Considering starting a cleaning company? Entering this industry can be surprisingly accessible, with starting costs as low as $500 for a small-scale residential setup and escalating to $50,000+ for a full-fledged commercial operation. But it’s about more than just the art of cleaning — thriving in this space requires top-notch customer service, efficient time management, and, for larger operations, adept staff coordination.
With the cleaning sector boasting profit margins from 20% to 50%, these businesses can be attractive to entrepreneurs. However, the journey to profitability is paved with challenges like navigating stiff competition, meeting ever-evolving health standards, and managing a sometimes transitory and unstable workforce.
Intrigued about unlocking the potential of the cleaning industry? Let’s discuss the details and see if starting a cleaning business is right for you.
|Initial Investment||Estimated startup costs can range from $500 (basic supplies for small-scale residential cleaning) to $50,000+ (commercial cleaning with staff and equipment).|
|Skills Required||Cleaning techniques, customer service, time management, basic business operations, and staff management (if hiring).|
|Demand||High demand in both residential and commercial sectors. Post-pandemic, sanitization services have seen increased demand.|
|Location||Primarily client locations. A home office for management or a physical location for equipment storage may be needed.|
|Hours||Typically daytime for residential cleaning, but commercial cleaning might require night or weekend shifts.|
|Permits and Licenses||Depending on local regulations, you may need a business license and/or cleaning and environmental permits.|
|Profit Margin||Ranges from 20% to 50%, depending on the scale and services offered.|
|Challenges||Competition with large cleaning business chains, keeping up with health standards, managing client expectations, and staff turnover.|
Janitorial services have a significant domestic market value. Small businesses for cleaning services are local, can’t be outsourced overseas, and are an important customer service that people and businesses want to retain. The startup is fast, and no experience is required. A cleaning business can get off the ground with:
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.
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.
You need a business plan for your cleaning business. That doesn’t mean a complex, thick brick of paper, because a business plan can be as short as a few pages. Writing a business plan helps you think through your venture’s purpose, market, finances, and operations.
Create a business plan where you:
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.
How do you plan to fund your startup? There are several paths you can take.
You may be able to access additional funding resources from the Small Business Administration (SBA), or you can use personal assets for funding your business. If you form an LLC, you’ll have opportunities for commercial bank loans, venture capital, or other private funding sources.
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:
Name your LLC
Enter your desired business name to get started
Especially if you form 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 money and your personal assets.
Know your Employer Identification Number (EIN). For sole proprietorships, this is usually your personal Social Security number. Sole proprietorships and LLCs can also get their own dedicated EIN from the IRS. Depending on your area, you’ll also need to see what licensing, zoning, and insurance requirements your business needs to follow.
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.
To give you a general idea of the costs you may face, here are common startup expenses for a low-cost cleaning business:
To help you keep costs low, we can form your new LLC for free (+ state fee). Your cleaning equipment and products may range from $300 to $600. High-quality, commercial-quality vacuum cleaners can cost hundreds of dollars, but all-purpose cleaning solutions can be as affordable as a few dollars. Brooms, mops, and other basic dusting supplies can be procured for less than $50.
Don’t neglect advertising and marketing for your cleaning business, and labor costs. Expect to invest at least $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.
No matter the scale of your business, starting up will cost money. How you fund your cleaning business startup costs is a crucial decision:
No matter your niche, your company will need 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.
How will people find your business? Incorporating some of the following techniques can help launch your new business.
Cleaning businesses can take many forms or specialize in various niches. Here are a few ideas for a cleaning 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 company and start cleaning up the profits.
If you want to keep your startup costs low, remember that we can form your new cleaning service LLC for free (+ state fee).
Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
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When it comes to compliance, costs, and other factors, these are popular states for forming an LLC.
Ready to Start Your Cleaning Business?