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How to Start a Cleaning Business
Starting a cleaning business is one of the simplest opportunities out there. With minimal equipment and experience required, you could even get up and running in a week or less!
This explains why the US cleaning industry has seen steady growth in recent years and is now worth billions. Still, if you want to make the most of this opportunity, you’ll need the right information.
Thankfully, you’ve come to the right place, as this step-by-step guide provides all the insight you’ll need to develop and launch your successful cleaning business.
Let’s begin with the crucial first step.
$1,100 to $17,850
Time to build
Step 1: Decide if the Business Is Right for You
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
- Strong competition
- Smaller profit margins, as clients focus on price
- Tough, physical, even disgusting, work
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. Market analyst IBISWorld values the US janitorial sector at nearly $76 billion and expects 4% growth in 2021.https://www.ibisworld.com/industry-statistics/market-size/janitorial-services-united-states/ Analysis firm Research and Markets, meanwhile, foresees steady 6% annual growth for the US cleaning services industry through 2026. … Continue reading
Two of the leading industry trends are growing interest in eco-friendly cleaners and green technologies, to reduce the environmental footprint of cleaning services and supplies, and 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.
|City||Residential Cleaning Jobs|
|City||Commercial Cleaning Jobs|
Source: U.S. Bureau of Labor Statistics
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 at launch a commercial cleaning company or taking 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.
|Licenses and permits||$100.00||$500||$300|
|Cleaning equipment and supplies||$300.00||$5,000||$2,650|
|Branding, Marketing and Advertising||$100.00||$1,000||$550|
How much can you earn from a cleaning business?
Revenue and profit will vary widely depending on capabilities. For solopreneurs, you could expect to revenue around $50,000 in your first year or two, even with a modest number of appointments.
With more bookings, you can hire additional cleaners to boost revenue. For every full-time cleaner you employ at an hourly rate of $35, you should generate an extra $50,000 in annual revenue. To break this down further:
- Solopreneur: $50,000
- 2 full-time Cleaners: $150,000
- 5 full-time Cleaners: $300,000
Solopreneurs who operate from home could achieve a 50-80% margin, with costs including cleaning supplies, minimal marketing, and travel. Of course, your expenses will be much higher if you have employees and an office. Larger firms need to pay wages, rent, utilities, and higher insurance premiums, which leaves a margin of around 30%.
In your first years, you could expect a pre-tax profit of $40,000 to $70,000, depending on size. But this is a business that can scale fast. Consider that industry leader ServiceMaster brings in about $2 billion each year.
What barriers to entry are there?
The cleaning industry is quite easy to enter as startup costs are low and there are very little 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
Step 2: Hone Your Idea
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.
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, as this is the least frequently cleaned part of most businesses. Other services include waste disposal, general office cleaning, and window washing. Many different clients fit under this umbrella, from schools and shopping centers to offices, factories, and hospitals.
Analyst Allied Market Research examined the global commercial cleaning industry and found floor care as the most lucrative service, followed by window cleaning, vacuuming, and other services.
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.
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, use the Step By Step profit margin calculator to determine your price points.
Below is an example of hourly price calculations.
|Costs||Per Labour Hour|
|Total Direct Cost of Sales||$14.28|
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.
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 client and focus on them. By doing this, you can also generate referrals through word-of-mouth.
Step 3: Brainstorm a 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: “Jim’s Bakery” over “Jim’s Cookies”
- Avoid location-based names that might hinder future expansion
- Use online tools like the Step by Step business name generator
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 at a web cataloging site such as NameChk. 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. And if you’ve exhausted all your creative juices but still don’t have a business name, don’t stress! Instead, check out our business name generator. Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.
Step 4: Create a 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 yourself before, it can be an intimidating task. Consider hiring an experienced business plan writer on Fiverr to create a professional business plan for you.
Step 5: Register Your Business
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 services.
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 four 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.
- Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the pre-tax profits and are liable for losses.
- Corporation – 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.
- 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.
We recommend that most new business owners form an LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can quickly and cheaply form an LLC using ZenBusiness’s online LLC formation service (it can take as little as 5 minutes). They will check that your business name is available before filing, submit your Articles of Organization and be on hand to answer any questions you have about the company formation process.
Step 6: Register for Taxes
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.
The IRS website also offers a tax-payers checklist, and taxes can be filed online. 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.
- Crowdfunding: Websites like Kickstarter and GoFundMe offer an increasingly popular low-risk option, in which donors fund an entrepreneur’s vision.
- Personal: Self-fund your business via your savings, the sale of property or other assets, and support from family and friends.
Step 8: Apply for Licenses/Permits
Starting a cleaning business requires obtaining a number of licenses and permits from local, state, and federal governments.
Federal regulations, licenses, and permits associated with starting your business include doing business as, health license and permit 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 licenses 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. You could also check this SBA guide for your state’s requirements.
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.
For peace of mind and to save time, we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state, and provide them to you to make sure you’re fully compliant.
Step 9: Open a Business Bank Account
Before you start making money you’ll need a place to keep it, and that requires opening a bank account.
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.
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. 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.
You can create your own website using services like WordPress, Webflow, 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.
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.
Cleaning management software will help you schedule appointments, manage customer data and even invoice your clients. Here are three top options:
- Cleaning Business Software: Makes scheduling appointments easy and stores client info in easy-access database
- Jobber: Tracks project progress, accepts multiple payment options, and optimizes travel routes
- Housecall Pro: Reduces paperwork and smoothes dispatching; offers risk-free 14-day trial
Some of your business will come from word-of-mouth or online visitors, but still you should invest in 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.
- Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero.
- 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.
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
- Disposable/reusable towels
- Mops and brooms
If you need any specialized cleaning supplies, you could shop at a specialist such as Cleaning Supplies USA.
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:
- General Manager
- Marketing Lead
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 hire a recruitment agency to help you find talent.
Step 13: Start Making Money!
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.” Some 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
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.
- Optimize calls to action – Experiment with text, color, size, and position of calls to action such as “Clean Now”. This can sharply increase purchases.
- 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
Build Affiliate Relationships
Affiliate marketing is advertising in which you compensate third parties (i.e. your affiliates) in order to generate traffic to your website. You can develop long-term relationships with these affiliates and generate traffic for each other on an ongoing basis.
You’re now ready to start cleaning and making good money! But you might want to bookmark this page, just in case.
Cleaning Business FAQs
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.
The total investment needed ranges from $1,100 to $17,850, but on average, you’ll need $9,475.
On average, a cleaning business makes $71,053 in gross income, while the net profit is estimated to be $20,306.
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.
Most cleaning businesses fail due to several factors, but the most common issues are poor management, carelessness from employees, and missed appointments and delays.
Yes, if you want to legally protect yourself from your business’s liabilities and obligations, you should register your cleaning business as an LLC.