The potentially lucrative realm of commercial cleaning offers an enticing pathway for entrepreneurs to capitalize on the consistent demand for sanitation and cleanliness services, especially in the post-pandemic era. With startup costs varying widely from $1,000 for a smaller operation to upwards of $100,000 for larger endeavors, the financial investment can suit diverse budgets. However, succeeding in this competitive field often requires a blend of precise cleaning techniques, adept staff management, strategic business operations, and impeccable customer service.
The commercial cleaning industry, boasting average profit margins ranging from 10% to 40%, can be a rewarding venture for those ready to sweep through the challenges of maintaining high-quality service and standing out in a crowded market. Are you ready to clear the clutter and shine in the commercial cleaning business? Let’s explore the steps required to get started in this industry.
|Initial Investment||Estimated startup costs can range from $1,000 (small operations) to $100,000+ (large operations with staff and equipment).|
|Skills Required||Cleaning techniques, customer service, time management, business operations, staff management, and sales skills.|
|Demand||High demand in commercial sectors, especially post-pandemic with increased focus on sanitation and cleanliness.|
|Location||High demand in commercial sectors, especially post-pandemic with an increased focus on sanitation and cleanliness.|
|Hours||Generally evenings and weekends to clean offices and commercial spaces after business hours.|
|Permits and Licenses||Depending on your location, you may need a business license and any necessary cleaning or environmental permits.|
|Profit Margin||Average profit margins range from 10% to 40%, depending on services offered and operational efficiency.|
|Challenges||Competition with larger cleaning companies, maintaining high-quality services, and managing a potentially large staff.|
The main benefit to opening a commercial cleaning business from scratch is the income potential versus start-up costs. You’ll have to buy cleaning products and equipment, and spend money to market the company up-front, but you can start charging almost immediately and recoup those costs.
Unlike apartment and house cleaning where the rates are lower, as a commercial cleaning company you can charge by the hour, square foot, or long-term contract with recurring retainer fee. This means that the costs of the business (paying employees, buying cleaning supplies, etc.) are mostly incurred while the business is actually bringing in money.
So, where do you begin this quest to start a commercial cleaning company? And what’s after that? Just like with any big project, you can accomplish this giant task one step at a time.
Creating a business plan is the key first step. Don’t overlook it or skip out on it. This will be your map for how to turn your dream into a successful cleaning business. Create the business plan by:
Here’s more info on writing your commercial cleaning business plan, along with examples.
Your business has to be registered with the IRS, which means you must choose from the multiple company structures it offers. Choosing a business structure is important because it impacts your taxation and potential liability. Pick the structure that best represents your particular legal and tax setup.
If you were starting a residential cleaning business, you may entertain the idea of beginning as a sole proprietorship. In commercial cleaning, however, you’ll almost certainly have people working for you from day one. They’ll operate in buildings owned and rented by others.
Because of the potential for liability, a new commercial cleaning service is usually formed as a limited liability company (LLC). This structure protects your personal assets from liability and avoids the double taxation that comes with other structures such as C corporations. You can also file for an LLC online.
Research what business license you may need. Commercial cleaning businesses need, at the least, a vendor’s license. Depending on your location, there are requirements including licenses, permits, and surety bonds to consider.
Creating a business name can be really fun. Let your imagination go wild! What name conveys the feeling and brand you intend? Brainstorm a list of a dozen possibilities.
Now filter the list of potential names through these questions:
Once you settle on a name, register its domain and social media presences.
Name your cleaning business
Enter your desired LLC name to get started
It’s time to make everything official. Register your commercial cleaning business with state and local agencies using the structure you selected earlier (likely an LLC). You can save time and hassle by using an LLC formation service to handle this step on your behalf. Then visit the IRS site to obtain an employer identification number (EIN).
Take your EIN and registration documents to the bank to open business bank accounts. You’ll want to keep business and personal banking separate to make sure the liability protections stay in place. Also, it’ll be easier to file taxes at the end of the year when you can clearly see the business finances separately from your own.
Check with your local municipality to find out more about potential licensing requirements for commercial cleaners in your area.
Finally, consult local insurance agents to determine what type(s) of business and general liability insurance are best for your situation.
Great news! The costs for starting a commercial cleaning business are very low relative to other industries. As you think through and count up the costs, try to categorize them as fixed costs, ongoing expenses, and one-time costs.
For example, you won’t buy vacuum cleaners and mops every month. Those are one-time purchases. But you’ll likely need to regularly replace vacuum bags and mop heads, making these ongoing expenses.
Fixed costs are things that don’t change over time, even if your client load changes. These include pay for your workers, fees for an attorney and accountant (and bookkeeper, if needed), as well as any business insurance and office rent.
Make sure your pricing covers your costs. Brush up on pricing with this commercial cleaning cost guide.
Since startup costs for a commercial cleaning business are low, you may not need outside assistance to get up and running. If you do, there are several forms of government assistance for small business owners. Also, your bank may offer loan programs from the Small Business Administration (SBA).
You could also research the possibility of a personal loan or talk with friends and family about whether they want to invest in your company or provide a loan. Just be careful of potentially harming personal relationships due to late payments and other issues.
Business credit cards are another option, but it helps to have a solid payback plan in place. Otherwise, you could end up overwhelmed with debt to pay off.
The equipment you’ll need for your commercial cleaning business depends on exactly what services you’ll provide. The list will likely include:
You can find longer lists of the supplies and equipment you may need online.
There are a few ways to market your new business, both in real life and online.
The least expensive way to market in real life is to identify about a dozen potential clients and cold-call them. Either set up a meeting or ask right then if they have a cleaning service and whether or not they’d consider hiring yours. Be prepared to offer initial discounts to secure new clients, especially if you are operating in a saturated market. You could print flyers and mail them to business owners.
Also, join local business groups like the Chamber of Commerce and attend their events. Hand out your business card liberally. Serve on committees with business owners in order to develop relationships with them. Get your business listed on Google My Business as well as local registries and phone books to make sure you’re being found in local searches.
In the online world, you’ll need a search-engine-optimized website and a social media presence. Create a strategy for social media posting that maintains a consistent brand voice across all online platforms. Post regularly and often, perhaps by including free cleaning tips and photos of a job well done.
Once you have a few customers, think about how you could incentivize them to recommend your service to other businesses. Consider perks like free cleanings or a discount for referrals.
See this guide to commercial cleaning business marketing for more ideas and information on forming your marketing strategy.
Your commercial cleaning business could focus on entire office buildings, small businesses leasing a few rooms, retail spaces, schools, daycares, or nonprofits. There are numerous possibilities. Specializing in a particular type of business or a handful of buildings may help you carve out ownership of that niche because you and your employees will be most knowledgeable about those buildings or that kind of business’s cleaning needs (e.g. wiping down kiddo toys in daycares).
You may not be starting as part of a franchise, but it may be worth studying the successful commercial cleaning franchises for practices and policies that could work well for your business.
Starting a commercial cleaning business from scratch requires little startup money or time investment while offering incredible potential income. It’s a competitive market, but with commitment, dedication, consistency, and good business and employee management, you could very well find incredible financial success.
We’ll form your LLC today so you can hit the ground running for just $0 + state fee. Past that, we’ll introduce you to the best resources to help run and grow your business as efficiently as possible.
The number of clients and size of space being cleaned impacts how much commercial cleaning businesses make. The average starts at about $70,000/year and can easily increase to over $100,000.
The top challenges for janitorial services include marketing, hiring, and competition.
There are 1.4 million commercial cleaning establishments, including over 36,000 franchised outlets. About 2.4 million people work in the commercial cleaning industry.
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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