additional cleaners to boost revenue and rent an office. For every full-time cleaner you employ at an hourly rate of $35, you should generate an extra $50,000 in annual revenue. With yourself and 5 full-time cleaners, you’d make $300,000 in annual revenue. But your profit margin could reduce to 30% because of the bigger operating expenses. You’d still make a tidy profit of $90,000.
What barriers to entry are there?
The cleaning industry is quite easy to enter as startup costs are low and there are very few experience requirements, unless you plan to deal with dangerous chemicals (as in pool cleaning).
The main barriers to entry in the cleaning space are:
Market saturation and high levels of competition
Low profit margins due to competitive markets
Health and safety compliance for industrial/commercial services
Related Business Ideas
If you’re still not sure whether this business idea is the right choice for you, here are some related business opportunities to help you on your path to entrepreneurial success.
Now that you know whether the industry is right for you, it’s time to flesh out the details of your cleaning business. Let’s begin with identifying an opportunity within the industry.
Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.
Why? Identify an opportunity
It’s all good and well to decide you want to start a cleaning business, but without a reason for offering your services, your success is determined by chance.
First, you might want to consider your ideal client. Offering cleaning services to the elderly, for instance, could be viable, as they may find it difficult to do such work themselves. On the other hand, targeting clients with high income might be a better option as they’re more likely to be willing to pay good money for cleaning services.
On the commercial cleaning side, as mentioned above, it may be a good idea to target clinics, hospitals, medical centers, and testing laboratories, which are increasingly concerned about sterilization these days.
What? Determine your products or services
The opportunity you chose in the previous section will largely determine the cleaning services you’ll offer. For example, if you decide to service elderly clients, your main offering could be regular cleaning such as wiping, dusting, sweeping, and mopping, with the occasional deep clean. But if you choose to go after commercial clients, floor cleaning would be an in-demand service.
At the end of the day, as long as your chosen services are in line with your target market, you’ll be good to go.
Here are some typical cleaning services and products:
As the world becomes more conscious of the environment, the demand for eco-friendly cleaning continues to grow. In a recent Statista survey, nearly one-fifth of those surveyed said they’d spend up to 10% more on eco-friendly cleaning products.
With this information, you could tailor your business to that eco-conscious demographic and charge higher rates for a green clean. On the other hand, you could use eco-friendly products as an add-on service for any interested customers.
Residential cleaning services are the simplest to offer, but can range in complexity. You could offer all of these services below, or specialize in one. A common niche residential service is moving cleaning since these are usually larger projects.
Regular home maintenance: Dusting, vacuuming, washing surfaces, mopping floors, polishing mirrors, and interior window cleaning.
Move-in and move-out cleaning: Deep cleaning walls, appliances, windows, yards, and more.
General deep cleaning: Cleaning out pantries, cupboards, walls, baseboards, fans, and other hidden areas. Similar to moving cleaning but less extensive.
Residential event cleanup: Cleaning up the mess left from an event and getting the home back in tip-top shape.
When it comes to commercial cleaning, the most in-demand service is floor cleaning, according to analyst Allied Market Research. Many different clients fit under this umbrella, from schools and shopping centers to offices, factories, and hospitals.
You could consider the following types of commercial cleaning services:
General office cleaning: Mopping and vacuuming, carpet and window cleaning, removing trash, waxing floors, dusting, and sanitizing bathrooms.
Construction cleaning: Perform a final cleaning and removal of construction materials. type of cleaning may require heavy equipment and tools, which will increase the startup cost requirements.
Disaster and hazardous waste cleaning: This is likely the hardest to get into as you will have to work closely with EPA and OSHA guidelines, but it’s also likely the most lucrative.
How much should you charge for cleaning?
There are three ways to price your cleaning services: hourly, fixed-rate, or long-term contract.
Hourly is the simplest and a good way to get started, especially if you have little experience.
Using a fixed rate is the next step up and requires an accurate estimate. One benefit of using a fixed rate is that you can end up with a high hourly rate if you finish more quickly than expected.
Finally, with the long-term contract, you may end up with a lower overall hourly rate if the workload increases. In addition, clients may want a discount due to the length of the contract. On the plus side, this route ensures steady cash flow over an extended period, and helps build client loyalty.
Before setting service prices, here are a few things you should do:
Research prices of local competitors: According to Home Guide, the average national hourly rate for house cleaning services is $25 to $50 per cleaner. Clearly this rate varies widely, so you’ll want to charge a price that’s in line with cleaners in your area.
Estimate your labor cost: The U.S. Bureau of Labor Statistics indicates that the mean hourly wage for cleaners is about $13.50. Ensure that the price you quote covers the time spent cleaning and other tasks, such as travel.
Estimate the cost of supplies: Usually 6% of labor, or $0.81 per labor hour, based on average wages.
Consider overheads and taxes: Your prices will also need to cover any overhead costs such as rent, wages, utilities, taxes, and marketing. As a solopreneur, you could add an extra 50% to the price to cover these costs. But, if you plan on running a larger company with employees, adding anywhere between 60% – 90% extra would be wise.
Add an appropriate mark-up: The last step of the puzzle is a mark-up to generate profits. While a 1000% mark-up would be nice, you have to stay competitive in your local market, so around 30% to 50% is a good place to start. On average, cleaning businesses add a mark-up of about 40%, or $10 per labor hour.
Based on the information above, the average hourly price for cleaning services is $34.98, but naturally, this will vary depending on your location and expenses.
Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.
Below is an example of hourly price calculations.
Per Labor Hour
Total Direct Cost of Sales
Who? Identify your target market
You should by now have a good idea of the clients you plan to target based on the services you expect to provide. Here are the different clients you can target depending on whether you choose residential or commercial cleaning.
Residents: Would you like to help busy working parents clean up after their kids? What about elderly clients who can’t clean the way they used to?
Landlords: You could offer your services to landlords as a value-add for their rental properties, or offer to clean apartments in between renters.
Property managers: Similar to landlords, but you may get extra projects such as cleaning between open houses or inspections.
Property management companies: While you’re offering cleaning for the properties they manage, you could also take care of their offices.
Educational Institutions: Schools, universities, and other institutions have heavy foot traffic, so regular floor cleaning could be in order.
Businesses and Gov’t: Offices always require regular cleaning so everything stays organized and presentable.
Hospitals: Heavy foot traffic and the pandemic mean floors need regular cleaning and rooms need sanitization.
Builders and construction contractors: Construction sites are always messy and need people to dispose of waste and leftover materials.
Where? Choose your business premises
In the early stages, you may want to run your business from home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and may need to rent out an office space. You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.
When choosing a commercial space, you may want to follow these rules of thumb:
Central location accessible via public transport
Ventilated and spacious, with good natural light
Flexible lease that can be extended as your business grows
Ready-to-use space with no major renovations or repairs needed
Step 3: Brainstorm a Cleaning Business Name
Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.
Here are some ideas for brainstorming your business name:
Short, unique, and catchy names tend to stand out
Names that are easy to say and spell tend to do better
The name should be relevant to your product or service offerings
Ask around — family, friends, colleagues, social media — for suggestions
Including keywords, such as “cleaning” or “maids”, boosts SEO
Choose a name that allows for expansion: “Pure Clean Company” over “Corporate Clean Solutions” or “Event Cleaning Experts”
Avoid location-based names that might hinder future expansion
Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these.
Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.
Step 4: Create a Cleaning Business Plan
Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:
Executive Summary: Brief overview of the entire business plan; should be written after the plan is complete.
Business Overview: Overview of the company, vision, mission, ownership, and corporate goals.
Product and Services: Describe your offerings in detail.
Market Analysis: Assess market trends such as variations in demand and prospects for growth, and do a SWOT analysis.
Competitive Analysis: Analyze main competitors, assessing their strengths and weaknesses, and create a list of the advantages of your services.
Sales and Marketing: Examine your companies’ unique selling propositions (USPs) and develop sales, marketing, and promotional strategies.
Management Team: Overview of management team, detailing their roles and professional background, along with a corporate hierarchy.
Operations Plan: Your company’s operational plan includes procurement, office location, key assets and equipment, and other logistical details.
Financial Plan: Three years of financial planning, including startup costs, break-even analysis, profit and loss estimates, cash flow, and balance sheet.
Appendix: Include any additional financial or business-related documents.
If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.
Make Logos, Business Cards, Social Designs and More!
Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.
Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business!
Choose where to register your company
Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to cleaning businesses.
If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state.
Choose your business structure
Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your cleaning business will shape your taxes, personal liability, and business registration requirements, so choose wisely.
Here are the main options:
Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
Limited Liability Company (LLC)– Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.
We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.
The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN.
Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.
It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.
Step 7: Fund your Business
Securing financing is your next step and there are plenty of ways to raise capital:
Bank loans: This is the most common method, but getting approved requires a rock-solid business plan and strong credit history.
SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
Personal: Self-fund your business via your savings or the sale of property or other assets.
Bank and SBA loans are probably the best options, other than friends and family, for funding a cleaning business. You might also try crowdfunding if you have an innovative concept.
Step 8: Apply for Cleaning Business Licenses and Permits
Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits.
You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more.
This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties. If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.
Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your cleaning business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.
Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.
Step 10: Get Business Insurance
Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.
Here are some types of insurance to consider:
General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
Business Property: Provides coverage for your equipment and supplies.
Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
Worker’s compensation: Provides compensation to employees injured on the job.
Property: Covers your physical space, whether it is a cart, storefront, or office.
Commercial auto: Protection for your company-owned vehicle.
Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of any of the above insurance types.
Step 11: Prepare to Launch
As opening day nears, prepare for launch by reviewing and improving some key elements of your business.
Essential software and tools
Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.
If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.
Develop your website
Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.
You can create your own website using services like WordPress, Wix, or Squarespace. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.
They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google.
Some of your business will come from word-of-mouth or online visitors, but you should still invest in digital marketing! Getting the word out is especially important for new businesses, as it’ll boost customer and brand awareness.
Once your website is up and running, link it to your social media accounts and vice versa. Social media is a great tool for promoting your business because you can create engaging posts that advertise your products:
Facebook: Great platform for paid advertising, allows you to target specific demographics, like men under age 50 in the Cleveland area.
Instagram: Same benefits as Facebook but with different target audiences.
Website: SEO will help your website appear closer to the top in relevant search results, a crucial element for increasing sales. Make sure that you optimize calls to action on your website. Experiment with text, color, size, and position of calls to action such as “Book Now”. This can sharply increase the number of clients.
Google and Yelp: For businesses that rely on local clientele, getting listed on Yelp and Google My Business can be crucial to generating awareness and customers.
Take advantage of your website, social media presence and real-life activities to increase awareness of your offerings and build your brand. Some suggestions include:
Competitions and giveaways – Generate interest by offering prizes for customers who complete a certain action, such as clients who sign a long-term contract get 30% off.
Signage – Put up eye-catching signage at your store and website.
Flyering – Distribute flyers in your neighborhood and at industry events.
In-Person Sales – Offer your products/services at local markets, trade shows.
Post a video – Post a video about your cleaning business. Use humor and maybe it will go viral!
Seek out referrals – Offer incentives to generate customer referrals to new clients.
Paid ads on social media – Choose sites that will reach your target market and do targeted ads.
Testimonials – Share customer testimonials about how your service helped them.
Create infographics – Post infographics and include them in your content.
Focus on USPs
Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your cleaning services meet their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire.
Global pizza chain Domino’s is renowned for having a very strong USP: “Fresh, hot pizza delivered in 30 minutes or less, guaranteed.” Signature USPs for your cleaning business could be:
We’ll finish on time or your cleaning is free!
All-natural, eco-friendly cleaners
All stains removed, guaranteed!
Same day cleaning service if you book before noon
24/7 cleaning — call or book online anytime
You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a cleaning business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in the cleaning industry for years and can offer invaluable insight and industry connections.
The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in cleaning services. You’ll probably generate new customers or find companies with which you could establish a partnership. Online businesses might also consider affiliate marketing as a way to build relationships with potential partners and boost business.
Step 12: Build Your Team
If you’re starting out small from home, you may not need any employees right away. But as your business grows, you will likely need workers to fill various roles. Potential positions for a cleaning business would include:
At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need.
Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.
Step 13: Run a Cleaning Business – Start Making Money!
This is a business that can scale fast. Consider that industry leader ServiceMaster brings in about $2 billion each year.
As you can see, there are many potential clients in the cleaning industry. That’s why it’s a good idea to choose your ideal clients from the start and establish a good relationship with them. By doing this, you’ll not only get repeat customers but can also generate referrals through word-of-mouth. This is why it’s also important to have a good business reputation and be responsive to the needs of your clients.
You’re now ready to start cleaning and making good money!
Cleaning Business FAQs
Is it worth starting a cleaning business?
Yes. The low startup costs and flexible working hours make the cleaning business suitable for most people, and it can be a great choice to gain business experience.
How much does a cleaning company make a year?
On average, a cleaning business makes $71,053 in gross income, while the net profit is estimated to be $20,306.
Can a cleaning business make you rich?
The average house cleaning job generates $138 in gross sales, so to make $1 million in gross revenue, you need to clean 7,246 houses a year. That’s about 20 houses a day based on a 7-day a week working schedule. While that is too much for one person to handle, many companies in the U.S. generate over a million dollars in revenue every year. So, if you hire employees to help you, it’s doable.
Why do cleaning businesses fail?
Most cleaning businesses fail due to several factors, but the most common issues are poor management, carelessness from employees, and missed appointments and delays.
Should a cleaning business be an LLC?
Yes, if you want to legally protect yourself from your business’s liabilities and obligations, you should register your cleaning business as an LLC.