In 2015, the cleaning services sector generated $41.7 billion, and it’s expected to grow to $46.3 billion by 2020. Besides enormous profit potential, the barriers to entry and startup costs for a cleaning service business are relatively low. All you need is relatively minimal startup financing, an entrepreneurial spirit, and a few basic equipment.
In this guide, we share everything that you need to help you start your own cleaning business.
- 1. Budget
- 2. Business Structure
- 3. Taxes
- 4. Business Name
- 5. Licence
- 6. Insurance
- 7. Bond
- 8. Workers Comp
- 9. Equipment
- 10. Rates & Business Model
- 11. Hourly Rate
- 12. Flat Rate
- 13. Square Foot Rate
- 14. Cleaning Business Market
- 15. Offline Marketing
- 16. Online Marketing
- 17. Create Your Own Site
- 20. Hire a Virtual Assistant
- Bottom Line
Other cleaning solutions business founders estimate that you can begin your own business for under $2,000. Here’s a breakdown of projected expenses you can expect:
- Licenses and Permits — $30 to $60 if you register as a sole proprietor or $100 to $500 in Case You register as a limited liability company
- Insurance — $500 to $3,500 annually Based on number of employees
- Cleaning Equipment and Products — $300 to $600 depending type of tools
- Advertising — $100 to $200 for printing and Internet marketing
- Labor — $11.63/hour per employee
- With such numbers, you can launch a registered and fully functional cleaning solutions company for as low as $930.
- The low startup cost is one of the reasons why you will find 898,474 cleaning services companies operating in the nation.
While you Can Begin a cleaning business under $1,000, Joanna Douglas, proprietor at Clean Affinity recommends that you begin with more:
“When I first started, I had a lot of extra money saved up from some of my previous employment. With the help of my husband, we were able to put up our own cleaning business. Honestly, it is better to be safe than sorry, so I would recommend that you have more than $2,000 to start with.”
2. Business Structure
Before starting your cleaning business, you have to get it registered. This usually means you have thought regarding the legal arrangement together with taxes.
There is not a great deal of paperwork included beneath this business arrangement and you since the owner has complete control. 1 drawback here is you will be held responsible if your business goes under with debt.
Other cleaning businesses enroll as a limited liability company (LLC), that gives owners protection from liability. On the other hand, the whole earnings you and other members of the LLC company are needed to earn self-employment tax gifts.
If you would like to understand more about that business structure is suitable for your cleaning company, you may find out more here.
Your taxes will depend on the type of business you enroll. If you enrolled as a sole proprietor, you won’t have to submit another tax report for your company’s profit and loss. You need to file an IRS Form 1040 for individual income tax return wherever your personal and business incomes are considered the same. Personal tax rates are implemented below sole proprietorship.
Taxes under an LLC is quite a bit more complex. Your company can be taxed as a sole proprietor, partnership, S Corp, or C Corp.. There are particular pros and cons for every tax treatment. You can find more information in our Small Business Owner’s Guide to LLC Taxes.
4. Business Name
Naming your business is often as difficult as naming your child. The title of your business must represent the ideals, services, and concepts that distinguish your company from others. You’ve got a whole lot to say in a few of phrases so you really need to make it all count.
To help you out here, we made the ultimate business name generator. You just need to enter your services, place, and your name as the founder. The tool generates multiple suggestions that you may use as a starting point to produce your own special idea.
As Soon as You have the final list, head to the US Patent and Trademark Office to assess that titles are still available.
Before deciding the structure of your cleaning company, CEO of Fantastic Services Rune Sovndahl suggest that you select a good franchise:
“A secret I would like to share with everyone is that it’s a great idea to pick a good franchise that will take care of the marketing for you. Otherwise, while you are testing which advertising tactic best works for your business and location (radio, tv or online) you might be missing out on making profits.How to grow the cleaning business? You should focus on building good systems and practices – the core of every business’ growth. And choosing to be a franchisee will mean having this core already established for you. Be smart and choose a franchise company that has experience working with hundreds similar companies. A franchise company that has created and implemented systems leading to a successful cleaning business.”
Licensing requirements may change depending upon your location, so check with your nation, city, and county. Some cities require cleaning businesses to secure an occupational license although some just ask that you file a Doing Business As (DBA) form.
The cleaning business plays a significant part in ensuring a clean and live-able atmosphere. To do so, it has to be supported by a skilled and productive workforce which will have the ability to provide for quality cleaning services for all service buyers. To allow this, NEA has been working together with partner agencies and organisations since 2010, such as the Ministry of Manpower (MOM), then-Singapore Workforce Development Agency (WDA) and the National Trades Union Congress, to embark on a trip to boost productivity, salary, employment conditions and support standards of the sector over time. A number of initiatives have been implemented since, for example, introduction of the voluntary certification scheme (VAS) in 2010, the improved clean mark certification scheme (EAS) in 2012, and also the introduction of a mandatory licensing regime in 2014. Together, these initiatives enhance the overall standards and professionalism of the overall cleaning business through better employment practices and productivity efforts. The mandatory licensing regime has helped to attract and maintain local cleaners through key licensing requirements like mandatory training for cleaners and adoption of this Progressive Wage Model (PWM), which maps out a clear career path for employees’ salary to progress with training and improvements in productivity and standards.
The enrollment process may seem intimidating, especially to first-time entrepreneurs. However, the practice is usually straightforward and takes as fast as one day.
As a cleaning business, damages or breakages to client property is inevitable. Accidents do occur in this line of work. You or your employee might unintentionally break a mirror or knock off the television. Liability insurance keeps you protected against such unfortunate incidents.
For companies catering to commercial clients, liability insurance is a necessity. It protects your business from losses or damages incurred by a client due to accidents given by you or your worker.
By way of example, an employee leaves the door open while taking a break which resulted in theft. Liability insurance can help you settle the damages or losses brought on by the event.
A bond is a type of insurance that functions as a financial guarantee against the details of the bond. By way of example, if a worker becomes convicted of stealing from a client. Though your worker is responsible, your business can be held accountable by the customer for the losses regarding the crime.
Most customers prefer cleaning businesses that are bonded and understandably so. Put money into a bond, not only for your peace of mind, but also to boost the odds of signing new customers.
8. Workers Comp
As you develop and hire more employees, your state may require you to pay into Workers Comp. This type of insurance protects your employees from accidents and illnesses sustained on the job.
It provides compensation in the form of wage and benefit replacement for your employees if they’re injured at work and can not continue to function in exchange for mandatory relinquishment of the worker’s right to sue their employer to the tort of negligence.
When there are some cases when your customer provides all the cleaning products and tools — for instance, if they’re sensitive or allergic to specific goods — you still have to invest in cleaning equipment like a vacuum cleaner, broom, and mop.
You can use your personal cleaning gear at the start, but take note that they are subject to wear and tear, especially in the event that you cater to businesses. Other supplies that you’ll need are:
- Cleaning uniform or apron with multiple pockets to store essential items
- Window cleaner
- Paper towels
- Latex gloves
- Scrubbing brushes
- All-purpose cleaner
Think about investing in organic products that you are able to utilize as a selling point to customers with pets or children. You can buy everything in the local grocery store as you launch your business. As you grow, however, you can check with your regional janitorial supplier so that you can purchase in bulk and reduce prices.
While purchasing equipment appears to be the only movement to get the ideal merchandise and tools to begin your cleaning business, it’s not really true. Bright & Clear Floor Care President of Operations Cornell Alston recommends that you rent equipment to begin:
“When we started our business in 1994 we started our business with $3,500 in the bank. Today, I would expect that the price to launch a cleaning business surprisingly could be much cheaper because of the option to rent. During the time that we launched our business we had to go out and purchase a ton of equipment but today there are several options for you to rent supplies and necessary cleaning machines on a per day usage.”
10. Rates & Business Model
The average hourly rate cleaning service companies charge is between $25 and $40 or a flat fee of $120 to $150 for a single-family house. Factors such as your location, your competition, your clientele, the dimensions and condition of the house, or some additional activities will influence where on this scale you collapse.
11. Hourly Rate
This is by far the most common way of charging customers for your cleaning solutions. It might sound easy, but many entrepreneurs struggle to come up with their own justifiable hourly fee.
The simplest way to set up your hourly rate would be to call your competitors, and inquire how much they charge. They have probably ran their own study and have factored in all expenses in their existing rates including labor, equipment use, gas, and goods.
If you do your market research, you’ll almost certainly get a variety of prices as firms seldom charge the same fees. You can use the range to come up with your own hourly rate.
12. Flat Rate
If you’re knowledgeable about the houses and establishments locally, you can use that knowledge to your advantage by charging a flat rate. Estimate the number of hours it’ll take you to clean a specific home and provide that rate for your client.
The benefit here is that you supply a fixed cost for your services. Many clients prefer this cleaning speed because they won’t need to worry about extra fees in case the task takes longer than anticipated.
As a business owner, you must be cautious when picking this cleaning rate. You have to be specific about what your apartment rate covers because otherwise, you may wind up losing money.
To mitigate that risk, you can produce a bundle that includes basic services like dusting, wiping, vacuuming, and cleaning.
After that you can charge extra for additional services like chimney cleaning, carpet cleaning, or roof and gutter cleaning.
Additional services have different fees as they vary on equipment and products to be used. Click here to find more information on home cleaning costs.
13. Square Foot Rate
This cleaning rate suits businesses that target large homes such as villas or vacation homes. These kinds of properties frequently have rooms and spaces which are rarely used and may require more manpower for an ultra deep clean.
Therefore, many businesses set higher hourly prices for properties which are larger than 1,000 square feet. By way of example, if you charge $25 per hour for a single family house, consider charging $30/hr for houses bigger than 1,000 square feet and $40/hr for properties larger than 2,000 square feet.
14. Cleaning Business Market
Now your pricing model is set, it is time to have the word on your new company. As a startup, you’re probably working with limited funds and you would want to make the most of your budget.
Thus, your marketing efforts should be highly-targeted. You need your materials to reach the right types of individuals. There are some methods to accomplish that.
15. Offline Marketing
Chinese billionaire Jack Ma said,”When selling to close family and friends, no matter how much you are selling to them, they will always feel you are earning their money, no matter how cheap you market them, they still wouldn’t appreciate it.” Rookie entrepreneurs often make the mistake of relying upon their internal circle to be their regulars.
But, that’s seldom true. Instead, ask your friends and family to put a fantastic word on your new business to their friends or relatives that match your customer persona. Word of mouth marketing is particularly effective since 9 out 10 consumers prone trust and purchase from a brand recommended by a friend.
In addition, word of mouth watering costs nothing. Set a consultation with people who want to get your services. Do not show up empty handed. Consider printing brochures which feature a menu of your services with respective fees.
Additionally, offer vouchers and loyalty accounts. Your coupons serve as your sweetener where you reduce a certain percentage like 10 percent off on your first 10 hours to give prospects an incentive to avail your services. Loyalty accounts is the value you add to existing clients. By way of example, clients earn free window cleaning services after they avail the services a specified variety of occasions.
This advertising strategy helps you make new customers and keep them in precisely the same time. More to the point, the plan costs your business near nothing aside from hard work. In case you have a high excellent printer, you will need to shell out about $35 to pay for the expenses of ink along with 250 pages of excellent paper.
Mike Kawula agrees a strong referral program is one of the best ways to get a business off the ground:
“Have a referral program that is strong. The best ways to drive new business is via word-of-mouth marketing. I spent over $2,000 a week using direct mail, but word-of-mouth drove the highest closing ratio by far. Also on marketing, try to build relationships with realtors in the area. They know everyone moving out that needs a clean and everyone moving into the neighborhood who needs a new service. Have a solid referral program in place for realtors and go out and sell them on it. You’ll have an army of salespeople this way.”
16. Online Marketing
The bulk of your marketing plan should be inactive. As a startup, you’ll probably do most of the cleaning yourself which leaves hardly any time that you perform advertising tasks. Given that scenario, one of the greatest ways to expand your marketplace is to get inbound leads from the net.
75% of today’s customers use the world wide web to discover a local business. In other words, the majority of the clients who want your services are searching for you on line. They usually do local searches in which a set of keywords and place are typed on an internet search engine such as:
- Home cleaning Baltimore
- Carpet cleaning Akron
- Chimney cleaning Chicago
You have to establish online presence or risk losing potential customers to your opponents. We recommend investing a massive proportion of your advertising budget to building a website and generating marketing content.
17. Create Your Own Site
You can create your own site yourself from scratch. It is not as complicated as people make it seem. All you will need is a little imagination. In addition, you would have to pay a minimum of $15 per month for basic Services like:
Domain Name — your site’s address like “cleaninghero.com”
WordPress site — the content management system in which you set up your website
We’ve got a comprehensive guide that can help you make your own website in the floor up, even if you don’t have any technical skills.
20. Hire a Virtual Assistant
After you set up your own site, the next step is to employ someone who has the abilities to put your website in front of people who are looking for your services on the internet. These virtual assistants (VAs) come with a hefty hourly fee if you are hiring someone from the country. But, VAs from developing countries are significantly cost effective. Freelancers from such countries proficient in articles curation and search engine optimisation fee somewhere between $5 and $10 per hour.
If you would rather leave the job to the experts. Take a look at popular outsourcing sites like Fiverr and Upwork. A budget of $200 to $250 can get you 80 hours worth of work. That is more than sufficient to get a professional to conduct keyword research and write articles to receive your site to rank on search engines such as google.
When you have hired a Virtual Assistant, look at assigning jobs that help promote your business on interpersonal networking. Cornell Alston of Bright & Clear Floor Care recommends that you begin with Facebook:
“It’s important as a cleaning business to know what social media outlets your target audience is using. For us, a lot of our clients are on Facebook; therefore, we create content on Facebook that promotes our services not only to our current customer base but to others in our target audience.”
Many people strongly think about starting their own cleaning business because the barriers to entry and required startup capital are substantially lower compared to other kinds of businesses. Before you start, however, your key considerations are the costs, your business model, and how to market your new business.
With the help of this guide, you can easily look after these aspects essential to any type of business, so you may start focusing on making your cleaning business a success.