How to Start a Janitorial Business: Cost, Licenses and Profit Potential

Here are the key factors to keep in mind when launching your janitorial business:

1. Range of services — Decide on the range of services you will offer, such as office cleaning, carpet cleaning, window washing, floor maintenance, and residential cleaning.
2. Specialization — Consider offering specialized services like green cleaning, post-construction cleanup, or specialized disinfection services to differentiate your business.
3. Cleaning equipment and supplies — Invest in high-quality cleaning equipment, such as vacuum cleaners, floor polishers, carpet cleaners, and pressure washers. Stock up on essential cleaning supplies, including disinfectants, detergents, microfiber cloths, mops, brooms, and trash bags. Consider using eco-friendly products to appeal to environmentally conscious clients.
4. Licenses and permits — Check local regulations for any specific permits required to operate a janitorial business.
5. Register your business — A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple. Form your business immediately using ZenBusiness LLC formation service or choose one of the top services available.
6. Legal business aspects — Register for taxes, open a business bank account, and get an EIN.
7. Hire staff — Hire reliable and trustworthy staff with experience in janitorial work. Conduct background checks to ensure the safety and security of your clients.
8. Management software — Use scheduling and management software to organize cleaning schedules, track employee hours, manage client information, and streamline operations.

Step 1: Decide if the Business Is Right for You

Pros and cons

Starting a janitorial business has pros and cons to consider before deciding if it’s right for you.

Janitorial industry trends

Industry size and growth

• Industry size and past growth – The US commercial cleaning industry’s projected value in 2022 is nearly $82 billion, reflecting a projected increase of over 4% during the year. The industry has experienced growth of over an impressive 50% over the last decade.((https://www.ibisworld.com/industry-statistics/market-size/janitorial-services-united-states/))  
• Growth forecast – High demand for disinfection and specialized cleaning services in the wake of the COVID-19 pandemic is expected to spur the industry’s growth over the five years to 2026, according to market analyst IBISWorld.((https://www.ibisworld.com/united-states/market-research-reports/janitorial-services-industry/))
• Number of businesses – There are more than a million janitorial services businesses in the US.((https://www.ibisworld.com/industry-statistics/number-of-businesses/janitorial-services-united-states/)) 
• Number of people employed – More than 2 million people are employed in the janitorial services industry.((https://www.ibisworld.com/industry-statistics/employment/janitorial-services-united-states/))

Trends and challenges

Trends in the janitorial industry include:

• The pandemic has increased the demand for janitorial services, but also for very detailed, sanitizing cleaning services. Cleanings are more frequent, but also more time-consuming.
• Green cleaning, meaning LEED compliant cleaning, is a growing trend. LEED cleaning involves using LEED-certified products. LEED stands for leadership in energy and environmental design, a coalition formed to set green standards for buildings.

Some challenges also exist in the janitorial industry which include:

• Employee turnover in the janitorial industry is high, which presents a labor challenge for business owners.
• With the high demand comes a need for greater efficiency. New cleaning equipment that improves efficiency has been developed but comes at a higher price.

What kind of people work in janitorial services?

• Gender – Nearly two-thirds of janitors are male, while about 37% are female.((https://www.zippia.com/janitor-jobs/demographics/#gender-statistics))
• Average level of education – More than half of janitors completed high school.((https://www.zippia.com/janitor-jobs/education/))
• Average age – Most janitors are more than 43 years old.((https://www.zippia.com/janitor-jobs/demographics/#age-statistics))

How much does it cost to start a janitorial business?

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:

• Janitorial cart
• Vacuum
• Buckets, brooms, mops, rags
• Cleaning brushes
• Paper towels and trash bags
• Rubber gloves

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

How much can you earn from a janitorial business?

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.

What barriers to entry are there?

The only barrier to entry for a janitorial business is the competitive nature of the industry.

Step 2: Hone Your Idea

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.

Why? Identify an opportunity

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.

This could jumpstart your word-of-mouth marketing and attract clients right away. 

What? Determine your cleaning services

In addition to basic janitorial services, you could offer additional services including:

• Carpet cleaning
• Tile and grout cleaning
• Window washing
• Furniture cleaning

How much should you charge for janitorial services?

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.

Who? Identify your target 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.

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. 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 Business Name

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 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “janitorial” or “cleaning”, boosts SEO
• Name should allow for expansion, for ex: “Sparkling Services” over “School Cleaning Services”
• A location-based name can help establish a strong connection with your local community and help with the SEO but 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 below. 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 Business Plan

Here are the key components of a business plan:

• Executive Summary: A brief overview of your janitorial business plan, summarizing its key points and objectives.
• Business Overview: An introduction to your janitorial business, highlighting its purpose, location, and legal structure.
• Product and Services: Details about the specific cleaning services your janitorial business will offer, including any specialty services.
• Market Analysis: Examination of the janitorial industry, including market size, trends, and potential customers in your area.
• Competitive Analysis: Evaluation of competitors in the local janitorial market, their strengths and weaknesses.
• Sales and Marketing: Strategies for promoting your janitorial services, reaching customers, and generating sales.
• Management Team: Information about key individuals responsible for running the business and their qualifications.
• Operations Plan: Details on day-to-day operations, including staffing, equipment, and workflow.
• Financial Plan: Projections and analysis of your janitorial business’s financial performance, including income, expenses, and profitability.
• Appendix: Supplementary materials, such as resumes, contracts, or additional documentation supporting your 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.

Step 5: Register Your Business

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 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. 

Choose your business structure

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:

• 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.

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.

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.
• Personal: Self-fund your business via your savings or the sale of property or other assets.

Since startup costs are so low, your best bet is to use personal funds to avoid having debt.

Step 8: Apply for Licenses/Permits

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. 

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 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. 

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.  

You can use industry-specific software, such as Service Autopilot, Celayix, or aspire, to manage your scheduling, cleaning crews, workflows, estimates, and billing.

Accounting

• 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.

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 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. 

Marketing

Here are some powerful marketing strategies for your future business:

• Professional Branding — Create a brand that exudes cleanliness and efficiency, including professional logos, uniforms, and branded cleaning vehicles or equipment.
• Website Optimization — Develop a website that details your cleaning services and client testimonials, optimized for local searches on janitorial and commercial cleaning services.
• Direct Outreach — Network with local businesses, educational institutions, and healthcare facilities, offering introductory discounts or free trial cleanings to attract new clients.
• Social Media Engagement — Utilize LinkedIn for professional networking and Facebook to display before-and-after photos and share customer testimonials.
• Content Marketing — Maintain a blog with posts about best cleaning practices, the benefits of clean workspaces, and the latest industry standards.
• Email Newsletters — Distribute regular newsletters highlighting new services, seasonal cleaning tips, and special promotions.
• Video Demonstrations — Produce videos that demonstrate your team’s cleaning methods and the advanced technology and products you use.
• Experiential Marketing — Offer live cleaning demonstrations at business expos and local trade shows to showcase your methods and products.
• Local Business Partnerships — Forge referral partnerships with related businesses, such as office supply firms, to enhance mutual client bases.
• Referral and Loyalty Programs — Implement programs offering benefits for referrals and rewards for repeat customers to foster loyalty.
• Targeted Local Advertising — Employ advertising strategies in local media, community bulletin boards, and online platforms tailored to the regional market.

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 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: 

• Green cleaning solutions for your health and the environment
• Premium detail cleaning to eliminate viruses
• Green commercial cleaning for less

Networking

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 

Step 12: Build Your Team

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:

• Cleaners – provide cleaning services
• General Manager – scheduling, staff management, accounting
• Marketing Lead – SEO strategies, social media, other marketing

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 Janitorial Business – Start Making Money!

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. 

Q&A Section

Is a janitorial business profitable?

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. 

How much should I pay my janitorial workers?

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. 

Is a janitorial business recession proof?

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. 

What is the difference between a janitor and a cleaner?

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.

How do I differentiate my janitorial business from competitors?

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.