How much cash you’ll need to start your cleaning business
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, protective gloves, etc. — 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-$12 per cleaner, per hour.
- 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: Around $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 speciality 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, like 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 a cleaning business on the side.
Once you’ve chosen the type of cleaning business you want to start, 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 like eco-friendly cleaning, carpet cleaning, move in/move out cleaning, deep cleaning, etc. This will form the basis of your marketing strategy.
How to launch your cleaning business
Before you pick up a duster or broom, you need to register your cleaning business. This involves choosing a business structure and name, filing the correct paperwork and organizing your business finances.
1. 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 startup 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 LLC later.
2. 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.
3. 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. Find out more here.
- 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.
4. 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.
Getting 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: 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: Compensates 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: 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.
Purchasing 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, like 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 non-toxic 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.
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.
Choosing a pricing model to charge for cleaning
You’ve figured out what it will cost to run your business (e.g., supplies, employee wages, mileage and fuel, insurance), 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 clients’ 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.
- Upgrade options: 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.
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 print and online marketing — which can be cheap or even free in some cases.
Print 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, uniforms, etc. 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.
- For small businesses, ratings and reviews matter. To get your first reviews, 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.
- To encourage people to try out your services, you can offer special deals to first-time customers (e.g., 10% off their first cleaning). Other ideas include incentives for customer referrals and a simple customer loyalty program.
Online marketing ideas
- 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 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.
- 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.
FAQs about starting a cleaning business
How much does it cost to start a cleaning service?
It depends on your location, number of employees and whether or not you purchase a company vehicle, but you can typically start a profitable cleaning business with less than $5,000.
How much money can you make from a cleaning business?
It depends on factors like your location, number of employees, rates, number of clients and more, but cleaning businesses can typically bring in $30,000 to $50,000 in their first year.
What equipment do I need to start a cleaning business?
Beyond basic cleaning supplies and equipment, you might also want to invest in a scheduling tool to manage client bookings, accounting software to keep track of how you’re doing financially and any speciality cleaning equipment you might need, such as a carpet steamers, pressure washers, etc.