How much cash you’ll need for a cleaning business start-up
There are a number of costs you should plan for when starting up a cleaning business—from legal documents and cleaning supplies to hiring staff and marketing your services. Here are some of the expenses you should budget for:
- Licenses and permits: The license and permits you’ll need to start your cleaning business will depend on the state, county and city. Fees will vary but could range from $30 to $500, depending on if you register as a sole proprietor or limited liability company.
- Insurance: You’ll typically need a few types of insurance to protect your business, including surety bonds, general liability insurance and workers’ compensation. This will generally cost from $2,000 to $4,000 per year.
- Supplies: High-quality vacuums can be an upfront investment of around $300 to $700, but most other cleaning supplies, such as mops, dusters, trash bags and protective gloves, are much cheaper. Expect to spend between $200 and $500 per month, depending on the type and quality of your equipment.
- Staff: In the beginning, you may choose to go it alone and run your cleaning business by yourself. But you may want to hire a small cleaning crew to build your business faster. If you plan on hiring cleaning staff, it will typically cost you $11-$15 per cleaner, per hour, but be sure to follow your state’s minimum wage guidelines.
- Transportation: Buying a company vehicle comes with certain tax advantages, but can be a costly upfront expense, ranging from $10,000 to $30,000 depending on if you buy new or used. Reimbursing your employees for the use of a personal car to drive to job sites also comes with expenses you should keep in mind, such as mileage reimbursement (about $0.50 per mile) and auto insurance (typically less than $200 per month, per vehicle).
- Marketing and advertising: Expect to spend at least $200 per month for both offline and online marketing. This part of your budget may also include the cost of a company uniform (roughly $100 or less per employee).
Choosing a specialty and niche for your cleaning business
There are two main types of cleaning businesses: residential and commercial. A residential cleaning service specializes in cleaning homes, apartments and condos. A commercial cleaning business focuses on commercial spaces, including offices, hotels and retail stores.
The residential cleaning industry is typically easier and cheaper to break into than the commercial cleaning business, which often requires expensive specialist equipment, more effort to get clients and evening/night shifts. For these reasons, a residential cleaning business might be the best option when you’re first starting out or starting up a cleaning business on the side.
Once you’ve chosen the type of cleaning business you want to build, narrow it down even further by finding and choosing a niche. What will make your business unique? Do your research and look at demand in your area. If you’re in a college town, for example, consider specializing in apartment cleaning.
You can also look into specialties such as eco-friendly cleaning, carpet cleaning, move in/move out cleaning or deep cleaning. This will form the basis of your marketing strategy.
How to start a cleaning business from scratch
To improve your chances of success when starting a cleaning process, follow these steps:
1. Research the industry
Starting up a cleaning business without understanding the commercial cleaning industry is like going in with your eyes closed. By gaining a full understanding of the industry and current market conditions, you’ll be in a better position to make smart choices as you proceed through each step outlined in this guide on how to start a cleaning business. To research the industry:
- Call your future cleaning business competitors and inquire about their services and pricing.
- Consider joining an industry group like the Worldwide Cleaning Industry Association for access to resources and reports about market conditions.
- Interview cleaning business owners located outside of your area.
- Explore franchise options, which may streamline the cleaning business start-up process.
2. Assess your skills
If you plan to be the sole employer or the on-site supervisor for your cleaning business, you need to know whether you have the skills to provide exceptional service to your customers. Ask relatives and friends if they’ll allow you to clean their homes or businesses. Create an evaluation checklist and ask them to fill it out honestly. Then, study the feedback they provide to assess your performance. Receiving high marks is a good indication that you’re on track for starting up a cleaning business. Should you receive negative feedback, you may wish to continue practicing or even consider taking a part-time job as a cleaner to develop your skills.
3. Get to know your target market
You should already have chosen a niche for your cleaning business, but how well do you know the people or organizations that you intend to serve? Spend time thinking about why your target market would seek the help of a cleaning business. What problems are they looking to solve? What are their values? How much can they afford to spend on your services? The more you understand your target market, the better able you will be to tailor your cleaning business start-up to their preferences, budgets and tastes to position your company as the best option for their needs.
4. Choose the right business structure
There are two common legal structures you should consider before you register your cleaning business: sole proprietorship or limited liability company (LLC).
- Sole proprietorship: Operating your cleaning business as a sole proprietorship is typically the cheapest and easiest option. Under this structure, you’ll have absolute control over the business. However, your personal assets could be at risk, and it might be more difficult to obtain loans.
- Limited liability company (LLC): Forming an LLC reduces your personal liability by making your cleaning business its own financial and tax entity. This structure adds a layer of protection between what happens with your business and your personal assets but typically comes with higher start-up costs and complexity.
Consider consulting with an attorney to make sure you’re organizing your business in a way that works for you. Keep in mind that you can always start out as a sole proprietor and change to an LLC later.
5. Name your cleaning business
Before you can register your business, you need to choose a business name that reflects your brand, niche, company values and the services you offer.
You typically can’t register a business name if another business in the same state is already using it, so whether you use an online name generator or already have a name in mind, make sure it’s available. Many states have online databases you can search through to see if a business name is taken. Since you’ll want to create a company website later on, it’s also a good idea to check domain availability for the name you want to use.
6. Register your cleaning business
Registering your business with the right federal, state and local agencies is an important step that can give you personal liability protection and other legal and tax benefits. Here are the steps you should take:
- Register your business name: For most cleaning businesses, all you have to do is register your business name with state and local governments.
- Register with the IRS: You’ll need to get an Employer Identification Number (EIN) from the IRS to pay taxes, hire employees, open a business bank account and apply for a business license.
- Register with state and local agencies: Some states, counties and cities also require you to register a DBA (a “doing business as” name) if you’re starting a sole proprietorship. Depending on where you live, you might also need to get a state tax ID number.
7. Open up a business bank account
Once you receive your federal EIN, consider opening a business bank account to keep your business transactions separate from your personal finances. A business account also allows you to accept credit card payments from customers, keep records of income and expenses and organize your taxes.
8. Get the right insurance coverage
There are a few types of insurance you should consider getting to protect yourself, your employees and your business:
- General liability insurance: This protects your cleaning business against financial loss if a customer slips on a wet floor after you mop it, for example, or you damage an item in a customer’s home.
- Surety bonds: Surety bonds compensate your customers if anything is stolen while their home is being cleaned. Many people are hesitant to work with cleaning companies that aren’t bonded.
- Workers’ compensation insurance: This covers medical expenses and a portion of lost wages if an employee is hurt on the job. This type of insurance is required in most states for cleaning businesses with employees.
- Auto insurance: Whether you own a company vehicle or your employees drive their own cars to and from job sites, you’ll probably need more than just personal auto coverage. Look into commercial auto insurance or hired and non-owned auto insurance (HNOA), depending on your needs.
9. Purchase your equipment and supplies
Now that you have all your legal paperwork in order, it’s time to purchase the essentials. Keep in mind that you can typically save more money by buying cleaning supplies in bulk online or from wholesalers.
Some basic supplies you’ll need to get started include vacuum cleaners, mops, dusters, microfiber cloths, toilet brushes, dustpans and brooms, general or all-purpose cleaners, sponges, squeegees, trash bags, bleach, air freshener, disinfectant wipes, paper towels, floor cleaner, gloves and masks.
Consider investing in durable, high-quality equipment, including vacuum cleaners, that will last a long time. You can always rent more expensive equipment, such as carpet steamers, when you’re first starting out. It’s also important to keep your niche in mind. If you’re going for eco-friendly cleaning, for example, make sure to purchase supplies that are nontoxic and easy on the environment.
Since reliable transportation is crucial to get to and from cleaning jobs, now might also be the time to think about purchasing a company car, truck or van.
Be sure to check local, state and federal health and safety regulations before you shop for supplies. You may need to buy certain personal protective equipment or avoid using specific chemicals to comply with laws governing residential and commercial cleaning.
10. Hire employees
While you might want to start out on your own, hiring employees is essential if you want to expand your business—and profits.
To hire cleaning staff, start by writing a standout cleaner job description to ensure that the most qualified cleaners apply for the position. Some skills to look for include interpersonal and communication skills, the ability to work without direct supervision and knowledge of cleaning supplies and techniques.
When interviewing your top candidates, ask a mix of general interview questions and specific cleaning questions. Research the average hourly pay rate for cleaners in your area to ensure that you make competitive offers to the highest quality candidates. In addition, consider what type of employee benefits package you’ll provide, if any.
Read more: Cleaner Interview Questions
11. Choosing a pricing model to charge for cleaning
You’ve figured out what it will cost to run your business, so now it’s time to figure out how to price your services. Keep in mind that you want to make sure your rates are competitive, while still charging enough to make a profit.
There are three popular pricing models for cleaning businesses:
- Hourly: To establish your hourly rate, find out what other cleaning businesses charge per hour in your area. Since your competitors have already done the research, they know how much to charge to make a profit while factoring in overhead expenses and other costs. Setting an hourly rate is a great option when starting a cleaning company, but it can also be limiting as you get faster and more efficient.
- Flat fee: Many customers prefer flat fees since they know what they’ll have to pay upfront—no matter how long the job takes. Estimate how many hours it will take to clean a client’s house based on the number of bedrooms and bathrooms, and offer that rate to your client as a flat fee. The downside is that you might end up losing money if the job takes longer than you originally estimated.
- Square feet: Another option is to charge a square foot rate. For example, you might charge five cents per square foot for a routine cleaning. The advantage is that you can charge more than your hourly rate for bigger homes. If you normally charge $30 per hour for a basic clean, for example, you can use the square foot model to charge a slightly higher hourly rate for homes over 2,000 square feet.
Beyond standard cleanings, which might include vacuuming, mopping, dusting, sweeping, etc., you might also want to offer add-ons for an extra fee. This could include laundry services, refrigerator or oven cleanings, wall washing, window cleanings, deep cleans, move-out cleaning and more.
Read more: How to Determine Pricing for Your Business
Best ways to market your business and find clients
You’ve registered your business, purchased your supplies and insurance, hired employees and set your pricing model, so now it’s time to get the word out and start building a roster of customers.
To reach the right types of people, use a mix of offline and online marketing, which can be cheap or even free in some cases.
Offline marketing ideas for your cleaning business
- Design a logo that reflects your name and niche. Keep in mind that your logo will be used across your website, social media, flyers, invoices and uniforms, so it’s important to get it right. Hiring a graphic designer is probably your best bet, but you can also try your hand at designing a logo yourself to save money.
- Create flyers, brochures and business cards to distribute in your area. You can also advertise in local newspapers and magazines.
- Turn your vehicles into rolling billboards. Get a custom magnetic sign made for cars used by you or your employees to get to and from job sites. Include your company logo, phone number and website on the vehicles.
- Encourage ratings and reviews. For a cleaning business start-up, online reviews matter. To get your first ones, offer your cleaning services to friends and family at a reduced rate. Ask them to write an online review and spread the word about your business to help draw in new customers. Avoid paying people to write reviews or asking friends to write fake reviews. Doing so may violate the terms of service of review sites and put your cleaning start-up at risk of being banned.
- Offer special deals to first-time customers to encourage people to try out your services. For example, you could provide a coupon for 10% off their first cleaning.
- Foster word-of-mouth marketing. Start a referral program to encourage satisfied customers to refer their friends and families. You can offer a large one-time discount or a smaller ongoing discount for each newly referred client.
Online marketing ideas for your cleaning business
- Develop a business website to establish your online presence. Include the services you offer, your prices and your contact information. Implement search engine optimization (SEO) techniques so your website appears at the top of search results for cleaning services in your local area.
- Set up social media accounts on Facebook, Twitter and/or Instagram to build up an audience and make it easier for people to find your business online. Consider purchasing targeted ads based on location, demographics and interests to reach more people.
- Register with Google. Another simple (and free) way to show up in online search results is by registering your business with Google. This allows people to leave Google reviews and see your website, phone number and business hours when they look you up.
- Establish yourself as an expert in cleaning by creating content for a blog hosted on your website or videos you upload to YouTube, Instagram and TikTok. High-quality content could go viral and reach many potential customers in your area.
- Use online platforms such as Angi, TaskRabbit or Handy to reach new clients. Create strong profiles geared toward your target market and respond to inquiries quickly to secure new business.
Frequently asked questions about how to start a cleaning business
How do I get funding for my cleaning business start-up?
One of the most important steps of how to start a cleaning business from scratch is to determine where you’ll get the money to fund your start-up. Some potential sources of funding include:
- Personal savings
- Angel investors
- Business loans
- Personal loans
- Venture capital
How much money can you make from a cleaning business?
It depends on factors such as location, number of employees, rates, number of clients and more, but cleaning businesses can typically bring in $30,000 to $70,000 per year.
Do you need a business plan when starting a cleaning business?
A business plan can benefit entrepreneurs hoping to enter any industry. Writing a business plan can make it simpler to learn how to start a cleaning business because you’ll need to complete many of the above steps as you fill in the various sections of the document. You may also need a business plan to obtain a loan or other funding for your cleaning business start-up.