Thinking of starting a commercial cleaning business from scratch? This $117B industry is an easy one to enter with low start-up costs, no higher education requirements, and plenty of contracts to go around.
Keep in mind that commercial cleaning is not residential cleaning. We’re talking office buildings, retail stores, and the like. As long as there are places where people work, there’s demand for commercial cleaners. If you’ve got the skills to manage people and a business, and you find value in creating a clean workspace for businesses, then this industry could be a lucrative fit for you.
Benefits of Opening a Commercial Cleaning Business
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.
How to Start a Commercial Cleaning Business Checklist
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.
Checklist for How to Start a Commercial Cleaning Business:
- Create a Business Plan
- Choose a Business Structure
- Determine Your Commercial Cleaning Business Costs
- Name Your Business
- Register Business with Government Entities and Open Financial Accounts
- Purchase Cleaning Equipment and Supplies
- Market Your Commercial Cleaning Business
1. Create a Business Plan
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:
- Specifically state your cleaning business idea and the issue it solves
- Set SMART goals (Specific, Measurable, Attainable, Realistic, and Timely)
- Identify potential problems, like competing cleaning companies in the area, and how you’ll solve them.
- Describe your target market and types of customers you hope to serve. Will you aim for restaurants, offices, retail stores, or a mix?
- Check for tax breaks and local grants
- Identify types of insurance and bonds needed, and the plan for securing them
- Outline a pricing strategy (per square foot, hourly rate, or recurring fee) for your cleaning jobs
- Identify state and local licensing requirements
- Provide a sample service agreement
- Write strategies for how you’ll grow the business
Here’s more info on writing your commercial cleaning business plan, along with examples.
2. Choose a Business Structure
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.
3. Determine Your Commercial Cleaning Business Costs
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.
How can you fund your startup costs?
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.
4. Name Your Business
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:
- Which one is easiest to understand? “The Cleaning Cupcakes” may be cute, but does it make sense for a cleaning business?
- Which is most memorable? (Memorable for good reasons!)
- Which one has an available website address and social media handles? This is important for marketing purposes because you want to make sure clients can associate your Twitter handle, for example, with your business.
- Which one is not already taken by another business? Using an existing cleaning business name can have legal repercussions and create confusion with potential customers.
Once you settle on a name, register its domain and social media presences.
5. Register Business with Government Entities and Open Financial Accounts
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). 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.
6. Purchase Cleaning Equipment and Supplies
The equipment you’ll need for your commercial cleaning business depends on exactly what services you’ll provide. The list will likely include:
- Commercial vacuum
- Latex gloves
- Cart to store equipment
- Cleaning cloths and paper towels
- Different cleaning solutions and disinfectants
- Shirts or aprons for employees
- Face masks (especially during the COVID-19 pandemic)
- Vehicle to transport cleaning equipment and/or employees
- Computer and printer for the office
You can find longer lists of the supplies and equipment you may need online.
7. Market Your Commercial Cleaning Business
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.
Examples of Commercial Cleaning Businesses to Start
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.
Commercial Cleaning Business FAQs
How much does the average commercial cleaning business owner make?
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.
What are the biggest challenges to starting a commercial cleaning business from scratch?
The top challenges for janitorial services include marketing, hiring, and competition.
How many commercial cleaners already operate in the U.S.?
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.