A 2020 report values America’s commercial cleaning and maintenance services industry at over $117 billion. Residential and commercial cleaning services alone are growing at a compound annual growth rate of 6.2%, and are expected to top $74 million by 2022.
The cleaning industry is everywhere. Whether commercial janitorial services or in-home cleaning, chimney sweeps or post-disaster restoration, sooner or later everything in our society needs cleaning services. Let’s walk through the steps you’ll typically follow to open your cleaning business.
Benefits of Opening Your Own Cleaning Business
Janitorial services alone had a $61.2 billion market value in 2019. Small businesses for cleaning services are local, can’t be outsourced overseas, and they’re typically a customer service that people and businesses want to retain. Startup is fast, and no experience is required. A cleaning business can get off the ground with:
- Basic cleaning supplies
- Reliable transportation
- Willingness to connect with potential clients
- Simple marketing materials: business cards, website, and/or a Facebook Page
State and local requirements for licensing and liability insurance vary, but cleaning businesses typically operate with relatively low startup costs and overhead. Since cleaning services are often recurring, you can lock in a stable clientele and workload that’s right for you.
How to Start Your Own Cleaning Business Checklist
As you plan and begin your cleaning business, think through how you’d like it to run, what your ambitions are for growth, and how you want the company to fit into the rest of your life. Also understand practical considerations, such as state or local requirements, business insurance, trends, and opportunities in your area.
Get underway on your new cleaning business with the checklist below.
1. Create a Business Plan
Yes, you need a business plan. That doesn’t mean a complex, thick brick of paper, because a business plan can be as short as several pages. Writing a business plan helps you think through your venture’s purpose, market, finances, and operations.
Create a business plan where you:
- Clarify your company’s idea. Are you a one-person show who wants to stay that way? Do you have visions of multiple locations and employees?
- Identify what issue or problem your business can solve. Customers pay for you to solve a problem that they either can’t or don’t want to solve themselves.
- Set SMART objectives. Outline goals that are Specific, Measurable, Attainable, Realistic, and Timely. SMART goals help you track progress, so you can determine whether or not you are meeting your goals for growth, revenue, customer base, operations, personnel, etc.
- Spot potential problems. Every startup deals with delays, mistakes, and roadblocks. You can’t spot every problem in advance — but you can spot some. Try to anticipate potential problems and how you’ll resolve them before they threaten your operations.
- Measure progress. Use your time-management skills to determine the metrics you’ll track, how often you’ll review progress, and how you’ll evaluate the state of your business and make changes.
Don’t spend days on this, but do the work. Too many new business owners skip this step, then run into trouble getting funding, miss important setup steps, and fail to understand their customers and competition. Skip the struggle, and arrive with a plan.
2. Choose a Business Structure
- Sole props are the easiest entity to establish
- Review potential business taxes and structuring and how it may impact your self-employment income
- LLCs can provide liability shields that can help protect your personal assets. Check state law, though, because the degree of protection varies state to state.
- Sole owner or multiple owners? The “sole” in sole prop means the business can have only one owner. For multiple owners, start an LLC. For a sole owner, either entity may be right for your business.
How do you plan to fund your startup? There are several paths you can take.
Sole props may be able to access additional funding resources from the Small Business Administration (SBA), and it can be easier to use personal assets for funding your business. LLCs, however, may find a warmer welcome for commercial bank loans, venture capital, or other private funding sources.
3. Determine Your Business Costs
To stay open, your cleaning business has to manage cash flow and expenses. Having a reasonable sense of your operation’s costs will help you price your cleaning services and figure out how to manage cash flow.
For starters, estimate the price to start a small business.
What are your fixed costs? Fixed costs may change over time but are stable for set periods, such as an annual lease. They include insurance, utilities, leases, and mortgages.
What are your variable costs? These recurring costs fluctuate and can cover payroll, taxes, supplies, cleaning products, and fuel.
Choose your target market: Residential cleaning will have different costs, requirements, and expectations than commercial cleaning. Specialty niches, such as carpet cleaning or chimney sweeping, will also have their own niche considerations. Other factors may affect the costs you have for servicing your target market, such as a preference for environmentally-friendly cleaners, or additional sanitation requirements due to the COVID-19 pandemic.
- Costs for transportation, supplies, and equipment. Account for how you’ll budget for maintenance, re-supply, replacements, and upgrades.
- How will you charge clients? Cleaning businesses use a variety of cost structures, including all-inclusive packages, time and materials, and flat fees per service.
- Finalize costs and pricing. Use your understanding of business costs to set your pricing and make sure it works with what your market accepts.
To give you a general idea of the costs you may face, here are common startup expenses for a low-cost cleaning business:
- Business license and permits: $100 to $500 to register as an LLC
- Insurance: May be $500 to $3,500 annually, depending on number of employees
Your cleaning equipment and products may range $300 to $600. High-quality, commercial-quality vacuum cleaners can cost hundreds of dollars, but all-purpose cleaning solutions can be as low as $10. Brooms, mops, and other basic dusting supplies can be procured for less than $50.
Don’t neglect advertising, marketing, and labor costs either. Expect to invest up to $200 for print and online marketing, such as printing business cards and setting up a basic website. Typical cleaning job labor costs start at an hourly rate of $12 per employee. Adjust depending on prevailing rates in your area.
How will you fund your cleaning business’s startup costs?
No matter the scale of your business, starting up will cost money. How you fund your cleaning business startup costs is a crucial decision:
- Government resources: SBA loans can provide attractive repayment periods and low interest rates. However, the approval process can be time-consuming, and programs may require good or excellent credit.
- Credit cards: Your wallet may already hold a funding source. Credit cards can increase your spending power, but high interest rates will cost you.
- Bank loans: Loan costs may be tax deductible, and you maintain control of your operations. Beware that guidelines and credit expectations can be strict, and you’ll need to provide collateral.
- Friends and family: You may be able to raise a large sum or multiple small sums, plus you have granular control over the terms of the loan. If there’s no contract or if you run into problems with repayment, though, you risk harming your personal relationships.
4. Name Your Business
Every business needs a name. As a sole proprietor, you can generally do business with your name alone. However, most cleaning businesses will want to come up with a good name that reinforces their brand:
- Is the name easy to pronounce?
- Is another business using the name? State governments usually have searchable online databases where you can look up business names.
- Can you register a website domain name that uses your business name?
- Register your company name and entity with the relevant state and/or local offices. (This may also require registering your trade name, also known as a DBA, or “doing business as.”)
5. Register Your Business and Open Financial Accounts
Whether a sole prop or an LLC, you need to keep your personal and business financial accounts separate. At the least, your company needs a business checking account. That way it’s easier to track income and expenses, manage tax requirements, and keep some barrier between your business’s money and your personal money.
Depending on your area, you’ll also need to see what licensing, zoning, and insurance requirements your business needs to follow.
6. Purchase Equipment for Your Cleaning Business
No matter your niche, your company will need a minimum amount of certain cleaning and safety equipment in order for you to get started. What is the minimum equipment needed to start your specific cleaning business? What equipment will be durable, and what consumable supplies will you need? Be ready to replace as needed, so you don’t risk service interruptions.
7. Market Your Cleaning Business
Here’s the wonderful thing: People want cleaning services — now more than ever. How will people find your business? The right marketing:
- Print materials: Business cards, brochures, and postcards can be effective ways to get your brand in front of potential customers.
- Establish your brand on Google My Business: You’ll be able to customize your company profile to appeal to people searching for your services.
- Build professional presences on relevant social networks: At a minimum, consider setting up a Facebook Page and LinkedIn profile. This can help prospects connect with your brand, especially for customers in the case of LinkedIn.
- Ask customers to refer you to people they know: Word-of-mouth referrals remain one of the strongest ways to get new customers.
- Build a search-optimized website: A basic website explains who you are, what you do, and how customers can contact you. Including keywords relevant to your area and the services you provide can help people find you through online searches.
Ideas for Cleaning Businesses
Cleaning businesses can take many forms or specialize in various niches. Here are a few ideas:
- Carpet cleaning
- Janitorial cleaning
- Commercial cleaning
- Residential cleaning
- Ceiling and wall cleaning
- Pressure washing
- Disaster cleaning and restoration
- Blind cleaning
- Chimney sweeping
- Restroom cleaning
- Post-death and trauma cleaning
Start Your Cleaning Business
A cleaning business can be a great way to start your own business. Now you know the different ways you can structure your cleaning business, how you can specialize, and the types of startup funding and planning you need to do. The market is there to open your cleaning company and start cleaning up the profits.