As the first step, you must decide what type of cleaning service you will be, and who you will target. Domestic, commercial, and specialty cleaning are the three primary markets. It would be best if you were to perform some research before choosing a market, but it will probably depend on numerous factors, such as a comprehensive market review and your prior knowledge and experience.
Is Starting a Cleaning Business a Profitable Idea?
Starting a cleaning company is an excellent idea. While the market has seen increased demand for various cleaning services, start-up costs remain modest. With proper planning, launching a cleaning business offers a substantial opportunity to increase profit margins and revenue as your business grows.
In a report by Global News Wire, the market growth for contract cleaning services is expected to reach 5.38% from 2021 to 2026.
IBISWorld estimates that in 2022, the revenue generated by the general building cleaning industry reached $6.1bn, and the growth rate is 7.5%. It’s also the 147th largest industry in the UK, and it is unlikely that this industry is small in other countries across the globe.
In 2022, the commercial cleaning services industry will continue to dominate the U.S. market and employ many Americans. According to data from 2021, nearly three million people work in the cleaning services industry in the country. Revenue for a one-person cleaning service may vary depending on the following:
- Whether you offer cleaning services for homes or businesses, or industries
- The cost of your services and the size of your profit margins
- If you have a solo business or hire employees
- If you provide specialized services like carpet or green cleaning
However, not all that income will end up in your bank account. Although many start-up cleaning companies are small, overhead expenses still affect profits, and employees must be paid too.
Cleaning is labor-intensive, even though it may appear like a simple task. Starting small and making sure it is something you genuinely enjoy doing is a good idea before making the leap to building a cleaning business.
Benefits of starting a cleaning business
There are several compelling reasons why starting a cleaning business is a lucrative idea.
- Demand for business is high
- Once you build your reputation, you can often count on repeat clientele
- It is simple and low-cost to start a cleaning business
- No prior experience needed
How to Set up Your Own Cleaning Business
Let’s run through the key elements you need to consider when setting up a cleaning business.
How much does it cost to start a cleaning business?
The start-up costs for a cleaning business depend on many factors. Do you plan to do residential or commercial cleaning? Do you plan to run a business? Will you have employees, or will you do it all yourself? Depending on your business plan, start-up costs may range from $1,000 to $3,000, including specialized equipment, insurance coverage, tools, materials, labor, and marketing. The initial capital needed is significantly lower than in other businesses or industries.
This is a business like any other, which means you will need to establish your target market. Most cleaning services focus on commercial or domestic cleaning services. In the planning phase of your business plan, you will need to do in-depth research to determine your rates. First, you need an understanding of your overhead, which is the costs involved in doing business. Things to consider when establishing rates:
- Costs of supplies and materials
- Transportation expenses
- Cost of marketing your business
- Cost of equipment
- Competitive pricing in your market
Although managing resources such as money, time, and teams may appear challenging, it is quite doable with some planning and organization.
Different cleaning services to offer
Residential cleaning services focus on cleaning around the house, such as floors, bedrooms, and bathrooms.
Commercial cleaning services clean places like offices, buildings, and retail stores and concentrate on special events like fire and flood cleanup. There is a need to require industrial equipment to clean items that have suffered from severe water or other types of damage. Additionally, cleanup at the construction site or after building or renovations are complete is included here.
Cleaning supplies
Starting as a domestic cleaner, you'll need the bare minimum of adequate cleaning supplies and necessary cleaning equipment.
- Equipment carts
- Vacuum cleaners
- Steam cleaners
- A dependable vehicle large enough to carry your equipment and supplies
These types of equipment are required for commercial cleaning services in small home offices and large commercial properties.
- Industrial wet and dry cleaners
- Floor rotary machines and pressure washers
- Ladders
In addition to the equipment you need, you will also need cleaning supplies. These can often be bought in bulk and will depend, in part, on the type of cleaning you specialize in, from glass cleaner to your favorite brand of washing scrub, factor in the costs of supplies to your overall business budget.
Competency and training
There are no particular qualifications needed to start a cleaning business. However, if you plan to grow your company in the future, getting specialized training may be helpful. You are acquiring a specific skill set to identify yourself as a professional, just like in any other line of work.
Many training programs are accessible on government websites to help you locate trainers. Although you don't need the qualification to work as a cleaner, keep in mind that it can enhance your professional profile.
Business registration
Before starting your first cleaning job, you should register as a business entity to operate legitimately in compliance with the laws and ordinances of your geographic location. Registering your business also allows you to choose your company's organizational structure.
In the United States, you can register your small business as a partnership, a Limited Liability Corporation (LLC), or a sole proprietor. The simplest and least expensive method is to register as a sole proprietor. This is an excellent business structure to start with if you intend to work with a small staff.
You must obtain an employer identification number if you plan to employ people or if you don't want your company's taxes to include your social security number.
The next step is determining whether your municipality or county has any license or zoning permit requirements for your business. Contacting the town or county governments in your area will provide you with this information.
Once your business has been registered, take all your registration documentation to open a business checking account. Separating the proceeds from your cleaning business from your personal bank accounts is essential. In particular, tracking your revenue and costs for tax filing is essential for your company's financial reporting and management.
Insurance
It is highly advised to obtain insurance. Any incidents that arise as an outcome of your work should be covered by either public liability insurance or general liability insurance. In the U.S., if you meet the established criteria, you'll also need workers' compensation insurance to cover potential accidents if you want to hire cleaners. Additionally, most property and business owners will demand it.
If someone is hurt or property is harmed due to your service, liability coverage ensures that you are protected financially from lawsuits. Having the right coverage to safeguard your business from liability and demonstrate your credibility to potential customers with whom you can do business confidently is essential.
Drawing up a business plan for a cleaning business
A business plan is similar to a blueprint for your cleaning services company that outlines your objectives, area of specialization, and desired rate of expansion.
According to a Reserve Bank of Australia report, Capital investments can be limited if businesses do not have a well-developed business plan. Therefore, a business strategy is essential for your company. The first step in achieving your company's goals is simply considering what type of business you want to own and then putting your plans for the operation of the business in writing.
A strong cleaning business plan will assist you in setting, visualizing, and achieving your objectives. Additionally, it will assist you in seizing prospective market possibilities that you may use to expand your company.
A cleaning services business plan should contain details on your financial history and any estimates you can make based on your market study since banks, investors, and insurance providers will want a comprehensive understanding of the business's finances. Balance statements, anticipated payroll costs, cash flow projections, and capital spending plans for the next three to five years are all essential information.
The business plan needs to explain what your business does, the kinds of customers it serves, and how it exceeds the expectations of its clients. Information about your ownership and management, services offered, and marketing tactics are just a few examples of the details that may be indicated.
Include all of your start-up expenses in the start-up summary. This can help you estimate how much it will cost to purchase the equipment and chemicals you'll need to start a cleaning business.
CRM tool for cleaning businesses
A CRM (Customer Relationship Management) platform allows you to manage marketing campaigns, follow up on service issues, identify sales opportunities, and maintain customer and prospect contact information in one place.
As a start-up cleaning company, your ability to control labor expenses, demonstrate contract fulfillment, and secure new business is essential to your survival. It may seem overwhelming initially, but software applications like CleanTelligent have been developed to help streamline the cleaning processes.
Find out more: Need funding? Check out our guide on small business grants.
Getting Funding to Start Your Cleaning Company
Starting a cleaning company from scratch can be difficult, especially when it comes financing. Often, entrepreneurs are forced to achieve this by obtaining a personal loan, a business loan, or using credit.
If you’d like to discover advice and options for loans, you can read our loans to buy a business guide. While its purpose is to provide information on loans for acquisitions, it is still relevant for start-ups seeking capital.
A cleaning service may have relatively low start-up costs depending on the company's size. Many entrepreneurs may decide to initiate the start-up of their cleaning business without taking out a business loan. Starting your business without debt allows you to increase spending and the size of your operations as your business grows.
There are grants available to assist small businesses, but many new business owners are unaware of them. Therefore, they are potentially losing out on an important source of funding! Starting a cleaning business without enough cash can be difficult, but there are grants you may be eligible for that can help you with some of the necessary start-up money. You can read our small business grants guide for more information on grants available in different countries.
How to Market Your Cleaning Company
Being visible where potential consumers are looking for your services is essential for promoting your cleaning company. Search engines such as Google are where prospective customers search for service providers.
A webpage will help you stand out from the competition and earn the trust of potential consumers. Additionally, it will give potential clients more details about what you have to offer and an approach to contact you or request an estimate.
Don't forget the power of word-of-mouth referrals. Social media makes an excellent marketing tool where you can reach a sizeable audience without incurring hefty costs. Make sure to inform your friends and family on social media when you start a cleaning business and urge them to forward the word before you begin selling your services.
To succeed in this industry, cleaning companies must have effective marketing plans. You may use marketing to develop new leads, establish yourself as a cleaning authority, and ensure your cleaning services are more appealing than your rivals.
Find out more: Want more advice on selling, buying, or starting a business? Explore our business guides for valuable insights and tips.
Starting a Cleaning Business is Not Your Only Option
Although starting a cleaning business is exciting, entrepreneurs also have other options to consider.
Investing in a cleaning franchise
Purchasing a franchise is another way to get financial aid and start making money immediately. Franchise opportunities in cleaning enable business owners to avoid beginning from zero. These companies offer ongoing assistance, allowing their franchisees to start successfully and generate healthy earnings.
Additionally, this opportunity allows you freedom because, in most circumstances, you will oversee the cleaning rather than perform it. Brand recognition, dependability, and a strong support network should be your top priorities when looking for cleaning franchise opportunities.
Buying a cleaning business
It may seem difficult to buy a cleaning company, but it just requires the correct inquiries and investment. You'll need to be well-versed in the clientele, finances, resources, and possibilities for business expansion. You're buying a cleaning company so that you may keep fostering its growth; therefore, you should understand how to prevent it from going out of business.
We have multiple cleaning businesses for sale on our site, including:
If you’d like more support and advice on buying a business before you make a decision, you can read our buying a business guide.
A checklist for starting your cleaning business:
- A business plan should be the first item on your to-do list when you start a cleaning business
- List the principal rivals in your market, along with the products and prices they provide
- Decide if you want to handle the cleaning yourself or if you want to hire staff
- Estimate your capital requirements and financing options for your cleaning company
- Work out a detailed marketing strategy to start acquiring new customers
It is rewarding to work in this field and empowering to own your own business as you can constantly expand your service offerings and improve your expertise. Connect with us if you need any advice or support on your new business venture. Wishing you the best of luck and great success!
