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Written by: Carolyn Young
Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.
Edited by: David Lepeska
David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.
Published on January 10, 2022
Investment range
$2,050 - $5,100
Revenue potential
$140,000 - $850,000 p.a.
Time to build
0 – 3 months
Profit potential
$130,000 - $260,000 p.a.
Industry trend
Growing
Commitment
Flexible
Here are the key factors to keep in mind when launching your janitorial business:
Starting a janitorial business has pros and cons to consider before deciding if it’s right for you.
Trends in the janitorial industry include:
Some challenges also exist in the janitorial industry which include:
The startup costs for a janitorial business range from $2,000 to $5,000. The main expenses are for a website and your janitorial supplies.
You’ll need a handful of items to successfully launch your janitorial business. Here’s a list to get you started:
| Start-up Costs | Ballpark Range | Average |
|---|---|---|
| Setting up a business name and corportation | $150 - $200 | $175 |
| Licenses and permits | $100 - $300 | $200 |
| Insurance | $100 - $300 | $200 |
| Business cards and brochures | $200 - $300 | $250 |
| Website setup | $1,000 - $3,000 | $2,000 |
| Janitorial cart and equipment | $500 - $1,000 | $750 |
| Total | $2,050 - $5,100 | $3,575 |
The average price of janitorial services is $.11 per square foot, so cleaning a 5,000 square foot building would be $550. If you start out working by yourself, your profit margin should be about 90%.
In your first year or two, you could work from home and clean 5 buildings a week, bringing in over $140,000 in annual revenue. This would mean $130,000 in profit, assuming that 90% margin. As your brand gains recognition, sales could climb to 30 buildings a week. At this stage, you would rent a commercial space and have a staff, reducing your profit margin to around 30%. With expected annual revenue of over $850,000, you would make nearly $260,000.
The only barrier to entry for a janitorial business is the competitive nature of the industry.
Now that you know what’s involved in starting a janitorial business, it’s a good idea to hone your concept in preparation to enter a competitive market.
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.
Research janitorial businesses in your area to examine their services, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the local market is missing a green janitorial business.
You might consider targeting a niche market by specializing in a certain aspect of your industry such as schools.
This could jumpstart your word-of-mouth marketing and attract clients right away.
In addition to basic janitorial services, you could offer additional services including:
Prices range from $.07 to $.15 per square foot with an average of $.11. When you’re working by yourself, your only costs will be fuel and cleaning supplies, so you should aim for a profit margin of 90%. When you add to your team and rent an office, your profit margin will be closer to 30%.
Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price point. Remember, the price you use at launch should be subject to change if warranted by the market.
Your target market will be mainly business and building owners, as well as school or hospital administrators. You can reach these people by making direct calls to decision-makers, or on sites like LinkedIn.
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. 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:
Here are some ideas for brainstorming your business name:
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.
Here are the key components of a business plan:
If you’ve never created a business plan yourself before, it can be an intimidating task. Consider hiring an experienced business plan writer to create a professional business plan for you.
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!
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 janitorial 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.
Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your janitorial business will shape your taxes, personal liability, and business registration requirements, so choose wisely.
Here are the main options:
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.
Choose Your State
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.
Securing financing is your next step and there are plenty of ways to raise capital:
Since startup costs are so low, your best bet is to use personal funds to avoid having debt.
Starting a janitorial 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.
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 janitorial 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.
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:
As opening day nears, prepare for launch by reviewing and improving some key elements of your business.
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.
You can use industry-specific software, such as Service Autopilot, Celayix, or aspire, to manage your scheduling, cleaning crews, workflows, estimates, and billing.
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 website builders. 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.
Here are some powerful marketing strategies for your future business:
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 janitorial business meets 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 its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your janitorial business could be:
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 janitorial business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in janitorial businesses 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 janitorial services. You’ll probably generate new customers or find companies with which you could establish a partnership
If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a janitorial 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.
As you can see, there is money to be made in the janitorial business. It’s a $72 billion industry and janitorial services, particularly now, are in high demand. Offices, schools, hospitals, and small businesses use janitorial services to protect employees and customers by keeping their premises sanitized.
You can start small and eventually grow your business and build a crew so that you’re not the one doing the cleaning anymore! You’ve gotten off to a great start by learning what you need to know, so you’re now ready to start your entrepreneurial adventure and build a janitorial empire.
The average price for janitorial services is $.11 per square foot, which doesn’t sound like much, but for a 5000 square foot office building that translates to $550. If you only do 5 buildings a week, you’re bringing in well over $100,000 a year.
The average wage for a janitor is $15 per hour. You should check pay rates in your local area to make sure that you stay in line with the competition. Underpaying workers can lead to high turnover which is not good for your business.
While no business is completely recession-proof, a janitorial business can be more resilient than others during economic downturns. This is because businesses and organizations will always need to maintain a clean and sanitary environment, regardless of the economic climate.
Janitors typically handle general cleaning and maintenance in commercial settings, including tasks like sweeping, mopping, and emptying trash. Cleaners often focus on cleaning private homes or specialized tasks such as carpet cleaning and window washing.
To differentiate your janitorial business from competitors, you can focus on providing high-quality services that are tailored to the unique needs of each client. This can include offering specialized cleaning services, such as deep cleaning or sanitizing, using eco-friendly cleaning products, and offering flexible scheduling and payment options.
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