How to Start a Cleaning Business
A Step-by-Step Guide to Start your own Cleaning Company and find Financial Freedom
Have you ever dreamed of owning your own business? Have you ever wanted to decide your own financial future? If so, a cleaning company may be perfect for you – assuming you don’t mind getting your hands dirty! By starting your own cleaning company, you have the chance to become an entrepreneur, without having to invest too much cash. Perhaps best of all, you won’t even need to put in too much effort to drum up future work.
Homes, businesses, and public buildings all need to be cleaned regularly. Somebody passionate about offering a professional cleaning service at an affordable price could find their business begins to boom, just few weeks after starting up. In today’s economic times, such an opportunity isn’t to be dismissed lightly.
Cleaning companies are an easily marketable business to start up and succeed in, becoming increasingly more popular among entrepreneurs looking to create their very own cleaning business venture. The professional cleaning industry can market to consumer and commercial groups, which can allow you to build a profitable business that you can operate either part-time or full-time. The ability to hone in on market niches and flex your company to suit your individual skills and services is what makes this industry to appealing to budding entrepreneurs, providing great opportunities and the extensive ability to build and expand. With such a great need for cleaning services among all types of markets, the cleaning service industry is really an economical way to establish a successful business.
For starting any type of business, it is essential to understand the fundamentals and qualifications to make your business work and succeed. There are many factors that go into building a business, and many different aspects to consider. Understanding the basic business skills is key to running an efficient business and making sure that your cleaning company runs smoothly.
If cleaning for profit is something you’d be happy to do, the following steps will guide you through the process of turning the idea into cold, hard cash.
Step One: Understand the Industry
When it comes to cleaning for profit, there are two types of clients you need to know about: consumer clients and commercial clients. It’s advisable, when starting out, that you specialize one particular type of client in order to improve your advertising effectiveness and to keep costs at a minimum.
Your responsibilities will be fairly similar regardless of which cleaning niche you decide to specialize in. What will change, however, is the scale of the cleaning operation. Cleaning the carpet inside a small house is far easier than cleaning the carpet inside a giant office building.
Before doing anything else, decide whether you want to be a consumer cleaner or a commercial cleaner. Remember, you can diversify at a later date if you’re particularly successful.
Starting a cleaning business can be daunting if you don’t have the proper tools. An important part of conducting your business is to consider starting off with using your own resources and assets, and then building from here. You can also gather support from family, friends, partner, and even government programs who are designed to fund and support small businesses. Think about the image you want your company to display, and determine what type of locations you want to clean.
- Do you want to establish your cleaning business from a home based office or a commercial location?
- What places are you willing to clean?
- What are your financial goals?
- What kind of work schedule would you like?
- Do you plan on hiring employees eventually?
Targeting the businesses that you wish to serve can help you branch out into different areas of commercial cleaning that are offered, from small office buildings to large skyscrapers and schools. If you’re just starting out with limited help and resources, you may want to stick to the smaller side until you build up a substantial employee base and become an established company.
Step Two: Understand Yourself
Before jumping into the deep end and starting your cleaning business, you’ll need to take stock of what you currently possess. Create a definite figure in your mind of how much time you can invest per week in order to get your business off the ground. Also, if possible, make a clear note of how much money you’re able to invest.
While you don’t need to give up everything else in your life to make your venture successful, you do need to organize your current assets to make sure you don’t bite off more than you can chew.
Once you know whether you want to go full-time or part-time, and you know how much cash you want to put in up front, you can begin to create a strategy that will help you in your quest to start a cleaning business.
Of course, this is also the point where you want to decide if you’re actually up to the task of cleaning for a living. Are you prepared to work unsociable hours if need be? Are you willing to work up a sweat in order to get a room looking spotless? There’s no shame if you’re not. Just be honest with yourself.
Step Three: Cleaning Franchise or Start Your Own Cleaning Business ?
Depending on where you live and how much money you have to invest, you may opt to run your business as a franchise, rather than an independent company. There are numerous benefits to this, such as branded equipment and a reliable name. Franchising means your business gets to enjoy a fine reputation from day one as somebody has already done the hard work of building it.
Franchising isn’t for everybody, though. Giving away a cut of your profits each month may not sound too appealing to you. It’s also possible that you desire the chance to succeed in your own right. When I first started I put a lot of thought into whether or not to franchise. There were a couple things that popped out immediately making the franchise route all but impossible:
- The entry fee (or franchise fee) is expensive. In the tens of thousands actually. You may be able to find a smaller operation that offers a lower cost to entry, but it will also be a franchise most people have never heard of.
- Franchises will limit your coverage area, ultimately handcuffing the amount of business you can accept long term.
- On top of paying a franchise fee and a percent of all revenue ongoing… you’re still going to have to purchase equipment, vehicles, supplies, etc. For me this was out of the question, i started my company will less than $500 and that would just not be possible in a franchise situation.
There’s no right or wrong answer when it comes to franchising. It’s a personal choice, one you have to give serious thought to before you can go any further.
Step Three: Financing
Most people finance their cleaning companies through savings. This means their profits aren’t eaten up paying back loan repayments.
If you don’t have any savings, you have a few choices:
- Begin to save now and opt for a smaller domestic cleaning business with lower upfront costs.
- Look for government initiatives in your area.
- Borrow money from friends, family, a business partner, or the bank.
Again, the option you choose will be personal to your circumstances. The safest bet is to save up a little of your own money
for cleaning products then begin a small domestic cleaning company that won’t require too much investment on your part.
Do be aware though, that the more money you’re able to invest, the quicker your company will probably get off of the ground. If you want to look into getting a loan from the Small Business Administration, (SBA) there are programs that are specifically set aside for minorities. Lots of woman take advantage of the programs, some funding is in the form of a grant (free money!)
Step Four: Analyze the Market
Once you’ve thought about what kind of business you want (and are able) to run, and how you’re going to finance it, it’s time to research your market. Doing this has many benefits. First, it’ll help you make sure reality matches up with your ambition. Second, it’ll help you get those first few clients that bit quicker.
Knowing how to start a cleaning business that will make long-term profits starts with this step right here.
Begin to collect quotes from your competitors regarding services you plan to offer. Also, try to find out more information on these companies. Do they offer a 24-hour service? Do they use premium cleaning products? The more information you collect, the more you’ll be able to spot weaknesses in their services that you can exploit.
Another key aspect of market research is testing the waters for customers. Do you have friends or family that would use your service? Do those closest to you know anybody looking for a cleaner?
You’ll be surprised at just how many leads you’ll get when doing this market research. A reliable cleaning company is more sought after than you think!
Step Five: Time to Get Started. Name That Business!
Now that you have decided that you’re ready to jump into the cleaning industry and you’ve decided on your business’s niche and services, actually setting up the business is the next step. Deciding on a business name is an important part of successfully marketing yourself and your services, so it is important to come up with a name that demonstrates your professionalism and makes customers want to hire you. Choose something that highlights the advantages and highlights of your business, rather than choosing something outrageous or generic, and keep it simple and easy to remember but effective in grabbing a potential customer’s attention.
In today’s business climate, it’s important to choose a company name that matches an available domain name. For example: If my company is Joes Cleaning, I want to register the web name JoesCleaning.com This will ensure my customers are not confused when they try to find my website online. A lot of my companies traffic comes from people searching online for cleaning services. If I was out cleaning windows and someone saw my company name on the back of my shirt, but couldn’t remember my website because I had to choose a long name like: www.TheRealJoesCleaningAustinTx.com then i would potentially lose business. Keep this in mind when choosing a company name.
Step Six: Purchasing Assets
Hopefully by now you know a lot more about how to start a cleaning company of your very own. You’ve done a lot of the ground work, and are probably feeling pretty excited over what’s to come.
This is the part of the process where you begin purchasing your assets – your vehicle, your uniforms, your cleaning products, etc.
For cleaning businesses, you need to have a supply of cleaning supplies and equipment that you’ll need to complete the job. You’ll also need to consider the use of vehicles used for your employees to get to the customers’ sites, making sure that you choose a vehicle equipped with enough room to store supplies and transport your cleaning employees. For purchasing equipment, as long as you’ve provided some investment into your business you should be able to acquire financing, although there are plenty of ways to raise money, like grants, loans, line-of-credits from your bank, etc. Look into federal funding too, minorities especially are qualified for loans or outright funding www.treasury.gov/resource-center/sb-programs/Pages/Small-Business-Lending-Fund.aspx .
When deciding on what kind of cleaning supplies you want to use, you must first determine if you are going to be cleaning residences, commercial businesses, or both. For cleaning businesses, consider buying cleaning supplies in high volumes as the commercial sites usually cover a larger area surface. It’s also important to gain access to floor, mirror, and window cleaning agents that will be essential for your business use. Some larger equipment that may be needed can include vacuum cleaner or carpet cleaners, as businesses may also hire you to clean their carpets as well.
Step Seven: Logistics and Licensing
After purchasing your assets, you’re almost ready to go. Now you just need to take care of a few things before your company can start serving your community.
Depending on where you live, you’ll need to apply for a business licence. To do this, you can get in touch with a representative who will inform you on the type of license required for commercial cleaning businesses. You will need your DBA (Doing Business As) and vendor’s license. You can use http://www.business.gov/register/licenses-and-permits/ as a guide. This will also inform you of the specific requirements for the state your in. New York has much different requirements then say, a small rural state like Maine has. I was able to register at my local town office for free. Once you decide to file as an LLC or S-Corp/C-Corp , you will be dealing with the Secretary of State. I didn’t file this on my own, I had my accountant do it. I HIGHLY suggest having a legal professional do this for you! 😆
If you’re planning on hiring staff right from the get-go, this is the time to start putting concrete plans in place. If you’ve negotiated contracts from the market research stage, you can hire staff straight away. If you’re still waiting for work to come in, make sure your workers are at least ready to go when needed.
Step Eight: Insurance
Liability insurance is an important requirement for your cleaning business, and is the next step you should take towards establishing your company. You can find commercial liability insurance through local agents, and you can also use http://ww.netquote.com. You can use this find your business insurance quote, which can be costly depending on the geographical location of your business. Another thing to consider is obtaining bonds, especially if plan on expanding your business to hire employees or partners. A bond will help protect your cleaning business against employee theft. Your local agent can also help arrange for you to find a bond that suits your business.
My policy started at $600 for the year and payments are made quarterly. Most of the companies i have contracts with require at least $1,000,000 in coverage and some require twice that. Over the past 5 years my rates have gone up a little, as my company has grown, but still overall i’m paying around $900 a year. Janitorial, in general, is not a high risk industry, so rates are not as high as a roofing company or a business that deals in dangerous chemicals.
Step Nine: Pricing and Billing
Another critical component of setting up your cleaning business is determining the rates that your business is going to offer for services. This can be decided in any way, and really depends on your preference and what best suits your business’s finances.
You should determine your hourly rate based on what you want to gain as a profit, factoring in expenses such as insurance, license, gas, maintenance, and supplies and equipment needed for the job. Also consider the location that you are setting your business in when deciding on how to price. You will need to figure into the pricing how many hours your service will take, including factors such as the type of floor, number of rooms, size of the area, number of employees, and bathrooms.
Make sure you factor the price of labor and materials, as well as indirect expenses needed to operate the business, and the amount of money needed to make a profit. Deciding pricing may be a trial and error process which will get better as you gain more experience with your business, so just gain an initial pricing by calculating your hourly rate by the time it takes to clean.
Unless you’re great with numbers, pricing up your service isn’t going to be that easy. In fact, you may find it really intimidating.
Correct pricing is essential to success, though, so it’s worth learning to do correctly. If your prices are too low, they’ll put people off. If they’re too high, potential customers will go elsewhere. There’s a sweet spot you have to find.
As you won’t have any concrete figures to work with at the start of your venture, you’ll have to estimate to the best of your ability. Decide how long you think a particular job will take. Add together your labor cost and the cost of materials per job. Include state taxes, and you should have a fairly reliable rate to work with. If you want to, you can add a little extra to your price to cover profit. How soon you should do this however depends on the strength of your competition.
When billing your clients, find out about their payment preferences. Some companies only pay invoices on a certain day, while others prefer certain payment methods. Your goal should be to get payment for your work as soon as possible. That being said, as soon as possible doesn’t mean instantly. Work with your customers, and they’ll reward you for it with more business. I try to lay out all the options, just so there are no surprises when you get to this point. I have customers who both pay me at the beginning of the month for services that haven’t even been rendered yet and I also have customers who are typically 30 days late on all invoices. Check out this post on how to quote cleaning jobs to get an idea of how to charge your clients!
Step Ten: Marketing your Cleaning Business
When starting a business, the key to catapulting it into success is to appeal to the market. Advertising and marketing is essential for getting your business off the ground, especially if you’re a startup operating from your home. You can market your business in a cost effective way by printing your own fliers and business cards to deliver to local residences and businesses in the area of your focus. Also consider placing an ad in a major newspaper for your city in order to gain exposure, as well as using referrals to spread the word about your business and gain more customers.
Promotions and deals are also a good way to circulate the name around and increase exposure. In order to market your company successfully, you must know your target audience that you are selling to. Determine if you want to aim for a specific niche, and explicitly target your marketing to that audience. Do you want to focus specifically on cleaning home residences? Or commercial businesses? Or maybe you are going to design your company to specifically deal with carpet cleaning? Do some research into the demographics of your audience based on the niche and location of your business, and base your marketing strategies off of a comprehensive marketing analysis. I did a massive post laying out a ton of ways to advertise your business for FREE. Check out the post:
Step Eleven: Staffing and Hiring
You may want to think about whether you are planning on hiring employees to clean for your business, or if you are going to focus on running the business yourself. Your staffing needs will depend on your financial stature at the time you initially start your cleaning business, and you may want to either start off cleaning small areas or with a small group of employees. Once you begin to make more profit and expand your business, you can hire more employees to get the job done more efficiently. As the business grows, consider hiring different employees to cover different aspects of the business, such as marketing/sales, customer service, supervisors, as well as cleaning members. This will help increase your customer satisfaction and help your business run more smoothly. Click here if you need tips on how to write an eye catching help wanted article.
There are so many ways to get the message out that your company is expanding and needs reliable employees. Just a few places to post a help wanted ad:
- Local Newspapers
- Helpwanted.com and related sites
- Use your own social media site and ask friends/family
- Referrals from people you trust
- Call the local staffing companies and offer the job
In these uncertain economic times, more and more people are choosing to break away from the uncertainty of the corporate world and start their own business, working for themselves.
Some of these businesses are doomed to fail. They either require too much start-up capital or involve providing services that people neither want nor need.
When it comes to running a cleaning company, you don’t have to worry about either of these problems. An abundance of work is there, waiting for you. So too is growth, as long as you do your job well.
Very few companies are able to operate in an industry that requires very little upfront cost and has few barriers to entry. For those with the determination to make a business like this work, starting a cleaning company really does offer a unique opportunity.
Breaking into the cleaning industry is rewarding and appealing on many levels. Entrepreneurs are becoming more and more interested in starting up successful cleaning businesses. The accessible market for cleaning companies makes it easy even for people who are not professional entrepreneurs to successfully create and run a company, it just takes investment, dedication, and some basic business understanding. Cleaning service businesses can provide you with an incredibly flexible schedule and style that allows you to run your business in any way you wish.
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