How to Start a Cleaning Business?
(The Easy Step by Step Guide),
Valued at $46 million in 2019, the cleaning industry in the US is expected to grow exponentially in the coming years. If you want to learn how to start a cleaning business to step into this ever-growing industry, you’re in the right place.
Most cleaning businesses are individual or family-operated, making them one of the few businesses that big corporations don’t have a monopoly over.
Cleaning businesses are expected to increase employment by up to 6% in 2020.
Thus, it’s a good time to invest in a cleaning business, help build the economy, and earn a handsome income.
In this guide, you’ll learn about starting a cleaning business from scratch without any previous expertise. Using the tips and guidelines we give along the way, you can set your business on the right track from the beginning and build a loyal clientele.
What You'll Learn..
What Type of Business to Start?
As the name gives it away, a cleaning business helps keep spaces clean. Now, you have to decide what you want to clean.
As tempting as it might be, don’t jump into the pitfall of starting an all-rounder cleaning company.
Start by choosing one particular sector of the industry and then expand your services to cater to others.
The cleaning industry can be divided into three categories: commercial cleaning, residential cleaning, and specialty cleaning.
Residential cleaning services include cleaning houses and residential apartments. This market is most popular in bigger cities or regions where people have above-average income.
Americans over the age of 40, holding college degrees and having stable incomes make the perfect clientele for this cleaning sector.
Back in the day, it was old retired couples who were hiring cleaning services, but now, couples aged between 40-50 are the target market.
This shift is possible because, in most homes, both partners have a job, and no one wants to scrub a toilet after an eight-hour-long shift at work.
You can offer services such as event cleanup, green cleaning, moving in/out cleaning, and deep spring cleaning.
Commercial cleaning caters to factories, corporations, offices, schools, warehouses, and other commercial outlets.
A third of the cleaning industry is controlled by commercial cleaning services. Also known as janitorial cleaning, this industry has a broader scope than residential cleaning but requires a larger capital for a startup.
Many non-residential construction sites hire commercial cleaning services on weekends or last shifts of work, as this is when the space is mostly empty.
If you want to start a commercial cleaning business, target business estates, and be ready to spend some extra money.
If you want to face the least competition, specialty cleaning is the right category. However, it requires special training, workforce, and equipment.
These services are needed after a natural or human-made disaster, such as an earthquake or a murder crime scene.
Often, hospitals and industries with hazardous waste also hire specialty cleaning services. For specialty cleaning, you must be compliant with OSHA guidelines.
How to Choose the Right Cleaning Business?
When starting a cleaning business, you have to do a little more than just follow your interests. To generate revenue and grow clientele, it’s necessary to keep other factors into account.
Firstly, you have to determine what kind of cleaning services people avail in your region.
Do you live in a suburb or around industrial estates? How many cleaning services are already operating in the region?
Starting a residential cleaning service in a small town where no one has the extra money to spend isn’t a good idea.
Conversely, setting up your service in a posh neighborhood where residential cleaning services are already densely established will leave you with no clients.
Instead, focus on the kind of people that live around you, age group, their average income, and your competition.
If you’re starting a cleaning business from your living room, you won’t have a ton of cash to spend. Keep in mind that your investment capital must cover:
Depending on how much you can spend, choose a cleaning business that you can start with sufficient equipment and manpower.
Lastly, focus on client demand. Urban areas have many businesses, schools, and offices, making commercial cleaning services a huge hit there.
Nowadays, there’s also an increased demand for ‘green cleaning’ services. With people becoming conscious of conserving their environment, the trend has spread all over the country.
If you’re starting your business around college residential areas, offer green cleaning services as young people are more inclined towards eco-friendliness.
Start Your Own Business or Buy a Franchise?
You can either start your own cleaning business or buy a franchise, depending on how much time and money you can spend.
Starting your own business gives you full control and the option to customize your brand experience. On the other hand, buying a franchise provides an already established brand to build upon.
Starting Your Own Business
Buying Cleaning Franchise
Most people start cleaning businesses because of their interest in the field. If you don’t want your business to go down the drain due to corporate greed, it’s best to start your own company.
It might be a bit overwhelming at first, but as clients and experience come pouring in, operating your business becomes easier.
Since the cleaning industry is service-based, you have to be on top of your game. Although buying a franchise does half the work for you, your business can be affected by the low service provision of another franchise of the same company.
On the contrary, owning your personal business gives you full operational control.
You can create a distinct brand image and define services for your business.
More importantly, today’s customers don’t completely trust giant corporations and would rather like face-to-face dealings. It’s important to keep your services top-notch and customer service responsive because this is what customers are looking for now.
However, if you have the investment capital and want to earn significantly from your first month of operation, buying a franchise is the right choice.
Make sure you do your research well before coming to a decision. Speak to the people who already own franchises from the company and ask them about their experience.
Secondly, keep track of the company’s financial performance, customer service reports, and any scandals or controversies.
Ask for marketing, advertising, and operating support from the company. Although most corporations already offer help, make sure to get the best deal. If you have expert help, it will be easier to attract clients, dodge competition, and establish a name in your region.
Beware of the Franchise Hidden Costs
Along with the one-time setup and royalty fees, the franchise also has hidden costs that you may only find about after signing the deal. If you do your research well, you’ll find something on their website or paperwork.
Also, talking to the franchise owners in your area can help you get a clear picture. You will know if there’s something fishy going on.
Another thing to consider is the franchise regulations and guidelines. Most companies have ties with service providers and vendors they do regular business with.
Once you own a franchise from the company, your contract will legally bind you to avail of the vendors’ services. Often, this is not the most economical or convenient option.
The Business Essentials: Business Registration, Licenses, Training, Insurance, and Taxes
Paperwork is the most uninteresting yet unavoidable part of starting a cleaning business. If you want your business to be a success, you have to ensure all your paperwork and licenses are in order.
Also, it’s best to keep the business model simple as it will reduce the complications of paperwork.
The US ranks sixth in ease of doing business, so you shouldn’t face much trouble when starting. However, make sure you are well-informed about everything.
Since your state laws might differ from the general framework to some extent, it’s best to hire a legal advisor to get relevant information about starting a cleaning business.
However, you can use this helpful guide as a general to-do list for setting up a business.
Business Structure and Registration
In the US, your business will fall into one of the four business structures. The tax, liabilities, and income for each business structure are different.
This is the simplest business structure and most common in the US. In this type, the owner has full control of the company and is responsible for paying self-employment taxes.
A partnership refers to the joining of two or more people to run a business. Partners may or may not have an equal share in profits and investments.
Although oral agreements are standard, it’s best to have written agreements to avoid financial problems later.
Limited Liability Company
An LLC is a hybrid of corporation and partnership. Like corporations, owners can be protected from liabilities if they operate an LLC. They can also be run like partnerships. The taxation will depend on the structure you choose for your LLC.
Corporations are the most complex business structure regulated by state laws. They are also taxed separately, depending on their size and tax rules that apply to them.
Registering your company with the government makes it a legal entity that follows, and is protected by the government guidelines.
Firstly, you have to determine if and how you need to register your business. Your business structure and state will determine the registration process.
To start a business with any name other than your own, you have to register your business name with your state government.
Your company name will be the DBA(Doing Business As) that you’ll further use for getting an Employer Identification Number.
If you start a business with your own name, there’s no need for registration. However, not registering a business means you lose eligibility for tax and legal benefits.
Register With State Agencies
Since cleaning businesses are either a partnership or an individually-owned company, you’ll have to register with the state where you’re conducting your business.
You are eligible to register with a state government if:
If most of your clientele comes from a particular state, you need to register with the local authorities. Depending on which state you live in, you’ll either have to send filled paper documents or register online.
Mostly, the total fee for registration is below $300, but the amount may vary depending on your business model and state. Make sure you have information below on hand:
If your cleaning business is a partnership or corporation, you must have a registered agent for filing for registration.
The agent will receive the paperwork on your behalf and must be a resident of the state where you conduct business.
Register With Federal Agencies
Although you don’t have to register with the federal government, some companies do that to get tax exemption and trademark protection.
You can trademark your name so that no other company in the US can use it.
Before you choose a name, make sure it’s not already in use. The United States Patent and Trademark Office keeps a record of all business names.
If you skip this step, you might end up being sued for trademark infringement by a company, which is very costly to get out of.
Open a Business Bank Account
Once your papers are ready and you have a name, you can easily get a business bank account. Having a business account helps you keep business and personal funds separate.
It also allows you to offer credit card payment options to your clients for a direct transfer of money to your business account.
Additionally, you can get different services like getting a loan for buying equipment or expanding your business.
A business bank account also proves to be helpful while filing taxes and staying legally compliant.
Licensing: State and Local Councils
Having licenses and permits allows you to run your business smoothly and legally. The license needed by your company differs according to location, state, business structure, and industry.
You only have to get a federal license if your business is regulated by the federal government. Since cleaning services are not under a federal agency, you’ll have to get a permit from your state instead.
The requirements and information for each state vary. To learn about your state licensing requirements, go to the state’s website.
Besides, licenses and permits often expire over time. Keep track of the expiry dates, so you can renew the license before someone shuts your business.
Although training qualifications are not a government requirement, it’s good to have them on hand. You’ll be going into people’s personal spaces, so it’s ideal to have the right skills and training.
Most training services also guide you about local laws, if any, for cleaning services. Send your employees for training before you put them to work.
Most importantly, if you’re offering specialty cleaning services, you won’t be hired without qualifications.
Also, you must be compliant with the EPA’s guidelines for cleaning hazardous waste and high-risk spaces.
You’ll have to pay for the damages caused to the client’s property and belongings by your employees.
Public liability insurance is an ideal option for cleaning businesses. Moreover, most insurance companies in the US offer cleaning insurance as a sub-category for business insurance.
These insurance plans are suitable for laundry services, house cleaning, office cleaning, commercial cleaning, and dry cleaning businesses.
The cost of your insurance plant will depend on the amount of risk you or your employees are exposed to. For example, in residential cleaning, you’re working with simple machines and not exposed to a lot of dust or harmful particles.
On the contrary, specialty cleaning insurance costs will be higher as you’ll be working with complicated machines in hazardous waste areas.
Cleaning services cover general liability, i.e., damage to life or property and commercial auto, including coverage for vehicles used.
Instead of offering flat rates, most insurance plans are customized according to your business size, employee number, and past claims.
Get quotes from different companies and compare them to find the best one for your cleaning service.
If your cleaning business just includes you and another employee, you can apply for self-employed health coverage.
Self-employment lets you choose a health insurance plan from the Health Insurance Marketplace. Even if you’re working with one or two employees or your spouse, you may be eligible for SHOP Marketplace for small businesses.
Business Records and Taxes
After registering your business, apply for an EIN(Employee Identification Number), which will be your federal tax ID. The application is free.
You only have to change your EIN in case you change the company’s name, address, ownership, management, or tax status.
Again, check on your state’s websites if you need to pay state taxes. In some cases, small businesses get state tax ID numbers even if it’s not compulsory to get tax benefits.
Picking the Right Equipment and Cleaning Products
The equipment required for your cleaning business will depend on the sector you’re catering to. For example, if you’re running a residential cleaning business, you need basic cleaning supplies like:
While you can buy the basic cleaning supplies at your local market, most of your money will be spent on electronic equipment.
Buying a vacuum cleaner will cost a lot more than your other cleaning supplies. Thus, be wise in your choice and buy a vacuum cleaner that won’t break down the second month.
For commercial and specialty cleaning, you’ll have to invest in equipment.
For example, if you’re working at an accident site, you’ll need much more than a mop and dustpan. In some cases, you can also rent bigger equipment that you use rarely.
Where to Find Cleaning Supplies and Equipment?
To save money on cleaning supplies, it’s best to buy in bulk from retailers. For expensive machines and equipment, head over to online stores as they always have the best deals.
Amazon has everything from vacuum cleaners to pressure washers.
You can find machinery in different price ranges, depending on your budget. Also, if your budget is tight, you can always opt for used machinery.
If you’re in luck, you might find equipment for dirt cheap prices on Craigslist. Instead of buying everything at once, start with the basics.
Make it your goal to buy one new piece of equipment a month and slowly build your supplies over time.
New vs. Used Equipment
To put it straight, both new and used equipment has its pros and cons.
If you have the money, it is better to go for new machines and products. Firstly, you’ll get a new product that will last long. Secondly, you’ll probably get a company warranty that covers the cost of damages for a while.
However, if you can’t go out of your way in terms of spending, buying used cleaning equipment is also a good option.
You can find used vacuum cleaners and other equipment on Facebook Marketplace, eBay, and Amazon.
Do not buy a machine if it’s visibly damaged or about to fall apart, just to save some money. You’ll be putting your employees’ health at risk.
Never compromise on equipment quality in specialty cleaning. Since specialty cleaning deals with complicated cleaning tasks, you must have the right machine power at your side.
Besides, the government might revoke your license if you’re using old and unreliable machinery for specialty cleaning.
As for cleaning products, always buy them in bulk to save money. Online companies offer free shipping for bulk orders, so you save fuel money too.
Nowadays, people appreciate the use of natural and green cleaners, as they are safe for the environment. Although they cost more than traditional cleaners, they’re a way to earn your customers’ satisfaction and trust.
How to Beat Your Competition?
If you make one quick search on Google for cleaning services in your area, you’ll find several options. Now, extend this search to your state, and there will be hundreds of options.
Why should a client choose you and not your competitor? To be in the limelight, you have to do something that others are not doing.
Provide Excellent Customer Service
In product-based industries, you can attract customers by introducing a new product or updating an existing one.
However, in service-based industries, such as cleaning business, customer satisfaction determines your worth.
Make sure your customers feel comfortable and well-catered from the moment they call you till the end of the cleaning session.
If you have an online website or Facebook page, listen to people’s advice and reviews. Make sure a complaint does not repeat.
Customers love knowing they’re listened to. Often, companies focus too much on making money and too little on satisfying clients. As a result, they end up losing their loyal customers.
By simply having offers for the holiday season or giving a coupon, you can set yourself apart from your competitors.
Stick to a Specialty
Another thing to do is to choose one particular kind of cleaning. If you offer residential cleaning, be the best in it. You can narrow down your services by offering holiday season or moving out cleaning.
Similarly, when you’re in a commercial cleaning business, select a certain market such as schools or restaurants.
Look around to figure out which cleaning service is missing in your region. Then, provide that particular service to customers.
If everyone is selling the same thing, it’s not possible to stand out. To be prominent and make money, you must offer something that no one else is offering.
Getting the Pricing Right
It’s tricky to get the pricing right as startups often make the mistake of charging too much or too little.
If you don’t do your research, you might end up charging more than the standard rate.
On the other hand, charging too little to attract clients isn’t smart either. You have to pay for supplies, employees, and transportation, so make sure your price is right.
The best way to decide the rates is to add your expenditure and a profit margin.
People are ready to pay more when they see you offering quality products and services. For example, if you offer green cleaning, people will pay you more than normal rates.
However, do not stick to one price for too long. You can increase the charges as your business grows and you have a loyal clientele. Don’t make drastic changes in the payment plans, as this can drive customers away.
Offer discounts around the time of the year when people hire cleaning services more frequently. For example, you can give discounts for holiday cleaning.
Most people hire cleaning services when their kids are going off to college. Offer packages for college move in or move out cleaning.
Setting a basic price and then building on it, with additional services, is most convenient for you and the clients.
For instance, create a standard package. Then, add additional services like lawn cleaning, deep kitchen cleaning, or window power washing, at an additional price.
If you’re having trouble deciding a standard price, use our Cleaning Pricing and Estimate Calculator. It will help you choose the right price according to expenditure and standard rates in your area.
How to Find Your First Customers?
After you’ve set up your business, the most difficult task is to get customers. You can’t wait for them to come to you, as they probably won’t even know about your business. Do you see the point here? You have to create your business identity.
With proper advertisement, you may have clients in the first week of opening.
Nowadays, the best way to let people know about your business is to advertise online via Google or social media. You can advertise using Google Adwords.
When people search for a cleaning service in their area, the advertised company appears on the top of the page. Being easily visible increases the chances of getting clients.
Also, you can advertise your business on Craigslist. Since the pages are categorized according to state, it’s easier for the clients to find you.
Alternatively, you can advertise through social media. Set up a Facebook or Instagram account for your business.
Along with advertising your business, you can also get customer feedback through comments. Social media is an excellent way to connect with your clients and meet their demands.
No matter how digital the world gets, word of mouth will always be the most powerful way of marketing a business.
92% of the consumers reportedly said that they trust referrals from friends and family more than advertisements.
As soon as you start getting customers, ask them to refer you to their friends. You can also offer them discounts for referring you further to other people.
If your service is top-grade, clients will most likely refer you further, so keep working on providing the best.
Local Facebook Groups
Most people learn about new businesses and services in Facebook groups.
Search for local Facebook groups where people sell used products or advertise their businesses. Here, you can tell others about your cleaning business.
Since Facebook groups are mostly local, you’ll be advertising to the people nearby. Thus, your chances of landing a client are higher.
Post on weekends or holidays, as this is when people are most active. Most people are only free during the weekends, so most moving in and out takes place during these days.
If you offer moving in or out cleaning services, try to reach out to clients during the weekend.
Brochures and Flyers
Even today, when everything is online, people still read flyers as they are a precise way to get information about a business or a cause.
You can design your own flyers on Canva or get them designed by a professional. Make sure it has your services, contact details, and offers.
People are more likely to pick up and read a flyer if it’s about a discount or a cheap package. Mention packages, such as those for students or veterans, on the front to attract clients.
Most people rely on their local papers for everyday news. Advertise your business in the local papers to attract clients.
If you don’t want to spend money on hiring a designer, a simple textual advert will do. Just like flyers, make sure all the information people must know is in the advert.
Make it interesting and attractive.
For example, if you run a commercial cleaning business, mention your cleaning qualifications or certifications.
Real Estate Agencies
When people move in or out of a house, they often avail deep cleaning services. Leave your cards at a real estate agent or ask them to recommend your business to their clients.
Sometimes, the agency might hire you to clean the houses they sell or rent.
Commercial cleaning services can branch out quickly with one or two long-term clients. For example, if you offer cleaning services to one branch or department of an office, you can ask them to recommend you to their other branches.
In this way, you can expand your business without having to find a new client.
Expanding and Growing: Hire Employees
When you start your business, you’re mostly on your own. You might have your spouse or friend by your side, but that’s almost it.
As a small business, your primary goal should be to expand and grow.
For this purpose, you have to hire employees. If you clean on your own, you’ll only serve one to two clients a day.
When you have a whole team of cleaners, you can cater to multiple clients a day, earning more.
You can go about it in two ways: hire trained people or hire untrained people and train them yourself. It actually depends on your budget.
Both ways, you end up with a cleaning staff that knows what they’re doing.
About 2.15 million people are working as cleaners in the US, which proves that there isn’t a shortage of employees. You just have to find the best ones.
Your employees create a brand image. They’re the ones who’ll interact with the clients and work in their homes or office.
Therefore, you have to make sure you are choosing the right people for the job.
One of the easiest ways to get employees is by posting advertisements online or in the newspaper. Only advertise through credible sources to avoid getting scammed.
What to Look for When Hiring Cleaning Staff?
The hiring of cleaning staff is not the same as hiring other employees. There is no resume or degree to judge someone by. Instead, you can ask them for references or previous experience.
It’s best to keep a few pointers in mind to avoid any unpleasant situation in the future.
Questions to Ask
Having a checklist of all qualities you’re looking for in an employee can streamline the hiring process. Ask the applicants the following questions to filter out the people you don’t think will be suitable for the job.
Once you’ve chosen your employees and formed a team, it’s time for automating the business processes. Everything from payment to employee working hours tracking should be automated.
If you’re working with a handful of employees, it’s okay to do everything on paper.
However, as your team grows, shift to software for payroll management, working hours tracking, and communicating.
Till now, you should know what it takes to run a business. You need to have a proper structure, workflow, and the workforce.
Let’s see how you can use marketing to expand or update your cleaning business.
Here are a few ways to market your cleaning business.
Create a Logo
Your brand’s logo is its identity. It’s what people recognize you by.
You can either design your own logo using Canva or hire a freelancer. For just around $20, you can get a logo designed to represent your company.
Often, expert freelance designers may charge a lot of money to make a logo. As a newbie, you shouldn’t waste your money on fancy designs.
Instead, make sure the logo speaks for your company. It should be unique, simple, targeted to your customers, and appropriate.
Social media has made it very simple for new businesses to market their services and increase clientele. You can connect business accounts to your personal Facebook or Instagram accounts.
Although organic growth is rich, it’s slow. To make the process of getting followers faster, you can run ads on Instagram and Facebook to increase your visibility to people. These platforms even let you choose your target audience, age group, gender, and location.
Secondly, you can market your services online through a website. Business cards are still in place today, but they can only do so much.
Having a website allows you to display your services online, take orders, and let people pay in advance through online channels.
Just like logo signs, you can hire a freelancer to design a website for your business. Alternatively, you can use website builders to build a website yourself.
Include the following things in your company’s website:
Although running a website may cost you an additional amount of up to $250 a year, it will boost your business visibility. Don’t splurge on buying web services that you don’t need.
Stick to a simple website that people can easily navigate through. A website makes you look professional and gets you more clients.
Since all the information is readily available on your website, you won’t be getting ten calls a day from people asking about your services.
No matter how popular KFC or Burger King is, their employees still wear uniforms. This is because uniforms make your brand name visible.
Moreover, wearing a uniform also gives your employees a sense of loyalty, making teamwork better.
Most importantly, your employees won’t want their clothes to get dirty while cleaning. Having a uniform protects their clothes and keeps them comfortable while working.
Design the uniform yourself by choosing the color scheme and material. You can place the logo on the chest, back, or arm to make it visible.
If you have reached here, it means you know enough about starting a cleaning business to get to work.
You can sit in bed and read as many guides as you want, but you can never be fully prepared. Hurdles are a part of the journey, but they should not stop you from taking action.
Choose a name, register, create a team, and start cleaning.
If you stay legally compliant and rise above the industry standards, you’ll have your well-established cleaning business in no time.
Don’t expect to make a lot of profit when you start a cleaning business. As you grow and bring in more clients, your earnings will definitely increase.
The best thing about a cleaning business is expense tracking. With minimal initial costs and overhead expenses, cleaning businesses prove to be profitable in the long run.
If you run a residential cleaning business, you can earn up to $20 per cleaning job after paying the cleaner and covering the cost of cleaning supplies. Even though it doesn’t seem a lot, it adds up to a significant amount if you have a team of cleaners.
To increase your income, offer additional services like power washing and pool cleaning, etc.
Commercial cleaning companies can make up to $100 an hour, depending on the services they provide.
No license is required for residential or commercial cleaning. However, you may need a permit to operate certain machinery for specialty cleaning.
Also, some states require you to have a general Business License even for small and online businesses. The cost of this license is $75.
Without insurance, you’ll lose many clients and land in financial trouble in case of damage to the client’s property. At a minimum, get general liability insurance. It will cover for any damage to client property and employee injury.
Often, clients ask for proof of insurance before hiring you. Also, mentioning that you’re insured on your website will increase your credibility.